The What, When and How of building a marketing team in an early stage tech startup
By Marc Rougier & Elnaz Giboulot.
Tech startups often face the challenge of scaling-up Marketing and Sales around the Series A phase. After having observed and discussed this topic with many early stage tech startups, we’d love to share the most common definition of the marketing roles, and more importantly, how they play together as a team to bring success.
As a basic yet important reminder: there is no one size fits all answer to building a Marketing team; because your startup is unique. The definitions mentioned below are therefore just a humble checklist, and a bird’s eye view of how they are usually organized.
To start, there is generally a rather clear distinction between Strategic Marketing and Operational Marketing. They are of course closely related and work hand in hand, but they are not covered by the same person in a tech startup.
Strategic Marketing = market knowledge + The famous 4Ps
a) Market knowledge
Market knowledge, or market intelligence, is about understanding both sides — demand and supply — of the space you play in. Understanding the demand is about gauging the opportunity, in terms of absolute numbers, trends, underlying forces. Understanding the supply is knowing who is competing in serving this demand. Market knowledge is also about understanding the value chains that link this supply to its demand.
Traps to look out for in startups with respect to Market knowledge:
- Analyzing a market is like peeling an onion with seemingly infinite zoom-in opportunities. While you may be tempted to present the upper layer of the onion to your future VC (hey, we dream big!), stay focused on the core (we execute in the real life).
- But don’t overanalyze! The market is moving fast and challengers are sprouting all over the world. Don’t turn market knowledge into a full time race that will at best distract your talent and at worst erode your confidence.
b) The famous 4Ps
The famous 4Ps, aka Marketing Mix, have been the pillars of Marketing for a while; their concept still very much applies but, the digital economy calls for a subtle refreshing of their individual definitions.
The initial definition of the 4Ps, dating back to the 60s, is: Product, Price, Place, Promotion. “What you sell, how much, how you distribute it and how do your clients know”.
While some recent evolutions of the model have added other Ps (People, Process, Physical evidence), let’s stick to only 4 (focus!) but with an important adjustment, in order to keep it strategic: 4Ps: Product, Persona, Price, Place.
Product: from a strategic marketing standpoint, it is not about technology but value proposition. You need to know exactly why the world needs your product; what excruciating pain point you solve, what compelling advantage your product offers over other painkillers, what your Unique Selling Proposition (USP) is that will make your prospect turn into a satisfied customer.
Persona: Hyper segmentation and near real-time interaction make it now possible to know your persona with greater precision. Even so, many startups shoot their awesome USP randomly in the wild and expect it to spontaneously fall down on their target personas. This won’t achieve the best results, you need to know who uses, who pays for, who distributes, who recommends your product and who influences them. Know them better than the back of your hand.
Pricing: is a complex exercise for tech startups due to specific business models (SaaS, subscription based, freemium, etc) but it benefits from a very potent tool: AB testing (however, do not forget the math required to extract relevance from data). The interdependence between Price and Persona should never be underestimated: the perceived and actual value (ROI) of a given product, especially a digital product (i.e. that costs nothing to produce), largely depends on the target persona.
Place: is where you distribute your product. In startup lingo, it would be renamed go-to-market, which unfortunately does not start with a P😞. B2C vs B2B is generally the first question. Ad-based or subscription-based, e-commerce or marketplace, on-prem vs. SaaS, direct vs. partner channels, and many other questions, come next. A winning product with the wrong go-to-market leads to failure. The good news is that part of the answer lies in the excellent knowledge of your USP and target personas.
Operational Marketing = brand awareness + lead generation
Ultimately, operational marketing — how you convince a prospect to engage with you and your product — is about increasing the Company’s revenues and is therefore about performance. In today’s tech startup, this has become very specific, with a very data-driven, ROI-focused approach.
Investments which returns cannot be estimated in a reasonable timeframe concern brand awareness: notoriety, reputation, thought leadership; the objective is to gain, over time, a top-of-mind position with your target personas, its ecosystem and its value chain. Demand and lead generation activities, on the other hand, are ROI-driven. While multi-channel allocation is a difficult problem to solve, tracking the cost of acquisition of leads is mandatory. Aim at optimizing your market reach, your cost of acquisition and the quality of your leads by constantly AB testing different messages and channels, in a rigorous, data-driven approach.
To deliver on brand awareness and lead generation, Operational Marketing will execute both offline and online tactics, in a coordinated manner. Offline includes advertisements on “traditional” channels (TV, radio, press), conferences, public relations, etc. Online entails advertisement on digital media, community management, SEO, UX (lead gen pages or transactional sites), etc. Becoming a media source (aka content strategy) is the pillar of Operational Marketing in the digital age (it’s needed for establishing thought leadership; engaging with the community, the influencers, the prospects, the clients; it’s the basis of SEO too).
This role seems to be the most difficult to define and to fulfil amongst early stage tech startups. What is Product Marketing, and where does it fit in the above Marketing map?
Product Marketing in tech startups is a crucial role which exists because tech startups are born essentially on a product vision. In the early ages of a tech startup, the product was the DNA, the core asset, the focus of most investments and efforts. The product was born in a CEO or CTO’s mind and that’s why they decided to engage in this crazy venture. Altogether, the CEO and the CTO master the technicalities of the product and have a vision about why and how it will disrupt a market. But there is (much) more to a product than technology on the one end and a disrupted market on the other. In-between lies a roadmap, a competitive positioning, a SWOT, an interpretation of the USP and the needed extension of the first P of the four Ps of strategic marketing. And, eventually content to communicate, explain and demonstrate all of this to the world. This is Product Marketing.
The role lives in very close relationship with the Product owner (CEO, CTO, CPO, depending on the startup). It’s mainly a Strategic Marketing role: it must know and understand the persona’s needs and be aware of the competitive landscape with its agents and its trends. It contributes to defining the product strategy because it influences (and sometimes even defines, depending on the ownership within the organization) the product road map. But it’s also a contributor to Operational Marketing in that it produces content that feeds the editorial line of the startup.
Another reason that sets this marketing role a bit apart is that it requires both marketing talent and technical/product knowledge.
How to build a team with all these ingredients?
So, all things considered, we have Strategic Marketing Market Knowledge, Product, Persona, Price, Go-to-Market, Operational Marketing brand awareness, lead generation, offline, online, Product Marketing, etc… Knowing that every single one of the sub-tasks entailed in any of these roles could be a full time job. It does not make any sense for an early stage tech startup (“early stage” as in anything from a few staff members to a few tens of staff) to cover every one of these tasks with the same sense of expectation and urgency. Learn to prioritize based on what works for you!
In addition, it is safe to say that the founding team of any tech startup already covers part of these tasks — after all, this is their vision, their product, their market: they must already know clearly what problem they solve, for whom, and how!
So the pragmatic way to build the first marketing team in an early stage tech startup would be to:
- Solve the first problem: spell out the first 2 Ps (USP and personas) of Strategic Marketing and their respective ownership. Under all likelihood, because the startup has been founded to solve an identified problem at the first place, the founding team will answer this question and no hiring is needed here (note: it’s however necessary to identify clearly who has the ownership over these first 2 Ps).
- Address the next 2 Ps (Pricing and Go-to-Market). If a member of the founding team has the motivation and expertise, done! Otherwise, two options come next: the first one is to hire a Strategic Marketer. The second is to consider that defining a pricing and a go-to-market falls under the responsibility of the Head of Sales. This would be a natural allocation and, as a head of sales is also a key member of the startup (whether the head of sales is part of the founding team or not: there is an absolute need for a head of sales), it would mean no additional role is required and the 4 Ps are covered!
- Market knowledge exists in all startups. This role is not critical enough to call for a dedicated hire. Once the team is complete, this role can be allocated as a subtask to whomever in the team is the most “strategic marketing” oriented.
- Once the 4Ps are sorted, the next crucial role is rapid lead generation in order to capture the defining early references. The shortest time to sales is off-line. Organizing lead generation through off-line channels (personal network, In Real Life or IRL events, partners, etc) is therefore key and requires dedicated resources; such resources can be considered as marketing or as sales (sales forces in early stage startup generate most of their leads themselves).
- Then comes the scaling up of sales, which will lead to the long term building of brand awareness. This will mainly be achieved, in most cases, through online operational marketing, focusing initially on Content and Ads (SEM, SEO, PPC, etc). Depending on the business (eg B2C), Community Management will also be important. The scaling up will eventually mix inbound and outbound techniques for a good balance between market reach and cost of acquisition. But as hiring the initial team is the subject, Content (production and distribution) and online ads (multiple channels) should be the focus.
If you only remember a few points from this article, remember this:
What a super lean and mean initial marketing team could look like:
- Founding Team Product and Persona
- Head of Sales Pricing, Place and Offline lead generation
- Digital Marketing Online lead gen and branding, starting with Content and Ads
- Product Marketing Road map, competitive landscape; contributes to content
Of course, every company will have slight differences and these are only suggestions.
Key points to consider:
- Underestimating the importance of ownership of the 4Ps is a frequent mistake that blurs the overall direction of the Company.
- Over-stretching each members’ role to cover all possible marketing tasks leads to mediocre delivery throughout.
- Hiring too many too fast not only creates unnecessary cash pressure, but most importantly, it slows the decision process down and dissolves the sense of ownership.
Designing the initial organization of the marketing team for an early stage tech startup is not an unsurmountable task, as long as we properly choose our priorities and battles.
As for finding the required talent on the market, this is another challenge altogether but of course we can help 😊 Our portfolio companies are hiring… yes, in Marketing too! Check out our job board here.