Welcome to the post-product decade
Welcome to the post-product decade
In a time of overflowing categories and commoditised products, the only way to stand out is better marketing
Last year, friend and former colleague Nivas Ravichandran had ambled up to my cubicle in the Freshworks office, and we had a long conversation about marketing and startups.
I remember one thing about that particular exchange: At one point, we had both violently agreed that marketing was not something products could think about after being built. Those days were over.
If you launched with a half-baked website, not very clear positioning, and broken on-boarding, it isn’t going to be enough. You will be losing an important tactic of the modern marketing arsenal - the launch event. But that’s not all - by not taking your marketing and branding seriously, you will be undermining the experience in a time when customers are used to some of the smoothest, slickest marketing communication possible.
They’ll simply see you as inferior.
In the last five years, product startups have really understood the importance of the user experience. This has been prompted, of course, by customers not wanting to have anything to do with broken, buggy interfaces and less-than-perfect experiences. But once this became the norm, CXOs have understood, to their credit, that an impeccable customer experience is now table-stakes.
Which is why early stage teams hire UX, UI, and interaction designers as some of their first non-engineering employees. Without having a great user experience, a product won’t even be in the consideration set, let alone in a sales conversation.
This isn’t amazing foresight, though.
Startups are just responding to the market, which is demanding a superior experience.
In engineering teams, specialisation is widely understood and treated with respect.
A great front-end engineer is as important as someone who can build great back-end infrastructure. These are both different from engineers who are adept at integrations - handling, creating, and working with APIs to make sure different systems work together. And they in turn are different from those who work in data science, and those who work on DevOps.
These are all different roles with different needs, and demand different skillsets. Startups and founders understand this really well - that there are different kinds of engineers and different kinds of engineering problems to solve.
But for some reason they think that this doesn’t apply to marketing.
Almost every founder has a JD written for their first marketing hire that asks for an expert in content, email, tools, copywriting, product marketing, SEO, and paid demand generation, all at once.
If you had a SaaS product in India a decade ago, you had a fairly straightforward path to initial growth.
First, of course, you figured out product/market fit. Once that was achieved, you figured out the marketplaces and aggregators that were relevant to you and made sure you had a good presence there. You did some PR, you got the word out in your circles. You tested and produced a few landing pages, made sure they had good SEO, and slowly ramped up your paid marketing spend. You hired a couple of people to write great copy and content.
If you did these things fairly decently, very rarely would your product not go from zero to one.
Not anymore, though.
The good old days of the last decade are over.
In SaaS, one of the most important metrics is what we call the CAC, the cost of customer acquisition. Keeping CAC as low as possible is an important KPI for marketing. By doing the things pointed out before, you could hope to keep the CAC low, and move the revenue needle up.
But it has become more and more difficult to keep CAC down.
As Andrew Chen says, it is easier than ever to start-up, but more difficult than ever to grow and sustain it.
Why?
Firstly, SaaS has low entry barriers. A good, ambitious programmer with business and product sense, armed with a Macbook and a credit card can sit down and build something. Possible differentiators like next-generation machine-learning capabilities are also increasingly available via API, and improving all the time. With the rise of no-code tools, they don’t even need expert engineering.
Second, the SaaS customer-acquisition playbook is an open secret, which means there is immense competition for the distribution channels. Adwords, Social Media, even SEO (which is even more difficult to do well) — all of them are getting clogged up. Conversion rates have flattened, and decreasing returns over time from these channels means that newer players find it harder to acquire customers.
Third, with hardly any entry barriers, product differentiation is becoming harder as marketing messages and sales pitches overlap. In a marketplace getting more and more crowded, and features becoming easier to replicate, with very little that differentiates Player A and Player B going after the same market.
As your CACs constantly go up, you’ll be fighting a pitched battle with every single SaaS business across the world.
Indian startups still have one advantage, and it may perhaps be the last one left — our labour costs. We have good engineers and sales folks, and they cost less than their European or American counterparts. Theoretically, we can build more stuff faster, and sell to more SMBs.
But this isn’t going to last either. The market for differentiated talent worldwide has accelerated with the pandemic, and as remote working becomes more and more ubiquitous, talented developers will code for Silicon Valley unicorns out of Bangalore and Pune.
The time when just making a superior product, building faster, and giving better support could give you an advantage is over.
This is the post-product decade.
And I’m not talking here about game changing software like Canva, Notion, or Dropbox. If you have something that really shifts the world’s axis by a few degrees, you’ll grow. I’m not talking about you.
I’m talking about B2B software that is competing in an increasingly saturated market to win customers, the industry I’m in.
There remains only one way to differentiate and grow in the 2020s, in this post-product decade, all else held equal: Better marketing.
But what does better marketing mean?
You could formulate, activate and reap the benefits of a referral program like Dropbox, or build in some inherent virality, which powers Drift. You could construct a huge content marketing engine, like Hubspot, or go big on brand and social, like Fast.
But that cannot be an afterthought. If you are not baking marketing into your product as you are building it, you cannot possibly compete against products who will.
Ashwini Ashokan, CEO of Mad Street Den, tweeted about this some time ago: “If you are a company in the SaaS space right now, you should pay attention to storytelling, content, and branding.”
Please note that all of them are the organic, creative, even abstract parts of marketing.
What is better marketing for your startup is something that you have to decide, but if you are building a startup and have not thought about marketing yet, and I apologise if this is blunt: You have a problem.
Like great UX has become table-stakes, a great marketing experience is also now expected. Prospects want your website to look good enough for them to trust. They want to read great case studies, they want to be entertained by your social media, they want to be impressed, they want to buy. And they will be put off by a substandard experience, by typos, by bad emails, and by silly short-term acquisition tactics.
This means that if you aren’t working on your marketing as much as you are working on your product, you are going to make your own job harder. And if you are thinking of hiring one marketer to do all of what needs to be done, I wish you good luck.
And lastly, please appreciate that I’m navigating this post-product decade without a map, same as you. The world has changed already. I’m just the messenger.