While still in its early stages, there are plenty of things Elijah Tyson has left to do to grow his fledgling startup app, Coldspace.
The University at Buffalo student, with his team of Hnu Thaper and Abid Alam, just returned from a Tech Stars business camp in New York City. They’re finding capital; modifying the product, which offers refrigerated storage lockers for students on campus via a cell phone app; and beta testing it.
“We’re still in the customer validation, product development phase,” Tyson says. “We’re on track and moving forward.”
As a startup CEO and founder, there’s one step Tyson knows his company will have to take next to be successful: Developing a social media marketing strategy that will allow his team to grow a brand at a fraction of the cost of traditional advertising.
A New York Times article from Nov. 5 notes the importance of advertising giants Facebook and Google for startup companies.
"The process is easy, cheap, and effective,” Burt Helm, a senior contributing writer for Inc. Magazine, writes in the Times article. “With a few hundred dollars and a morning’s effort, an entrepreneur can place his or her ads before social-media users that same afternoon. Companies unsure which ads are best can upload a handful of them and let Facebook’s artificial-intelligence software test their efficacy.”
Tyson says that building a product almost exclusively targeting college students on the go will require extensive social media marketing to gain a foothold in an often-saturated market.
“Social media is great. Students are on social media anyway. It’s a great way to get to know and understand the product,” he says.
Currently, Tyson is using social media to engage with students and develop feedback. The question is, can small startups benefit from social media giants like Facebook as much as the solar-sized company has benefitted from them?
According to Pivotal Research Group, Facebook and Google control 70 percent of the digital advertising market in the United States. Five million advertisers, the New York Times article states, are using social media, which offers an attentive and sometimes media-addicted audience in exchange for a couple hundred dollars or a few hours of work. Facebook’s algorithms allow small companies to expend almost zero effort in targeting their audience. And at its core, social media platforms like Facebook offer instant engagement with customers. Much of that is free.
“Social media is definitely huge,” Tyson says. There’s always a medium to get that end-user engagement, and it’s a huge part of branding. I think it’s definitely mandatory for any startup,” Tyson adds.
At the TechStars camp in October, to which Coldspace earned a trip after winning an entrepreneur pitch competition at the student center, Tyson says startup founders were encouraged to actively engage on social media platforms.
For many companies, that one-on-one engagement between CEOs and customers becomes part of the branding. See Elon Musk or Mark Cuban.
And because the Facebook and Google advertising algorithm has become so advanced and can pinpoint a target audience with such accuracy, businesses would be negligent to not at least pursue a marketing campaign with them.
“In the meantime, more and more companies — startups, mom-and-pop stores, major corporations — are handing their dollars and their data to the social-networking giant. Facebook’s Ads Manager is user-friendly. Sales are plentiful. And if you don’t take advantage of it, your competitors will. How could you not go there?” Helm writes.