October 8, 2012

Very Basic Startup Marketing

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?

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

  • For startups, this usually means referral from an existing user, PR,
    or ways that the product talks about itself (eg: “posted by Instagram”
    on Facebook)
  • A big part of awareness to me is crisp positioning. Potential users
    need to “get it” right away. You’ll spend 30 minutes reading about each
    great feature of a new apple product.  But you’ll only spend 10 seconds
    trying to understand a new no-name product that someone tells you about
  • Product impacts awareness, which seems strange given that awareness happens before trial.
  • The challenge for startups is how to great broad awareness with
    limited resources.  When Gillette launches a new razor, they spend
    millions to make sure that in short time, every male knows about it. As a
    startup, you have to focus on cheap awareness channels and get the most
    value out of your efforts/dollars.  This usually means focusing on a
    narrow user segment that has a particularly strong need for your
    product, and expanding from there.

Conversion: Getting people who are aware to take action

  • Most of the stuff on startup marketing is about this part.  Getting
    people to hit your webpage, try your product, come back and engage, and
    ultimately pay. There are tons of great resources on this on the web.  David Skok’s blog, for example, is one of the best for SAAS marketing.
  • But, I think optimizing conversion can be a red herring for early
    stage companies early on.  Some of our fascination with conversion stems
    from the desire to analyze and measure stuff.  But without enough
    traffic, testing conversion is meaningless.  It’s fun to optimize
    conversion because it’s concrete and rewarding.  But be mindful about
    whether this effort is a big rock or small rock.

Raving Fans: Getting customers to love you and be evangelists

  • The best marketing is customer success.  That’s why I think it’s
    incredibly important that the functions of product and marketing not be
    thought of as two silos.  The job is not done when you’ve gotten someone
    to pay.  It is done when you have delighted a customer to the point
    that they can’t help but tell others about you.
  • You want to make it really easy for customers to evangelize for you.
    Referral links need to work really well, and incentives should feel
    win-win. Again, the value proposition needs to be very crisp, and easy. 
    That’s why it’s often best for startups to deliver simple services with
    discreet value propositions even at the expense of being fully
  • This is why “swiss army knife” products rarely work. You hopefully
    create a raving fan by being an amazing scalpel for a particular
    problem.  Then, that person will tell everyone else who needs a scalpel
    that you are a great solution.  Then, the person who hears the same
    recommendation 3-5 times, will finally give you a try.  That’s much
    harder to do if you are trying to be all things for all people.

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

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

is a Co-Founder and Partner of a seed investment firm called
NextView VenturesYou
can find this post, as well as
additional content on his blog called  You can also follow Rob (@robgo) on Twitter by clicking here.