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As 2021 draws to a close, teams at early stage startups will be looking forward to a well earned break. In between the mince pies and family drama, there likely will be some quiet moments to pause and reflect on what is to come in the year ahead. Big strategic plans and vital tactical decisions lie in wait, and for startups whose runway is limited - a fast start to the new year is of existential importance.
But what questions should early stage teams be asking themselves about marketing? What decisions really move the needle in terms of growth? In this final Xmas edition of the Passionfruit newsletter, we round up the five most frequent questions (and corresponding answers) we've been asked by founders looking to get ahead in the new year.
I don't have a community - should I build one?
There has been a boom in thought leaders proclaiming that a digital community will be a critical part of every startup's future. This kind of argument is superficially persuasive, but it's also damaging for companies that see building community as launching a Discord channel and inviting lots of people to join. Before you start, get clear on what milestones your community will help its members achieve. What additional bits of value-add do other users provide that your product itself cannot? In the case of mobility startups, that might be exclusive charging points atother members houses, or "insider" routes round cities, for instance.
Once you have an answer in place, and once it has been deeply validated by users - not merely imagined in a meeting room - start by offering the incremental value to a select group of your power users (the greater their own distribution across social channels, the better) and create rituals that provide regular opportunities for those users to honour that new value. If you've successfully designed for that "community/market fit", as Greg Isenberg describes it, within months you will notice word-of-mouth spreading and you will be reaping the manifold benefits of community-led products.
Are creator partnerships effective?
There are a lot of reports coming through the grapevine of TikTok creator partnerships being the lifeblood of top of funnel leads for B2C and even some B2B businesses right now; especially those with a freemium SAAS model. We can confirm this as true in some cases. For one, our friends at Night Media have gone on record with Business Insider to explain how they've used creators to fuel the success of Current - a consumer fin-tech brand backed by Mr Beast.
The real answer - just ask anyone who's spent meaningful time in the creator space - is that these partnerships are proportionately effective to the buy-in you have from the creator. Unlike traditional media placements, creators' enthusiasm matters when it comes to conversion rates. A banner ad doesn't care about crypto, but a GenZ creator in India (the country in the world with the most crypto holders) may well do.
What's important is a proper strategy in place to prospect and connect with creators that stand to benefit emotionally from your success. You want creators who are already sold on your mission as a startup. If you can make your business the vehicle through which brings about some change or difference they want to see in the world, you'll almost always get extremely good ROI. If you go in without a plan, and use follower numbers as the determining factor in your selection process, your budget will get used up fast, with little impact.
When do I need to refresh our brand strategy?
This is one of those questions that if you're asking it, the answer is now. You're likely going through one of those moments where your mission, vision and purpose feels in some way unclear, and as a result your positioning is losing its lustre.
Let's be totally clear: at the earliest stages, narrative-market fit beats product-market fit.
For the most part, a compelling narrative is built on a brand. A brand is a story, a mindset, a way of seeing the world which can be conjured through a motto, a colour scheme, a jingle, a logo – or any other visual or auditory cue (think Swoosh or I’m Lovin’ It). The world’s best brands are known to millions who will never even buy them - they are so much more than a visual identity.
As a founder you likely know the domain or subject area better than most. However, what a brand strategist provides is not domain-specific expertise but rather domain-agnostic best practices. These are evergreen guardrails within which the seeds of a watertight brand will grow, informing your behaviour and business strategy for years to come. It’s also important to note this strategy specialist is almost always not an identity (i.e. design) specialist as well – they are different skill sets.
My story seems to be landing with investors but not customers; why is that?
The temptation when you start a company is to sell yourself and everyone around you "the dream": to imagine the dozens of use cases in which your product could work, and visualise the global scale you'll reach. This is important to do when speaking with VC investors: they make their money on big home runs and if you don't seem like the kind of person who wants to reach "venture scale", it'll be a thanks but no thanks.
Your message for investors, however, should be markedly different from the one that you sell to your initial beachhead of customers. When it comes to competing with incumbents to gain initial traction, unfortunately, as Mark Ritson has put it, “capitalism isn’t fair and the big f***er f***s everyone else.” Put less aggressively, the wider you focus your product marketing, the more diluted your brand, and a weaker brand leaves you vulnerable. Big brands grow because they have the resources to chase both current and future customers at the same time.
If you're fresh out the gates, the surest way to gain a foothold with customers is to settle on an emotionally-charged, unmistakeable point of view that speaks to a very narrow group of users, and win them over first. Remember, the most ambitious approach you can take is to work out one beachhead sector or space that you can dominate. You only earn the right to build an enduring or "venture scale" brand once you've captured an initial piece of the map.
Should I be concerned that 75% of my traffic is coming from paid ads?
As Bennett Carroccio of Canal has spoken about, the price of digital advertising is going up sodramatically that CAC:LTV ratios are getting hit even for more established players.
What this means is yes: if you're overly reliant on paid ads then you're vulnerable. If you It’s time to start investing in organic distribution channels, the earlier the better, and thinking and actinglike a media company with a proper content strategy is fast becoming table stakes for every startup out there. Subscribe to our newsletter as we'll be launching a full piece on startups as media businesses early in the new year.
