JESSICA LIVINGSTON: The most important thing an early-stage startup should know about marketing is rather counterintuitive: that you probably shouldn’t be doing anything you’d use the term “marketing” to describe. Sales and marketing are two ends of a continuum. At the sales end your outreach is narrow and deep. At the marketing end it is broad and shallow. And for an early stage startup, narrow and deep is what you want — not just in the way you appeal to users, but in the type of product you build. Which means the kind of marketing you should be doing should be indistinguishable from sales: you should be talking to a small number of users who are seriously interested in what you’re making, not a broad audience who are on the whole indifferent.
Successful startups almost always start narrow and deep. Apple started with a computer Steve Wozniak made to impress his friends at the Homebrew Computer Club. There weren’t a lot of them, but they were really interested. Facebook started out just for Harvard University students. Again, not a lot of potential users, but they really wanted it. Successful startups start narrow and deep partly because they don’t have the power to reach a big audience, so they have to choose a very interested one. But also because the product is still being defined. The conversation with initial users is also market research.
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At Y Combinator, we advise most startups to begin by seeking out some core group of early adopters and then engaging with individual users to convince them to sign up.
For example, the early adopters of Airbnb were hosts and guests in New York City (Y Combinator funded Airbnb in Winter of 2009). To grow, Airbnb needed to get more hosts and also help existing hosts convert better. So Brian Chesky and Joe Gebbia flew to New York every week to meet with hosts — teaching them how to price their listings, take better photos, and so on. They also asked hosts for introductions to potential new hosts, who they then met in person.
Stripe (YC S09) was particularly aggressive about signing up users manually at first. The YC alumni network are a good source of early adopters for a service like Stripe. Co-founders Patrick and John Collison worked their way methodically through it, and when someone agreed to try Stripe, the brothers would install it for them on the spot rather than email a link. We now call their technique “Collison installation.”
Many guest speakers at Y Combinator offer stories about how manual the initial process of getting users was. Pinterest is a mass consumer product, but Ben Silbermann said even he began by recruiting users manually. Ben would literally walk into cafes in Palo Alto and ask random people to try out Pinterest while he gathered feedback over their shoulders.
The danger of the term “marketing” is that it implies the opposite end of the sales/marketing spectrum from the one startups should be focusing on. And just as focusing on the right end has a double benefit — you acquire users and define the product — focusing on the wrong end is doubly dangerous, because you not only fail to grow, but you can remain in denial about your product’s lameness.
All too often, I’ve seen founders build some initially mediocre product, announce it to the world, find that users never show up, and not know what to do next. As well as not getting any users, the startup never gets the feedback it needs to improve the product.
So why wouldn’t all founders start by engaging with users individually? Because it’s hard and demoralizing. Sales gives you a kind of harsh feedback that “marketing” doesn’t. You try to convince someone to use what you’ve built, and they won’t. These conversations are painful, but necessary. I suspect from my experience that founders who want to remain in denial about the inadequacy of their product and/or the difficulty of starting a startup subconsciously prefer the broad and shallow “marketing” approach precisely because they can’t face the work and unpleasant truths they’ll find if they talk to users.
How should you measure if your manual efforts are effective? Focus on growth rate rather than absolute numbers. Then you won’t be dismayed if the absolute numbers are small at first. If you have 20 users, you only need two more this week to grow 10%. And while two users is a small number for most products, 10% a week is a great growth rate. If you keep growing at 10% a week, the absolute numbers will eventually become impressive.
Our advice at Y Combinator is always to make a really good product and go out and get users manually. The two work hand-in-hand: you need to talk individually to early adopters to make a really good product. So focusing on the narrow and deep end of the sales/marketing continuum is not just the most effective way to get users. Your startup will die if you don’t.
I feel that Levinson (Guerrilla Marketing) defines marketing in the most simple and true way -- anything you do to help sell a product or service. These two terms are connected at the hip...sales do not take place without effective marketing no matter what you choose to use to communicate messages. A face-to-face with early adopters, reaching out through influencers (thank you Malcolm Gladwell), or effective networking within a narrow group can all be considered marketing. Just as much as direct mail, television commercials or an Adwords campaign. You can't just go out and sell without making sure your message is clear (and differentiates you). And you can't go out with a clear message without determining what communication method will work most effectively with your target audience. In the end, we are all marketers and salespeople, and where we are on the marketing - sales continuum is determined by the moment at which you want to ask for someone to buy you/your product. Even though methodology might evolve and change what doesn't change is the need to make sure your message breaks through the marketing clutter so that the intended target says yes when you ask them to buy what you're marketing to them.
This article and the associated comments pretty much sums up the primary problem with "marketing", that people have varying definitions. Product management concepts (4P's), outbound campaign concepts (for brand, benefits, offers, promotions, positioning, etc.), inbound (market research, iterative development, etc.), and marketing communications (internal and external, PR). All of these discrete concepts are valid and essential in running a business, and have different focus/priority depending on the stage of the company.
That said, having been involved in successful and unsuccessful startup, the point of the article is valid, that good analysis of product adoption by early users is essential to the success of a product and more important than activities that drive broad, mass awareness. This feedback loop is an extension of the iterative feedback loop found in most agile development activities, the users are just providing another feedback point, namely the willingness to spend their dollars.
While I've encountered entrepreneurs that hesitate to engage early users, these are typically the same folks that don't respond well when you tell them certain aspects of the product need to be changed during the development process. It's just their belief that they know best. Unlike Steve Jobs et al, they haven't done their time with users.
One proposal for future "marketing" articles is to clearly identify the aspect of "marketing" to be discussed. Much like Operations and Product Development, Marketing encompasses many disciplines. Unfortunately, a few of the disciplines call themselves Marketing in various organizations.
Cheers.
It appears times have changed and not for the better for the small business owners and start-up entrepreneurs. Sales cannot be generated without marketing and the small owner, not the larger business owner has no consumption of free offers to enhance their business. I had a teaching school for 31 years with business education and trained some 250,000 business owners at a 90% success rating. Coming back from a 10 years retiring stay I have tried to re-start the same program with additional educational program and new concepts, It's been some 10 months and not a nibble on one of the best educational program ever offered into the small business world. The marketing has not gathered one cent in sales and after offering more than $500.00 per person in free services, and materials, and much more. More than 6000 contacts 150 programs and within those contacts more than 2000 personal face to face presentations, and reviewed materials. It seems I cannot reach the small business owner to make them a better owner and a more profitable and saleable business. I have created new programs, insurance guarantees, seminars guarantees, free promotional advertising, on air free promotions, and so many other business programs.
I don't know to agree, or disagree but the fact remains that the marketing is not the same as it was going back to when, in 1985 when I started. When you offer sound and sounder business program for free and no one asked for the program I am at the end of my rope and some 50 years of experience and $35 million in sales in 1989, WHO CAN OFFER THE CORRECT ANSWER TO REACH THE SMALL BUSINESS OWNER.. Thanks Tony Pezza
It doesn't appear you understand or appreciate the definition of marketing. There are at least four essential components of marketing (some argue there are as many as six), each with considerable depth and no more important than the other components: The product itself, the place/distribution channel through which you will sell the product, the price of the product and the way in which you'll position/promote the product to drive sales.
Andrew Shea
Senior Marketing Executive
St. Louis, Missouri
I'm not a marketing/sales person, so I won't go there. But, having founded my consulting firm three years ago, one of the most important lessons I've learned is investors and lenders are most impressed by revenue. And, one generates revenue by making sales. If your company can demonstrate that it can create yield on a small budget investors and lenders will be (1) taken with management (a critical threshold) and (2) more inclined to invest or lend funds.