With little money in the bank, a new start-up must improvise, especially when it comes to service providers, when it continues to work from a new location to finance the new dream, and when they want to mass market the product. Whether an app or a physical product, the ability to present and offer it to the world is quite limited when you lack a pile of cash on the table. It is much easier to pour out money advertising on Google, Facebook, or Twitter, or to promote banners on leading ad networks, but in the case of a new start-up, the options are limited. Moreover, competition at app stores and for consumers’ disposable income is becoming harder.
What are the options when the budget is limited. We asked the three incubators participating in the “Globes” and Bank Hapoalim (TASE: POLI) Smartup2 program for tips for the start-ups they are assisting.
Explore.Dream.Discover. COO Nimrod Cohen is advising GreenIQ Ltd., which has developed a water and money-saving app for watering lawns, about marketing. He says that GreenIQ’s team must know how to stand out outside traditional advertising methods. “Today’s consumers carry out in-depth online research on their own before contacting a supplier. They have basically made the final decision about the purchase before any interaction with the supplier. The customer often never meets the supplier, or meets it after having made up his mind and does not give the supplier the chance to persuade him of the advantages of its product, he says, adding that consumer research is conducted through various information channels, including expert blogs and discussion groups on social networks. He argues that in order to adapt the company’s online sales to this reality, it must undertake several activities to stand out from the crowd.
Cohen advises focusing on building GreenIQ’s brand. “It’s necessary to build a brand that will be associated with water conservation and environmental quality and to be known as alert to the subject. Take care not to push the company’s product at every opportunity, but to be known as an objective party as much as possible,” he says.
Cohen advises GeenIQ to prepare studies on water wastage, the smart home, and so forth, and to repeatedly emphasize that the company’s product should stay out of advertisements in order to create brand awareness and values and not to try direct sales to users. He says that the company should concentrate on countries with high conservation awareness and water shortages.
Another way for the company to stand out against the competition in the field and to create awareness is for the products to go viral online. “The public barely knows Internet of Things, where GreenIQ operates. In this reality, the first products attract a lot of attention, and people often like to brag about the innovative product they just bought. The message should be adapted to this spirit,” he says. “In this case, you should make viral video clips to highlight the product’s advantages, its usefulness, and need to the general public.”
The viral engine
Nielsen Innovate VP business development Dov Yarkoni, who is advising Zeekit Ltd., says that the developer of a technology for fitting clothes with a simple photograph is using two different product promotion models. The first is development of a consumer app to take the pictures, upload them, and choose the clothes after seeing how they look on the app. The other model is to work directly with e-commerce fashion designers, in which Zeekit will have technology vendors.
Naturally, the first model, based on B2C, targets a wider clientele and is therefore more challenging, but also quite interesting. Yarkoni says that before starting penetration tactics and creating a wave of downloads and users of the app, “it is important that every service which targets consumers to have an organized tracking system so the entrepreneurs can monitor via which channel users arrive, and on the other hand how much revenue the user generates.”
Yarkoni adds, “The basis for marketing in this field is the announcement that costs me X dollars to bring users to the app and to ensure that it generates X-plus revenue so that the business will be profitable over time.” He says that before spending money on active marketing, it is desirable to create organic growth engines that will be a solid foundation for success. “One of them is the viral engine. Since Zeekit is an app that lets people see how they look when they upload the picture. It creates an opportunity for dialogue between friends, a husband and wife, or anyone who can provide feedback about how the clothes look on them and whether they should buy the item.”
Yarkoni says that the addition of social network tools, which make it possible to upload pictures to Facebook, Twitter, Pinterest, and so on, creates a viral effect for the app. Another direction that he suggests is to create fashion content on social networks. “It’s possible to upload interesting content to Instagram or to create a group on Pinterest with different collections,” he says.
A third channel that can create an organic growth engine for a social app is collaboration with fashion bloggers or leading celebrities. “If they can create relationships with leading fashion opinion-setters, they will basically want them to praise this service and create free publicity,” he says.
Yarkoni also points to the fact that the app itself is compensated for success and going viral. It is important to promote feedback for the app at relevant stores to facilitate sales at App Store or Google Play. “This is very important for the app’s usability and appearance. Positive feedback from users can give Zeekit greater presence in the app stores,” he says. Furthermore, the app’s presentation at the stores should be optimized by creating video clips to show users the app’s essence and how to use it.
“Only after this work, when there is a user base and they start to see the app’s use and value to them, and there are repeat users, is it possible to begin using paid advertising growth engines,” Yarkoni concludes. One way to promote downloads of the app is by targeted ads for installing it, which are found on Facebook, Twitter, and Google. He also suggests using app advertising systems, such as ironSource and Matomy Media Group (LSE:MTMY) ( “As I said, it’s important to activate tracking systems in this case in order to know whether users find the app on Facebook ads or somewhere else.”
Use the experts
8200 EISP founder Inbal Arieli, who advises HopOn Ltd. says that the start-up, which is developing an app for paying bus fares via smartphones, should use two marketing channels: a B2B model with bus and train operators, and a B2C model for consumers.
Arieli says that conversations with HopOn’s founder suggested marketing to end users through full collaboration with public transportation companies, because of the direct incentive of the companies’ cost savings by switching passengers from current fare payment methods to HopOn’s method.
“HopOn has a major edge in the position given them at the friction points between potential users of the app and public transport, such as ads at bus stops or on trains and buses. We therefore advise them to focus their efforts on this channel,” says Arieli. “In addition, because most passengers pass the time surfing on their smartphones, it is worthwhile advertising on popular apps, such as Facebook.”
She adds that, in addition to the initial brand foothold campaign, the growth rate will likely be based on going viral and from word of mouth.
For B2B marketing, Arieli says, “An analysis by HopOn and its familiarity with the market found that public transportation operators are conservative, with long decision-making processes, and that each is focused on a different geographical area. The company should therefore adapt and focus its messages to each region separately in terms of language, tangible examples, such as maps for that region or local bus lines, and user interface.”
She says that it is also worthwhile for the company’s entrepreneurs to use their financial experience as accountants to emphasize their management capability, in addition to the product, which has already been implemented in full in its first market and is gaining footholds in more markets.
Tell the story
If the three startups in the Smartup2 program are put to one side, it is worthwhile to try and look at the big picture to see how to connect the market to the product and how to promote the company. “A major part of marketing is how to tell your story, or storytelling,” says Zula CMO Hillel Fuld, a mentor and advisor to entrepreneurs. “You have to know how to tell your story to your users, your investors, and to journalists who want to cover your start-up.”
“Marketing is something that goes hand in hand with sales. Ultimately, both try the same message,” he says. “For example, I sell you my pen. Sales are to say, ‘My pen is the most recommended. Buy it.’ Marketing is to talk about what is trendy in the pen market, what was trendy last year, and, by the way, to mention that I sell pens. It doesn’t matter if this happens on Facebook or Twitter; the idea is to tell your story, but not to sell it directly.”
A good example of this is that it is not necessary to have direct sales. Fuld says that Apple Inc. (Nasdaq: AAPL) recently acquired a competitor to a start-up that he advises, and that thousands of Android developers can no longer use the competitor’s services. “The start-up’s CEO asked me what to do. He said that these Android developers were tweeting to find another company in the field. He asked whether to respond to them and write about his company. I told him, ‘Heaven forbid. Be quiet. Just mark their tweets as favorites.’ He thought that I had gone crazy, but later all these users received alerts that the company had made them favorites, checked the company out, and they tweeted, ‘Hey guys, this company knows how to listen and not just to sell.’ The company now has new users and ambassadors,” he relates.
“This does not mean that this method always works, but in any case, part of marketing is to listen to customers and potential customers,” says Fuld, citing a classic marketing example of Internet marketing expert Gary Vaynerchuk. “Early in his career in the business, when he managed his wine store, a customer came in and bought expensive wine. Gary went to the customer’s Twitter, saw that he a fan of a particular football team, bought a shirt on eBay and sent it the customer’s home. That customer returned with tears in his eyes and promised that he would never buy wine at any other company. What happened here is that Gary thought, listened, studied the person and understood him.”
Fuld concludes, “With every start-up that provides value, you get real engagement. If you market content in the most natural way possible, then people will want to join you. You won’t see a return on investment tomorrow, but your brand will rise above the noise, where everyone promotes and sell themselves. If a start-up writes a valuable blog, you’ll build greater ROI than an immediate sale.”
Published by Globes [online], Israel business news - www.globes-online.com - on August 3, 2014
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