This is part one of a two-part article. Click here to read the second part.
In my experience of working at both startup incubators and accelerators, I witnessed countless app-based startups fail. In most cases, the failure is not around the technology. Most founders building an app are quite technically skilled and build a quality product. The problem is that the venture fails to achieve a sufficient number of recurring users. When this happens, the venture is unable to generate sufficient revenue to cover operating costs, causing it to run out of cash, and eventually implode. The underlying cause of the issue is the lack of a marketing strategy that details how the venture will acquire users and convert them to customers. This article will discuss why many app-based startups make this mistake, and present why a marketing strategy is so crucial for a startup to succeed.
You Can Build It, but They May Not Come
Many startups make the assumption that attracting users will not be an issue. This is known as the ‘build it and they will come’ assumption, meaning that once an app is published on the Internet, users will quickly find it, acquire it, and most importantly, use it frequently. Unfortunately, this assumption is completely incorrect. In order for people to download your app, they must be made aware that it exists. Furthermore, the marketing for the app must be sufficiently compelling to cause a person to take action to download and use the app once they are made aware of it.
Viral Marketing: Challenging with a Huge Reach
Entrepreneurs cannot take a passive approach to marketing their app. In order to attract users, startups must take focused action to market their app. Startups typically take two approaches to marketing their app. The first is viral marketing. Many startups seek viral marketing for their app because most startups have few resources to perform a traditional marketing campaign. The hope is that a small number of consumers are exposed to the app and through sharing via social media and blog posts inform a larger number of consumers, who then continue the cycle until a critical mass is obtained where the message is spread across the entire globe. This technique can be extremely powerful. Digital marketing firm Xanthos estimates that a viral campaign from one company, Booking.com, generated over 16 million impressions. But viral marketing is extremely difficult to achieve, so much so that a smart founder will understand there is no guarantee of achieving it. In fact, one of Uber’s marketing leaders, Andrew Chen, notes that viral marketing should not even be considered as a potential marketing strategy. Founders are better served not focusing on viral campaigns and putting that energy into more traditional channels.
In the next article, you will learn why paid marketing is a necessary, but costly channel for startups, and how a marketing strategy will help a startup allocate marketing dollars properly to maximize lead generation without draining the bank.
John Pitchko is the owner of Pitchko Technology Inc, a digital marketing agency in Calgary, Alberta and is an advisor to several exciting technology startups. Learn more tips for launching a successful startup on his blog.