Digital startup naming mistakes that everyone should avoid

Imagine, you’ve got a fantastic business idea with great prospects, clearly defined audience and the revenue model is crystal clear too. You are absolutely bullish about its chances to become “the next big thing”.

Suddenly, everything comes crashing down because your billion dollar dream domain is not available.

Any why not, the world consists of nearly 6,500 spoken languages. Thousands of new, weird words are coming to life every year. No matter how smart you may be, there is no way of knowing all of the words in the world or who, in the online arena, has used them before you.

Choosing a name just like that is absolutely out of question because the name you’ve chosen may have a negative connotation in the real or virtual world. It could be a bad omen in certain specific cultures or a slang used in some absurd social context. You would obviously want to avoid all those options.

Here are simple tips to help you avoid some of the startup naming mistakes.

Research

Google your desired brand name. What results are in the first page? Anything suspicious there? Are people complaining? Answer these questions by following these steps.

  • Should your new brand name sound like a generic word, evaluate the strengths of the first 10 results and make sure you will be able at all to rank for it. Use the Mozbar to check the Domain and Page authority of each result.
  • Check your new brand name in Google’s Keyword planner. Are there search volumes shown for your new brand name in exact match? Then it must exist somewhere, so you need to Google for it better.

Also Read : 7 Tips to name your company

Domain doesn’t matter

In my experience as a startup consultant, I’ve seen founders losing their night’s sleep over not being able to get the exact domain name as the business name. Frankly speaking, domain name doesn’t matter at all. The name itself matters much more than having the same domain name. Pick a great name, go with a tweaked domain name. Pick a great name, then add something to get a domain name. It really doesn’t matter all that much – whether you get the domain later or don’t. Then get building!

Also Read: Does your company name matter?

Don’t pick too creative names

The problem with having a name like Naymz, Takkle, Flickr, or Speesees is that you will forever have to spell it when you say it, because it isn’t spelled how people hear it. Most importantly, with voice recognition devices like SIRI or Google Now, you would never be able to get your brand search on the top.

Don’t play mixology with your company name

If you invent a new “word” for your name, be careful that it doesn’t sound unnatural. Mashing two words together or mixing up a bunch of letters to form a new word rarely appears or sounds smooth. And be cautious using trendy suffixes to make up a new word. Startups names like Learnyst, Hotelogix, Intelliber, Mobiefit are such examples.

 

4 Digital Marketing sins in the Real Estate

According to an ASSOCHAM survey:

Real estate firms throughout India spend about Rs 2,500 crore annually on publicity across different media and digital marketing accounts for about 25 per cent with a share of about Rs 625 crore.

According to www.emarketer.com, overall online ad spend is projected to steadily increase year over year:

  • 2013- $42.5B
  • 2014- $47.8B
  • 2015- $51.9B
  • 2016- $55.2B

If the real estate industry simply maintains its current share of overall online spending, using www.emarketer.com data as a baseline, the relative yearly spends would equate to:

  • 2013- $15B  +9.7% Year over Year (YoY) growth
  • 2014- $16.7B  +19.2% YoY
  • 2015- $18.1B  +8.3% YoY
  • 2016- $19.3B  +6.6% YoY

 

With a series of new startup companies like Housing.com and Commonfloor entering the space, real estate has suddenly made a grand comeback to the digital marketing. Naturally, with the kind of VC cash at their disposal, these startups are all set to disrupt the space pretty fast. It could well be a comeback for the Real Estate vertical to the digital marketing mainstream.

Frankly speaking, real estate is a funny space in India. As a digital marketer, you can only do so much and there are much bigger factors at play throughout customer’s purchase funnel. It would be fair to say that property guys never really got a complete hang of the digital space.

For a long period of time, most of the real estate people thought that Google is only way they could generate leads and hence, they splurged thousands of rupees in getting their website’s SEO. Even today, getting your real estate project’s website with strong SEO is considered to be a huge priority item for every builder.

As quoted by Indian origin Pritesh Patel, a real estate marketing consultant in UK:

There used to be a time when Google would release a major update to it’s algorithm twice a year. Now it’s like almost every month. There used to be a time when you could pay someone, or an agency, who would build you 50 links per month, regardless of where those links are placed and there are thousands of such SEO and web design companies across the country.

After their recent algorithm changes, Google released a Google Webmaster Quality Guidelines against poor SEO practices. All those marketers who were earlier using link building strategies through paid sources lost their page rank significantly.

The REAL Trends 2013 Online Performance Study reveals some shocking statistics around how the greater real estate industry effectively throws its online advertising budgets to the wind.

Considering that:

  • 90% of consumers did online research before they bought their last home
  • 45% of consumers expect an initial response from an online inquiry within 15 minutes
  • 56% of consumers expect a response from their agent within 30 minutes
  • 89% of consumers said response time was very important when choosing their agent
  • 45% of inquiries on real estate websites never receive a response.

Billions of dollars of real estate marketing money is getting wasted on digital marketing products and services.

Here are some of the most commonly committed sins by real estate companies in digital marketing:

1 Million Facebook Likes Syndrome

Concept of generating likes for your Facebook page has become the latest fad for all real estate marketing teams. Almost as if it is a Bollywood box office release which is aiming for a 100 cr box office collections on the opening weekend. Feeding property updates to your thousands of ‘friends’ on Facebook, even those that live thousands of miles away is clearly a waste of precious marketing dollars. ( Also read : Why you should not worry about Facebook page likes )

Email Nuisance

I can already foresee a time when people would stop using emails because of so much spam hitting their inboxes. Unfortunately, Real Estate industry does not understand the meaning of data segmentation or personalisation. All they know is to blast emailing your entire database just to stay ‘top of mind’ or Tweeting incessantly because, you know, the first place people go to when they think of buying a house is Twitter.

Making 100 project websites

Often I’ve seen real estate companies creating 100’s of domains and sub domains (often one for each project), in order to generate visibility for these projects and garner more number of eyeballs for their brand. I believe it is a poor strategy as you are spending money every time you launch a project. Instead focus on building a strong brand name and keep adding success stories under your belt.

Lead generation is Dead!

A lot of you might be thinking that I am going mad. But trust me, you’ve read the heading correctly.

But how can I even think of doing marketing without lead generation? You can’t, but read the above heading again, what I am saying is that Lead Generation is dead, but Demand Generation is now in.

I’ve seen how madly real estate companies are generating leads to sell their properties. Incidentally, generating hundreds of leads is no good enough. The decision to buy a house takes much longer than what it used to 5 years ago. You are not just supposed to generate a lead but actively see it through till the end. Generating hundreds of leads which are not followed or not managed is a waste of precious money.

Top 6 reasons why digital startups fail

A few months ago, I wrote an article on global trends of failed startups, and guess what, last week I stumbled upon one ex-founder of a failed startup company who has now gone back to his full time job and doing quite well in his new role as a business head.

The pace at which new startups are coming up is less bizarre compared to if you see the pace at which they get shut down.

Question is, why?

Since 2011, 70% of the companies having raised less than $5M overall are dead. Statistics like these can scare the hell out of any young, aspiring entrepreneur. We all read those beautifully written PR stories around few people receiving millions of dollars of funding by VC firms or angel investors, what we miss out on is the list of companies who failed after receiving those funding.

Last year, CB Insights shared below list of top 20 reasons for startup failure which were based on the post mortem done with 100 failed startup founders.

Top reasons startups fail

Top reasons startups fail

 

Let me expand some of these and add some more from my side based on my startup consulting experience:

Single Founder Startups

Let me rephrase the above statement, single “active” founder startup. Incidentally, I’ve worked with couple of them in my career, being a single startup founder is one of the most difficult things in life. Does the destiny sympathizes with these heroes or lady luck favors them? Not really, in fact, it is even more harsh for a single founder to take off their dream. Though there are some nice plus in this situation for e.g. decision making is much faster as the startup is almost like a sole proprietor firm, but considering the single founder cannot be an expert in every single aspect of the business, it sometimes takes a lot more than it should. And sometimes, it may lead to business fatal decision making.

Focused on Niche

If your startup business model targeting a very small segment of audience, you might want to re-look at your business strategy. A lot of founders pick up ideas focussed at a niche audience in order to avoid the competition and carve a stronghold in that segment. But this can be suicidal as it will increase your marketing cost of audience acquisition and if your idea is not strong enough and/or your product experience is weak, a bigger player might just gobble up your segment as well despite yours being a unique idea.

If you make anything good, you’re going to have competitors, so you may as well face that. You can only avoid competition by avoiding good ideas. ~ Paul Graham ( Y Combinator )

Bad Hiring

Also read: How to hire for your bootstrap startup?

One of the most obvious and perhaps the most important reason as to why a lot of startups fail is ‘PEOPLE’. Today, every single early stage startup is going through the worst nightmare of hiring the right people for their idea. There is no doubt that startups need people with a different set of skill sets and more importantly attitude. Needless to say, you cannot filter these people using any job portal. At times, startups end up hiring people in a hurry to get the ball rolling, especially when the investor pressure is high to deliver and scale up. This can also happen when startups hire people based on their background and not the skills they are actually looking for. Result is quite obvious, wrong people get on the bus that leads to project delays and eventually, product failure.

Too longer proof of concept

Also read: 6 Stages of a Startup

Call it a personality issue but some startup founders get themselves into a zone when they spend just too much time in building their product prototype for the proof of concept. It could be because the pandora box of ideas within the parent idea becomes just too much to handle and they just don’t know what to test within their MVP, but this causes massive delay to the project launch and at times so much so that it leads to losing the first mover advantage in the market.

Poor Marketing

This is typical to all B2B startups who raise funding based on their unique product idea which looks really fancy on the presentation, but it is equally difficult to engage audience on that concept. More often than not, there is no clear strategy to build brand as B2B companies focus on customer acquisition without thinking about future growth. Net new customer acquisition becomes increasingly difficult and after a point and lack of repeat business or up-sell starts hitting the bottom lines.

In Fighting

With so much of blood and sweat being put into building a startup, they are extremely prone to ego-battles within the founding team. Once that happen, Decision making becomes increasingly difficult on key issues, positive energies starts to disappear and the balance sheet starts reflecting the reality. This reaches a point where founders can’t see eye to eye and the startup failure becomes increasingly imminent.

Digital Strategy Template – for startups & small business

Prologue

Building a Digital Strategy Template, is on the wish list of almost each and every individual in the digital advertising business, every tech entrepreneur, existing startups or marketing communication teams in corporates.

But can we really create a generic strategy template? Lets find out.

People in the traditional advertising would definitely know about the role of a “strategic planner“. They are the genius brains (inside every advertising agency) who create the “brand story”, who add their midas touch by wearing a strategic hat and making sure that each and every part of the brand messaging goes through a quality prism.

The problem is, there was no such concept of a “Digital Strategy Planner” for a very long time. Fundamentally, planning & strategy in the online space was restricted to “Media Planning”. The ad agencies & the marketing team never really thought about “digital strategy” from an integrated customer outreach standpoint. It was more of a “media oriented approach” where the only objective was to optimize cost per user acquisition.

Unfortunately, social media ended this madness but added some new madness of its own. With Facebook & Twitter taking over the digital world like a storm, conventional media publishing models got massively disrupted. Audience started discovering new content on the social platforms and as a result, a lot of small publishers had to shut down their operations as bulk of the marketing spends started to move into social platforms because client’s objective shifted from just acquisition to engagement.

The Need

As a digital marketing consultant, I’ve heard this from so many aspired entrepreneurs in different startups meets, there is no single approach using which they can prepare their digital strategy to promote their SAAS product or to increase their app downloads or prepare a basic customer acquisition plan while they are bootstrapping it.

A lot of startup marketing teams see “Digital Strategy” in silos and not as an integrated marketing approach which is critical to build a consistent communication & brand experience across all audience touch points.

Who can use this document?

  • Early stage – Mid Stage startups
  • B2B Marketing Teams
  • Digital Ad Agencies
  • Digital Marketing Managers
  • App Developers

In this presentation, I’ve tried to cover very practical approach on how to break down your digital strategy process into stages that cuts across identifying & segmenting your target audience, choosing the right digital marketing channels and creating the marketing metrics to track your performance.

Digital Marketing Consultant vs Digital Agency, both are relevant for business

This post is not to convince people against digital ad agencies, instead it is to help business owners make better business decisions.

Back in 2006, when I started my career in Quasar Media (a leading independent digital agency & now a WPP company) , I never thought that I would get an opportunity to work as an independent Digital Marketing Consultant for such a long time.

Over the years, I’ve worked with clients ranging from enterprise companies to absolute bare bones startups. For someone like me who has actually gone through from the mad corridors of digital advertising to the “politically corrected” corporate boardrooms and now a “meandering consultant”, its been a helluva ride.

But this post is not about me, this post is to help you make better decisions while you are choosing the right marketing partner for your business. But lets understand the business problem in a much more holistic manner.

In the last 5 years, there has been a massive increase in the number of marketing channels, marketing technologies are changing at the pace of light and the world is no longer about just generating new customer leads, thanks to social media and mobile ad tech, you can now predict when and from where you would get your next customer. But all of that isn’t that simple either.

Gartners Digital Marketing Transit Map

Gartners Digital Marketing Transit Map

Gartner’s Digital Marketing Transit Map is just an indicator of this increasingly complex world. Needless to say, with newer technologies like artificial intelligence taking over the reins, marketing can become further complex for future organisations.

In this situation, every business must choose the right vendor partner who can help them navigate through this phenomenally complex world of digital marketing.

The decision of choosing between a Digital Marketing Consultant vs Digital Agency is usually based on the size of the organization, but there are still multiple factors that affect this decision:

Digital Marketing Consultant Services

Digital Marketing Consultant Services

For Enterprise Company

If there is one word that defines their business, it is “LARGE”.

For them it is an obvious choice to hire multiple vendors/ agencies to manage their different digital work streams like customer acquisition, brand management, technology development, content marketing, publicity design, customer relationship management and the most critical one, data management. Based on these, an enterprise company usually hires vendors for the following functions:

  • Digital communication design
  • Technology development for different platforms like web, mobile, digital outdoors etc.
  • Digital brand strategy
  • Localisation agency to managed campaigns in different regions
  • PR & Social Media Agency
  • CRM
  • Digital Content Production
  • Customer Data, Analytics & Research Partner
  • Digital Media Agency ( for paid media campaigns like SEM, FB ads, Performance Marketing, Affiliate Marketing)

There are very few cases where an enterprise company hires an independent consultant. Only where the work is project based and highly niche in nature which cannot be provided at the same level expertise by any of the existing vendors in the market, hiring a consultant becomes imminent for the enterprise brand.

For Small Medium Business

This is where it is most difficult to assess your business requirement. Majority of the SMB’s are focussed towards generating more sales and not building their brand. For them, marketing is an expense, which should be avoided as much as possible, and only ROI driven marketing tactics are considered by the business owners with the clear objective to achieve sales.

However, there are multiple segments (based on size, nature of business, employee count, technology, customer base etc.) within the SME space, each of which has a different level of marketing requirements.

  1. For Local Business – the size of the business is extremely small ( like a small travel operator, Builders & Real Estate Agents, SOHO business, local retail, personalised services etc. ) which is not lucrative for any mid-large digital vendor, not just from scale but from monetary standpoint.
    1. Their marketing requirements (briefs) are often vaguely defined and restricted to most commonly used plus tried & tested digital marketing practices like Search optimisation & Adwords Marketing, Social Media Optimisation and Lead Generation.
    2. Most of these businesses get their low cost websites done by some local web design company without much focus on brand hygiene or customer relationship.
    3. Recommendation : Today, there are tremendous opportunities for any local business to grow, what they lack is a clear focus and direction based on the type of their business. Digital Marketing Consultants are best bets for local business as they can help them define their business focus and create a simple roadmap to grow without spending too much money. Its like visiting a private doctor’s clinic for expert’s advice before getting admitted to a hospital.
  2. For Startups – they come in many shapes and forms based on the stage of business , funded vs bootstrapped, tech vs non tech, product based vs service, e-commerce vs non e-commerce. Based on the type of startup, their marketing requirements are also different in nature.
    1. Early stage startups literally bootstrap their marketing expenditure for a long period of time. I’ve seen founders getting their hands dirty with everything in the marketing, right from building the strategy, finding alliances and partners, writing the PR copy, social media campaign, customer support etc.
    2. Startups are also secretive about their core idea till they build enough customer base. They usually hire people for doing specific task in marketing like SEO, Social Media Marketing, Email Marketing etc. (Also read : How to hire for your bootstrapped startup?)
    3. For startups who manage to raise decent amount of funding in Series A/B, prefer to build their own digital marketing team instead of working with ad agencies. I guess most of the startup founders believe that ad agencies would not understand the vision completely. However, the trend is changing, startups are working with digital vendors for specific requirements like content marketing, online video campaigns (Also Read : How beautifully Faballey created their #unfollow campaign)
    4. Recommendation : on one side, early stage startups badly need top quality resources, but they also want to bootstrap it till the time they find gold aka funding source. Building momentum is super crucial for the founders as it allows them to build a strong business case to prospect investors. In this situation, it is highly advisable to hire experienced Freelance Digital Marketing Consultant who’ve been there and done that. The biggest benefit of working with a consultant is that they bring best practices from all perspectives including product management, sales, integrated marketing, customer relationship management etc.
  3. For Small Enterprise – these companies are those who are on a growth trajectory and certainly big enough in terms of their marketing operations, that allows them hire full time digital agencies.
    1. Despite being cash rich, these companies are extremely performance driven and sales focussed. Having said that, they still hire best of the marketing resources from elite B-schools all around the country by offering fat pay packages.
    2. Their requirements are often multi disciplinary, right from the core strategy to building a sustainable marketing plan to finding right partners in every aspect of their business.
    3. Usually these companies are cash rich and are prepared to spend money on brand building as well. The annual revenues are in high 3 digit numbers with double digit YOY growth.
    4. Please note, below recommendation is extremely relevant for Small B2B enterprise companies.
    5. Recommendation: Companies like these should prioritize their annual budgets and resources based on their short, medium & long term goals. While a Freelance Digital Marketing Consultant may not be the right option as (s)he cannot drive scale for their ambitious growth plans but (s)he can certainly come handy to drive certain specific needs like corporate training, creating your website content, creating your corporate blog strategy, building your website SEO & analytics. Digital Agencies are perfectly modeled for this kind of business as they can offer end-to-end services to their clients.

Building Platform Strategy | How to decide between Mobile Website vs Mobile App?

Even after so many years, a lot of people usually get confused between Mobile Website vs Mobile App and most importantly, which one is relevant to your business. The decision however, is actually not that difficult. Just so that you can understand this in a more logical manner, lets go to the bare basics.

What is a Mobile Website?

The mobile web refers to access to the world wide web, i.e. the use of browser-based Internet services, from a handheld mobile device, such as a smartphone or a feature phone, connected to a mobile network or other wireless network. ~ Wikipedia

Statistics have significantly tilted towards mobile adoption globally and there is no doubt that mobile users are exceeding desktop users on the Web. (see below graph)

mobile users beating desktop users

mobile users beating desktop users

After recent algorithm changes made by Google, I don’t think there is any option of not having a responsive website anymore. It even make a lot of business sense considering majority of the content is consumed through mobile browsers and the number is bound to increase at exponential pace in future.

However, do you really need to build a native app for your business?

What is a Native Mobile App?

Native apps are installed through an application store (such as Google Play or Apple’s App Store). They are developed specifically for one platform, and can take full advantage of all the device features ~ Techopedia

According to a report by Flurry Analytics, App usage has sky rocketed in the last 2 years and there is just no comparison with mobile web:

apps dominating mobile web

apps dominating mobile web

Native Mobile App benefits

  1. Offline Mode: Once the browser is closed, mobile website is of little use to anyone. Unless you are a huge brand in your category or your SEO rankings are really good or your social campaign is super rocking. Mobile App, on the hand allows you to download key content on the mobile which can be accessed without internet connection.
  2. Control: Because users have to download and install the app, businesses have more control over their presence on a device than they would with a mobile website, a mobile app can be closed or inactive, but still work in the background to send geo-targeted push notifications and gather data about customer’s preferences and behaviors.
  3. UI/UX: Native apps are build for a specific platform like iOS or Android or Windows and can be installed from respective App store / Play store. Although a lot of people consider this as a drawback since considerable amount of time, effort and resources is required to customize the app in its UI and UX. But the benefits clearly surpass the challenge because it offers tremendous opportunity to the developer to build personalization capabilities for the app users native to respective mobile OS.
  4. Device Features: One of the biggest advantage of the native apps is that they can take full advantage of all the device features — they can use the camera, the GPS, the accelerometer, the compass, the list of contacts, and so on. This is something you can never achieve in browser environment due to massive to-an-fro data processing which is required at the backend.
  5. Experience: For an experience that is well polished, fast response, and simply feels nice to the user, native apps are the go to solution.
    • Generally, web apps include elements from the browser such as the search and navigation bars which clutter the experience. When using a smaller device this means less space for app specific controls.

    • Native apps respond more fluidly to user gestures such as swipes and pinches.
  6. Engagement & Loyalty : Native apps allows you build repeat engagement with your customers / audience, you can focus your energies towards creating quality content and deliver powerful experience because you are not worried about your SEO rankings.

Conclusion

Mobile Website vs Mobile App

Mobile Website vs Mobile App

In order to decide if you want to develop a native app, you need to consider the following points:

  • How important speed and performance would be for the product / service you are trying to sell to your customers? e.g. gaming apps which needs huge amount of performance for graphics which is not possible to produce in a browser environment.
  • Does your communication needs engagement through any of the mobile device features? e.g. apps that require camera settings, directory listings that need your map location etc.
  • If you want your web service to be Internet-enabled, i.e. if you believe that there will be constant to-an-fro of data with the server. e.g. e-commerce apps which need continuous internet connection for faster transaction.
  • If you want your app to support multiple mobile platforms and devices and if yes, how many. See your web analytics, may be majority of your audience coming from a particular mobile device. ( Also Read: how to track mobile visitors in GA? )
  • Your budget, vs. the estimated cost of developing your app.
  • If you would like to monetize your app in the future

[poll id=”2″]

Startup Lessons : When to launch your digital startup?

The article was first published in 2009 as a part of Startup Lessons Learned. Author of this article is Eric Ries who is considered to be one of the most powerful individuals in Tech Entrepreneurship space. 

Here’s a common question I get from digital startups, especially in the early stages: when should we launch? My answer is almost always the same: don’t.

First off, what does it mean to launch? Generally, we conflate two unrelated concepts into the term, which is important to clarify right up front.

  1. Announce a new product, start its PR campaign, and engage in buzz marketing activities. (Marketing launch)
  2. Make a new product available to customers in the general public. (Product launch)

In today’s world, there is no reason you have to do these two things at the same time. In fact, in most situations it’s a bad idea for startups to synchronize these events.

Launching is a tactic, not a strategy. In the right situation, it’s a very useful tactic, too. In particular, a marketing launch can help you do three things (courtesy, as is most of my marketing advice, of The Four Steps to the Epiphany):

  1. Drive customers into your sales pipeline. This is the usual reason given for a marketing launch, but for most early stage startups, it’s a failure. That’s because a marketing launch is a one-time event, and rarely translates into renewable audiences. Worse, if you are not geared up to make the best use of those customers when the launch sends them your way, it’s a pretty big waste. And, as we’ll talk about in a moment, you don’t get a second chance.Because this reason is so often used as an excuse, I recommend giving it extra scrutiny. Are you really choosing to engage in marketing in places where your potential customers pay attention? Do your customers really read TechCrunch? If not, do not launch there. Even if you must launch to your customers, avoid the urge to also launch in extra places, just because your PR firm can do it at the same time.
  2. Establish credibility with potential partners. In some businesses, especially in certain industries like traditional enterprise software, you simply cannot bring a new product to market on your own. You need to combine your product with others, and this requires partners like OEM’s or system integrators. A marketing launch can help you get in the door with those partners, if you’re having trouble getting their attention. Again, it’s critical to focus your marketing launch on those publications, venues, and channels that your potential partners are paying attention to. If you don’t know who the partners are, what they pay attention to, or what kind of message they are open to receiving – it’s too early to launch. Do some Customer Development instead.
  3. Help you raise money. If you are having trouble raising money, sometimes a little PR can help. But don’t be too sure. When VC’s and other investors see PR activity, they are going to expect to see significant traction as a result. If you launch and see only mediocre results, it may actually make it harder to raise money. Sometimes, it can be easier to raise money pre-launch, if the launch is not imminent and there is some fear on the part of investors that they might lose the deal when the launch drives awareness of your company to all their peers.

Those are the potential goals of a marketing launch, but those are not its only effects. It also has causes other tectonic shifts that many digital startup founders don’t consider:

  1. A marketing launch establishes your positioning. If you don’t know what the right positioning is for your company, do not launch. Figuring this out takes time, and few entrepreneurs have the patience to wait it out, because the business plan does such a good job of explaining what customers are going to think. The problem is that customers don’t read your business plan.When you launch with the wrong positioning, you have to spend extra effort and money later cleaning it up. For example, we did some early press (in Wired, no less) for IMVU that called us the next generation of IM and compared us positively to AOL. At the time, we thought that was great. Now, I look back and cringe. Being compared to AOL isn’t so great these days, and IM is considered a pretty weak form of socializing. When we finally launched for real, we had to compensate for that early blunder.Of course, we didn’t realize it was a blunder at all. We were actually really proud of the positive coverage. In fact, at that time we were auditing Steve Blank’s class at Haas, since he was an early investor. Since we hadn’t shown him much in the way of progress recently, we actually brought in the article to show off. I won’t recount what happened next (although your can hear us recount it in audio). Suffice to say I can trace my understanding of what it means to launch to that day. We’re lucky we had a mentor on board who could call us on the bad strategy before it was too late. Most startups aren’t so fortunate.
  2. You have to know your business model. Most startups launch before they’ve figured out what business they’re in. Pay attention to your fundamental driver of growth. If the product needs to be tweaked just a little bit in order to convert users into customers, you want to figure that out before the launch. If the viral coefficient is 0.9, keep iterating until it’s 1.1 before you launch. And if your product doesn’t retain customers, what’s the point of driving a bunch of them to use it? Spend your time with renewable sources of customers and iterate.
  3. You never get a second chance to launch. Unlike a lot of other startup activities, PR is not one where you can try it, iterate, learn, and try again. It’s a one-way event, so you’d better get it right. Remember the story about IMVU’s early encounter with Wired? When we finally did launch the company, even though our product had grown and changed significantly, Wired didn’t cover it.

I wrote a little bit about the epic launch we had at a previous startup in my post Achieving a failure. We really did it well, with a great PR firm and great coverage. New York Times, Wall Street Journal, CNN, the works. But it turned into a crushing defeat, because we couldn’t capitalize on all that attention. The product didn’t convert well enough, the mainstream customers we were driving weren’t ready for the concept, and the event fed expectations about how successful the product was going to be that turned out to be hyper-inflated.

Worse, we tricked ourselves into thinking that what the press said about our success was actually true. And even worse, we’d cranked up the burn rate in order to be ready to handle all those millions of mainstream customers we anticipated. When they failed to materialize, the company was in big trouble.

Why do startups synchronize marketing launch and product launch? I think it has mostly to do with psychology.

  1. Investors push for it. Many investors have a desire to see their companies lauded publicly. This actually makes a lot of sense, if you see the world from their point of view. Third-party validation is one of the few forms of feedback they have available to them. Most investors in startups have a 3, 5 or even 10 year horizon for liquidity. That means they don’t really know if they made a good investment for a very long time. Seeing the press talk about what a great investor they are is a great form of feedback. As a bonus, it gives them something to show their partners and LP’s.This trend is so strong, this is actually a question I recommend to screen potential investors: “How do you know it’s time to launch the company?” See if their answer is about tactics or strategy.
  2. Founders push for it. Who doesn’t want to see their name in print? Investors aren’t the only ones with ego invested in the company. In some ways, founders are even worse. How do they know they are making progress? They spend so much of their time trying to convince everyone around them that their idea is great and the company is doing well: employees, investors, partners, friends, family, significant others – it’s a long list. But when they go to sleep at night, who’s there to convince them that they are making progress? My experience is that many founders actually have a deep anxiety that maybe they are not succeeding. Sure, they are keeping everyone busy, but are they really working on the right things? A marketing launch is a temporary salve for these kinds of worries. Plus, it gives you something you can send home to mom (hi, mom!). Unfortunately, it’s not a long-term solution, so it can become a bit of an addiction and, therefore, a huge distraction.
  3. There is also fear of the accidental launch. Companies that are thinking strategically sometimes reason like this: “if we do a product launch, members of the public will see our early product. They’ll form their own opinions, maybe see our wrong positioning, and maybe talk to members of the press. By the time we’re ready for a marketing launch, it will be too late. Better to launch now and get ahead of the story, or stay in closed beta until we’re ready.”In most situations, this fear is misplaced. Here was our experience at IMVU, which I have seen replicated at many other consumer internet startups. We did alienate and mis-position to our early customers. Luckily, if your product isn’t good enough to have traction, you simply cannot alienate very many customers – because you can’t get them engaged with the product. When you finally do get traction, the millions who see the right positioning will dwarf the few who saw the wrong one. And you can get an astronomical amount of traction before anyone will write about your company of their own accord. IMVU was a top-1000 website in the world, with millions of customers and making millions of dollars without getting any significant press coverage.In fact, we often felt frustrated when new startups with a fraction of our success got terrific write-ups in Silicon Valley-centric venues. We had to resist the urge to launch just to make that frustration stop. And, more often than not, we’d watch those companies flame out and die while we continued to grow steadily every month. If we’d wasted energy chasing their PR coverage, we’d probably have died too.

So don’t combine your product launch with a marketing launch. Instead, do your product launch first. Don’t chicken out and do a closed beta; get real customers in through real renewable channels. Start with a five-dollar-a-day SEM campaign. Iterate as fast and for as long as you can. Don’t scale. Don’t marketing launch.

How do you know you’re ready for marketing launch?

  • When you have a strategy for the launch, which means knowing why you’re doing it. Make sure it’s solving a problem you actually have, and not one that you think you might have some day.
  • Know what the success metrics are for the launch. If you know what the strategy is, you’ll know how to tell it was a success. Write it down ahead of time, and hold yourself accountable for hitting those objectives.
  • Know what your fundamental driver of growth is. Make sure the math for your model makes sense. That way, you’ll be able to predict the future. When customers come in from your marketing launch, you’ll know exactly what they are going to do and how that benefits your business.
  • Know where, when, and how to launch. If you know what your strategy is, and you know your target well (customers, partners, investors) you will also know where they are paying attention, and what messages they are able to absorb. Hold yourself and your PR agency accountable for developing a high level of understanding of these questions ahead of time.

One last suggestions. Think about the psychological motivations that are driving you to want to launch earlier than makes sense for your company. See if there’s anything you can do to address those underlying needs that does make sense. For example, if your employees are feeling frustrated that they don’t get much third-party validation for their work, use a board of advisers to fill that role. Bring in people that they (and you) respect to evaluate your progress and make suggestions. In my experience, this has provided an effective boost to morale and also helpful guidance.