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Marketing in tech startups: 4 lessons learned

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As a marketing consulting company, we have about 20 years of experience. When we brought our tech startup Husky (a digital marketing planner) to the market in October 2016, we didn’t worry about marketing, at all. In practice, however, that was a big mistake. Roughly two and a half years later, for the first time, we have the feeling that we are gaining control over our marketing policy.

In this article, I would like to share the four lessons we remember from our adventure.

Go to the market as soon as possible and co-create with your customers.

Legend has it that tech startups are entering the market with powerpoint presentations, waiting for the product to become tangible. Most, however, don’t have the guts to do so and don’t make their first move until there is at least an MVP (Minimal Viable Product). With Husky, we tried to find a balance. In any case, we learned that there was a huge conceptual difference between our basic product idea (a digital planner for management to write a strategic marketing plan) and our current product (a digital marketing planner in which the entire marketing team centrally manages all operational marketing data).

We have been very open to feedback from users right from the start. Moreover, we stimulated it by being very close to our customers. As a founder, I spent most of my time talking to customers. That puts the CAC (Customer Acquisition Cost) under pressure, but it is vital to find the right product-market fit.

Such an approach has an important pitfall: the criticism you will get from customers and prospects. Your product has more weaknesses than strengths in the beginning or does not (yet) meet the requirements of critical or demanding customers. Look at it from this perspective: “every remark or criticism gives me a better picture of how the product best meets the needs of the market”. Those who are open to it have the key to success in their hands.

Set up a marketing team (but don’t hire anyone)

Soon after starting up, we hired a marketing manager with experience in a tech startup environment. Her main objective was lead generation. Because, as a tech startup, you need leads. Unfortunately, after about five months, we had to let her go. Her approach did not work. Hardly any leads came in. Our mistake was to attract a specific digital marketing profile. We learned that digital marketing or inbound marketing is particularly important in a tech startup (see point 3 below), but also that you need a long lead time with lots of content marketing actions. In other words: our marketer came too early to work on lead generation via digital marketing. In the beginning, you have to experiment. Events and outbound marketing worked best for us for the first two years, and digital marketing lagged in terms of leads.

We replaced our marketing manager with a freelance team of marketers who each worked in a specific marketing field. A colleague-founder did event marketing. I started developing and executing our content marketing plan. A part-timer worked two days a week on SEO (search engine optimisation) and social media, a digital agency developed advertising campaigns. This approach still works today (after two and a half years!). It allows us to switch quickly when a particular technique shouldn’t work anymore. We learned that a white knight (who masters all aspects of tech startup marketing) might be utopian for us.

Combine inbound marketing with outbound campaigns

Anyone who reads marketing literature for tech startups sees one constant recurring: the absolute focus on inbound marketing (actions aimed at incoming leads). I have to admit one thing: at some point, inbound marketing will have to become the engine of your marketing policy if you want to make the step from startup to scale-up. Currently, we spend 80% of our marketing budget on inbound related marketing actions. The rest goes to outbound marketing actions in which partnerships, events and target group campaigns are prime.

The strength, therefore, lies in finding the right (marketing) mix of inbound and outbound. The relationship between the two is constantly evolving, depending on the phase of the startup. A general rule is, the more mature the company and the product, the more significant the investment in inbound marketing. The younger the company and the product, the more you will have to search for a market yourself. That’s frustrating in the beginning, but it also offers a bonus: you create more contact moments with the market, so that you can continuously work on your product market fit again.

Always think from the perspective of your sales and marketing funnel

Below is our marketing funnel. It is a scheme that serves as the guideline to manage our sales and marketing policy. A funnel maps out the flow through which leads and customers are moving towards a sustainable customer relationship. Every success or failure can be attributed to a moment in the funnel that goes right or wrong.

You can assign employees, processes, tools or marketing actions to each of the phases in the funnel to ensure a smooth flow of leads. Such an approach is a better alternative to the organisational matrix that you often see in startups. An organisational matrix uses a rather inside-out approach while thinking from the perspective of the sales and marketing funnel generates an outside-in attitude.

In conclusion, we learned that a tech startup is not a ‘normal’ product or service business. It can take very long to find the right fit with your market, not only concerning your product but also when it comes to marketing. The most important thing to remember is that there is no ultimate strategy. Take your time to experiment in order to find the right fit. Later on, you should be ready to dynamically adjust your marketing strategy following the stages your startup goes through.

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