Join us next week as we host our biggest demo pit yet, featuring the latest ventures to come out of MaRS. You’ll also get the chance to network with fellow attendees and our panelists. Our Meet the Entrepreneurs panel features four rock-star tech founders who will share stories of the opportunities and challenges they faced when launching their businesses.
You have a minimum viable product and you’re ready to enter the marketplace. Now what? What’s the right online distribution channel for your product or service? How can you acquire customers or generate leads? What types of promotional strategies should you pursue?
At last week’s Entrepreneurship 101, we welcomed three speakers to explore this topic: Tom Walsham (Director of Product, The Working Group), David Payne (CEO, Invent Dev) and Paul Barter (Advisor, ICT Venture Services, MaRS Discovery District). Tom, David and Paul discussed various channels of communication and distribution, and left the audience with key considerations for the realms of digital commerce and trade shows, and what to know about and how to respond to earned promotion.
Tom kicked off the evening with an overview of trends and best practices in e-commerce. He differentiates between a number of online channels:
This is the traditional e-commerce platform—think Shopify, or any platform that allows you to fully control the entire sales process. Tom points out that it’s great for control, tested markets and creating differentiation. However, “build and they will come” is not a truism online: you have to spend a lot of time and money to bring people into your store, and that can be a challenge.
Amazon, Ebay and Etsy are all existing marketplaces where you can distribute your product or service, and the great thing with these is that there’s an existing audience and clear user intention to shop and buy. But there’s also a lot of similar products, and standing out amongst the crowd is a formidable challenge.
One of the lesser-known ways to operate is through affiliate marketing, where you are actually buying the marketing channels themselves. Your affiliates have the traffic and they sell your products and services. It’s great for emerging markets, but you have very little control in this space. Ultimately, when you’re playing the affiliate game, it’s going to be a high-volume, low-margins game.
If you’re just getting started, you might consider using Kickstarter as an initial distribution channel. There’s low initial risk, limited overhead and rewards for innovative products. But Tom cautions not to tread lightly here. While you often hear about the great successes, it’s not, in fact, as easy as it sounds and there are tons of companies that end up being unable to deliver their product or service.
What’s really interesting is Tom’s breakdown of the factors that go into selecting the right channel. And for this, you have to know your business really, really well, and harbour no illusions about the maturity of your business model, team and capacity—among other things.
For instance, if you don’t have a strong marketer on your team, you’re not going to want to set up your own channel that will require extensive marketing efforts to drive people to your site. In the same vein, if you don’t have the needed technical expertise on your team, you might opt to distribute your product on Amazon rather than setting up your own site.
One popular method of promotion is the trade show.
In both the B2C and B2B worlds, trade shows can be used as a way to generate either customers or leads. But considering the time and cost of exhibiting, are trade shows worth your while?
David Payne is no stranger to trade shows. He launched his company in September 2014, and has since started to get traction by getting businesses to try his product at conferences and trade shows across North America.
He’s adamant that while trade shows can be a great opportunity to get in front of your target audience, it’s how you make use of that opportunity that makes or breaks your success. And it’s all in the details. The layout of your booth, giveaways, staffing, signage, product placement…there’s a lot that goes into the booths that stand out and impress, and it takes careful consideration and a lot of planning.
For David, one of the most important factors for success is following up, and he says that although it might sound harsh, if you don’t follow up within two to three days of the show, then don’t bother exhibiting. He suggests ranking all qualified leads, and strategically reaching out to them to ensure that all of the effort that went into planning, preparing and exhibiting is not for naught.
Trade shows are one way of promoting your product or service to hundreds of people. Our last speaker, Paul Barter, further broke down the promotion piece of the marketing mix into three subcategories: owned, paid and earned.
Paul gave a quick history lesson comparing what these types of promotion looked like traditionally, and what they might look like today.
|Owned||Coca-Cola truck||Company website|
|Paid||Malboro ad in a magazine||Instagram ad|
|Earned||Talking to your friends at a beauty salon||Sharing a tweet|
One of the interesting things to note about the above comparison is the expansion of our social networks in the digital age. Word-of-mouth promotion in the pre-digital age might have at most introduced your product or services to a few hundred people and at a pretty slow rate. Today, a tweet about your product or service from a respected blogger can get thousands of views in a minute.
It’s no secret that a great way to get digital earned promotion is by creating awesome content. Paul used the example of a Volvo ad that went viral a few years ago. Great content is shareable by nature. For Volvo, it wasn’t even necessary to have to pay for ad placement. By creating enjoyable content, people watched it because they wanted to.
But, as Paul rightly pointed out, Volvo is a huge company that spent a lot money to produce that content. How do you get earned promotion when you’re just starting out? For that answer, Paul points to local Toronto startup, TunnelBear. TunnelBear came up with a great earned-promotion strategy: they offer customers a free gigabyte of data when they tweet about the company. It’s a strategy that keeps on giving, and every day roughly 300 people tweet about TunnelBear to their networks.
There’s a lot to consider when it comes to delivering and promoting your product, and each of our speakers emphasized using channels as a two-way street. It’s not just about pushing your product or messaging out—it’s also about listening to the feedback that comes in and integrating that feedback into your product. That’s what the most successful startups are doing, and it’s a good lesson in the ongoing nature of customer discovery.
It’s not too late to hear what Tom, David and Paul had to say. Check out the videos below.
And search “Entrepreneurship 101” on iTunes U.