Last week I talked about sales in Running a Salesforce . This week it is the turn of marketing. Let me start by pointing out that marketing is a lot more than PR, which is what many technical people seem to imagine. When I did marketing consulting, It would take about ten minutes before the CEO of a startup would ask me how to get an article in BusinessWeek or Wired Magazine . Since the revenue would typically be close to zero, I'd have to point out that working out how to grow the revenue might be a better place to start. Usually I would propose to write a white paper on the company's product. This would both produce a tangible deliverable, and also allow me to dig in and understand the technology. Then we could start to work out how to sell it. This is what I like to call “City Slickers Marketing”, named after the movie City Slickers . For those of you who have not seen it, there is an old cowboy, Curly (played by Jack Palance) and a young advertising account manager Mitch (played by Billy Crystal). The marketing is named for the following conversation: Curly: Do you know what the secret of life is? [holds up one finger] This. Mitch: Your finger? Curly: One thing. Just one thing. You stick to that and the rest don't mean sh*t. Mitch: But, what is the “one thing?” Curly: [smiles] That's what you have to find out. When I arrive at startups where the CEO is the key technologist or even just an engineer by background, I tend to have a conversation like this: “What’s the one reason people should buy your product?” I ask. “One reason, I can give you twenty,” the CEO replies. Technical people (and I am one, so this is a lesson I had to learn the hard way, too) tend to overvalue technical features in a product and assume that if the technology is good, then the product will sell itself. And if one feature is a good reason to buy, then lots of features are even more of a reason. But the world doesn’t work that way. For a startup, there needs to be a single compelling reason for a customer to buy. A company board member reminded me once about a store in San Jose that sold “Fine art and bicycles,” presumably a fine art dealer who also was a keen cyclist. This is an extreme example of how multiple features are not necessarily additive when you take account of the way the customers look at the world. There simply isn’t a “fine art and bicycle” market. In fact, even if you are the best art shop in the area, selling bicycles, too, isn’t a plus—it detracts from your message. A lot of early marketing in a startup is working out what the single compelling reason is for a customer to engage with you. And it has to be just one (or maybe a couple if you can segment the market a bit). You can’t find the single compelling reason as an intellectual exercise, you have to get out and engage with customers and work out where your technology solves problems the customer cares about. Paul Graham, the co-founder of Y-Combinator, is famous for telling all the companies that they invest in to "make something people want." Steve Blank, professor and author, describes a startup company as a search for a repeatable business model. This also means that the customers have to be buying the product for the same reason, or else you don’t know how to find the next one, and you never get to the scalable stage where you just need to add money to make the company big and valuable. When I arrived at Ambit, I learned that our value was that we produced faster circuits than Synopsys. And we had better time-budgeting. And we could run top-down. And we ran faster. And our pricing was bundled. And physical synthesis was in development. And...and...and. But it was once we realized that we could handle large million-gate designs in one gulp that we really started to get traction. The other things were all true, but none of them was compelling enough to get a company to engage with a startup. But if you had a million-gate design and you couldn’t get it through Design Compiler, then you were calling us to take your money. We grew 1,400% that year (and Cadence bought us). Bottom line for most startups is that they need to find the one compelling reason to buy, and focus completely on that. Books I mentioned Steve Blank above. He self-published a book, The Four Steps to the Epiphany , that was passed around in Silicon Valley like a secret tract. It was not an easy read (and IMHO not a great title) but it took the idea of a startup being a company searching for a repeatable business model, and ran with it. It introduced the idea of a minimal viable product, and rapid iteration. Another famous phrase is to "get out of the building," pointing out that startups often fail by failing to engage early enough with customers to find out what they want. Steve rewrote the book (along with co-author Bob Dorf) as The Startup Owner's Manual . It is less dense (which means it is only about 600 pages long) but much more readable. Sign up for Sunday Brunch, the weekly Breakfast Bytes email.![]()
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