I haven’t lived in New Zealand since I was at university but growing up there, I remember we always seemed to get new technology early.  When we travelled to Australia on a family holiday, I couldn’t believe they didn’t yet have Eftpos!  Because of its small market size, isolation, population density and demographic similarity to America and Europe, innovators often use New Zealand as a test market.

Looking back, I wish I’d trialled Posse in New Zealand first. I’d have used the lessons we learned to improve our product and strategy before launching in Australia or the US.  Now we have momentum there, I’m going to ensure we work steadily at developing the market.  Other than it being an awesome place to hang out, here are five other reasons why startups should consider market testing in New Zealand:

1. New Zealanders like to be market leaders and try new things.   I think it’s inherent in the Kiwi attitude to be enthusiastic about new products.  There’s a culture of inventing and of applauding innovators.  We receive more feedback from New Zealand users than any others: they often write in to say what a ‘neat idea’ Posse is, and how they’ll help spread the word in their area.  Stores are excited when we call to tell them a customer has recommended them on our app and want to find out more.  If you tell people you’re launching in New Zealand before anywhere else in the world, I imagine you’d get a tonne of support.

2. Word spreads quickly.  The media in New Zealand is centred in Auckland.  There are a handful of TV news shows that matter, and radio mainly broadcasts from Auckland to the rest of the country.  There are quite a few large local papers and lots of great business and entrepreneur focussed websites and magazines.  In Australia, we paid to hire a PR company but in New Zealand, we did it ourselves.  A friend at The Icehouse helped introduce me to a few folks, and we just approached the others cold.  Everyone was welcoming.  Within a few days we’d set up interviews on one of the highest rated evening news TV shows, almost every major newspaper, the top talk radio station and several magazines.  The response was amazing: everyone was genuinely interested in the idea and our story; all ran positive articles.

For some reason, when things catch on in New Zealand they catch on big time.  New Zealand is regularly the biggest per capita market for odd music artists (Robbie Williams went more than 30X platinum in NZ!) and they all like to use the same technology.  Local eBay copy ‘Trade Me’ grew to become a billion dollar company even though it only operated in NZ because virtually the entire country was addicted to it!

3. The demographics are similar to Australia, the US and UK.  Culturally I’d say New Zealand is halfway between the UK and Australia but with an awesome Pacifica vibe thrown in.  It’s likely that whatever problem your business is aiming to solve will exist in New Zealand too.  They consume the same media and use the same apps.  If your product works in New Zealand then it’s likely it’ll work in bigger markets.

4. It’s easier and cheaper.  When you’re starting out you’ve a host of problems to solve: getting the team right, improving the product, and staying solvent are just a few.  All round, New Zealand is an easier test market.  There’s less competition and everything is cheaper — even Facebook app advertising is significantly less expensive in New Zealand than Australia.

5. It’s isolated and you can make mistakes: If you do a major TV interview and your site crashes (like ours did) you can learn what went wrong and improve it for less forgiving markets.  No one is going to write your product off in New Zealand, even if it is buggy at first.  In the US and even Australia, the media can be quick to judge new products and it’s hard to get people to take a second look.  In NZ, you can develop a product under the radar of media scrutiny and launch something slicker in the bigger markets when you’re ready.

You also get to visit beautiful places like Queenstown!

The startup scene in New Zealand is thriving.  Wellington-based cloud accounting company ‘Xero’ was recently valued at $2 billion and there’s a long list of others making global waves from the bottom of the world.  The universities are world class so the technical talent pool is strong.  There’s also a vibrant investor community.   Wealthy folks like Peter Thiel and others from Silicon Valley have second homes in New Zealand for the lifestyle or the lack of a capital gains tax – or both.

New Zealand is perhaps the perfect place for startups to test a market.  I’m certainly going to make sure I try my next idea out there first.

New Zealand Startup Resources:

1. Business incubation & Angel Investment: The Icehouse
2. Helping NZ startups export: Katabolt
3. The conference for NZ Entrepreneurs: Morgo
4. Free online mag for NZ Entrepreneurs: NZ Entrepreneur Magazine

I’ll look at three ways of reaching your first 10,000 fans, and how I used each in music and at Posse, to varying levels of success.

1. Paid marketing, PR and hype

All these methods aim to put your brand in front of as many people as possible in a way that says, “Try me.  I’m cool and I’ll make your life better.”  All work, otherwise no one would use them.  PR may create more exposure for cost than paid advertising, although some new marketing tools like paid Facebook ads can be effective at reaching targeted audiences.  Hype helped raise sites like Pinterest and Wanelo from hundreds of thousands of users to many millions.  But do they work for the first 10,000 fans?

A new start-up with a good story can score both PR and hype.  That’s easy.  It’s also easy for a new band to set the whole music industry talking through rumours that a major record deal is imminent.  But hype, PR and paid marketing are like cotton candy.  It tastes sweet; you get an instant sugar high, and then crash when everyone goes away.  Big record labels used to burn through artist’s careers by launching them like this.  They had pots of money, were impatient, and – a bit lazy.  Does anyone remember the girl group ‘Cherry’, or ‘Jackson Mendoza’?  One big label launched both in the late 1990′s / early 2000′s, coupled with massive marketing budgets.  Both failed to connect.  They never found the first 10,000 fans so they never got the momentum they needed to build a community.

It’s the same in tech.  At Posse, we’ve had a lot of great PR.  Every time a headline story breaks, our user numbers jump – but often we don’t gain quality users.  They join the site, add a couple of places and don’t come back.  If we depended on PR, marketing and hype to build our user base, we’d be dead.

2. One-by-one engagement and community building.

This is the long, slow, painful, effective way to build an engaged audience.  In a previous blog, I wrote about our early experiences launching the band Evermore.  We had no money, and spent two years driving all over the country playing in high schools by day and small pubs by night.  After they played, the band would hang around and meet fans, personally selling CD singles and signing them.  They met a lot of people in two years, and these fans felt special.  They’d seen a show, had met the band personally, and became evangelists, calling their local radio stations requesting the songs.  Momentum started to build.

Matt Corby playing in a fan’s backyard

The bad news?  It’s a process that takes time, hard work and can’t be accelerated.  In 2008 my music company, Scorpio, signed the musician Matt Corby.  In 2009 we released is first EP and his manager, Matt Emsell, arranged for Matt to play ‘secret shows’ at fans’ houses, in their back gardens, so long as they could organise enough people.  Over four years of constant touring and many EP releases he built up a passionate army of fans.  So, when his new record was released in 2012, they rushed to buy it and share it with friends.  The fans felt that they were responsible for Matt’s success – and they were.  This real momentum created hype which led to the 2012 EP reaching 5X platinum sales and winning the ARIA Award for Song of the Year.

Communities in tech that have stood the test of time often also took years to develop.  Twitter launched in 2006 and developed a passionate but small user base before taking off more than two years later in January 2009.  Pinterest launched in 2009 by issuing a handful of invitations to designers to use the platform, and they each received invitations to give to friends.  By October 2010, they had 40,000 users and started organising user meet-ups to help fans build real-world relationships.  Founder Ben Silbermann often tells the story about how he had trouble raising money from VCs because his initial growth curve wasn’t steep enough.  It wasn’t until January 2012, more than two years after they launched, that Pinterest became airborne, and in August 2012 they lifted the need to have an invitation to join.

We’re still in the early stages of building our fan community at Posse.  Of the strategies we’ve tried, two have been powerful.

Advisor program: We advertise on free student job boards all over the world for ‘advisors’ to intern from home for our startup.  These advisors commit to completing two activities a week for a four-week program, and at the end we provide them with a letter for their résumé.  The activities include running user experience tests and writing up product feedback and suggestions, recruiting friends to join Posse, promoting Posse to retailers in their area and distributing stickers for the store windows, and creating a blog about the best places in their town.  We run the program every four weeks and aim to have 120 advisors participate.  We’ve now run it six times and improve it each time.  This has been an incredibly effective, low cost way for us to build communities of engaged evangelists and seed new geographies for Posse.  The advisors themselves love the program, they report that they learn a lot, use the reference letter to gain entry to places in university courses, and many ask to stay involved with Posse as brand ambassadors.

Our blog:  We post 2 – 3 blogs every day featuring the favourite places of well-known people or lists of the best places to do X in a town.  For example, check out this blog post featuring Sydney Lord Mayor Clover Moore’s favourite places to eat and drink.  It’s very easy to ask a chef, fashion designer, musician, actor or politician for a list of their favourite places to visit in their home-town; people love to share their recommendations.  Our community manager Justine writes up the blogs and encourages the person who’s being featured to share it on Facebook and Twitter (which they usually do, often to hundreds of thousands of followers).  She also reaches out to each of the featured stores and they all post and tweet the link.  Everyone is looking for content to post to social media, and the blog generates a huge amount of traffic for Posse.

3. Aligning yourself with another brand

I’ve found this to be the most effective way to accelerate desirable growth.  In 2004, we had spent two years building Evermore’s community one by one.  There was good momentum but they were not a national name.  But everyone was aware of a new show on Channel Ten called ‘The OC’.  It was edgy, young, cool and loved by the right crowd of teenage girls and sophisticated young women.  I also noticed that Channel Ten hammered the promos in every ad break.  I called up the Channel switchboard and asked reception: who makes the promos for the OC?  Eventually, I reached their producer, introduced myself, described Evermore, and said I’d courier a CD of the song straight away (no emailing MP3s then!)  Later that afternoon he called me back, said he loved the track and would use it as the theme to the promo that would start playing during the final of Big Brother that Sunday.

Channel Ten continued to play Evermore’s song ‘It’s Too Late’ as the theme for The OC trailers for another month.  Thousands of new people signed up to our website every day.  The OC had captured the imagination of a huge audience.  They emotionally connected with the characters and the sentiment of the show.  The brand alignment worked for us because of the emotional connection.  The audience transferred their feelings for the show to Evermore so by association we were a hit too.  No one remembers which song was the theme of Dancing with the Stars or The Rugby World Cup, even though they received the same level of exposure.

Brand alignments for startups often mean working out how to leverage another platform’s audience.  AirBNB’s growth thanks to Craigslist is a good example of this.  I’m working on a couple of opportunities for Posse right now; I’ll tell you if one of them comes off!

Finding the right first 10,000 fans takes careful thought, hard work and patience.  There are few examples of bands or companies with longevity that took off overnight without some kind of granular community strategy.  We’re always looking for new ways to engage our users and turn them into evangelists.

If anyone else knows stories of how others have succeeded in music or in tech, or if you’d like to share your own ideas please add them as comments below.  I’d love to hear them!

Between 2003 – 2010, I came to SXSW four times; each visit launched a different artist.  My job was to set up a stunning show – the best sound, lights and vibe – and ensure it was packed with influential people, folk who’d write about the band or sign them to a record deal.  Each trip cost the artist a wad of money, so I had to work out how to make an impact cheaply.

The Posse street team at our stand (made from items bought at Wal-Mart!)

This year I’m back at SXSW, launching our internet company and App.  I applied many of the tactics I learned in music, and we had amazing success at securing media coverage and traction.  I can safely say that Posse is one of the ‘buzzing’ companies people are talking about after the conference.  Check out this Best of SXSW wrap up in AdAge this morning.  Here are six tricks I learned in music that I used to launch Posse at SXSW this week on a budget.

1. Get influential people talking about you before the festival.

In music, we focused on being heard by high profile producers: these guys are great talkers and they aren’t pitched every day.  For the Posse launch, we worked out which US tech influencers love SXSW and asked them to share their five favourite places to eat, drink and shop in Austin.  Everyone likes to share places they’ve discovered; it was easy to get the lists.  We secured big names like Elspeth Rountree (NBC & Fox), Maya Baratz (ABC News) and David Tisch (Boxgroup) asking them to contribute – and turned it into a ‘Tech Elite’s Guide to Austin’.  We published the map on our site at www.posse.com/sxsw and distributed printed copies around the festival.

We posted blogs featuring the list of a different influencer daily in the two weeks leading up to Austin, all of which were retweeted by the featured people themselves, their businesses, media and the retailers they recommended.  There was already demand for the complete map when we published it the day the festival started.

2. Timing is everything.  

Bands save releasing records until right before SXSW.  Every company has an interesting story to tell – the kind that could be covered in TechCrunch or Pando Daily.  When something awesome happens (like you release an App or secure a round of funding) don’t write a press release straight away.  We saved our App Launch and funding announcement so we could land a major press story right on the eve of SXSW.  We offered an exclusive to TechCrunch who ran this awesome article on Friday.  This meant Posse was top of the mind for any other tech reporters covering the festival, as everyone reads TechCrunch.

3. Guerrilla marketing works – but you have to be clever.  

Every pole in downtown Austin is covered by 9am each morning.  Big companies spend thousands designing and printing fancy-looking posters and then hire people to cover the poles.  The most effective posters are simple, and if you’re on a low budget like us, you must find a way to stand out.  Today, plain blue posters all over town say ‘Where is Biffy Clyro’?  They had a lot of people talking.  It’s a conversation starter – ‘what ever did happen to Biffy Clyro?  I wonder if he’s here?’

We ran a super-effective campaign promoting our Austin Map.  The notices were designed like handmade ‘Lost’ posters, and then we found the ugliest and funniest looking animals we could and put them in the middle with a prompt for people to find the best places to eat, drink and shop at posse.com‘s Insider’s guide to Austin.  We printed 100 posters at the UPS store and stuck them up ourselves the next morning at 7am.  By 10am everyone was talking about the posters and we were even mentioned in Mashable.

4. Hustle all day and all night!

If you come to SXSW launching anything, you have to be prepared to hustle from 7am to midnight every day.  I brought Jen from our office; there was just the two of us from Posse here but it’s safe to say we met thousands of people.  We were on the streets handing out stickers and our maps of Austin, lurking in hotel lobbies where influential people might stay, meeting people and spreading the word.  We were at all the parties we could make – if you’re influential and you’ve been at SXSW, there’s a good chance we spoke to you and tried to get you to download our app.  Opportunities were everywhere – on the first day when everyone was waiting to register, we combed through the queue meeting everyone and offering cupcakes to anyone who signed up on the spot.

The reporter’s still holding the stickers we just gave him!

Hustling pays off because you get to meet some amazing people!  Jen and I were getting out of a cab on Saturday after buying stuff at Wal-Mart to build our tradeshow stand.  We handed stickers to two guys as we stepped out of the cab door.  They happened to be journalists for NBC and asked to interview me for the evening news.  Five minutes later, I was being interviewed on the street and they filmed us handing out stickers and sprucing our company.  That night, we were the lead story on NBC News in Austin!  The next day our tradeshow stand was packed with people who saw us on TV the night before.  We’ve met too many amazing, helpful people to mention while hustling, but it’ll all lead to media, speaking opportunities and partnerships in time.

5. Get a street team

You can only cover so much ground by yourself.  To maximise your impact it’s important to try to get as many people as possible representing you at the festival.  A month before, we advertised on the University of Texas jobs board for student volunteers to help launch our startup at SXSW.  Students would have the opportunity to help promote Posse for four days over SXSW, to learn how to launch a company at an event like this and would get a letter for their resume at the end.  Astonishingly we were the only company to advertise for volunteers at UT and we had an influx of awesome applications.  We chose a team of enthusiastic marketing students who did an excellent job signing up users, distributing maps and helping run our tradeshow stand.

6. Tie yourself to other people’s events

Randi Zuckerberg was at an event we hosted!

The key trick of SXSW for a band is to get on the bill at an event where everyone is going to be.  If you try to put on your own show, you have the near-impossible job of promoting the show to a large group of people you don’t know and who already have a plan of events they want to go to. One of the most successful launches I ran at SXSW was when I managed to get Operator Please to play at the NME Party.

It’s the same for an internet company.  SXSW will try to convince you spend $10K to throw your own party.  Don’t!  We don’t have that much spare cash; even if we did, I know it would be hopeless to attract the right people to our party.  For Posse the people I really wanted to get behind us were influential women in technology.  So we teamed up with a Women in Tech advocacy group called ‘Change The Ratio’ who were already throwing a power women’s brunch.  We paid a very small sponsorship fee (even a startup like us could afford it) and they brought all the power women along.  With virtually no effort and very little cost we got to own the hottest women’s event of the festival, and people like Randi Zuckerberg and Cindy Gallop were at our event!

I’m writing this blog on the last afternoon of the festival while waiting to get a cab to the airport.  Before I came to SXSW this year, I read a lot of blogs warning startups to avoid it.  ‘There’s too much competition,’ they said and ‘you can’t make an impact unless you’re prepared to spend up big.’  We decided to give it a shot, and I’m happy to report that we did make an impact.  We signed up more than 4000 new users this week, raised our profile in the US considerably, enjoyed a tonne of press, made a lot of amazing connections and we did it all on a budget of less than $10K.

Jen and I are exhausted, but we’ve had so much fun. I’d definitely recommend SXSW and other trade shows like it if you want to make an impact, so long as you’re prepared to work incredibly hard to make it all happen.

I caught Jen sleeping backstage at our tradeshow stand after a hard day networking!