Wednesday, 29 September 2010

Social media and startup companies

Yes social media is cool, it is effective and a great means to engage customers and drive sales. However, it sure requires dedicated resources and manpower. Is it feasible for a startup company with minimum resources? So, it made me wander into the internet to find a convincing answer to this question.

The first article I read was by Ken Yeung (2009) on "Helping Startups Understand Promotion & Survival Using Social Media". One interesting mention was of Clara Shih (author of The Facebook Era)'s insight into changes in promotional activities with the introduction of Web2.0. In the early telephone promotion years, interaction between a business and clients was on a 1:1 basis. With Web1.0, i.e. static websites, the paradigm shifted to 1:Many and with the development of Web2.0, the interaction of business:customer has become Many:Many. Another reinforcing statement extracted from this article was that "you don’t have to work with big agencies to promote your brand ... it’s all about networking, going to events, showing the benefits of your product in the ecosystem through partnering with influencers and others".

Jeremiah Owyang (Forrester Analyst) points out three things that startups need to follow to succeed in incorporating social media into their marketing strategies:

1. "Be specific in what problem you’re solving"
2. "Crowdsource your support"
3. "Be a part of the dialogue happening online"

According to blogger Jeremy Toeman, for startups to reach out to big bloggers like TechCrunch or Mashable, building trust by engaging with comments and conversations with them is vital. The unanimous outcome of this meeting was that "(product) positioning is more important than exclusivity when dealing with bloggers". The bottom line for startups - "Define a specific problem" and build a customer experience in the first 30 seconds of customers first trying out the product.

Now that said and done, I came across a blog by Joanna Lord, which was pretty much in the same lines I was having my thoughts directed. She talks about the less resources, pressure from friends, boards and investors and the apprehension of over-investment. It is fundamental that she pointed out the fact that social media adoption is experimental and adopted by many big companies in a trial by error fashion - expending time and resources till a match is hit which is capable of generating enough returns. This method is almost an impossible dream for startups.

Furthermore, she rightly mentions that startups first need to have content where the "attracted" customers can get back to, and that "it is important to really lay down a concrete foundation for a start-up’s brand, pub­lic face, and network"; only after successfully materialising these efforts should startups devote resources into developing and executing a social media plan.

However, few interesting comments gave me convincing answers to the question I raised in the first place -  startups in particular should use social media as it is freely available and the ROI is relatively easy to measure. 
However, there should be more reason to using social media than just because its free. Investigation about the target audience - if they use social media and which platform (Facebook, Twitter, etc) ?

The conclusion i draw from this discussion is that content is important to lock the fans and followers, but with a suitably devised social media plan and a well-defined way to measure ROI, social media is worth a try for start-ups.

Further curiosity led me to another question if platforms like Twitter and Facebook can be used to launch new products/services by startups! Check out my next post for answers.

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