A marketing failure (Via Fail Blog)

Guest commentary: Marketing for a startup is different than anything you may have done before. It’s different from the big-company and/or traditional marketing many executives may be used to, and a whole new challenge for entrepreneurs who don’t have a background in marketing to begin with.

The way startups need to market themselves is as unique as their product, service, market and target customer. But there are several mistakes many new startups consistently make.

Whether you’re managing a startup, managing marketing for a startup, or even consulting for a startup, here are seven common mistakes to avoid.

1. Hiring a PR firm too early

PR is sexy. It’s exciting to see your name in print, to have others talking about you, to have articles framed on the wall and shared with investors. And PR can be an important component of early marketing strategy for some startups. But hiring a full PR firm might not be the right answer, at least not yet.

Your initial PR efforts should be organic. They should stem from self-published channels and social networks, spread via employees, investors and customers directly. Executing on this opportunity requires a smart strategy and well-understood messages & objectives, and may very well require some outside help to coordinate. But early-stage startups can typically achieve these objectives and save money in the process by working with an independent socially-adept PR consultant who can help coordinate the internal and organic efforts that will drive early PR momentum.

2. Overthinking brand

Matt Heinz

I’ve seen countless startups obsess about their brand at the expense of the business. They build thick brand guidelines before they even have something to monetize or sell, and fuss over the logo instead of empowering the sales team.

Early startup marketing strategies need be executed with a bias for action, sales and revenue. If the color palette is slightly different for the email campaign vs. the trade show banner, nobody except a handful of insiders and others with too much time on their hands are going to notice and care.

Brand is important, brand consistency is important. But shipping, testing, moving fast and driving customer behavior and monetization is more important. If you can’t drive revenue and grow the business, that brand binder isn’t going to mean a thing.

3. Starting with a marketing budget

Startups should have to earn their marketing budget. They should operate with the assumption that there’s no money for marketing, and instead focus initially on the scrappy, organically-generated ways to drive customer awareness, demand and closed business.

We live in a world where our customers can be a powerful marketing channel, where countless free tools exist for us to be effective publishers with good content, where a good product and great value can create inbound demand that supersedes the need to pay the expensive, traditional marketing “tax”.

You may eventually start spending money to accelerate your opportunity. But if you start by spending money, there’s little incentive or motivation to first figure out what can drive the same performance and results with far less investment.

4. Taking strategy or tactical cues from competitors

If you’re doing it right, you’re obsessed with your competitors. You’re watching everything they do – from product updates to Web site changes to what their low-level employees are tweeting. And when you get a link from an investor to something that a competitor did that you’re not doing, your first reaction may be to scramble to catch up.

Resist that temptation. Use your competitors as a source of ideas, but filter them through your own objectives, priorities and needs. What’s good for your competitor may not work for your business. And what competitors are doing, launching or trying today may fantastically fail. If you’re doing it just because they did it, you’re distracted from the work that will more directly drive your unique business forward.

5. Letting interns drive the social media plan

Would you let a college student run your customer service department? Would you put them on a panel at an important customer event? Would you trust them to serve as the voice of your business directly to current customers, prospects, future investors and more?

Interns may be more socially-savvy than you, they may have more time to execute, they may have great ideas. But they by definition aren’t going to be around for long, they aren’t as invested in the business as you are, and anything they start that you can’t sustain when they leave is wasted work, or worse. Countless blogs, Twitter accounts and Facebook fan pages sit dormant since the intern left, making the company look like it stopped doing business. Don’t be that company.

6. Allowing adversarial relationships with sales and biz dev

It’s ridiculous that businesses big and small allow an adversarial relationship between marketing and sales to persist. It’s more ridiculous for marketers in today’s environment to fail to hold themselves accountable for measurable performance and revenue traction.

Sales and biz dev may close the deal, but marketing can set the table. Marketing can have a direct impact on driving larger sales pipelines, more business development opportunities, and faster revenue ramp. If sales, marketing and business development have the same goals, and are measured based on their individual and collective performance against measurable revenue-based outputs, it’s far more likely that they’ll work together.

There’s no reason that marketing can’t drive this process. And if you run the business, put common metrics & expectations in place and expect this level of collaboration to take place.

7. Impressing board members & investors instead of customers

Your board and investors are important constituents, no question. They’ll have lots of opinions and ideas. But it’s your job to filter those ideas through the eyes of your customer and your target market. Not every idea is going to work, not every idea is even worth testing.

And if you explain your rationale back to the originator with a thoughtful, customer-driven response, I guarantee your board and investors will greatly appreciate that you didn’t waste your time (and their money) on something that was less likely to work.

Matt Heinz is president of Heinz Marketing, a Redmond-based marketing firm. Follow him on Twitter@heinzmarketing.

Comments

  • http://www.intrinsicstrategy.com FrankCatalano

    Matt, great piece and I agree fully. (I had a different, but complementary, take on the same subject in an essay I did for digital education startups,  “If I Only Had 100 Marketing Dollars”). To elaborate on a couple of your points:

    1. PR. I think it’s important to emphasize something you appear to conclude — public relations, in its broadest sense, IS important. It is one of the most cost-effective, though slow-building, marketing tactics, and these days it encompasses not just media relations, but award entries, speaking engagements, white papers and more. Even a well-written online news release builds SEO. In addition to considering an independent PR consultant, I suggest startups also consider a very small boutique PR firm with strong domain expertise in the startup’s market space, so the firm can bring targeted relationships to the table.

    4. Competitors. I’d add a caution that startups that want to do things the way their competitors do have unconsciously created a failing strategy — they will always be behind the competitors, because they are letting the competitors define the playing field and rules. Be hyper-aware, as you note, but don’t be led.

    Great advice. Thanks for sharing it.

    • http://www.heinzmarketing.com Matt Heinz

       Thanks, Frank.  You’re absolutely right about PR, it’s a highly-leveraged function when done right.  Excellent point about finding PR resources with vertical market expertise in early stages as well.  Those people and boutique firms are sometimes difficult to find, and often not in your same geographic market, but can quickly help you navigate the trade press, industry influencers, etc.

  • http://twitter.com/NickyChips Nik Souris

    Great points Matt, although none are as FATAL as what we might call common business sense as “NO” marketing.  Many technologists and inventors alike have this self serving idea of a product/service and execute on a “build and they will come” philosophy failing to validate much less identify/quantify a market. 

    • http://www.heinzmarketing.com Matt Heinz

      Great point, Nik.  Quantifying the market opportunity up front should be “table stakes” for any new business, and too often it’s an afterthought.  But when you’ve identified an unserved market and nail the product execution, the BEST marketing possible is a great product or service that early customers can’t help but rave about. 

      If you did your homework up front, you likely wrote your marketing position before you started building.  As long as you stay true to that value proposition, marketing translates to simply setting the fire (so to speak).

  • Karl Schafer-Junger

    I’d add two others – 1. Not spending a small amount of money upfront for tactical market research that provides the company with comprehensive positioning for the intial elevator pitch, email, powerpoint and competitive assessment as you enter a market.  2. (Since you didn’t do number one) – constantly changing your pitch based upon feedback from the last non-buyer you spoke with.  Doing a little bit of professional homework upfront results in a much more accelerated sales process as you move forward.

    • http://www.heinzmarketing.com Matt Heinz

       Yeah, you nailed it.  Your marketing strategy and positioning will ping-pong unless you have pre-launch confidence in who you’re building for.  There will always be unhappy customers, target prospects who say no, early adopters who don’t yet understand what you’re doing.  You want to learn from these conversations, but constantly bounce them off of the clarity of mission and message you established early.

  • http://www.helenkitchen-pr.co.uk Helen

    Fantastic – you just made my Monday morning positive! Looking forward to the week now and sharing your recommendations with others. Wholeheartedly agree with 1 and 4 – well said!  

  • Jim Quinlivan

    Nice piece, Matt, and persuasive. Enjoyed meeting you at Whidbey earlier this year and certainly profited from your presentation and workshop. One bone to pick about your piece here: regarding marketing, there may be many free tools for publishing, but good content often comes with a price — and it’s often worth it. I doubt many start-ups have the skills, experience and time to be good content marketers. Mapping a content marketing strategy that’s aligned with business objectives will provide the framework for creating the valuable, useful, informative content to drive the inbound leads and lead nurturing that you recommend. Realistically, though, start-ups would be wise to avoid the “tax” of traditional marketing, but they’d also be wise to invest in content marketing — the marketing that keeps on giving. 

    • http://www.heinzmarketing.com Matt Heinz

      There is a measurable difference in performance and results for companies who simply publish vs. those who publish strategically – with the right content, customer-focused themes, participation in social communities, etc.  You’re absolutely right that a well thought-out content strategy is highly leveraged and worth the investment (especially if dollars/resources are available already for traditional marketing).  

  • Mike1115

     Great advice. Ignore at your own peril!

  • http://spifflines.blogspot.com/ John Bailo

    What I’d like to see rather than Venture Capital is Venture Sales.

    For example, I’ve worked for big and small companies.   When on the inside of a big company, I’ve championed various small companies with great ideas.   I fought to get their product purchased and give them not only revenue, but a company where their product could be employed, and maybe refined, made more marketable.

    I would like to see more of this in the software world.  We need better Executives who see the niches in the big revenue generating companies and match make with the startups.

     

  • mike Ribero

    Matt, I enjoyed your post article and agree with your thinking. However, having both made mistakes running a start-up myself and in also working with others, I suggest that there are critical factors that precede those you mention. These factors not only shape the company and culture, but likely determine its potential for long-term success. Three that come to mind include:
    1.     Product marketing – As a mentor of mine would always say, “there is no marketing without product,” and far too many companies worry about image and brand without devoting enough (or any) time to understanding what their customers want. As one of the others that responded put it, if I had $100 dollars to spend on marketing,  I would spend all of it on the product and understanding what customers want, require, and might ultimately  need. Brand, PR and other marketing issues are secondary to product;
    2.     Fiscal planning and management – Virtually every start-up with which I have worked is not nearly as fiscally conservative as they should be to ensure long-term success. To illustrate this point, about 80% of start-ups I know failed to achieve even their “conservative” or “worst-case” forecasts, all the while spending as if they were on-plan. Combine this with the lack of effective contingency planning (plan for the worst, work tirelessly for the best) and you have the perfect recipe for failure.
    Interestingly, this issue is driven by the conundrum that is venture-based financing. If your pitch is too conservative, the probability of getting financed decreases, but if your pitch is too aggressive, the higher perceived level of risk also reduces the likelihood of getting financed. This is why VC’s and others look for those that can straddled this line and are smart enough to treat the capital they are given as if it were the proceeds of their life savings;
    3.     Effectively operationalizing the company’s strategy – Beyond the fiscal issues that kill more start-ups than anything else, I have found that a company’s inability to efficiently and effectively operationalize their strategy is the second biggest killer of entrepreneurial dreams. Many entrepreneurs are, in fact, dreamers, visionaries, and not necessarily ideal operators. This is why having the right team, with synergistic, if not symbiotic, skills within the management team, is the best way to maximize the likelihood a company’s strategy is operationalized in a way that will ensure success;
    The right team does not stop with management. If companies spent more time ensuring the quality and productivity of their team, at least some of the issues you highlighted would never become problems in the first place.
    Needless to say, there are other reasons why start-ups fail, enough to fill a book. However, without addressing these critical issues from the very beginning, the probability of success decreases and the number of other issues that put start-ups at risk increases.
    I would be more than happy to discuss.

    • http://www.heinzmarketing.com Matt Heinz

      Oh, man, the list of factors and variables required to make any business succeed goes on and on.  Many, as you’ve listed, require forethought on behalf of founders and leaders.  Plenty more are outside of anyone’s control.  But I think that’s part of what makes a start-up so fun and attractive to so many.

  • Sandra Holtzman

    Great ideas. Especially listening to your customers instead of your board.  I’ve found thatit  puts you in touch with your customers much faster and in their own words which helps cut through the clutter (even the self-generated clutter). This also holds true of larger companies who generate what I call chest-beating marketing as opposed to customer-focused marketing.  Venturenner.com has a free webinar coming up on 7 at 12 PM EST.  that deals with this directly.

    http://ventureneer.com/webclass/top-10-lies-startups-tell-avoid-marketing

    • http://www.heinzmarketing.com Matt Heinz

      Customer-centric marketing, and a customer-centric approach to the business overall, needs to be owned by more than just the marketing team.  It has to live in every employee.  Here’s something I wrote awhile ago about how to give every employee a customer point of view:  http://bit.ly/jTorUM

  • Anonymous

     Totally agree re: PR agencies. If you have a great idea it should speak for itself, and with a bit of personal outreach to reporters and some online buzz you should be able to get a bit of coverage, and snowball it from there. In my opinion a PR agency will never be as passionate about your business as you are, and they’ll likely have someone junior on your account who is dealing with media. Letting PR come from the horse’s mouth is way more effective, and allows your passion as an entrepreneur to shine through. 

    • Sandra Holtzman

      Agree..agree…agree!!!!

    • http://www.heinzmarketing.com Matt Heinz

       There’s no question PR can be completely outsourced.  Many PR programs fail because companies assume the PR firm or consultant can do all the work.  That simply does not work. 

      That said, there are some amazing PR professionals – both working on their own as well as within agencies – who can generate meaningful, measurable uplift in awareness and brand value. You just have to be smart about how and when you bring in those resources.

  • Alyson

     While I agree theoretically with a lot of these suggestions, they only make sense in certain industries. I suppose this is GeekWire, but for any retailer this would put them out of business before they opened the doors. No marketing budget? I am all for guerilla tactics but you need to invest something to get the doors open. If no one knows about your product or store how in the world can you make sales? And branding, while I agree that obsession can paralyze someone…you need to make a first impression and if you don’t have strong and consistent branding, no one will ever remember your company nor every notice you in the clutter. And you never have a second chance to get them in the door and “buzzing” which would be your “free” marketing…

  • Alyson

     While I agree theoretically with a lot of these suggestions, they only make sense in certain industries. I suppose this is GeekWire, but for any retailer this would put them out of business before they opened the doors. No marketing budget? I am all for guerilla tactics but you need to invest something to get the doors open. If no one knows about your product or store how in the world can you make sales? And branding, while I agree that obsession can paralyze someone…you need to make a first impression and if you don’t have strong and consistent branding, no one will ever remember your company nor every notice you in the clutter. And you never have a second chance to get them in the door and “buzzing” which would be your “free” marketing…

  • Alyson

     While I agree theoretically with a lot of these suggestions, they only make sense in certain industries. I suppose this is GeekWire, but for any retailer this would put them out of business before they opened the doors. No marketing budget? I am all for guerilla tactics but you need to invest something to get the doors open. If no one knows about your product or store how in the world can you make sales? And branding, while I agree that obsession can paralyze someone…you need to make a first impression and if you don’t have strong and consistent branding, no one will ever remember your company nor every notice you in the clutter. And you never have a second chance to get them in the door and “buzzing” which would be your “free” marketing…

    • http://www.heinzmarketing.com Matt Heinz

      My working assumption (and perhaps the liberty I gave myself) in the comment above about starting without a marketing budget is that awareness, demand creation, network effect, any customer or prospect behavior can be created without spending money.  It’s harder, and possibly higher risk, but it can be done.

      Let’s say you’re a consignment shop.  There’s a time gap between when you decide to start the business and when you decide to open the shop.  How do you use that time to build buzz for your shop?  How do you find a core audience of early adopters who can help spread the word for you? 

      A marketing budget can make this easier.  It can also make it more expensive than it has to be.

  • http://twitter.com/chrisamccoy Chris McCoy

    Build a killer product, bake viral in from beginning, and relentlessly execute customer acquisition. 

    As for business development, open your data and let your API be your biz dev team.

    Best stuff on startup marketing coming from Dave McClure: http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version

  • http://twitter.com/designkompany DesignKompany

    Matt, I get your intent here, and there’s some solid advice here (esp. as you read on. Amen to the point 4, 6 & 7!). And I hope startup folks will take the time to read your words and not just skim them over.

    As a marketing consultant like you who’s worked with a few startups and small firms with little “marketing budget,” though, I’m a bit afraid some of your points, especially gleamed through just going over the headlines, serve to further the confusion many feel about the term marketing and brand than clarify it. By just reading the deadline, one gets an impression that branding is some window dressing you pay some fancy photo-shoppers for (and can be gotten without much “thinking”), and marketing as all ads and PR campaigns, generally unnecessary frills. The real advice here, if I can be so presumptuous to know, is that you have to do the homework first of defining your strengths and positioning in order to have a _real_ marketing, as opposed to the bells & whistles without substance you see sometimes. Marketing is supremely important. The message people sometimes miss isn’t that marketing dollars aren’t necessary, but that marketing needs to be baked into the process of starting a business, not added on as a frill.All that said, I wonder if many startups these days have enough money to throw around that they consider making the mistake of overspending on PR campaigns, thick brand guideline books or ad campaigns from the get go. 

    Thanks for a stimulating read!

    • http://www.heinzmarketing.com Matt Heinz

      Great points, thank you.  I’m not a big fan of marketing (or marketing budgets) without purpose.  If you have a specific, measurable objective, and manage your execution to that measure of success, then brand, PR, trade shows, almost anything can make sense.

      But I think marketing priorities and budgets should be earned and justified.  It shouldn’t just be a % of revenue or an arbitrary number that creeps up every year.

      Don’t take this to mean I’m just a stingy marketer.  I think there’s plenty you can do without out of pocket money, but if you find something that’s working, do more of it. 

      If the bank had a sale on dollar bills, and would sell them to you at 90 cents each, how many would you buy?  Wouldn’t you argue that budget in this situation is largely irrelevant?

  • http://www.pnwrainmakers.com Gary

     Interesting perspective. 

  • http://twitter.com/questionsall Carl Setzer

    I’ve seen startups get marketing messed up in the beginning. Often, it’s simply the focus on “traditional” marketing (i.e.: ads). Especially in today’s market, new companies can gain much more for their investment with other means, be it blogs, trade shows, white papers, et al. Non-traditional means may not have the global reach, but startups generally don’t need that. They need a few, passionate customers. Having such, engaging with them and adding value to their lives is far more impactful than millions in ad spend. Once you have something to sell, and fans willing to back up your claims, ads can truly add value.

  • Srlm5

    Great info, thanks!
     

  • http://www.rightsourcemarketing.com/ Mike Sweeney

    Great, great post. Every single point is spot on – I especially like #5 on letting interns drive the social media plan, and #2 on overthinking branding. We just posted “Hey Startup Founder, Your Messaging Sucks” and I wish I had found this post beforehand so I could have linked to it. Anyway, appreciate all the detail in this post and give this a read:

    http://www.marketingtrenches.com/marketing-strategy/hey-startup-founder-your-messaging-sucks/

    • Preeti Juneja

      I agree. I also feel that your key media guys are easily accessible online these days. Just if you maintain great relations with these key people on your list, you really don’t need a PR agency.

      I also feel the agencies understanding of brands, is not always up to mark. The pr campaigns or social media campaigns they propose go way out of the way from what the brand manager has in mind. It’s always best to call agencies for a pitch before nailing them down and giving them work.

      Social media is partly paid advertising and partly content generation through a set of designers and writers. There is always a bent towards spending more on advertising being proposed by agenecies, which may not result in anything substantial for the brand. Be wary about it. Outsourcing content writing could a step forward. Best if you can get your content signed off by key people from your industry to make it more credible.

Job Listings on GeekWork

Find more jobs on GeekWork. Employers, post a job here.
Sr. Program ManagerUIEvolution Inc.
Senior Software EngineerIntentional Software