To Meme or Not to Meme, That is the (Startup) Question

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Editor’s note: This guest post was written by Dave Chase, the CEO of Avado.com, a patient portal & relationship management company that was a TechCrunch Disrupt finalist. Previously he was a management consultant for Accenture’s healthcare practice and founder of Microsoft’s Health platform business. You can follow him on Twitter @chasedave.

Smart B2B companies have long known that winning big is predicated on redefining the rules of competition to your advantage over incumbent vendors. A more difficult question is whether you want to own a meme. In other words, do you want to define a new categorical term. Microsoft did that to great effect when they created the office suite category. More recently, Salesforce.com did a similar thing becoming the de facto player one thinks of when they think of cloud computing. It’s a very high risk, high return strategy.

For my money, the best recent example of this approach is HubSpot. HubSpot that has created and “owned” the Inbound Marketing term and category. Having recently started discussions with investors, there is a paradox that I’ve discovered: On the one hand, investors like startups that shoot for big opportunities. On the other hand, they get sweaty palms when you describe how you are going to own a new category. Most of them would rather have you go after a known category. I thought it would be interesting to hear how Hubspot went through this decision process.

Hubspot’s Biggest Internal Debate
It wasn’t clear cut at the beginning, yet Hubspot’s choice to own a new category now has their competition playing by Hubspot’s rules. In fact, their competition is essentially funding Hubspot’s marketing — many of their competitors define themselves as “Inbound Marketing” companies. Yet Google “Inbound Marketing” and you’ll see how Hubspot dominates the results.

In the early days, the choice wasn’t obvious for Hubspot. There was known market demand for search terms like Internet marketing optimization, SEO, etc. As Hubspot’s CEO, Brian Halligan, said “we decided if we wanted to own something big, we’d need to create our own solar system rather than live in someone else’s.” At that point, they spent ~60% of their time building the concept of Inbound marketing and 40% on marketing Hubspot itself. Today, the mix has flipped as their competitors are picking up the tab for category marketing.

Hubspot Becomes a Content Production Machine
Halligan describes Hubspot as virtually a TV production operation with the volume of content that they produce. The advantage from the outset that Hubspot maintains today is that they are gated more by the width of their brain than the fatness of their wallet. As long as they can continue to come up with new insights and ideas on how to be a more effective inbound marketer, they are able to inexpensively produce content in a model that scales very efficiently. Hubspot’s array of inbound marketing drives 95% of their 50,000 monthly leads/inquiries. The following list is the stack rank of the highest ROI inbound marketing tactics they employ (see links below to their most popular webinars, ebooks and blog posts):

Grader applications: Free tools such as the Marketing Grader that assess a business’ marketing via code
Corporate blog: Filled with an ever-expanding mix of evergreen content
Webinars: Thought leadership webinars sharing data and insights
Opt-in email list (mainly built via Grader applications)
Annual conference: Roughly 1000 people attend their annual in-person event
Twitter: Across their various twitter feeds, they have a few hundred thousand people following them while their nearest competitor has less than 10% of followers
LinkedIn: Over 75,000 people in their LinkedIn group
Book
Facebook: Close to 100,000 people in their Facebook group
YouTube: Their videos have been viewed over a million times

Hubspot has demonstrated that if you are long on your opportunity, building your own meme that you can own reaps major dividends. Naturally, one has to be particularly deft at producing interesting content (or apps) that isn’t marketing pabulum. However, if an organization produces valuable content that grows a category that it “owns” the ROI of that content production is likely the highest ROI item that a company can invest in.

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