I have been thinking about how my way of thinking about web entrepreneurship has changed since I started (two years ago). One of the biggest changes has been in how I think about marketing and distribution.
When I started this subject was more about luck, but like with most things in doing business as you learn more you realize it is less about luck but positioning and thought, obviously with some serendipity thrown into the equation.
Press is not a sufficient distribution strategy
I don’t think many people have made a successful business just relying on blogs and other media coverage. This might give you your initial 1000 or maybe even 10k users but then how do you get to 1k users a day consistently, or if you really want to be successful at least 3k users a day? That is more than a Techcrunch articles worth of users a day
(side note: TC gives you something like 10k uniques, Digg can give you something like 100k, which is an absolute maximum, but neither of those convert that well.).
Press has many uses;
- it is a nice way of gaining brand recognition,
- it can give some seed users,
- it can be useful for getting investors' attention
- it can create opportunities as new people in your industry find out about you.
So press is definitely important, but it really can’t be everything, because it does not scale.
Some assumptionsI am making various assumptions and also I am using a specific definition of distribution so I would like to talk about that briefly.
- A lot of my experience and knowledge is in the consumer web. It may not apply directly to b2b plays, or non-tech industries.
- Obviously all of the things I come up with here should be adapted to your particular product and I am sure there are far more creative ways that I am missing.
In general I consider the words distribution, marketing, route to market and some other terms pretty similar. They are a general way of describing how you get your product to be used by people and how it will then continue to grow in user/customer base.
So if press is not enough, how do companies get to millions of users? The main methods I can come up with are as follows (these have some overlaps):
- Word of mouth and social
- SEO
- SEM and Web advertising in general
- Viral
- Distribution channels
- Distribution partnerships
- Guerrilla marketing
- Niche marketing
Some of these are more obvious than others so I will talk about those less.
One could imagine drawing another matrix, which shows how easy these things are to achieve, how effective an important they are and what attributes the product requires to tune for them. I would recommend you do an analysis like that if you are thinking about distribution and marketing your product.
Word of mouth and socialMake something good that people like and they will talk about it. You can tune this better by making something which is easy to talk about. For example people love talking about youtube videos, but if you make a porn website than its harder to get word of mouth traffic. Websites that target niches are easier to achieve these affects in.
You can create word of mouth affects, you can tune for them, but its something fairly obvious I think.
SEOI think its one of the most important distribution strategy. SEO is Search Engine Optimisation, but I tend to use it in general to denote distribution through organic (non-payed for) search results.
Some ideas are very SEO friendly. Anything where you are creating unique user-generated content works pretty well for SEO, because people will search for it and that is how they will find you.
SEO is strong because if you take a few basic measures, you can for no extra work ensure a consistent level of traffic. The other interesting thing to me about organic search traffic is that often users from search results are most likely to click on well positioned relevant adverts on your website.
I know a lot of start-ups that get most of their traffic through SEO. User Generated Contents and blogs are perfect for SEO, sometimes I think many ideas in Web 2.0 were a direct reaction to Page Rank :).
SEM and Web Advertising in generalSEM or Search Engine Marketing and paid for advertising is interesting.
This only works in certain circumstances but when it does, it is very good because you don’t have to rely on anyone else. Here are a few factors
• If you directly monetize users, and the ROI (Return on Investment) on adertising is more than 1. For example if you make $2 per user and it costs you $1 to acquire that user than you have a scalable business.
• This is also a great way to test out ideas, and possible seed them. You can target a niche and see how many people convert and what they like
• This is very experimental for the right words or targeting at the right kind of site can literally lead to factors of improvement in conversions or ROI.
• If you rely completely on SEM, your position may become untenable as Google would squeeze your margins. This is more of an abstract concept, but in general if this is your strategy you should be diversified.
Update: Joe pointed out in the comments that
Affiliate marketing would fit under this section. See cj.com for a website where you can manage affiliate marketing campaigns.
Viral distribution strategies.This is kind off an old concept now and fairly well talked about. Look at
Andrew Chen’s blog for more about viral than you can imagine.
Some quick thoughts on it.
- It is possible to build for viral but it helps to have products which are inherently viral
- You don’t get viral unless you build for it
- Viral strategies become all about tuning and A/B testing. The aim is to get one user to invite more than one user. So you track where your users come from how you can incentivize them to invite someone. Try out different strategies, track their affect.
- Certain environments are very conducive to virality, like Facebook.
- There are many types and many definitions for viral. I guess an overarching one would be that your product is built in such a way that it distributes itself. This is inherently true in applications that become more useful the more users you add to them such as social networks and instant messaging applications.
A lot more can be said I am sure, this is one of the most interesting strategies. As strategies are used more they become less effective, so you have to be cleverer in how you go viral and probably create more value than previously required but its very clearly still possible.
Distribution channelsThis is very interesting. Some technologies and applications have good distribution channels in place that they don’t have to do any extra work. Some examples of channels that have developed recently.
- Facebook Applications pages.
- IPhone App Store
- Mozilla recommended addons
- Yahoo directories – an oldy.
If you catch distribution channels very early on or with the right product than the highly targeted traffic they receive can create snowball affect that give you very fast and effective distribution.
Distribution partnershipsIn the distribution channel section I was thinking about channels that are inherently available to you for whatever reason. Distribution partnerships however are harder to get but they can give you a lot of power. What distribution partnership makes sense for your product depends strongly on what you are doing. The biggest and most obvious distribution partnership that lead to success was Google’s partnership with Yahoo!, that gave shit loads of traffic to Google.
There are a lot of other partnerships some of which are paid for, some are just mutually useful or strategic. Some more examples
- Default Google search in Firefox.
- The Times newspaper in Starbucks
- AT&T in Apple Stores and vice versa
- Clickpass with all of its great partners :)
VCs tend to like ideas that can be use distribution partnerships to get scale. If they can see a story where they can apply $x millions of and use their contacts to get a distribution deal done and generate a company instantly worth $20x million than it’s a no-brainer.
Guerrilla marketingI used to be more excited by this. Not that interesting any more. I think its hard to scale doing quirky things. I am sure there are some examples of very effective guerrilla marketing to achieve a seed userbase. 37Signals did a
good article on some things that did, which might be classified are guerrilla marketing.
If you are creative it is possible to come up with a lot of these. I think it is very dependent on the industry you are in and I am sure it does not work for everything.
Niche marketingNiche marketing is not a strategy like the others, it is more like a paradigm that you may use in conjunction with the above. Lets say you are a video website and your target market is every Internet user in the US; that is a 120 million people. If you are a start-up you may have a hard time getting in front of 120 million people. So what you do is segment the users and find niches that would be far more reachable, while keeping your product basically the same. So in the case of the video website you may decide to target sports, or even better football in the bay area. Now you have come down a very easy to target market segment.
This is similar to the way that Facebook expanded from University to University starting with the Ivy League, which is obviously a great place to start from.
ConclusionAs an web entrepreneur, you generally don’t have the luxury of a big budget and often throwing money at the issue does not necessarily give the best result.
That was not everything. I am sure I am missing some strategies. In general most people achieve success using only one or two of these strategies. Also your idea/product will definitely lend itself heavily to a strategy, so it is worth understand and experimenting with different strategies to get the best results.
