MARKETING IN A STARTUP

Ron Carson - VP MarketingInnovation Asset Group

March 18, 2009

ABOUT ME• ~10 Years in Silicon Valley, ~5 Years in RTP

• Companies: Tandem, Compaq, Digital, HP

• Startups: patent troll and a B2B software company

• Industries: Healthcare, e-commerce, Pharmaceuticals, Telecommunications, Banking, Biotech, Supply Chain, Intellectual Property

• Roles: Business Development, Sales and Marketing

• Currently: VP of Marketing with a strong bias to market strategy, business development and customer acquisition

WHAT I WANT TO SHARE

• Marketing vs. marketing

• Some start-up reality perspectives

• Things I would have wanted to know

• What I do, why I do it and how I do it

• I hope it helps

TODAY’S ECONOMY• Angel Investors:

• “I’ve just lost 50% across my entire investment portfolio. Why would I invest with a high risk, early-stage company when I could invest in beaten-down, highly liquid stocks like GE or Apple?”“

• Can you be cash-flow positive in 6 months?”

• Venture Capitalists:

• IPO market is dry. M&A market is tight. No easy exit.

• May just let you die if you’re already in the portfolio.

• Only funding truly stunning business plans, preferably with revenue already flowing

• Customers:

• “So, if I buy this, who can I fire?”

• Payback must be (way) less than one year. ROI almost does not matter. Spending is close to frozen.

MARKETING

"...Because its purpose is to create a customer, business has two -- and only two functions: Marketing and innovation. Marketing and innovation produce results, all the rest are costs."

-- Peter Drucker

MARKETING IS NOT:• Advertising

• Tradeshows

• Collateral

• Websites

• Blogging

• Twitter

• Search Engines

• Press Releases

• Lead Generation

• T-shirts

• Coffee Mugs

• Strategic Partnerships

• Channel Development

MARKETING

“There will always be need for some selling. But the aim of marketing is to make selling superfluous.

The aim of marketing is to know and understand the customer so well that the product or service fits them and sells itself.”

— Peter Drucker

Strategic Marketing Tactical Marketing

Have to get this right... ...for this to work.

- Market Analysis- Market Sizing- Market Segmentation - Target Segments- Unmet Needs- Competitive Analysis- ...

- Lead Generation- Advertising- Promotion- Awareness- Websites- Collateral- ...

MARKETING

Alignment is Key

IF YOU GET IT WRONG...

• In this economy, you are dead.

• Wasted time

• Wasted money

• Wasted credibility

• I learned hard lessons:

• Secure Electronic Transaction

• Electronic Health Record

• Intellectual Property Management

• Others I continue to observe…

It’s Not OK

You Bonehead! You’ve wasted your investors’ money and your business is dead in the water.

HOW TO GET IT RIGHT

To Know:

• To have knowledge or information concerning.

• To be absolutely certain or sure about something.

• To be aware of through observation, inquiry, or information.

Know Your Customer

Your opinion, while interesting, is irrelevant.- Pragmatic Marketing

GETTING TO “KNOW”Information

SourceExamples Useful For Insufficient

Because

Industry Analyst Reports Forrester, Gartner

Broad trends, market sizing, growth rates,

segmentation, Third party validation

Superficial, academic, in-actionable intelligence.

Financial Analyst ReportsTD Ameritrade, Motley

FoolTrends, growth rates,

competition.

Usually too focused on near-term investment

metrics.

Industry publications (incl. Blogs)

IP Law & BusinessHot Topic Issues. Identify companies, people and

topics of relevance.

Editorial calendars necessarily shift. Hype

sells - possibly misleading.

Business Publications BusinessWeek, ForbesBroad trends, current

events. General education.

The readers digest version.

Personal Conversations with 30 prospective

customers

Danaher, Analog Devices, John Deere, Biomet,

Cephalon, etc.

Dose of reality - needs, pains, barriers, opportunities

Risk of short-term bias.

TALK TO YOUR

CUSTOMERSThe phone is your friend.

WHAT TO TALK ABOUT

• Formulate hypotheses for :

• The problem, the product/solution

• Test hypotheses

• Talk to prospective customers, present problem - listen

• Incorporate into product/solution concept - test & listen

• Refine (repeat as necessary)

• Verify - problem, product, business model

• Go/No Go

CONCEPTS TO KEEP IN MIND(THINGS I WISH I LEARNED EARLIER)

• Business Equation Concept • a.k.a. Ecosystem, value chain, life cycle, etc…• Bottom Line: track the flow of dollars through a market or company• Who is going to make money or save money?

• Buying Processes• How will the purchase be made? Who will make it?

• Competition• never under estimate. • Probe for alternatives.

• Fast Fail - always look for this

COLD CALL BASICS• Write down your objective

• Script your opening pitch

• List questions you want answered

• Rehearse

• Pick up the phone (don’t read your pitch)

• Take notes

• Request permission to follow up

• Refine

• You have a target market segment, a problem theory to test, a solution concept to bounce off of someone -- so who do you call?

• Tap the local network.

• Use tools success the ones below to find relevant people and their contact info:

• DO NOT rent or buy lists!

“WHO YOU GONNA CALL?”

SOME STUFF WE DID

Top-down and Bottom-up

Named Companies

Named Contacts

Built Marketing DB

Low Cost Marketing

Tangible Results

EXAMPLE

• Primary Target Market• Companies with a degree of IP complexity to be managed.

• Complexity can come from the number of assets in the portfolio, the number of incoming and outgoing obligations associated with the portfolio and from company specific IP workflow automation.

• As a rule of thumb, we look for companies with more than 300 patents in their portfolios, and over $300M in revenue.

• These are companies in need of an IP management solution, and with the financial resources to pay for one.

• Secondary Target Markets• Medium sized companies with between 100 and 300

patents in their portfolios, and less than $300M in revenue.

• These are companies who understand the strategic importance of IP and are actively seeking an integratd IP management solution.

• We do not activley prospect in this segment at this time.

• Target Audience• Within the target market companies, we seek the person

responsible for corporate intellectual property strategy.

• Common titles include Chief IP Counsel, Vice President of IP.

Primary Target Market Sizing

Top-down

Bottom-up

• Number of companies with SIC codes which correspond to IP-intensive industries: 46,000

• Manually compiling list of named companies within our target market. (2,500 and growing)

Today: 2,500+ named companies and 5,500+ contacts that are candidates for one or more Decipher Modules:

Innovation, Portfolio Management, Commercialization.

• Estimated percentage in our primary target market: 10%

• = 4,600 companies.

• Initial list of companies with more than 300 patents = 1000 companies (Calculated this list to be under estimated by a

factor of at least 2x-3x)

• Adding contacts from the target audience (5,500 and

growing)

EXAMPLE CONTINUED

• Marketing Foundation

• New Website - describes solution in (mostly) terms the market used to describe their needs/wants.

• SEO Optimized

• Direct Marketing Infrastructure & automation -- track & measure everything.

• ~3,000 target companies in marketing database

• >10,000 contacts - multiple departments can influence sale

• 40,000 lower quality contacts in newsletter DB

METRICSNew Leads Generated

0

5

10

15

20

25

30

35

July Aug Sept Oct Nov Dec Jan

Month

Raw

Lea

ds fr

om E

vent

s, D

atas

heet

D

ownl

oads

, Dem

o R

eque

sts,

Con

tact

Us

and

Cal

l-ins

Direct e-mail Campaign Performance

IPO CEO - MIT CTO-Innovation

CIPC - CostControl

IAG-DennemeyerCost Control

Co

nve

rsio

n R

ate

10%

6%

Industry Benchmark& PerformanceTarget = 3%

IP Currents Conversions

0

10

20

30

40

50

60

70

80

90

Nov'07 Dec'07 July'08 Aug'08 Sept'08 Oct'08 Nov'08 Dec'08 Jan'09

Month

Wh

ite

Pap

er D

ow

nlo

ads

Growing Visbility

0

20

40

60

80

100

120

July Aug Sept Oct Nov Dec Jan

Month

Whi

te P

aper

Dow

nloa

ds &

Sub

scrip

tions

•Multiple keywords on Google first page.•SEO leads generated include multiple

Fortune 500 companies.•Faster Sales Cycles

COMMENTS?QUESTIONS?

BACKUP SLIDES

SWOT ANALYSIS TEMPLATEStrengths

•

Opportunity• -

Weaknesses−

Threat• -

Implications for my company

• --