You have a great product idea — Check. You have the means to develop the product — Check. What did you forget? Marketing. I’ve worked with several startups in my career and I can’t tell you how many new startups say they have funding for product development, but they don’t have funding for marketing “at this stage.” What does that mean? What I’ve heard over and over again is that they plan on funding marketing once they get their first investment round.
Here’s the problem: investors want to see success. They want you to be able to demonstrate that there is a market for your product before they will be willing to invest their own dollars. Having a great idea is the first step. Developing it is the second step. Marketing it to test the market is the third step. Then you move into refinement. Funding can come in at several places along the way. There is a reason there is a movement for the Lean Startup; it’s because so many entrepreneurs have wasted ridiculous amounts of money developing products that aren’t viable in the market place. Here are 4 tips to prevent doing the same thing.
Tip 1: Test the Market BEFORE You Develop the Product
You could learn a lot from Information Product Marketers, the marketers who sell information online. They develop landing pages for products they haven’t even developed yet to see if their audience even wants the product before they develop it. They run some simple Google Ads to see if people are willing to provide their email address for a scaled down version of the free product first. They usually market it as early access for something that is coming. If this is successful, they develop a small portion of the full product and test how much people will pay for it. Seriously. I’ve seen variable landing pages with different prices paired with Google Ads simply designed to see what the minimum and maximum price points are. But here’s the kicker: you have to put some budget in for the advertising to test it. Then once they figure that out, they develop the product further and do the same test to see how much MORE people will pay for it. These test can be run in as little as a week’s time and see success.
The key here is that development is done after the audience has validated they want the product and then shown their price thresholds. There are several master information product marketers you can follow to watch HOW they market their own products. These include Copy Blogger, Amy Porterfield, Mari Smith, and Eben Pagen. While they do focus on information products, their testing techniques are very applicable to several types of products with a few minor tweaks.
Tip 2: Budget for Marketing DURING Product Development
While the tests above can be accomplished with a very minimal marketing budget, once you commit to developing a product, you need to commit to marketing it. I mean, seriously, if you are going to put your life savings into something you are truly passionate about, you need to fund the part of the business plan that is the only hope at making it a success. While we’d all like to think that our product is so awesome that people will just find it, that’s just not how the world works. We all have problems and we all want solutions, but if we don’t know the solution exists, we will continue to deal with our problems on our own. The only way we are going to know your solution exists is if we get smacked upside the head with it so we can’t help but take notice.
We HATE BEING SOLD TO, but WE LOVE BUYING! So the key is to find a marketing agency that helps you make it stupid easy for your audience to buy and that can help you build the excitement you need to bring the right buyers to your door when you are ready. This takes time. It isn’t just a light switch you can flip on. So start early and reap the rewards when you are ready to hit the market. Oh, and any firm worth their weight won’t work on a performance basis, so be smart and don’t think you can skimp on the good stuff.
Tip 3: Don’t Think Going Viral is the Answer
If I had a nickel for every startup that came to me and said, “we just need to go viral,” I would be retired and living on a beach sipping a nice vodka tonic. Sure, it would be amazing if your product went viral, BUT IT PROBABLY WON’T! Here’s the little known secret: the content that goes viral usually has a rock solid content marketing strategy behind it that was developed by someone who knows what the heck they are doing. Take a look at Dollar Shave Club. The video on their home page is one of the funniest videos I’ve ever seen.
I needed to share it (and know of 6 people who have signed up since I shared it with them), but it wasn’t just chance. It was a well orchestrated content marketing plan executed by their CEO Michael Dubin, whose history includes creating content for Time, Inc. and doing sketch comedy with the Upright Citizens Brigade. Fortunately for them, they had content marketing talent from the beginning and clearly it worked. They did go viral, but it was with a plan. You need a Plan A for what you will do if you actually go viral, and a Plan B for what you will do if you don’t.
Tip 4: Don’t Think Investors are Stupid Enough to Buy Your Pitch
Investors have money to invest for a reason. They know how to ask the tough questions, and the best thing you can do is be prepared for the likes of Mr. Wonderful, the investor who only cares about how your product is going to make him more money. Then, you’ll have an easy time with the ones who actually care about your product, too. You also need to understand the bottom line. Understand how to get your product to market and how to make a return for investors. While I’m slightly biased as a marketer, don’t be stupid enough to think you can get there without a marketing plan. Protect your own investment and you’ll be well positioned to protect your investors too.
This is a guest post by Nichole Kelly, president of SME Digital, the digital marketing division of Social Media Explorer. Kelly leverages 14 years of corporate marketing experience and digital expertise. She is most widely known for her Full Frontal ROI methodology a systematic, measurement oriented and practical approach to connecting an organizations social media marketing activity to core business objectives.
