10 Marketing Lessons for Early-Stage Tech Startups

Posted on Jun 27, 2011 | 65 comments


10 Marketing Lessons for Early-Stage Tech Startups

I made every textbook mistake at my first startup, which is why I believe I was much more effective at my second one. I have adopted the motto “good judgment comes from experience, but experience comes from bad judgment. We need to learn from doing, by trial-and-error.

If I can help you avoid some of my first-time mistakes it would be a victory. The following are some lessons I learned about early-stage startup marketing. Because market is such a broad topic, I’m restricting these lessons to PR marketing (as opposed SEO, SEM, product marketing, etc.).

1. Where Stealth is Good – There’s a lot of discussions on the web about whether startups should be stealthy before they launch or not. The truth is – there isn’t a “right” answer so for your company.  You need some guidelines to make decisions. My general rule is that it’s good to be stealth in the early days while you’re building your product and testing your market. Stealth does not mean constipated, paranoid and totally untrusting of others. It does mean not telling more people your future plans than is necessary. It means avoiding drinking too much at cocktail parties with other tech people and bragging about your plans. It means not over-sharing your deal with VCs or other investors.

The truth is that we work in a very small, tight-knit industry and news & plans spread fast. In the early days you don’t really want 3 extra teams hearing your ideas and gearing up to compete before you feel you’ve got a solid head start. Most people totally advise against stealth. They think that only by being open and testing your ideas in an open marketplace can you be successful. Be careful about this advice.

Also be careful about VCs.  Most ones that I know have very high ethical standards so I’m not concerned about that. But once a VC has heard your idea he can’t “un-think” it. And these ideas have ways of seeping into board discussions with portfolio companies as in, “have you ever thought about trying A, B or C?” It’s mostly unintentional but tacit knowledge about ideas spreads quickly amongst the chattering elite.

I actually like finding entrepreneurs who are more circumspect, less braggadocios and generally more planned about their actions.

2. Where Stealth is Bad – I do meet entrepreneurs who clearly fall on the other side of spectrum and are totally closed. I worked with an entrepreneur who was to appear at a startup networking event where he was to talk about his company’s plans. He considered pulling out of the event because he wanted to stay in “stealth mode” and felt an event like this compromised him. I counseled him to do the event (it was high profile) and talk in broad themes about the areas in which his business would compete. There are very few truly novel ideas so talking in broad themes certainly wouldn’t give away any grand strategy. In stead he went to the event and told everybody “we’re in stealth mode and can’t yet reveal what we do.” It went down like a lead balloon.

I think he really learned from this experience: Experience comes from bad judgment. Nobody likes to hear you say, “we can’t tell you anything we’re in stealth mode” so develop some generic talking points that don’t give anything away when you’re asked what you do.

The biggest problem with over-stealthing yourself is that you cut off some of your most valuable resources in terms of testing your ideas, getting feedback from smart entrepreneurs & investors and helping you figure out the potential flaws in your approach.

In my experience, entrepreneurs who are overly paranoid or are information hoarders rarely do well. They certainly struggle to find mentors as there is nothing more frustrating than trying to help a company who is afraid to tell you anything.

3. Market Today’s Puck, Not Where It’s Going – I often tell startups to “skate where the puck is going” as a metaphor for not just copying what every other company is doing today but to think about where the future lies and planning for that now.

But it is a big mistake to tell too many people where you’re heading. I call this “marketing futures.” Marketing futures can be really good for enterprise software companies where the information is passed between sales rep and potential customer in terms of near-term roadmap. The buying cycles are often 3-6 months so you want to put your best future foot forward. But don’t let this information get out into the general press and don’t market more than a few months out.

For early-stage consumer companies I would be careful not to market futures at all.

We all know that much of early-stage technology startup success comes from execution and often what you’re working on today will be rolled out more seriously over the next several months. So I recommend that companies talk in detail about the puck at their feet but avoid talking about where the puck is going. While all your competitors are trying to copy your model, you’re already on to the next thing on your engineering team.

Nobody seems more disciplined at this tight-lipped future marketing than Apple and you can see how it has served them.

4. Don’t Market a Bad Product – Perhaps the most important lesson for first-time entrepreneurs is that you can’t have great marketing for a bad product. The corollary is that it is very hard to recover from a crappy marketing campaign that over-hyped. I think I first heard this from Guy Kawasaki but it’s kind of obvious. In a world in which you’re encouraged to launch early and get feedback from customers you can often confuse “product launch” with “marketing.”

I think a great example right now is turntable.fm. It’s a buggy product but pretty damn cool. I haven’t heard them pounding their chest and running big marketing campaigns. And the product itself is invite-only so they can control volume and everybody has expectations managed. By the time they go GA (generally available product) I’ll be the kinks are all worked out. And the anticipation of wanting to see the product will build.

The strategy they’re employing is called “velvet rope” as in what nightclubs do to build scarcity and interest in getting on the inside. It also helps to keep down issues with crowds getting too big, too early.

5. Don’t Blow Your Wad Early – There is a temptation of startups to announce that they’re “first” at something so they rush to market with announcements. I know because I did this in early 2000. We rushed to market to be first and got great coverage in the Financial Times (we were in London). But our product wasn’t ready for prime time and we struggled to live up to the hype we had created.

As you can imagine that once you’re compared to Ishtar (the movie) you’ve got a higher bar of success to get people interested the second time. Not everyone has a spare 40 mill for a re-do.

6. Market to Your Target Audience – I’ve seen a lot of startups who like to write blog posts on life as an entrepreneur. That’s fine if entrepreneurs are your target market. But be clear on whom your target market is and what the messages you want to communicate to them are. I talked about that in detail on this post about how to blog as a startup.

But whom you’re marketing to is not always an easy topic. At one company I work with it’s clear that our target user today is youth-oriented and middle America as opposed to 20-something and Silicon Valley or New York. We’ve been very successful at the former. But we also need to be mindful that often the influencers are on the coasts (LA/NY/SF) and that we can’t ignore them. So we’ve launched some campaigns to be sure we’re picking up these crowds with different messages.

7. Don’t Believe the Hype – Perhaps one of the biggest mistakes in marketing is to get caught up in your competitors marketing noise. When you’re inside the bubble and paying attention to every announcement of your nearest 3-4 competitors it’s easy to get despondent when they get their killer press articles or announce new features.

Those of us that have been around the block tend to not get too worked up on any big competitor announcements. They come and go. They’re mostly fleeting. Life goes on. iMessage is announced. The NY Times puts Group Messaging companies on their list of companies crushed by Apple’s WWDC. But life doesn’t end. It’s a narrow product. Most app-to-app products are inter-operable, Apple isn’t. You have tons of differentiation. Life goes on.

8. Your Competitors Look the Same as You When They’re Naked in the Mirror – One thing that startup CEOs often overlook is the impact of marketing on team morale. Every day your team members are reading about all of the great things happening at your competitors company. You’re reading their press releases or blog posts. Insider your company everything feels like it’s going to hell in a hand basket.

That’s because that’s how it ALWAYS feels at a startup. You always have too much technical debt, too many problems, staff members quitting, not enough capital, customer complaints, etc. That is EXACTLY how your competitors feel, too. And they’re reading your press articles and thinking, “shit, they have everything figured out.” You don’t. Make sure your team knows this and stays confident. I wrote about it in detail in this article.

9. Build Relationships – Many startups make the mistake of thinking that they simply approach a journalist any time they have a story and get coverage. IIt doesn’t work that way. Journalist are constantly harangued by over-eager entrepreneurs. Go slowly. Get to know journalists when you don’t need stories. If you care about this topic a more detailed article is here.

Follow them on Twitter. Respect their profession. Read their articles. Comment. Ask if you can help be a source for other stories. Say hello to them at conferences. Understand how their job works. Understand that for every article they write they need “an angle” and if you can’t help shape that you’re not likely to get inches. The more helpful you are over time the more likely you are to get inches when you need them.

10. It’s a Marathon, Not a Sprint – Some startup teams I speak with try to lump a bunch of announcements all into one release to try and have more effect. And example is lumping your VC funding announcement into a story about major customers wins, product features or key milestones. Don’t do this.

A funding announcement is a stand-alone event. It’s an angle. There are journals who dedicate a lot of time & energy into covering funding. Focus solely on that event. When it’s time later to talk about some major customer wins or big biz dev partnerships you’ll do so. If you announce killer product features worthy of coverage then talk about that.

One strategy I encourage is to break up mini-releases into exclusives that you give to different journalists to spread the love around and give everybody something unique to write about. Nobody likes writing re-hashed stories.

  • http://growingforward.net Scott Asai

    #9 & #10 are spot on!

  • MarketingZone.com Editor

    Great practical advice on marketing.  Added a link to this blog to the article on MarketingZone.com on how to get the press to cover your business. 

    Derrith
    founder and one of the editors of MarketingZone.com, a new how-to site and community for small business on marketing.  I’m ex HP marketing/advertising exec and former SVP at a global brand/ad research firm.  Our Managing Editor is ex online agency exec. 

  • http://twitter.com/addoway Fredrick Nijm

    This was a great read! Thank you for the information. Let’s not forget to not get too discouraged when new competitors are getting into the market and raising money before they have traction. Much of this is due to the team behind it. 

  • http://www.blockbeta.com/ Robbin Block

    As for your first question, how long before a startup isn’t one any longer, there are probably many answers to that one. Perhaps when your revenue exceeds your funding?

    As for advertising, how you promote depends on your product. The short answer is that public relations is usually a better place to start than advertising. It delivers greater credibility and could possibly give you better bang for your buck. It leverages what little resources you have with exposure in publications (both on and offline) that reach more people. Follow that with socializing in the right places. The key is always to promote where most of your target audience will see the information.

  • Anonymous

    Thanks Mark.  This is a foundational article. I’m sending it to my team every day for a week.  We launch in two months and 8, & 10 are must learns. I believe the concept of a startup being a marathon (launch day is not the goal – just a check point); pacing ourselves, being knowledgeable but not being overly concerned with our competition, and running with a single goal in mind, will bring success.  Your article validates what we already know is true.

  • http://www.blockbeta.com/ Robbin Block

    This article addresses a questions I hear often, and much of what it says isn’t just for tech products.

    Regarding #4, what many people in tech don’t understand is that marketing is not just about promoting a product. Marketing is integral to developing the “right” product, and it starts with research into target audience and competition. 

    What I’m wondering about involves services that need to develop a following early; that is community-based services. Let’s say a 99 Designs or something like that. When does it make sense to start building a “public” audience, for example on Facebook, so the startup can leverage this population for launch?

  • Anonymous

    Great advice Mark!

  • http://twitter.com/alans Alan Seideman

    Excellent post, Mark. Leaving me thinking about #3… 

  • http://www.internetbillboards.net Tom George

    Hi Mark,
    Thanks for sharing your professional experience on this topic. There is after all no substitute for experience and it’s surprising, but I do believe most of us tend to learn more from the bad experiences, and eventually are able to create some good ones as a result of that entire process 

  • Bryan

    Great post. Especially #10

  • Bryan

    Great post. Especially #10

  • Matthieu Zinger

    Great post. Although I go crazy when I talk to someone that has “an idea for a startup” and doesn’t want to share it. I often say that unless it is a mathematical or chemical formula to cure baldness it is worth nothing. 
    These people often keep their “secrets” for a year or 2 until they realize it’s been done 20x and start talking about it. Sharing your ideas with savvy people might save you a lot of time…

    Matt Zinger
    Co-founder @thehotelcloud.com

  • Andrew Beinbrink

    Sound advice Mark, sharing with our team. Really like the point to not believe the hype!

  • Anonymous

    Passion is good, but that leads to problems with #5, blowing your wad too early. There are some really smart startup founders out there that are so incredibly passionate about their ideas that they’re willing to throw everything they have into their startup right away, which can cause problems for long-term survival because its a marathon not a sprint. You shouldn’t spend too much on ads before really learning about what works and what doesn’t or otherwise you’re just throwing money away. Also, you have to be very smart and learn to take advantage of what the marketplace gives you. I think that Facebook is such a threat to Google because people see when their friends like stuff, and this has led to a rise of a number of sites listed at http://buyfacebookfansreviews.com that can help people gain more Facebook fans. These can be useful to gaining some traction but you have to do it the right way or it can cause problems. Joining a few startups early in your career can help you learn some of these lessons and I would certainly recommend that before trying to start your own business because you can definitely learn some of these lessons before you invest your own time and money into it.

  • http://www.web-self-service.com Wesley Wise

    Very nice article. I totally agree on not going with the hype. Some businessmen have this mentality “If you can’t beat them, join them” but it’s not really a sound advice, like you said. It’s actually a pathetic excuse for the lack of creativity and drive to face a challenge.