Mar 16th 09

Social Media Marketing Strategy for Startups

In the last year, Social Media sources (blogs, Digg, Twitter, Facebook, etc) have quickly emerged as the most powerful growth drivers in the startups I’ve helped launch. Despite this, I’d have a hard time writing a ten page book on Social Media Marketing. So on a recent trip to Barnes & Nobel I was surprised to see several thick books on the subject. One contained over 350 pages of social media marketing “wisdom.”

I’m sure there are a few useful nuggets in each of these books, but I doubt it would be worth wading through hundreds of pages to find them.

This will be a very brief blog post explaining how we’ve been able to drive hundreds of thousands of new users through social media in recent startups. OK, here it is: effective customer development… By figuring out who needs your product/service, why they need it, what constitutes a gratifying experience with the product/service and getting more of the right type of people to this gratifying experience (highlighting the right benefits and reducing barriers) social media can become a powerful driver for your business too.

You are probably asking: How can this possibly be an effective Social Media strategy? To understand this, you need to understand why social media is important for startup marketers. The most relevant part of social media is that it includes a person’s network of trusted online contacts. Some of these contacts broadcast their opinions widely through blogs, others a bit more narrowly through twitter and status updates and finally others through facebook wall posts, etc. Social media has given consumers better access to their expanded personal networks and a megaphone to broadcast their opinions and experiences to people who actually care.

So how does this help startups? The best innovations have always come from startups, but we’ve been blocked from the channels that were so critical for established companies. Over time these companies educated the channels and expanded their presence. A little startup had a very hard time competing even if they had a vastly superior product. And the channels were seldom awarded for trying to help the startup, since most startups went out of business anyway.

Today, social networks make it much easier for useful innovative products to spread to the masses (especially when combined with Google Adwords). But for a startup to leverage these social networks, they need to get their innovation into the hands of the right users and ensure they have the right experience. And if they are able to create a clear value proposition, these users will be able to more easily spread the innovation to their networks.

While social media makes it easier to spread useful innovative products, it also empowers vigilante customers that have been wronged. Therefore be very careful trying to game these systems. One of the most common short-term gaming tactics is address book scraping where users are prompted to invite their entire address book to join a service. This is often successful because a small percentage of users inadvertently agree to allow their address book to be scraped when they initially sign up for the service. If one in ten people get their address book scraped and each one has 100+ contacts, growth quickly goes viral. In the short-term the marketer looks brilliant as numbers go through the roof. But many of these (former) customers are now furious and let their network know about it. Eventually these tactics bite the company in the ass.

One of my favorite travel services recently burned my mother with this tactic (after I introduced her to the service). Not only has she expressed her anger to every contact, I will never recommend the service again. And that is after I earlier blogged about the service and verbally recommended it to many. I’d reveal the name, but a good friend is an investor. Was that really worth the short term gain of address book scraping?

Effective social media marketing is really just about good old fashion doing the right thing for your customers. Once you’ve accomplished this, you can use these networks to enhance your relationship with your customers (through a company blog, twitter account, facebook page, etc), but I believe these tactics are minor compared to the approach described above.

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7 Responses to “Social Media Marketing Strategy for Startups”

  1. Neil
    Mar 16, 2009 5:12 pm

    So far I have discovered that social media is great for exposure and also fantastic if your are a B2C type of business. I haven’t seen a lot of benefit yet to B2B type of business directly. Our customers are all other businesses

  2. Evan
    Mar 16, 2009 8:12 pm

    This post kind of went the opposite direction from what I expected–how not to screw yourself rather than how to get a leg up. I realize those two aren’t necessarily mutually exclusive, and that not screwing yourself may in fact be the biggest win–both in terms of long net growth and performance relative to the field–but I was hoping for something more directly related to social media driven growth.

    I don’t have any data to back this up, but I’d be surprised if there were really significant gains being made by the “share this on xyz” buttons or”twitter this” links. I’d imagine something like Tripit’s (which I’m guessing is the service you’re talking about) LinkedIn app is extremely successful.

    Obviously some of these are going to be due to idiosyncratic factors–Tripit’s service is of far more value to my average LinkedIn contact than a random blog post is to my Twitter followers–but among the randomness I’d expect some reliable patterns. Maybe you haven’t been able to parse (m)any of those out reliably yet, hence the <10 page book, but if you have I’d be curious in hearing more about what’s been successful and what’s not.

  3. Sean
    Mar 17, 2009 6:15 am

    I have a feeling that it went in the opposite direction of what most people were expecting. A lot of startups are looking for quick tricks to boost growth, while my post was more about a strategy that leverages the strengths of Social Media to build a business in the long term.

    It’s interesting that you mention Tripit. Despite all the social elements they build into the service, for me the true value is a super convenient way to organize and access my travel details. Most of the social angles just clutter this experience for me. However, because of the real benefits that I receive, I’ve recommended the service to many – both verbally and through social media channels. While I have the Tripit App on LinkedIn, I really haven’t received much value from it. Of course I may be in a minority here. If I was responsible for their customer development, I’d spend a lot of time finding out who the service is really resonating with and why it is resonating with them. Getting this experience right for these people will boost the impact of social media more than any single social tactic. Then afterwards, they can add relevant tactics to boost it further.

    Just my thoughts – I could be missing something here. Hopefully you’ll take the time to read through one of those thick books and come back and share the useful nuggets with us.

  4. Evan
    Mar 17, 2009 9:29 pm

    I totally get the long term idea and think that’s an spect of social media (combined with the “don’t screw yourself” stuff) that too few people pay attention to. I understand why–it’s not sexy at all–but it’s obviously what’s most important for a lot of companies.

    I think the Tripit example is really interesting. On one hand, I think there’s a good case to be made for the Tripit LinkedIn app adding value to other peoples’ experiences. That, of course, begs the question of why an individual would actually install it in the first place, if it’s adding value for everyone but them. Narcissism aside, I don’t really know the answer to that question. Maybe that’s what you’re saying. I can get behind the idea that without a purely selfish goal in sight for the user, any marketing strategy is suspect at best, but evidence from places like Facebook and Twitter (probably FB moreso) seems to indicate that people do go through a lot of tasks that end up benefiting others more than themselves.

    Maybe I’m overthinking all of this. To be honest, I completely agree with you re: Tripit. I added some connections on it because it was easy and I was bored, but I don’t have the LinkedIn app installed. For me, it’s an organizational tool.

    I don’t think I’ll dive into any of these social media cookbooks any time soon, and I doubt that at this point there are a lot of reliable, cost-effective strategies with a short term focus–at least not to be found in books by people claiming to be social media gurus.

  5. Sean
    Mar 18, 2009 1:21 pm

    Thanks Randy. My concern with offline media is that it’s often hard to track ROI. Online marketing channels are pretty easy to execute profitably if you’ve effectively completed customer development.

  6. Vivek Puri
    Mar 26, 2009 11:35 am

    “Eventually these tactics bite the company in the ass” – FYI: 3 sites that do email address scraping in the most aggressive form: http://www.alexa.com/data/details/traffic_details/hi5.com , http://www.alexa.com/data/details/traffic_details/tagged.com , http://www.alexa.com/data/details/traffic_details/yaari.com . Plaxo also used to do that and they had a nice exit. Hi5 can easily do $1 billion. Tagged $300+ million.

  7. Sean
    Mar 29, 2009 10:29 am

    Vivek – Definitely some good points. I still wonder if they would have the same success starting with this tactic today. It is only in the last couple of years that I’ve seen social media sources become important for the startups with whom I’m working. These guys rode the front side of that trend, but now that social media has gained critical mass I think it does a better job exposing new companies trying deceitful tactics. If you can get away with deceitful tactics, the upside can be huge. But if you are a startup founder that is trying to introduce the world to a “better way” of doing something important, I don’t believe this tactical risk is worth taking. There are other safer ways to build a long-term thriving business.

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