GUEST MENTOR Scott Sage, partner at DFJ Esprit: In today’s data-driven marketing world, you should really only think about marketing once you have reached your ‘product-market-fit’. This is the stage in your company where you know without a doubt what problem your product is solving for your users, that your users would be extremely upset if you shut down your product, and when you start to get unsolicited inbound leads for new users who are interested in using your product.
In the very early days of building your company, marketing isn’t about big publicity events, it is all about getting immediate and insightful feedback from your new customers. The days of the dot-com product launch are gone. Now, I cringe when I see a company blowing what must be hundreds of thousands of dollars on a launch party where the founders and creators of the product are unable to attribute marketing spend to new users.
See what other startup mentors have to say about how, when and where to market.
The first step to getting new users is to make a list of all of your potential marketing channels – web (SEO, search engine marketing, affiliate), email, referral, above the line (TV, adverts, billboards), user-get-user etc. Find someone (if they’re not already on your team) to start experimenting with your marketing, using a very small budget, on the channels where you can measure the immediate impact. Most tech startups start with SEM and social marketing to try get basic metrics on conversion (how many users saw our ad, clicked through and gave us their email address, registered to trial our product, installed the app, or purchased something). At this stage, you are looking for the best kinds of users – those that use your product a lot and share it with their friends. It is also imperative to measure how engaged your new and old users are with your product.
It doesn’t make sense to spend money on one channel if you are acquiring thousands of users a day that then leave after a few weeks. Your goal at this stage is to find users who had the same problem as your initial customers, as they may become the users with the highest lifetime value (LTV). Lifetime value is the net profit attributed to that particular user after the cost of acquiring that user (total revenue minus the initial cost of acquisition).
So the lesson is to start marketing slowly with a small number of targeted channels, measure the impact this is having on engagement with your product, learn from your early campaigns and continue refining your marketing strategy from there.