You’ve carefully crafted your pitch deck to showcase your product, your team, and your revenue, sales numbers, signups, and projections. But other factors are playing an increasingly important role for VCs as they determine whether to invest in a startup. Today, we continue our four-part series on what investors look for beyond financials with something startups can begin to develop before the pitch itself: social media.
Startups often have limited time and funds to allocate to marketing or advertising. While founders understand the need to build buzz about their product or service, they may not have the means to develop lengthy campaigns or purchase expensive airtime. That’s why social media is such a valuable platform to build brand awareness; these platforms have significantly accelerated the pace at which word-of-mouth marketing takes place and have made it possible for startups to easily and inexpensively reach potential customers.
Tracking things like follower count (number of fans), mentions (followers tagging your brand in posts), shares (followers pinning, retweeting, or otherwise sharing your posts), or reach (how many people have seen your posts) will help you stay aware of how well your brand is recognized. Those numbers can be used in your pitch deck as another example of traction – or how well your product/service is being adopted by users.
Another way social media can be useful for startups is in market research. Social media is great for quantifying and qualifying trends over time and in real time. For example, searchable hashtags on Instagram and Twitter can allow startups to discover trending news, keep up with industry conversations, learn what competitors are talking about, and even develop a plan for branded content using an original hashtag. On Facebook, startups could turn followers into a focus group and have them answer questions concerning their likes and dislikes, new uses for current products or services, or ideas about new variations. By understanding what your followers want to see from your startup, you can better address product-market fit (a topic coming soon in our blog series!).
On a similar note, social media also allows startups to identify key influencers in their respective industries. As ambassadors for your brand, these influencers can tap their own followers and turn them onto your brand – but that takes time and outreach. In the meantime, even following these influencers and listening to their content can be a huge help as you identify a strategy for your social interactions. For example, fintech startups may want to follow Brett King, Founder of Moven, author of Bank 3.0, and host of “Breaking Bank$ with Brett King,” to keep up with press and join in on industry conversations.
Social media also lets you handle customer support. While startups may be wary of having unfiltered feedback about their products or services online for anyone to see, it can be hugely beneficial. It can not only improve the ease with which you respond to customers but can also improve your digital reputation by allowing you to engage with customers in real time and actively channel negative feedback.
As social media continues to disrupt traditional marketing and advertising channels, startups shouldn’t neglect to create profiles and begin sharing content. Next time you enter a presentation, keep in mind that many VCs have already checked your company’s number of followers, online discussions, and promotional campaigns before you walked in the door.