Marketing for High-Tech Startups presented at UC Berkeley


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This is a talk I delivered to Ikhlaq Sidhu's class at CET UC Berkeley on Jan 18th, 2013.

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Marketing for High-Tech Startups presented at UC Berkeley

  1. 1. Marketing for Startups in High-Tech Marketing for High-Tech StartupsR. Paul Singh – rpaulsinghEntrepreneur CyLAN 1
  2. 2. AGENDAWhat has changed in Software business?4Ps of MarketingProductDistributionPricing and Revenue ModelPromotion & Customer Acquisition
  3. 3. Software Markets 5 years ago Consumer Large Ent. Small Business Medium Medium Enterprises Enterprise Large Ent. Small Business Consumer
  4. 4. What is the goal of Marketing?Create a good brandPeter Thiel: Brand is as a classic code word formonopoly. But getting more specific than that ishard. Whatever a brand is, it means that people donot see products as interchangeable and are thuswilling to pay more.A good brand provides a clear and memorable senseof what your business stands for! 4
  5. 5. Select Core 4Ps of Marketing Product Process People Positioning Place Prayer Promotion Packaging Pricing
  6. 6. Has Marketing def changed?What differentiates High-Tech Marketing?For a marketing plan to be successful, the mix of 4Ps must reflect the desires of the consumers in the target market – Philip KotlerPeter Drucker --- Marketing is ◦ creating a product that sells itself ◦ creating a product people want to buy ◦ creating an environment that encourages people to buy
  7. 7. Development philosophies have Marketing repercussionsBlack-box Development Iterative DevelopmentHardware, High priced Software, Accessoriessoftware productsPre-development research Research as you gonecessaryLimited alpha and beta Large alphas, Open betasBuzz building after beta Buzz building starts veryphase early
  8. 8. Where is your Elephant? C A B
  9. 9. Where is your Elephant?Staying ahead of the Elephant (A) ◦ Difficult strategy to execute ◦ Need at least 2 years lead ◦ Some examples – AMD, SybaseStaying below the Elephant (B) ◦ Starting with a niche ◦ Some examples – F5, Packeteer, Portal SoftwareRiding the Elephant (C) ◦ Bumpy but the safest of the three alternatives ◦ Some examples – Airespace, Google, Thousands of app developers for Apple, Goog, MS, Oracle
  10. 10. Choose your Elephant & Partnering distance Fill-A-Gap Exclusive Value-Add Leverage Choose Ecosystem (s) MS, Apple, Google, FB, Tw, SF……
  11. 11. What is your Product like?Is your Product ◦ Physical ◦ Services ◦ SoftwareIs your Product ◦ Pain Killer ◦ VitaminDoes your Product ◦ Fit an existing market category ◦ Creating a new market segment
  12. 12. Segmenting & Finding your Customers  Yahoo Vs Google
  13. 13. Did you get the product right? ANALYZE
  14. 14. Does Distribution channel matter?High-Tech Demand Demand FulfillmentProduct GenerationCategoriesConsumer Vendor Web, Mobile,Software DistributorsConsumer Vendor Own Store, 3rd party E-Hardware stores, RetailAPIs/ Widgets Vendor Others (Web, Mobile)B2B Software Vendor Direct, Existing ChannelsInfrastructure Vendor Direct, Existing Channels
  15. 15. Pricing – Software Revenue ModelsBusiness Business ConsumerModelsSell – One-time Perpetual model, Perpetual model, App Stores App StoresSell – Direct DirectSubscriptionFremium Direct, In-App Direct, In-AppAd Supported Not Direct sale, Ad recommended Inventory from othersFree with Upsell Not Own product or recommended 3rd party product
  16. 16. Why Fremium?Channel for buying users = ExpensiveProduct has network effectsCost to offer products/services = LowWant to see if users adopt it firstMore users to talk toTease that works for your competitors/other similar products
  17. 17. Some Hows of Fremium?Showing pricing right away shows better conversionShowing 3 pricing seem to be very popularClearly articulate value for upgrade to premiumTest Change Test ChangeRemind free users often but not annoy Good reference – Matt Brezina of Xobni on Slideshare
  18. 18. Is your Customer Lifetime Value > 0?
  19. 19. What does it cost to acquire customers?
  20. 20. Promotion = Customer Acquisition Promotion is explaining to people who should care about what you’re selling in the way they want to hear about it (radio, print, mobile) in words and concepts they will understand why what you’re selling meets their needs Message is the keySome good reference presentations
  21. 21. Dave McClure model - Startup metrics for PiratesAcquisition – Discovery – First visit/usage – Most expensive phaseActivate – First visit/usage is enjoyable – Design is the new mantraRetention – Your product is actually solving a problem & users have figured out their use caseReferral – Users recommend to others – make it easy to do soRevenue – Users are willing to pay and you convert them to revenue
  22. 22. Acquisition Channels/PromotionsChannels NotesPR PR Agency, Cost, When, HowSEO Keyword, Website designBlogs Which products, Why, HowEmail Collect, Opt-in, Title is everything, HowSocial Media LI, FB, Tw, Quora, Digg, Youtube, Pinterest….Affiliates When and HowAds CPM, CPC, CPA, MediaTrade Shows Investment vs return, Pay to play& Awards
  23. 23. Primer: 8 Steps to Buzz via Social MediaThe Eight Commandments… Understand what you’re trying to sell, to whom, how they prefer to hear about it, and in what terms. Target – don’t sell Nuke Reactors on twitter? Craft the message(s). What do you want each audience (purchasers, media, mass audience) to hear? Set up your infrastructure: Twitter Account(s), Facebook App, RSS tags on blog on your site, Digg Link buttons,Video… what’s appropriate? Craft content. What’s the story around your message that makes it socially transmissible? Is it cool, new, funny, controversial, insightful…? Be ready to respond, reciprocate (have space to link back, time to reply) Be proactive. Don’t just post; submit. Participate. Comment on others! Reward good behavior. Feature your customers, make ‘em heros. Do not spin. Do do lots of news and “press releases”
  24. 24. Typical B2B Lead Generation Process Lists from industry groups, cold- calling, ads, & direct email, keywords, referrals Suspect “Opt-In”: responses to ads & email, No indication of interest or potential / Cold lead trade show leads, evals Prospect Contact made / Indication of interest Solutions Guides, Webinars, Customer Case Studies Opportunity Datasheets, Pricing Guides, Identified project, or VMware use case Powerpoint Prod. Presos, Demo Qualified “decision criteria” known / “buying process” known / Funds or budget available Whitepapers, Reviewers guides, guided evaluations & demos Validated Technical fit confirmed by prospect /Business fit confirmed by prospect Comparitive documents, competitive guides SelectedCustomer confirms that you are selected vendor / “Reverse timeline(RTL)” done Incentive (“buy now”) programs Negotiation Business terms being negotiated TCO and ROI studies Closed Contracts signed / PO in hand / No “hair” on deal
  25. 25. Marketing in Dilbert’s words
  26. 26. Summary