{"id":10482,"date":"2020-07-09T09:58:00","date_gmt":"2020-07-09T13:58:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=10482"},"modified":"2020-07-10T22:02:41","modified_gmt":"2020-07-11T02:02:41","slug":"marketing-and-advertising-zero-to-one","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/marketing-and-advertising-zero-to-one\/","title":{"rendered":"Sell It: Marketing and Advertising for Startups (Peter Thiel)"},"content":{"rendered":"\n

What is the role of marketing and advertising in startups? Do you need a strong strategy to succeed?<\/p>\n\n\n\n

A startup needs marketing and advertising to succeed. Before you launch your company, you’ll need a strong marketing and advertising plan in place. Read to find out why.<\/p>\n\n\n\n\n\n\n\n

Marketing and Advertising<\/strong> for Startups<\/h2>\n\n\n\n

Marketing and advertising are effective for selling low-priced products for mass consumption<\/strong>\u2014such as package goods sold in supermarkets\u2014that don\u2019t lend themselves to viral sales or traditional sales<\/a> by reps.<\/p>\n\n\n\n

For example, to sell laundry detergent in large retail outlets, Procter and Gamble creates television commercials and newspaper coupons, and it designs its boxes to be eye-catching in stores.<\/p>\n\n\n\n

Advertising can be effective for startups as well\u2014but only when your customer lifetime value acquisition costs make traditional or complex sales<\/a> methods unfeasible (since the human labor cost<\/a> of sales exceeds the value of gaining a customer). The company selling $100 eyeglasses, Warby Parker, was able to get its affordable glasses in front of millions through quirky TV ads. <\/p>\n\n\n\n

On a cautionary note, startups shouldn\u2019t be tempted by the ego boost of a high-profile ad campaign\u2014it\u2019s generally a waste of money to vie with larger companies in an unending battle for attention via TV stunts.<\/p>\n\n\n\n

Viral Marketing<\/strong> and Advertising<\/h3>\n\n\n\n

Marketing and advertising through viral marketing<\/a> is the cheapest and fastest way to sell a product\u2014by using it, people encourage additional users to participate<\/strong>. Facebook and PayPal both grew quickly through viral marketing. Every time someone shared with a friend or made a payment they pulled more people into the network.<\/p>\n\n\n\n

Viral marketing or distribution can trigger exponential growth. The effect should be seamless and fast. YouTube videos or internet memes can be seen by millions in a very short time: In just seconds, people see a cute post, feel a glow, and share it.<\/p>\n\n\n\n

PayPal started with only 24 users (employees). But the company achieved extraordinary growth through a form of viral marketing by paying people to sign up and refer their friends. In a few months, PayPal had hundreds of thousands of users. Because they charged customers a transaction fee, revenue exceeded their customer acquisition cost<\/a>.<\/p>\n\n\n\n

The company that\u2019s first to dominate a key market slice with viral capability will ultimately dominate the entire market (be the last mover<\/a> that no one else can match), if it expands judiciously. PayPal first dominated a key segment\u2014”power sellers.\u201d Once the company had corralled these intense users and began expanding, no imitators could catch up.<\/p>\n\n\n\n

Selling Yourself <\/strong><\/h3>\n\n\n\n

Besides selling your product, you need to sell recruits, employees, and investors on the value of your company.<\/p>\n\n\n\n

Some entrepreneurs fall for the human relations \u201clie\u201d that their company is so good people will be clamoring to work for it (this is like the \u201cgreat products sell themselves\u201d distribution lie).<\/p>\n\n\n\n

The funding version of this lie is that investors will be knocking down your doors to invest. That’s not true\u2014convincing investors should be a part of your early marketing and advertising plans. <\/p>\n\n\n\n

However, great attention doesn\u2019t come without a public relations strategy for selling your company<\/a> to the media. While entrepreneurs may be wary of the media, they shouldn\u2019t try to ignore it. Media exposure can help you attract customers<\/a> as well as employees and investors. Any good job candidate will research your company\u2014what comes up in a Google search should be part of your overall public relations plan.<\/p>\n\n\n\n

Marketing and Advertising Exercise: Your Distribution Plan<\/strong><\/h2>\n\n\n\n

Some entrepreneurs develop a great product but fail to plan for its distribution, or the process for selling the product (advertising, sales, marketing, and distribution). But customers aren\u2019t going to buy it automatically. Distribution should be part of your product design.<\/p>\n\n\n\n

Think of a product you currently sell or a potential product. What are your current or planned methods for marketing\/selling it?<\/p>\n\n\n\n

How did you decide your sales methods<\/a>? How do they target your most valuable customers<\/a>?<\/p>\n\n\n\n

How do you measure your sales effectiveness? How could you make your methods more effective?<\/p>\n\n\n\n

Marketing and advertising should be a focal point of your startup strategy<\/a>. Make sure you spend time on your marketing and advertising strategy so you can launch with confidence. <\/p>\n","protected":false},"excerpt":{"rendered":"

What is the role of marketing and advertising in startups? Do you need a strong strategy to succeed? A startup needs marketing and advertising to succeed. Before you launch your company, you’ll need a strong marketing and advertising plan in place. Read to find out why.<\/p>\n","protected":false},"author":5,"featured_media":10487,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,79],"tags":[97],"class_list":["post-10482","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-entrepreneurship","tag-zero-to-one","","tg-column-two"],"yoast_head":"\nSell It: Marketing and Advertising for Startups (Peter Thiel) - Shortform Books<\/title>\n<meta name=\"description\" content=\"Marketing and advertising are often overlooked in startup launches. 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