Understanding your market

Some startups become huge sensations without requiring any active marketing – YouTube, Skype, and Twitter come to mind. However, the vast majority of successful startups gained adoption through marketing: PR, SEO, partnerships, paid marketing, and so on. My strong suggestion would be to hope for the former but plan for the latter.

Marketing is a huge topic. Here I just want to make the point that, for starters, you need to figure out two things:  1) how information and influence flows in your market, and 2) when and where people use and/or purchase your product.

I’ll use my last startup, SiteAdvisor, as an example. SiteAdvisor (now called McAfee SiteAdvisor) is a consumer security product. Most consumers don’t learn about security products on their own. Instead, they rely on their “family/friend sysadmin” (smartest computer person they know). These family sysadmins read technical websites and magazines. In order to reach this audience, we performed studies on data we had collected, which led to lots of coverage, which raised our profile and bolstered our credibility.

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Now to when and where people buy security products. Most people only think about security when 1) they buy a new computer, 2) they first get internet access, or 3) they get a virus or other security problem. The last case is actually pretty rare, so most companies focus on 1 and 2. How do you reach people at those moments? Through “channels” – in particular PC makers (”OEMs”) and internet providers (”ISPs”). (For public market people: focusing on these two channels was McAfee’s big insight in the 2000’s and how they made a comeback versus Symantec who dominates retail).

Most people don’t talk to their friends about security products, so it’s very hard to do mass word-of-mouth marketing. (Exceptions would be the beginning of the spyware epidemic around 2001-2 when AdAware got super popular via word of mouth). So you have to understand and pitch to these channels.

These observations are specific to consumer security, but every startup should have a similar theory of how to market their product.