Marketing and Startups

Fred Wilson caused a commenting storm with this post about marketing at early-stage companies.

One of the things that drew so many comments was the fact that Fred showed some real emotion – in fact, he really hates marketers (for example, “marketing hires in our companies have had the lowest succcess rate of any hire and there are many so called experts who have turned out to be bad and expensive hires”).

In fact, it is common for non-marketing execs and investors in startups to come to hate marketing and marketing people. Why?

• Marketing is very expensive. For instance, if you want to run an advertising campaign and you have less than $500K to spend, most likely you shouldn’t bother. Events are expensive. Tradeshows are expensive. PR firms can be expensive. The payback on small budgets is often at or close to zero.
• Marketing people can be obnoxious… Unlike engineers, who tend to be rational-if-a-touch-paranoid, and money-motivated sales people, many marketing people are motivated by power/influence, which gives them sharp elbows (and makes them like venture capitalists).
• Money spent on bad/mis-directed marketing doesn’t come back. In engineering, if your project is harder than you expect, the money you spend getting part way has at least got you part way. In marketing, if you have the wrong positioning, spending big money to promote that wrong positioning doesn’t take you part way to the right positioning, and in fact may make it harder to make the right positioning work in future.
• If you have what you believe is a good product, a failure in sales and/or marketing is resented – “they” are not doing their part to match the product team’s hard work. The fact that the team may come to doubt the product itself only makes the resentment sharper.
• Marketing seems like cheating – rather than build a valuable product you create the mere appearance of value. This seems the least credible reason to me… if you can’t communicate your value, or your users/customers can’t perceive the value, how valuable is it really? Scratch the surface of most successes supposedly based on marketing rather than product, and you may find compelling product benefits underneath – albeit often not the benefits that the cognoscenti think should be the key ones (Microsoft Office user-experience-consistency is one example from the 90s). Likewise, we have all seen examples of companies with massive market power falling on their faces when they tried to push a weak product (Microsoft Kin is an example).

So what to do?

• Remember – early-stage marketing is about learning and experimentation. Don’t scale and spend until you know – and have proof points – that what you are communicating, and how you are communicating, is going to resonate.
• In your business plan, include the time you’ll need for learning how to market. Just as it takes time to build a product, it takes time to build the right marketing and go-to-market approach and system. Nothing is more corrosive to marketing success than drawing a graph which says “Here we spend $10m and get 100m users” – that just encourages companies to pour money into marketing before they know how to spend it effectively.
• A lot has been written in the last few years on how to market with $0. Learn from what others have done, and make use of it.

At the same time, when you’re ready, effective marketing – in which I would include matching your product to the few core benefits that users really care about – can be a key part of standing out from the crowd and outgrowing those competitors too timid to make use of the leverage marketing can give them.