February 16, 2021

Why Startups Need to Focus on Sales, Not Marketing

A summary of one of our favourite blog posts from Jessica Livingstone

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Jessica Livingston is an American author, coordinator of the Startup School and a founding partner of the seed stage venture firm Y Combinator.  

Below is a summary of some of the highlights.

Sales vs Marketing: Narrow and Deep

Early-stage startups should prioritize narrow and deep outreach instead of broad and shallow marketing. This approach involves engaging with a small group of highly interested users and tailoring the product to their needs. This user interaction also serves as market research.

Examples of successful startups that followed this principle:

  1. Apple - Started with Steve Wozniak's computer for the Homebrew Computer Club
  2. Facebook - Initially targeted only Harvard University students

Engaging Early Adopters

At Y Combinator, startups are advised to seek out early adopters and engage with them individually. Some examples:

  1. Airbnb - Co-founders met with hosts in New York City to help them improve their listings and get referrals
  2. Stripe - Co-founders Patrick and John Collison manually installed their product for early adopters, a technique now called "Collison installation"
  3. Pinterest - Ben Silbermann recruited users manually, even asking strangers in cafes to try out the platform

Dangers of Focusing on Marketing

Focusing on the wrong end of the sales/marketing spectrum can be detrimental to a startup. Traditional marketing can lead to a lack of user growth and a denial of the product's flaws. Founders might fail to gather the necessary feedback to improve their product.

Why Startups Avoid Individual User Engagement

Engaging with users individually can be hard and demoralizing. Sales provide harsh feedback that founders may not want to face. However, these conversations are crucial for the startup's success.

Measuring Success

To measure the effectiveness of manual efforts, startups should focus on growth rate rather than absolute numbers. A consistent growth rate, even if the absolute numbers are small, can eventually lead to impressive results.

Y Combinator advises startups to focus on creating a great product and acquiring users manually. Engaging with early adopters on an individual level is crucial for both product improvement and user growth, ultimately determining the success or failure of a startup.

You can read the full article here: https://foundersatwork.posthaven.com/why-startups-need-to-focus-on-sales-not-marketing