Marketing & Innovation

Startups Don’t Need Marketing … Or Maybe Later by Fred Wilson

Startups Don’t Need Marketing … Or Maybe Later. Is a piece by Fred Wilson, an NYC Venture Capitalist, about why Marketing isn’t what a startup needs when its initiative is kick-started. Startups need intuition, hunches, “segmentuition” as I often say, not pricy surveys or acquisition campaigns. All of that comes later. One may disagree with that statement, however. It’s only true if you believe that “marketing is what you do when your product or service sucks”, Yet marketing goes way beyond this.

Startups Don’t Need Marketing … Or Maybe Later

You asked for it Arnold and 84 others (so far). So I’m gonna talk about marketing.

I believe that marketing is what you do when your product or service sucks or when you make so much profit on every marginal customer that it would be crazy to not spend a bit of that profit acquiring more of them (coke, Zynga, bud, viagra).

A very experienced and successful entrepreneur came into our office a week ago to pitch his latest company. At the end of his pitch, he showed us some numbers. Normally for a raw startup, we see almost all product and engineering expenses (headcount). But his plan had a monthly budget for customer acquisition. After he left, we talked about his plan and my partners focused on the customer acquisition number. It bugged us. It felt wrong.

So a few days later, I called him. We talked about what we liked about his plan and pitch and what we didn’t like. I brought up the customer acquisition line item at one point in that call. He said, “every company needs a marketing budget.” It seemed like a strong reply but in truth not one of our top-performing companies had a marketing budget in their initial business plan.

Read on at: http://www.avc.com/a_vc/2011/02/marketing.html

Yann Gourvennec
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Yann Gourvennec

Yann Gourvennec created visionarymarketing.com in 1996. He is a speaker and author of 6 books. In 2014 he went from intrapreneur to entrepreneur, when he created his digital marketing agency. ———————————————————— Yann Gourvennec a créé visionarymarketing.com en 1996. Il est conférencier et auteur de 6 livres. En 2014, il est passé d'intrapreneur à entrepreneur en créant son agence de marketing numérique. More »

One Comment

    1. As there are 2 comments I will only address the other one.

    1. As there are 2 comments I will only address the other one.

  1. … and i swear I had not yet read the blog post at avc.com, nor Seth Godin’s comment! ;o)
    I’m glad he agree’s with me … ;o))

    1. Thanks for your comment. Actually, I hadn’t seen the comments below, this is my mistake, I’m eating my hat … so to speak.
      Back to the gist of the comment.
      Honestly, much as I admire Seth, whom I saw twice (once in 2001 and later in 2009 with small group from the Social Media Business Council), I don’t understand that comment, and I still find this post interesting and relevant to similar situations I have witnessed.
      A) Although I agree that marketing isn’t just “what you do when a product sucks …” the number of startups – or even just BU managers – trying to do just that is overwhelming. Then that’s what THEY would call marketing, we are back to square zero. I do relate to that issue, I actually spoke to someone at lunchtime who was trying to do just that. His offer just doesn’t cut the mustard and he is ready to throw some budget on “customer acquisition”. This is an issue and Wilson’s point is well made,
      B) “Customer Acquisition” isn’t precisely “communication”. In fact it isn’t at all. It’s about sales and well… like it or not this is marketing (a term which, by the way, has as many definitions as people trying to define it),
      C) Because of those many definitions, debating forever on what is and isn’t marketing is pointless, the number of comments and counter comments in the post are a sign of that, I tired after reading a dozen of them,
      C) Hence the mention of a “marketing budget” which doesn’t shock me at all and Wilson’s point is good and relevant even though he seems to shrink by adding a comment that he should have submitted his post for approval,
      Honestly, I fail to understand the issue, and the point that this remark is making, my vision of business is pretty basic maybe, and I might not be on the intellectual side or I might miss something but let’s face it: years in sales have taught me that thinking for too long or too much isn’t always the best way of making a new venture succeed. Much is made up in business while going along and that, believe me, IS marketing.

  2. Yann,
    I actually agree with what you say, although I would see it differently …
    Let’s take the hypothesis that Seth’s comment is correct, i.e. “what people usually refer to when pronouncing the word ‘Marketing’ is actually ‘Advertising’” (in other words, Marketing is more than Communication. Communication is a part of marketing), and let’s look at your analysis:
    A) if your product/service sucks, then the answer is not ‘communication’, we all agree on that (and I believe that this is what Wilson meant to write. Hence the comments saying “just replace “marketing” by “communication” in your blog post and it will be spot on!). Now in my opinion, the answer to a bad product/service IS Marketing … but the analytical/strategic one, not the operational one => go back to your customer base, listen to what they say, and amend your product/service to fit that demand in terms of features, price, distribution channel, …
    B) “customer acquisition is not communication” : it depends on what you call “customer acquisition”. If you mean “lead generation” “lead nurturing” “lead qualification” … then we agree, this is not Communication, but you do need to attract the leads first and for many people the best way to do that is to advertise. In my opinion, there are, in many cases / markets, better ways to communicate that blunt advertising, but this is another debate …
    C) I agree that there are too many definitions out there, but I can’t help to react when I see people reducing Marketing to Communication (or even worse to Advertising). And I admit that I stopped reading the comments after a while too … ;o)
    D) Again, I don’t mind Wilson’s point if he did mean that startups shouldn’t budget communication. But they should have a strategy for customer acquisition (in the sense “finding someone to sell our stuff to”)
    I did write on this issue (Marketing Vs MarComm) … 3 years ago … http://barthox.wordpress.com/2008/08/21/marketing-vs-marketing/ so yes, I admit that this is one of my pet topics … ;o)

    1. Thanks for this Xavier. I repeat that “communication” isn’t a dirty word on the one hand, and that it is a part of Marketing and that Wilson has a point when he says you do not need an customer acquisition programme at that stage. I take it that he does mean “lead generation” indeed.

  3. Yann,
    I actually agree with what you say, although I would see it differently …
    Let’s take the hypothesis that Seth’s comment is correct, i.e. “what people usually refer to when pronouncing the word ‘Marketing’ is actually ‘Advertising’” (in other words, Marketing is more than Communication. Communication is a part of marketing), and let’s look at your analysis:
    A) if your product/service sucks, then the answer is not ‘communication’, we all agree on that (and I believe that this is what Wilson meant to write. Hence the comments saying “just replace “marketing” by “communication” in your blog post and it will be spot on!). Now in my opinion, the answer to a bad product/service IS Marketing … but the analytical/strategic one, not the operational one => go back to your customer base, listen to what they say, and amend your product/service to fit that demand in terms of features, price, distribution channel, …
    B) “customer acquisition is not communication” : it depends on what you call “customer acquisition”. If you mean “lead generation” “lead nurturing” “lead qualification” … then we agree, this is not Communication, but you do need to attract the leads first and for many people the best way to do that is to advertise. In my opinion, there are, in many cases / markets, better ways to communicate that blunt advertising, but this is another debate …
    C) I agree that there are too many definitions out there, but I can’t help to react when I see people reducing Marketing to Communication (or even worse to Advertising). And I admit that I stopped reading the comments after a while too … ;o)
    D) Again, I don’t mind Wilson’s point if he did mean that startups shouldn’t budget communication. But they should have a strategy for customer acquisition (in the sense “finding someone to sell our stuff to”)
    I did write on this issue (Marketing Vs MarComm) … 3 years ago … http://barthox.wordpress.com/2008/08/21/marketing-vs-marketing/ so yes, I admit that this is one of my pet topics … ;o)

    1. Thanks for this Xavier. I repeat that “communication” isn’t a dirty word on the one hand, and that it is a part of Marketing and that Wilson has a point when he says you do not need an customer acquisition programme at that stage. I take it that he does mean “lead generation” indeed.

  4. Couple of quick comments to add:
    – As has been stated, Marketing is not Advertising. Marketing is positioning your product in the market versus the com

    1. Sorry, was trying to do this on my PDA – will wait and type up comPlete thoughts later.

      1. Hi Jeff, I thought you were going to add more things but apparently not. So I publish both your comments and emphasise once more that I have already made a comment about the fact that communications is part of marketing and that I can’t really see the point that is being made.

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