Any startup is a story about business. The end of the story can be happy or sad. 90% of startups fail. Moreover, 14% fail due to poor marketing strategy.
Marketing evolves with speed that nobody can catch up. It changes with internet, technologies, and competition, that push professionals to learn fast and adapt. Developing your product and perfecting it is as important as building a unique marketing strategy. In the world where each company claims to “make your life better," you need marketing to increase your sales and improve the bottom line. Your product can be perfect, but it won’t sell itself. Moreover, it is getting harder and harder to drive customer acquisition growth.
So, what can we do to keep up?
Well, we can learn from startup’s past failures to avoid making the same mistakes. It is impossible not to fail, but it’s irresponsible to fail repeating others. It's important to know precisely which marketing tricks do not work, and don't use them.
" The only way to win is to learn faster than anyone else." Eric Ries
I listed four marketing mistakes that startups have to avoid. Moreover, you know what is interesting? These strategies were popular in the past, and some companies still use them! This article will protect you from failure.
Mistake 1: Targeting a large market
Spreading everywhere is the most common mistake. The main essence of this strategy is that the more, the better.
You cold-call to thousands of people, you send hundreds of emails, you create content marketing targeting as many people as possible, you hand out brochures in a subway, you buy Facebook ads, Instagram ads.
You're just trying to stand out in the crowd. It's like looking for a needle in a haystack without a magnet. You will have to pass through thousands of people, listen to millions of refusals so that eventually your business is on its feet. Undoubtedly many at first tried this approach. In result, they were only disappointed.
The reasons for the failure are apparent: If you initially target a large number of people, it is complicated to determine who needs your product or service.
“One of the biggest lessons I learned was not to spread myself too thin. Like other entrepreneurs, I love trying to do multiple things at once. However, once I learned to focus all of my time and energy into one business, I was able to make it grow faster than all of my previous businesses.” - Neil Patel for Buffer.
What to do instead?
Precisely determine your buyer persona. Who is your potential client? When you answer this question clearly, and in detail, you will find people who already want to hear from you.
Determine how your buyer persona makes a buying decision. How he/she researches information, what are their preferences? If your ideal customer uses Instagram often, then use the platform to connect with prospects. Implement an incremental approach and build your customer pool gradually, but effectively.
In contrast, not spreading anywhere and relying only on the perfection of a product is sales catalyst.
At the end of 2015, one of the first music streaming services, Radio, was closed. The former Skype team developed it and the service itself, according to subscribers, was very pleasant and well-designed in terms of the interface and interacting with the user.
The problem of the company consisted, as the journalists believe, in the fact that the team preferred to bet on the product and did not practically promote and market its service. The product was polished to the smallest detail but always remained in the shadow of competitors who created more noise in the press - for example, Spotify and Apple Music. Besides, the use of Radio was paid, so failed to gain sufficient user base.
Mistake 2: Postponing marketing future
Marketing is one of the most underestimated aspects of doing business. Many startup founders mistakenly believe that the most challenging task is to create an innovative product. They spend weeks and months, money and effort to make one grave mistake. There is a high risk of creating a product that nobody needs. Yes, your product can be efficient, fast, innovative, but it requires buyers.
One of our major mistake as a startup had been focusing only on developing the product. TDSmaker's application has a comprehensive code; it was hard to create. So most of our energy we spent there. Moreover, we don't have a competitor in the market. Therefore we had to define the problems, solution and the features which can solve the problem of the users without any comparison.
However, while we were focusing on the technical issues and developing the excellent tool at the same time, we postponed marketing, and we were late to start marketing strategies and raising customer numbers. It caused us to make some mistakes on our estimations of designing user-friendly interface and the detailed features. We realized that some of the features of the app had taken days even though it is not crucial for the users.
The valuable lesson from our mistake is a power of listening. You shouldn’t act straight away but must analyze the recommendations without a rush.
When you start your own business, close people support you. They tell you the right words at awkward moments.Everyone lives in its world, with his or her interests, tasks, goals. People are busy. Your friends love you and wish you success. However, they are not your prospects or buyer personas.
Your ideas can resonate with them.
What to do instead?
“Life’s too short to build something nobody wants.- Ash Maurya
You don’t need to spend a considerable amount of money on marketing to get results. You can plan and launch marketing experiments to find out if your offer meets market needs, test your sales channels and get data on a possible growth engine. (It can help you to avoid unnecessary expenses.) After that, you can prepare a comprehensive marketing plan with the calculation of the potential profit, and then look for investors to request the funds needed to implement the marketing plan.
Develop MVP (Minimum viable product), give it to your ideal customers, listen to their feedback and continuously learn.
Work on creating your small community of prospects, who will be potentially interested in buying your product. It is important. You will have a better understanding of what they want and need so that you will provide better content for them. Your community will have similar characteristics; you can use similar channels to reach them. They are the ones who will provide accurate feedback.
“We spent way too much time building it for ourselves and not getting feedback from prospects — it’s easy to get tunnel vision. I’d recommend not going more than two or three months from the initial start to getting into the hands of prospects that are truly objective.”
— from David Cummings Post Mortem on a Failed Product
Clinkle was a mobile payment system that attempts to combine a consumer electronic wallet with seller systems. The startup received $30.5 million.
The product development took three years, during which some reports about products were released. When the product still came out, it has already become not particularly attractive to anyone.
Mistake 3: Rely Only Paid Traffic
Facebook Ads, Instagram Ads, LinkedIn Ads are effective mechanisms for advertisement. With the right approach, advertising on these platforms gives steep results to many companies. The problem lies in one nuance.
It is not that simple as it looks. In reality, it requires a creative, even a virtuoso approach. It takes much time to play and correctly set parameters such as segmentation, location, budget, choosing the right words and format. Most Internet entrepreneurs who successfully work with online ads have a whole team (or at least a particular person) who works only on this task.
Until you become a pro, it will be difficult to get at least some results.
If you are targeting a large market, you probably need a massive budget to convey marketing strategy. As I mentioned, you can conduct an effective marketing campaign without significant funds.
A better solution?
If you are starting out, a guaranteed way for you and your business is to optimize social networks and establish regular contact with your audience. Work on creating your community. First, work on free promotional strategies. Master SEO, social media marketing, and don’t underestimate the power of forums/groups such as Quora or Reddit. Get the result, evaluate them.
Organic search is an excellent long-term investment. When your maximum is reached, and you have a steady flow of prospects, switch to paid ads.
Mistake 4: Not Controlling Your Costs
Marketing used to be considered as a creative exercise. We associated it with innovative advertising, unique promotions, filming viral videos. All of these are still a big part of today's definition of marketing. Calculating the exact cost required to acquire a customer help you to understand the amount of capital and revenue you need. Determine your metrics and concentrate on improving them. Do you have 10K Instagram followers? Good, but it is a vanity metric, and if followers don’t turn into buyers, the number of followers don’t matter. What matters is an amount of money and time you have to spend to acquire them. Conversion rate optimization is what you should be concerned about.
Know your time, how much you spend on each content you create. We all know that time is money. Acquisition cost will help you calculate efforts that aren’t cost-effective. A data-driven culture in your organization will contribute vastly to the success of your start-up. There are many questions you should ask yourself to control marketing costs.
How cost effective is hiring PR agency or CPM ads, or printing brochures or buying podcast’s spots? Know all your numbers. Compare them and work on their efficiency and effectiveness. Many startups fail because they fail to base their decisions on numbers. They don’t know what to measure, how to measure and they don’t learn on their or other's mistakes. Don’t do that.
Startup marketing is challenging and has its unique drivers. Making your own mistakes can cost you a reputation and even shut down the whole business. To avoid building an unnecessary product, create MVP, get feedback and learn from it. Determine in details who is your buyer persona. Budget your money and time wisely and don’t spend time on unnecessary marketing strategies.