Tuesday Oct 9, 2012 by Rob Go - Co-Founder and Partner, NextView Ventures
I was spending some time with an MIT senior who is very involved with the startup community and has spent some time working at venture funded companies. We were chatting a bit about marketing for early stage companies. How important is it? Who does it well? Does it even matter? Etc.
She asked a pretty simple question: “What is marketing for a startup, really?”
I was a bit struck by the simplicity of the question. But I think marketing is one of those disciplines that is a bit of a black box to startup founders who come from more of an engineering background. I’ve heard founders think about marketing both as something that doesn’t really matter (since all that matters is the product) or something that matters a lot and requires hiring a fancy CMO or VP Marketing.
I disagree with both of these paths, but that’s for another post. In a nutshell, here is the basic way I think about marketing for startups.
First, I think of marketing as a funnel. It can be a very basic funnel, but you can drill down to much more specific sub-components of the funnel. At the highest level, I see it as: Awareness –> Conversion –> Raving Fans. A couple examples on each:
Awareness: How people first hear about your company
Conversion: Getting people who are aware to take action
Raving Fans: Getting customers to love you and be evangelists
So, that’s marketing as a funnel. Next, I think of marketing as understanding your customers. And I mean really understanding them. It’s not a box to check – let’s do 10 customer interviews and we’re done. It a continuous process that goes very deep. That’s why most early stage companies find success when the founders are solving problems that stem from authentic experiences.
A big part of understanding your customers is understanding customer segmentation. For an early stage company, the most important goal is creating raving fans out of some market segment. And when you are starting, narrowly defining your target segment is ok. VC’s may beat you up about “how big is that market”, but you have a much better chance of success by winning a narrow segment first and broadening vs. taking a shotgun to the entire market. That’s why I always cringe when I see companies talk about their customers as “everyone that is computer literate, ages 25-60 with incomes over $50K”. That is not segmentation.
Third, I think of marketing as a cycle that evolves. It’s neither a machine that you build and then set and forget, nor is it a black box of unfocused activities. Very early on, you might focus quite broadly on driving awareness in a bunch of customer segments to see what sticks. You may later choose to go very very narrow with your marketing once you’ve got a hunch that a particular segment is promising. You might also lean in on one or two tactics that really work to drive low cost customers to your service. But over time, that channel my change, dry up, or get expensive, so you need to always be experimenting with new channels and tactics. You need to have the instrumentation to keep a pulse on your marketing machine and know what’s going on. But you have to continuously experiment and be creative at the same time.
It’s also both a macro and micro cycle. Even at the level of individual marketing campaigns, the cycle of hypothesis, testing, measurement, and iteration happens. And for internet based businesses, this is happening faster and faster. This is why, often, classically trained marketers at large consumer products companies struggle greatly when they start competing in internet businesses. The cycles of iteration are so much faster, and your resources so much more constrained.
So, that’s it from a high level.
1. Marketing is a funnel of awareness –> conversion –> raving fans
2. Marketing is about understanding your customers deeply
3. Marketing is cycle that constantly evolves
Rob Go is a Co-Founder and Partner of a seed investment firm called NextView Ventures. You can find this post, as well as additional content on his blog called robgo.org. You can also follow Rob (@robgo) on Twitter by clicking here.