A CEO of a high-tech start-up recently lamented to me:
I was told I needed marketing, so I hired a PR firm and after 6 months and a lot of money, I got nothing.
Paraphrasing, a local venture capitalist admits:
Most CEOs lack marketing skills. They need marketing help.
Yet his portfolio is dominated by companies without dedicated executive marketers.
According to the uninitiated,
PR = Marketing = Advertising = Branding = Logo + Slogan = Lots of $$ and yet, sales suck.
Both the initiated and the uninitiated think sales suck because so does the web site, and the collateral, and the webinars, and the white papers, and the demo, and there are no leads, and they’re attending the wrong trade shows, and there are neither counterpoints to the competition nor answers to buyer objections, and the product is missing this feature — no that feature — well, really, both features.
Is this really what’s wrong?
In a seminar on venture financing we put on the other night, one of the presenters rightfully stated that the amount of money the entrepreneur is asking for will be important in determining the type of capital investors willing to fund the opportunity. $3M, for example, is often considered to small for many VCs. While true, I’m not sure the entrepreneurs got the point.
Typically, they’ve already decided they want VC money. So they pick the sum of investment based on the type of money and build their plan around that.
I am curious, do these opportunities get funded? Do “top-down” business plans, if after months of tweaking the spreadsheet numbers add up, get funded?
If they get funded, is the CEO held accountable to the revenue projections of the first several years of this top-down business plan? Is that what leads companies to the “classic failure” of many start-ups?
So I have lots of questions. Do I have any answers? Here’s one: there’s got to be another way. Maybe a bottom-up approach:
Who is your customer? I don’t mean does he wear glasses, or whether he’s a he or if he wears Hawaiian shirts on casual Friday. But who are all the people who would benefit from your technology? And which is the one you should be addressing.
There are at least a dozen criteria you should use to determine the answer, e.g. pain level, competition, price/budget, sales model required, partnerships needed, product fit, segment size, core competency, cost to reach buyer, length of sales cycle, proliferation potential, etc.
In other words, which is your optimal market segment? Your entire business plan will derive from the answer to this question. This is market-driven business planning and its marketing worth investing in. BTW, It’s more important than your logo.