Richard Giles

Recently, in the Silicon Beach Google Group, someone asked “Now I’ve launched…I’m scratching my head wondering how to attract customers.”

One thing I’ve been saying for some time now, is that many web start-ups need to adopt traditional business practices. What’s interesting is that many don’t, probably for two reasons: they’re predominantly engineers who love coding, and the web community loves to snub it’s nose at “traditional business.”

Fortunately a large part of my background includes marketing and sales, so I live and breathe this stuff.

What’s interesting is that they were inspired to start their web application after watching David Heinemeier Hansson at Startup School 08. It’s a great presentation, but it lacks so many fundamental business practices it’s dangerous.

David Heinemeier Hansson,
originally uploaded by mathoov.

Now I’m certain if I sat down with David, he’d agree that the presentation didn’t contain all of the details that he knows. It was essentially a presentation to inspire web start-ups to make money. And that is a great thing. So many don’t even consider Price a factor, and if his presentation inspires people to think of at least that step then it’s a good thing.

He also had some other great points about starting a web company, like not panicking about releasing to market quickly, running the company as a side-business initially, and solving simple problems.

However, he over simplifies the problem of launching a business (even though he does reiterate that it all takes hard work), when he says it’s simple: Have a great application. Have a price. People pay.

In marketing there are several more considerations than just Price. In fact it’s so engrained in marketing they are known as the Four Ps:

• Product
• Price
• Place
• Promotion

In the same Google Group thread Geoff McQueen points to a great podcast/lecture by Steve Blank: Retooling Early Stage Development.

In the presentation Blank suggests that over 90% of start-ups fail because they didn’t find a market and customers. He then outlines a model, he calls Customer Development, that any start-up can adopt to launch a product. Its whole focus is on the customer.

Wow, funny how that sounds exactly like the sole focus of marketing.

Interestingly enough, “marketing” is considered a dirty word by a lot of engineers/developers .

It really comes back to the age old questions of “What customer need does the product meet?” Or, “What pain am I solving for the customer?” Which are both really good simple questions you ask yourself in the sales process.

They’re also product related, but they flow down to price, place and promotion. So if the pain you’re alleviating is big enough, the price can be more significant. Place, or distribution will depend on who the customer is, and the product. And then throw in promotion, which in itself is insanely complex.

So this is an ongoing process, that takes time to get right.

My point being, the presentation by Hansson is a good one, but the process of launching a start-up is far from simple. You can’t just create a product, slap a price on, and wait for the customers to roll in.

Saying that, if you’re considering starting a company, jump in. As Hansson suggests, run it on the side, learn as you go, launch early, try new things, and research like buggery. It is incredibly rewarding. Just keep in mind, it’s not simple or easy.

I’d love to elaborate on the marketing process some more. But it really warrants blog posts spanning several weeks. But if people have some specific questions, feel free to ask in the comments or email me, and I’ll provide my answer.