I just piggybacked on a twitter conversation between Sean Ellis and April Dunford talking about product management versus product marketing (see April’s post). Sean tweeted this comment which I just wanted to highlight:

“Functions” is part of the problem in early stage. IMO goals better: PM fit, then conv eff, then growth… [Ed note: PM fit = product-market fit; conv eff = conversion efficiency]

I completely agree with this.  At the beginning, you need a small, tight-knit, complementary team that ignores function and focuses entirely on goals, splitting up tasks to effectively meet those goals.  With Aprizi, I do any product marketing tasks, and Liz and I split various product management functions.  Function definitions are not relevant, and we don’t feel pressure to do things irrelevant to the near-term goal of product-market fit, save for some effort sowing seeds via relationship building.

“Function temptation” is more of a problem for heavily- funded companies with large starting teams and immediate investor pressure for growth.

At founding, make sure you all agree on priorities.  I was talking to a very talented business development person the other day, and he was stuck on the importance of distribution.  His logic, as I understood it, was that customer acquisition is the biggest struggle for consumer Web startups, so clearly distribution is the most important thing and must happen right away.

I disagree.  A big distribution deal before product-market-fit is a recipe for disaster*, and I’m not talking about the economics.  You might get pressure from the big partner to make what *they* want, not what the customer wants.  Your flexibility to pivot will be severely restricted by expectations, promises given, and a legal document.  Instead of iterating your product in obscurity, and thus relative brand safety, you risk giving hundreds of thousands of people a bad experience.  That bad user experience will threaten your relationship with the distribution partner and possibly neuter future opportunities.

This BD person isn’t an idiot, but rather they are a talent, attitude and skillset that should come on board only *after* product-market fit is found.

My belief in customer development > product market fit > conversion optimization > growth is borne from many scars, mistakes, and a burning desire to do this thing we call “startup” better.

[Update: just to clarify, I'm not saying that you should completely ignore all BD work, since channels are indeed important and they take a long time to develop. I write more about relationship building in the comments below where Sean and April weigh in, and where I think the discussion is better than the actual post.]

Few things are more painful than coming up with a good yet inexpensive name for a business on the Web.  Somehow you need to find something that is “cocktail party friendly” (i.e. someone can hear it, spell it, remember it), search engine friendly (i.e. type it in and have a shot at appearing high on list), and yet available / cheap.

Naming is also agonizing because you have more important things to worry about, like validating your concepts and building your business. I don’t recommend getting bogged down in names and logos when you don’t even know if your idea holds water. Still, at some point fairly early on, you have to come up with something.

Pain also comes from land-mines called other people’s opinions.  Trust me, you will never get everyone to agree to a name. Do not try to make everyone universally happy.

For those of us who don’t have thousands of dollars to drop on a snazzy URL, there are a few different options: a gibberish word, an unusual suffix (see the explosion of *.ly and *.io companies), and a combination of two words.  If you want to shoot for the latter, there are some services like bustaname that can speed things up.

Warmup Routine
Start by thinking about words related to your business:

• what words might be your 1-word dumbwaiter pitch?
• what are the actions your customer takes?
• what are the emotional brand connotations and attributes you want swirling around your business?
• what are some of the names of well-established brands that have those attributes?

All of this might not get you an actual name, but it is worth having them running in your mental background.  Before you start, you also need to decide if you want a name for your product or a name for your company, and if they should really be the same.

An Exercise for Gibberish
In my case, I tried word combinations, thesaurus hunts, unusual suffixes, and came up short.  Since I was not going to spend $$$$ on a name, that meant going with a gibberish word.  That did not bother me.  I happen to believe that some of the great brand names are gibberish words; they become great because the company is great, not the word.

One method is to take pieces of two words, and stick them together.

Another is the following exercise: pick a favorite and famous gibberish name and plant it firmly in your brain.  Then go through every letter in the alphabet making sounds and fake words with this name rooted in the back of your head. Think of it like mentally tossing a fishing net out to sea, and don’t get self-conscious about the stupid stuff coming out of your mouth.  You’ll get plenty of junk, but sometimes can hit upon something you like.

In my case, I picked Pepsi as my root brand name.  Aprizi was a result and passed the following checklist:

• I liked it (short, peppy, vaguely retail-ey, reasonably spellable, start of alphabet, nice “etymology” to words like apprendre and prizi)
• my co-founder Liz liked it well enough
• it passed a gut-check from some people who fit our expected customer type
• the URL was available
• possible misspelling URLs were available
• Google search came up pretty clear
• U.S. trademark search came up clear

I am not a fancy name consultant (thankfully!), but this basic process helped me, and if you are struggling, I hope it can help you.

For more advice on naming:

• a good older marketing-oriented post from Guy Kawasaki
• How to Avoid Trademark Infringement When Selecting Business and Product Names from Jill Hubbard Bowman at IP Law for Startups
• How to name your startup, by April Dunford at Rocket Watcher

First Chris Dixon tweeted, “Does anyone really want to have a “conversation with brands”? I I want my relationship to Starbucks limited to buying coffee.”

Roger Ehrenberg then responded with a great post on authenticity in brand conversations.

I would argue that they are both right, they are just talking about two different people.  Just as Dixon once wrote about techies vs normals, when it comes to brands there are enthusiasts and normals.

Every good brand has enthusiasts.  I spoke recently to a large apparel company who has an email list of some 40 million customers, but about 2 million of them will open every marketing email.  These people love to hear from their beloved brand, they crave a personal connection of some kind (i.e. authenticity), they will follow a twitter or Facebook feed (and not just for deals), and they don’t need cash prizes or direct incentives to get involved in an initiative.

Not every brand has these people, but every brand should try to cultivate an enthusiast base.

From a startup perspective, you want to think about how you can get *your* enthusiasts involved and evangelizing.  Brainstorm on something more active than mere retweets and email forwarding.  It needs to be fun, meaningful and people cannot feel used.  Again, you *don’t* need a cash prize.

Don’t forget that the majority of your customers will be “normals” (which affects your product design decisions), but if you are lucky enough to have enthusiasts, involve them and cultivate the relationship as much as you can!

OK, back into the cave for this product push…here beta… heeeerrrreee beta, good boy!

Interesting recent posts somewhat related:

• Josh Kopelman, Everyone I spoke with loved the idea…
• Eric Wiesen, Customer Service is the New Location
• Sarah Tavel, Online Retailers are Innovating: Customer Service is #1

When you are in the weeds building, testing, and iterating, communication challenges can pop up.

• First, you want everyone on the same page as to how the “value proposition” has evolved, what needs to be validated next, and why.
• Second, when your business feels like a moving target, sometimes it can be awfully hard to explain to others in clear English what it is you are doing.

Back in January, Kent Beck made a wonderful recommendation on the lean startup circle: write a short, fictional letter from a happy customer. His advice stuck with me and we put it into practice today. I loved the results.

Kent’s suggestion was as follows: “tell the story of their dilemma before they happened to find your site, how they found it, how they interacted with it, and what happened subsequently. It doesn’t need to be long–just 4-5 sentences will do.”

I actually recommend quickly writing three or four letters.  Don’t agonize over them, keep it real, and keep them short.  They don’t all need to include everything in Kent’s list but they should all list one reason why the customer is happy with your service.  I also think you can have some or all of them end with a criticism or suggestion.

Have your teammates do the same exercise, without reading anyone else’s letters.  Then share.

This exercise helps you channel your customer and spell out your value in plain English. It also allows you to see the entire team’s individual assumptions both on the mission, and, if you write fictional criticisms/suggestions, where the company might be falling short.

Give it a shot.  It takes no time, and I bet you’ll find the exercise quite useful.

The other day, Cindy Alvarez (product manager at KISSmetrics and author of a great blog), wrote a post called “Anybody, As Long As It’s Not You” , saying:

“Who should give you feedback on your early-stage product mockups/demo? Anybody, as long as it’s not you. OK, sure, there’s probably an “ideal” audience to show your product to.  But it probably doesn’t matter.”

On Twitter, I commented about the importance of demographics / targeting, and Cindy responded that many products are not very specialized, so anybody’s feedback is a useful first step.  I won’t disagree with her — it *is* a useful first step. Still, I need to bang on a few points.  I touched on this the other day with my thoughts on product-market fit, and find myself hung up on the line “it probably doesn’t matter“.

First, most startups cannot design for ‘everyman”. Instead, you usually have a particular problem (or form of entertainment) in mind, which usually means you have a particular kind of customer in mind, even if broadly defined.  This is especially true with enterprise products (how big? what industry verticals? how high in the organization?), but it applies to a ton of consumer applications as well.

You might be creating a product that the whole world could use, but the reality is that you are going to start with a group of early adopters of one kind or another.  As a startup, your marketing resources are going to be limited so you need to focus your energies, otherwise you will waste time with an ineffective (and possibly expensive) shotgun approach or simply play a “hit and hope” game praying for viral adoption and media buzz. #notgood!

So yes, talk to lots of people, but categorize and filter your feedback based on what kind of people they are.  You are not just testing your product, you are also trying to answer the questions: who are my primary customers? who are my very first customers?

If you can even roughly answer these questions, you can figure out how these people learn about new products and structure your customer acquisition strategies accordingly.  Yes, it all needs to be tested and measured, but you want to pick a smart place to start. #focuswin!

I’ll pick startup examples out of a hat: Stardoll needed to test their product with teenage girls, not 40 year old men.  Smartbear needed programmers, not marketers.  Gilt Group needed fashionable urban women, not midwest farmers. At the start, Facebook cared about college kids not baby boomers. KISSMetrics wants Internet entrepreneurs, not retirees.  Foursquare needs social media geeks and young urbanites.  There are exceptions to all of this, but I bet you find it harder to think of them than the opposite.

As Steve Blank says, “get outside the building” and test your assumptions for success, but do not focus exclusively on product and forget about customer acquisition.  Your need to pivot might come from the problem you are trying to solve OR your product design OR your expected demographic. You need to test all of the above!

PS. where I see demographics being a little less important is usability testing. Yes, you want to test your primary customer, but watching *anyone* get confused as they try to use your software is painfully illuminating.

Final note: I’m not trying to put words in Cindy’s mouth because she *was* just talking about a first step, not ignoring this stuff.  I just felt the need to pound on the topic, perhaps not unlike the apes at the start of 2001: A Space Odyssey.

UPDATE:

I’m interested in gathering other opinions on the topic, posting them here, and seeing if I can’t advance my own thoughts.

• Eric Ries: “my $.02: targeting is something you discover, not something you decide. it’s important, but not if it keeps you in the bldg” and “I’ve literally been the situation of: To customer: “get out of my way, I’m trying to talk to my target market”"
• Jason Cohen of A Smart Bear: “maybe you don’t know the perfect customer, but you can cut out a lot of folks, and that’s important.  It’s a similar argument to listening to feedback from people using the tool for free versus paying for.  With freemium you have many more people using for free than not, and usually that means their feedback overwhelms the others.  But frequently those willing to pay have different needs, and those are in the end the most important ones.”
• Cindy Alvarez’s response, “Wait until your idea makes sense, then start targeting“

A reader named Eric asked a question about customer validation / development on my “Bull doesn’t build” post, and I thought I would answer with a post.  Eric’s question was:

“You talk about your ‘focus right now is on building a solid foundation of product-market fit.’
At what point do you spend more time focusing on product-market fit then on actually developing the product? I’m finding myself torn as to when do i decide to commit? how developed should my idea, or product, be before i go out and get actual market feedback about it…”

Short answer:

1. Start learning from customers right away (and research competitors). Unless you’ve been working in a space for years or your idea is incredibly simple to prototype, assume that you don’t know enough to start designing without first learning.
2. Write down all of your hypotheses and assumptions about the problem, your solution, and your hoped-for economics (i.e. how you make money), and try to discover the truth behind those assumptions. Review this list regularly because it will change.
3. When you talk to people, start with open-ended questions and then get reactions to specific ideas.  Ask about problems and/or behavior before suggesting your ideas for solutions. Listen, don’t talk.
4. Talk to people.  You can do a survey and try techniques like “SEM to a mock up page” to test interest,  but nothing beats looking someone in the eye and reading their body language. (Link: great Steve Blank post)
5. In our case (a new consumer Internet application), I connected with ~100 people first while my technical co-founder did some technology investigations. Once we felt confident that we were on to something, we committed.  We are building our first prototype now and in the meantime I am designing UI mockups to do 1-on-1 and multi-person paper tests, and continuing to learn, learn, learn.

I’ll add that with some things, like game design, you really can just jump right into crude paper testing and go from there.  A long answer is after the fold…

Long answer:

My new company, Aprizi, is now only about 5-6 weeks old, and I’ll walk you through a bit of our process so far.

After the light bulb moment, I started by calling on two types of folks: 1. potential customers, and 2. some smart entrepreneurs and investors I knew.  The goal with the first group was to figure out whether people would actually want my service.  The goal with the second was to see gut-reactions to the idea, reality-check the technology concepts, network to folks with domain knowledge who could advise me, and discover previous attempts or current competitors which I had not discovered.

Potential customers – Since my concept is a consumer play, I needed to cast a wide net.  I either met with or spoke on the phone with people of both genders, a mix of ages, living in city / suburbia / country, and who knew me by various degrees (and asked for introductions to folks who didn’t know me).  I started with people I knew would give me honest, blunt answers, and always started a conversation stating that I needed honesty, not kindness.

I also ran a survey with Google forms, which was interesting but at this ephemeral stage I find surveys to be most useful for gathering facts rather than subjective/opinion declarations.  In many cases, I found subjective survey responses to conflict with what I then heard in an in-person interview, and I believe the latter.

Remember that your goal is maximum honesty, not to have someone tell you what you hope to hear.  Press people about whether your idea sounds like a must-have or a nice-to-have.  Frankly, if no one is saying the latter (or worse), then you are probably doing something wrong in your approach (nothing is loved by *everyone*).  Be prepared to be wrong about what the market wants, and iterate to something better.  However, there are no one-size-fits-all rules about startups — if you are doing something truly disruptive, you might have to buckle down, believe in yourself, and bull your way through a lot of initial “you are crazy”.

Investors — Knowing that we will eventually need to raise some seed capital around this, I also have been talking to a few VC and angel investors.  One of the many differences between today and the first time I started a company (am I starting to feel old?) is that I have some great folks who are willing to let me call them with an undefined idea.  VCs have a different thought process, and you can get a feel for key trigger points that cause excitement or red flags.

If you do this, be clear about how early you are, and steer your conversation away from feeling like a pitch.  If you don’t have relationships where you can bring a half-baked idea, there are early-stage firms out there that love to stay in tune with new ideas and startup activity, and might be willing to talk to you (in New York, Charlie O’Donnell with FRC, is very open to this).  As a rule with investors, you will be better off if you can get introduced by a mutual acquaintance.

Experts – While I continually examine assumptions and try to spot gaps in my knowledge, I have been networking to knowledgeable people who can provide insights.  A lot of people find startups interesting, like rooting for the new guy on the block, and are quite open to talking.

Two side notes:
1. I find it very useful to create a financial model even at this early stage because it will reveal your assumptions, knowledge gaps, and can point out flaws and pressure points in your ideas on how to make money;

2. I don’t believe that you are helped by keeping your idea secret, although there are instances where I will hold off approaching someone too early if competitive risk feels very strong.What’s Next?

I am lucky to have an amazing technical partner, and since no one can effectively code without uninterrupted time, I’m trying to let her stay focused on the prototype while I continue to learn from the market and just give her updates (and wear every hat *other* than coder).  Our prototype functionality is so stripped down that, at this point, the first version won’t really change much based on what I’m doing.

Customers — my immediate goal while we work on prototype v.1 is finishing UI mockups of different features we need to prioritize and using those for more 1-on-1 conversations as well as focus groups.  My goal with the focus groups is to primarily include people who do not know me (although I will be networking to them via people who do).  Once we have a prototype up, we will start a closed alpha/beta process and I might also take advantage of this cool user testing service, usertesting.com (which I just discovered thanks to Chris Carella).

Investors — at this point, I’ve gathered my initial data points and reactions, so I’m pausing this effort save for a few folks where I just want to get Aprizi on their radar.

Experts & Partners — I continue to network to people that can increase my knowledge and answer key questions.  I’m also having very preliminary conversations with potential partners who could be useful for distribution or other synergies.  At this point, my primary goal is not a deal but rather to understand what those partners care about — i.e. what can I bring to the table that interests them, and how does this affect my design decisions?

Startup Blogosphere — I’m also talking to other entrepreneurs and listening to the “lean startup” crowd on the Web to pick up ideas and methods that I either haven’t thought about, haven’t prioritized appropriately, or have simply forgotten.  There are lots of great ideas out there.

I hope this post has been useful — I’m sure I’ve left stuff out but it’s back to the hustle for me.  What do you think I’ve forgotten?

I was reading Fred Destin’s post on why entrepreneurs hate VCs, when a quote caught my eye: “Learning from mistakes is far less useful than emulating success.“  It’s a message that 37Signals likes to harp on as well.  I’d argue that you have an equal shot at learning from mistakes or successes, as long as you take the time to objectively dissect the facts.

However, all this misses the real point.  No matter what you are learning from, the key is to correctly translate it to your new context.

People will preach, “this is what worked for me, so it will work for you.”  Just don’t swallow it whole.

I don’t care what philosophy or framework you are interested in — whether the Blank/Ries lean startup approach or 37Signals ethos — don’t get religious.  Tech startups share huge commonalities, yet the devil is in the details and you need to filter everything for your details — your team, your timing, your product, your competition, your market noise, your financial resources, etc.

When it comes to marketing, definitely study your and others’ successes, but remember that you are not alone.  Lately, I’ve been looking at Mint.com’s trajectory, but so is everyone else (a VC friend of mine said he’s getting tired of hearing, “We’re the Mint.com of X”).  Mint lived in its context.  Some of their strategies will work for my startup, and some won’t.  In my new context, I have to decide where copycat marketing noise will degrade effectiveness. (here’s a long post on tactics)

So two messages:

1. It doesn’t matter whether you won or lost, don’t fight the last war.
2. When you get a piece of advice, use your brain and make it your own.

“What is your growth strategy?” It is a classic question from VCs to early-stage consumer Internet companies, and one often difficult to answer at such an early point in a company’s life cycle because you have not yet seen which specific tactics work best.  There is usually no silver bullet answer, just a lot of hard work ahead.

This post, targeted at early stage Internet companies, tries to put some structure around that question, and provides some tactical ideas. I’ll preface with two caveats: 1. Internet marketing is a constantly evolving battleground and some tactics lose their usefulness; 2. this article does not cover important marketing topics like product-market fit, figuring out your target demographic or great customer support.

I’ll tee it off with three statements:

• your marketing strategy should be iterative just like your product and business strategy
• you can’t spend your way to product success on the Web (you can just fake it for a while)
• you can lay out an initial game plan by thinking through tactics across four different areas:

1. Viral marketing
   1. product design
   2. word of mouth
   3. pricing
2. Active marketing/outreach
   1. Advertising
   2. PR (broadly defined)
   3. Direct outreach
3. Distribution partnerships
4. Design optimization

1. Virality

VCs hate the term “viral” when it is waved around like a magic wand, however they respond well if you’ve got concrete drivers of behavior.  There are multiple ways to encourage virality and I’ll break it into three sub-sections.

• Product design
• Word of mouth
• Pricing

1.1 Product design :: Some products are well suited for virality — Hotmail was the big example in Web 1.0 with their simple email footer, and today the reigning champions are probably the social games. Playfish and Zynga have designed human motivators like competition, teamwork, pride, and generosity directly into the user experience to get people to interact and spread the word.

Take a step back from your product, think about touch points between people, and examine whether you can strengthen or encourage social interaction, and thus word of mouth, through your functionality, starting with the sign-up process all the way through.   Remember that your design has a huge influence over a customer’s behavior.  Viral triggers work best when integrated into an experience.

1.2 Word of mouth :: Take a look at successful companies that are similar to yours and analyze their marketing practices.  In particular, try to study their latest tricks because their previous tricks are probably so copied that the noise level is overwhelming to consumers. If nothing else, this might help you get creative.

One simple approach is to enable “shout-outs” to sites like Facebook, Twitter, etc. but the key here is making sure you place these links where customers have a legitimate reason to shout out. Don’t think about what *you* want them to do, but rather focus on what they will want to do — and test it!

Again, don’t get so overzealous that you are causing a spam problem, because that will backfire.  If you are on Facebook, you’ll want to examine how successful social game companies are adapting to the FB redesign and policy changes, and pay attention to Justin Smith’s analyses on Inside Facebook and Inside Social Games.

Don’t overlook more traditional methods.  Blog widgets have gone a little bit out of style, but that might make them attractive again.  Email marketing can be incredibly effective.  For example, Mint.com was not a naturally viral application but they had incredibly passionate users.  In one instance, they ran an email marketing campaign asking their users to spread the word and more than 10 percent of the email recipients invited an average of 5 others to join, resulting in one new user signing up per 2.6 invitations (see case study).

Lastly, I’ll note that anything related to charitable giving always gets faster word of mouth than things purely commercial, but it must feel genuine.

1.3 Pricing :: don’t forget that you have an incentive structure in the form of pricing.  A few ideas: you can reward users with discounts for inviting others (or gift cards but just don’t kill your cash flow), offer group discounts to get teams to join in unison, and offer lifetime memberships in the early days.

- – -

2. Active Marketing / Outreach

For Active Marketing, I want to hit on three areas:

• Advertising
• PR (which I define very broadly)
• Direct outreach
  

I believe that most Internet successes came about because of a great product, not advertising.   I loved this recent quote from Sean Ellis:

It’s taken years for me to realize that our growth was less a function of clever marketing tactics than beginning with something that customers truly needed.  Some growth would have been automatic; the marketing team simply accelerated this growth.

Mint.com spent only about $50K on search terms. Pandora spent about $100K on search in the early days, but stopped that approach and founder Tim Westergren says “he’s not interested in traditional marketing” (source). Evernote hit 1.4 million registered users with no advertising, and EventBrite says growth has been primarily through word of mouth.  Social games company Playfish did no advertising, although I would be remiss to not point out that competitor Zynga advertises heavily on top of viral designs and admittedly has grown faster.

This does not mean that you should sit back and passively wait for organic growth to appear for your highly-iterated, agile-developed product.  Even without advertising, Mint.com says they spent ~$2 million on marketing in the two years prior to Intuit’s acquisition, which primarily went towards a marketing staff of 5 people and consultants like a PR agency and email marketing partner.

2.1 Advertising :: I think most early stage companies would be foolish to forecast significant spend on advertising. Google Search is no longer an affordable growth mechanism.  However, I do think you should experiment with advertising in small doses.  Folks seem to be increasingly turning to Facebook and possibly even StumbleUpon for more affordable, targeted campaigns.

Make sure you do two things before you spend much money:

1. understand your cap on customer acquisition cost by guesstimating the “lifetime value” of an average customer (i.e. revenue) and subtracting how much it will cost you to operate your company and service in order to earn that “lifetime value”. Make sure your LTV is conservative, i.e. reasonable customer spend and over a limited time span. (interesting post on LTV)

2. have analytics in place so you can measure results of campaigns (and ideally A/B/n tests of campaigns)

If you are finding that an ad campaign is netting great conversions at affordable prices, then by all means continue! Expect that it will take several weeks to find your sweet spot on bid levels and conversion rates.

2.2 Public Relations :: PR covers not just getting press, but also engagement with the blogosphere and online communities.  If you are running the business end of a seed-stage company, don’t put this off to a PR firm — not only is it expensive but frankly, no one can explain your product and company as well as you.

With the media, don’t actively chase PR too early (wait until you are confident of product-market fit), but learn about the journalists who cover your space and try to build your own relationships even before you are asking for a story.  Be willing to share concrete metrics — that always increases the odds of getting a story.  Look for PR help when you are hitting more of a growth stride. You can hire a firm, or look for independent PR people/boutiques in your industry who offer better rates and might be more likely to understand your product.

With the blogosphere, you can’t market *at* the community — you have to join and support the community.  Find bloggers with content you respect and an audience that is relevant, and participate on their sites. Make comments and engage in a dialogue with them — not about your company but about the relevant topics you both love (otherwise you wouldn’t be doing a startup around it, and they wouldn’t be blogging about it).  Again, you are building relationships.  Having a blog of your own helps here.

Look for online forums with a match to your target demographic, and again participate with rather than market at. I heard that Microsoft generated some of its best early growth for Office Live by participating in SMB discussion sites.  Building up a reputation takes time but not a lot of direct cash, and as you grow, is something that can be passed on to bright, young (thus less-expensive) employees.

Create your own touch points, such as a blog, a Twitter account, and a Facebook page.  Put in the time to make these actually useful and interesting, i.e. think about adding value through interesting content, not just sending out the online version of press releases. You should also examine whether YouTube videos or knowledge sharing through Slideshare, Scribd, or Docstoc could be useful.

2.3 Direct Outreach :: Finally, don’t stop getting out there and selling individuals, especially (but not exclusively) those you consider influencers.  As you grow, don’t let customer interactions get captured by customer support, the marketing team, and HCI testing, but rather keep those sales skills honed.  The insights you will get from these discussions are invaluable. It battle-tests your ability to effectively message your product and company. It keeps you grounded in the marketplace rather than the la-la land of ivory tower thinking which has cratered so many startups.

- – -

3. Distribution Partnerships

This is always a doozy for me.  Sadly, many partnership deals are more useful for how they impress VCs than for what they actually do for your business.  Over 15 years, I’ve seen so many deals which looked good on paper deliver completely mediocre results.  Don’t get me wrong — you need to invest time in this area because the sales cycles can be very long (exceptions being partners who are explicitly in the distribution business such as Miniclip), but do not count on quick results.  As an unproven company, it will be tough just to get time and attention.

Ruthlessly prioritize your targets because trying to cut deals with big companies can suck up an enormous amount of time from both bizdev people and developers (what, you thought that mega company wasn’t going to demand new features or some crazy integration?). Make sure you really match up your target demographics with that of your target partner.  Make sure you really believe that results will come and don’t waste time on “press release” partnerships unless you really think it will transform your company’s credibility. For example:

• will that big website really put your message front and center? They know they can’t clutter up their key pages with distractions, and if you can’t get prominent placement, is it worth the bother?  You know that users are used to tuning out distractions on a web page, and minor features/add-ons rarely get clicked. Even if you have a great champion who believes in the synergies, remember that the politics of web placement/design inside a big company can kill you.
• are those VARs or enterprise sales people really going to give a damn about your upsell/add-on product? They are already getting huge pressure from the customer to discount the price on the core money-makers (and as a fledgling startup, you inherently are not yet that).
• Is the technical integration between our two products going to be so complex for either party or for the end user that we’ll never effectively get off the ground?  Does the partner have the resources and urgency to get this done in a timely manner?

If you want access to someone else’s customer base, you are going to need to be prepared to pay in one form or another.  Thankfully, it’s no longer the bubble years where companies like AOL could charge millions up-front for a bullshit placement on a semi-buried page, but you should expect to give up a chunk of the economics and possibly of your company as well. The numbers really range quite widely. Please just don’t forget to negotiate performance metrics and contractual outs for yourself based on poor results (speaking as someone who has inherited deals missing these key elements, and had to attempt to renegotiate — *not fun*).

A wonderful thing for today’s startups is that there are a number of interesting, open platforms where you can get distribute your product without needing a partnership, such as Facebook, iPhone (cough, semi-open), Android, and maybe LinkedIn if they truly are opening up.  However, that kind of distribution takes you out of this section (i.e. those aren’t partnerships) and back into other marketing tactics.

After spending all this time bashing BD deals, would I still spend time on this?  Yes, I definitely would, albeit with a rigorous filter for deals that could truly enable my business. Ask yourself:

• who has an extremely synergistic product to mine?
• who has a user base identical to my target demographic?
• who would be really interested in the assets I’ve built up already (data, relationships, etc)
• who has a track record of doing partnership deals in my general space?
• who would be a good acquirer of my business?

Make sure you also think through competitive risk, but don’t let that cripple you.  Lastly, I will also note that you can achieve shorter sales cycles and possibly better terms if you and your target distribution partner(s) share the same investor. That is one useful criteria for examining which investor you want to work with.

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4. Design Optimization

This is no-brainer stuff, but it is worth remembering that you need a few key things when it comes to design:

1. pay attention to SEO basics (here’s a recent Chris Dixon post on that topic)
2. keep your messaging clear, concise, and compelling whether text or video
3. A/B test both copy, images, and layout to try to find the best combination of the three on your website landing pages and your marketing emails

This stuff is critical for execution, but not really something you would bother talking to a VC about because it is just expected. However, if you have some concrete A/B testing results, they might find that both illuminating from a product/market perspective and see that you really walk the walk.

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Final Thoughts

1. I believe that an early stage company should experiment and iterate, using both qualitative feedback and quantitative analytics to help prioritize, grow or kill various initiatives. This post isn’t meant to be an all-encompassing list of marketing methods but hopefully it has helped with your brainstorming.

2. Remember that marketing tactics need to constantly evolve as effective channels become flooded over time, destroying their usefulness either out of noise or inflated cost.

3. As you think through lots of marketing activities and ideas, remember to bring your mind back to your product and think about how/if favorite concepts can be better integrated into your design.

4. This post talked about types of marketing activities, and if you want to read a great post about timing and priority of activities, check out Sean Ellis’ post Milestones to Startup Success.

5. I am constantly learning and would love to learn from you.  Please let me know your thoughts via comment or direct email to me.

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Additional posts you might find interesting:

• Sean Ellis: Milestones to Startup Success
• Matt Brezina: No one cares about your stupid startup – 5 tips to make them care
• Josh Kopelman: Let’s just add in a little virality (and hopefully his follow-ups)
• Andrew Chen: How to create a profitable freemium startup
• Avinash Kaushik: A Manifesto for Web Marketers and Analysts

Modern Music Marketing

“The most important thing that an artist can do is to tour, absolutely.  Touring provides the spark that all the other marketing segments need to work off of.”

An interesting quote from Mike King, of the Berklee College of Music, in a video interview on modern music marketing. (via Hypebot)

Amanda Palmer & Twitter

There have also been a lot of articles/posts recently about Amanda Palmer’s monetary success on twitter… some good, some bad, and including a big comment debate on TechDirt.  One of the better posts is from Suzanne Lainson at Brands Plus Music, where she writes about success due to intimacy and the fostering of an “insiders club” to make fans feel special. A half-chewed postcard is not valuable in and of itself, but a memento and memory of a shared moment with a musician you adore… to some that’s priceless.

(btw, her tour manager also weighs in at Hypebot on Amanda’s path to independent success)

These techniques cannot scale the way selling a CD once did, but then I think musicians are reconciling themselves to the reality that no single revenue source will brings in all the dough anymore — they need to cultivate lots of revenue streams across physical and digital music, touring, merchandise, premium offerings, licensing, etc.

In general within the game/virtual world space, I prefer micro-transaction models to subscription because you enable your really enthusiastic fans to give you a larger share of their wallet, rather than capping their spend or expecting people to assign the same value to your service. That’s not how people work. Just look at eBay, which became huge because one person’s junk was another person’s gold. (There are times when subscriptions, or a hybrid, are the best approach, but I’m not going into that here)

Musicians are learning the same thing, innovating new ways (often using technology to make it work) to connect with fans and offering a broad range of value across the full spectrum of “fan type” from casual to intense.

Speaking of Amanda Palmer, I have a hard time getting Ampersand out of my head.