Avoiding the Number 1 Startup Marketing Mistake

The past 2 days I’ve answered a bunch of marketing questions from entrepreneurs on Sprouter‘s new Answers forum for startups (more on that later).  There were a few themes that emerged but one really came into focus when I got this question:

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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72 thoughts on “Avoiding the Number 1 Startup Marketing Mistake”

    1. I always called this the temptation to “boil the ocean”. I used to work for a VP/GM of a business unit who wanted to target everyone everywhere.

      I got tired of fighting this battle. Naturally, our performance was diluted. This is not only a Startup fault!

      Geoff

      1. HI Geoff,
        “Let’s not boil the ocean” was a phrase we used a lot at IBM. I think you are right that this isn’t only a startup problem. The difference though is that more established products in established markets can sometimes get away with marketing to everyone. For startups, this type of marketing is frequently fatal.
        April

  1. This is definitely a big problem, and I see it in bigger companies all the time. Fortunately, the only startups I’ve worked with so far are the ones where the founder is marrying a valuable problem (for a known domain, usually a market segment) with a novel solution. Those startups avoid this problem (at least with their first product) because they are building on previously-acquired knowledge of the needs of customers in a segment.

    Are there a lot of startups that actually become “going concerns” without this type of initial focus?

    Even the focused startups risk this problem with their “second product.”

    Great article, thanks!

    1. Hi Scott,
      Thanks for the comment. Unfortunately there is the perception that a lot of big B2C online companies started out with no focus whatsoever. The biggest examples I hear are Google, YouTube and Twitter. The reality is that in some cases they did specifically target segments early on (YouTube for example was aimed at film buffs), or as in the case of Twitter the segmentation happened on it’s own by more luck than good management.
      April

      1. Very true. It seems like a mistake startups are doomed to repeat again and again.

        From what I’ve seen, this mistake is often exacerbated by the desire to get a better early valuation by VCs who want to know that the potential market size is enormous.

        Good reminder of one of the principles from Crossing the Chasm. Pick a beach head you can conquer in the short term, then expand from there.

        Yet another great post. Thanks.

        1. HI Chas,
          Great point about the VC thing – I think that could very well be part of the problem and the origin of some of this kind of thinking. I think it’s a much bigger issue with B2C online startups because there is a perception that all consumers are the same and there are lots of things that everyone needs (it’s the old everyone needs a toothbrush argument). However the markets that startups are in are generally not commoditized mainstream markets and those assumptions don’t hold.
          April

  2. April –

    I agree with Scott’s comment on bigger companies. I see it when folks are thinking about marketing their solutions outside the US. It is tempting to go for the biggest addressable market. As you point out – it takes a bit of discipline to force yourself to dig into the market, understand who you are attempting to reach, and if they are potential customers. I wonder if this isn’t one of the top 10 overall marketing mistakes not just for start-ups…

    Great point.
    -Jocelyn

    1. Hi Jocelyn,
      Thanks fir the comment. Bigger companies have generally passes through a stage of focusing on niches and are often at the stage where they are marketing a fairly commodity product at a fairly general market. When you are at that stage targeting becomes less important and reach becomes more important. Startups however can never win at this game – they don’t have the resources, product or customer base to support it.
      That said, beyond the largest of companies, I think everyone benefits from targeting.
      April

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