Engineering-as-marketing: How startups transform marketing - Platform Strategy - by Sangeet Paul Choudary
You (or your team’s) engineering talents can get your startup traction directly by building tools and resources that reach more people. We call this traction channel engineering as marketing: using engineering time to create useful tools like calculators, widgets, and educational micro-sites to get your company in front of potential customers. These tools then generate leads and expand your customer base.
HubSpot, a marketing automation software company, has reached tens of millions in revenue in a few short years. One key to their success is a free marketing review tool they created called Marketing Grader.
When you enter your site’s web address into Marketing Grader, you get back a report about your online marketing (social media mentions, blog post shares, basic SEO). At the same time, you’ve given HubSpot information they use to qualify you as a potential prospect. After all, someone who wants to evaluate the success of their site’s marketing is a good candidate for HubSpot’s marketing tool. These are quality leads!
While conducting interviews and research for Traction, I interviewed HubSpot’s founder, Dharmesh Shah, about Marketing Grader (formerly called Website Grader). His story gave us insight into the thought process that goes into building tools:
“The early story of Website Grader is interesting. There were only three people at HubSpot at the time. My co-founder and I would regularly “sell” (in the early days, a lot of those sales calls were with friends and friends of friends). One of the initial steps in the sales process was for me to get a sense for how good a given company’s website was at inbound marketing. My co-founder (Brian Halligan) would constantly send me websites he wanted me to take a look at so we could determine if they were a good fit.
After a few days of this, I got tired of going through the manual steps (look at Alexa, look at their page titles, check out their domain, etc.). So, I built an application to automate that process for me. On a related note, I had also started angel investing at the time, and I used the same process to assess the marketing savviness of potential startups I was considering investing in. Once the app was built (it didn’t take more than a few days for the initial version), I thought it might be useful for other people, so I registered “websitegrader.com” and made the app available publicly. We eventually started collecting email addresses in the app, and kept iterating on it.”
Since HubSpot launched Marketing Grader, over three million sites have used it. Dharmesh said that it accounts for a large portion of the 50,000+ leads HubSpot gets each month.
Another company that nails engineering as marketing is Moz, the leader in SEO software. Two of their free SEO tools, Followerwonk and Open Site Explorer, have driven tens of thousands of leads for Moz. Like Marketing Grader, each solves a problem that an ideal Moz customer has. Followerwonk allows users to analyze their Twitter followers and get tips on growing their audience. Open Site Explorer allows users to see where sites are getting links, which is valuable competitive intelligence for any SEO campaign.
A key feature of these tools is their ease of use: prospects simply go to the site and enter a domain name or Twitter handle. Once someone uses the tools, companies can begin to engage these potential customers through other traction channels like sales and email marketing.
These tools are amazing. But, once you have these leads, what do you do with them?
Converting Potential Customers
WP Engine, a WordPress hosting provider, is another prime example of a company using this channel successfully. The hosting market is saturated with hundreds of hosting companies, yet WP Engine has cornered the market on high-end WordPress hosting, thanks in part to their free speed testing tool.
The WP Engine speed testing tool asks for only an email address in exchange for a detailed report about your site’s speed. It also gives you the option to opt in for a free mini-course about improving the speed of your blog. Once they have a user’s email, they send them tips on improving their site speed and end with a sales pitch 6 emails later. As you can imagine, this free mini-course converts incredibly well.
Dharmesh mentioned that it helps him to think of these tools as marketing assets with ongoing returns, rather than ads that result in a one-time boost.
“I think of free tools as content (albeit, interactive content). At HubSpot, we really believe in marketing channels that have high leverage (i.e. write it or build it once – and get value forever). As such, we take a very geeky and analytical approach to marketing. We think of each piece of content (blog article, app, video, whatever) as a marketing asset. This asset creates a return – often indefinitely.
We contrast that to buying an ad which does not scale as well. When you advertise, the money you’re spending is what drives how much attention you get. Want more clicks? Spend more money. Contrast this to inbound marketing whereby the cost of producing a piece of content is relatively constant. But, if it generates 10x more leads in a month, your marginal cost for those extra leads is almost zero. Further, with advertising (outbound marketing), the traffic you generally get stops when you stop paying. With inbound marketing, even *after* you stop producing new content, the old content can still drive ongoing visitors and leads.”
The case for spending engineering resources on marketing becomes much stronger when you think about the resulting tools as assets. These tools have the potential to become a continual source of leads that make up the majority of your traction.
When Gabriel of DuckDuckGo, a privacy-based search engine, wrote blog posts about search privacy he got a big response from readers. After engaging with commenters in social media channels, it became clear that this is a topic that really resonated with people. Gabriel had the idea that a micro-site might address people’s concerns more fully while simultaneously exposing DuckDuckGo to a broader audience.
In 2011, Gabriel built such a micro-site, DontTrack.us, that showed how Google tracks your searches and why that can harm you. The site raised awareness about these practices and spread virally. At the same time, readers learned that DuckDuckGo does not track users or store their personal information.
Even after the initial wave of press and users, this micro-site has been useful. As unpredictable events unfold (like news of NSA tracking), or predictable events recur (like Data Privacy Day), the traffic on the ever-present micro-site persists. Users of DuckDuckGo often send the site to friends and family to explain the issues surrounding search tracking. The strategy worked so well that DuckDuckGo now has four micro-sites and is planning more.
Chris Fralic (former Head of business development at Delicious and Half.com) tells us that creating a Delicious bookmark widget more than tripled the adoption of their social bookmarking product.
How many times have you seen Facebook, Twitter and other sharing buttons on a site? For each of those widgets (e.g. Facebook, StumbleUpon, Google+, and Twitter buttons), a company used engineering resources to create a marketing tool that was embeddable on sites. These widgets drive engagement, traffic, and traction for these social platforms and the sites that use these tools.
We also spoke with Robert Moore, founder of RJMetrics (an e-commerce Analytics company) to learn how they’ve used this traction channel to drive the majority of their leads and sales. As an engineer himself, Robert said he’s been using his engineering skills to bring in customers since he founded the company.
RJ Metrics began to use this channel when they started building tools and micro-sites. They own (and create content for) domains like cohortanalysis.com and querymongo.com, which contain keywords a potential RJ Metrics customer would search for.
In the case of querymongo.com, they built a tool that translates SQL queries to MongoDB syntax (two database technologies). This is useful for developers or product managers starting to use MongoDB but who are still more familiar with SQL queries. Querymongo is RJ’s highest-trafficked micro-site and drives hundreds of leads per month.
Robert said they look for high ROI on engineering time: if a few days of engineering time can drive hundreds of leads, that’s an investment they make whenever they can.
Using your engineering resources to create assets can serve as your main growth channel. Dharmesh mentioned that engineering as marketing is especially valuable because so few companies use it.
“I’m a big believer in using an engineering approach to marketing. But, I’m biased (being an engineer myself). And yes, there are many other marketing channels available, but creating applications has a unique investment/return profile. Since it is considerably harder to build a very popular application, fewer people do it: so, the “free apps” channel is usually less saturated.
The best companies to use this apps-powered model are software companies. In this case, they can launch complementary apps – or subsets – for free. This not only creates value that draws people in, but it also educates people on what the main product does.”
Companies have a hard time using engineering resources for anything but product development. Any technical focus on something other than product seems wasted since engineering time is so expensive. As a result, most founders and product managers use all their engineering resources to build new features for a product that’s struggling to acquire users.
Don’t make the same mistake. Instead, consider using some of that engineering time to build a tool that moves the needle for your business.