Have you been thinking lately “Damn! XY Startup again logged in the next investment round! Why them? Why not us?”
You might be wondering why ‘those other startups’ get so much more visibility and have already logged in the next investment round, piling up success story after success story.
What is their secret sauce?
The good news is: It is no secret, not even a sauce. They are simply avoiding the usual risky and expensive marketing and sales mistakes, and getting it right instead.
So, today you have the chance to go down a similar route as these successful startups. We’re going to give you some ‘behind-the-scenes’ insights from a digital brand marketing agency that has seen it all (well, nearly).
Mistake #1: “Build it and they will come”
This is super risky. Because, quite honestly, it won’t happen. It never has, it never will. Unless you get really really lucky. And luck is a nice add-on on top of systematically created success, but nothing you should try to build your company on.
Risk level: High. Mid- to long- term costs: Massive. Could even cost you the company.
Mistake #2: Underestimate the power of well-crafted branding
Branding is not just a logo. It is sooo much more. Besides making the whole affair look cooler (which it can and should), it provides you with a great sales story that is relevant to your target group(s). Well-done branding pre-sells via each communication channel and asset that you use (website, social media, PR). It makes sure that you tell the same messages whenever you communicate. This positive way of repeating yourself (it is called ‘redundancy’) does you a very important service:
Positive redundancy creates TRUST
And if there is any kind of secret sauce, that would be it. Trust is the number one main differentiator making customers decide to choose your product instead of the competitor ones.
Mistake #3: Start TOO early with external communication
Even though it is true that there is no value-add in tweaking the next line of code when the product is actually already ready to sell, it must be your priority that the product is exactly that: Ready to be sold. Ready for the go-to market.
This being “ready for the market” in most cases it is not so much blocked by an even better line of code, but rather by a lack of clarity. Unless you are clear about use cases, their relevance, benefits, how and when they can be experienced, all external communication about your amazing product or offer is futile or can at least get risky.
The risk involved stems from the underlying insecurity in communication – and it will give you away quicker than you could ever guess. The competition as well as the clients will smell the underlying insecurity via that communication miles afar – and this counteracts the most important asset you need… trust (see above).
No “fake it till you make it” confidence will get you the same effect as well crafted marketing messages.
If you are not marketing and communication experts per se do get professional help. It will pay off and back.
Mistake #4: Thinking that lean startup methodology alone will get you there
A lean business model canvas can truly be a great thing: it is simple, it helps you focus. But it is not a business plan and totally not a marketing one – even less a sales plan. Not having a marketing and sales plan means you will probably not have a decent budget to set up a marketing and sales system.
Which then in turn will most probably leave you having a product to sell and no leverage for doing it. Or bootstrapping like crazy and wondering why all the hustle is getting you nowhere.
That would be bad, right? Oh yes, it would.
Mistake #5: Get personas and target groups mixed up
Lots of startups are intrigued by design thinking methodology and its concept of creating ‘Personas’. Thinking and targeting personas can be really helpful, however, it is vital to know that it actually comes second in process.
What you definitely need is a real target group first. “Real” meaning:
- They exist;
- Enough of them exist;
- They are eager or at least open to buying your services / product;
- They do have the money for it
Well identified target groups make sure that there is money in your business, which, of course, needs to be confirmed before you get ahead and think about how to approach your personas. The personas serve as an important inspirational role in marketing and sales communication, but do not take profit making opportunities into account.
Besides, having matter-of-fact intelligence about the size and openness of the market opportunity will also help in figuring out which budget will be needed to market and sell it.
Linked with that is…
Mistake #6: “We are the first and only in the market”
Well… how to break the news here?
It is pretty much probable that this is not the case.
This in itself by the way is not even a problem, because investors know that being first also involves massive risks and uncertainty.
It is ok to enter a market that already feeds the mouths of your competition.
The risk arises if a team chooses to ignore the competition and their interaction with (your) potential customers.
Mistake #7: Mix up “marketing” with communication
Marketing is much more than that. This is not only ‘good to know’, the problem is, if the other parts of marketing get ignored, it will open the doors to massive risks. As a real clever startup team, think of marketing as including:
- Pricing strategy – Get the wrong price point and you’ll be out of the market. Get it right and experience riding the wave.
- Product – Create a product that is great not only for you, but is crafted according to the needs of a well paying target group.
- Place – Sell it in all the wrong places, and you’re out! Find clever sales channels and partners, and all can be so much easier!
- Promotion – This is where communication comes in! You need a plan and focus here, otherwise you will easily get lost.
Mistake #8: We don’t need a (marketing) strategy, we are too agile for that
Actually it works the other way round: Because you want to be able to be and stay agile, you do need strategy. You need a clear vision of what, why and how you are doing things. What is within (budget / timing) range and what isn’t. Otherwise you’ll be zig-zagging around, spreading budgets, and end up exhausted by repetitive discussion loops.
Mistake #9: Trust in that one sales guy with the massive network to get the job done
This is one of the most risky mistakes ever. Why put all the eggs in one basket if it is about your life and company?
This is the other side of diversity and gender bias: Men tend to trust other men, and too much. They tell each other stories they easily believe, they just sound so good and it would be great if he would be right about his promise. Yep, would.
Get a really great sales man or sales woman with a proven track record (that you can see in terms of numbers, money, closed deals), and/or be that great sales guy yourself. Then get help to get you equipped with a compelling sales story and great sales and marketing material.
That will massively increase your chances of success.
Mistake #10: Our product is tech mostly, so we hire dev. first, also for our website
Bad bad mistake. Really bad mistake. As bad as it gets.
For one, you do not need developers in that sense and in the lead for any normal website. One might need their help, but a website these days is about its content and well crafted communication. It is a communication and marketing and sales job, not a development job.
Please do not go ahead and spend all the money on development, so you end up having no budget for brand, marketing, communication. You will lack the leverage into the market (whether it is the customers, users or the investors).
Mistake #11: Timing doesn’t matter – if our product is great
The awkward truth is: Timing matters hugely. If you consider what happened last year, the pandemic had an influence on the overall business atmosphere – some boats were lifted by it, some destroyed. It pays to be realistic about the overall context and the current momentum.
Once we had a case of a crypto project going on and then there was suddenly a big scandal related to a German crypto startup called savedroid. Trust about that upcoming token market was massively harmed, and this makes selling or pitching much more difficult. You might still decide to ‘go out there’, but it will need larger budgets and even better leverage to work out.
Mistake #12: We are still early stage, we don’t need a real brand – yet
Well this is a bit of a hen and egg question, isn’t it? Of course, no one expects your startup to have a popular global brand like Coca Cola right from the start.
Try on this perspective for a moment: Your future investors can and will expect that you show (don’t tell!) them that you’re a gang of pro’s.
How do you show them you are operating on a pro level?
With a well crafted business and brand story, a prepped pitch, and seamless look. That’s it.
And we can’t promise anything, but heading out there in such a well-equipped manner makes getting that million investment so much easier.
Also, if you hesitate investing the money for it, think about it like this: How much time do you have to pitch and pitch again? You only have one chance to make a good first impression. You better make it count.
Summing up how you can approach this in a better way
Of course, there will be mistakes along the the way as you’re building your startup from the ground up.
It sure as hell will happen. But as some mistakes are unavoidable, we highly recommend avoiding the kind of mistakes that are avoidable, such as these twelve.
Get geared up by doing these 10 clever things instead
- Get a decent marketing and sales strategy (including pricing, sales channels, promotional activities and budgets, product concept incl. target groups)
- Have your product development status checked from a marketer’s expert perspective – define what is really needed to get ready for your Go-to-Market
- Make sure your budget reflects your business priorities – if that is a successful launch and/or go to market, this should show in marketing and sales budget proportions
- Do not hesitate to get a deeper market opportunity check by pragmatic market research methodology such as focus groups (also possible in remote mode) or mystery shopping
- Use both to also check in about timing and momentum – use those insights to adapt your approach and/or budgets
- Invest in your investor search success as well as your overall future success by starting out at least with a basic till medium brand package including brand positioning, messages, look as well as basic on- and offline collaterals
- Make sure all your online outlets look sleek and consistent, think website, social media including LinkedIn
- Complement great in-house sales skills with a good set supporting efficient sales processes and sales automation tools
- If you plan doing lots of DIY, choose a marketing and branding agency that enables you via coaching or templates to take over in-house if wanted
- If you are seeking investment, have a decent pitch deck ready. Best in a modular mode so it can easily be tweaked for that spontaneous opportunity coming up tomorrow morning.
Special Offer for EU-Startups Readers for your success
At OVERW8 agency, we are committed to helping entrepreneurs going down that clever route. That’s why we are offering 10 free 30-minute consultations (normally at a value of 199€). No strings attached.
Enjoy an exclusive one-on-one session with OVERW8’s CEO Kristin Reinbach via Zoom and get your individual quick assessment of your situation. First come, first serve.
Make sure to file your meeting request until the booking deadline of July 20. This exclusive one-on-one meeting opportunity for EU-Startups readers is valid until the end of July.