Marketing is as essential for tech startups as it is for companies with thousands of paying customers. But tech startups — even well-funded ones — tend to have a much smaller marketing budget than their larger counterparts, and that makes deciding how to fund it especially challenging. Since the lean startup model encourages startups to begin testing the market with a minimum viable product (MVP), it makes sense that startups take a similar approach to marketing in what might be called ‘minimum viable marketing’ (MVM).
Having the best marketing on the planet still won’t help sell snow cones to Eskimos. Clearly the largest initial investment a startup makes has to go into product development, at least until it has a clear understanding of its market. MVP should nevertheless be accompanied by MVM, which can and should include many of the traditional marketing activities.
Here are some valuable tips on marketing fundamentals for tech startups that will help them get most out the marketing spend.
Market Research
Before a startup can even think to begin, it must know what market it will serve. Indeed, it’s at this early stage where many tech startups have a tendency to go offtrack. While it’s true that lean startups have the ability to make frequent pivots in search of market fit, most of them have limited funds to burn through in search of profit. All the more reason to conduct research before and during the MVP phase. The overarching goal of market research is to determine who the target customers are, what they want in a solution and how to deliver the right solution at the right price.
Research should start with an analysis of the overall market being targeted such that the industry, total estimated customers, competition and total addressable market are well understood and reflected in an initial business plan. Most of this information is available for purchase from secondary sources like market research firms, but it can also be obtained fairly easily from free online sources. This kind of research helps a startup capture an accurate snapshot of the market potential while also understanding general market trends. Performing a SWOT analysis (strengths, weaknesses, opportunities and threats) on a few of the dominant players in the industry will allow for a better understanding of how a startup can differentiate itself even as it figures out what kind of product and marketing mix to incorporate.
A startup can employ quantitative and qualitative research to better determine potential unmet needs or weaknesses in the competition. An online survey is a form of quantitative research that can shed light on items ranging from product offerings and pricing strategy to customer beliefs and purchase behavior. A focus group or individual interviews are examples of qualitative research that can yield valuable insight for startups wanting to have a better understanding of how, when and why a customer experiences a need for a particular product, not to mention gauge the rational and emotional responses to things like product usability, pricing, messaging, satisfaction, etc. This type of research almost always requires a skilled research professional to ensure the results are valid and insightful.
Brand Identity
Once a startup researches the market and begins to figure out its differentiating features and benefits during the MVP stage, it should define its brand identity. Coming up with an effective brand identity involves a good deal of introspection and discovery. Brand identity ultimately allows a startup to become more easily recognizable in the market, not to mention in a sea of other brands.
To arrive at a brand that supports a startup’s eventual launch and early growth trajectory, it must answer the following questions:
- What constitute your core values?
- What is the brand message you’re communicating?
- What is the brand personality you are aiming to exude? (your brand personality will inform your unique ‘brand voice’)
Once a startup answers these three questions, it will help define the brand icons of which the most important assets are: name, logo and tagline.
Name: too often startups come up with a name before truly understanding their own offering. A name should reinforce the overarching brand aspirations (values, messaging and personality). There must be harmony between the two or the cognitive dissonance will spell trouble for the startup’s launch and growth plans. Finding a name has kept a great many founders already awake at night. It is a challenging exercise to be sure, but going through the roadmap we explained here will prove to be of great help. For those in need of a little help finding a name that’s unique and has an associated website domain available, check out Shopify’s handy little business name generator.
Logo: the logo visually communicates what a brand is or aspires to be. It’s no surprise that many design agencies charge a healthy sum to come up with several workable options for startups. From the drawing itself to the color palette, startups must find the right visually appealing mix to convey who they are and what they stand for. The key is to stand out from the competition without sending the wrong message to the target market. For example, a logo that works perfectly for millennials seeking crowdsourced retirement tips would not suit the Baby Boom generation wanting to know their nest egg is almost ready for their retirement.
Tagline: nothing is easy about coming up with a brand identity that perfectly describes what a startup stands for. After all, many startups are like young kids, still forming their personality and trying to find their place in the world. Making matters worse, taglines are notoriously challenging to get right. The ideal tagline is three to four words long, but many exceed that number. For instance, in 2015 Oracle changed its tagline to “Integrated Applications & Platform Services” in order to tie its brand firmly to the Cloud solutions market. The problem with longer taglines, however, is that they are much harder for customers to remember.
By having a well-designed logo, unique name and memorable tagline, startups will have solid brand icons to convey their brand messages and personality. After all, the brand identity should be in everything a customer sees, from the website and social media profiles to trade show booths and marketing collateral.
Part 2 is next…In the next installment of our series on marketing fundamentals for startups we will address the website and social media. The website is still the body and soul of a startup and by far the most important marketing asset. Social media is how many prospects learn about a startup, often for the first time, and see the startup brand in action. Stay tuned!