Lean Startup Marketing: A Practical Guide to Marketing a Product or Service into a Thriving Business: 1

Lean Startup MARKETING

Workbook 1: PRODUCTIZATION

Step 1 of the 3-Step RAF Marketing Method

for Actualizing and Marketing

an Offering into a Profitable Business

Real-World Marketing, Step-by-Step, Idea to Launch and Beyond

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Copyright ©2019 by Entropy Press

All rights reserved.

Lean Startup Marketing is a non-fiction, industry-specific publication. No part of this publication may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical photocopying, recording, scanning or otherwise distributed without written permission of the publisher. For information regarding permission, write to:

Entropy Publications, LLC, San Francisco, CA

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Entropy Press® is a registered trademark of Entropy Publications, LLC.

Library of Congress Cataloging-in-Publication Data is available.

ISBN-13: 978-1-7325431-0-2 (Entropy Press)

ISBN-10: 1-7325431-0-0

1. Entrepreneurship. 2. Small Business Marketing. 3. Content Marketing.

4. MVP, Minimum Viable Product. 4. Digital Marketing. 6. Social Media Marketing.

Printed in the U.S.A

Cover design by TargetMediaDesign

Lean Startup Marketing

WORKBOOK 1 CONTENTS

LSM WORKBOOK 1: PREFACE

MODULE 1

• Introduction to the RAF (Ready, Aim, Fire) Marketing Method

MODULE 2

• Marketing Fundamentals: Foundation, Purpose, and Real-World Practice of Marketing...Anything

MODULE 3

• Startup Hierarchy: Set Up Your Startup for Success

MODULE 4

• The Productizaton Process: Get Intimate with Your Offering

MODULE 5

• Productizing Software: Identify Your Product/Market 'Fit'

MODULE 6

• Target Marketing and Targeting Users: Find Your Customers

MODULE 7

• The Elevator Pitch: Create a Pitch to Market Your Offering

MODULE 8

• The Iterative Search Process: Find What You Want Fast

MODULE 9

• Competitive Analysis: Discover Competitors, and Define Your UVPs

MODULE 10

• Horizontal and Vertical Marketing: R & D, and New Markets

MODULE 11

• Profit Models: Pick a Profit Model for Launch, and Beyond

MODULE 12

• Projects: Create Productization Lists, Elevator Pitches, and Profit Models for 

Your Startup

Lean Startup MARKETING

Workbook 1: Get Ready—PRODUCTIZE

Step 1 of the 3-Step RAF Marketing Method for

Turning Your Ideas into Offerings of Value, for Profit

-PRODUCTIZATION Preface-

I am privileged, and honored to be a native Californian, a part of the most innovated state in the U.S. Born and raised in L.A., after I finished college, I became an Art Director for the manic entertainment industry. I developed marketing campaigns for many of the major movie houses and networks, before tiring of the Hollywood scene and moving up to the San Francisco Bay area in 1995, at the start of the dot com boom.

My first experience marketing startups was for Stac Electronics, even before I left L.A. The engineers had developed a lossless disk compression system they called Stacker. Initially, their product was very successful. They even piqued Microsoft's interest, but after the MS engineers met with the Stac founders and reviewed their code as part of the due diligence process, Microsoft promptly produced their own data compression software, DoubleSpace. While Stac won their lawsuit for copyright infringement for $120 million a year later, they never found their footing again, and eventually sold their technology and remaining assets after the dot com bust.

My experience with Stac taught me that I'd rather help innovators, engineers and developers to market and launch their own companies, than help groping Hollywood moguls sell one more crappy movie or TV show.

After moving up to the Bay area, I began marketing startups, helping innovators launch new products, or get more traction with selling the products they'd produced, or to get seed-round financing for their ideas. My first client, Softkey International, developed educational software for children. It eventually became The Learning Company, which sold to Mattel in 1998 for $2.4 billion.

Ensconced in the entrepreneurial environment, I met a software engineer hoping to launch the multi-dimensional database system he'd created into a thriving startup. Like so many talented developers, he had no knowledge of marketing. He insisted his creation was uniquely brilliant, light years ahead of its time, and all he needed to do was tell people at the SIG (special interest group) meetings he attended in Silicon Valley what he was working on, and they'd line up to buy it. Marketing, he insisted, was on par with prostitution. His creation would surely sell itself.

It didn't. Three years after he'd quit his job to invent the technology, the software was complete. He'd been talking about it for well over a year when we met at a networking mixer. During the event, he gave me a detailed monologue about database technology, describing in technical terms what his software was. He was unable, even after I prompted multiple times, to tell me what it did, what solutions it provided, or why it might be of valuable to anyone but him.

Enamored with his passion and creative mind, I agreed to help him with some marketing strategies to sell his software. We spent the next day, and most of that evening talking about his invention—what he had created, what it did, what function or solution it provided, and who would likely want it.

Less than a year later, in 1997, he sold MD² for close to $1 million in a perpetual licensing agreement to Sybase, which is now part of SAP. We married, and moved to Boston for 2 years while my new husband integrated his software into the Sybase code base. I had our first child, while working with ad agencies marketing Fortune 500 accounts like Toys R Us and Hewlett Packard. But I missed working with startups, and the creative energy that I absorbed working with them.

We came back to California at the beginning of the new millennium, at the peek of the dot com bubble. It seemed everyone in the Bay was working on a startup, but few had a clue how to sell what they were inventing. My husband took a job at what he referred to as a gold-plated startup, gold-plated because they were dropping a lot of cash on "team building' trips to expensive corporate retreats. The founders had invented web-based software to track user experience. But in 2000, business websites just weren't that popular yet, so this new startup had technology, but no market to sell it to.

One of the founders, the CEO, hired me to create an identity package for his new internet company. I will never forget what he told me when I asked him to describe what his startup produced, what his technology did—what real world solutions it provided, and for who.

His response: "We don't need a product. Anything internet related is hot right now. We are selling perception, the idea that we have internet solutions."

A year later this startup was laying off their staff of 80+, including my husband. Without a product, or even a service, they had nothing to market. Perception may be marketable, generate buzz, but it can't generate an income with no product to sell. As the internet took off, and every business built a website, their software eventually found a place in generating data used for analytics. They eventually sold their technology to IBM.

The day my husband was laid off, he came home and said: This startup (name withheld to protect identities), like so many I've worked for, used the 'Fire, Aim, Ready,' approach to building a company, which is why it is failing.

I laughed. What's that?

"They should be doing, 'Ready, Aim, Fire.' You know, actually develop a product first, before trying to sell it. They have technology, but no product. They have no one to sell their software to because they haven't stopped to consider what it actually does, in the real world, that would be of use to anyone."

His words ricocheted off the walls of my brain for years. Many startups I consulted for had the same issue. They'd hire me to brand their product and new company, or ask me to create campaigns, without any idea what they were selling, or who would find value in their offering. Most burned through the cash from investors within the first year. Many failed.

As the internet has become an integral part of doing business, new marketing approaches became popular. Instead of integrating these new strategies with traditional marketing methods, many entrepreneurs ignored the foundation of marketing, deemed it irrelevant, and threw away the best practices known for eons to generate response and conversion (click, buy, subscribe).

Today, many software engineers like to think of themselves as marketing pros. Growth hackers—software developers who think they can produce response-oriented marketing by A/B testing campaigns, or using keyword tricks to reach #1 in search engine ranking (SEO), are often the only people producing marketing for the company. If there is a marketing department at all, these people will tell you it's all about 'Reach.' All they need to do is get a lot of Likes and Shares, or get people to follow their company on social media to generate sales.

This is a fallacy. While achieving #1 in Google ranking, and split testing campaigns may help improve response on your marketing efforts, using traditional marketing best practices will produce greater conversion than can be achieved by split testing campaigns with low initial response. Today's marketers have thrown out the baby with the bath water. Abandoning the 'Ready, Aim, Fire' marketing method is the reason 90% of all startups fail the first year.

Disheartened by all the startup failures both my husband and I witnessed while working with so many over the last two decades, about 7 years ago I wrote a blog, Marketing 101, highlighting the foundation of effective marketing, as well as three timeless best practices that must be performed in order—'Ready, Aim, Fire'—to get the greatest response on any marketing effort. This blog eventually became the Lean Startup Marketing (LSM) course taught at UC Berkeley, Stanford, and other accredited universities in L.A. and the Bay area.

Over the last 6 years, LSM has helped hundreds of students launch and market a startup with the RAF ('Ready, Aim, Fire') Marketing method.

Get Ready, and Productize your offering.

Take Aim, and Brand your offering.

Fire, and Launch your marketing efforts.

This three-step process gives innovators practical, doable steps to build a sustainable business. It also provides startups struggling to get traction with their marketing efforts, a clear and direct process to achieve much greater response on their marketing efforts, at launch and beyond.

LSM is not marketing theory. Each of the three workbooks, filled with slides, challenges and projects, are step-by-step guides you'll refer to again and again, to assure you are on the proper path to building a thriving business. The Lean Startup Entrepreneurial (LSE) series provides specific, low-budget, actionable steps for marketing your offerings, to sell directly, or launch your first offering as a profitable startup.

Lean Startup workbooks are designed to teach you the process of turning an idea or product in development into an offering of value, and then marketing it for profit. Each workbook also guides learners through the process of creating and producing marketing for your new venture that gets the greatest response. Learn by engaging in the process, and you’ll be able to actualize most any idea you have now, or any that may come, by simply following the steps of the RAF Marketing Method, in order (kind of like working a math equation... ; ).

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Welcome to LSM Workbook 1: PRODUCTIZATION

To actualize any idea into a reality you must begin at the beginning. You can not build a building without architectural plans. You can not create a cupcake without a recipe or list of required ingredients. And you can not start a business without some sort of plan.

LSM gives you the framework for marketing and launching a startup, but before you market any offering you must begin by understanding what you plan to sell.

LSM Workbook 1: PRODUCTIZATION, is the process of getting intimate with your idea, or developed product. Neglect to productize your offering, and at best, your marketing efforts will get little traction. At worse, ignoring Productization leads to startup failure.

Productization is unquestionably the most neglected step in the product and startup development process, but this first step is imperative to implement before creating marketing for your offering. You can't possibly brand and advertise your product or service if you are not intimate with what you plan to sell and who you plan to sell it to. Implementing the steps of Productization, in order, allows you to produce tightly targeted marketing campaigns that motivate viewers to click, try, or buy your offering.

LSM Workbook 1: PRODUCTIZATION provides the following steps to get your offering Ready (RAF Marketing method) to market:

• MBA to marketing novice, learn all the marketing you'll ever need to know to become proficient at marketing...anything.

• Create Productization lists filled with targeted content to use in your branding, marketing and advertising campaigns throughout the life-cycle of your business.

• Identify specific Target Markets and Targeted Users who will find a solution or value in your product or service—customers that are most likely buy your new offering.

• Learn how to utilize your Productization lists to create tightly targeted marketing that gets the greatest response and conversion.

• Construct an Elevator Pitch to succinctly chat up your new venture.

• Perform Competitive Analysis, and find differentiators that make your offering special, unique, valuable.

• Project Horizontal and Vertical products and markets for current and future offerings.

• Choose an effective Profit Model to make money on your offering at launch, as well as two years and five years down the line.

LSM Workbook 1 guides you step-by-step through the process of developing your idea into a software application, product, or service that adds value, or solves a problem for specific groups of people (Target Marketing). This workbook provides an in-depth examination of the Productization process to turning an idea into an offering of value, for profit. If you already have a salable product or service, and have yet to productize your offering, do it now! Better late than never. Executing Productization lists, pitches and profit models will enable you create, or direct those you hire to produce targeted, response-oriented marketing for your new venture.

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Projects for LSM Workbook 1

There are three multifaceted projects in LSM Workbook 1. Completing each will give you targeted content—keywords and phrases related to your offering, that's directed at your likely audience—to use in the branding and advertising campaigns you'll learn to create in LSB Workbook 2. Completing each project will also make you aware of your competition, help you identify what makes your offering unique, project future products and markets to sell to, as well as create pitches to promote your offering in-person and online.

There are twelve projects throughout the entire LSE series. As each is completed, in order, you will have the marketing material required for the pre-launch and launch of your new venture by the last module of LSL Workbook 3.

The knowledge you'll gain doing each project, in the order each is given, will give you a greater understanding of your offering, the company you are developing, and the steps you must take to market them effectively. Even if you choose to hire designers or ad agencies, you'll be better equipped to direct those you contract, to economically produce tightly targeted campaigns that get the greatest response.

You can read each of these workbooks twenty times, memorize them in fact, and not learn as much as you will from doing the work. To really understand how something works—you must work the process.

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Challenges

Challenges are different from projects. They'll appear throughout Workbook 1, with a few scattered in Workbooks 2 and 3, usually at the end of important content. Completed Challenges will not be used to market your product or startup, but are provided to help you get familiar with the process of marketing...anything.

If you already have a complete offering, but want to get more traction with your marketing efforts, the Challenges will help you broaden your understanding of the intricacies of how marketing works.

As with the projects, I strongly suggest you do all the Challenges! Beyond using each project to create and then produce your marketing campaigns, both the projects and challenges in the LSE series have been designed to accelerate your learning of the Lean Startup Marketing process.

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The Private Language of Any Industry

Most every industry, from baked goods to software, has their own private language. Learning the language of business marketing is essential for startup success. Throughout LSM Workshop 1, as well as the entire LSE series, you will see words in bold. You'll also find acronyms—abbreviated initials of broader concepts—used every day in the entrepreneurial industry. It is imperative these terms and acronyms get inside your head. Pay extra attention to the words and phrases in bold, and the acronyms that follow them. Even if you don't always remember their meaning, over the course of the entire LSE series, you'll see them in context often enough to learn the language of startup marketing.

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Access to LSM Workbook 1 Slides

You will find all the slides in LSM Workbook 1 at this URL address:

• https://startupmarketingonline.com/lsm-workbook-1-slides/

• Password: LSM-Productization

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STOP! Do CHALLENGE #1 before moving on.

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CHALLENGE #1: Generating Product Ideas

If you already have an idea you'd like to produce, a product in development, or a fully actualized offering you are in the process of marketing, skip this Challenge.

It is highly recommended that you have an idea to actualize, to realize the full potential of this course. The idea is less important than working the process, so don't dwell on creating a brilliant offering, or even one that you will produce right now (if ever).

Imagine creating something that's fun to do, or solving a recurring problem. Now, come up with a basic (even vague) idea of something you'd enjoy doing, or a fix for your recurring issue.

STEP 1. THINK of [at least] five (5) PROBLEMS you frequently encounter, and write them into a document titled: MY FREQUENT PROBLEMS. Number each problem as shown.

Examples:

1. Trash bags that don't stay fixed to the rim of the can.

2. Spending an hour or more looking for a movie you'll actually like on your streaming video services.

3. Internet access that keeps crashing while you're watching the Netflix movie it just took you an hour to find.

4. Your kids are not doing their chores, or well in school, or...?

5. You have no one with whom to share how you really feel, and you can't afford therapy.

6. You don't have the time or energy to be a full-time parent and build a full-time career, but you want kids and need money.

7. You get tired by 3:00p.m. and want a wake-you-up, but slow burning energy snack.

8. You can't get a good job without work experience. And you can't get work experience without a job.

9. You know it's unhealthy for your dog to be locked inside all day, but there's no way to let him run and play during your workday.

STEP 2. Use a corresponding number to LIST [at least] five (5) SOLUTIONS to your list of problems.

Examples:

1a. Trash bags made with a 3" thick rubber-band around the top rim.

2a. A recommendation system that figures out individual preferences.

5a. Online therapy with qualified pro counselors available when you need to talk.

7a. My organic, low-fat, gluten-free, great-tasting cupcakes and scones.

8a. A web platform to match students or recent grads with corporate internships.

9a. A P2P service of local, professional pet care advocates, with pick-up and drop-off, to personal doggy assistants.

STEP 3. Pick ONE of your SOLUTIONS. If you don't already have an idea, or product in development to sell, use the solution to the problem you've discovered in this challenge as the idea you'll actualize and market for profit, to follow the steps presented throughout the LSE series. (Check out the next Challenge for an alternate startup idea generation technique.)

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Real World Startup Marketing

So, you think you have a great idea for a new software app, product or service. Perhaps you've started a startup with what you thought was a great idea, but are getting little to no traction on your marketing efforts. Or, maybe you don't have any ideas yet, but want to become your own CEO and run your own show, doing something you love.

What's an idea worth?

Nothing. Unless you actualize it. And beyond just building the product, service, or software application, you have to market your offering, for the entire life-cycle of your business—pre-launch, launch, and beyond.

Talented innovators are creating awesome apps, from social platforms, to lifestyle organizers, to peer-to-peer online services. Others are developing goods and products from cupcakes, to fashion, to nutritional supplements. Entrepreneurs are busy in their garages, dining rooms, and offices, designing solutions that will enable us to be more efficient, productive, and have more fun! Most are hoping to create thriving companies. And the fact is, most will never become sustainable businesses without effective marketing.

Now, more than ever, with globalization and automation, it is urgent we learn to create our own jobs, and possibly start companies that will employ others. The Lean Startup workbook series teach you how to turn your ideas into products and services you can sell directly (Amazon, Google Play, Etsy), to start a microbusiness, or create a startup of many offerings to come, from the ground up—idea to launch. The LSE series will also help existing startups realize greater response with their marketing efforts.

The Lean Startup Marketing series has been taught live, in its entirety, at Stanford University, and UC Berkeley, since 2012. LSM has empowered entrepreneurs, mompreneurs, retirees, developers, designers, and business professionals to turn their ideas into quality offerings of value, and grow sustainable startups, for a nominal monetary investment.

Get ready for the journey of your professional life, when you commit to directing your own career, creating and selling something you are passionate about. With LSE, it won't cost you much money to start your business, but it's going to be hugely time consuming, and at times absurdly frustrating. It'll surely be scary scary scary at times, leaving you questioning if you are on the right path. Often you won't be, and you'll have to recalibrate and try again and again. More often than not, it'll feel like you're getting nowhere. And, of course, there will always be friends and family who tell you your idea won't ever go anywhere, and to give it up and focus on your real job, try to be the best employee you can be.

You will encounter many challenges starting your own business, but you'll look forward to coming to work every day. And wouldn't you rather be spending the greater portion of most every day of your life doing something you like to do, instead of working for someone else?

The best bit—you don't have to quit your day job if you aren't rich, or don't have a benefactor to float you financially while you develop and market your startup. Just stop blowing away your evenings and weekends binge-watching Netflix (or however you choose to waste time). Invest those hours into actualizing your idea into a product or service someone actually wants, then learn how to sell it to them with the RAF Marketing Method. Follow each and every step, IN ORDER, of the step-by-step process introduced