For startups, the amount of money you have to burn before you either need to break even or raise more capital is your runway. Extending the length of that runway is an art form that requires startup founders to learn how to squeeze maximum value out of every dollar they spend. Social media is one important way that startups are saving money while still delivering value.
Whether being used for customer service, community building, product marketing, or internally for staying organized and communicating as a team, one common thread can be found through the social media use of every startup we talked to: Cost savings.
“We have no outside investment. That means we’re bootstrapping right now,” said Jack Benoff, Director of Marketing at Zugara, which last year went back into “startup mode” to create their own augmented reality software. “Social media has given startups the ability to market themselves in a way that wouldn’t have been possible before. Sure, it takes a commitment (in time), but the hard costs are minimal. It allows us to focus our financial resources on production, research and development, and sales, which is huge for us.”
Here are four ways that startups are using social media for real results.
1. Customer Service
One of the most useful ways that startups are employing social media is for customer service. “On the customer service side, beamME gets tremendous value out of social media. These days, people expect to be able to post issues with companies directly to Twitter and obtain a real-time response. This instantaneous access to our customers is invaluable,” said Gabe Zichermann, CEO of beamME, a maker of mobile networking tools.
According to Zichermann, one of the most useful tools they’ve used to manage their customer-focused social media efforts is Hootsuite, which has cut the amount of time necessary to look after their Twitter and Facebook accounts tremendously by allowing them to be used at the same time. “HootSuite is particularly effective and cuts down our time/cost requirements,” said Zichermann, who still advises getting someone, at least part-time, to help manage the flow of social media use and plan things out as far into the future as possible. “[That] will reduce the repetitive workload and make campaigns run faster.”
Phonebooth.com, which sells PBX services to small businesses, has had a similar experience using Twitter for customer relations. Said Todd Barr, Vice President of Marketing at Phonebooth:
“Twitter has become the launching point for many of our internal processes. We have multiple examples of responding to an issue on Twitter within a couple of minutes and being on the phone with them within ten minutes. A tweet actually starts an internal process where we pull in the appropriate parties, get our information together, and reach out to the customer.
All of our other social media usages are extremely important, but Twitter is actually helping to create a culture change. We’re able to quickly assemble the correct folks to improve life for the customer. Internally, this begins to shed light on the power of social media and the team of folks who want to be involved is gradually expanding.”
Barr told us that Phonebooth has solved over 20 customer support issues using Twitter and has also created a “vibrant product feedback loop, with good user participation.”
2. Building Community
Barr and Phonebooth also utilize social media for building a community of customer evangelists. “With the launch of Phonebooth Free, we heavily relied on our social media efforts to rapidly build a community and are providing support, invites, encouragement and general engagement through Twitter. Social media also impacted our decision to launch Phonebooth Free at SXSW,” said Barr. “We believe that it is important to focus on where our customers are and not where our industry is. This is a very important distinction in our minds.”
Zugara also uses social media to create community and build awareness. Both the company’s Twitter account and Facebook page are used to actively engage people, Benoff told us. “We also use Twitter to attempt to organicly build relationships with our industry’s key influencers,” said Benoff, who reached out to Mashable over Twitter for this post.
Building relationship and fostering community are commonly talked about uses for social media, but one of the most often overlooked aspects of social media is building relationship offline. It is important for startups to take online networking to the next level and go out and talk to customers in person at tweetups and conferences.
“There were at least ten social media people that were critical to our success at SXSW that we had met in person before or planned to meet in Austin. Many of those connections even helped funnel people to our booth and evangelize Phonebooth,” said Barr.
3. Product Marketing
Using social media for marketing is another cost-saving no-brainer for startups. Social media tools like YouTube, SlideShare, and Ustream have helped Zugara save money and increase new business opportunities, said Benoff. Much of Zugara’s social media use is centered around thought leadership and allowing journalists and potential customers to have immediate and easy access to information about their products and industry.
Social media marketing tactics also figured into the launch plans for Phonebooth Free. “Social media levels the playing field. It has never been easier to be more in touch with your customers or market than it is now,” said Phonebooth’s Barr, who used social media to lay the groundwork for the Phonebooth Free product. “Traditional marketing promotes messages to unwitting audiences –- our marketing seeks to draw in interested people who want to hear from us with compelling content, products and conversations.”
As a result, Phonebooth Free “blew away” launch goals, according to Barr, in large part because “our [social media] messages were amplified by a strong group of followers.”
However, startups using social media for marketing need to be in it for the long haul, cautioned Benoff. “If you are going to use social media to market yourself think of it as a commitment, or strategy, not a campaign. You can’t start a conversation with someone (in the real world) and then walk away. The same applies here.”
Every startup we talked to counseled on the value of being authentic. “Be honest. Be respectful. Be responsive. Be transparent. Sell infrequently,” said Benoff.
“Keep it real: Don’t try to be someone you’re not; don’t cover up issues/problems –- instead, address them head-on and transparently; follow-up with people (do what you say you are going to do),” was Barr’s advice.
“Concentrate on the value you’re providing for others through these tools,” said Dmitry Dragilev, Marketing Lead at ZURB. “The tools are just another communication medium. What value are you providing for them through SM? Try to imagine yourself in their shoes –- would you be interested? Imagine you’re standing with strangers in an airport -– what would you say to them to get their attention and get them excited about what you’re doing?”
4. Staying Organized
Finally, startups are also using social media with great success internally as a way for employees to stay organized and more connected with each other. At interaction design firm ZURB, they’ve actually built two social media tools, Notable and Verify (in invite-only beta), to help streamline their internal workflow. Though they now sell it as a “software as a service app,” their flagship product Notable, an application that organizes and manages design feedback, is actually used internally at ZURB.
“The homepage of Notable was actually designed with the help of Notable,” said Dragilev. “We took the capture of it, iterated through feedback with the team, then closed it down and implemented it.”
The team also uses Harvest (time tracking) and Highrise (CRM) to keep track of complex consulting hours and people at the more than 75 companies they have worked with. “Social media has provided another channel for teams to streamline their internal workflows,” according to Dragilev.
Online gadget community gdgtuses a number of social media and web-based applications to create a virtual office environment for its employees that increases communication and collaboration. Company founder Peter Rojas explained how gdgt uses social media tools internally:
“We don’t have an office (at least not yet!), so being able to collaborate together online is essential. We use Campfire as our primary chat room, Skype when we’re rolling out new features and need really close collaboration or have a conference call, Google Docs for documenting anything and everything, Dropbox for sharing files, and Yammer as sort of a looser way to chat and share links.”
By relying on web-based tools and not needing to have an office, said Rojas, the company is able to save a significant amount of money and been able to better communicate with each other. “I think it’s made it easier to be decentralized and run very horizontal organizations with a minimum of micromanagement,” said Rojas.
One thing to remember when putting social media in place internally, according to Rojas, is to test applications and find the ones that work for your startup. “I’d recommend trying out different [apps] until you find one that’s the right fit for your organization. The tools need to fit with the team rather than the other way around,” he said.