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Marketing for High-Tech Startups presented at UC Berkeley
1. Marketing for high-tech startups has changed in recent years due to shifts in software markets and development philosophies. Products are often developed iteratively now rather than using the black-box model of the past. 2. When developing a marketing strategy, startups must consider the 4Ps of marketing - product, price, place, and promotion. This includes deciding where the company's product fits relative to larger competitors, choosing the appropriate pricing and distribution models, and determining how to effectively promote the product and acquire customers. 3. Effective customer acquisition involves testing various promotion channels like social media, blogs, conferences and evaluating their cost effectiveness. The goal is to drive customers through the lifecycle from initial contact
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Marketing for High-Tech Startups presented at UC Berkeley
- 1. Marketing for Startupsin High-Tech Marketing for High-Tech Startups R. Paul Singh – rpaulsingh Entrepreneur CyLAN 1
- 2. AGENDA What has changed in Software business? 4Ps of Marketing Product Distribution Pricing and Revenue Model Promotion & Customer Acquisition
- 3. Software Markets 5years ago Consumer Large Ent. Small Business Medium Medium Enterprises Enterprise Large Ent. Small Business Consumer
- 4. What is thegoal of Marketing? Create a good brand Peter Thiel: Brand is as a classic code word for monopoly. But getting more specific than that is hard. Whatever a brand is, it means that people do not see products as interchangeable and are thus willing to pay more. A good brand provides a clear and memorable sense of what your business stands for! 4
- 5. Select Core 4Psof Marketing Product Process People Positioning Place Prayer Promotion Packaging Pricing
- 6. Has Marketing defchanged? 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. Development philosophies have Marketing repercussions Black-box Development Iterative Development Hardware, High priced Software, Accessories software products Pre-development research Research as you go necessary Limited alpha and beta Large alphas, Open betas Buzz building after beta Buzz building starts very phase early
- 8. Where is yourElephant? C A B
- 9. Where is yourElephant? 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. Choose your Elephant& Partnering distance Fill-A-Gap Exclusive Value-Add Leverage Choose Ecosystem (s) MS, Apple, Google, FB, Tw, SF……
- 11. What is yourProduct 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. Segmenting & Findingyour Customers Yahoo Vs Google
- 13. Did you getthe product right? ANALYZE
- 14. Does Distribution channelmatter? High-Tech Demand Demand Fulfillment Product Generation Categories Consumer Vendor Web, Mobile, Software Distributors Consumer Vendor Own Store, 3rd party E- Hardware stores, Retail APIs/ Widgets Vendor Others (Web, Mobile) B2B Software Vendor Direct, Existing Channels Infrastructure Vendor Direct, Existing Channels
- 15. Pricing – SoftwareRevenue Models Business Business Consumer Models Sell – One-time Perpetual model, Perpetual model, App Stores App Stores Sell – Direct Direct Subscription Fremium Direct, In-App Direct, In-App Ad Supported Not Direct sale, Ad recommended Inventory from others Free with Upsell Not Own product or recommended 3rd party product
- 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. Some Hows ofFremium? 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. Is your CustomerLifetime Value > 0?
- 19. What does itcost to acquire customers?
- 20. Promotion = CustomerAcquisition 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 key Some good reference presentations http://www.slideshare.net/dmc500hats/startup-metrics-ignite-velocity?type=powerpoint http://www.slideshare.net/Startonomics/creating-implementing-a-web-20-marketing-plan
- 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. Acquisition Channels/Promotions Channels Notes PR PR Agency, Cost, When, How SEO Keyword, Website design Blogs Which products, Why, How Email Collect, Opt-in, Title is everything, How Social Media LI, FB, Tw, Quora, Digg, Youtube, Pinterest…. Affiliates When and How Ads CPM, CPC, CPA, Media Trade Shows Investment vs return, Pay to play & Awards
- 23. Primer: 8 Stepsto Buzz via Social Media The 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. Typical B2B LeadGeneration 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 Selected Customer 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
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