7 of the Biggest Marketing Mistakes Made by Early-Stage Startups
By: Julianne Keu
Tags: Marketing Strategies, Startup Marketing, Growth Marketing, Startup Mistakes, Startup

(This article was originally written for Vancouver Startup Week.)

Over the years, I have worked with and consulted for startups of various stages, from bootstrapped ideation to post Series A. In my position, I’ve observed a common pattern of startup marketing mistakes perpetrated by otherwise brilliant people, which has left me and my co-founder perplexed. At the same time, we recognize that it is much easier to form opinions from the outside than to execute your way to the startup’s version of the Promised Land. If getting there were easy, we wouldn’t hear of startling figures like the 95 percent failure rate.

But I can’t imagine ignorance being any more helpful either. On that, here are 7 of the biggest marketing mistakes made by early-stage startups:

1. Not knowing what the heck marketing actually is (as it pertains to early-stage startups).

Marketing is anything that gets customers. This is the only definition of marketing you need to know. Once you accept this definition of the discipline, you begin to see marketing as having a role in critical functions such as customer development, product development, and sales.

2. Not engaging with your target customers (and assuming relative advantage will carry you through).

You might know your product through and through, but how well do know the people for whom it is intended to serve? In my experience, most first-time founders do not know their customers well enough. Those with a background in STEM are especially privy to this, focusing instead on full-time innovation. This may be enabled by the presumption that customers will naturally gravitate towards a “superior product.” I mean, that would be the rational thing to do … right?

Unfortunately, human beings are emotional actors, and every decision we make is fundamentally an emotional one. Relative advantage is but one factor in the decision to adopt a new product. Other factors include the product’s communicability, compatibility with customer values and experiences, and risks (the potential consequences of the innovation not meeting customer expectations). You can increase your chances of successful product diffusion by anticipating these factors accordingly. Because you’re not omnipotent, you must engage with your target market for answers every step of the way — beginning at proof of concept.

3. Having a weak value proposition (or not having one at all).

A value proposition is a clear statement of what you offer and how you offer it better. It is your “what and why,” packed neatly into a single statement. This statement serves as the basis on which all your sales, marketing, and product development efforts ride.

The next time you meet a seed-stage entrepreneur, try this little exercise: ask them to describe what their company does in one sentence. You’d be surprised how much this question lends itself to fillers and run-on sentences. Developing a strong value proposition is a process that requires a thorough understanding of your market landscape, your position in it, and the psyche of your customers.

And no, “Like ‘X,’ but better” is not a value proposition.

4. Not allocating enough funds to marketing in the seed stage.

How younger startups can afford 2–3 full-time developers yet claim to have no funds for marketing, I will never understand. Perhaps marketing is often seen as something better saved for after a company raises its first major round of funding. The problem is, investors will not only want to see hockey stick growth potential, but evidence for it too.

“But what if I’m really bootstrapped? How do I make the most out of what little budget I have?” The short answer is, “Start small and focus on quality of customers.” The frank answer is, “Don’t get yourself into that position in the first place.” I always advise seed stage startups to set aside at least a third of their entire budget for marketing. This includes market research, customer development, and all the work that goes into increasing your company’s viability in the eyes of investors. Setting the funds aside from the beginning becomes intuitive once you are cognizant of the idea that a product is only about as good as how its beneficiaries say it is.

5. Using paid media as your primary customer acquisition channel.

— Before you have achieved product/market fit. Marc Andreessen defines it as “being in a good market with a product that can satisfy that market.” Product/market fit is considered to be achieved once 40 percent of a company’s surveyed customers report that they would be “very disappointed” if that product were to suddenly disappear.

Startups generally fall into two categories: pre-product/market fit (pre-growth stage) and post-product/market fit (growth stage). Advertising in the growth stage can be an efficient way for a startup to scale. Advertising in the pre-growth stage can be an efficient way for a startup to burn through its marketing budget, run out of capital, and fail. (Hey, that rhymed!)

Does this mean that pre-growth startups should avoid the use of paid ads altogether? Not necessarily. Advertising can be a great tool for gathering feedback on your product for validated learning. Perhaps a simpler rule of thumb is this: if you have not yet achieved product-market fit, all your efforts — development, marketing, and sales — should be aligned to get you there as quickly as possible, as efficiently as possible.

6. “Brand-building.”

Don’t waste your money on nebulous concepts like brand-building. “Brand-building for growth” is a misconception we can’t seem to shake because it just seems so intuitive. Creating brand awareness gets attention. Attention converts into interest. Interest, into sales. That sounds fine and all, save the fact that you have a limited runway and people don’t actually care about what you have to say (until you give them a good reason to).

For most technology companies, the customer experience is the brand. Is your customer experience seamless? Are you going the extra mile to ensure customer satisfaction? How much does your product live up to expectations? Invest in improving the customer experience and your brand will naturally evolve to reflect this.

7. Outsourcing your marketing strategy to “experienced marketers.”

My first full-time job out of college was in an entry level marketing position at an AI startup. It was well-funded and well-staffed, yet initially lacked an in-house marketing department (with the exception of yours truly). In my position, I was to take direction from two independent marketing consultants the company had hired. On paper, these consultants glistened. They were adorned with marketing degrees from prestigious universities and managerial positions at nationwide companies. These consultants appeared to be perfectly poised to help my company gain traction.

Except they ended up doing squat. Several months and tens of thousands of dollars in, we finally let them go. It was the perfect opportunity for me to prove my strategic chops; shortly after the consultants left, we were “growth hacking” our way to thousands of organic app installs per month at a fraction of the previous cost.

The lesson here is not necessarily to staff your marketing team with fresh faces. Critical thinking knows no age. However, being an “expert” can lend itself to cognitive bias, making it more difficult for you to see your area of expertise in radically different ways. Starting from a blank slate forces you to think critically. And this notion — tackling problems with a fresh perspective — is the hallmark of the growth hacking mentality.