CEO: We invented an amazing, novel, disruptive technology. The market is huge. Let’s hire a sales leader to go sell it!
Sales Leader, (after a short time with the company): I thought you told me this product was ready for the market?
CEO: It is! What are you saying?
Sales Leader: Our customers are upset. They’re telling us that there are issues with implementation, they need more support and are not happy about paying a premium price. It hasn’t been smooth sailing for them.
CEO: What?! I’m surprised to hear this feedback!
Sales Leader: We need to back up the train. We need to address a few vital marketing questions to help us be successful in our sales efforts.
CEO: What marketing questions?
This experience happens all too often. I know. I filled the shoes of an SVP of Sales & Marketing with medical device startups for many years. These new technologies were life-saving. But in many cases, the company rushed them out before the marketing plan was buttoned up, only to find out from customers and/or hear from a new sales leader that essential marketing questions still needed to be addressed to successfully sell.
A lack of attention to all aspects of a pre-commercial marketing plan – early on – followed by a data-driven Go-to-Market plan can result in a mis-timed product launch, poor customer experience, pricing/cost issues – and other sales obstacles – all resulting in lost sales and time, and even possibly of running out of money. Not to mention the immense stress for all team members. This, unfortunately, can lead to loss of great personnel.
Recently published research (Wilbur Labs*) enumerates the top reasons why 70% of entrepreneurs will face potential business failure within the first 25 months of launching their company.
The majority of reasons for failure can be avoided!
Aside from finance and legal challenges, the top reasons startups fail include:
- No business plan or model (25.5%)
- Lost focus (23.9%)
- Not the right team (22.8%)
- No market need (20.1%)
- Pricing/cost issues (19.8%)
- Poor marketing (19.8%)
- Failure to pivot (19.3%)
- Poor customer experience (18.8%)
- Ignored customers (17.9%)
- Disharmony among team/investors (16%)
- Unsuccessful pivot (13.9%)
- Product mistimed (12.2%)
How early does a startup need a marketing strategy? From the beginning!
In parallel with working on a functional prototype, financial investment (by family, friends or others) and securing IP, intentional effort to develop a well-researched pre-commercial marketing plan is vital.
Key elements of a pre-commercial marketing plan early on include:
- Market research – is there a market?
- Who is the target market?
- Understanding the customer base
- Competitive analysis
- Clear value proposition
- Business model – how will your business be monetized?
Intentionality in developing a pre-commercial marketing plan will not only help put a solid foundation under your business, but it will also be instrumental in informing a compelling story necessary to raise commercial financing to launch your Go-to-Market strategy.
Sharon Smith is a Fractional VP of Sales & Business Development at The Anser Group.