1. Marketing for high-tech startups has changed in recent years due to shifts in software markets and development philosophies. Products are often developed iteratively now rather than using the black-box model of the past.
2. When developing a marketing strategy, startups must consider the 4Ps of marketing - product, price, place, and promotion. This includes deciding where the company's product fits relative to larger competitors, choosing the appropriate pricing and distribution models, and determining how to effectively promote the product and acquire customers.
3. Effective customer acquisition involves testing various promotion channels like social media, blogs, conferences and evaluating their cost effectiveness. The goal is to drive customers through the lifecycle from initial contact
Marketing for High-Tech Startups presented at UC Berkeley
1. Marketing for Startups in High-Tech
Marketing for High-Tech Startups
R. Paul Singh – rpaulsingh
Entrepreneur
CyLAN
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2. AGENDA
What has changed in Software business?
4Ps of Marketing
Product
Distribution
Pricing and Revenue Model
Promotion & Customer Acquisition
3. Software Markets 5 years ago
Consumer
Large
Ent.
Small Business
Medium
Medium
Enterprises
Enterprise
Large
Ent.
Small Business
Consumer
4. What is the goal of Marketing?
Create a good brand
Peter Thiel: Brand is as a classic code word for
monopoly. But getting more specific than that is
hard. Whatever a brand is, it means that people do
not see products as interchangeable and are thus
willing to pay more.
A good brand provides a clear and memorable sense
of what your business stands for!
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5. Select Core 4Ps of Marketing
Product Process People
Positioning Place Prayer
Promotion Packaging Pricing
6. Has Marketing def changed?
What differentiates High-Tech Marketing?
For a marketing plan to be successful, the
mix of 4Ps must reflect the desires of the
consumers in the target market – Philip
Kotler
Peter Drucker --- Marketing is
◦ creating a product that sells itself
◦ creating a product people want to buy
◦ creating an environment that encourages people
to buy
7. Development philosophies have
Marketing repercussions
Black-box Development Iterative Development
Hardware, High priced Software, Accessories
software products
Pre-development research Research as you go
necessary
Limited alpha and beta Large alphas, Open betas
Buzz building after beta Buzz building starts very
phase early
9. Where is your Elephant?
Staying ahead of the Elephant (A)
◦ Difficult strategy to execute
◦ Need at least 2 years lead
◦ Some examples – AMD, Sybase
Staying below the Elephant (B)
◦ Starting with a niche
◦ Some examples – F5, Packeteer, Portal Software
Riding the Elephant (C)
◦ Bumpy but the safest of the three alternatives
◦ Some examples – Airespace, Google, Thousands of app
developers for Apple, Goog, MS, Oracle
10. Choose your Elephant & Partnering distance
Fill-A-Gap
Exclusive
Value-Add
Leverage
Choose Ecosystem (s) MS, Apple, Google,
FB, Tw, SF……
11. What is your Product like?
Is your Product
◦ Physical
◦ Services
◦ Software
Is your Product
◦ Pain Killer
◦ Vitamin
Does your Product
◦ Fit an existing market category
◦ Creating a new market segment
15. Pricing – Software Revenue Models
Business Business Consumer
Models
Sell – One-time Perpetual model, Perpetual model,
App Stores App Stores
Sell – Direct Direct
Subscription
Fremium Direct, In-App Direct, In-App
Ad Supported Not Direct sale, Ad
recommended Inventory from
others
Free with Upsell Not Own product or
recommended 3rd party product
16. Why Fremium?
Channel for buying users = Expensive
Product has network effects
Cost to offer products/services = Low
Want to see if users adopt it first
More users to talk to
Tease that works for your
competitors/other similar products
17. Some Hows of Fremium?
Showing pricing right away shows better
conversion
Showing 3 pricing seem to be very popular
Clearly articulate value for upgrade to premium
Test Change Test Change
Remind free users often but not annoy
Good reference – Matt Brezina of Xobni on Slideshare
20. Promotion = Customer Acquisition
Promotion is explaining
to people who should care about what you’re
selling
in the way they want to hear about it (radio,
print, mobile)
in words and concepts they will understand
why what you’re selling meets their needs
Message is the key
Some good reference presentations
http://www.slideshare.net/dmc500hats/startup-metrics-ignite-velocity?type=powerpoint
http://www.slideshare.net/Startonomics/creating-implementing-a-web-20-marketing-plan
21. Dave McClure model - Startup metrics for Pirates
Acquisition – Discovery – First visit/usage –
Most expensive phase
Activate – First visit/usage is enjoyable –
Design is the new mantra
Retention – Your product is actually solving a
problem & users have figured out their use
case
Referral – Users recommend to others –
make it easy to do so
Revenue – Users are willing to pay and you
convert them to revenue
22. Acquisition Channels/Promotions
Channels Notes
PR PR Agency, Cost, When, How
SEO Keyword, Website design
Blogs Which products, Why, How
Email Collect, Opt-in, Title is everything, How
Social Media LI, FB, Tw, Quora, Digg, Youtube,
Pinterest….
Affiliates When and How
Ads CPM, CPC, CPA, Media
Trade Shows Investment vs return, Pay to play
& Awards
23. Primer: 8 Steps to Buzz via Social Media
The Eight Commandments…
Understand what you’re trying to sell, to whom, how they prefer to
hear about it, and in what terms. Target – don’t sell Nuke Reactors on
twitter?
Craft the message(s). What do you want each audience (purchasers,
media, mass audience) to hear?
Set up your infrastructure: Twitter Account(s), Facebook App, RSS tags
on blog on your site, Digg Link buttons,Video… what’s appropriate?
Craft content. What’s the story around your message that makes it
socially transmissible? Is it cool, new, funny, controversial, insightful…?
Be ready to respond, reciprocate (have space to link back, time to reply)
Be proactive. Don’t just post; submit. Participate. Comment on others!
Reward good behavior. Feature your customers, make ‘em heros.
Do not spin. Do do lots of news and “press releases”
24. Typical B2B Lead Generation Process
Lists from industry groups, cold-
calling, ads, & direct email, keywords,
referrals
Suspect “Opt-In”: responses to ads & email,
No indication of interest or potential / Cold lead
trade show leads, evals
Prospect
Contact made / Indication of interest Solutions Guides, Webinars,
Customer Case Studies
Opportunity Datasheets, Pricing Guides,
Identified project, or VMware use case
Powerpoint Prod. Presos, Demo
Qualified
“decision criteria” known / “buying process” known / Funds or budget available Whitepapers, Reviewers guides,
guided evaluations & demos
Validated
Technical fit confirmed by prospect /Business fit confirmed by prospect Comparitive documents, competitive
guides
Selected
Customer confirms that you are selected vendor / “Reverse timeline(RTL)” done Incentive (“buy now”) programs
Negotiation
Business terms being negotiated TCO and ROI studies
Closed
Contracts signed / PO in hand / No “hair” on deal