Do Startups Need Marketing? HELL YES Advertising? Not Really

New York based venture capitalist Fred Wilson, whose company Union Square Ventures has investments in Twitter, Foursquare and Zynga amongst others shared the following thoughts about startup marketing in his post a few months ago,

Early in a startup you need to acquire your customers for free. Later on, you can spend on customer acquisition

Marketing is for companies who have sucky products. If you build something that is amazing people will adopt it because it is amazing. And you won’t have to do much marketing, at least at the start.

While I generally agree with the first statement for consumer web startups (this is not true for anyone selling hardware, to small businesses or the enterprise), the second statement is more problematic. Fred is a well known and highly reputed name in the VC community so I am unsure whether to simply write off his thoughts as mix up of the words “marketing” and “advertising” or assume that he is genuinely in the wrong.

In his case, Fred specifically calls out Flipboard as a company that had such a great product at launch, it didn’t need to market. I can promise you this is just plain wrong. I am close friends with the founding team of Flipboard and have watched the company grow at every stage of its development. If you think their marketing had nothing to do with their success, I am sure the company would be thrilled, but that is a truly naive assessment. So how did Flipboard market themselves and how did it contribute to their success?

If we remember history correctly Flipboard’s market penetration was not the typical slow run up over months or years where the product slowly caught on, but rather was an explosive, “Jobsian” launch day celebration with a huge run up of anticipation beforehand. Why the anticipation? Well, the fantastic marketing team at Flipboard lined up numerous notable tech commentators and press from Walt Mossberg to Robert Scoble to Ashton Kutcher who saw the product in Beta and started buzzing about it prior to launch. Was a great product a necessary condition for success? Of course! But good marketing can really accelerate a good product’s adoption and ideally you should have both. If you happen to be a lean start-up not eager to invest in marketing resources consider hiring an experiential agency that takes an engagement approach to communications.

A great product is a necessary but not a sufficient condition for success. There are surely dozens if not hundreds of great websites and mobile apps out there that never get “picked up” in part because of a lack of successful marketing. Let me also say that Flipboard’s “marketing” plan was a lot deeper than a few meetings with press, in particular Flipboard’s investors (Kleiner Perkins and Index) acted as additional sources of positive marketing momentum (among many others). Flipboard’s clean and elegant website is also part of that marketing effort. You see, marketing is a very broad concept. Did Flipboard ever take out an advertisement? Not to my knowledge. Did they market, HELL YES. They marketed the shit out of their product.

Another great example in this context is Dropbox. Did Dropbox start off by taking out millions of dollars in Google AdWords to acquire customers? NO. Did they market? Absolutely. One of the very core concepts of marketing is defining a customer segment, understanding the needs of that customer and meeting those needs. By exclusively launching on and focusing on OS X at first Dropbox applied this marketing lesson to serve one customer segment really, really well rather than serving everyone in a poor way.

So in summary:

• Should startups market? HELL YES. THEY SHOULD.
• Should startups advertise? Certainly not at first though the timing will depend on what you’re selling, who you’re selling to and how.

Blockbuster products are great because they provide remarkable experiences and to share those experiences you need to market, although you don’t necessarily have to advertise.

Author Bio: Tom Loverro is a Stanford and Kellogg School of Management Alumnus. A passionate entrepreneur and technologist, Tom has worked in the startup and VC communities in Silicon Valley, New York and Chicago. Checkout his blog here and follow him on twitter @tomloverro