An entrepreneur who's just been accepted into a start-up accelerator that provides cash for young companies asks:"How would you spend a $30,000 budget for marketing an SMB software-as-a-service (SaaS) application?"
He's selling into "a huge but highly competitive market." Based on feedback from about 10 active users, he explains, "I feel confident my application is ready to go to market."
Now it's just a matter of where to spend the $30,000.
Don't spend a dime yet
My advice: Put the checkbook away.
Sure, the company could try several marketing tactics that might be helpful and reasonably cost-effective: search engine optimization (SEO), Google adwords, PR, and others.
But in a highly competitive market, $30,000 won't go far. The company could easily spend that amount on adwords in a single month, and good SEO or PR professionals need to get paid.
If the company is facing well-established and well-funded competitors, it'll need to articulate a significant advantage over these other solutions. A few extra features aren't nearly enough.
A new solution can't just be better; it needs to be a lot better.
Don't promote before you know what you're promoting
There's a lesson in here for all SaaS companies:
Don't spend money on search engine marketing, PR, or any other channel, until you have a
Once the solution is built is not the time to start marketing. Companies should think through these messages and their value proposition much earlier in the process.
If you're interested in building a viable business, developing a compelling value proposition is just as important as developing a sound technology solution. Marketing and messaging are not after-thoughts.
If you don't know who should buy your solution, what problem it solves, and why it's better than anything else out in the market, no amount of money - not $30,000, not $300,000, not $3 million - will help much.
