Marketing a VC like a startup
Applying the Marketing Fundamentals Canvas to Union Square Ventures
Just like the tech companies it backs, Union Square Ventures is a competitive business. It needs to attract talented entrepreneurs, convey a compelling message and stand out from other VC firmwho are vying for the same startups. In other words, it needs to engage in marketing.
It’s clear that the firm has a done a good job on this front, given its aura in the New York tech community and its fantastic track record. But how did it get to where it is today and how can it think about the future?
One way to analyze USV’s approach is through the lens of the marketing fundamentals canvas, a framework I recently launched to help companies define, direct and focus their business. The beauty of the framework is that it applies as much to tech startups and service companies as it does to VC firms and billion-dollar brands. Because it covers the very essentials of marketing, it’s the natural starting point for any company with at least a nominal product-market fit.
To illustrate the power of the marketing fundamentals canvas to the tech community, I’ve taken the liberty of completing the framework for USV. I did a similar exercise one year ago by rewriting USV’s creative logo brief, and found that people’s familiarity with the firm made it a good topic for discussion. I hope to achieve the same here.
Note: I’ve made certain assumptions about USV based on publicly available information and my personal knowledge of the fund.
MARKETING FUNDAMENTALS CANVAS
Mission: USV’s purpose and reason for being. I derived this statement from USV’s investment thesis, particularly the point about “network effects” which I found very salient. I feel that the firm’s internal driving force is much bigger than simply adding value to entrepreneurs. It invests in companies that break down old institutions and give power to the people, making a positive impact on our daily lives.
Vision: USV’s long-term, aspirational business goals. USV is a small fund with only 5 partners (the last of whom joined in 2011) and a handful of associates. This means that it must be extremely selective when distributing its capital and focus on iconic startups that will have a disproportionate return for its business. Contrast USV’s vision to a firm like Andreesen Horowitz, which operates on a much larger scale and therefore has a much different vision for success. (Thanks to Brian Watson for insights on this point).
Brand: The promise that USV makes to its audience that is differentiated from competition. Much of the language I chose here is a reflection of USV’s thesis as well as its entrepreneur-facing activities, which includes the vibrant community on USV.com as well as partner blogs like Fred Wilson’s AVC or Albert Wenger’s Continuations. One thing to note is the disconnect between the firm’s brand values and its visual identity. I feel USV’s logo could do a lot more to convey meaning, whereas now it comes off as simple and elegant but very much generic.
Target Audience: The people who USV serves. To keep things simple, I only focused on USV’s primary audience—entrepreneurs. In addition to bringing them to life through examples (eg Simon Khalaf, Dennis Crowley), I’ve articulated both their demographics as well as their phsychographics. I believe the latter descriptors are more important because they capture a universal mindset that cuts across traditional categories of people. The observations that founders need to surround themselves with smart people comes from a post written by Fred, while the rest of the information is based on my observations and experience as a founder.
Market Niche: USV’s market position relative to competition. The goal of this exercise is to demonstrate—in a very simple and visual way—how USV fits into the broader market, which I’ve narrowed to the New York startup ecosystem. I used a 2x2 matrix to map two dimensions that are particularly relevant to the firm and in which it excels: leadership and openness. I then mapped other VC firms on the chart for comparison. Note that this is not a definitive perspective on the VC ecosystem, nor is the model I used to illustrate it (for example, a Venn diagram could also work). I’m sure that USV has a much deeper understanding of this topic and could provide additional insights to describe its market niche.
Key Message: The one idea that USV wants to convey to entrepreneurs. In this exercise, I was drawn to USV’s impressive track record and the impact that its portfolio companies make on their respective industries with the firm’s support. The statement reflects what I would want entrepreneurs to take away from a pitch meeting with USV, especially if multiple funds were vying for their business. It also uses language that is bold and action-oriented. Note that the key message is structured as a benefit to entrepreneurs, rather than an observation about USV itself.
SUMMARY
The marketing fundamentals canvas is a great starting point for companies. While it looks deceptively simple, each of its modules carries a wealth of information about what makes a business unique and where it’s heading. This information is invaluable to all marketing decisions, many of which impact the trajectory of a firm.
In the case of established firms like Union Square Ventures, the canvas helps to synthesize and clarify information that resides in partners’ minds, various blog posts and other documents. For nascent startups, it goes much further, helping them to minimize their business assumptions and make smarter marketing decisions when facing limited time and resources.
I look forward to people’s feedback on USV’s marketing fundamentals canvas and the framework in general. To share your thoughts, please visit the comments section of my blog.
Cezary Pietrzak is a marketing and mobile consultant for startups. Prior to his advisory work, he co-founded Wanderfly, a travel discovery startup acquired by TripAdvisor, and led marketing for several tech companies. You can follow him on Twitter at @ckp, read his blog at cezary.co and sign up for his newsletter.
