Movement Marketing and Category Definition
I take extensive notes on my readings to aid retention and share with my teams. In 2020, I decided to start publishing notes on my readings. These are less book/article reviews, and more reports or summaries of critical, interesting and insightful points in the cannon of business literature.
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David Sacks (Yammer) often has a lot of smart things to say about how to market high-growth startups. I’ve bundled together my notes here on two of his recent Substack posts that are interwoven — Your Startup Is a Movement and The One Who Defines the Category Wins the Category.
To build a startup brand, create a movement and focus on mission
To market a startup, founders need to think beyond the product they sell and care about something larger than dollars and cents. That’s like a politician who runs a campaign proclaiming that she cares only about winning.
In fact, the campaign metaphor is an apt one, and it’s used throughout Sacks’ piece because, like political campaigns, marketing strategies are about rallying people behind your brand. It’s something the best brands in tech (Tesla, Salesforce) have done without spending massive ad budgets, allowing them to disrupt more established and entrenched players on their way to market dominance.
There’s often no good formula for ROI on this type of spend, and the returns as they pertain to brand are esoteric and hard to measure. Sacks sums it up quite well:
This is undeniably crucial, but since the metrics are hard to quantify, founders often have trouble with it. Like a math whiz who aces the Math section of the SAT and flunks the Verbal, many founders are comfortable stacking up small quantifiable wins on lead-gen campaigns while never attempting the step-change that great marketing can bring.
THE STARTUP BRAND BUILDING PROCESS
Sacks outlines a several-step process:
Define a larger cause - What does the company stand for? What does the company stand against? This message is essential to rallying people to your brand.
Articulate the problem better than anyone else - Speak to the user pain point.
Attack the status quo - Name your enemy, rooted in the mission and customer problem above and attack it in your marketing. (Ie. Salesforce’s “No Software” campaign).
Define a category - Position not just who you are as the solution but what you do as the solution. The category is the answer, a category you can own. (More on that later).
Build the right team - Hire experts in the quantitative and creative sides of marketing.
Use grassroots customer testimonials - People are suspicious of any claim you make, so get customers to back you up.
Release news in lightening strikes, not dribs and drabs - That thing you think is interesting to the press probably isn’t. Up-level your message to combine news about new features, customer stories, corporate announcement into big lightening strikes of news. Always be reminding people of what you stand for and the problem you’re solving.
Organize events to focus attention - They’re the equivalent of campaign rallies and they build the movement.
Nurture your community - Let your customers mix and learn from each other. Build a community then use that energy in your campaigns and to multiply other marketing efforts.
Pick noble fights - The rules of business fight club are 1) punch up, 2) stay product focused, 3) stay positive.
Strive for a large tent - Stay away from political battles that could alienate people.
Work with press and influencers - Talk about customer success and the change they are making in the world.
Stay grounded - Be careful to stay rooted in business value and don’t use aggrandizing language.
Defining and winning the category
In SaaS, first-mover advantage matters, with over 75% of market cap going to the category leader. Better funding flows to these companies and customers flock to them.
“… issues dissipate once you are recognized as the category leader. Many customers will automatically order from the category leader once they understand themselves to have the problem that category solves.”
And so, the purpose of brand marketing should be to establish category leadership. In the case of:
New category, it means proving it actually exists
An existing category, it means reframing the category around your disruption
Sacks lays out the following steps for category dominance:
Define the category - In 2 to 4 words. No flowerly language. (Ie. “Cloud CRM” / “Sending Platform” / “Code-Driven Analytics”). The new category should underscore your differentiation.
Redefining a category - Better to redefine your category if you’re a niche player or challenger. Instead of Yammer trying to attach themselves to Gartner’s “Social Software in the Workplace” already dominated by Jive, they carved out a new category of “Enterprise Social Networking,” and stopped competing on Gartner’s terms. Getting customers to recognize your category is tantamount to winning, since to customers categories = problems to be solved.
Customer proof - Prospective customers will be skeptical. Use existing customer success stories to validate the category you seek to dominate.
Position & deposition - Once you have created a category you can continually define and redefine to position your company as the leader and deposition your competitors.
Welcome competition from big companies - If big players want in on your category and position themselves against you, it means you’re the leader.
PUT THE customer problem at the core of building brand
The customer problem is the atomic nucleus of brand building. It’s where the energy is stored, and unleashing it will power all of your marketing efforts
In Sack’s framework, the customer problem should drive the mission; it should determine your larger cause; it should determine the category you seek to dominate. Once those strategic elements are in place, customers are the atomic fuel (to keep this metaphor going) that power your tactics, from events to community, to marketing with ongoing customer testimonials.
The stay grounded advice is important while developing brand, as companies tend to go hard in one of two wrong directions. They either adopt an overly lofty brand purpose that doesn’t speak to the true customer pain (cliches about changing the world) or they can’t seem to get their head out of the product and its features to understand the more important change they are driving.
Many companies have been successful without having a well-defined brand strategy. But in winner-take-all markets rife with creative destruction like technology — where you are always on the verge of being disrupted and overtaken by new entrants — crafting a powerful brand story that earns you category domination is your competitive advantage.