Invisible Startups
Market Your Startup Without Incinerating Cash

So you’ve got a great market and a great product. A few select people know about your product, they use it all the time, and they love it. Problem is, they’re all friends of yours! Like the tree falling in the empty forest, thousands of great products have gone unused because no one knew they existed. You’re not just unknown—you’re invisible.

But how do you get the word out in a crowded market? How do you stand out from the crowd without mortgaging your house or burning through your hard-won venture dollars? No longer is it sufficient to do basic search-engine marketing and optimization. Just buying keywords, putting up landing pages on your web site, and doing PR won’t cut it. Avoid getting lost in the noise and stand out from the crowd using these seven proven ways to market your startup.

Startups You’ve Never Heard Of

Investors lump failures into one of two categories.

Some companies struggle in a market where everyone fails. Things look good, but ultimately mainstream customers or a large volume of users are unwilling to take a chance on a new concept. Skilled execution and a reasonable backup plan don’t compensate for a market that fails to develop as quickly as originally anticipated. Some entrepreneurs are able to switch markets completely early on—if they haven’t raised and spent too much cash. But typically in this scenario, all companies in the given market flounder or fail. It isn’t a desired outcome, but it’s not for lack of trying. It’s often the nature of creating new markets.

Then there are the really painful failures—those that keep me and other investors I know up at night. Some investments fail due to self-inflicted wounds. A competitor winds up owning what turns out to be a very large market. The other company moved faster and out-executed. Often, they did this by having a better product and by out-acquiring users or customers. Here’s a good example.

The file-sharing market has existed for a long time. For as long as computers have been around, people have needed to move files from one place to another. Yet we’ve all experienced attaching a large file to an e-mail message only to find out that the file was too big to send or get a bounce-back message indicating it was too large for the recipient to receive. And the problem has only gotten worse as people have started creating, capturing, and sharing more and more high-resolution media.

From product-design files to project documents, from high-resolution photographs to video, everyone needs to move more and bigger files, and share them not just with one person but with friends and large teams. Although high-speed broadband seems as though it could have made this problem virtually disappear, it’s had the opposite effect—now that many people have a high-speed connection, they expect to be able to move large files quickly and easily. They often need to share media with others or want to back up all those documents, videos, photographs, and other important files.

Recognizing the increased adoption of high-speed broadband and the creation of larger files, a number of companies developed file-sharing products early on. But they faced some significant challenges to adoption.

Some of the companies were simply too early to market. People had relatively high-speed Internet, but it wasn’t yet fast enough to support rapid transfer of large files. It might be okay for an upload to go on for hours or days in the background, but if took that long to retrieve a file, forget it. What’s more, storage and bandwidth costs were prohibitively high—the companies couldn’t offer storage at a price that customers were willing to accept and still make money. They failed because they were too early.

Later, the gorillas entered the market—Amazon, Apple, Google, and Microsoft—primarily by acquiring companies in the space, integrating, and rebranding their products. Yet all the gorilla and stand-alone product offerings had critical shortcomings: restrictions on uploading or sharing of larger files, really slow upload speeds, and/or hard-to-use user interfaces.

Some lacked a desktop component, so users had to drop large files onto a browser and then leave the browser window open while waiting for the upload to complete—which could take hours and made it very difficult to synchronize files across different devices. These products failed because they weren’t great products and they didn’t live up to users’ expectations.

Enter the cloud. Lots of products existed in the space, but none truly solved the problem: making it easy to share and synchronize files across any device, privately or with others. Two companies emerged as the market leaders: Box.net and Dropbox. Box targeted the enterprise, and Dropbox the consumer.

These companies did two things well that differentiated them from the failures. They built exceptionally easy-to-use products that solved the problem and “just worked,” and they transformed the way file-sharing products were marketed. In doing so, they transformed the market.

Instead of talking about file sharing or backup or moving bits around, they talked about access on any device. They talked about simplicity. They talked about transforming your data. And it wasn’t just talk; their products matched their marketing promise.

In fact, they became marketing machines. They used many of the tactics described in this chapter to become the well-known technology leaders they are today. So can you.

Product Innovation

Product innovation may be your best marketing and acquisition strategy.

The number-one factor in marketing success is a great product. Deliver a bad product, and people will write and talk about it. Today, there is no hiding from bad product. Customers don’t just call customer service to complain—they post, tweet, and create YouTube videos like the well-known “United Breaks Guitars.”

A great product is one that is easy to use, is self-explanatory, and delights your customers and users. Apple has a great brand because the company has combined best-of-breed product with brilliant marketing. Fundamentally, the company’s products are intuitive, well designed, and pleasing to the user from start to finish. From purchasing to unwrapping to using to doing more purchasing, Apple delivers an excellent user experience.

What’s more, Apple’s products grow with you. A new iPad user might not realize that swiping left brings up search, but over time they figure it out. Seemingly small things like making more advanced features discoverable provide a great experience. But they also incent users with a reward: that “ah hah” moment when they discover a new feature themselves, which in turn releases dopamine, a chemical that controls the brain’s pleasure and reward systems.

Product matters more now than ever before. The Internet has increased the speed at which word of mouth spreads. Entrepreneurs are creating new products at unprecedented rates due to the declining cost and broader availability of infrastructure needed to build and deliver products to market. This means consumers and business users alike have more alternatives.

Design matters more now than does technology alone. Information technology has achieved mass adoption. Even the most technology-resistant people now text, check e-mail, and browse the Web at home, at work, and on their phones. It’s no longer sufficient just to build a product of features.

It used to be so fundamentally difficult to build product that vast amounts of engineering time and capital were consumed getting the product to work. Nearly everything had to be built from scratch. Today, however, you can leverage a lot of existing building blocks; and, just as critically, you can get your product into the hands of potential users for feedback much more quickly and easily.

That doesn’t mean all the hard technology problems have been solved, nor that products must be perfect before you release them to the market. But it does mean you can’t just cough up new products and expect users to use them. New products must have the design, integration, and ease of use today’s savvy consumers have come to expect.

More products are becoming platforms. Some of the most interesting product innovations don’t come from your own product team but from other people leveraging your product as a platform. Of note in recent years was social gaming company Zynga’s ability to tap into the inherent virality of Facebook to expand its user base rapidly.

Opening up your product to integration with others not only drives faster adoption but also spurs new innovations. In the past, only the very largest companies could be platforms—Apple and Microsoft, for example. Because many applications are now delivered over the Web, however, opening up an interface that allows third party developers to integrate with your product is not only straightforward, it’s expected.

That said, with rare exceptions, products come first, and platforms come second. Companies ultimately recognized as platforms don’t typically start out building platforms—they build applications that gain widespread adoption first, and then they open up to become platforms. Amazon, Salesforce, Facebook, Google, and others that have emerged to become platform companies, were successful as application companies first.

But opening yourself up and defining yourself as a platform—once you’ve achieved application success, of course—does one other incredible thing for you from a marketing perspective: it puts you in the center of the ecosystem rather than on the edge of the circle. That means you get to define your market position rather than have others define it for you. It puts you at the center of activity rather than at the periphery. The more you define your ecosystem, the more control you have over your own destiny—a good thing for any startup.

Viral Marketing

To make your product viral, make viral your product. Imagine Facebook or YouTube without user-uploaded photos and videos and the ability to share them easily. Unlike other marketing techniques, viral is built-in and free. With viral acquisition, your users acquire you more users just by using your product.

Some products are inherently viral—Facebook and LinkedIn, for example. At their core, they’re frameworks for letting people share their own content. In the case of Facebook, that’s personal content like photos and updates on what people are up to. In the case of LinkedIn, it’s professional networking information.

Not all products are naturally viral from the ground up, but by giving your users the ability to invite their friends, make money, get a discount, or obtain capabilities such as free storage for every user they refer, your site or app can take advantage of viral marketing. You can go one step further by adding special features only available to those who get their friends to sign up. Viral marketing, executed well, delivers near zero-cost user acquisition. A big part of that efficiency is that viral marketing leverages existing user-acquisition and communication mechanisms like e-mail and social networks.

One compelling form of viral marketing is media sharing. If your product requires users to share what they’re doing (documents, images, or links, for example) with others, that drives adoption. Every time an existing user shares a piece of media with a friend or colleague, your product has been exposed to a potential new user.

Part of what makes viral adoption work so well is its personalized nature. As Robert Cialdini pointed out in Influence: The Psychology of Persuasion (Harper, 2006), people trust recommendations from those they already trust. So when your friend Joe says he’s using a new application and suggests you use it too, that’s likely to carry more weight than randomly hearing about the application. Although you may not be able to turn your application into a viral-content container like Facebook or LinkedIn, you can certainly incorporate some basic viral elements along these lines. “Joe is using Application X,” and “Joe shared a document with you,” both carry a lot of weight because they’re coming from a trusted source—Joe.

Nearly every product today should have at least the most basic of viral elements built in. Ideally, it should also incorporate virality in a much more fundamental way into core product design so that it uses e-mail, social networks, and other mechanisms to get the word out.

Hand in hand with building in viral features, of course, is testing their impact and making changes based on the data. Everything about a viral feature can be measured, tested, and iterated on, from senders to receivers to the content of the message itself. For example, what are the characteristics of senders whose invites are most frequently accepted? How about those of recipients who accept invitations? What about the content of the invitation?

Users and potential users provide huge amounts of signaling data through their actions—you can make this data actionable by measuring it.

Viral marketing works best when coupled with gaming dynamics. File-sharing company Dropbox calls its free space a bonus. It’s not just free space: “You’re 2 steps away from a 250MB bonus.” And it couples that with quests, much like a game: “Complete these quests and become a Dropbox guru!”

The product seamlessly introduces rewards in the form of bonuses, quests to complete, and status levels like guru. These incent user behavior and drive adoption. They also make the product fun, adding excitement to potentially mundane steps like putting files in a folder and installing an application on your mobile device.

Social Media

People often lump viral marketing and social media together. In reality, viral marketing and social media are very different. Social media (or social) can help get the viral-marketing flywheel spinning, but at its core, social is about presence, credibility, and visibility.

Social is pages, likes, tweets, posts, blogs, answers, comments, and word of mouth. Inexpensive e-mail newsletter tools are available to help you communicate with users, and they can be a very effective way to re-engage those who have tried your product in the past. You can bring social directly into your application by combining viral and social, social and mobile. More on that later.

Fortunately, it’s easy to use social media these days. Post regularly on your site’s blog. Tweet about new features, customers, and users multiple times per day. Social means being part of the conversation. So don’t just do it yourself—enlist your customers, fans, and friends to leave comments, write, and tweet about you and your products.

Create videos and podcasts, and publish those on your web site as well as on destinations like YouTube and other web sites. This is an excellent and low-cost form of marketing that takes advantage of the great asset you have in your users and customers. Don’t just make the videos about your product—enlist your users and customers to make the content more personal and applicable.

You can also create online communities for your users. Not only a community for discussion or help about your product—although that is certainly a must—but also a destination where users can share their stories and connect emotionally with you and your product.

Consider a company that provides web-based customer-support software. Although the product itself may not be viral, the company can create a social destination, something like CustomerServicesReallySuck.com¹. Everyone has had a bad customer-service experience at one time or another and wanted to share their pain and frustration by telling someone else about that experience. A web-based customer support company can easily tap into that pent-up customer anguish by providing an outlet for it—and, of course, the solution.

What do you do if you’re bootstrapped and find yourself without the time (or interest) to tweet, blog, and comment? Either make the time or do what many other companies do: hire someone to do these activities for you. Think you can’t afford to? The real question is whether you can afford not to. Plus, with recent college graduate unemployment rates at their highest in decades, you should be able to find someone highly educated and Internet savvy who is looking for experience and income. Put that person to work as your social media expert.

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Buzz

Closely related to social is buzz. Buzz means your company is visible—highly visible. To get buzz, you need to take advantage of that other four-letter word, hype. To generate buzz, it’s not enough to tweet, post, and blog. You have to be visible: on Internet TV shows, in blogs, at big events. You have to be seen as a leader in your space, often slightly controversial or edgy. Get people talking about your company, your product, or you. Today, success begets visibility, and visibility begets success.

I grew up in the school of thought best articulated by Steve Jobs in 2003: “Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.” I still agree with that statement. But don’t forget the 1984 Apple Super Bowl commercial: not only did it create buzz, but it also created an emotional connection. Fortunately, these days, you don’t need to spend millions of dollars on a Super Bowl ad to generate buzz.

Prior to the late 1990s, few had heard of an individual who had been a vice president at Bankers Trust and a computer scientist at D. E. Shaw & Co. This individual went on to make the—at the time—outrageous claim that he was building the world’s largest bookstore. Of course, everyone now knows the name Jeff Bezos and the company Amazon.com.

Being unique, social, and personally visible is critical to generating buzz. But it’s not sufficient. To stand out from the masses, you must go one step further. You must have and communicate a transformative vision, also known as a BHAG—a Big Hairy Audacious Goal—coined by Jim Collins and Jerry Porras in their book Good to Great (HarperBusiness, 2001).

Some may consider BHAG a cliché. After all, what startup really needs to deal with things like vision and mission? But consider the difference between “a set of web pages for displaying customer information stored in a database” and “the end of software.” Both statements describe the world’s largest customer relationship management (CRM) company, Salesforce.com. But it’s clear which statement is more proactive, visionary, and buzz-worthy.

To be worthwhile, buzz must translate into value. In its most extreme form, buzz may appear purely superficial. But not only did “the end of software” statement serve Salesforce.com’s marketing purposes, it also served as a clear point of differentiation, a focus, and as a rallying cry for the company.

Done right, buzz is more than skin deep. It’s the articulation of a vision that comes from your company’s very core. That helps you sell product, drives user awareness, and helps with financing activities and, ultimately, liquidity. Moreover, in crowded spaces, a big, transformative vision combined with a powerful articulation of that vision lets one company break out from the pack.

Search

With Facebook accounting for some 25% of U.S. Internet traffic, it might be tempting to discount traditional online acquisition mechanisms such as search. But search, in the form of search engine optimization (SEO)² and search engine marketing (SEM), generates a lot of users. According to some estimates, Google handles about three billion searches per day. The challenge is making search cost-effective as a way for your company to acquire customers. With patience, effort, and the right analytics tools, however, search pays off.

Test, measure, and repeat. Nothing is too small to be tested, from pricing plans and ad copy to layouts, colors, and animated buttons. Ask every customer to link back to you from their web site—consider offering discounts to those that do. Not all of them will do it, but enough will to drive up your rankings and traffic. Get the details right, such as anchor text, so you rank high in search results for the terms you care about. Plus, referral traffic alone boosts sales. Add an affiliate program to reward your customers and partners for sending people your way.

Defining your goals and tuning your conversion flow before spending too much money is critical. The right product-market fit—a product and price point that a very large number of people want—is paramount. When it comes to search marketing, the sheer volume of searches means it’s easy to spend a lot of money and produce very little in the way of results.

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Company X decided to invest in Google AdWords as a way to acquire customers. However, the company didn’t define goals for the campaigns ahead of time, nor did it give much thought to the rest of the flow, such as landing pages and what to do when customers indicated their interest. This may seem unfathomable—why spend money before you know what you plan to do with the results? But it happens in startups all the time.

In contrast, Company Y, which was targeting small and medium businesses (SMBs), set clear goals for its online marketing campaigns and was even showing good progress—but it couldn’t find a path from generating a few customers a day to generating thousands of them. This is mission-critical in the SMB space. So although it won the battle on AdWords, it lost the war on scaling the overall business.

Company Z was very successful at buying AdWords that converted people into customers, but it had a leaky-bucket problem. Customers came, tried the product, and then left. It appeared for a period of time that the company was making progress, but it wasn’t. The company had found half of the product-market equation: the market. But it hadn’t yet discovered product fit for that market; users either weren’t getting what they expected or weren’t getting enough value. Either way, they weren’t sticking around.

The management of Company Z, feeling pressure to grow, continued to spend without pausing to refine the product. The decision to keep spending seemed like the right one—customer acquisition appeared to be working. Yet the team didn’t want to admit that half the equation wasn’t right and adjust course accordingly.

If any of these sounds like your business, then before spending another penny on online marketing, ask yourself two questions. First, what is your online marketing goal? It’s most likely not one goal but a series of milestones. It’s fine for your first goal to be, for example, “Let’s learn whether we can acquire customers via AdWords.” The next goal might be, “Let’s determine the cost of acquisition and whether it will be profitable for us.” And finally, “How much can we spend, and how fast?” In other words, get a sense of whether a particular acquisition channel will work at all, and then refine and optimize. Second, keep asking yourself whether you have product-market fit—are you able to get customers to come to the well (market) and to keep drinking from it (product)?

Finally, there are some very low-cost yet innovative ways to drive search (and word of mouth) traffic. One example is to create compelling content to which people want to refer. Infographics are a great way to do this. With relatively little effort, crowd-sourced work company oDesk created such a graphic to represent reaching more than one million hours of work done per month. Numerous people linked back to, commented on, and shared the graphic because it provided interesting data in an informative and unique format. The result was more links back to the company’s web site, which both improved the site’s rankings in search results and drove traffic directly to the site.

Mobile

According to an article in the New York Times, the average smartphone user spends 667 minutes each month using mobile apps.³ That’s more time than those users spend talking on the phone. To reach your potential users where they are, you need to have a strong mobile presence.

Plus, many compelling features are only enabled on mobile: photos and video on the go and, of course, location. In addition to providing great marketing, developing a mobile version of your application is sure to be a great source of product innovation, as your users unlock new and exciting use cases for your product, leading to new market and revenue opportunities for your company.

Of course, some applications are mobile in and of themselves. The primary use case for photo apps, video apps, and many games is a mobile one. Other applications aren’t inherently mobile or weren’t originally designed to be mobile but have added compelling mobile apps. Review and travel-reservation web sites are good examples. Not only may users want to access your offering on the go, but a mobile app can also be a great promotional vehicle. As users search and browse through app stores, it’s just as important to be there as it is to be highly ranked in Google search results.

Today, having a mobile interface has become a competitive imperative, much like having a web site was a few years ago. Users comparing functionality across products see mobile as a big gap if a competitor has an offering and you don’t.

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Getting a mobile application built may not be as challenging, time consuming, or expensive as you think. To get your iPhone or Android application built requires just three things. First, create a design for your application. Second, you need a set of application programming interfaces (APIs) to which the application can connect: for example, to upload files or download messages. Third, you need a developer or developers who can build the app. Online marketplaces like oDesk and vWorker.com make it possible to find developers who charge on a low-cost hourly or per-project basis.

Brand

Building a great brand is about being known for one thing. Lots of other web sites sold shoes, but online shoe retailer Zappos became known for its incredible customer service—people developed an emotional connection with the company and raved about it.

Your brand identity is critical as well—name, logo, icon, and even a single letter. F for Facebook. P for Pandora. Easiest and most powerful is to have the same company and product name. In a crowded world, there is little benefit in trying to market two brands—it’s challenging enough to market one.

Things get exciting when you bring it all together. Delivered an order or a product? Ask your users to help spread the word by typing in a one-sentence description of why they loved your service and posting it to your web site and on their Facebook wall. That means more content for the search engines and more visibility for you, all driving more potential users to your site.

When one user invites another to use your application, support the integrated ability for both users to post that to their wall or tweet it. “I just started using…” might sound corny, and some users may opt out, but many participate. That drives up your visibility. Integrate the Facebook Like button directly into your product experience; don’t just think of it as a piece of marketing.

Take a page out of today’s social games. Reward your users with gifts such as free storage, discounts, and more, and then ask them to reciprocate by spreading the word about your product. Don’t relegate ways for users to tell other potential users about your product to the marketing section of your web site. Instead, build those mechanisms directly into your product experience. At the time of upload, purchase, or in e-mails you send your users, give them quick and easy ways to share your product with the world.

Protect your brand. If you get a reputation for having a great product and treating customers and users well, you develop a great brand. Fail to fulfill your brand promise, however, and users will communicate that failure to others faster than you can tap out a tweet.

Summary

The seven ways to market your startup described in this chapter may seem overwhelming. It might appear that you have to be everywhere at once. But by engineering viral, mobile, and social capabilities into your product, you don’t have to be—your marketing is an integrated part of your product, and vice versa.

What’s more, with this approach and the marketing channels available today, you don’t have to incinerate your hard-won cash to promote your company. By combining product investment that you need to make anyway with free and low-cost marketing mechanisms, you can achieve huge leverage on your marketing time and dollar investment. Through smart spending, testing, and iteration, you can then accelerate your marketing machine. Unsure how best to market your startup? Get help from someone who’s been there and done it before.

Ultimately, great marketing means an incredible product combined with a clear, memorable message. What’s so powerful about marketing today is that you can easily enlist your users in your success. To paraphrase Jerry Maguire, help your users help you.

To succeed, put the seven marketing approaches to work for you:

• Product innovation
• Viral marketing
• Social media
• Buzz
• Search
• Mobile
• Brand