13 Strategic Marketing Imperatives Every Startup Must Get Right Actions startups must get right to avoid losing time, money, and market position 13 Strategic Marketing Imperatives Every Startup Must Get Right Lisa Fernow President Fernow Consulting With thanks to my clients and the entrepreneurs, investors, and subject matter experts who contributed their insights.

But first, a bit about you… Startup experience? Marketing experience? B2B? B2C? B2B2C? For profit / social venture?

A bit about me… Strategist Global marketing exec lisa.fernow@gmail.com A bit about me… Intrapreneur Roles Strategist Global marketing exec Customer insights professional Iconic brand building 25+ years experience Cornell: Johnson School Advisory Board UW: Foster School of Business Executive Education Advisory Board Guest lecturer Executives in Residence consulting Business plan competition judging Fernow Consulting (2000) Help companies innovate more successfully Startups Fortune 500 enterprises Visionary non-profits Sample Clients This is me … Write down my email address – and if you email me I’ll answer!

Marketing can make or break your startup’s success Why should every startup pay attention to marketing? Because it can make or break your success. Here is one industry observer’s take on the top reasons CEO’s give for startup failure. And btw 9/10 startups eventually fail. (Not trying to discourage you here, just recognize that doing a startup is very hard work and not for the faint-hearted!) The source for this is CB insights based on their analysis of 101 startup CEO post-mortems. Most startups failed for multiple reasons so these numbers won’t add to 100%. The green bars represent areas where marketing plays a role. You can see the most frequent reason given is that the company developed a product there was no market need for.

What exactly is marketing? You can see from the earlier slide that I have defined marketing more broadly than you might imagine it to be. It’s not just advertising, promotions, social media and PR. Marketing refers to the actions a company takes to identify an unmet need, develop compelling solutions that competitors can’t match, bring them to market, and accelerate performance to deliver a sustainable profit Successful companies place the consumer / customer at the center of their innovation process Marketing works in close collaboration with other functions Marketing actions are actually undertaken by everyone in the company The dilemma that startups face is that you need to make critical marketing decisions before you can typically afford to bring in a CMO. But if you don’t make the right decisions you’ll end up having to repeat work later, costing time, money and market position. This presentation discusses 13 strategic marketing imperatives to focus on – a checklist for CEO’s and marketers. As you listen I’d like you to consider which imperatives seem most useful to your situation. This can depend on a number of factors: what type of business you’re launching, where you are in the process, and who else is on your team. At the end I’m going to ask for a show of hands to see which you chose.

1. Validate the market need Validate the market need exists, and sharpen your knowledge of the opportunity What exactly is the problem you are solving and for whom?   Is this a substantial problem across a large, definable market? How large? What solution are you replacing and where will your volume come from? What are your strengths and weaknesses versus existing and emerging competitors and substitutes? Why do you want to enter this market and why will you succeed better than anyone else? How do you know you are entering at the right time? These are the questions your investors will ask, and validating the market need will help you focus your efforts as a company which can mean shorter time to market, and greater market success. How you do this: by doing secondary research and talking to potential customers, partners and experts

2. Understand your eco-system Identify and talk to… Consumer segments Channels Strategic partners Understand their needs and purchase process Identifying and talking to your key potential consumer segments, channels and strategic partners is the first real test of your idea. Who are you getting interest from? What need does this fill for them? What’s missing in their lives that your product or service can provide? How would they buy your product or service – who decides / how / how long does it take etc. Startups take off when they can activate network effects. DEFINITION of 'Network Effect' A phenomenon whereby a good or service becomes more valuable when more people use it. The internet is a good example. Initially, there were few users of the internet, and it was of relatively little value to anyone outside of the military and a few research scientists. Now it’s part of all our lives. Which groups in your eco-system are critical to the success of your company? Which value your offering the most? Which are most influential? This helps inform your decision to go to market as a B2B, B2B2C or B2C. The decision to go to market as B2B, B2B2C or B2C is a big one, and sometimes the answer can be surprising. MEDIFY example – Medify was started by UW Entrepreneur in Residence Derek Streat, whose daughter suffers from a rare medical condition. After researching her condition and finding it frustrating to have to sift through all the databases for the exact research that pertained to their situation, he was inspired to found Medify – Medify basically collects these databases in one place and allows people to search on the exact criteria they are looking for. The need was clearly there for patients and their caregivers, and the founder originally decided to go after the consumer market as a B2C play – the question became, which consumer segments or conditions to focus on – such as breast cancer, leukemia and autism. After talking with the physicians, hospitals, insurers, drug manufacturers and advocacy groups that supported them it was easy to prioritize which conditions were likely to have the best network effects. But after building out the software and carefully watching who was using the product, it turned out that while patients and caregivers had a direct stake in being better informed, physicians actually valued Medify the most because it saved them time they could otherwise be spending with patients. How best to activate network effects? Go to market strategy? B2B B2B2C B2C Prioritize… Target customers Buyers

13 Strategic Imperatives for Startups Identify Need Develop Solution Go to Market Accelerate Performance Market need Ecosystem

3. Develop your positioning How do you want your target audience to think and feel about your brand? Target Their unmet need Category / frame of reference Benefits Reasons why only you deliver Ultimate Guides everything you do A positioning statement is a concise description of how you want that target market to perceive your brand. How they think about it and how they feel about it. Though it may read like something from your promotional materials, your positioning statement is an internal tool and guides everything you do. Positioning is hard work – and it’s really helpful to use an outside partner to help you see the opportunity from the point of view of your target. The value proposition is very similar to the positioning statement but can be stated publically, and focuses on what your target audience gets versus what they pay in terms of $, effort and risk. Definitions of positioning and value proposition vary a lot depending on where you were trained, and the distinctions aren’t that critical for startups - don’t worry too much about this. Just know you need to decide on target and what their unmet need is, category or frame of reference, benefits, reasons why, and ultimate benefit your target gets from buying and using your product – this means connecting to a deeply primitive need like safety, need for self expression, etc.. Messaging guides cover the main points you want to make – or the key conversations you want to have – with each of your key constituencies at each stage of their purchase process. This is basically the foundation for your website and all your marketing communications.

4. Develop your brand identity This is something a lot of companies often get wrong in the beginning and you can waste a lot of time and money on this. Brand identity brings your positioning to life and when you are just starting out it makes you look like a more established business than you are. Don’t expect to get it perfectly out of the blocks. Expect to refine your identity as you get experience with customers. Porch is a great example. Great name – simple and feels neighborhoody. Logo feels like a roof over your head. The look is appealing to the target they are going after – upscale, modern, clean lines. Very differentiated versus Angie’s list, which feels more transactional. Company / product brand names, logos, and brand look, tone and feel

5. Define the end-to-end customer experience Consider all touch points What will make it… Memorable Complete Disruptive Identify growth and profitability levers What must you do superbly well to… Acquire customers Earn their loyalty Build a scalable, sustainable business You’ve got to start with the customer experience and work back toward the technology – not the other way around. Steve Jobs How learn about the product, how try / demo – how buy – how use – how get support … If design in a vacuum without considering the consumer you generally fail. Even Steve Jobs observed people!!!

6. Inform the minimum viable product Work with your technical team to help inform the minimum viable product – the “basic” version from which you will learn and develop a stronger product-market solution Does anyone use all these buttons??? Minimum viable product a crucial decision because here is where all the money and effort goes, and here is where your consumers will first encounter – and vote yea or nay – on your offer. Marketing plays an important role to validate what consumers most want and need in the product or service you’re creating. And marketing, representing the consumer, is in the best position to veto unnecessary features and prevent feature creep.

7. Secure the intellectual property The CEO / CFO/ VP Engineering will drive the overall IP strategy for patents. Marketing may play a role in helping to identify potential applications for the technology. Talk to your lawyer about what you need to trademark protect. Don’t tend to tm the corporation. If consumer facing more likely to need brand tm. Logo and brand trademarks, URL, taglines, etc.

13 Strategic Imperatives for Startups Identify Need Develop Solution Go to Market Accelerate Performance Market need Ecosystem Positioning Brand Identity Experience Minimum viable product Intellectual property

8. Develop a high performance team What types of marketing tasks will you need performed? What talent do you need to deliver it? Hire what you need, as you need it but have an idea what you’re building. Need to start with one really good marketer. Obviously you need to have some idea of your marketing plan – even before you formally build it. Consider the functional and industry experience you need now and in the future. Consider whether this talent should be internal to your company or externally sourced. Consider what knowledge they need to have already, and what they can learn on the job – and what training / mentoring support they’ll require. Consider what type of culture you want to build – this is everyone’s concern and you can’t start too early

9. Bring on the right customers Beta customers who you can get early traction with and learn from “Most valuable customers” who are highly profitable or influential Much of the important ground work will have been done up front when you identified target customers and buyers, defined your positioning statement and minimum viable product. Depending on how responsibilities have been divided, marketers can support the sales effort by providing background research to help qualify / prioritize potential customers, selling materials, and ongoing customer support. The goal of a startup is to find a sustainable, repeatable and scalable business model. And so much of a startup's success is dependent on the early “beta period” where you provide access (to your product) to a limited group of prospects. You want them to be representative of your ideal target and minimum viable product use case, and willing to work with you to iterate on your offering. “Most valuable customers” represent the customers who represent the big profits and influence – who you might not easily convince to get involved at the early stages.

10. Marketing strategy and go-to-market plan Product Price Place / channels Promotion decisions Activities needed to launch and sustain the business Assigns responsibilities and budget Basically all team members should be discussing this. Marketing strategy covers the 4 P’s at a high level, in the context of the overall business strategy, whereas the gtm plan does into detail. A learning agenda articulates what hypotheses you want to test about your positioning, and your product, pricing, channel and promotion decisions, and how you will get the needed data and insights. KPI’s are key performance indicators that tell you your are on the right track. Examples: customer satisfaction and willingness to refer, repeat business. Include your learning agenda, KPIs, and contingency plans for likely competitive response and performance +/- forecast

11. Execute the go-to-market plan Deliver marketing activities in your plan Track KPIs, diagnose +/- performance gaps and adjust The best strategy will fail if you don’t execute, and it’s only once you get in market that you see what’s really working. Marketing should be tracking key performance indicators, diagnosing performance gaps versus objectives – positively and negatively – and recommending how to adjust. This is where you need to be most responsive to what you are hearing from the market, and working tightly with other members of the team.

13 Strategic Imperatives for Startups Identify Need Develop Solution Go to Market Accelerate Performance Market need Ecosystem Positioning Brand Identity Experience Minimum viable product Intellectual property Team Customers Strategy and go-to-market plan Execute

12. Conduct lean research Conduct just enough lean research to understand what’s working, what’s not, and why Revisit and refine assumptions – repeatedly! By lean research I mean just enough depth and quality of research to get you enough of an answer to keep going. Startups need continual feedback and marketing takes point on listening and interpreting data, and translating it into useful insights that lead to action. It’s important to revisit and refine your assumptions – repeatedly. Do you have the right target? The right product? The right business model? Is your go-to-market strategy correct? Research is not a substitute for decision making. It’s an aid to decision making. You need to understand your consumers, what drives them, and how they are responding to your product or service. You can tap into secondary research from published sources, such as general insights into the target you’re going after - or primary research you conduct yourself or hire out to help you understand what’s working, what’s not and why. You’ll want to use a combination of observation, interviews, data analysis, and other methods depending on your research question.

Consider which investments will yield the greatest returns 13. Plan for expansion By now you have hopefully found the right target and product fit, and leaned what works and what doesn’t so you can optimize your offer. The next step is to think through where and how to expand – considering which investments will yield the greatest returns. Obviously you’ll do this with the entire team. Some examples: Geographic expansion Product or service improvements Broadened product portfolio New customer segments Infrastructure Strategic partnerships Increased marketing Stronger loyalty programs Expanded team Consider which investments will yield the greatest returns

13 Strategic Imperatives for Startups Identify Need Develop Solution Go to Market Accelerate Performance Market need Ecosystem Positioning Brand Identity Experience Minimum viable product Intellectual property Team Customers Strategy and go-to-market plan Execute Research Expansion plan So to summarize, marketing is all about identifying a need, developing a solution, taking that solution to market, and listening all the while for what it takes to accelerate performance. Depending on where you are in the process, some of these will be more important – which are most relevant to your situation? Which are most important for your particular situation?

Questions? lisa.fernow@gmail.com Happy to take your questions, and if I can’t cover it here, please write to me. Thank you for your time! Questions? lisa.fernow@gmail.com