Promoting Software Development Company - how to become "38 signals"?

Hello, I finally decided to write the most important post of this blog. The situation i want to cover is the marketing strategy basics for small software development business. OBS Group plays on this market for over 4, and i am selling our services all that time. I don't think i become expert in this area, but still think that i "ate few dogs" in this.

So the terms are usually rather hard - you have only say $500/month marketing budget. I think that's realistic sum for most Eastern Europe, India startups.

Trying to be simple i'd like just list good and bad strategies:
GOOD:

1. Promote yourself on SW markets and freelancers sites. Do not order ad there, but surely get full subscription and access to major products. Spend time on reviewing jobs daily and communication with promising customers. Your first goal on such sites is to get phone of client or at least email. If you see name of company on such site don't be confused to google it and contact directly, not via board on site, asking if they are in need for your services. Get some CRM application and track all you A,B,C-type clients and leads. KEEP COMMUNICATING! I know that you used to code programmes, not sell insurances, but you HAVE TO DO SALES
2. Do GOOD JOB This should be #1. Remember that most of jobs you will get from you existing customers having long term relations with them. Must read: Never Wrestle with a Pig by McCormack. That's 100% about SW development business!
3. Invest in your corporate site. You site site should be nice, contain major info about your company and services. But remember - the main goal of it is to get you new leads- so it just should make it easy for customers to contact you! Unfortunately OBS started invested in our site not so far ago, but i still believe that its important point. Do SEO for your site.
4. Create you own cutting edge product - simple pacman game on flash, simple service for world global pizza ordering - anything! Its much more easy to promote something having value for audience. Don't forget to put ling to your site and say who is the author of course. That is what OBS working on now.
5. Create your own blog about area of your expertise, try to create your own community. Not so easy, i know, but community of your area experts gives you unlimited source of new projects for your company. That is what we are doing here :) Google to find advices how to create better blogs and look at SEO post To be the honest we are still proving effectiveness of this strategy, but my feeling that it should work
6. Google Ad with words something like elance, guru, developers... Ruby, ASP.NET. Using names of popular web sites as keywords is a very good tip, they work best!
7. Patience

NO GOOD

1. Never buy any ready leads "just for $10 each". Just to be short - its shit and cheating. Proven.
2. Do not invest in banner advertisement on job and other sites. Completely useless.
3. Do not even try to listen "consulters", "marketing contsultes" and all that stuff. No matter what they are talking - you will always get same result - they will give you A4 "marketing letter", and and useless email list and charge you for $1000
4. Try to find direct customers in US and EU, and not to deal with middlemans from India.

That's all for the good start, feel free to comment if i missed something.