FoundersCard CEO Eric Kuhn created his business — an exclusive membership organization for founders and serial entrepreneurs that offers perks like instant elite status on airlines, discounts with Apple and AT&T, and more — because it's something he wishes had been around when he started his first company.
"I had started an internet company back in the late '90s," Kuhn said. "This is the business or the organization that I wish [were] always around."
We spoke to Eric, who offered great tips anyone can use on how to market to entrepreneurs and build a business through word of mouth. Our conversation has been edited for length and clarity.
Who is your ideal target for the FoundersCard?
I had started an internet company back in the late '90s, this is the business or the organization that I wish [were] always around when I was building and growing Varsity Books, an internet company I started in the late '90s. So our target market consists of entrepreneurs, some first-timers, many well-known serial entrepreneurs, and a lot of people in between.
What in particular appeals to that group?
What we’ve done is we’ve created a community that helps and benefits and rewards entrepreneurs in two primary ways. The first is to provide them with ongoing networking opportunities. We regularly host events for our members, for example later this week we are having a members-only event in Las Vegas at the Mandarin Oriental. Our members are going to be there during CES. And this is an example of the events that we regularly hold for our members, giving them an opportunity to connect with like-minded entrepreneurs, share experiences, make deals and just really have good time.
I remember when I was starting and growing my company, being an entrepreneur could be lonely, and there are many times when you just need to get away from the day-to-day grind and want to connect with people who are similarly trying to build and grow companies. So that’s one aspect of what FoundersCard delivers to its members.
The second aspect of membership is our benefits program, and we’ve assembled what we think is an amazing collection of unique, incredibly valuable ongoing benefits for our members. We give our members elite access to airlines, hotels, car rental companies. Many of the other benefits are practical in that they give our members preferred rates with business brands like At&T Wireless, some real necessities and business services. So its sort of that combination of giving them access and preferred rates that’s been very helpful and powerful to our members.
So it appeals, in a way, because almost everything founders do is in support of their company?
Exactly, you got it. On the benefits side, some of them sort of naturally benefit [founders'] companies, like our preferred rates with UPS. If you’re a FoundersCard member you can access a higher level of preferred pricing rates that a company couldn’t necessarily get on their own.
On the other hand, there is the sort of fun and aspirational aspect to it, where if you want to travel whether for business or leisure you can take advantage of one of the 150 hotels where we have members-only negotiation rates and upgrades, so it’s a little bit of both.
On the other side, what's the pitch you make to big corporations to provide these perks?
So if you’re the Ritz Carlton or the Four Seasons, Virgin Atlantic, or Jet Blue, some of the brands that we’ve established preferred benefits with for our members, what we’re delivering to them is a really highly sought after target of entrepreneurs and founders.
These companies are very well set up to go after the corporate market, for the Fortune 500 companies, but what we’re delivering to them with one partnership is access to a growing number of highly entrepreneurial influential members, who are building lifetime loyalties not to mention spending lots of money traveling and spending on business services, personally and for their business.
So these companies see FoundersCard as a vehicle to reach an important demographic that they’re not particularly well set out to reach in their traditional sales outreach.
How do you build a business via word of mouth, without any traditional marketing?
Listen closely to your customers and don’t stop listening to them. You constantly need to make sure that you’re being responsive to their needs and delivering something that really over-delivers every day. I’m constantly trying to meet with as many members as possible, to make sure that our product, our membership is working well for them, that we know what would make it better and we can deliver on that.
That first thing allows you to build a product that will resonate with your customers in a high impact way. The reason why we’ve been able to succeed and grow rapidly by relying exclusively on our membership base is that our customers do love the product, and I think it has a lot to do with the fact that we listen to them constantly and spend every day trying to make it better.
But in the world of Twitter, in the world of social media, and just the internet more broadly, any one customer can disproportionately impact your business. Its important, it's always been important, but it's more important than ever, that people are responsive and listening to their customers. It doesn’t mean that you can’t make mistakes — quite the contrary. It means that you can correct, but you just need to be highly responsive.
The last thing thing is you have to just keep reaching for the stars and go out there and shoot for and demand really big things from our partners, so we go out there and do something that’s very different . Our goal as we embark on any new partnership is to do something that’s never been done before, and that’s really delighted a lot of our members. It creates a true sense of exclusivity and uniqueness out there in an otherwise cluttered marketplace.
Did you take any lessons from your first business?
Definitely. With this company we spent the first two years pretty much exclusively building the product, with really our heads down, spending every day making the membership experience better for existing and future members. That means we kind of shut out the outside world and really just focused on the product, and on what our members wanted, listening to them and constantly iterating and improving. We were able to do that because we didn’t have outside funding.
It’s not every company that's in that position. We didn’t have board meetings. We didn’t have presentations. We didn’t have a lot of external forces and realities. Aside from that, we just made a decision that we are going to focus on a simple business model and sort of reinvent the membership model and do it better than anyone’s ever done it.
And I think the lesson that we learned was, there is a fine line between the greatest strength and greatest potential weakness of a startup. I think the greatest strength is that you can be better at something than anyone else in the world, but I think that to do that you have to bring an acute sense of focus. And I think that once you try to do five things in 20 different markets you wind up not doing anything well. I think the lesson that I personally learned, is if you just singularly focus on building something amazing and have everyone passionate about what you’re doing, that’s not a guarantee of success, but it is a key ingredient of a successful business.
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