How to spend it — part 4
Marketing Hacks for Early-Stage Startups
13 low-cost activities that work, and 5 that will only shrink your budget
Start-ups in the early stages are in a dilemma. Many of them lack money, but they need a wide reach. I’m always inclined to spend a significant amount of money on marketing, but only if the most important questions are answered:
- Who is my target audience or ideal customer?
- What is the specific problem we can help solve?
- Is the problem big enough that people will pay enough for a solution?
- Is our solution the one that best fits the needs of our target customer?
- When and through what channels can we reach potential customers?
- What story and messages touch our customers?
- What steps are necessary to make a sale?
- Do they buy our solution?
- What is the average customer acquisition cost (CAC)?
- What is the average customer lifetime value (CLV)?
CAC and CLV are important key performance indicators for unit economics. Knowing them goes beyond simple solution-market fit. I would clearly distinguish between the phase where we have answers and clear evidence to all the above questions (proven solution-market fit + unit economics — let’s call this the “Informed Marketing Phase”) and the time before, where at least one question is still open (with no or imagined solution-market fit — let’s call this the “Hypothetical Marketing Phase”).
Startups need to reach out to customers even in the Hypothetical Phase for many reasons: to understand their customers’ world, needs, pains, and benefits; to solicit feedback on potential solutions and functionalities; and to sell products and services as early as possible.
Until we are in the Informed Phase, the startup is far from implementing a structured marketing and sales process. All the founders can and need to do is get out of the building, interact with potential customers and users, learn as much as possible as quickly as possible, and sell their solution in person.