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OK, fail fast, but fail smart!

While on my way home from buying a lottery ticket today (I am sure to buy from the store that has sold the most winning tickets), I got to thinking about failure.  We've been hearing a lot about it recently:

Failure breeds success. Fail fast, Fail often, or fail early, but just fail!  That way, you can be sure VCs will respect you in the morning.

It is interesting to me that a concept that seems precise -- failure -- can actually have a variety of meanings.  A story passed around a campfire loses its original meaning because words have different connotations depending on context.

Failing fast, early and often without learning from your mistakes -- without a process for learning -- is merely falling flat on your face.  The cheer "failure breeds success" is a self-help gimmick, typically called by MLMers leaning upon metaphysical beliefs Read More »

Oh no, not another pitch template

This is an oft-repeated subject.  I've reviewed 4 decks in the last week, however, so I'm going to give you my perspective while it's all fresh on my mind.

First, even if you are not seeking funding, go through the exercise of creating a pitch and presenting it to others.  The process of creating a good pitch forces you into highly focused, critical thinking that can only serve you and your business well.  At the very least, it's the beginning of a sales pitch, or a partner pitch, etc.,   In fact, it's not a bad 1st exercise for gut check #1.
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Customer Development Gut Checks

Through the evolution of their start-ups, entrepreneurs will face many  inflection points, at which decisions made or not made will determine their future.   The painful truth is that a wrong turn may lead to its demise, whereas a right turn leads to another inflection point.

Relevant to ongoing discussions about Blank's "Customer Development," I wish to highlight a few of these "inflection points."

The first step in Blank's model is "Customer Discovery."   This step seeks to answer this fundamental question: Read More »

Mumford's Law and Vision vs. Customer

Lewis Mumford (1895-1990) was an American Architecture and Literary critic, as well as Sociologist and Philosopher.  I often attribute a particular quote to Mumford, though I can't seem to locate the source.  When asked where to put a sidewalk, Mumford responds:

See where the people walk and then pave their path.

How many times have you seen two sidewalks intersecting at 90 degree angles, with worn grass cutting the corners?

There's a fine line between executing on your vision and listening to your customers.  Consider Mumford's quote, thinking of the sidewalk as the "vision" and the path as "customer needs."

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Marketing for Technologists

As I mentioned before, non-marketing people tend to view marketing as this expensive, monolithic necessary evil, dominated by wasteful "Madison Ave" style marketing, i.e., advertisements, logos and slogans.

In a nutshell, Marketing=PR=Ads=Marcom=Branding.

This is far from the truth.  Understanding the basics of marketing and whom to hire for marketing help, is critical for CEOs and technologists to understand.

The key thing to understand is that the type of marketing is highly dependent on Who you are, Who your customers are, and What stage your business is in.  Here's a quick and dirty primer:
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Market Segments

As with most marketing terms, the phrase "market segment" is often tossed about carelessly by entrepreneurs, technologists, and yes, even by some marketers. To my mind, however, segments are a cornerstone of market-driven business plans. Market segments are fundamental to a process-oriented view of taking technology to market and building business plans from the "bottom up."

In 1991, Geoffrey Moore in Crossing the Chasm defined a market segment as:

  • a set of actual or potential customers
  • for a given set of products or services
  • who have a common set of needs or wants, and
  • who reference each other when making a buying decision.

Most of this is pretty intuitive.  In a nutshell, a market segment is comprised of like buyers who share the same pain.  But there's more to it.   The reference part trips some people up.  The key point to understand is that the customers and potential buyers must be willing AND able to reference each other. 

So, for example,
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Who "Gets" Marketing?

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.
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Process-Driven Sales and Marketing

A couple of years ago, a colleague and I began developing a process-oriented way to lead companies toward gaining market traction.  The idea was born out of a conversation my colleague had with a partner at Sequoia Capital about how to significantly reduce, if not eliminate, the classic high-burn, low return tactics of typical B2B software start-ups.

So to oversimplify, the classic failure might look like:

  1. Build financial model based on revenue and go-to-market assumptions and present to the Board;
  2. Develop product;
  3. Hire VP of Sales w/ relevant contacts;
  4. Build sales plan based on promises to the board;
  5. Hire field sales team;
  6. Hire marketing person to support sales;
  7. Burn cash, miss milestones;
  8. Go back to board with new assumptions;
  9. Build sales plan based on new promises;
  10. Rinse. Repeat.

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