SME's DIY: Why SME's Need to Focus on Sales, Not Marketingsmestudio.xyz
JESSICA LIVINGSTON: The most important thing an early-stage startup should know about marketing is rather counterintuitive: that you probably shouldn’t be doing anything you’d use the term “marketing” to describe. Sales and marketing are two ends of a continuum. At the sales end your outreach is narrow and deep. At the marketing end it is broad and shallow. And for an early stage startup, narrow and deep is what you want — not just in the way you appeal to users, but in the type of product you build. Which means the kind of marketing you should be doing should be indistinguishable from sales: you should be talking to a small number of users who are seriously interested in what you’re making, not a broad audience who are on the whole indifferent.
Successful startups almost always start narrow and deep. Apple started with a computer Steve Wozniak made to impress his friends at the Homebrew Computer Club. There weren’t a lot of them, but they were really interested. Facebook started out just for Harvard University students. Again, not a lot of potential users, but they really wanted it. Successful startups start narrow and deep partly because they don’t have the power to reach a big audience, so they have to choose a very interested one. But also because the product is still being defined. The conversation with initial users is also market research.
At Y Combinator, we advise most startups to begin by seeking out some core group of early adopters and then engaging with individual users to convince them to sign up.
For example, the early adopters of Airbnb were hosts and guests in New York City (Y Combinator funded Airbnb in Winter of 2009). To grow, Airbnb needed to get more hosts and also help existing hosts convert better. So Brian Chesky and Joe Gebbia flew to New York every week to meet with hosts — teaching them how to price their listings, take better photos, and so on. They also asked hosts for introductions to potential new hosts, who they then met in person.
Stripe (YC S09) was particularly aggressive about signing up users manually at first. The YC alumni network are a good source of early adopters for a service like Stripe. Co-founders Patrick and John Collison worked their way methodically through it, and when someone agreed to try Stripe, the brothers would install it for them on the spot rather than email a link. We now call their technique “Collison installation.”
Many guest speakers at Y Combinator offer stories about how manual the initial process of getting users was. Pinterest is a mass consumer product, but Ben Silbermann said even he began by recruiting users manually. Ben would literally walk into cafes in Palo Alto and ask random people to try out Pinterest while he gathered feedback over their shoulders.
The danger of the term “marketing” is that it implies the opposite end of the sales/marketing spectrum from the one startups should be focusing on. And just as focusing on the right end has a double benefit — you acquire users and define the product — focusing on the wrong end is doubly dangerous, because you not only fail to grow, but you can remain in denial about your product’s lameness.
All too often, I’ve seen founders build some initially mediocre product, announce it to the world, find that users never show up, and not know what to do next. As well as not getting any users, the startup never gets the feedback it needs to improve the product.
So why wouldn’t all founders start by engaging with users individually? Because it’s hard and demoralizing. Sales gives you a kind of harsh feedback that “marketing” doesn’t. You try to convince someone to use what you’ve built, and they won’t. These conversations are painful, but necessary. I suspect from my experience that founders who want to remain in denial about the inadequacy of their product and/or the difficulty of starting a startup subconsciously prefer the broad and shallow “marketing” approach precisely because they can’t face the work and unpleasant truths they’ll find if they talk to users.
How should you measure if your manual efforts are effective? Focus on growth rate rather than absolute numbers. Then you won’t be dismayed if the absolute numbers are small at first. If you have 20 users, you only need two more this week to grow 10%. And while two users is a small number for most products, 10% a week is a great growth rate. If you keep growing at 10% a week, the absolute numbers will eventually become impressive.
Our advice at Y Combinator is always to make a really good product and go out and get users manually. The two work hand-in-hand: you need to talk individually to early adopters to make a really good product. So focusing on the narrow and deep end of the sales/marketing continuum is not just the most effective way to get users. Your startup will die if you don’t.