The big difference with working a start-up is that there are no blueprints. Nobody has done this before. Nobody has sold what you’re about to sell. Very few people will have written a marketing plan for a business that has no brand presence or a product that doesn’t exist yet. Fewer still will have seen that proposition through to launch and beyond. That’s why marketing in a start-up is so different from an established business. You just don’t have anything to fall back on. No product adoption, marketing or sales history. You have the experience of your people, but it’s only relevant to a point, and you quickly learn, that it’s the things that you don’t yet know that make all the difference.
Here are my top tips for Start-up survival:
When individuals have very personal interests in the success of a project, they tend to focus on the viability of an idea, instead of validating a market and changing the resultant product or service accordingly. It’s imperative therefore, that someone in the business has the ability to challenge this.
A start-up has to be able to establish sources of unbiased market validation and ensure that this data is being used to drive decision making. As part of the Go-to-Market Plan and /or the MRD the marketing manager will develop market insight but they need to be mandated to go further. They need to become the one source of truth for your company. They need to be given the authority and budget to develop processes that continuously test product developments and management assumptions, and this has to be recognized as a core job function.
Establishing marketing’s authority as the guardian of market insight has huge ramifications for the culture of the business. Not only does this help develop a structure for continuous data-driven decision making, it also lays the foundations for the integration of business functions. Both of which are absolutely crucial for start-up business dynamics.
With established principles around data management this becomes so much easier for marketing people to achieve. It enables them to focus every resource on the demands of the business (and not hereditary job functions. This is essential if you want to move a company away from constantly asking customers what it is that they want and to understanding what it is that the really need!
The most effective technique for understanding who your customers are and how they are likely to evolve is to develop a series of what marketing people call ‘user personas’. A ‘user persona’ is the archetypal person whom you want your marketing to reach. It’s almost never just one persona, nor can you realistically do a good job with more than three or four. You need to walk through their world, understand their idiosyncrasies and find opportunity clusters. This can be a laborious process, but once you’ve mapped this out, you have the basis of your Marketing Plan. All you have to do now, is zero-in on the most pain.
The customers you prioritise for an innovation aren’t necessarily the same as they would be if you had a well-established product. Your goal is to establish yourself in a beachhead market and prove the value proposition. So, it’s not just about solving a paint point – as many think – but servicing a ‘primary’ paint point in a market where you can quickly establish a competitive advantage.
The odds are stacked against you, so you have to be looking for the path of least resistance. You want to focus on a customer base where there’s a clear use-case, defined channels to market and straightforward buyer economics. You’ve got understand the barriers to sale. You might have a unique product, but are you selling it into an already congested market? You need to understand who the key influencers are for your customers and focus in on those who you can get to easily.
In the book ‘The Lean Start-up ’Eric Ries talks about the need to treat everything as an experiment because it helps you manage failure. What he means of course, is not to just run off some random stuff and see what sticks, but to make sure that you structure the building of your programmes around a framework that enables some kind of objective analysis.
This is a very important philosophy, but it’s not quite as easy as that. There are politics in every business, even start-ups, and so, don’t believe the hype, you are not going to be allowed to fail!
But you have to learn. So, it’s really important that you come out of the end of everything with something that shapes future activity. That’s why I advocate doing A/B testing and running more modularised marketing campaigns, as it’s then clear that you’re evaluating different types of activities. The key here is to make sure that when you fail, you also learn something, otherwise your days will be numbered.
According to Gartner. Campaigns integrating four or more digital channels will outperform single or dual-channel campaigns by 300%. Gone are the days of random acts, isolated initiatives and marketing as a purely reactive function. The integration of processes, activities and technologies is now not an option. Sales and marketing teams needs to be joined at the hip and marketing has to be a part of the plan from the get-go
All too often, marketing is the last piece of the start-up jigsaw that entrepreneurs figure out! That makes no sense, because a professional marketing set-up can make all the difference, a half-baked attempt on the other hand, will almost certainly hemorrhage most of your cash.
Eric Ries also talks extensively about the trap that many start-ups fall into in what he describes as ‘success theatre’. It’s what happens when managers get dragged in to focus on measures that give the impression progress is being made, rather than those that properly validate growth.
Experienced corporate managers might see this as a necessary evil to keep share and stakeholders on-side. But in an innovation set-up it can lead to a dangerous circle of development which compounds rather than challenges potentially terminal problems. According to Ries, if the focus is on making an impression first, then that, all too often, leads to a culture of compliance which new cash injections only help to sustain!
The thing to remember is that there are things that may be just a head cold for a corporate, can be a terminal illness for a start-up.
Bad pricing can kill a business, everybody know this. So it always amazes me how much start-up pricing is a reflection of want the founders need to become squillionaires!
Price is a reflection of the value a customer puts on something. Getting it right for your product is incredibly important, so you need to test different price points early on and then make a decision based on something that’s going to drive initial market traction. That might not be the cheapest price point, because that could undermine the value of the technology, and it’s very likely that the optimum price will change as you grow (something you also have to plan for too). But the key is to respect market sentiment, not ignore it.
You pay peanuts, and you get monkeys working for you! Harsh on monkeys maybe, but a business adage that many subscribe to. So why would that be any different for a start-up? In a world where precious few make any real money, isn’t it even more important that your investment has the best people working on it?
I know every penny is a prisoner and all that; and I’m not saying give these guys six-figures and a car from the get-go. But if your hot hires are sweating spinal fluid and still worrying about buying lunch, it opens up your business to a whole host of issues that you don’t need.
In my experience, not paying market rate doesn’t develop drive (or highlight a lack of it) all it does is limit who you can employ in the first place. While that may help cash flow in the short run, it also creates lots of false economies that can destroy your business model just as quickly.
Build the need to employ good people and pay them a living wage into your business case or it will come back to haunt you when you least need it.
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