In this podcast, I hosted Pierre-Adrien Giroguy, the founder, with his brother, of Skwad, a monetization platform for nano- and micro-influencers. The excellent magazine Challenges chose it as one of the 100 companies to follow in 2023. Pierre-Arien talks about Skwad’s creation and growth. As in many entrepreneurial adventures, personal dissatisfaction (a “customer pain”) allowed the idea to germinate. I enjoyed this exchange because Pierre-Adrien shared some practical advice on getting your first customers. Good listening!
Marketing lessons to remember
- The POC (Proof of Concept) is an efficient way to confirm the demand. It does not have to be considered a wasted cost. It is possible to make it profitable.
- Market research can allow you to get your first customers. You will create demand by creating expectations, involving your respondents in the product’s design, and allowing them to test it.
- Use your network to gather a sample of potential marketing targets you can activate later when your product is ready to be tested. You need to engage these targets to increase the likelihood of conversion to a customer.
- In B2B, if you distribute a questionnaire for your market research, don’t be obsessed with the number of respondents. What counts is the targets’ relevance and ability to be converted into leads.
- A/B testing is a very effective approach to increase the efficiency of your marketing actions. Surprisingly, so few companies have adopted it.
- Barriers to entry can be of legal origin. Therefore, remember to work on your PESTEL analysis and remember any exogenous factors that could jeopardize your project. In the case of Skwad, significant work had to be done upstream so that the monetization of influence would align with tax rules.
The influencing market in 2023
The influencing market will represent $25 billion in 2023, and projections estimate its potential to be $100 billion. Today, the term “influence” is often summarized by big influencers with more than 100,000 followers. However, the observation on which Skwad’s idea is based is that you can have a smaller community and still be an influencer. 4.5 billion potential nano- and micro-influencers can be relays for their community. This is the basis of word-of-mouth. Pierre-Adrien sees a clear blue ocean.
The influence market is driven by the time spent on social networks. In January 2023, the average time spent on social networks was 2h31. The time spent online is increasing year after year. This is naturally at the expense of traditional linear media, as explained here.
For Pierre-Adrien Giroguy, influence and traditional advertising remain complementary. He reminds us that it takes 4.2 repetitions in classic advertising to be top of mind, whereas content relayed by an influencer will only be once.
The influencer sector is also the subject of many controversies that have led to a law proposal in France, Skwad’s natural market.
The best networks to monetize your influence in 2023 in B2C
Instagram and Tik Tok represent today 98% of the B2C influencer market. Instagram launched the market, but the Meta network is losing ground to Tik Tok. Pierre-Adrien Giroguy believes that Tik Tok’s video formats have allowed content creators to express themselves differently and more authentically. Instagram’s response was Reels, and YouTube’s was Shorts. As Abidin (2021) showed, Instagram’s and Tik Tok’s mechanisms for capturing attention differed. His research points out that the format introduced by Tik Tok was a key success factor in freeing up the modes of expression for content creators.
LinkedIn in B2B
LinkedIn is the only network that allows today to monetize its influence in B2B. A post on LinkedIn can be monetized between 500€ and 2500€. However, this figure can rise to 20,000€ for more complex campaigns based on a video or a series of several posts. A campaign is based on an expert, who has an aura on a subject, and who shares on his page a sponsored content.
Market research was a preparation for [finding] the first leads.
Market research to confirm the idea
I liked in this podcast the method Pierre-Adrien, and his brother used to confirm their business idea. Indeed, it is not enough to feel “customer pain” and to have an idea. It is also necessary that it has potential.
In concrete terms, they carried out market research. This was based on a questionnaire distributed to relevant marketing targets (about 90). Choosing these targets was essential to build a first base of prospects. Pierre-Adrien and his brother were clever enough to use their professional network to select these targets and get them to participate indirectly in developing the product. Pierre-Adrien explains it very clearly in the podcast. There is an obvious desire to use the respondents’ feedback to improve the basic idea. This is the first step of our market research method.
When we go to see investors, the fact that we have identified sources of revenue is very reassuring.
A POC to confirm the concept … and attract investors
The other very good practice used by Skwad is the POC. I need to repeat more that the prototyping phase is essential. It is an integral part of market research.
In concrete terms, an application was developed to test the concept. The POC was used for 8 months with 5,000 users and generated a substantial turnover (7,500€) covering the costs (30-50,000€). This is an important lesson for all project leaders. It would be best if you thought of your POC as something that can make money and even be profitable. Don’t assume that a POC is a sunk cost. No matter how sophisticated the prototype is, you can make money if the idea is good.
By the way, the application “The Social Race” developed by Skwad has been iterated and kept until December 2022. The MVP cost a total of 120.000€.
Beyond confirming the concept, the POC is also the most effective way to reassure investors. It’s concrete, and if it’s already making money, it means you have a tangible basis for assessing your future revenues. In 2023, with credit drying up for tech entrepreneurs, having an existing revenue stream is essential to convince investors.
The most successful marketing action
When asked about Skwad’s most successful marketing action, Pierre-Adrien talked about the sponsorship between creators. Skwad navigates in a complex, hybrid market. There are the creators on one side and, on the other, the advertisers. The latter’s interest depends on the former’s number and profile.
Skwad has set up a paid sponsorship policy to attract content creators. The right formula was difficult to find, and Pierre-Adrien shared his secret weapon: A/B Testing. This technique allows for a comparison of the reaction of cohorts by changing only one parameter. This is how Skwad was able to settle on its current sponsorship mode.
The Future of Skwad and the Impact of Generative AI
Skwad’s business model is hybrid: both B2B and B2C. The company’s growth is therefore based on 2 levers:
- the constitution of a panel of influencers as large as possible and the use of the platform by the influencers
- the use of the service by communication agencies with which Skwad is associated in white label
ChatGPT is used by Skwad to “challenge ideas,” i.e., to bring a new potential during internal reflections. Pierre-Adrien particularly appreciates the possibility, thanks to chatGPT, of freeing himself from the biases inherent to human reflection.
Posted in Entrepreneurship.