What are basic steps to creating a simple marketing strategy for a small startup?

I have started a small startup online business. I need to drive traffic to the site and create new users - a classic "inbound marketing" problem. I have seen that people have asked similar questions in the past and they have been recommended to read "Inbound Marketing" By Shah and Halligan. I have placed an order with Amazon today for that book.

I notice also, that in most responses to these sort of questions, the OP is advised to create great content. That makes sense naturally, but in cases (such as mine) where the site is based on user generated content, that sound advice poses me with a chicken and egg dilema - namely, I have a site with great content generating functionality etc, but nobody knows the site exists, so no one generates content, and so therefore the site has no useful content (from the Googlebot POV at least) - so the site dosen't rank. On the other hand, if the site is able to attract sufficient people who then start generating content, once the site attains critical mass, there will be sufficient 'great content' on the site to make Googlebot situp and take notice.

I tried the route of getting friends to register and start using the tools etc, in an attempt to gain critical mass but that failed for two reasons:

1. The subject area covered by the site, is not one that my "friends" are generally familiar with (they tend to work in different industries)
2. The few ones that visited the site, were interested, agreed it was a good concept - but turned out they were jealous of my 'perceived' success (I found this out from another source later) - the old "crab mentality" syndrome.

So how does one go about breaking out of this vicious circle? Can someone with actual practical experience layout the few simple steps that I need to take to drive traffic to the site (bearing in mind that most of the content will be user generated ), so as to gain critical mass for the site?

Last but not the least, the steps should be simple ones that I can implement myself, as I am funding all of this out of my savings.

Any useful and practical help that gets me started and produces results will be very much appreciated.

When you read Inbound Marketing, you'll learn it has five steps: creating remarkable content, optimizing it for search, promoting through social media, converting visitors to customers and analyzing everything. The first three are designed to drive traffic to the "top of the funnel" (ToFu) while the last two concentrate on obtaining and improving results in the "middle of the funnel" (MoFu).

From what you describe, it sounds like you're having a problem with the top of the funnel, so we'll examine those first three items.

1) Content - I couldn't quite tell from your question whether or not you feel like there is enough compelling content on the site for it to be consistently remarkable. As you've already read, this is the key to whole process. If you are lacking for quantity, you'll need to make that up somehow. This could be done by creating it yourself, outsourcing it (you can get decent articles written for as little as $5 or $10 each), or reaching out to guest bloggers. If quantity isn't a problem, quality may be. Make sure it's truly remarkable - that people who read it will find it valuable and (most importantly) want to share it with their friends and colleagues. This also means that the design of your website needs to make it easy for people to share your content if they want to do so (i.e Facebook, Twitter and Google share buttons).

2) SEO - This can be a huge problem with user-generated content. Bloggers take great care with their titles, headings, anchor text, alt text, etc... to make sure that the site's content is optimized for search. Users creating your content obviously have no interest in this aspect so it's going to be a challenge. You need to provide some of that structure to the site by making sure that content is categorized and tagged for SEO purposes.

3) Social Media Promotion - I don't know the niche you're targeting, so it's tough to know whether Twitter or Facebook would be your best bet. In either case, you're going to need to build an audience and that is just going to take time. There are some techniques that can accelerate the process and I've found that combining real-life networking with social media can be very effective. This means attending conferences and networking events in the industry you're targeting. You can piggy-back on the conversations and expand your audience significantly. For example, I attended Hubspot's Inbound Marketing Summit last week and sent out lots of Tweets with their hash tag. Next, I used a program called TweetAdder to search for others who had used that hash tag and followed them. When they looked at my stream, they saw lots of content aligned with their interests and are more likely to follow me back. I gained several hundred high quality followers in about a week, including some influential ones like Dharmesh Shah.

And that's going to be a key for you: Identify influencers in your target industry and get on their radar somehow. They can help you drive traffic to your site (ToFu). But once they get there, you need to make sure it's designed well to convert them from visitors to contributors (MoFu).

There's no magic formula that's going to generate high quality traffic quickly. You're going to have to employ multiple parallel strategies to build an online audience over time. If you have the funds, you can supplement these efforts with PPC efforts on Google and Facebook. Also, use the Q&A feature on LinkedIn and Quora to find people looking for information that your site might provide. It's all about getting on peoples' radar one way or another.

1. On the site itself, when it's about user generated content, the critical mass chicken-egg problem always exists, and you will have to work very hard manually to produce content yourself to get started. You'll have to create accounts and start generating valuable content with them. You can't depend on friends with this.
2. Generally, the best way to address the chicken-egg problem is to find a way or add a feature that adds value to the site for the first visitor as well, even without seeing any content. Delicious is a good example, it's a social service, but it was usable to access your bookmarks anywhere, even when there wasn't enough traffic for the social features to be useful.
3. Great content goes for your blog as well. For marketing purposes, you'll have to have at least a blog, a facebook page, and a twitter account. All these are platforms to place great content about your industry. If you design your stuff well, it will drive significant traffic to your site.
4. It sounds like a problem if you don't know anybody in the industry you are aiming at. It raises the question whether you know the target market well enough? You will also have to talk to potential customers one by one and convince them to use the site.

Check out The Ultimate Online Marketing Recipe from the KISSmetrics blog. Everything you need to know to market your business online is in there.