Marketing Mistakes Serial Entrepreneurs Only Make Once


A version of this article previously appeared in The Wall Street Journal.

A startup’s marketing launch strategy should resemble an inverse funnel. As the launch proceeds, the degree of influence of the parties exposed to your solution should commensurately grow.

This approach allows your venture to “fail in the small” and make course corrections before spending significant marketing resources. It also facilitates determining your proper product and market fit before your startup is under a white-hot media spotlight.

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An infamous example of a startup that did not follow this strategy is Color. Best known as an overly-hyped venture that failed to even remotely live up to its publicity, Color raised too much money, generated too much media interest and launched with immensely high-profile partners before it had properly validated its value proposition. When the venture was unable to initially meet its grandiose expectations, the market crucified the company.

In addition to not abiding by the inverted funnel approach to rolling outproducts, failed startups often make the following rookie marketing mistakes:

Launch In Stealth Mode 

“Stealth mode” occurs when an organization intentionally flies under the radar, obscuring its true purpose and shunning public exposure.

In concept, working in a secretive fashion facilitatesquietly locking-in key industry stakeholders and resources, allowing the company to emerge from stealth mode with a significant first-move advantage.

However, in actuality, when a startup discusses its value proposition in an obtuse, circumspect manner, it inherently reduces the quality of the market feedback it receives and thus slows its ability to achieve a viable product / market fit.

Rely On A Public Relations Agency

Many entrepreneurs naively hire a PR firm to launch their nascent products in the hope of leveraging the firm’s industry contacts.

The sad reality is that PR firms value their affiliations with media and industry gatekeepers more than their relationship with any single client. This causes even the most earnest third-party PR professionals to champion your message in a measured, pedestrian manner. As soon as they encounter resistance from a trusted media compatriot, they invariably back offand protect their long-term relationships, rather than champion your solution.

Public relations at a startup is a sales process. Creating marketing awareness requires passion and persistence, two attributes that are in short supply at most PR firms.

Moderate persistent can be purchased, but passion can never be outsourced. As such, startups must directly tell their stories in their early days, to ensure they are received unfiltered and with the fervor that only a wild-eyed entrepreneur can deliver.

Prove The Hypothesis

Intellectually honest scientists know that it is more important to disprove their hypothesis than to confirm it. If they vigorously attempt to disprove their suppositions and are unable to do so, then they have effectively validated their research.

Unfortunately, when marketing a new product, many startup executives are more concerned with proving the merit of their assumptions, rather than looking at them with a jaundiced eye. This mindset often results in entrepreneurs missing unintended uses and unintentional users of their products.

As such, entrepreneurs should not attempt to validate their assumptions. Rather, they should objectively assess the market’s feedback to ensure they do not overlook potential new markets or unanticipated customer segments.

Humility Has Its Appeal

No one likes a braggart. In keeping with this sentiment, a startup’s marketing strategy should never get ahead of its ability to deliver on it promises. The best way to ensure this never happens is to err on the side of modesty and encourage others to share your value proposition, rather than blowing your own horn too early or too loudly.

Follow my startup-oriented Twitter feed here: @johngreathouse. I promise I will never Tweet about that killer burrito I just ate.

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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Follow John’s Startup Oriented Twitter Stream. He promises to never Tweet about sunsets, kittens or awesome burritos.

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