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
• 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
• --