The need to be viable in terms of paying customers and indeed the very survival of start ups are dependent on their ability to attract as many paying customers in a short time frame- however a majority of early stage start ups do not look at a planned approach to their marketing, branding and sales and depend a lot on their individual jugaad. The case study written down will capture a start up who was not successful-in an attempt to highlight some of the common sales and marketing blunders start ups make in their journey.
Case Study: Amit had been the best student in his IIT days plus when he did his MS his professors where extremely impressed with his ability to work hands on in cutting edge engineering. In his career Amit had been a success as an engineer and a technology manager: Amit decided to start his own venture in India. He chose a domain he was comfortable with- IT Assets and its effective utilization. However his approach was different. He chose a niche which was high end and a product which relied more in audit & governance for effective utilization of IT assets. He started with a core engineering team India and invested 3 years to build a product framework which was ready to be taken to the market. He then hired senior sale persons with successful track records in India to sell the product to enterprise customers. However adoption was slow & at the end of 5 years most of Amit’s cash had run out with only one low paying customer.
The above scenario perhaps may have similarity with many start ups and let us introspect a little bit more deeply from a marketing and sales perspective on what could Amit have done better.(For the sake of brevity the case study may not mention each of the aspects in great detail)
- Research your market: One of the fundamental flaws in the above case study was a lack of comprehensive research into the market before entering the fray. While the product at some level was solving asset utilization problems for customers however the market was not ready in India to adopt the product –it was not a fundamental problem for them. The market growth in the US was faster and there was no plan to address the US market. Besides there were many players with different offerings.
- Differentiate your product and position it at the right place in the market: As we now know that Amit did not research the market, his positioning in the market was not right. He did not find the niche in which he could position the product with an unique value and kept on changing the positioning and the messaging from time to time confusing his customers and his sales team.
- Time to market & customer validation: In the above case study little attention was paid to get quickly off the block. The product was developed from an engineering perspective i.e. to develop a perfect product; however that ate up a lot of resources in terms of time and money. Customer validation only started happening post the sales team got on board thus loosing crucial time to market.
- Promotion & marketing: There was no attempt to provide a marketing cover to sales people. Low cost marketing options like social media, blogs, white papers, webinars, digital PR, ambush marketing at high profile events was nearly absent. Sales people where left to their own network to generate leads thus merely duplicating the personal network based approach of Amit. Training of sales people was not up to the mark and the collaterals provided to them were of poor quality.
- Pricing: As we have seen that the market was not well researched, pricing was left on discovery and individual intuition of the founder- which is of doubtful efficacy. The sales people were not prepared with pricing plus Amit was not present in many of the discussions and hence intuition became a liability.
- Proper capitalization of marketing and sales: Amit did not properly capitalize his marketing and sales initiatives which led to inability to spend on crucial must do plans thus in a way underutilizing his resources.
Though the above case study does not explicitly mention the following points but I thought I should bring this up to highlight their importance:
- Advisors: Amit chose advisors who he knew personally typically past colleagues or friends with differing start up backgrounds. They were necessarily not experts in the domain or understood the market & geography very well. This starved the company of wisdom and path setting.
- Thought leaders, Academia: No attempts were made to cultivate relationships with thought leaders and academia. Amit was deprived of crucial knowledge which could help him come out with a more effective & relevant proposition.
- Investment community: Unplanned & sporadic attempts were made to reach out to the investment community. The approach was transactional and not long term in terms of continuous engagement & building up a consistent pitch.
- Personal chemistry with sales teams: Amit chose not to heed his own sales team in terms of leads to prioritize & qualify. Since he came from an engineering background his attempt to qualify leads on his individual intuition led to sales people chasing dead leads some of the time.
The above is a fictitious case study. This article only attempts to put in perspective some of the challenges start ups face from a sales and marketing perspective. They are not insurmountable-with a methodical and planned approach most of the challenges can be mitigated