10 marketing lessons for tech startups

June 28, 2011, 12:49 AM UTC

How to, and how not to, market a tech startup.

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

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

1. Where Stealth is Good. There’s a lot of discussion about whether startups should be stealthy before they launch or not. The truth is that there isn’t a “right” answer so for your company.

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 spreads fast. In the early days you don’t really want three 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, 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 one who was scheduled to talk about his company’s plans at a startup networking event. He considered pulling out 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.

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 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 thinking 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 was over-hyped. 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 manage everybody’s expectations. By the time they go GA (generally available product) I’ll bet 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 to announce that you’re “first” at something, so you 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 million 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.

7. Don’t Believe the Hype. 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. Don’t get caught up in their marketing noise.

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 competitor’s company. You’re reading their press releases or blog posts. Inside 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. You competitors feel that way too. And they’re reading your press articles and thinking, “they have everything figured out.” You don’t. Make sure your team knows this and stays confident.

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. It 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.

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 try to lump a bunch of announcements all into one release to have more impact. For example, you might lump your VC funding announcement into a story about major customers wins, product features or key milestones. Don’t.

A funding announcement is a stand-alone event. It’s an angle. There are journals who dedicate a lot of time and 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.

Mark Suster joined GRP Partners in 2007 as a general partner after selling his company to Salesforce.com. He focuses on early-stage technology companies. He blogs at Bothsidesofthetable.com

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