Big companies with products in established markets worry about the competition. In fact, at the larger companies I’ve worked at we’ve had entire teams dedicated to figuring out what the competition was up to.  Startups on the other hand often spend way too much time worrying about the minute details of features and functions that their competitors deliver.  In my opinion the only way that startups should look at their competition is through the eyes of their customers.

Customers Will Give You The Big Competitive Picture

In the very early stages of a startup looking at competitors is a distraction from the job at hand, which is figuring out if your offering is a fit for a particular market.  If the focus is on customers, you’ll hear first-hand what customers see as the alternatives to your offering.  This list usually will contain a couple of companies, along with some more difficult competitors like “do nothing” or “build it ourselves”.  The list is interesting because it tells you what category your customers place you in, what budget they will pull from to buy you, what existing products they might replace with yours.  It doesn’t of course tell you what exactly to build.

The Small Stuff Doesn’t Matter for Startups

In mature markets many products get bought based on nothing more than company reputation (including the customer’s history with that company) and a feature/function checklist.  Almost by definition, startups don’t make it on the list and if they did, they would lose the checklist war.  Less mature markets are a whole different ballgame – reputations matter less and the checklist changes all the time.  Startups can bring a whole new approach (a new business model, a new way of solving the problem, new economics or a new something else) that makes the checklist irrelevant. For most startups, your offering will have to be so obviously differentiated from what’s in the market today in order to be successful, it won’t matter what little features and functions your competitors offer. Sure, you’ll have to watch them to see how they react to your approach but they likely won’t even notice you exist until you have some traction in the market.  They won’t notice because they are spending all their time looking at what their competitors are delivering and making sure they stack up well in a checklist.

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Related posts:

1. 3 Startup Branding Mistakes
2. Startup Marketing 101
3. When Having No Competition is a Problem

1. Reduce the number of words you use – People have short attention spans and they won’t read a page of text just to figure out what you do.  Take your one page description that describes your key differentiated points of value for your market.  Then pare it down to a paragraph.  Then whittle it down to 2 sentences. Now tell me in 8 words or less.  You need to be able to communicate what you do, why people care, and who the people are that should care in as simple a way as possible.  Simple value statements work better.
2. Lose your pointless tagline – Why do so many startups I come across have pointless taglines? Some even have great one line descriptions of what they do and then add a completely non-differentiating tagline that not only fails to add to anyone’s understanding of the offering but distracts from the decent description they do have. Follow, forget, fail.  If it can’t stand alone than just don’t do it.  Write a solid one-line description of what you do and leave it at that.
3. Get rid of not just buzzwords but also jargon or overly technical terms – Startups in particular often fall into the trap of using terms that are very familiar inside the company but less so to potential customers.  Simple terms always work better in high-level messaging.  Remember that in your deeper content (whitepapers, e-books, etc) you will have plenty of room to get into as much detail as you need to.
4. Get to the good stuff sooner – Many startups try to cram too much into their high level messages, trying to articulate an overly long list of reasons why customers should buy.  Remember the goal in your high level messaging is to help customers determine if they should spend the next 5 minutes with your site.  Get the most compelling stuff front and center and there will be plenty of time to go deeper after you’ve convinced the prospect to stay a while.
5. Highlight value, not features – inside your startup, you product and development team is very focused on delivering features but your marketing should reflect the value those features deliver for customers.  It’s simple to say but I still see many technology startups spending too much time on feature descriptions while spending too little time describing why customers would find those features valuable.

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Related posts:

1. Pre-Launch Marketing for Stealthy Startups
2. Crafting Simple Value Statements
3. Startup Messaging

I’ve been fielding a lot of questions from startups about how you figure out what customers really want vs. the “nice to have” stuff.  This process of “Customer Discovery” as Steve Blank calls it is something that a lot of founders I’ve spoken with don’t have a lot of experience with.  I had an email exchange recently with Tim Johnson talking about my favorite question: “So What?” I like to have marketers use it on themselves but Tim related an example of how he uses it in customer engagements.  It was a great example and I asked him to write it up in the post below.  Although his examples are around trying to close deals, I think they apply equally well to an early stage startup that is trying to get at the root of what’s really important in a solution vs. the nice to have stuff.  What I also like about this story is how it illustrates how customers may talk about “brand” characteristics as being important (we like company X because they are “fun”) when what they really mean is something much more tangible (company X’s products work with what I’ve already invested in). Read on…

If you want to cut to the chase or destroy all the hubris around a conversation with a customer, the absolutely most effective question you can ask is, “So what?” A softer version is “Why is that important?” The customer will either tell you why it’s a key decision criteria or they will admit that it just sounded nice to have or they didn’t need it in the first place.

The company I was at in the late 90’s had software in the PeopleSoft box and I was managing the relationship with them as well as the business around it. At my first meeting with PeopleSoft they introduced me to the VP of Supply Chain for Dow Corning – their first customer in the manufacturing segment. The room was lined with those iconic fun, homey PeopleSoft posters claiming, “We work in your world.” I was new to the segment and asked the Dow VP why he had chosen PeopleSoft when SAP cut their teeth in the manufacturing space. He said, “Because they’re fun.” My immediate reply was, “So what?” He told me that the SAP guys were arrogant and immediately told him his processes were broken and they were going to implement best practices to fix his business. He asked the SAP rep, Tell me, how many miles of fibre optic cable SAP manufactured last month?” The PeopleSoft guys, he went on, were friendly and asked him what they needed to do to their software to complement his existing processes and ensure his success.

In one question, I got a clear explanation of the value of the relationship he had with his key vendor. PeopleSoft may have been fun to work with but the real value was a company willing to adapt to his needs and treat him with the respect he was due. My relationship with him and with PeopleSoft going forward was predicated on that knowledge.

More recently, I was interviewing a customer for a success story. He told me that in one pass of my software, he was able to reduce his annual storage costs by 20%. I was ecstatic until I did a little math to find that translated to less than a thousand dollars. Suspecting something deeper, I asked, “So what?” He went into a core dump of how his bonus was mostly based on service levels, which he hadn’t been meeting lately. Because my product cleared out so much junk from his network, he was able to hit his backup and restore windows with ease AND lower their cost of storage. He didn’t really care about saving the company 300 bucks, he cared about getting his bonus back. My case study changed from saving money to business continuity planning and meeting service levels – a much more compelling message than the meaningless and monotonous “lowering TCO.”

Your goal in any customer conversation is to get the real heart of the matter: to separate the fly specks from the black pepper, as my Dad often says.  ”So what?”, ” Who cares?” or “Why is that important?” will get you to the honest answers that you need to create effective messaging and sales tools.

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Related posts:

1. Is Facebook’s Zuckerberg Right? Sometimes Listening to Your Customers is “Stupid.”
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3. Should You Teach Your Customers How to Buy?

What is the number 1 startup marketing mistake?

My answer?  They try to market to everyone.

I understand how startups get there.  There is a sort of straightforward logic that says that the more people that are aware of your product, the more will check it out and ultimately pay you for it.  This would work if your product was suitable for everyone (it isn’t) and you had a marketing budget big enough to reach everybody (you don’t).  The trick to effective marketing is focus your efforts on the segments that are the best fit for your product.  Those segments have the strongest need for your product and the best understanding of the value you offer.  By marketing to everyone, you run the risk that the folks that are the most likely to buy from you either never hear about you or when they do, can’t recognize the great fit your product is for them because it appears to be built for “everyone”.

Here are 4 reasons you should focus your marketing efforts on specific segments:

1. Targeted Messaging and Offers are Always More Effective – If you are selling t-shirts for fashion conscious 20-something’s you will probably emphasize the styling.  If your business is selling t-shirts to kids sports teams you might emphasize the durability of the shirt or the low cost.  If you are selling t-shirts to everyone you’d either just talk about t-shirts in a boring vanilla way or touch on both style and durability (and  10 other things) so superficially that no style conscious 20 something, nor buyer for kids sports teams would think your offering was for them.  Messaging built to appeal to everybody appeals to nobody.
2. Word of Mouth and Social Proof Works Best within Communities – Word of mouth travels through communities. If you are focused on everyone, chances are you will get a little word of mouth everywhere but not enough to really register within any particular group. If instead you focus on a particular segment it’s more likely that your story will get heard and shared within that particular community.  Customer examples, references, referral programs (and other tactics we put in the “social proof” bucket) are also more effective.  People can see that folks just like them (or companies just like them) are using the product in ways similar to how they would.
3. Getting Heard Above the Noise is Easier in a Small Room than it is in a Stadium – Small companies are at a disadvantage when it comes to visibility in a particular market.  The broader that market is, the more resources it will take to be heard above the noise and the more you are going to be going head to head with the big guys.  By specifically targeting smaller markets, you have the opportunity to become a bigger fish in a smaller pond.
4. Traction Builds on Traction – Acquiring customers is hard work when nobody knows who you are but after a while you start to be known in a market and customers begin to come to you rather than you having to always pay to get their attention.  Get good traction in a particular market and suddenly that traction will accelerate on its own.  This is easier to do when your market is narrow (for all of the reasons outlined in the previous 3 points).  Imagine how many customers you would have to bring on board to get to that stage if your market was “everyone.”

As I mentioned earlier in this post, the folks at Sprouter have launched their new “Answers” feature.  Sprouter is an online community for startups.  Their new “Answers” feature allows entrepreneurs to ask questions and get answers from a panel of startup experts.  I’m happy to be part of that along with folks like Amber MacArthur, C.C. Chapman and Dan Martell.  You can get access to the experts here.

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Related posts:

1. 7 Startup Customer Discovery Questions
2. Competitive Intelligence Startup Style
3. Startup Marketing 101

It’s easy for startups to fall into the trap of thinking that customers will switch when given the option of a clearly superior product.  The problem is that switching is often much harder for customers than startups realize.  Having a clearly better product is only one piece of the puzzle.

Here are 10 reasons customers won’t switch to your product even though they understand the value of it:

1. Migrating from the existing product is too expensive/time consuming – I put off migrating this blog from Typepad to WordPress for 6 months because I didn’t have the time to do it.  How much better would a photo sharing site have to be to get you to move your stuff off of flickr? I spent years marketing databases and data integration products.  If you want to give an enterprise IT guy a heart attack, tell him you need to migrate a gig or so of data from one platform to another.
2. Skills – It took your potential customers a while to learn to use the stuff they have today and even if your product is much easier to use, the time investment required (even it it’s just their guess of what it might take) to learn it might be enough to turn customers off.
3. Enterprise lock-in – Startups underestimate the power of an enterprise license agreement to stop even a small department from choosing to use a different tool from the corporate standard.  You may be able to fly in under the radar of a CIO that’s standardized on Microsoft or Oracle or IBM in a small department but the moment you attempt to expand to other departments or your solution becomes important enough that the CIO and/or your competitor gets wind that you exist, you’ll get the boot faster than you can say “competitive tiger team”.
4. Your product functionality is too narrow – related to the above point, often companies buy from a larger vendor because they can get several products packaged together in a bundle.  Even though your point product might be better, the price and functionality offered by a suite might kill you.  At the larger companies I’ve worked at we regularly gave product away for free to win a larger, broader deal.
5. Politics/Relationships – this is true particularly for larger accounts where a single decision maker holds a lot of control. I’ve lost a deal because the decision maker had a long relationship with the account rep for our competitor (we later hired that guy, but that’s another blog post) and I’ve won deals because a customer was on our customer advisory council. Relationships matter more than products (sometimes anyway).
6. Customization/Implementation costs are too high – Just because your price is lower, doesn’t mean the total cost of getting your solution up and running doesn’t matter.  It does.
7. Your company is too small – The more important your solution is for your customers, the more they will worry what would happen if you ever went out of business or got acquired.
8. You can’t provide 24/7 service – if your services hours are 8AM to 8PM there are folks in geographies that won’t use your products because you can’t service them during regular business hours. If you are selling to global businesses, this can sometimes be a requirement you can’t get around.
9. You can’t support the customer’s environment – Your product might be better but it doesn’t support IE6 or run on a Mac or have a Blackberry client.  It might use MySQL and the company standard is Oracle (and yeah I know it’s all the same company now but the SQL is still different).  Any of these might not seem like a big issues to you but can be deal-stoppers for customers.
10. Your product is better but not THAT much better – “Do nothing” is the worst competitor you will ever come up against.  It’s always the cheapest, fastest, most risk-free decision a customer can make. You are going to have to offer some pretty serious compelling value to get folks to move away from what they’ve already got and a couple of extra bells and whistles alone isn’t going to do it.

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Related posts:

1. 8 Reasons to Run a Customer Advisory Council
2. 5 Not Obvious Reasons Product Marketers Should Twitter
3. Startups and The Vision Thing

I decided to gather 4 of the smartest Content Marketing folks I could think of together and submitted the panel that I would have liked to have seen last time around.  Amazingly, they all agreed.  Here’s the lineup:

Jay Baer – Social Media Strategy consultant and the author of the Convince and Convert blog.
Valeria Maltoni – Director of Strategy at Powered Inc. And author of the Conversation Agent blog.
David Meerman Scott – Author of several books including the marketing classic The New Rules of Marketing and PR and the author of the Web Ink Now blog.
Joe Pulizzi – founder of Junta 42 and The Content Marketing Institute, and author of Get Content, Get Customers.

If you’d like to hear what these folks have to say as much as I would, PLEASE CLICK HERE TO VOTE FOR THIS SESSION.  You’ll need to register to give it the thumbs up (it’s painless, trust me) and feel free to leave a comment over there that might encourage other folks to vote too.  Thanks so much!!

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Mistake #1: Confusing Branding with Design (and Forgetting about Awareness)

Design (particularly for your website) is important because it has a direct impact on your conversion rates and how easily people can find what they are looking for.  Branding on the other hand is about what people believe about your company, product and/or services.  For most startups, the problem is not that people have misconceptions about your brand, it’s that they don’t think about you AT ALL.  If nobody ever finds out about you, your beautiful logo, amazing crafted “brand values” and meticulously thought-out “brand image” won’t matter (please note: Apple does not have this problem).  In order to have a brand, you need to be known.  The best way for small companies to get known is to have an offering that a market loves (and ideally loves to talk about).

Mistake #2: Believing that you have Control over your Brand

Again, your brand is what people believe about your company, and it’s products.  As such, it’s something that a company can try to steer in a direction but buyers will ultimately control.  For example, in the past week I’ve heard Microsoft described as “evil”, IBM as “stodgy”, Oracle as “mean”, and Apple as “arrogant”.  I’m sure none of these companies is spending marketing budget to support these.  What a market decides your brand is about is the direct reflection of their experiences with your product and company.  By focusing on those you are focusing on your brand.

Mistake #3 – Believing that Brand Matters more than Product or Customer Service

When folks say “We need to market more like Apple” often what they are getting at is that people will buy Apple products, even if they are more expensive and have lesser features, because of the Apple “brand”.  But startups would be foolish to think that they can win in the market with inferior, more expensive products because their marketing looks better.  Apple didn’t.  The beautiful marketing alone without highly differentiated products, a great in-store customer experience, the reputation they have built over decades for innovative, easy to use products, etc. etc. would not have been enough.  There’s no shortcut to building a great brand.  You still have to do the work of building products that people love and providing customers with service that keeps them happy over time.

If you do a great job with customer service and product, later on when you are flush with cash, you can hire some fancy consultants to come in to give your brand a face to match its soul.  Your company isn’t Apple.  At least not yet it isn’t.

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Related posts:

1. Android and Google and Branding
2. Logos and Other Stuff You Should Not Worry About
3. Competitive Intelligence Startup Style

I also got to put a check mark beside the item: “Say the word fart on Canadian national television” on my bucket list.

Here’s the clip:

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Related posts:

1. Marketing, Lying and the iPhone 4
2. Android and Google and Branding
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In their rush to churn out content in support of product launches, many start-ups fail to strategically address their content requirements. As a result, they struggle to nurture prospects throughout a buying process that can extend for many months.

Let’s say you produce only a white paper or brochure. What are your prospects supposed to do next? It’s highly unlikely they’re going to call in their order after reading a single piece of information from your company – especially if your product costs thousands of dollars.

Your potential customers need many questions answered along the path to purchase and your content needs to provide the right answers at the right time. By adopting best practices around content marketing, you’ll establish a solid foundation for marketing your offering and engaging prospects throughout the buying cycle.

Step 1: Understand your prospects’ concerns and preferences. Before you develop any content, conduct research to understand what your ideal customers care about and how they go about making a buying decision. Hopefully you uncovered this while performing the market research that helped shape your offering. If so, you will have found that buyers don’t want to hear about your product at the beginning of the buying cycle. Instead, they want to understand industry trends, options for addressing the challenges they face, and recommended best practices and approaches. Later on they’ll want to know the ins and outs of your offering, how it compares to the competition, and how other companies have used it successfully.

You also want to find out what content types prospective customers prefer at each stage in the buying cycle. For example, a business decision maker might prefer a combination of in-depth information and quick summaries, while a technical evaluator may be looking for detailed information about your offering and a demo. The user might prefer high-level information accompanied by trial software. The key is to gauge whether or not there’s a pattern around these preferences so you can develop your content accordingly.

Step 2: Identify 2-3 major themes. Once you figure out the top issues keeping your prospects awake at night, plan your content for the year around those themes. This will give you a solid framework for producing content, and help you stay disciplined and focused in your content production efforts. Instead of just working down the checklist of collateral types, you can plan content that will attract and engage prospects.

Step 3: Interview SMEs. Take the time to get a brain dump on everything your subject matter experts know around the themes you’ve identified, moving beyond details of your offering to consider all the angles that might concern your prospects. Cover everything from industry trends and best practices, concerns of each buyer involved in the purchase process, options for addressing the issues, and the role your solution plays. Don’t forget to interview partners, beta customers, board members, and industry experts. You want to gather as much information from as many channels as possible to create this foundation document. With this in place, you’ll be able to identify where your company’s expertise intersects with your prospects’ concerns so you can focus on the sweet spot.

Step 4: Develop a content plan. Now you’re ready to start mapping out the issues you need to cover and the various content formats you need to produce. Ideally, before launching your product and any marketing campaigns, you’ll produce content that answers your prospects’ major concerns at each stage of the buying cycle. Pull from the foundation document you created as a jumping-off point.

I know it can feel daunting to produce all of this content, so keep in mind these tips:

1. Write a series of short articles or blog posts that you eventually fold into a white paper or eBook.
2. As you interview subject matter experts to create your foundation document, record the discussion as audio or video and post bite-size snippets on your site.
3. If one of your executive presents at a conference, record the presentation and post it to your site.
4. Record a customer’s success as a video or audio that you post on your site; you can always write an in-depth case study down the line.
5. Dissect your white papers or eBooks into standalone pieces, such as a list of 10 best practices or a checklist of considerations when evaluating possible solutions.
6. Consider aggregating and curating relevant content from third-party sources to create an information-rich hub that attracts and engages prospective buyers; HiveFire offers software (http://www.getcurata.com/) that helps you do this.

Stephanie Tilton is a content-marketing consultant who helps B2B companies craft content that engages prospects and customers, nurtures leads, and advances the buying cycle. You can follow her on Twitter @StephanieTilton or read more of her posts on Savvy B2B Marketing.

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