Marketing Hurdles for Startups

By Srinivas Anumolu

As an entrepreneur who has helped the online freelancing marketplace Elance, Inc. grow into a successful company from the startup phase, I have a continued interest in the numerous small companies looking to expand their enterprises to the point of significant market presence, IPO, or buyout. Many startups, equipped only with an innovative idea, immediately begin to raise money, build a website, and hire a team. Unfortunately, they neglect the most critical aspect of building a successful enterprise: developing a coherent marketing strategy.

Unlike brick and mortar stores, which have a physical presence that translates into people stopping and making purchases, websites depend on the complex metrics of search engine placement and marketing strategies. Individual websites may contain all the bells and whistles that generally result in high sales and brand recognition, but without sufficient Internet traffic they are like a tree falling in the forest.

The primary ways of driving traffic to a website are search engine marketing (SEM), search engine optimization (SEO), viral marketing, and business-to business (B2B) partnerships. Each of these marketing strategies presents unique hurdles and challenges. SEM can be effective, but requires a lot of blind purchasing of marketing placement on Google AdWords and other pay-per-click venues. It pays to have deep pockets to fund the many attempts it may take to find success utilizing this approach. SEO marketing is difficult for another reason: the great majority of prime search real estate is already taken, particularly when it comes to popular keywords. No matter how well SEO-wired your firm’s website is, fighting to the top of search algorithms without an existing audience and traffic is an uphill battle. Interestingly, emerging Internet markets, such as those in India, offer far superior opportunities for success in SEO marketing. Viral marketing, for better or worse, is something that often just happens. That is not to say that many companies do not go to great lengths creating YouTube spots designed to go viral, but it is nearly impossible to create a viral marketing plan that will succeed every time. The final marketing option is B2B, which involves achieving a significant deal with a search engine portal such as Google. This is clearly easier said than done. With all these hurdles, it is no wonder that so many Internet-focused startups have a hard time expanding beyond their original “revolutionary” idea.

About the Author:
With a Master of Business Administration from the University of California, Los Angeles, Srinivas Anumolu is one of the founders of Elance, Inc., an online services marketplace.