Video Helps Startups Learn and Leverage
May 6, 2012
Video Helps Startups Learn and Leverage
Last week Sarah Needleman, one of the small-business reporting leads at the Wall St. Journal asked for my take on how startups are using video to succeed. I shared several thoughts on my experience--some which are captured in her article here. Now, I would like to use this post to expand on how video can help startups learn early and further leverage their ideas to improve their odds of success. The value of video communication Simply put: Sight, sound and motion communicate much better than written copy and static images. You can post your video across dozens of social networks; and the costs of production continue to decline. No wonder many startups are giving demo videos priority on their websites. In fact, the latest hot startups feature a full-screen video demo looping in the background of the landing page. Check out the latest sites for Path and ShopKick as examples. I first saw the startup video trend happen when Flipboard launched its service with a video on YouTube. It is simple, compelling and effective: In my Minimum Viable Concept Testing I've found that videos typically score significantly better than print or website concepts--mimicking what happens in the real world. I almost always recommend that clients test video if they have it. It's simply the best way to fully engage a prospect's senses with multiple conscious and unconscious cues. But don't fall for the siren song of "viral videos."  Too many people see the success of big brand marketing videos featuring the Old Spice guy or Kia hamsters and figure that's the way to win. Dollar Shave Club is being held up as a model for startups, but getting this kind of success is a very long shot. Big brands must try for ultra-creative viral success because their base products are mostly uninteresting. Success is not about collecting video views, but about generating users and paying customers. And when your product is interesting, a simple, straight-forward video can break through the clutter and get consumers to pay attention. Believe it or not, people are actually interested in what's new and different. Did you know that TiVo reports informercials are some of the least-skipped TV ads? When I worked in new products at Procter & Gamble, I once consumer-tested a $10,000 concept video in the same research process that we used for $500,000 TV commercials that play in prime-time. Guess what? My cheap, boring product video scored in the top 20% of all commercials tested in the past decade. Startups offer new and interesting "products" that can generate high engagement and social sharing with videos that explain what they are and how they work. Plus, the buzz you get is about your new business--not the guy on a horse or hip-hop hamsters. The recent case study of Google Glass and its amazing product-focused concept video shows a much better way to go. Follow the proven structure If you watch a handful of startup demo videos you will likely notice a pattern that was laid down by the first mass advertisers nearly a century ago. The first radio and television commercials repeated this pattern to introduce new-to-the-world categories such as laundry detergent and dandruff shampoo.  This structure is a proven framework for a video, and mimics a conversation people might have in real-life. Here's the simple, yet effective structure of a good concept that most CPG marketers learn in their first week on the job: Accepted Consumer Belief - The problem statement, a.k.a. the "Don't you hate it when...?" It frames the issue in people's minds and captures the pain and issues they experience--even though they are likely not experiencing the pain at that moment. Using Instagram as an example, it might be: "I love sharing mobile photos, but the quality is poor, it takes too long to upload, and I can't share across multiple social sites." Benefit Statement - Introduces the new brand and describes the single most important improvement that it brings. "Introducing Instagram. It helps you get more out of mobile picture-taking." Reason(s) to Believe - This provides some evidence to back up the Benefit Statement--usually a data point or a short description of how it works. "Instagram is a mobile app that includes filters to help you improve the look of your photos, then quickly share them on Facebook, Twitter or email. As an example of how this can be done effectively (and fairly cheaply) for even a very technical product, check out the video below from Ilesfay, a B2B IT startup in our CincyTech portfolio: In using this concept development process with my clients in the first step of MVC Testing, I've found that it helps them focus on what is most important--and some go back to whittle down their websites or feature lists before the test results even come back. This focus is the single biggest takeaway from Instagram's success. Meanwhile, the historic mass marketers already have mass household penetration--there just aren't many new-to-the-world categories of consumer products. So they use creative commercials, celebrity endorsements, and recognizable music to remind you that they exist. But innovation happens elsewhere, and this proven communication model has been picked up by everyone from Oxiclean to Apple. Three tips for success Based on my experience personally launching new products with videos and coaching dozens of startups, I offer these two suggestions:
  1. Limit your time - Too often companies throw the kitchen sink of benefits into a video. Since the video can be as long as they like, they become tempted to wedge a laundry list of problems-solved and features-offered into the video. Again, focus, focus, focus is the name of the game. For general consumers, anything over 60 seconds is pushing it; but I think it's OK to go to 2 minutes for a B2B product where buyers are more likely to lean forward.
  2. Go with the pros - I almost always subscribe to the belief that startups should do everything they can by themselves, and there are a few ways you can make your own demo video. But I believe video development is an area where outside expertise is well worth the money. Creative talent will help enormously with quality, and it's getting easier to find the help. For example, Tenlegs has created a marketplace for video buyers to connect directly with top creatives. This video for CourseHorse, an local teaching marketplace, was done for only $2,000.
  3. Test your work - Don't expect to just put the video up and wait for the view count to jump to life. Save money for editing based on early views, and be ready to change your video as you adjust and pivot your business in the months ahead. Of course, when your video is complete it's a great time to get some quantitative data from real-world consumers and compare it against a database of other startup concepts for a mere $1,000. (sorry for the blatant plug).
Getting over the cost barrier  The biggest issue with videos is obviously cost.  Even a simple animation can run $10,000 to $25,000 or more for professional assistance (which I fully recommend--it's a skill, people). In selling my own Minimum Viable Concept Test research to startups I've seen that any expense is difficult to take on--especially when the costs are known and the return on investment is unknown and mainly intangible. Last week I spoke about the issue with Lucas Cole, head of business development for Epipheo Studios. If you're a digital entrepreneur you have likely run across Epipheo's signature videos for hundreds of startups, as well as for a few big brands like Google, Amazon and GE.  (Side note: Epipheo is a fellow Cincinnati-based startup.) Lucas has often talked startups through the budget challenge and feels their pain. He shared a few stories about startups that stroked a check with fear, but ended up getting seed funding or early customers after simply running the video a few minutes after starting a meeting. Of course not every startup that develops a video or runs a Minimum Viable Concept Test becomes successful.  Just last week I had to share some not-so-good MVC Test results with a team of passionate entrepreneurs. That is never a fun meeting--but I feel good about the chance to provide difficult news early, rather than watching a great team spend the next year of their lives and thousands of dollars in digital development to create a product that flops upon market entry. A $10,000 concept video and $1,000 MVC test can help startups and their investors learn long before they leap--and just might help you score seed funding at a rich valuation. You should learn more about the MVC Test here, and follow me on Twitter here. +Bob Gilbreath

2 Responses to Video Helps Startups Learn and Leverage

  1. Jonathan Richman

    Great advice in here (as we’re headed down this path right now). A helpful site I ran across recently:

    A ton of videos from, you guessed it, startups. Great to compare your ideas and for some inspiration.


Leave a Comment

Want to join the discussion?
Feel free to contribute!


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>