Marketing Is Simple

Twenty five years ago legendary marketing scholar Theodore Levitt of Harvard Business School made the statement that "The purpose of a business is to create and keep a customer" which at the time was pretty revolutionary at the time.  As I discussed last week, to get a customer you have to solve a problem. 

When it comes to startup technology marketing, from a more traditional marketing function perspective, I find that a lot of companies don't do it.  They don't do it because they don't understand it.  They don't understand it because some marketing type dressed in all black and drinking a latte starts spouting in marketing speak the need to "segment the paradigm in a way that leverages your core competencies into product attributes that effectively capture your brand essence so at the end of the day you can create a customer centric communication platform that will enable you to not only enter the target's evoked set but create acquisition programs with strong calls to action that have effective ROI and meet your KPI metrics.  And by the way, this is going to cost about $15k per month for the next year."

By the time Mr. Marketing is finished the geeks are looking at each other as befuddled as they should be, trying to get the guy out the door, and left with the impression that marketing is difficult and expensive.  Well let me tell you it does not have to be. 

Marketing is simple.  It is two things.  And number one is a lot more important than number two. 

1. Getting customers
2. Building awareness of your company and product

In the early stages of a company you can filter any marketing proposed activity through these two lenses.  If you do not understand how some marketing program can help your company to achieve one of these two things don't do it.

Marketing is simple.  Just keep away from all those types dressed in all black.  The good marketing types wear blue jeans. 

Why I Love Purdue

I met my wife at Indiana University.

Skribit In Open Beta

Skribit entered open beta last week.  Since we launched the product in private beta we have spent a good deal of effort making sure that the service and production environment were stable to handle the load.  And the load surely is growing.  We are getting upwards of 25K UV with no marketing spend as this Compete graph demonstrates:

The main customer visible changes as we move into open beta are notifications to bloggers when they get new suggestions and to readers when a blogger writes about a topic they suggested.  We also created weekly activity summaries for bloggers and added the ability to comment on suggestions.

The team is now at work on creating the next rev of the application that is focusing much more on improving the overall usability of the application and increasing user engagement. And that is what Skribit is all about, increasing the engagement between bloggers and their readers.

What's also pretty exciting is that I think we are also getting close to paring down the group to a core team that is going to dedicate more time moving the project forward.   Not sure about this but we could be the first Startup Weekend project to take this step.  When it happens we will announce on the Skribit blog.

Regardless, if you blog give Skribit a whirl on your own site.  If you don't blog make a suggestion in the application on the sidebar for something interesting for me to write about.  Either way the team and I would love your feedback on the Skribit application.

Quote of the Week

"Democracies don't make great products."

Jean-Louis Gasse

Marketing Is Not A Department

One of the suggestions that the Skribit application in my sidebar that has gotten quite a few votes is "Startup Marketing".  So giving my readers what they want I am going to start a series of posts on startup marketing that is based on a presentation that I gave at BarCamp Atlanta called Geek Marketing 101.  The presentation has 10 slides, so there will be 10 articles.  The first slide is entitled marketing is not a department.

For those of you with no formal marketing training it may be helpful to introduce a fundamental concept.  The concept of the marketing mix.  The marketing mix consists of the 4 P's which are product, price, place, and promotion.  (Yes, this is a simplistic view of marketing.  A Pillsbury VP and I came up with over 70 during an interview one day.  It was a test.  I passed.)

Graphically the marketing mix looks something like this:

There are two things that you need to glean about the marketing mix concept to understand startup technology marketing. 

The first is marketing starts with the product concept.   It continues with product development until a whole product is created.  A whole product that solves a customer need in a way that makes them want to tell their friends about it.  And if you have a whole product, a product that has everything that is needed for the customer to buy, you are going to be touching every "function" in the organization.  I don't see anyway around this.  Taking this course of thought to its logical conclusion you arrive at the realization that every employee is involved in marketing.  And in this day and age they are.   

Secondly, promotion, which most people think about when they say marketing, is not some isolated activity that can be bolted on at the end.  It interacts with all the other elements of the marketing mix and if you try to address it as an afterthought after the product has been created you are doomed to failure.  Doomed.

To do successful startup marketing every employee needs to make decisions from the beginning with the potential customer in mind.  And not in the back of the mind.  In the front.

Marketing is not a department. 

Venture Capital Investment Toolkit

Not too long ago a successful serial entrepreneur reached out to me to help with his fund raising efforts.   He has created a good concept, built a good team, and was starting to gain customer traction.  With all this success he felt that it might be a good time to go out and raise a venture capital round so that he could pour on the growth gas.  He was busy and wanted me to put together a 20 - 25 page business plan and an executive summary to support his fund raising effort.  And while I certainly would like the money that I typically charge someone to create such things, we had a very frank conversation.  I told him I did not think he needed a business plan to get funded but I would do a bit of research to make sure.

So I did.

On the down low I asked a half dozen or so VCs if an entrepreneur with a good concept, good team, and customer traction needed a long form business plan.  Not a single one said yes.  One admitted that they had never read a business plan in all their years as a VC.  When a VC asks for a business plan they are not asking for information.  It is a stall.  They telling you "no" without saying the word.

So what do they need?  I got some down low on that too.  I was told by my VC friends that you need four things; an one or two page executive summary, an overview presentation, a technical presentation, and a business model.

A one or two page executive summary is exactly that.  It summarizes your business in a page or two.  It includes such things as a company background, a description of the business, what problem you are solving, what is special about the way you are solving it, a bit about the management team, details about the market you are addressing, and summary financial information.  This is what you send to someone via email.  The overview presentation deck mirrors the executive summary but has a lot less words and you do not sent it via email.  Examples of both can be found on the ATDC web site.

The technical presentation is needed for when the technical due diligence starts.  Again, it is exactly what it is described to be.  A series of slides with increasing detail on the technical architecture of the solution you are creating.  The best way to get this together is to get your CTO type to whiteboard the solution and take detailed notes.  It is often just a few schematic type slides that can be talked through at great detail.

Finally you need a business model.  This is what feeds the summary financial information in the executive summary and overview presentation.  It is an excel spreadsheet.  With assumptions clearly outlined and put together in such a way that you can make changes to the assumptions to ascertain the end result.  This allows you to do two things.  One, change the assumptions as you learn more about your business.  Two, and more importantly, understand the drivers of business success so that you can focus on them.

Again venture capitalists, the guys that write the checks, don't read business plans.  they want an one or two page executive summary, an overview presentation, a technical presentation, and a business model.  And if you don't have the skill set to create this stuff, pay someone to do it.  But don't pay someone to write a business plan that no one is going to read.