For years now I’ve argued for the importance of marketing to startups. My very first post here shared the story of an accomplished entrepreneur saying brands “don’t matter,” and in the years since I’ve heard that sentiment articulated or implied many times, by local entrepreneurs and venture capitalists alike.
Back then I was a marketing person, though, and it doesn’t take a psych major to see I had a stake in advancing the cause of brand-building, especially in Boston where I make my home. Things have changed, though, and a year into my adventure as a VC I’ve decided to spend less time as a missionary among the heathens, and more as a priest within the temple.
In the past year I’ve met many strong teams chasing great opportunities absent the basic marketing sensibilities I believe are fundamental to business success. I’m not talking about mastery of the tactical levers of demand generation here… I’m talking about storytelling, about understanding that positioning against an urgent customer need is an absolute pre-cursor to a product that can win in the marketplace, and that communication excellence is just as important as engineering mastery in creating enterprise value.
When I encountered those teams I saw not a fatal flaw, but an investment opportunity. Surely on seeing what real marketing looked like, I reasoned, these entrepreneurs would not only see the error in their ways but embrace an investor uniquely willing and able to bring those skills to the table. Surely that would give G20 an edge in competing for the deals everyone wants to be a part of, to taking those deals away from funds that offered more of what those entrepreneurs probably wanted, but less of what they clearly needed.
Well you know what? I was wrong.
The fact is, once you have a founding team that doesn’t at least view the addition of executive-level marketing and sales perspective as fundamental to their success, no investor / outsider is going to convince them otherwise. You can’t just “bolt that on” to a team that’s already left the factory — like some leaky, after-market sunroof — without it being written into the DNA of a company from the start. And way too often, it’s just not.
The original sin of most East Coast technology startups is the lack of real marketing and storytelling sensibilities in the founding team. That’s right. I said it.
New Investment Criteria
I’ve tried to be pretty transparent about the questions we ask when evaluating a new investment opportunity for the fund, and I’m adding one just for the deals I’m going to spend my own time on: Is an orientation to sales and marketing excellence baked into the founding team? If the answer is no, from now on, I’m a pre-emptive pass.
What does that mean? Well, it doesn’t necessarily mean there’s someone with a marketing title right out of the gate. Startups only do three things that matter in the early days (find customers, build product, not run out of money…) and “marketing” — at least in the departmental sense — is not among them. What I’m looking for instead is a strong sense among founders that the key to unlocking success is somewhere out in the world, not hidden in some as yet undelivered feature or unwritten snippet of code. Entrepreneurs with this “outside-in” orientation are much more likely to succeed in my experience, regardless of whether they understand the tactics and tools of marketing as it’s come to be so narrowly (mis)understood over the years.
I‘m looking for teams focused on eliciting the right response from the people they’re trying to help, rather than just on crossing some functional threshold in the product they’re trying to develop. There are ways the latter serves the former, of course. But you can always tell what really matters to a founder when you talk to her. Is it the release of Version 2.x? Or is it the business result version 0.8 was able to deliver to Customer Y? Is she iterating though multiple attempts to tell her story in a way that can power their business? Or is her digital presence an after-thought to be fixed by some content marketing serf when they can afford the hire?
If you want a really smart investor who thinks engineering is everything and marketing is bullshit, you’re down to just a thousand or so other people in Boston who are happy to talk with you. But strategy boils down to a choice your competition disagrees with, and for me, this is now it.
If instead you’re chasing a big problem in the world and see your inability to tell the right story among your biggest obstacles to success, give me a buzz. I might be able to help, and doing so turns out to be a pretty good use of my time.
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