Key Leg In Start-Up Equation: Marketing

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The start-up world is build on a two-legged platform of technology and finance. If you don’t believe me, just watch Bravo’s "Start-ups: Silicon Valley," which does its best to tell a story about VCs raising capital and bootstrapping a new venture, together with the freaky and geeky world of engineers, programmers and developers.

Only that story is incomplete. There’s actually a third leg, which you don’t get to hear about. Perhaps you’ll catch a fleeting glimpse of a throwaway “marketing” or “sales” reference, but for the most part, it’s conspicuously absent in this show, industry and market in general.

I would argue — and I am a Madison Avenue guy who eats, sleeps and breathes brands — that the marketing leg is the most important part of the entire equation. Yet, it’s the one that is the most undervalued, underinvested, underutilized and misunderstood.

Most start-ups have the same visions (or sometimes delusions) of grandeur: We’ll get big fast because everyone will just go crazy sharing us with their friends, fans and followers on Facebook, Twitter and whatever else is popular at the time. Then we’ll monetize by selling ads — or just sell to Facebook, Twitter or whatever else is popular at the time.

That statement is fraught with holes and gaping voids, and it begins with the disconnect between today’s empowered consumer and their absolute disgust for interruptive advertising, banal messaging and irrelevant spam.

Contrary to popular belief, brands aren’t lining up waiting to advertise on the 1000th photo app to call themselves the “Instagram of….” Or “Instagram meets….” Hell, they’re barely doing anything on Instagr.am itself.

Brands are trapped within their own identity crisis, trying to figure out whether their start-up infatuation is a one-night stand or something more profound; whether it’s a quantity (scale) or quality (engagement) play; whether their metrics of success are ROI-based (return on investment) or ROI-based (return on innovation).

Then there’s the scope and scale of a “test”, “experiment” or pilot program. Brands are typically noncommittal when it comes to investing anything beyond chump change into a start-up desperate to get some proof of concept and validation. On the flipside, there are way too many start-ups that see an abundance of $-signs when a brand and/or their agency pays them a visit.

The Wild West is back, and the biggest problem is a lack of rules (of engagement), process and set of best practices, upon which to build a solid and enduring bridge of collaboration and mutual benefit.

I believe the meeting of the minds happens in the win-win wheelhouse of marketing. Ultimately, this is where both sides see eye-to-eye. Digital or technology based start-ups are founded on the basis and belief of being able to solve a problem (sit or squat), correct a market inefficiency (uber) and/or change the game (square). Brands couldn’t agree more, especially when it comes to delivering against a consumer insight, human truth and customer benefit.

No one wants a three-legged stool with a wobbly, weakened and/or uneven leg. Isn’t it time we shored up the marketing component of this succinct and compelling equation in order to ensure that start-up monetization, acceleration and evolution is balanced and counterbalanced with brand innovation, differentiation and transformation?

That’s rhetorical. The answer is yes.

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2 comments on "Key Leg In Start-Up Equation: Marketing".

1. Walter Sabo from SABO media
   

   commented on: November 20, 2012 at 10:11 a.m.
   Mr. Jaffe is correct. Unfortunately most VC's including the ubiquitous Fred Wilson brags that he won't invest in marketing budgets. Ironic since most of the start-ups offer marketing services. Enjoy the bottled water.
2. Francis Moran from Francis Moran and Associates
   

   commented on: November 20, 2012 at 11:49 a.m.
   Thanks for the excellent post, Joseph. This is something we are constantly writing about at www.francis-moran.com. There are a bunch of challenges here, though. Even when technology startups do talk about "marketing," they're usually only talking about the very end of the process, the bit where marketing-communications activities are implemented. They're not talking at all about the up-stream strategic stuff, what I call capital-M Marketing, which is all about the customer, the product and the competitive environment in which the product will be brought to market. When VCs disparage what they call marketing, like Fred Wilson is wont to do, they're usually conflating advertising with marketing. They say don't do any of that, and then go on to recommend all the things new companies should do, most if not all of which are marketing activities. You can't really blame them, though. Marketers themselves do a really poor job of explaining the strategic underpinning of marketing and its critical role right from the very onset of a new company trying to figure out who has the pain it could solve, what needs to be in the product to solve the pain, and how it is going to effectively differentiate its offering in a crowded and noisy marketplace. If we're going to persuade our employers and clients -- and the VCs who back them -- that marketing is the essential third leg on the milking stool, we need to be talking about a lot more than just the marketing stuff that could be done. Otherwise, we'll end up falling into the cow manure right along with them.

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