A tech startup is different from any other type of business. And while conventional business advisors would have us think that they are all getting venture capital and angel investors, and the mythical “friends and family” funding that everyone talks about but nobody ever really gets, in fact, the majority of tech startups run mostly on hopes and dreams, great ideas, and a little bit of smoke and mirrors.
The big question has always been, how a tech startup can handle a new product launch, and how they can grab attention in an increasingly crowded marketplace. Again, those conventional business advisors will counsel the startup entrepreneur to allocate a million or so dollars to the marketing budget, and look to companies like Apple for a good example of how to do it right. And indeed, Apple has a tremendous marketing engine, and they’re quite good at it. Apple could put a hundred random products in a hat, draw one out, and the next day be well on their way to cornering the market. But contrary to popular belief, the average tech startup entrepreneur drives a car that is older than he is, and still occasionally buys lunch with change found under the couch cushion in the office break room. Following Apple’s example is not realistic advice.
Waterstone Management Group partner Ken Ewell says, “One of the interesting things about our world that really applies to the space now, is the democratization of information. As a small software company now, you don’t have to spend your marketing budget in the same way that Apple would, because social media, and the ways in which people communicate, are so much more fluid.” Instead of thinking in terms of allocating big budgets, Ewell says that a budget-strapped startup entrepreneur can instead think in terms of “What are the point of influence I can use to create buzz ahead of my launch for free.”
Obviously, social media tools, leveraging those social media elements, and thinking in terms of which people and entities you can engage to get a strong Klout score, is not only a low budget way to capture that attention for your new company and new product, but it’s one that works. Some of the biggest successes in the crowdfunding space for example—like Ouya—had little in terms of cash marketing budget, but they had social media savvy, and they got attention from day one. Ouya in particular got tremendous attention, raising almost a million dollars within their first 24 hours on Kickstarter, and it wasn’t because they had a big ad budget. “That’s the democratization in action,” says Ewell. “It actually gives you an opportunity to punch above your weight without cost significantly above your weight. My big lever there is just around social media, and leveraging the interactions between individuals.”
Going beyond the social media aspect, there is a fundamental shift in how those go-to-market plans are being created and executed. “In the past,” says Ewell, “You used to sit down, and think about the user information you had, and then write a marketing plan, and that would be your point of differentiation. That’s not the way people should be thinking about it today.” It’s a lot less carved in stone today, and marketing and product launch is more about an ongoing dialog that changes the execution strategy on a regular basis. Ewell says to “have a starting premise for what’s going to get someone excited, but then evolve that by engaging in dialogue about what people really need. That is something that is overlooked, and often the larger companies are more susceptible to overlooking it because they’re coming at things from the standpoint of an existing platform. The appropriate lens is, how our customer is evolving, and what can I do to align myself with something that’s really cool to them. And if we can find that hook, then the hook for the influencer becomes much clearer.”