Growth Marketing 101: What can you learn from 60+ seed-stage startups?
I combed through dozens of seed-stage startups on the verge of high growth to find out if they can pass the basics of growth marketing. What are the emerging marketing trends I found in this study, and what take-aways can any marketer quickly learn?
As a freelance marketing consultant, I spend A LOT of time on AngelList trying to find my next project. And if you spend as much time on the site as I do, you begin to notice some trends:
- Do we really need that many CRM platforms?
- Are we just adding AI/VR/Blockchain to everything?
- What exactly is the market size for all these private jet apps?
Another trend? Many startups are not using basic growth marketing tactics. Websites with poorly written value propositions and no calls to action — these seem like no-brainer things to fix!
I decided to collect data on a sample of startups to see how many could pass Marketing 101. I developed a list of basic growth marketing tactics to measure, each with a set of mostly objective criteria from which to judge. There’s much to learn from others’ mistakes, so let’s get started.
Methods: Startup Selection Criteria
Any good scientist knows you need to start your research paper by telling the audience your methods of data collection. What startups did I choose and why?
On the date of data collection, there were 23,248 startups on AngelList advertising for open positions. That seemed like an impossibly big number to study on my own, so I needed to create a tighter target group of startups. I decided to pick seed-stage startups with 11–50 employees in San Francisco. Why?
My logic was simple: seed-stage startups with that many employees were probably on the verge of, or in the process of, raising a Series A, so they better be bringing their A-game (all puns intended) if they’re on the cusp of meteoric growth. I also assumed companies based in San Francisco are in the cradle of tech startup culture, and thus, no shortage of amazing talent to help any company craft and implement basic marketing strategies and tactics. I chose the first 50 companies that AngelList presented to me via their algorithm in the jobs section of their site.
I did study, as well, a corresponding group of startups in Europe as another variable. Are San Francisco startups far superior to their European counterparts? I chose startups based in Paris, solely because I’ve worked in the French tech ecosystem, and was curious how my past compatriots would fare. But also, because I am fluent-ish in French, and thus could read value props in their native tongue. There were 12 startups that met these criteria.
Do you agree with my logic for picking startups? This isn’t a paid academic study, it’s a summer holiday curiosity. So don’t rake me over the coals too hard! Hopefully this GIF of Lonely Island holding kittens will appease you.
Methods: Marketing Ranking Criteria
What data did I collect and/or measure, and how did I structure the scoring?
- Amount of seed funding raised (in dollars)
- The 7-second test: can I understand what you’re selling in seven seconds after loading your website homepage (with no scrolling below the fold)? Scoring: “WTF, huh?” scores 0 points; “Meh” scores 1 point; “Yeah, OK” scores 2 points; “OMG yaasss” scores 3 points.
- The Unique Value Proposition (UVP) test: does the (hopefully) eye-catching, pithy messaging succinctly describe your product/service, your target audience, and why they should become a customer? Scoring: out of eight points; one point each characteristic, using The 4 E’s and U’s of a UVP (see figure below and read this post).
- Calls to Actions (CTA): how many, and what was the main word associated with that action (example: “Start now,” “Try for free”)? To be considered a CTA, there needed to be a specific box to click or fill-in with prompt dialog that would progress a user through the sales funnel. Links with just words in a horizontal menu did not count. I only counted CTAs above or just directly below the fold.
- The SERP test: did the company hold the #1 spot on Google’s SERP when I searched for the startup’s name, and was there a specially written meta description that fit into the allotted character length? Scoring: If it held the first spot, the startup scores 3 points; appeared in the top three results to score 2 points; appeared on the first page to score 1 point; anything else scores no points. Yes/No for meta description.
Are you still reading? Because we’re now getting to the fun part…
The 7-Second and UVP tests:
First impressions matter! Using the data from the 50 San Francisco startups, it was a bit shocking to see how low many startups scored. While only five startups scored a “0” on the 7-second test, only four scored full marks. And most startups could only check half the boxes when it came to writing their UVP. On average, startups could explain why their product was useful, but could not evoke emotions, uniqueness, or urgency. I understand it’s no small feat to fit so much information into one or two succinct sentences, but it can make a huge difference.
Lessons: I recommend A/B testing your messaging to see which phrasing works best with audiences. Have your content writer or head of marketing lead group sessions with employees and/or users when developing the wording for your UVP. Make sure you’re not repeating the same phrase in your UVP; don’t waste valuable real estate saying the exact same thing twice or more.
Emerging trend: Websites are getting fancy! If done well, using embedded, looped video in your site header to explain your product more deeply in conjunction with a well-crafted UVP, can add significant and quick understanding. Almost 20% of websites used this tactic. Example: mytrove.com. I thought this was simply a self-storage company, given the short messaging, but the embedded video easily showed me all the services the company provides. I was sold!
The Calls to Action tally:
A call to action is how we can get a curious potential customer into our sales funnel, turning them into paying user. These little buttons are critical! Having too few CTAs or making visitors search for them can lead to abandonment of the process; likewise, too many could overwhelm a new visitor. A staggering 12% of startups’ website homepages didn’t have any CTAs! Conversely, 10% of startups had four or more CTAs.
Additionally, the most common phrases for CTAs involved the words “start,” “try,” and “demo.” Example: Get Started; Free Demo; Try Now! I like these, because the user knows what’s going to happen when they click the CTA. Vagueness is not our friend.
Lessons: Don’t miss out on getting a potential user into your funnel; have a CTA! The trend currently — having one or two CTAs in the banner/header, usually offering different entry-points into the sales funnel (example: “Watch our video” or “Learn more” AND “Request a demo” or “Free trial”) This will be accompanied by a “Sign up” button in the upper right corner, next to a smaller “Log in.” This is great, because it provides visitors to your site different levels of commitment into your funnel, but isn’t too overwhelming.
Emerging trend: Dual-sided marketplaces are everywhere these days. Over 20% of the startups were dual-sided in this study. By now, we realize picking a side to focus our marketing to help streamline the funnel. Of these startups, 77% focus on recruiting the demand side over the supply side with their messaging and CTAs.
The SERP test:
Companies like Fairy (itsfairy.com) and Shift (shift.org) are incredibly hard to find with just a simple name search. There are at least two full SERPs of startups called Shift when I search for it in conjunction with Crunchbase. HomeShare loses the #1 spot to an international nonprofit of the same name, also offering reduced-priced housing solutions. Confusing!
Additionally, once a user finds you on the SERP, is your startup’s meta description snippet written specifically for a search engine result? It looks sloppy, and can be confusing for a potential customer, if your meta description is pulling from the first 300 characters of your website (usually from a headline + menu options).
While 74% of companies managed to secure the #1 spot on Google’s SERP, only 44% could manage to also have a succinctly and specifically written meta description.
Lesson: I will always remember the sage words of wisdom from a marketing mentor: “I make up a word or choose something beyond obscure for the name of my company, because I don’t want to compete with Dictionary.com or Wikipedia for the top Google result.” That’s sound advice.
Les Startups Parisiennes:
In comparisons, our French brothers and sisters scored one point higher on the 7-second test, and scored the same on the UVP test. They also were in the Goldilocks Zone of CTAs: all startups had at least one CTA, but no more than three. Interestingly, they do this with less than half the seed funding. The French startups on average raised $1.5M, while the San Francisco average was over $3.8M.
Lessons: I hypothesize that having to write your websites for an international audience forces startups to be more clear and concise, as well as more visually descriptive, with their messaging. It hits home the need to have diversity when testing your messaging and CTAs.
As startup employees, we can be too intimately involved with our products and services. Sometimes we don’t realize that our messaging isn’t making the grade. Don’t keep the blinders on: write succinct, exciting UVPs and CTAs, and run your them past diverse focus groups and through A/B testing. Don’t forget the Four U’s and Four E’s of UVP writing, and what will get users to progress through your funnel.
Do you agree with how I measured the data? I know many of this is semi-subjective. Maybe I’m an idiot, who’s a slow reader and slow to understand, and therefore my 7-second test results are off. Let me know what data you’d collect and what measurements you’d change in the comments below!