PR for Startups

I've seen a number of references to the recent Calacanis article on PR tips for startups. Here's one from a blog I follow that does a good job summarizing the lengthy original post:

OnStartups

I share the viewpoint about PR firms in general, and particularly for web-based consumer-oriented startups, where grass roots branding (combined with blogging) has replaced big bang, major and industry media branding almost completely.

But I wouldn't go as far as summarily stating that PR firms are not valuable -- even in consumer applications, they can provide some insights that inexperienced founding teams may lack in terms of the basic PR etiquette.

I would say, in my experience, that PR firms are pretty awful in terms of thinking out of the box and going above and beyond for their customers. They follow a tried and (no longer) true formula that is now growing more than a bit tired -- and for the amount of coverage they generate, they are extremely expensive when viewed in terms of cost per customer acquisition.

Let's say your PR firm costs $10K/month plus expenses (which is table stakes) and they get you one placement each month in an industry publication that purportedly reaches 100,000 readers. If 10% of the subscription base see the (let's be generous and say) two page write up, and you convert 2% of those, your customer acquisition cost is $50, at a minimum. Great, if you're selling enterprise software. Not so great if that customer buys one $50 item and your margin is 30% (although a lot depends on the stickiness of your service). Much less great if you're counting CPMs.

The socializing CEO model suggested and embodied by Jason is demonstrably effective -- but is appropriate for some, not all. If the CEO is weak in that capacity, s/he should be complemented by an aggressive Co-Founder/Marketing VP or co-founder that loves to mix it up, on-line and off-line. But that's not nearly as interesting an interview as the CEO would be, in most cases.

My own company, Tradavo, services small format retailers and service businesses (hotels, parks, drug stores). Reaching these individual, independent units is extremely difficult -- and a traditional PR firm could be helpful. We're not quite ready for a major PR blast/launch, which we're scheduling for October. Sometime between now and then, we'll work out our strategy, which may include many recommendations from the Calacanis post.