Marketing Tips Tech Companies Must Follow to Survive
Politicians of all stripes universally tout the need for entrepreneurs to help keep our economy recovering and growing. But lately the rate of new business formation has been sagging. And worse yet, the sobering reality is that 90 percent of all startups fail.
It's popular, and sometimes appropriate, to focus on government's role in restraining the startup culture with tax and regulatory policies, but too often avoidable failures are self-inflicted. According to one detailed analysis, nearly half of startups fail because the company made something the market just didn't want. Put another way, those entrepreneurs may have understood technology but they didn't understand their market.
Most tech startups take as an article of faith that a clever and nimble company with just plain "awesome" technology can "disrupt" a market. Think of this as a Millennial-ized version of an old trope: build a better mousetrap and the world will beat a path to your door. Sometimes it happens. Mostly it doesn't.
Who hasn't heard a start-up CEO articulate something along the lines of "we have no competition," or "we're totally unique." Every product has competition, even if that competition is the status quo. A product (supply) without a market (demand) has no future. It's basic economics.
Some may say that the talented engineers who create start-ups make (the generally flawed) assumption that their tech abilities naturally translate into marketing domains. Others may posit that the gender-challenged tensions in tech (an issue much in the news these days) contribute to this dynamic because marketing (so far) tends to attract more females than does engineering.
The reality is, while these issues don't help, the core challenge is not so much misplaced confidence or even gender bias, but the tendency to see marketing as more of an opinion-based or ‘soft' discipline than, say, coding. It is remarkable how often a "data-driven" start-up CEO will totally miss the mark when it comes to building a facts- and stats-based marketing strategy. Markets and marketing processes are knowable, proven, and drive growth. If you peel back the cover of nearly every successful company you find a sophisticated team-regardless of gender-of economics-savvy, data-driven marketing experts. (Memo to startups: let's stop calling them "growth hackers," it's redundant.)
So, for my fellow Millennials pursuing the dreams of technology disruption, herein are a few guidelines from the frontlines of marketing for small tech companies. Some of this may seem obvious but execution (and experience) matters. A successful framework for a marketing strategy doesn't emerge from advertising or press coverage but from answering two sets of key questions.
The "do you know" questions:
* Do you know exactly who is buying/using your product, with specifics such as gender, age, geography and, if business-to-business, department and title?
* Do you know exactly how you compare to comparable products or even "no-buy" decisions?
* Do you know how your product impacts your customers' budgets, operations, and culture?
Detailed answers to these foundational questions defines your market, gives your marketing and sales team answers to tough questions, and, critically, shapes future marketing and product decisions.
Answering these questions requires data-driven tools, market research, case studies, focus groups, surveys, perhaps a customer advisory board, etc. And you need to be ready to adapt if unexpected answers emerge. Maybe you thought your product was geared toward Fortune 500 CFOs, but in fact CEOs at small businesses are more engaged and productive. That requires changing content, webpages, targeted events, channel partners, and potentially even product features.
The "do you have" questions:
* Do you have enough money allocated to marketing?
* Do you have the right marketing team?
* Do you have the necessary tools to reveal accountability metrics?
Every company has budget constraints. Sometimes (and sometimes necessarily) marketing budgets get fixed before market research has been done. But this is problematic because some markets are far more expensive to access than others. Market research should get done before locking down budgets and, especially, before making hiring decisions. And properly aligned talent always matters. You would never hire a code writer to fill a slot for a mechanical engineer, but it's amazing how often that kind of misalignment turns up in marketing hires.
A word on accountability: A former manager (I can't take credit) once observed: accountability is to marketing as diet is to getting in shape. While it's not as much fun as sponsoring conferences, creating promo videos, or "team-building" activities, building a dollar-centric and results-driven accountability system is how you deliver results. (There are plenty of accountability tools suitable for different budgets and markets.)
Tech CEOs can take a page from consumer fashion industry execs who instinctively understand the value of fact-driven market differentiation. Fashioniestas know well the difference between, say, Gap and Roberto Cavalli. They both sell clothes but they have very different buyers, channels, storefront locations, and marketing strategies.
Competent marketing, like competent engineering, is essential. Combine both with "awesome" technology and a company has a far better shot at joining the 10 percent of tech start-ups that actually succeed.