Marketing for startup companies can often be make or break. With the advent of the Internet, long gone are the days of “if you build it, they will come.” So how can you market your startup successfully, without the giant marketing budget of larger companies?
It’s important to remember the biggest prerequisite to successful marketing – having a great product. A great salesman can sell ice to an Eskimo, but without a solid product that solves an important problem, that Eskimo will not be a repeat customer.
Define Your Customer and Market
Once you have identified the problem you are solving and have determined that you have paying customers, it is time to start gathering as much data about your customers as possible.
It is common for entrepreneurs to believe their product is of perfect use for everyone and their mother, but in reality, almost all ideas have certain customer demographics that really drive sales. It is important to find out what those demographics are and who those customers are so you can market your product or service effectively.
“If you try to market your startup to everyone, you waste both time and money. The key is to identify a niche target market and go after market share aggressively.”
Your customers will give you a great starting place for determining the proper market for your startup, but there are a few other key aspects to consider as well.
Market Size and Wealth
A startup’s Total Addressable Market, or Market Size, is incredibly important not only in determining whether or not this opportunity is worth pursuing, but also if the company wants to try and court investors down the road. It is of utmost importance that the founders understand their customer demographic completely and understand how many potential customers fit that demographic or market.
Investors look at market size when comparing deals, and it often plays a crucial part in whether or not they invest. It doesn’t take a mathematician to figure out that the greater the number of potential customers, the greater the chance for making a large profit. Startups attacking a small market will have a very difficult time convincing investors that they will see a worthwhile return on investment.
In addition to the size of the market, it’s important to understand what type of money flows through that market. Are these customers willing to spend money? How much? Is that enough to justify pursuing the opportunity or investment?
Market Competition and Value Proposition
In some markets, the opportunity and market size are so attractive that there are already a bevvy of competitors in the space. What type of market share is left for your startup? Does your startup cut through the clutter and emerge as a dominant player in the space?
The key aspect in entering a crowded market is value proposition. Does your product provide a large enough benefit, while also being unique enough to stand out in a crowded market?
