A friend of mine recently landed a job at a startup as the first marketer and reached out for advice. I often get this question, so I’m turning my answer into a public post.

Being the first marketer at a startup is an extremely challenging yet rewarding opportunity. On the one hand, you often wear multiple hats: project manager, researcher, designer, copywriter, advertiser, analyst, PR, meme dealer; the list goes on. But, on the other hand, you also get to collaborate closely with the founding team and have an influential role in the overall company's culture and strategy.

The following is based on a compilation of advice from my network and personal experience. I hope it can help some of you navigate this formative adventure.

1. Think like an investor

Let’s be honest: joining as the first marketer at a startup is a risky bet. At the end of the day, most startups fail. Borrow from VCs to inform your decision. Before joining, make a complete due diligence on the market, product, and the team.

Here are some questions to ponder:

• Is there a path to a big market? Who are your first users going to be, and how do you know they want this?

• Does/will the product delight its customers? Can it scale?

• How determined are the founders, and what’s their primary motivation? Are they resilient enough to keep going when things go wrong? What’s their track record?

• Would you bet your own money on this? Why might your belief not be true? 

It’s not a perfect science (even professional investors make bad bets), but that could help you spot the most obvious red flags.

What makes a decision great is not that it has a great outcome. A great decision is the result of a good process, and that process must include an attempt to accurately represent our own state of knowledge. That state of knowledge, in turn, is some variation of “I’m not sure”.

Annie Duke, Thinking in Bets

2. You’re not alone

Being the first marketer doesn’t mean that there haven’t been any marketing initiatives before. Insights are probably not well documented and spread out in the organization. So spend some time talking to everyone in the team, listen and learn.

Here’s what Sophia Bendz did when she joined Spotify:

When I joined, what I actually did, was that I held a workshop with everyone in the company and at the time we were just 11 people; I bribed them with popcorn. We had like a 2-hour workshop where we talked about: Who are we? Why do we matter? Why do we believe that we will succeed and no one else will? That set some of the core values of Spotify and laid the foundation of the brand positioning.

Katarina, Rémy, and Stefan echo similar advice:

Find allies in all other departments. Start with sales and customer success to identify the stories/messages from customers and prospects that resonates with your target audience.

Katarina Nilsson, CMO at Occtoo

Communicate as much as you can with your team: let them know what you are working on, ask for their feedback and wishes.

Rémy Bertoli, Growth Manager at RecRight

I am by no means a generalist marketing person, but from my experience as a product person, the importance of product marketing & collaboration between product work and marketing work is huge in those early days when everything needs to shift continuously to find the right fit. No point in trying to do growth or build a brand out of a product that just doesn’t fit its audience.

Stefan Lindbohm, Product Leader and Coach

Not only will doing this help you gather ideas, but it will also set the right expectations while educating the team on why marketing matters and how they can contribute.

Dave Gerhardt @davegerhardt

If you're the marketing leader -- and you think the CEO doesn't get marketing like you do -- that's on you. That's your job. Probably half of it. At least. Fix that.

October 27th 2020

4 Retweets67 Likes

3. Don't assume, validate

Talking to your team is great, but there’s a major downside: they are probably biased!

Get out of the office and form your own opinions by talking to customers and potential ones. Just make sure to take another approach than Jared 😂

Desirée and Dave recommend:

Take time to sit down and understand the target audience(s) for the product/service/offering. Makes it so much easier to create and to start communicating.

Desirée Hylander, Site Manager at Vården.se

Work the hardest at defining the customer's profile and needs, then find some and listen carefully to them . . . best time investment you can make, as it will inform everything going forward.

Dave Poulos, Senior Director of Marketing at Pinnacle

4. Focus, focus, focus

If there is one thing you need to be good at as the first marketer: it’s prioritizing. Prioritize ruthlessly! Deciding what not to do is as important as choosing what to do.

Catherine, Katarina, and Arnaud add:

You can't excel across all marketing functions.

Catherine Kyule, Co-Founder and Marketing Manager at Bantaba

Focus your efforts and execute a few things really well and see them compound over time instead of trying to do everything at once.

Katarina

Focus on understanding your audience (speak with your customers!), start building your strategy BUT get some external expertise to execute. The more hats you put on, the less valuable the outcome will be.

Arnaud Caillot, Organic Marketing Manager at Mentimeter

So drop some hats! If you have difficulty defining a clear scope, I shared a framework for getting started with customer acquisition here. If you struggle with getting things done, I would recommend going analog and ditch your laptop from time to time. You’ll be more creative and effective when faced with fewer options and distractions.

5. Get comfortable with failure

Don’t overthink stuff, dare to just try! Do small tests and measure. Then increase budgets. Learn from mistakes, don't take them personally.

Amalie Marie Angelskår, CMO at Mindler

Don't be afraid to fail! You'll learn MOST by failed campaigns.

Rémy

Be ready and prepared to learn, fail and get back up. It can get stressful, a bit lonely and a bit frustrating at times but it's worth it in the end.

Anna Font, Content Marketing Specialist at Yayloh

Failing sucks. But at the same time, it’s the best way to learn. Failure is something you can’t avoid when you’re in startup mode. It’s going to happen: you will fail. So why not embrace it? Who said, “You miss 100% of the shots you don’t take”?

6. Embrace being small

In the early days, many startups try to look bigger than they actually are.

They want so much to seem big that they imitate even the flaws of big companies, like indifference to individual users. This seems to them more "professional." Actually it's better to embrace the fact that you're small and use whatever advantages that brings. Their standards for customer service have been set by the companies they've been customers of, which are mostly big ones. Tim Cook doesn't send you a hand-written note after you buy a laptop. He can't. But you can. That's one advantage of being small: you can provide a level of service no big company can.

Paul Graham, Y Combinator (Do Things That Don’t Scale)

Forget about chatbots and automated email campaigns for now. Instead, be personal and go the extra mile to delight your early customers for as long as you possibly can sustain. There will be plenty of room to think about automation when you scale operations.

7. Ask for help

Being a marketing team of one can be lonely, so loooonely.

It helps to have someone you can bounce ideas off of — someone who understands the specifics of the job and has experienced what you are going through.

If you look around you, I bet that there’s plenty of support available in your ecosystem.

Amalie suggests:

Ask for help (mentors, network, peers, colleagues) if there are areas you're unsure of. You're often alone for a while.

But beware of bad deals, warns Felix Lundevall, Head of Growth at Mindler:

From my experience, you will get contacted by 1000 different people trying to sell different services and types of media as soon as you start advertising. Some things are good and some people are trying to rip you off. If you are uncertain of what a deal actually contains, then you should wait with buying it. People trying to sell media will often bundle different packages to make you confused and make things seem a lot better then it actually is. Remember that there will always be plenty of media to buy so you never need to rush into a deal. Don’t let other people decide what you should buy but instead do your own research. Compare different options and when you then find a deal that you find priceworthy be fast on buying it.

8. Document your journey

Documenting will help you keeping track of your progress. It will also be a treasure trove of learnings for the next marketing resource (whenever that might be) and save you some precious time in the onboarding process.

It’ll also be some great material when you look back at your journey years from now.

Start doing monthly reports (if only for yourself) really early, it's really cool to look back at and see the development. It's kind of a growth diary!

Amalie

Sometimes when I think about the Spotify years, it’s like a big green fog because we were so busy. I wish I had taken more notes while at it.

Sophia

9. Enjoy the ride

I’ve been there. Joining an early-stage startup is an emotional rollercoaster. Sometimes you’ll feel amazing. Other, you’ll feel like giving up. It’s easy to forget when things move fast, but it’s not the destination; it’s the journey that matters.

Suhail @Suhail

A reminder to all founders:

January 24th 2021

250 Retweets2,135 Likes

Katarina, Anna, and Rémy conclude with words of encouragement:

Enjoy this time, being the only marketer means you get to interact with many different departements and get a broad understanding of the business in addition to using a wide range of the marketing toolbox. It is super rewarding and makes you develop your skill set and business acumen at rapid speed.

Katarina

I've had the chance to join big marketing team at one startup and be the first marketer for another startup and, if I had to choose, learning wise, I would choose the latter. By doing a bit of everything one gets the chance to truly experience a bit of everything and shape the future they want in marketing.

Anna

YOU ROCK! Everything you are doing will be invaluable for the company and will serve as the basis of all future marketing ops! Congrats

Rémy

If you’re joining a startup as the first marketer, I hope the insights above help. If you have any questions or need help with anything, feel free to reach out 👋

@Erwan

While the benefits of a solid data strategy are universal (better insights lead to better products, which leads to more growth opportunities for your business), it’s crucial to understand how the execution will vary depending on the stage of your company.

One of the main challenges for early-stage startups is that there is so much to do and so little time, money, and expertise. Yet, if data provides a valuable framework for thinking through priorities efficiently, it’s not immune from this same constraint. Hence, data strategy is usually an undertaking reserved for “after we've launched.”

To give some pointers, I asked a few questions to my former colleague Jacob Gustafsson, who built and led the analytics team at iZettle (now Zettle by PayPal).

On his journey

ED: According to this LinkedIn report, data-related jobs are some of the most in-demand right now. What led you to choose this career path "before it was cool"?

JG: I've always felt problem-solving and analysis to be stimulating. To figure things out through reasoning and logic has been fun for as long as I can remember.

However, joining the Growth Analytics team at a startup was more of a coincidence, I would say. I did not know of iZettle before joining, it appeared on a list of fast-growing startups and I saw an interesting job ad. Looking back, I did not completely know what I was getting into. But, it became clear pretty early that it was a good fit for me; I was very fortunate to be part of the journey at iZettle and learned a lot.

Data analytics will only increase in importance for tech companies going forward; it will be interesting to see how the space develops. I'm happy to be part of it.

On data, or lack thereof

ED: In your profile introduction, you write "helping startups become data-led and grow through user insights.” Can you expand on that? What are the main problems startups have when it comes to data and analytics?

JG: Startups have many challenges. On the one hand, they need to iterate on the product to find a good fit in the market. They also need to evaluate the distribution channels and find a sustainable way of acquiring new customers. On the other hand, since they are at an early stage, they don't yet have much data at hand. So it's harder to make data-led decisions. This is a crucial problem to solve; you need to be creative in the ways you gather data and systematic in the way you use it.

Early on, you sometimes need to "hack" your way to get the insights you need before getting more structured about data pipelines, instrumentation, and BI-tooling. I help companies with tools and techniques that they can use to get those insights and ultimately grow their product. Some hacks can be:

• Generate insights through micro surveys within your product, or actively reach out to customers and do interviews that yield valuable qualitative insight. The Superhuman case is a famous example of reaching P/M fit through insights early on). So the point here is, if you don’t get the data through product usage events, ask your customers smart questions.

• Use the scientific method without doing controlled experiments. Work with hypotheses, and think about observations that can reject your hypotheses, and iterate. A low volume of data is no excuse for being unscientific about how you build knowledge.

• Store or save the learnings and make it accessible across your team, that knowledge base will compound in value over time.

On strategy and structure

ED: Technical debt is a common challenge in software development. The same concept applies to analytics. How can startups avoid "data debt"?

JG: Early on, you should do two things:

1. Get insights using data that you have to drive decisions.

2. Think strategically about how your data stack should look like given the applications you foresee 3-5 years ahead, and build it in parallel.

Data debt can be mitigated by (2) above. I believe designing a robust pipeline, data warehouse, transformations, and BI-tooling is necessary to get to a point where data-led decision-making can really scale in the organization.

In addition to the data stack, tracking and instrumentation are key. I've learned to never underestimate the importance of structured naming conventions and KPI definitions. It will save a lot of time and money to do this consistently from day 1. It does not have to be complex at all, but there needs to be a way of naming events and one source of truth for the main KPIs; you will have to do it sooner or later.

One example from previous experience was that, during a project to generate insight about how a particular metric developed over time, while the analysis was done and results shared, the stakeholders involved realized that they had two different ideas about what the KPI itself meant. Leading to confusion and more work. I’ve also seen cases where KPIs started to emerge organically in different teams that contradicted each other in their definition, leading to that any meeting where these KPIs were discussed had to start with a lengthy “how do you define that” discussion. It’s a good sign that teams want to define meaningful KPIs, but a central way of defining, aligning, and storing these definitions is needed.

On the abundance of tools

ED: As famously illustrated here, the MarTech landscape keeps on growing, and choosing the right analytics tools can quickly become a rabbit hole for startup teams. What stack do you generally recommend for early-stage startups?

JG: The number of tools is increasing, and the quality of those tools as well.

The most important thing to consider when choosing tools is to make sure you understand what problems you are solving. Pipelining, Warehousing, Transforming, Visualizing are examples of problems, and there are various providers within each of those with specific nuances that could be a good fit.

Within the transformation step, I think getdbt from Fishtown Analytics is an exciting concept. It makes data analysts and data scientists work more like developers in that they use code and version control to do the transformations and build models. With this, analysts get more influence and autonomy on the data structure. I think this trend will accelerate, and companies, where analysts build tools in addition to consuming and analyzing data, will be successful.

Some of the most used tools, ordered by category, are:

Pipelining: Fivetran, Segment

Data warehousing: Snowflake, Google BigQuery, AWS Redshift

Transforming: getdbt (as mentioned above)

Visualisation: Looker, Tableau, Amplitude

On building a data-led culture

ED: Most startups don't have the luxury to have a data analyst early on. So when do you think is a good time to hire your first data analyst and build a team?

JG: In the beginning, everyone is an analyst.

Companies should use insights for decision-making from day 1. But you don't need to have "Analyst" in your title to do that. The first PM of a company probably needs to take on an analyst’s hat at times to evaluate a launch, prepare for new markets, etc. The first dedicated analyst probably comes when it's clear that the data has the potential to drive significant added value through insights. And this person should probably be more of a generalist who can support both commercial and product teams and be a "full-stack analyst" with some engineering skills. I've seen companies wait until Series C for hiring an analyst, and some are doing it at the Seed stage; it depends on the nature of the business. The one clear thing, though, is that every company should make an active decision on whether to prioritize the analytics/insights investments or not at any given stage.

On career advice

ED: What tips would you give to future data analysts?

JG: Learn broadly in the beginning – some data engineering, some analysis/scripting, some dashboarding, and communication. Getting a feel for all of these areas will make it easier to decide what to specialize in (unless you want to stay full-stack). Don't forget the communication part; a good analyst can have much more impact if insights are communicated in a clear way that decision-makers understand. I've seen cases where communication did not work or was not focused on, and the result was simply that those insights were not used.

Secondly, prepare to work on culture as well. Stakeholders within a company need to be educated around how to be data-led, and the culture is a deciding factor if companies will leverage analytics or not.

You are an analyst but also a driver of the data-led culture.

I hope this post was helpful and valuable. If you have any questions or would like to talk data and analytics with Jacob, you can connect with him on LinkedIn.

Thank you for reading! Wishing you all a fantastic summer ⛱

@Erwan

It's never been easier to start a company. During the last 20 years, the time and cost of starting a business decreased substantially worldwide. But it's a double-edged sword: more competition, more choices, more channels, more noise…

In this context, customer acquisition is arguably more challenging than ever.

If you’re a startup founder currently facing this challenge, you maybe feel:

• Paralyzed: “Where to even start?”

• Overwhelmed: “I’ve tried everything, but nothing is working.”

  

• A bit lost: “Am I doing this right?”

If you feel that way, I hope this post can help you and bring some clarity.

Common pitfalls to avoid

In my experience, here are the main pitfalls you should try to avoid:

1. A strategy that you can’t afford: these days, more often than not, startups kickstart customer acquisition with Facebook and Google Ads. While those channels are almost inevitable when scaling, they’re not the best to start with when you have a limited budget and runway. Be mindful of your burn rate.

2. Reinventing the wheel: many startups try to copy tactics used by more established companies. These companies have more resources and can afford to think long-term. Choose a strategy that you can realistically execute upon with your current resources, and that could pay dividends immediately.

3. Compromising: saying no is hard, and it can be tempting to onboard any customer that would like to test your product. But will they get it? Will they stick around? The most important for growth is retention and as a startup, it’s critical to zero in on the customers who care the most about the problem you solve.

The sweet spot is to find customer acquisition initiatives at the intersection:

Where to start?

Well, it depends! :)

When founders ask me this question, I tell them to forget about the lengthy process of personas, funnels, and marketing mix and draw this simple 2x2 matrix instead:

Why? If we simplify, there are only two types of potential customers for your product:

• people actively looking for a solution

• those who aren’t

And there are only two ways to get in touch with them:

• leveraging touchpoints that already exist

• building new ones

How to use this framework?

Here are some prompts and examples to help you fill in the matrix:

Quadrant 1

• When potential customers search for ——— (keywords related to the problem you solve) they usually find ——— (list of websites ranking for these terms). Among them, we could partner with ——— (selected website) by ——— (your initiative).

• When potential customers ask questions about ——— (questions related to the problem you solve) they usually do it on ——— (popular group or forum in your niche). We could join the conversation by ——— (your initiative).

• When they compare or review ——— (alternatives) they usually find ——— (list of review sites and comparators). We could be included by ——— (your initiative).

Example of initiatives: partnerships with affiliates, requests for article updates, joining and participating in an active community, listing your company on review sites….

Quadrant 2

• We could help potential customers searching for ——— (keywords related to the problem you solve) by building ——— (your initiative).

• We could help potential customers having questions about ——— (questions related to the problem you solve) by building ——— (your initiative).

• We could help potential customers to compare and make a decision by comparing ——— (alternatives) with our product by building ——— (your initiative).

Example of initiatives: landing pages for SEO, FAQ, guides and blog posts, user-generated content (forums, community…), reviews, and comparison pages…

Tips: I wrote earlier about SEO for early-stage startups and comparison marketing.

Quadrant 3

• Most of our potential customers also care about ——— (related topics relevant for your audience). Their go-to is ——— (leading publications in that space). We could partner with ——— (selected publication) by ——— (your initiative).

• Most of our potential customers follow and trust ——— (influential profiles in your industry). We could partner with ——— (selected profile) by ——— (your initiative).

• Most of our potential customers also use ——— (adjacent products and services). We could partner with ——— (selected partner) by ——— (your initiative).

Example of initiatives: native advertising and PR, guest content, influencer marketing, strategic partnerships…

Quadrant 4

• We could inspire our potential customers who also care about ——— (related topics relevant for your audience) by building ——— (your initiative).

• We could raise the interest of our potential customers who follow and trust ——— (influential profiles in your industry) by featuring ——— (selected profile) in our ——— (your initiative).

• We could provide additional value for our potential customers also using ——— (adjacent products and services) by building ——— (your initiative).

Example of initiatives: content hubs, interviews, ambassador program, collabs, integrations, product directory, marketplace…

Notes

• This is just a framework; results will differ based on your creative inputs.

• The prompts are suggestions only; use other questions if you like.

• You don’t need to follow this order (quadrants) but it can help with prioritizing.

Tools that can help for market research

If you’re looking for some data and fresh ideas, I can recommend these tools:

• SEMrush: for competitive analysis and keyword research.

• AnswerThePublic: for finding relevant questions in your space.

• Sparktoro: for identifying sources of influence for your audience.

• SimilarWeb: for estimating traffic volumes (competitors, partners…).

Wrapping it up

If you felt paralyzed, overwhelmed, or lost about getting started with customer acquisition, I hope this post brought some inspiration and clarity to your journey.

Whether you use this framework or not, here are some key steps to keep in mind:

• Start with market research: map customer intents and touchpoints, focus on the places they already know and trust before building your own channels.

• Experiment and iterate: all initiatives won’t be a hit. Document your learnings and move on to the next one. Start small and stay consistent; it’ll pay off!

• Add layers over time: scaling user acquisition is all about adding layers and building repeatable systems, but it’s only possible with solid foundations.

If you found this framework valuable and would like to try it for a brainstorming session with your team you can get my template for free. Just let me know if you need help.

Have fun baking!

Get the template

Thank you for reading,

@Erwan 👋

Illustrations by Gustav Bodin

Last year, I wrote a post that addresses when to hire your first growth marketer, but a question I get even more often from startup founders is where to find relevant profiles.

The short version: to find a talented growth marketer for your startup, you need to take a different approach to the traditional recruitment process. It's not enough to rely on your network alone and hiring a talent acquisition agency is often too pricey. You'll need to be proactive.

For more details and actionable steps, keep reading.

Why is it so hard to find relevant profiles?

1. Exploding demand, short supply

The VC funding boom in the last decade led to rising demand for growth marketers, not only in Silicon Valley but all around the world. Growth marketers with a proven track record are highly sought-after.

2. Difficult to evaluate

Growth marketing is a relatively new function. It lacks industry standards and recognized certifications. Pretty much anyone can call themselves a growth marketer these days, but the quality of work varies a lot. For startup founders, it can be challenging to differentiate good and bad profiles before hiring them.

3. Early-stage isn’t for everyone

Being a GM1 at an early stage startup is a different ball game than being a GM at a scale-up. As a startup founder, you need to look for profiles that can be autonomous, hands-on, and strive with limited resources. The job description from Levels below is a good example of how to tackle this early in the recruitment process.

Well, so where to find them?

1. Try LinkedIn Sales Navigator but avoid generic InMails

LinkedIn Sales Navigator allows you to apply advanced search filters. Define your ideal candidate profile and apply some matching filters. Select relevant ones and reach out but avoid generic InMails (leave those to bigger companies using uninspiring recruiting methods). Instead, craft a short, friendly, and personalized message or find a way to get introduced. If they’re not interested or not available they might point you in the right direction.

2. Be where they hang out

As mentioned in the introduction, the best GMs are highly sought-after which means that they’re not actively looking for a new job. So the best way to catch their attention is to be where they hang out to discuss growth with like-minded professionals.

For example, a few communities I’m part of:

• Lenny’s newsletter

• Reforge

• Demand Curve

• Mobile Dev Memo

• 2PM

• Indie Hackers

• Makerpad

• Growth Hackers

• Growth Hackers Sweden

Instead of just sharing a link without context, start a conversation about a growth challenge you're currently facing. Not only will that generate more engagement and provide immediate value, but it could also lead to a genuine discussion with someone well-suited for the role.

3. Promote your opening on industry-specific job boards

If you didn't succeed to get any leads using the above tips or don't have time, consider promoting your job listing on some job boards dedicated to growth professionals and startups. For example, Demand Curve. These boards attract a more specific audience than LinkedIn and are still less costly than hiring a recruitment firm.

Other examples include:

• Product Hunt

• Super Path

• Angel.co

• The Hub

• Startup Jobs

• Hyper Island

4. Talk with career accelerator programs

Programs like Reforge and Growth Tribe help hundreds of professionals to upskill in growth every year. It’s in their interest to help alumni so why not reach out to their team and ask if they know someone currently searching for a growth position?

5. The growth marketer you’re looking for might already be on your team

Jeff Chang @JeffChang30

Head of growth is not a role most co's can hire for. It's a role you probably have to train: - The ratio of companies to operators with 6+ years of growth experience at a fast growing company is > 10:1 - Many turn into VCs / founders Don't wait to hire - invest in your team!

August 30th 2020

60 Retweets420 Likes

I totally agree with Jeff. I've seen several people successfully transition from customer success, engineering, or finance roles to growth leaders.

Early-stage GMs are generalists with a good understanding of marketing, product, and data. Strategies and frameworks can be taught. But you can't really teach cultural fit.

Finding a growth marketer that will be a good fit for your startup isn't an easy task. But by being proactive, using the right touchpoints, and creating a growth culture, you can increase your chances. If you're hiring, I hope this post was helpful!

@Erwan

If you’ve any questions, feel free to reply directly to this email or leave a comment.

I've been posting very infrequently in the past months, so you might not even remember subscribing to my newsletter. If you don't want to receive any more emails, just unsubscribe at the bottom, no hard feelings. If someone forwarded you this email, you can subscribe here to get my posts in your inbox a few times a month.

My next article will focus on effective go-to-market strategies for startups.

Rule 1:

If your customer does not mention the competition then neither should you. Never discuss the competition in any way unless you have to. Just carry on with your sales presentation as if they do not exist.

Above is the number 1 rule you’ll find in most sales playbook but also the general implicit guideline about competitors in marketing.

For startups, it’s the norm for founders to use competition slides in their pitch decks when meeting with investors. But elements of these analyses are rarely found outside of the boardroom.

If this information is so essential for investors couldn’t it also help potential customers to make a more informed decision? Why hiding the alternatives when they represent the only point of reference?

In this essay, I will not encourage you to start an advertising war à la McDonald’s and Burger King. Instead, I will describe how some successful startups like Figma, Ghost, or Notion intelligently mention their competitors in their communication and how you could do it too.

The psychology and behavioral bias behind new product adoption

When Steve Jobs introduced the iPhone in 2007, he spent more time talking about the incumbents than touting the benefits of Apple’s new product.

In fact, he used the same approach when launching the iMac and the iPad. Why would he do that? Weren’t these products so much better than the competition anyway? Well, Jobs was a genius salesman and a master at understanding consumer psychology. He was well aware of the often-overlooked psychological costs associated with behavior change.

Many products fail because of a universal, but largely ignored, psychological bias: People irrationally overvalue benefits they currently possess relative to those they don’t. The bias leads consumers to value the advantages of products they own more than the benefits of new ones. It also leads executives to value the benefits of innovations they’ve developed over the advantages of incumbent products.

John T. Gourville (Harvard Business Review, 2006)

Consumers evaluate new products based on a reference point. Your startup is only as good or as bad as what the user is comparing it to.

Take Figma for example, the first browser-based and real-time collaborative tool for design professionals, and arguably a much better solution than anything else currently available.

Problem? Their target audience developed long-time habits using tools like InVision, Sketch, or Framer throughout their careers.

To win them over, Figma created a compare section on their website in order to educate them about the product's key differentiators.

Mission accomplished! Figma is the fastest-growing tool in that category.

The upside of capturing comparison searches for user acquisition

As described in my previous post SEO for early-stage startups, ranking on Google for comparison and alternative search terms within your industry can be a very valuable user acquisition channel compounding over time.

Because it’s taboo for most companies to mention their competitors, these search terms are generally dominated by affiliates, comparison sites like Capterra, and review bloggers. While being listed or mentioned by “neutral” websites can be a precious trust factor for your brand, it can also be very pricey. As an early-stage startup, you might not have the necessary funds to compete with other players on that front.

So why not creating this content on your own website instead?

That’s exactly what Podia did, and the results are nothing but impressive.

Between research, design, and copywriting, I can’t imagine how much time it took for the team at Podia to create all these comparison pages.

But was it worth it?

According to data from SEMrush, a single landing page comparing their product with the more established player ‘Kajabi’ generates an estimated $18.7K worth of organic traffic every month in the US.

With 30+ similar landing pages, Podia now ranks on Google for keywords like “Patreon alternative”, “Gumroad”, or “Udemy alternative”.

A more effective (and ethical) strategy than aggressively bidding on competitors’ brand names via Google Adwords in my humble opinion.

In just 2 years, Podia gained significant market share in a very competitive industry with “only” $2.6M in funding (source: Crunchbase).

You’re not Starbucks

Most SaaS startups’ pricing pages read like a Starbucks menu.

Instead of the tall, grande, and venti options, we can choose between basic, standard, and premium or starter, professional, and enterprise.

Namings might change but it’s always the same tactic: the decoy effect.

In marketing, the decoy effect (or attraction effect or asymmetric dominance effect) is the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated.

Huber, Joel; Payne, John W.; Puto, Christopher (1982)

As a startup, it’s tempting to take inspiration from successful companies like Starbucks and Netflix and decide to apply the decoy effect too.

But as mentioned earlier in this article, buyers tend to overvalue products they already have and use. So the best way to market your innovation is not to emphasize your product benefits but to highlight what they’ll lose by not using it (avoiding pain, a hassle, a cost..).

Basecamp, a project management software, isn’t really a startup (founded in 1999) but applies this approach to perfection:

Josh Garofalo @swaycopy

@elisedopson When it comes to pricing, @basecamp nails it. It's dead simple ($99/team no matter what). Plus, they make the comparison they know people are making (Basecamp vs. team chat + project management + file storage + calendar/docs (it's no surprise Basecamp comes out on top).

March 21st 2019

2 Likes

Instead of choosing between another basic/pro/enterprise package, users are put in front of their alternative stack—far more painful and costly to maintain. Nudging done well! Your pricing page should be written from the perspective of your users, not your profits.

The painful transition from old to new, an opportunity for onboarding

Email services are generally free (except Superhuman) but we usually stick to the same one for years because of the switching cost.

It takes a lot of time and effort to change: exporting data and contacts, migrating, redirecting, updating subscriptions, marketing material…

Switching costs are the building blocks of the competitive advantage and the pricing power of companies. Firms strive to make switching costs as high as possible for their customers, which lets them lock customers in their products

Investopedia

For example, I’ve been using Evernote daily for almost 10 years. But in 2019, I found Notion. It looked better, had more features, and it was cheaper. But it also meant having to learn a new tool, reorganizing 1,000+ notes, reconnecting devices. You name it: first world problems…

But somewhere during the signup process, I was given the choice to automatically import my data from Evernote (and get credits for it). Boom! Problem solved, aha moment.

Note: Notion now has a dedicated landing page and signup flow for Evernote users (2nd screenshot below).

Like Notion, think about how you can flip the expectations relative to switching costs for your users and simplify the transition from old to new.

It’s not because you control the narrative that you can oversell

If you’re still reading, you might be convinced (or outraged) that I’m recommending you to mention your competitors in your communication.

But here comes Bowser, the final boss: your self-perception.

According to Harvard Business Review, startups overvalue the new benefits of their innovation over the advantages of incumbent products by a factor of three. In other words, it’s going to be very difficult for you to present an unbiased comparison of your own product vs alternatives.

When you control the narrative, it can be tempting to trash the competition or magnify your own features. But talk about your incumbents with humility (they paved the way for your company) and set the right expectations for your product. In the words of Ron Burgundy: “You stay classy”!

For inspiration, study how Ghost subtly does it:

This reminds me of one of my favorite marketing quotes:

It’s really scary to turn down most (the average) of what comes your way and hold out for the remarkable opportunities. Scary to go way out on an edge and intentionally make what you do unattractive to some. Which is why it’s such a great opportunity.

Seth Godin, No to average

Including competitors and alternatives in your communication is counterintuitive. It goes against everything you learned before, but in fact, it could be the most effective way to introduce an innovation.