Simplicity as marketing strategy
Reflecting on keeping things simple in marketing and business
"..simplicity is the defining feature of science. Alchemists were great experimenters, astrologers can do maths, and philosophers are great at logic. But only science insists on simplicity. Many advances of modern science involved a succession of simplifications, either through unifying previously disparate phenomena or by eliminating superfluous entities. Probably the greatest simplification was provided by Newton, who unified trillions of motions, both on Earth and in the heavens, into just three laws of motion and one of gravity. Einstein achieved perhaps the most radical simplification by unifying space and time within a single entity, spacetime. Each scientist considered their advance to deliver a simplification that eliminated superfluous complexity. As Wallace, the co-discoverer of natural selection, put it: 'The theory itself is exceedingly simple'."
From Johnjoe McFadden’s essay Why Simplicity Works, in Aeon.
I’ve written about simplicity in marketing before.
The following passage is paraphrased from a short essay I wrote in April on why simplicity scales. I’m describing how we measured things at Wingify.
As leaders, the simpler you make measurement, the faster you can scale.
We measured results in very simple terms - output. As head of marketing, I was quality control, and I hired exceptionally good leads of functions. I gave them singular numbers. Here, this is what I want from you and your pod. Hit them. No other goals.
This clarity meant that my team always knew what they had to do when they came into work. They knew what I would ask when we had our monthly or quarterly meetings. So they always knew what they were responsible for, there was no confusion. This made it easy for them to concentrate and execute. It also made it incredibly easy for me to measure performance.
They knew how they had performed, and so did I: It was a single number.
There were a glut of stories about Freshworks in the wake of its IPO. But the one that I want to draw attention to is Sumanth Raghavendra’s narrative of the company’s journey from startup to superstar.
It’s a remarkably perceptive piece because of its focus on the three things that Girish and Freshworks wielded to their advantage:
Value arbitrage
The focus on metrics
Ability to raise funding
First, Freshworks understood that they could build better products fast, and provide support to even SMBs or mid-market businesses by virtue of the cost benefit of being in India. This was a competitive advantage.
Second, as Sumanth put it, "..Freshworks focussed on two metrics—net retention ratio and net expansion rate. These numbers indicated how sticky the product was and how the size of a customer account could grow year-on-year organically, respectively."
Did Freshworks not measure other metrics? They definitely did. But these two were the most important, and they tracked and improved them constantly.
Third was the ability to raise money. This was because, in Sumanth’s words, "Once product-market-fit had been achieved with good unit economics, the business model was repeatable and scalable. All that was needed was capital to power the flywheel."
That’s it. That’s the bedrock of the Freshworks business model.
If this feels deceptively simple, that’s because it is. This almost austere simplicity is the reason scale was achieved so quickly, and so efficiently.
When I have conversations with early stage founders about marketing, I’m constantly surprised at how complicated some make it for themselves. It’s like they think that if things are not hard to do, if things are not complicated, they are probably doing it wrong.
But that idea is not just incorrect, it’s harmful.
The entire point is to distill strategy to its basic parts, so we can take it down to tactics, and execute repeatedly, consistently.
How do you do that?
By drilling down to the fundamentals.
There are only two broad strategies in SaaS marketing: Demand Capture, and Demand Creation.
If you are playing in an established category, you need to differentiate clearly, and make sure you are visible when folks are searching for you. This automatically involves SEO and Google ads and content marketing. This is demand capture.
If you are creating a category or selling something which is a first or is new, you need to do more brand marketing and content focused on opinion and taste-making. You’ll need to do podcasts or other media to keep your brand constantly in the news. This is demand creation.
If you are a demand capture business and are spending a lot on brand campaigns, that’s not a huge problem, you just need to recalibrate. But if you are a demand creation business and are focusing on SEO/inbound marketing, you have a problem. You are in a new category, who’s searching for you?
This framing can also tell you what kind of business will be easier to build. If you are capturing demand, it can be easier to stay bootstrapped, differentiate clearly, and build a profitable company. But if you are creating demand, you need constant noise, and smart branding - for which you need money.
This can also tell you who to hire first - SEO professionals or creatives, podcast producers or CSMs. If you are capturing demand, you need SEO and performance marketers first. If you are creating demand, you need content people first (case can be made that you need content folks anyway, but you get my point).
I repeat, then. The first question founders have to ask is this: Am I capturing demand or creating demand? If you begin here, tactics, channels, and subsequent marketing decisions become clearer. Though this is clearly a SaaS focused heuristic, it can quite easily be applied elsewhere, with minimal contextual changes.
Apply it. Simplify.