Marketing: When to start and how much to spend
The discussion often arises between company founders around the questions “when shall I start marketing hard?” or “how much shall I spend on marketing?”
In the early days, investors and friends often asked why we didn’t do more heavy marketing but my gut instinct always told me to hold off. I’ve since come up with a much more structured conclusion as to when larger budgets for marketing make sense.
Large marketing budgets only makes sense when Product Market fit has been achieved
In his presentation titled “Zero to Product Market fit”, Andrew Chen talks about the post Product Market Fit stage. His view is “Traction is everything, but it’s a reflection of getting product/market fit”. Product market fit is when people know they want your product and are happy with it. You should be seeing 100’s of organic signups each day, regular usage by consumers, active customer rates the day after signup of at least 30% and have a clear path to 100,000’s of users.
Test your marketing channels early
There are two reasons to test various marketing channels early. Firstly, you need users to regularly test the latest version of the product (assuming you iterate quickly, which you should be doing). With each cohort of users you should be tracking how close to Product Market fit you think you are, and ideally get some points as to what you need to improve on to get there. It’s important to start collecting data on how effective each marketing channel is so that when you come around to wanting to scale the platform, you have experience to guide you.
Pre Product-Market fit marketing
Pre Product-Market fit marketing should be low-cost. My personal favourite to focus on is PR (Public Relations). It’s relatively easy for startups to get coverage in the media and it can generate really good sign-up numbers and awareness. I also totally recommend building B2B partnerships, where a larger, more established company with a large user base can promote your product in return for benefiting from your service. Whisk.com has benefited hugely from both the above channels.
Further resources on this subject:
Originally published at www.nickholzherr.com.