Startup Marketing 101: A Founder's Guide to Selling Your Products to the First 1000 Customers

Welcome to a new edition of Building Digital Products (BDP).

You can catch up on the previous edition here.

Read to the end, I have a surprise for you.

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Building Digital Product (BDP) by Osita is a monthly newsletter that supports founders, investors and startup enthusiasts with insights and principles to build better products and startups.

This is my 18th edition and first edition for the year.

BDP's theme of the year is "Resilience."

Here is a little snapshot of me.

Osita James is a technology entrepreneur and a partner at BlackcrestLP. The start-up advisory law firm (Blackcrest LP) has successfully advised start-ups across Africa in investment deals worth over $5 million. He holds an MSc in Innovation Management and Entrepreneurship from the Nottingham Trent Business School and a Diploma in Technology and Innovation from the Nigerian University of Technology and Management (NUTM). He writes poetry and fiction in his free time.

I support African founders with legal and start-up operations advice. You can reach me at [email protected] for enquiries.

Some interesting things happened in the Tech ecosystem this month. You can find the summary below.

China approves 40 AI models within 6 months. Last week alone, 14 Chinese regulators granted approvals to a total of 14 large language models (LLM) for public use. This is in a race to catch up with US AI development.

Netflix Co-founder and Executive chairman Reed Hastings recently gifted two million shares of his holdings in the streaming giant to charity. The shares gifted have a current value of $1.1 billion.

Zoom has revealed it will release a VisionOS app following the launch of Apple's Vision Pro. According to Zoom, the new app brings capabilities such as “persona” support for users to use a digital avatar during calls, 3D object sharing, its chat feature "Team Chat" and more.

In Otaku legend, there is a character of great repute who swore to become the Ninja king (Hokage). He fought great adversaries and stood unwavering in faith against exceptional odds to become the greatest Hokage his village had ever seen.

Today's edition will focus on the marketing techniques that founders can explore to sell to their first 1,000 customers.

The first challenge every founder will face is selling their products to customers. It is easy to come up with ideas and create an MVP. But it isn't always as easy to sell to customers at the early stage. This edition will address common marketing misconceptions and provide a practical guide on how to sell digital products to early customers.

6 Common Marketing Misconceptions

The ability to market your product to a wide audience and get them to keep buying is a superpower that will make any business that possesses it, unassailable by competition. The trouble, however, is that many founders have a perspective about marketing that can prove problematic in the long run. In this section, I have outlined 6 popular marketing misconceptions that founders hold to be true.

1, If I build it, they will come

So many founders work on the assumption that the market is waiting for them to build their 'perfect' product to solve their problems. In reality, the market does not care about your product, they care about themselves. Understanding the core human attributes will change the way you think about marketing forever. The customers don't care about the features of your product or the quality as much as they care about how exactly it will do something for them. Unless your marketing communication addresses a critical aspect of the lives of your target audience, your marketing efforts will not achieve the desired results.

2, If I reduce my price, they will buy

Pricing and value have a subtle relationship in marketing. But price is not necessarily an indicator of value since some people price their products poorly even when they offer so much value.

According to the Harvard Business Review:

We see a market offering as having two elemental characteristics: its value and its price. Thus raising or lowering the price of a market offering does not change the value that such an offering provides to a customer. Rather, it changes the customer’s incentive to purchase that market offering.

The price you set your product at doesn't directly affect the value of your product, but the customer's incentive is what is impacted. A customer's incentive can be a wide range of things., it can be ease of accessing the service or product, tools to use the product or even no current need for the product. A customer who doesn't see your product offering as something that solves a problem for them will not buy irrespective of the price point.

3, If my target market is big, I will sell more

This has fed the digital marketing fuel for a long time. So many businesses burn thousands of dollars every month on Facebook and Google hoping to increase their revenue by selling to a wide digital audience. Yet, only a few of them make millions of dollars in revenue by selling these products online, why? Poor market targeting and poor offering. Most founders think their offer is pretty good but in reality, they are not. A good offer will double your returns with the same amount of traffic you currently have. If you target a smaller audience of say 200,000 with a great offer you stand a chance to earn more than if you target a larger audience with a generic offer.

4, If my product has more features, customers will prefer it.

Your features do not matter a lot to your customers. You are not the only one in your market selling the same product or service. For example, if you sell financial services that can help customers save, manage their bill payments, and invest in mutual funds and stocks. Your customers are interested in improving their lives, becoming more financially independent and thriving. If you market the features that allow them to access savings, bill payments and investing, it will come across as generic and uninteresting. Especially when there are other alternatives. Remember that you have competitors. You can differentiate your product offering by offering more support, cash back, discounts at partner stores and things like that. Startups who find more ways to support their customers win, not startups who build more features.

5, I know everything about my target market

Brilliant founders know a lot about their target market. They have spoken to thousands of them and have used their learning to create customer personas that influence their marketing communication and efforts. Despite all of that, such founders do not know everything about their target market. There are two key reasons for this:

1, People change and

2, The market needs evolve.

You do not need to know every single thing about your target market but you need to know enough to make them a good offer, that addresses their concerns and enough to envisage the things that can affect them.

6, I should only do marketing to get new customers

This is a common misconception. You do not need to only do marketing to get new customers because your customer lifetime value may not always be high. Excellent marketing targets customers at all stages of the buying journey.

A customer may not be ready to buy today but may be ready to buy next month. If your marketing communication is top-notch the customer will remember you even 6 months after they came in contact with your brand.

Marketing Guide for Startups

Now that you know the common misconceptions in marketing as a founder and better ways to think around them, I am going to further dive into how best to position yourself as a startup and the marketing techniques you should take advantage of to grow your business.

Step 1

Write down your business mission, vision and value clearly

Before you roll your eyes ask yourself this: Does your current marketing communication align with your mission, vision and values? Every marketing communication of a company has to take these into consideration to come across as consistent over a period of time. Startups who have transparency as one of their core values don’t post product offerings that are vague even if they increase the bottom line.?

If you don’t already have a vision, mission or core values, it is time to create one. If you already have, revisit it to align your overall marketing communication. Take some time to do this. Don’t do it in a day. Think about it deeply because your long-term growth and differentiation may depend on it.?

Step 2

Identify your customers

Every business without paying customers is a charity. You need to spend time identifying your customers. There are some easy ways you can do that. Here is a checklist of questions to get you started:?

• What do you sell??
• Who is likely to want to purchase what you sell??
• Where do they work?
• Where do they live??
• Which social media platforms are they on??
• What is their current frustration??
• What is their future frustration??
• How are they currently solving it??
• What businesses do they currently patronise??
• What is their income level??
• What is their age range??
• What is the prevalent gender of the people that have these problems??
• Is the problem they face short-term or long-term??

I know that felt like a lot but remember that building is a marathon not a sprint. You want to win the war, not a battle. Understanding your customers at a level your competitors would not, will give you an advantage in the short term and the long term.?

Step 3

Create an attractive offer

The best offers are unambiguous and succinct. They do not hide any details of the benefits the customer should expect and they give a guarantee as well.?

There are so many offers out there. The ones that stand out have to do something different from the average offers in the same industry.?

For example, if a real estate company that lets apartments makes the following offer:?

At Henry Homes, we give you access to apartments in the safest regions in Nottingham, a free furniture change for any one furniture you don’t like and a full refund if you don’t like any apartment we let to you, no questions asked.?

And?

At Merry Homes we give you access to a wide range of apartments in Nottingham close to the city center with 24/7 support for any apartment fixes you desire.?

Which one will you work with??

If you picked the first one, then why are you also not making offers that stand out like that? Research shows that very few customers actually request for a refund, so you don’t have to worry about it. Be bold, and work very hard to deliver on your promises. That’s how you build a reputation.?

Step 4

Create High-Value Content (HVC)

Please as a founder do not approach your marketing from the perspective of just posting content on social media and engaging on LinkedIn. You need to build a reputation and one effective way to do that is to create High Value Content. McKinsey excels at this. They are one of the most trusted consulting companies in the world and have written high-quality reports and articles on critical topics in e-commerce, innovation management, economic issues and social development. By doing this consistently they build a reputation in their consulting industry as people who know what the issues are. This also indirectly convinces their customers that they are the ones who can help solve them.?

As a founder, spend time learning about the key issues in your industry and start creating content around them to address your customer's concerns.?

For example, if you are a finance professional who sells financial advisory as a service, instead of writing content about the financial services write content about key insights other advisors will ordinarily not tell the customers. You can create a content title?such as:

10 worst performing stocks over the last 15 years that they don’t want you to know about

Ensure the content title is catchy to get people to read and when they do read, let them find quality. Do analysis and make arguments on different issues as though you were already advising. Clients who actually read this content usually start seeing the author as the authority on the subject. And when they are ready to buy, they buy from the person they trust already?knows what they are doing.?

Step 5

Create a content distribution Channel

Don’t just create quality content but also create a distribution channel. Think about your distribution from day one because your marketing effectiveness is only as effective as the channel of distribution. The following are some distribution channels?:

• Email newsletters?
• Online communities?
• Social Media?
• Website blogs?
• Partner blogs or websites?
• Podcast channels?

The one you choose should be dependent on the type of content. Long-form content is better distributed through email newsletters, website blogs and podcasts. Short-form content is better distributed through social media.?

It is a good idea to double them on platforms you’re conversant with. If you’re a Twitter pro, it makes sense to stick to it. The important thing is to post the appropriate content and strive to improve your marketing outcome monthly.?

Step 6

Create a digital ad strategy

Ads are one of the most effective way to gain millions in traffic to your marketing content as a founder. The top platforms are Google and Facebook. Creating ad campaigns, however, can be expensive and typically have to run for three months or more for you to get the best results. This means you need a strategy so you don’t burn all your cash on ads that don’t convert.?

Here is a checklist for creating an effective digital ad strategy:

• Define your ad goals or outcomes to manage expectations?
• Set a budget from the go
• Research relevant keywords?
• Set campaign type (video, display, shopping and search)
• Set campaign timeline?
• Track and optimize? the campaign for best results?
• Retarget the market audience?

It is noteworthy to include speaking to a professional if you have no idea what you’re doing. You’re more likely to lose more money in the long run if you do it yourself when you don’t know how it works.?

Step 7

Leverage partnerships with stakeholders

Still in line with creating high-value content. You don’t want to be a stand-alone authority, you want other authorities to also give you credibility by associating with you. Partnership is a powerful marketing tool because it allows your startup to leverage the authority and influence of more established brands to improve your overall brand standing.?

You can create partnerships to do things that don’t require a lot of commitment like a webinar or a physical event targeting a market the stakeholders are also interested in.?

Find below a checklist for creating and managing partnerships with more established stakeholders as a startup founder:

• Decide on your ideal partners?
• Network a lot?
• Have a direct ask and corresponding benefit for each partner?
• Create a channel of communication?
• Define responsibilities and obligations in an MoU
• Create a system of evaluation?

This is one of the popular marketing strategies that can increase customers and overall revenue for businesses that implement them successfully. You have to be careful though, you don’t want to make promises you can’t keep. Before you create a referral program consider your budget and spend time to think of a referral system that funds itself, that way, it is a self-sustaining cycle. For example, you can say whoever refers their friend to use a product you offer would get an amount if their friend has made a transaction to a certain amount. Ensure your margin is not eroded because of the referral program and measure it over time to determine if it’s helping you meet your targets.?

Step 9

Manage your business brand

Your brand is critical to your long-term success. When you start, customers may patronise you because of your offering but your brand association is what will make your customers choose you over your competitors now and in the future. This means you need to cultivate things that your customers will perceive as brand associations. Branding does not have to be an expensive endeavour. It can cost little and still be fun. For example, you could organize a marathon in collaboration with a charity and raise money for children with cancer or indigent people in your community. You can provide branded t-shirts for people participating in the marathon and a platform to collect donations from people. It doesn’t have to cost a lot but it has to be intentional and impactful.?

Branding takes time. Don’t rush it but ensure you start on time. Always think about what the customers think of when they remember your brand and work hard to ensure it is something positive all the time.?

Step 10

Track and measure marketing efforts

Your marketing strategy as a founder is only as good as your systems to improve it. You must start to continuously improve. Remember what I said, building is a marathon and not a sprint. You have to keep this in mind.?

Create your system for measuring progress. The more personalized it is, the higher the chances you will implement the changes you need to move the needle.?

Free Marketing Resources for founders

Hubspot Marketing plan template

Recommended Reading

• Sell Like Crazy by Sabri Suby
• Hooked by Nir Eyal
• Contagious: Why Things Catch on by Jonah Berger
• Permission Marketing: Turning Strangers into Friends and Friends into Customer
• Influence : The Psychology of Persuasion

Conclusion

You cannot avoid marketing if you want more than your mum and siblings to patronise your business. Marketing for a startup however has to be strategic and iterative because of the realities of budget constraints and the pressure to grow very fast. Your marketing can and will work for your startup if you're willing to eschew the popular misconceptions, fold your sleeves and do the work.

If you loved this edition please share it with another founder.

Keep building,

Osita.

The surprise

I am going to be offering a free 30-minute business strategy and clarity session to 10 founders in February.

How to qualify - Repost this newsletter and comment below I am interested and I will send you my email to schedule a time.

PS: It is my birthday in 3 days ???????? and I have curated a wish list.

Feel free to pick any item from the list.

Have a great week ahead.