How I Cut User Acqusition Costs by 40x For A $13.5M AI SaaS Startup

"In the land of the blind, the one-eyed man is king."

I started working with Pieces, a startup building memory for AI backed with $13.5M in funding.

Goal? Get a gazillion quality users. Problem? Cost.

The Problem

The current advertising was far too expensive and they didn't have bandwidth to fix it. I reduced the UAC (User Acqusition Cost ie the cost to get a new user) by 40x (not a typo).

To put that 40x UAC reduction in real numbers: If you're spending $500,000/yr on acquisition and reduce the UAC by 40x, you save $487,500. I can't disclose exact numbers, but Pieces saved roughly a heck-ton of money.

Also - we're talking US users. Not pumping up the numbers with users developing countries who rarely convert to the premium plans.

I'll try to explain how I did this best I can.

The Big Picture Was Off

The first thing I noticed was the ads weren't memetic enough. Too technical, too feature-focused.

"Unless your advertising contains a big idea, it will pass like a ship in the night." - David Ogilvy

So what made Pieces actually unique? It runs in the background and sees all the work you're doing for up to 9 months. Then you can access all that important info with an AI. That's actually insane when you think about it.

You can ask questions like:

• What's the link to that retention dashboard Alice sent a few weeks ago?
• Can you write an update for everything I worked on last week and my tasks for this week?
• Can you sum up and link all the research papers I read on arxiv today?

We tested a bunch of different ways to say this. What worked best: Headline: "AI that remembers everything you do." Subheadline: "Your superpower from the future"

Simple. Developers got it immediately. That was our big idea.

Now. Where could we find notoriously expensive-to-reach developers (our ideal avatar)?

Untapped Opportunity

Google Search was expensive. But display ads? Everyone ignores them because they think they don't work. And they usually don't for cold traffic, but more on that later.

Retargeting was especially good. Someone visited but didn't download? Maybe they got distracted at work or visited our page during their commute - we could get them back super cheap.

We Made So Many Ads

When I analyzed their current approach one thing stood out - they weren't making enough creatives. We needed to implement a regular creative and testing cadence. Big picture is key, but so is iteration.

"'You miss 100% of the shots you don't take.' - Wayne Gretzky" - Michael Scott

What worked best:

• Actually funny developer memes relevant to the big idea
• Proof - eg 9 months of memory gives it weight
• Graphs (who doesn't like graphs??)
• Before/after comparisons
• Short form videos

Having that much variety meant we could avoid ad fatigue and convince a much larger percentage of the TAM by saying it in a way that works for them.

The Weird Quality Problem

So I make these changes and we're getting downloads for cheap. Great, right?

But I noticed tons of people would download but never install.

I figured out why - our ads were showing on garbage websites. Like roblox cheats and free app sites.

You would think excluding these using Google's website categories helps. It doesn't.

This is exactly why people can't get Display Ads to work for cold traffic. So I made a list of 70,000 "bad websites" and blocked them all. Next day, 3x more people were finishing the install.

The Numbers

I can't be too specific here due to client privacy, so lets simulate data.

Like I said at the start of the case study, if you're spending $500,000/yr and you reduce UAC by 40x, that's $450,000 saved while getting the same number of users! And we got more.

Turning the right gears

"In the land of the blind, the one-eyed man is king."

SaaS marketing has 1000 components to it. Knowing which 4/1000 most important ones to change gives you most of the returns in the fastest time. And we all know speed is key with startups.

Unfortunately it takes years and 10,000 iterations to know how to spot those 4 gears and how to fix them.

Hopefully the above quote wasn't too self-aggrandizing.

But I do this kind of thing for tech startups - find the marketing opportunities everyone else misses and ~2x their growth. I might be able to do the same for you. Send an email at hello@lukakalajzic.com (I reply faster if you include a star wars quote)!