"Most start-ups fail. And they die remarkably young: The typical start-up lasts 20 months and burns through $1.3 million in financing before closing its doors. So what’s the formula for success for those start-ups that make it through the early trials, leveraging their early success into either getting acquired or issuing an IPO (initial public offering)?"
These are a few of the issues pondered by the new book The Ultimate Startup Guide: Marketing Lessons, War Stories, and Hard-won Advice from Leading Venture Capitalists and Angel Investors, authored by Tom Hogan and Carol Broadbent.
To find out more about how growing companies can stay alive in a harsh ecosystem, we invited Tom to chat with us on the Marketing Cloudcast — the marketing podcast from Salesforce. Tom is also co-founder of Crowded Ocean, one of Silicon Valley’s leading marketing firms for startups. He has over 25 years of marketing experience, including key roles at Oracle and a host of other Bay Area companies.
In this episode, we look at what makes a startup succeed, how small teams can compete for attention, and the key to a positive and productive company culture. If you’re not yet a subscriber, check out the Marketing Cloudcast on iTunes, Google Play Music, or Stitcher.
Take a listen here:
You should subscribe for the full episode, but here are a few takeaways from our conversation with Tom Hogan.
In his 25 years of experience, Tom has witnessed the growth of many companies, from small startups to large organizations, but he’s seen lot more that have been unsuccessful. The failure rate has stayed at about 90% over the last two decades .So what makes the difference?
Ultimately, it’s about blending young people who have new ideas with veterans who have done it before. As Tom puts it, ideally for some people on the team, “This isn’t their first rodeo. They’ve got the scars, and they’ve got the bruises.” At the end of the day, “there is something to be said for having failed once or twice.”
Everyone's heard the theory that the left brain is logical and the right brain is the emotional center. In The Ultimate Startup Guide, Tom talks about the Left-Right-Left approach to marketing. When you talk about branding or any kind of marketing initiative, we often want to start with the right brain question of what we want to evoke in people. While that’s important, you can’t answer it without starting with some left brain questions: What are you trying to sell? How is it going to impact your market?
Then, go to the right brain: what kind of emotional reaction should they have? How should they feel about you as a provider? Finally, go back to the left brain and test if what you’re hoping to achieve actually gets done. As Tom says, you need to “start with the logical, factual elements of what you can do for them.” Then you can look at having an emotional impact, but the real key is to measure that impact so you can go back and do it again.
Tom sees company culture as the key to success, and it all starts with the founders. As he puts it, “You are not Steve Jobs.” Too many founders have read about Steve's, um, intense leadership tactics and think they need to be a bully to get things done. But that approach actually has a negative impact on the culture and employees’ contributions.
We can look up to Steve for many things, but emulating his leadership style is probably not a success recipe for most founders.
Instead, Tom suggests that you need to “start with the idea that you’re hiring brilliant people that have given up a lot to join your company, and those people need an outlet and a voice — and [remember] they need to be involved regularly, not just in updates from you on how the product’s going or how the sales numbers look.”
If you look at the industry, you can see this notion backed up by investors. “The VCs have moved their value from technology to team.” If you have a great team, they will back you even if you get off on the wrong foot. They will keep you around and present you to the next big idea. The bottom line is that “hiring that core group has never been more critical to the long-term success of a company.”
“There’s never been a better time to be a marketing professional, and there’s never been a more level playing field,” says Tom. Whether you’re a big company or a lean startup, new tools and technology make it possible to get the best talent through freelancing and outsourcing networks. Instead of putting people on payroll permanently, you only need to dial them up on a project basis rather than having them burn up overhead and headcount.
As Tom says, “I think it’s a great time to be looking at everyone as a virtual resource rather than a full-time one.”
The other reality is that the market has shifted since about 2 years ago to be more mobile-centric. Marketers who get that and are working on that are faster and more nimble than their competitors. “In the next year or so,” Tom says, “they’re not going to need to be educating their clients and internal managers as much as they do now. The market is going to catch up to those guys and what they already know and feel in their bones.”
And that’s just scratching the surface of our conversation with Tom (@CrowdedOcean). Get the complete scoop on B2B content marketing in this episode of the Marketing Cloudcast.
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