Startups are one of my favorite client types to work with. They’re small and dynamic, ever-evolving and made up of real people with a vision to revolutionize a niche market. They’re also an absolutely fascinating case study to learn from when it comes to marketing and business development. Of course, we all know not all startups make it through the early stages – thankfully, I’ve had the unique opportunity to learn invaluable lessons from every startup I’ve consulted for. So let’s jump right into it, shall we?
The Burn Says…it’s Not Working
- I’m putting it at the top of this list because no amount of brilliant strategics will save a startup with a burn rate that is eating them alive. It sounds dramatic because it is. Popular phrases practically drilled into startups these days like: “You have to spend money to make money” aren’t wrong, but they are misleading in that they don’t highlight the immense calculation that should back decisions surrounding money. I have worked with too many startups that ignore an unsustainable burn rate and save the Investor Relations work till it’s nearly too late. So watch your burn rate, trim excess expenditures ferociously and have a clear IR strategy in place in the early stages of development.
- On the money-front: budget like a maniac. And don’t just budget for the areas you can predict, train yourself to budget for areas you can’t even foresee yet. Keep a ‘miscellaneous’ category in your budget that can be drawn from when an invite to sponsor a massive conference emerges or you encounter a team member you absolutely have to bring on board. Just because you can’t see the future doesn’t mean you can’t reasonably budget for it.
- Two caveats to this conversation I have to add: saving money and having an aggressive fundraising strategy in place are two conversations I have found startups place on a back-burner to developing their product. In my opinion, once an idea has had time to ferment into a feasible startup – a fundraising strategy should be that startups first major focus. Whatever you do – do not neglect the money-question for long, however daunting it may seem.
Do Not Bank on “Going Viral”
- The term ‘viral’ has been awarded far too much credit in my opinion. “Going viral” is now as sought after as a marketing scheme as “crowdfunding” is as a fundraising strategy when in practice the two strategies respectively lead to disappointment and frustration for the majority of startups that pursue them. There is no substitute for the gradual maturation of a well-researched strategy when it comes to developing a startup that survives its first couple years of business.
Creep Your Customer. Yes, Creep.
- Analytics is the professional term for it and I can’t count the number of startups I’ve walked into that haven’t set any up at all! There’s really no excuse. Whatever marketing channels you’re using, whatever software, platforms, CRM’s you’re using – put the infrastructure in place to accurately compile data so you can learn from it. When it comes to my area of expertise – marketing and business development a channel map means nothing if I can’t port the data I bring in from those channels into Analytics to dissect, analyze and generally obsess over it. On that note – once you have data compilation tools in place – make a habit of pouring over the data regularly in an attempt to understand every detail of your customer. Everything from their political views to their sleeping behaviors can influence their buying habits and it’s important to understand who your customers are if you want to make more of them.
Never Lose Your Cool
- Everyone knows that the startup life is not glamorous. The free-market is a jungle and only the hungriest and most adaptive survive. That said, watching a startup panic and make reactionary business moves when faced with unflattering data is cringe-worthy and futile. If you’re leading a startup try not to let your emotions get the best with you when you’re disappointed with the performance of your project. There’s going to be bad data, there’s going to be a lot of mistakes and there’s going to be a lot of guessing and checking, so, trust your strategy, and trust your team to stay adaptive and reasonable and a lot more good will come of it.