Marketing – The biggest hurdle to start-up success?

Living in a town that has a large university, a vibrant entrepreneurial community, and one of America’s national laboratories, I have lots of opportunities to meet people with big ideas. Here is how the conversation usually goes:

ME: I love your idea but it is really going to depend on an ability to scale quickly.

NEW BUSINESS HOPEFUL (NBH): Oh, that’s easy. We’ll just add more servers.

ME: No … I mean how are you going to get lots of people from all across the country to use your service?

NBH: Oh that won’t be a problem.   This is such a cool idea that everybody will want it.

… And it usually goes downhill from there.

I am absolutely amazed at how many great entrepreneurs have no marketing plan, no budget for marketing, not even a clue that they NEED marketing.

And it’s a shame because I LOVE helping people with a good idea, a vision, and passion. But all the passion in the world is not going to make you a dime without some notion of how you are going to market your product.

This is not a problem contained to my local community.  I find it everywhere I go. Last year at SXSW I did not meet one single start-up with a decent marketing plan. With a few notable exceptions, most economic development organizations and chambers struggle to provide meaningful, consistent marketing support for new business owners.

My friend, mentor, and teacher Peter Drucker famously said that a company is only marketing and innovation … everything else is overhead.  That is an extreme way to make an important point.  Without customers, you are nothing.

I spend a lot of time mentoring new business owners because I firmly believe this is what makes the economy tick.  There is no shortage of ideas.  Capital is tight but not impossible to find.  But how do these companies access the marketing expertise they need to be successful?

Chronic marketing problems for entrepreneurs:

  • They often don’t even know they have a problem.
  • They know they have a marketing problem but don’t have the budget to address it because it has all been spent on prototypes
  • They are bootstrapping and working two jobs so even if they know they have a problem they are too tired to do anything about it.
  • They’re not too tired to learn, but some people just naturally do not “get” marketing.
  • There are few reliable, inexpensive methods to get targeted, quality advice … at 2 a.m. when they need it!

It seems to me that a national foundation for entrepreneurial marketing could go a long way toward helping worthy start-ups along and the economy right with them. Maybe there is something like this now?

What do you think?  Are you helping small businesses succeed? What are some exceptional resources that you recommend?

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  • Mark,

    I like that you mentioned local Chambers and Biz Development Organizations… Though I applaud the effort (because otherwise there would be NOTHING) these organizations DO NOT do start-up and local businesses any favors in marketing.

    In my personal opinion this is because of the Revenue structure these organizations have developed. Marketing is a function of doing business with these organizations not a Product created out of the relationship.

    The goal is to get these start-ups to spend more through the Chamber or BizDev and that stifles growth…

    I’m not Anti-Chamber or BizDev I just think when it comes to Marketing they lack real vision or talent.

    Thanks!!

    Ryan H.

  • I think a lot of the problems are usually a combination of factors, that all come down to the fact that if you are spending time on marketing then you are not spending time on your product or on your existing clients. It becomes a feast or famine existence that can be hard to live successfully. You have no clients, so you market. You get clients from your marketing and then you must place your time with them sacrificing your marketing. Your contracts end and you and your clients move on and now you again are back at square one scrambling to find clients. It’s a horribly grinding process that can defeat some of the most driven people with some of the most inspired product.

  • Thank you Mark for this important “marketing” post I’ve bookmarked for time to locate the resources in response to the question you raised… ~Rae

  • Here’s an entrepreneur point of view from someone who has been involved in a few start-ups (with another on the way). When an entrepreneur has an idea AND knows the importance of marketing, it turns out it’s pretty HARD TO FIND the right marketing service to work with. It seems that marketing services fall into two categories: freelancers and full service firms. Very few cater to start-ups.

    The freelancers are generally very limited in their skills. In fact, many one hit wonders are usually singing one single song: people-must-find-you-through-SEO; you-must-have-a-great-logo; or I-will-blog-and-tweet-for-you. Rarely do you find individual marketing talent sitting in their Panera Bread office that really understand the world of start-ups and going big fast.

    On the other hand, full service marketing firms are no easier to work with. I suspect most firms see start-ups as clients with little or no money. I don’t blame them really, if I was an account manager for a marketing firm I think I’d much rather land the local car dealer client (with endless advertising) than a guy-with-some-website and is too cagey to talk about how much funding he really has.

    I have also met my share of full service marketing firms that say they “love start-ups.” But in the end, their proposals reflect the same old one-size-fits-all marketing plan they offer all their local clients. $50k for a new website, logo, and a couple YouTube videos makes an entrepreneur scratch his head.

    I know I’m generalizing here, and I’m sure their may be great marketing resources out there (even in our city, Mark), but the entrepreneur can get very frustrated finding the right help. Then, the worst trait of an entrepreneur kicks in: “aw hell, I’ll just do it myself.”

    It would be great if someone, or some firm, could truly develop a set of marketing services geared specifically toward start-ups.

    (And as a side note: if there are any marketing firms catering to start-ups in Knoxville or anywhere in TN, shame on you for not marketing yourselves that way. I know a number of entrepreneurs struggling to find that right marketing partner. But no one knows where to find you.)

  • I think you are exactly right Frank. I was on the other side of this. I devote time to helping start-ups but I wearied quickly of people expecting something for nothing (forever) and people with big ideas and no money. That’s why it’s important to have some money ear-marked for marketing if you are really going to go for it. Any money worth their salt is not going to keep working for free and that is exactly the help a start-up needs. Thanks the superb comment.

  • Terrific post, Mark. I didn’t know it was Peter Drucker who said a company is only marketing and innovation. Marketing is critical in business today – and vastly more important than sales – after all 70% deals are done before sales even meets the prospect.

    Good marketing books including Marketing Strategies for the Complex Sale by Ardath Albee http://www.emarketingstrategiesbook.com/

    A good shorter book is The Truth About Leads by Don McDade. http://www.pointclear.com/the-truth-about-leads/

    Thanks for your appearance on Mad Marketing TV Mark. http://madmarketing.tv/2012/02/16/return-on-influence-with-mark-schaefer-madmarketing-tv-episode-13/

  • I have done quite a bit of work with government orgainzations, and even some judging of competitions and can say that there are some really great things going on out there, paticuarly in NYC and Silicon Valley (naturally) but also in small towns who know they are not going to land the company headquarters so they MUST nurture their local talent to keep people living there and employed.So, it CAN be done if there is an awareness of the opportunity. Thanks Ryan!

  • In my mind, that is exactly the type of support a local chamber should be helpiing with. Entrepreneurs do not need another freaking class on Facebook marketing. They need intense support in terms of real expertise and resources. I have been learning a lot about the VC world and when you get to that level, a lot of this is supplied by the investment community if you canget that far. Chambers need to act more like VCs. Thanks for the real-world view Brian!

  • Great. That guy in the social media from scratch videos looks kind of familiar and oh-so handsome!!! : )

  • Hi Mark, You mention that you spend a lot of time mentoring new business owners. Why do you think these particular owners have earmarked monies for marketing vs. those who don’t? For example, do they have a background in marketing or sales rather than engineering or, say, finance? Are they are “serial” entrepreneurs who have learned the importance of marketing over time?

    Agree with most thoughts already posted – perhaps there is not a national foundation for entrepreneurial marketing or satisfactory solution as described by Frank, because there is not a healthy demand. Before I launched my business I interviewed several colleagues who advised me not to target startups because the willingness to pay and thus funding just wasn’t there.

  • Pavel Konoplenko

    Excellent post. I agree that marketing is an absolutely vital function of the business. This problem isn’t only limited to small businesses and entrepreneurs. This problem is even worse in the creative field, such as musicians and artists. Their problem stems from the misconception that talent and creativity trump everything – when unfortunately it does not.

    A business can have an amazing product, but if no one knows about it, then it’s worthless. I’ve spoken to a few hip hop artists who have great talent, but are doing absolutely nothing to market or promote themselves. They upload their songs to YouTube or SoundCloud, and then…. nothing. Maybe they’ll put up a Facebook message linking back to the SoundCloud, but that’s it. I’ve seen it happen so often and I keep telling them that success doesn’t come from just talent, you need to show off that talent. Artists don’t become huge from talent alone; they need to plan, or at least understand, how to promote themselves so the right audience hears their music.

    Marketing is so important for a business. You can have a crappy product, but if enough people know about it then you’ll be able to make a few sales. But if you have an amazing product, but ZERO people know about it, then you’re definitely not making ANY sales.

    The function of marketing to a business is akin to speaking to a person. A person may have the greatest idea, but if they don’t express it and present that idea to the world, then the idea will idea. A business can have the greatest product, but if don’t show it, then it too will die.

    I used to regret majoring in Marketing in college because I felt like I didn’t learn anything concrete – especially because everything changes so quickly in the marketing world. After a while, everything just seemed like commonsense to me, and all the classes centered around similar ideas of presented a message, building a brand, communication, etc etc. But now I realize that to most people it’s not commonsense. Most people don’t see the direct value of marketing the same way I do now after learning about it for 3 years. I guess the most important thing I learned was the inherent value of marketing to a business.

  • Although I’ve made many comments on the {grow} blog, I don’t recall ever shamelessly plugging myself or the services of my B2B Marketing Agency, MLT Creative. I will try not to cross that line too far this time but I must respond to some of the great ideas and questions included in the article and the comments thus far.

    I believe there are very smart answers for startups related to their unique marketing challenges before and beyond any issues mentioned already by Frank about the problems with either freelancers or full-service agencies.

    If an idea is truly remarkable, the entrepreneur with that idea has the most important ingredient they will need for their marketing. The next thing they need is a marketing resource (either freelance or full-service) that truly understands INBOUND Marketing, Content-driven strategy and how to take on some risk and a reasonable amount of deferred reward (pay for performance model) in a fair agreement (both businesses in the agreement must be ethical and entrepreneurial).

    I don’t want to start a debate with my comment about the merits of inbound marketing but I will say that our agency believes in it and we practice what we preach to our clients and prospects (all B2B), including startups. The co-founder of Hubspot (the leading Inbound marketing platform), and co-author of the book “Inbound Marketing”, Dharmesh Shah is one of the world’s leading experts on startups and marketing. in fact, Dharmesh created a dynamic community at http://www.onstartups.com that has existed for years and is full of helpful ideas on both topics.

    Please forgive me for any self-promotion but as a B2B marketer myself, I wouldn’t have been doing my job if I hadn’t piped up.

  • I think you were given good advice. Unfortunatey it is quite difficult to build a marketing business with a healthy diet of start-ups, at least that has been my experience. I take on start-ups any way because I believe that kind of innovation is critical to the economic health of our country. So, for example I have taken on a start-up as my “summer project” but it will not be profitable for me. As I say in the article, overlooking marketing and a marketing budget is chronic, and lethal.

  • Tremendous comment Pavel and you’re right. What might seem like common sense is not for most!

    I think the analogy to the creatives is accurate. I see the same attitude in business, that the idea trumps all. It doesn’t trump anything unless you have customers, and to have customers, you need marketing!

  • A very appropriate comment Billy from a true voice of authority. Thanks!

  • Thank you Mark. I agree!!! ; )

  • Ryan, I was a Chamber member many years ago, and also found as you mentioned “…they lack real vision…”

    Plus, their self-orientation stifled my growth, so I left with the realization that until awareness, and acceptance that these issues exist there is going to be no solution to helping start-ups with their marketing efforts.

  • Marwaan Sasman

    Thank you so much for this insightful post!
    The comments and discussion it has generated was even more informative!

    An entrepreneur has so much passion and vision, if only they translated that into their brands and marketing. Too many start-ups in my experience create “marketing” as an afterthought. Thinking of it as a “logo” or “banner ad”, and completely missing the key foundation of marketing: To communicate your message and value in EVERYTHING you do.

    For the greatest success, marketing (brand strategy) should be deeply embedded into the business and even into the product / service as well.

    I love working with entrepreneurial clients who understand this, and the creative work and strategy that we create together is phenomenal. Successful marketing always communicates the true passion and vision of the entrepreneur, and this always connects with people – if more start-ups spent time on it, they’ll notice not just the attraction of clients, but the credibility it adds to their investor pitches, partner proposals and even competitor relationships.

  • So true, it’s why I’ve turned my attention to working with young entrepreneurs

    One, because I love the go getting, forward thinking nature

    two, because so many great ideas don’t consider the true nature of marketing. Creating a solid Brand (not just a logo) is so important in modern day success. We’re in such a crowded world

    Matthew (Turndog Millionaire)

  • An important post.

    I think most people have a misconcept or no concept at all of marketing. They just don’t get it. Your quote from Drucker is so apt, because if you get this stuff wrong, there is very little else, other than dumb luck – which I am convinced accounts for a surprisingly large percentage of sales.

    As far as chambers are concerned, this kind of support is exactly what they should be doing. Our local chamber has networking events, some free seminars and a lot of expensive training. They posture and postulate, but nothing of concrete is offered.

    Here in the UK, we have startup Britain and loads of similar stuff, and they try to do a good job and do supply great information, but I don’t think many people look at it because it is not always well presented and it takes too long.

    The point about time – between working on and in the business – is well made. Businesses need a single, clear resource, perhaps with modules that can be followed.

    Of course, the ideal would be to begin to teach, or at least make young people aware of this stuff in scools and colleges. Then there might be a more natural progression to more sophisticated learning and understanding.

    Also, it must be said, a lot of so-called experts are nothing of the sort.

    Nevertheless, we need to create a positive environment where people with great ideas (or even quite good ideas) understand that they can’t be good at everything and seek the help they need. And know that there are resources to help them when money isn’t available.

  • If you’re a technology company you should be the book from Eric Ries (@ericries) – The lean startup. Develop a minimum viable product, test the market and only consider scaling when you’ve got a product/market fit. It certainly changed my attitude to developing products. With a technical background it’s easier to develop the product than market it!

    Also worth buying is the startup owners manual by Steve Blank. One of Steve’s great tips is ‘get out of the building’. Technology guys loving sitting in the office doing stuff.

    Neither provide a full Marketing plan but they both help change the mindset particularly of a technology organisation.

  • Pingback: Marketing – The biggest hurdle to start-up success? | fabriziofaraco()

  • Great post – where to start?! Much like you, I love working with start-ups. But, as you and others have mentioned, it’s rare that you find start-ups that have the budget or willingness to pay for help.

    One of the problems I’ve seen firsthand is business owners think they can do marketing themselves. While some certainly have the skill to do that, many do not. They flail about trying all sorts of different tactics instead of building a thoughtful plan and sticking to it. I hate when I see this happen, but it all too common.

    I have seen some businesses that have offered specials or deals just for start-ups. For instance, a design firm I use put together a discounted branding/website package specifically for start-ups: http://proofbranding.com/launch/

    They want to invest in the community, but they also hope that by helping the startup get off the ground, that the company will come back to them when they have additional needs. I’ll be interested to see how this works for them.

    Nashville has a great start-up community and there are some wonderful resources here. We have an Entrepreneur Center that offers mentoring and funding for start-ups. Jumpstart Foundry is an accelerator program with seed funding and mentorship also. Certainly, there is more that can be done, but I think some of these resources is why Nashville is starting to gain some attention as a great place to start a business.

    Love that idea about a national foundation for entrepreneurial marketing! I think perhaps you’d be just the person to start that! 🙂

  • Good luck with that Matthew!

  • Very interesting comment about luck. The unfortunate thing is, I believe your right but those “lucky successes” become marketing case studies. Perhaps marketing had nothing to do with it! : )

    I am encouraged by the number of universities and even high schools in the U.S. that are offering entrepreneurial curriculums. That is the right point to educate — before they get stressed with deadlines and financial pressures. Probably the best-near-term answer for communities.

  • I got to meet Eric and interview him at SXSW:
    http://www.businessesgrow.com/2012/03/14/lean-startup-movement-turning-some-heads/

    I agree that both are good resources but also seem to depend a lot on luck. What if innovation were based on real marketing insight?

  • Not. : )

    Brilliant point about the DIY mentality. What is with that? Marketing is NOT easy!!!

    Nashville is doing the right thing by having a central resource that seems to be focused and well-funded. We’re flailing around over here on this side of the state and it’s too bad because the entrepreneurial energy here is electric.

  • With most startups, I prefer Steve Blank’s term “customer development” to the term marketing, because most startups haven’t yet established who their product is for and what problem it solves, solving it completely (what Eric Ries calls achieving Product/Market fit). Like you, I find a lot of entrepreneurs think that because they love their product, it’s self evident that “everyone will want it”. This is never the case. The idea that a marketer can just start promoting a product and it will succeed is a false assumption. Until you have those first early customers who are paying for a product that does a good job solving their problem, your product is unproven, and it is a waste of time and money to try to expand the customer base.

  • Excellent comment Billy. Just gave it a +1.

  • The DIY mentality is bad news. I actually met with a prospect (an owner of an accounting firm) who told me “ya know, I don’t think marketing is that hard. I’m sure I could figure it out myself.” I told him, “ya know, I’m sure I could figure out how to file my own taxes too, but it would take me three times as long to do it and I’d more than likely screw it up.” Why is it people think they can do this without any training or expertise?! It drives me batty that marketers “don’t get no respect!”

    And yes, Nashville is making great strides, but we have a long way to go. I hope some of the resources here make it’s way east!

  • Thanks Aaron! 2013 should be the year America gets the opportunity to “Ask Aaron Lee” in person. I know of a great event in Knoxville next year… #SoSlam

  • I fall into the same camp as Billy. I’ve been reading your blog for ages and this particular post really resonated.
    We used to think bigger was better, but since we chose to focus on small businesses, our revenue (and client base) has grown dramatically. Why? Just as you pointed out, there is a huge unmet need for marketing support for small businesses. Some lack the expertise to do their own marketing, while others quite simply lack the time.
    The solution that these small but growing companies need is a true one stop shop – a “marketing back office” if you will. The challenge is finding this at a price that makes sense. but
    GREAT post Mark! Thanks for getting the discussion started!!
    Kathleen Booth
    Owner & CEO
    Quintain Marketing
    http://www.quintainmarketing.com
    @Quintain

  • They test to see if they have the right approach and adjust their direction based on results. But if you have really marketing insight at the start and then follow on with an Eric Ries type approach you get the best of both worlds.

  • Thank you very much for the excellent article, as always. It’s a great point often missed by entrepreneurs, but have also seen myself do the same thing while pursuing my own idea! I think the reason is that most entrepreneurs are wildly optimistic and believe the product will sell by itself. Consumer marketing is also quite hard and unpredictable – stories of instant successes probably do not help either, but no excuses for not thinking it through!

  • Oh I agree! Aaron would be a great speaker for #Soslam 13

  • Agree!

  • That is a fantastic response to the customer!

  • We are in complete agreement sir! Thanks for the comment.

  • Thanks for adding your view.

  • You’re right. Certainly there are plenty of examples of viral successes but I don’t think that kind of thing can be planned! Many thanks Alex.

  • Plus 100 : )

  • Excellent post Mark.

    I am a Marketing Consultant, working primarily with start-ups and small businesses. I am also a small business myself, so this all hits home!

    I could talk all day about this, but you will quickly be bored, so I’ll focus on three, likely unrelated thoughts that tend to come up in more and more conversations:

    1) Marketing is the generation of demand, and Sales is the process of converting that demand into revenue. So, as you say, the company is nothing without marketing. Furthermore, without adequate marketing (and positioning in particular), how is a salesperson supposed to know what to sell? Or how to sell? What is the value proposition? What are the campaigns running right now? What is the corporate pricing strategy? And on it goes…

    2) Social media is an incredible tool for small business. The first reaction I always get is: “I don’t have time for social media and how am I supposed to come up with all those things to say?”. I tell them: “Don’t!” Don’t worry about creating content. Leave that to people like this guy @markwschaefer, @marketingprofs, @unmarketing, and so on. Share. And more importantly, don’t think of social media as broadcasting only. Use social media to LISTEN and LEARN! There are so many nuggets of valuable marketing lessons out there. If an entrepreneur spent 5 minutes on Twitter, he/she’d surely get at least one good idea! There’s incredible value in that alone.

    3) For small businesses, it’s all about the allocation of limited resources. And resources include BOTH money and TIME. Every marketing idea is a good one, but they don’t have the resources to execute them all, so they have to be choosy. Use a planning exercise to examine each marketing idea and determine its ROI. And in the case of marketing (where it’s hard, if not impossible to measure ROI), R = the extent to which the idea helps you reach your marketing objectives, and I = the investment of time and/or money to do it well.

    Anyway, I could talk all day about this, so I tried (unsuccessfully) to keep it brief, but hopefully there’s a nugget of usefulness in there somewhere.

    Thanks Mark… one of my trusted sources for my small business!!

  • Thanks, Mark, for writing about the important role of marketing.
    As you pointed out, it’s a challenging role, and comes with a lot of responsibility. But that’s increasingly the case for many other roles as well.
    I believe that given the proper focus, attention, and resources already allocated to other core areas in companies, marketing, too, can become an integral key contributor to companies’ success.

  • Glenn this is a tremendous addition to the conversation and a great blog post in its own right! The points are not unrelated at all. I think they are highly relevant and meaningful. I preach the very same sermon to my clients. Thanks for the great comment!

  • It will have to be. You can’t be a company without customers! Thanks Sirpa!

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