An early learning I made in my career as an entrepreneur is what I’ve since seen coined the “Field of Dreams Fallacy.” This saying explains the natural predisposition many entrepreneurs have to believe the otherworldly voice in our head whispering “If you build it, they will come.”
Our hopeful disposition is only exacerbated by the entrepreneurial war stories from founders who seemingly never for one minute doubted the deep societal need for whatever far-fetched idea was taking form in their mind. This unwavering confidence — at times seemingly bordering on the delusional — makes for a great story. Unfortunately, it also makes for underdeveloped business plans with too little focus on the nuts and bolts of designing an effective go-to-market strategy and too little time spent building internal marketing expertise.
As you might guess, neglecting some the fundamentally hardest parts of a business sets an otherwise good idea up for failure. This psychological predisposition toward believing in the obvious merits of your own product — and the ability for others to clearly recognize those merits — almost inevitably leads to this domino effect of other business mistakes.
Harsh Reality #1: No matter how obvious you think the value of your product is, others will not agree.
After leaving the world of high finance to found WellPath, I fell into this trap of too readily believing that since what we were doing was so novel and so innovative (and so obviously superior to the competitors) that surely everyone would rush to buy it. You can probably guess how that worked out initially (otherwise I might not be writing this today).
I did not appreciate that even the best products must be marketed incredibly well to stand out in a crowded market. And great marketing doesn’t simply mean having great advertisements on Facebook — that is the surest path toward mediocrity — rather it means finding the unique channels where your customers might be living and where your competitors are not already creating fierce price competition for eyeballs. This task can require Herculean effort. With WellPath, we turned to partnership marketing, email acquisition and a huge focus on content, resulting in the creation of an over a half million person newsletter that has created one of our primary channels of customer acquisition. More importantly, it became a channel for us to build credibility and reputation within an increasingly crowded industry. We were lucky enough to figure out this strategy after we had launched and after we realized customers were not going to be knocking down our door (at least not initially).
This is not to say that ultimately you don’t need a great product. The very best marketing will likely not solve for a product no one wants (though I’ve seen great marketers sell some pretty mediocre products). Rather you don’t want to build a novel product without having the marketing expertise to get it in front of your archetype customer. History is littered with the bodies of fallen companies who were first to market with an idea but unable to get it out into the broader ecosystem.
Harsh Reality #2: If you’re a first time entrepreneur, you have not allocated enough budget for marketing.
The implication here is that many entrepreneurs are not thinking long and hard enough about customer acquisition. This results in a business not earmarking enough budget toward marketing, creating a situation where a business finds itself undercapitalized and unable to execute on the plan that would lead to real success. In all the early stage businesses I have evaluated and spent time with, particularly B2C companies, the line item that is almost always underestimated is the marketing budget.
Excluding several extreme examples of businesses that achieved incredible natural virality, most products — even very good ones — need an excellent marketing strategy to find their customers. This means great marketing people and great marketing strategy (fortunately the former should help beget the latter). Always assume your customer acquisition cost will be higher than your projections, that the acquired organic customers in the early days will be fewer than you anticipated, and that the press that feels so well earned will take far longer to materialize than you think justified. Remember, product market fit is more complex than simply the right product — you need to find the right customer and a means of reaching them at scale.
So what now?
The takeaway from this should be fairly obvious; no matter how good your product is (and I’m sure it is very good, very differentiated and very disruptive) you absolutely must accept that more likely than not others won’t immediately appreciate it’s many merits. The way in which you find, engage and ultimately sell to that customer will take nearly as much effort as the creation of the product itself. Sure, there is the chance you become one of those rare products where everyone comes to you, but prepare for the world in which you’re not.
About Colin Darretta
A reformed investment banker turned entrepreneur and investor interested in how technology can be a catalyst for change in otherwise mature industry verticals, both B2B and B2C. Despite it being gauche he still likes to use the word ‘disruptive’ (if it isn’t broke, don’t fix it) and in his spare time does his best to continue as an active member of the New York investment community with a particular focus on businesses in which he can come in and make a real positive impact through his experience in finance and entrepreneurship.
Colin has been interviewed and featured in a variety of industry publications on topics ranging from venture fundraising, investing, business strategies and tactics. Colin has also written for a variety of publications and occasionally posts his rantings and ravings on Medium.