Product Marketing for Startups

Who is this series for?

Early stage B2B or developer focused companies that have found their first few customers and believe they’re on a promising trajectory towards product/market fit. Spending time on product marketing without having any early traction is akin to spending time on 5 year revenue projections when you have just a handful of customers. You’ll end up with an elaborate work of fiction that you’ll need to throw away in six months when your understanding of the market inevitably changes.

Ideally, you want to start spending time on product marketing when you believe you’ve found enough customers with similar requirements and characteristics that want to use your product — a customer segment. But more often than not, I’ve seen startups wait too long to start working on product marketing as opposed to starting prematurely.

Why should you hear what I have to say?

I’ve spent the last 3 and a half years in product marketing at Twilio during a time of rapid change and transformation for the company.

We went from having barely any sales force at the time of going public, to growing the sales organization more than 10x by mid-2020. The scope of product marketing broadened from just developer awareness and adoption to prioritizing sales enablement and marketing campaigns focused on business and executive personas.

Some products I’ve positioned and launched:

  • Programmable Voice: I launched the original public beta of Voice Insights and improved the on-boarding and developer experience for new sign-ups for the Programmable Voice product.
  • Programmable Messaging: I launched Twilio Notify, scaled up sales enablement for the business unit and launched the Twilio WhatsApp API.
  • Autopilot: I took the product from beta to GA by formalizing positioning and sales enablement. I was also the PM for the developer experience where I improved the documentation, launched new dev tools and improved the on-boarding experience.

I left Twilio in October 2020 to join Modern Treasury to lead product marketing. I love advising early stage companies on product marketing and go-to-market and invest when it makes sense. There’s more about my startup advising and investing here.

What is Product Marketing?

Communicating the value of your offering to a target customer to get them to buy it at a target price.

Great Product Marketing drives preference for your product in the marketplace. It ensures your target customers think of your product first when faced with the problem it solves.

For example, consider the following problems a software buyer might face and the products that are most likely to come to their mind:

ProductProblem
StripeI need to receive payments online
SquareI need to accept credit cards in my store
TwilioI need to send text messages to my customers
PlaidI need to link my customers’ bank accounts
DataDogI need to monitor my cloud infrastructure

Products that are top of mind have great product marketing (in addition to being great products of course).

Product Marketing is the foundation of other marketing and sales activities like demand generation, outbound sales and community evangelism. It determines the core message, channel, target persona and call to action for each campaign. Running a deliberate marketing campaign before your first product marketing exercise is a recipe for failure.

The tactical focus of Product Marketing in a B2B startup changes based on stage — early product/market fit, late product/market fit and growth, and type — primarily top-enterprise sales and primarily bottom-up user or developer focused sales.

  • Early product/market fit → segmentation, competitive analysis, quantifying customer value, pricing experiments
  • Late product/market fit → case studies, packaging, campaign planning and prioritization, sales enablement
  • Primarily top-down sales → case studies, customer advisory boards, webinars, RoI calculators
  • Primarily bottoms-up sales → demos, documentation, developer experience, hackathons

By ‘early product/market fit’ I’m referring to the stage right after a startup finds their first target customer segment — when it makes sense to start working on product marketing.

Who owns Product Marketing at the early stage?

At the early stage, product marketing needs to be an input to your product strategy. Kicking off a few product marketing activities once you’ve found early traction ensures your product has a strong narrative from day one. It’s also very effective at placing you in your customer’s shoes, forcing you to look at your product from the outside-in.

In the absence of a dedicated product marketer, the same person that owns product management should own product marketing. A generalist marketer can also do a good job provided they’re entrepreneurial and technical enough to have sales conversations with your customers and comprehensively analyze the competition.

If  you’ve already raised money, chances are you’ve likely done some foundational product marketing work already. At this stage, there’s likely no difference between your product and your company. Some of the components of the story you’re telling investors can be repurposed in the story you’re telling customers — also known as positioning.

Breaking down Product Marketing

Product marketing consists of four components:

  1. Segmentation, also known as dividing and prioritizing your target market.
  2. Positioning, which determines how everyone at your company talks about the product to customers, whether on your marketing channels, sales conversations or support.
  3. Packaging, which describes different configurations of your features or products customers can buy.
  4. Pricing, which determines what and how you charge for individual products or packages.

You can see each component represented in the definition of product marketing I presented earlier:

Communicating the value of your offering to a target customer to get them to buy it at a target price.

  • Value = Positioning
  • Offering = Packaging
  • Target Customer = Segmentation
  • Target Price = Pricing

Packaging and pricing are only useful once you have completed segmentation and positioning. Segmentation and positioning are deeply intertwined. They can’t be performed discreetly. You can’t position a product without an audience in mind. And to identify an audience, you need a product and therefore a starting ‘position’. The good news is that your first set of customers are a great starting point for your first segmentation exercise. Positioning and segmentation set the foundation of great product marketing, and I’d argue even great product development.

It’s critical to not get too attached to your segmentation and positioning. Treat them as hypotheses that need to evolve with your business and the market environment.

Positioning and segmentation go hand-in-hand

Positioning can’t take place in a vacuum. Before you can come up with a compelling position for your product, you need to identify a target customer and the problems that matter to them. Looking at the same examples discussed earlier, each company is trying to reach a different target customer with their core product:

ProductProblemCustomer segment(s)
StripeI need to receive payments onlineDevelopers, PMs
SquareI need to accept credit cards in my storeSmall business owners
TwilioI need to send text messages to my customersDevelopers, PMs
PlaidI need to link my customers’ bank accountsDevelopers, PMs
DataDogI need to monitor my cloud infrastructureDevelopers, IT

Target customers must have one or more easily identifiable features — functions (as shown above), company size, industry, location and even company age — digital native or conventional enterprise, midmarket or SME.

You combine these features to create a customer segment. An example customer segment for Twilio could therefore be developers and PMs at automotive CRM companies.

Segmentation is critical because different customers value different capabilities of your product. They use different vocabularies to think about and describe their problems. You need to position your product differently to each segment.

Conversely, positioning success with one segment does not always translate to another segment. Consider software buyers with the following requirements:

I need software to run my 10,000 seat contact center.

Twilio wants to be the first name prospective customers think of here, but is still a newcomer to the contact center space. A lot of prospects that know of Twilio still only see it as an SMS company. The goal for Twilio with Flex is to position themselves as a serious option in a decades old contact center market dominated by incumbents.

I need serverless infrastructure to deploy my application

When Cloudflare launched a serverless computing platform called Workers, they were entering a crowded space consisting of major cloud platforms on one end and startups like Vercel, Netlify and Serverless on the other end. Workers was also a developer product, a very different persona than the IT or network admins Cloudflare typically sells to.

Their positioning for Workers is quite different from other Cloudflare products:

  • It has a separate subdomain
  • Code is front and center
  • Focuses on specific technical benefits
  • CTAs point to ‘Start Building’ or ‘Read docs’

Breaking down your TAM into customer segments also helps prioritize product decisions. Sometimes segmentation can even lead you to ignore a number of customer segments.

To summarize and conclude part 1, the goal of  product marketing is to drive preference for your product in the marketplace. It is the foundation of your marketing strategy because it helps you systematically identify the most compelling value proposition for a target customer segment. It’s key activities are positioning, packaging, segmentation and pricing. Positioning and segmentation come first, followed by pricing and then packaging.

In part 2, I’ll break down a positioning framework I like using.