Over the last 20 years I have collected tons of business cartoons to use in presentations and other work projects. One cartoon, in particular, is getting so worn from overuse that I should probably have it laminated. It is this one:
I have dragged out this beauty when companies have asked me about how to approach lay-offs (is it best to lay off operations people or sales people when times are tough?) and also when they fail to hire sales and marketing resources in the first place. This last one is a near epidemic in the health IT/digital health world. Company founders very often come from the ranks of technical people or physicians or those who come from places other than the world of marketing and sales. And that’s totally fine. Except when they forget how important those sales and marketing people are to succeeding and then forget to hire them.
Founders often get so attached to the process of perfecting their product that they fail to recognize the best way to do this is by engaging with potential customers. Founders often forget that the message really matters. A lot. That’s why politicians spend so much time on message: they want you to understand why and how they stand out and remember it all the damn time. The world’s best companies do the very same thing: invest in the message, the packaging, the pricing, the customer engagement and the sales effort just as they invest in every other aspect of the business or even more. Those companies understand that marketing and sales are the lifeblood of a business. Without deep market understanding that leads to revenue, there is only darkness. It may not be today, it may not be tomorrow, but trust me: it is very dark when your investor money runs out and you haven’t shown market traction. Dark. Like Darth Vader helmet dark.
And yet I still hear all the time from entrepreneurs that revenue models “will come later” and, worse, that the product is so great that the minute the world gets wind of it at Tech Crunch, the customers will beat a path to the company’s door. This has come to be known among the venture world as the Field of Dreams strategy (“If I build it, they will come”) and it is pretty much always wrong (Note: I have ranted about this before in this prior post https://venturevalkyrie.com/is-that-revenue-in-your-pocket-or-are-you-just-happy-to-see-me/).
You know all those healthcare companies that seem to be flying up and to the right like a rocket? I bet you one year of their revenue that they had a period of time before lift-off when they were very worried about sales and invested heavily to get them. I know dozens of examples from my own experience. None of the most successful companies sit around thinking marketing is a “nice to have” and hoping sales will show up. It is guerrilla warfare, especially in healthcare where sales cycles are long and demonstrations of value are scant. And it can take a lot of guerrillas.
So imagine my total lack of surprise when I saw this article by George Deeb, entitled What Would Founders Have Done Differently, which was recently distributed by the National Venture Capital Association. The article highlights a survey done by an organization called The Alternative Board asking entrepreneurs what they would do if they could do it all over again.
Not to be a spoiler, but the headline result of the survey is this: entrepreneurs wish they had spent a lot more time and a lot more money on sales and marketing than they did. Among the specific findings are these:
- 80% of our business owner survey respondents discovered that client development is significantly more important than product/service development.
- 32% of business owners surveyed, in hindsight, would have improved their company’s brand development when launching their business.
- 35% of them recognized that they should have established a lead generation system earlier in the launch of their business as well. This may seem like a “no-brainer”, but it is easy to get caught up in other functional areas of providing a product or service and let lead generation activities take the backseat, particularly when this is not already skill set.
These are important lessons to learn and learn early before it’s too late. You want the customers to remember your name, not just the office janitor who leaves before you do every night. Invest in the message and story of what you are doing so the world of potential customers knows who you are when you call. Get out of the building, as Steve Blank says. Go find your customers. Pitch, pitch, pitch till you get it right. Hire professional marketing and sales people and give them the reins to do their jobs. Trust them to deliver your message. Ride along and gain those very specialized skills yourself, because they make you a better entrepreneur and leader. There is an odd snobbery among some founders that consider those in sales and marketing to be less “qualified” than technical or operations people. That attitude has to go, because if no one sells your stuff, you all go.
Make early hires of senior marketing and sales people; these should not be afterthoughts. If you can’t spend on everything, do spend on this. Failure to do so may mean you will be left with a great product that no one even knows about and no money to prove its value. Or worse, you may be left penniless and with a silent phone and a mediocre product that could have been a lot better if you left the office for a sales call more often.
I think of it like an Oreo: the product is the outer cookie, but marketing and sales is the cream filling. In my experience, no one eats the cookie first. It’s the cream that seals the deal and brings you back for another.