15 years of startup marketing in one post, or how ideas are useless
This post is a summary of my recent talk at a marketing conference about things I’ve learned about tech marketing and growth. In that talk, I discovered myself stating multiple times how and why ideas are useless, or rather, what are the things that are more important than having good ideas.
Sidenote: I was suggested the title “Life lessons of an experienced marketer” but I changed it to “Reminiscences of an old marketing fart” instead.
#1. Treat your marketing budget like an investment portfolio
When I bought my first investment securities back in the day, I took the advice of a bank advisor and bought funds rather than individual stocks because this was less risky. Two years later my holdings had appreciated by double-digits but at the same time, popular stocks on the friendly neighbourhood stock exchange my friends had bought had gone up 5-7x in the same time.
I had taken on too little risk (for a 20-something).
What I should have done is put some of my investments in global funds for relatively safe returns and invest 10-50% of my budget in individual, risky stocks.
The same applies to marketing budgets. Yes, you need to do the things companies like yours have always done to make sales but you can’t afford to miss out on new, less tested tactics and channels. Things like testing novel tools, new advertising channels, new potential targets, new tactics.
And as everywhere, here too time is money. “Budget” can mean the media budget but it can also mean the hours and the attention of the marketing team.
What’s the right % to put into riskier bets?
That depends on the maturity of the market and your company.
Established companies in mature markets are wise to think like people close to retiring – you don’t want to take on too much risk. 5-20% of your budget should go to risky experiments and the rest to business-as-usual.
If you’re a startup operating in an exploding category, you may want to take on more risk, 25% or even 50% of the budget.
In other words, ideas don’t matter as much as having the right financial model does.
More on this: Your marketing budget as an investment portfolio
#2. One strategy that tends to over-perform? Find new emerging platforms
In the early days of Pipedrive (where I was head of marketing for 7 years) one-third of new signups came from Google Chrome Webstore because co-founder Martin Tajur thought it might be a good idea to invest some hours of work to try this out. Pipedrive did this before other CRMs did the same, got the advantage of more installs and reviews and this gift kept on giving for years.
We launched Outfunnel on Pipedrive Apps Marketplace at a time when the platform was relatively new. Our first version wasn’t that great of a product but if you’re one of the very few products in a category, this was enough to start getting signups.
Outside of b2b, Creative Mobile launched their drag-racing game on the Android platform just at a time then Google Play Store introduced the racing category. Today, their Nitro Nation drag racing game has bought in tens of millions and it’s still doing well in the crowded gaming market.
Whether or not emerging distribution channels apply to you, there are always new advertising channels launching.
Running Adwords in 2005 was super profitable because your competitors were not there yet to push up the prices.
In 2013-2014 it made all the sense to promote Pipedrive on Capterra because there were relatively few other CRM players there. (This was my first time experiencing maxing out a channel. We wanted to increase our Capterra CPC budget but the platform had no additional clicks to offer us at any price).
There’s a new distribution platform or advertising channel launching if not every day then every week. It pays to be looking for them and putting some of your resources into testing them. (see the previous point)
In other words, brilliant ideas don’t matter as much as finding the next platform that takes off.
#3. Understanding category awareness is the magic shortcut to marketing plans that work
“It seems we have product-market fit. Which marketing channels and tactics should we invest in?”
I think I have a pretty universal answer to this question, and this answer involves category awareness (and category urgency).
Your category awareness is high when most people in your target audience know the kind of product or service you’re offering. Email marketing software, smartphones, and “hotels in Copenhagen” are examples of things with high category awareness.
And your category awareness is low when people in your target market don’t know there’s a kind of product or service that they’d need. For example, most people wouldn’t know to look for bookable-by-the-hour call booths (a new emerging category of services) when they need to make an important call and most of us wouldn’t know to look for smart swimming goggles before stumbling on an Instagram ad.
There is also category urgency. You know what a DVD player is very well, but I doubt you’ve bought one recently. Similarly, category awareness for gym memberships is high throughout the year, but the first two weeks of every year is the time where this turns into action for many people.
If you know where the market you operate in stands in terms of category awareness and urgency, you can make your first pick of channels.
When people know what to look for and are motivated to look for it, you’d need to become findable (doh!). Coming up in various searches is then a great bet.
When people don’t know to look for you, you’d need to interrupt them with a “cold” call or brilliant viral video and say “there’s this thing. would you like to buy one?”.
In other words, the backbone of a solid marketing plan is not having good ideas, but understanding your category awareness and category urgency.
More on using category awareness and category urgency for marketing planning
#4. Ideas are useless when you don’t have a good system for prioritizing them
In every company I’ve ever been involved with, there is always the challenge that there are more ideas than the team can execute. So how do you choose?
Based on what team members vote to be the best ideas? Based on what the boss likes? Based on whether something has been tested before?
I’ve found that the best way for prioritizing ideas is ICE – a simple assessment of:
Impact: what is the likely effect on (business) metrics
Confidence: how sure are you that this tactic will work
Effort: how easy or difficult something is
You may also add “Reach” when some of the ideas can scale more than others, in which case ICE turns into RICE.
An important note: in my experience, it makes sense to add more weight to Confidence. Let’s assume that:
- = it sounds like a good idea
- = it’s worked for other companies
- = it recently worked for another company with a comparable target group
- = we’ve got qualitative information this works on our exact target group
- = we’ve tested this and gotten positive results
With these definitions, 5 is not 5 times better than 1 but 10-50x better, and you may want to adjust weights accordingly.
More on using ICE here written by Aivar Ots who was my team member back at Pipedrive
#5. Ideas are worthless, period. It’s the team that matters.
At around Pipedrive series A round we’d gotten a couple of channels to work well. Charts were going up-and-to-the-right and we have the budget to properly build out the team. Among other things, content had started to work well, and done so without a lot of resources. Time to scale, right?
But seven expensive hires later you’re getting the same results…
But then web CRO, an area you’d given up on after several failed experiments gets a new lead, and your conversion rates start to improve dramatically.
This is how I learned there are no “good” or “bad” channels. It’s all about the people in your team.
And more importantly, it’s about the person that brushes your teeth when you look in the mirror. It’s about you. (Or me, in my case.) Things change fast in a startup and your role changes faster than you think. One day you’re operational, managing your PPC ads in one tab and drafting the next blog post in another.
And sooner than you think, you should have stopped all operational work and focused on hiring 90-100%. And soon thereafter, you would’ve needed to get really good at creating people room and resources to do their best work (in addition to hiring).
More on how you evolve as a marketer
More on hiring marketers at a startup
Were these all my important lessons from 15 years of tech marketing? Surely not. But these are among my TOP20 or even TOP10 for sure.
PS. Liked this line of thinking? Outfunnel is looking for a Growth Marketer