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If Your Product Sucks, Your Startup is DOA

suck-meterOf the startups I’ve worked with since launching my consulting business, I’d say 90% have developed a product that has addressed a need or solved a problem. This isn’t to suggest all of them have succeeded but their products had the potential to become a viable business.

For all the talk about social media, content marketing and the sales funnel, a startup’s prospects hinge on the product.

You can put lipstick on a pig but if a product fails to meet a need, solve a problem or, frankly, sucks, traction is difficult, if not impossible, to achieve.

It’s something too many entrepreneurs can overlook because they’re so excited about doing a startup. It is painful to run into an entrepreneur who thinks they’re onto something when, in fact, it’s pretty obvious their idea is going nowhere fast.

Many entrepreneurs fail to realize their product isn’t viable because their eternal optimism doesn’t let them think rationally. Maybe their “product” is nothing more than a quasi-interesting feature, perhaps it only appeals to a small niche, or it’s attempting to compete against bigger and better rivals.

Even then, many entrepreneurs will continue a Don Quixote quest to attract customers. This could carry on for months and involve continual iterations, a wave of new features or even a pivot. Still, a bad product is still a bad product no matter have much TLC it gets.

At some point, a startup entrepreneur has to see the writing on the wall. They need to decide whether the product has absolutely no appeal (the worst case scenario), or whether it seems to be resonating with certain customer segments (aka a ray of hope). In the latter case, the product may have shot at gaining some potential if the right moves are made.

To be honest, most products don’t evolve or have the opportunity to head in a new, better direction. Far too often, entrepreneurs are far too married to an idea that simply doesn’t work and, as a result, they’re trying to force their product into a market that doesn’t want or need it.

One last thought: Even with a good product, startups need to execute well from a marketing and sales perspective. It means have a strategic plan, and then figuring out how to pull the right levers at the right time – something that is easier said than done.

Note: The inspiration for post came from Kissmetrics, which published a post “13 critically important lessons from over 50 growth hackers”. Coming in at #12 was: It’s the product stupid.

“In the final assessment, growth hacking, when deployed in the service of a bad product, is a waste of life. Sorry, it needs to be said that bluntly. Engineering growth for something meaningful and important is a noble cause. Pushing a lazy idea, with lazy execution, is not worthy of your energy. Your results won’t be lasting no matter what your charts look like in the short-term. Time breaks all hockey sticks that are not owned by great products.”

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Thinking Out of the Marketing Box

out of the boxOne of the realities about marketing is it’s difficult to rise above the crowd. When everyone is talking about their brands and products, it makes for a noisy landscape.

This can be daunting for startups looking to establish brand awareness, particularly when most of them have small or no marketing budgets.

So how do cash or resource-strapped startups thrive at marketing when there are bigger, better financed rivals?

One of the keys is thinking out of the box, and I’m not talking about Facebook contests, link-bait blog headlines or buying Twitter followers.

Instead, I’m talking about startups with the willingness and ability to do things differently, even if means taking  risks. These are startups that go against the grain. When everyone is embracing Pinterest, they do something completely different.

This can be difficult because not only does it require an appetite for risk but, in many cases, a lot of creativity and agility. It’s about having a corporate culture and a marketing approach that makes it easy to be opportunistic.

A great example is Fongo, which recently offered to buy Wind Mobile for $1 and a 49% stake in the Waterloo, Ont.-based startup. The “offer” was creative and oozed with cheekiness but it got Fongo and its free mobile service a lot of attention.

It was the kind of marketing that can go either way. While Fongo basked in glory of its “offer”, the marketing gambit could have backfired because there is likely no way the company could afford to buy Wind, which has more than 600,000 wireless subscribers.

But it also demonstrated how living on the edge can reap huge benefits for  startups able to seize the moment. I would estimate Fongo spent less than $1,000 to have a press release put on the wire. Based on the coverage, the campaign had awesome ROI.

During a meeting with a startup client recently, one of their executives threw out a made-up name to describe the service. At first, it seemed like nothing more than humorous but the more I thought it, the more I realized the word could be used as part of a contest r campaign that would ask people to provide a definition.

I’m not suggesting the contest would have been an slam-dunk success but it reflects how different kinds of marketing activities can be effective.

For startups willing to think out of the box, there’s a fine balance between success and failure.

The difference lies in timing, creativity, delivery and luck. And falling flat on your face can happen even if the right creative buttons are pushed.

A good example is Pawngo, which dumped 1,000 Butterfinger candy bars in Boston’s Copley Square after the New England Patriots’ Wes Welker dropped a ball against the New York Giants during Super Bowl XLVI.

The stunt not only irked Patriots’ fans but Pawngo was hit with a commercial dumping violation. At the end of the day, Pawngo wasn’t seen as cheeky and creative as much as a nuisance and garbage dumper.

Nevertheless, Pawngo should get points for trying. It’s easy to take the safe route but more difficult to live on the edge where you’re not quite sure what’s going to happen. But as they say, no pain, no gain

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Why Startups Should Create Customer Personas

For startups looking to break into the market, identifying their customer is obvious.

Far too often, however, startups tend to look at target audiences as one amorphous group that has the same characteristics, needs and interests.

The problem with a one-size-fits-all approach is while “the customer” may appear to be the same, they may actually break down into several target segments with slightly differently needs and interests.

A startup’s product may serve all customer segments but the messaging to reach them can’t be the same. What works well for one group, may not resonate with another.

To get a better handle on your customer segments, a valuable exercise is persona creation.

This involves discovering and drilling down into the different types of potential buyers. It means answering questions such as:

  • How old are they?
  • What are their specific needs and interests?
  • Where do they discover information about your products?
  • What would solve their problems or make them successful?
  • How would they look like a hero to their boss?

In creating personas, startups may discover there are several distinct groups of customers. As a result, the startup may have to change its marketing and sales strategy and tactics to effectively pursue them.

This scenario happened with a client recently that was targeting social media managers. In creating personas, it became apparent that while social media managers were a target audience, other customer segments included digital marketers and chief marketing officers and PR/digital agencies.

Each of these customers could be served by the product but their needs and goals were different. It became obvious that having a single marketing and sales approach wasn’t going to work well.

So how are personas created?

It begins with being open to the idea there are different kinds of customers. Then, each customer has to be personalized. The easiest way is giving each of them a name, and then layering on characteristics such as age, job title, experience and responsibilities.

Let’s look at a small business owner looking for accounting products. One customer could be “Mary”, who runs a 10-person small business. Mary does her own accounting using Excel but needs accounting software to accommodate growth.

Another group could be “John”, who handles accounting and HR for a 25-person business with $5-million in sales. John is using basic accounting software but needs something more powerful and able to integrate with the company’s CRM system.

Mary and John could use the same accounting software but their needs are different. It means the messaging has to be personalized rather than generalized.

For startups, the big challenge is having a balance between having corporate messaging that embraces different types of customers and, at the same time, being able to speak to these customers in different ways.

The creation of personas is not only important but it could reveal surprising and valuable insight to jump-start your marketing and sales efforts.

There are many ways to create personas, including an online service called personapp.

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This Week in Canadian Startups (May 18, 2013)

startup newsletterFor people who have been watching Pebble for awhile, it has been fascinating to see its path from a smart watch project created by students at the University of Waterloo to being the belle of the ball at Kickstarter (more than $10-million raised) to now raising $15-million in venture capital.

Pebble is the lead story in the newest edition of “This Week in Canadian Startups”. There is also two items about incubators: a Financial Post suggesting incubators are failing because they don’t spawn enough successful startups, while Mark MacLeod counters that incubators are doing a great job of nurturing entrepreneurs.

To get “This Week in Canadian Startups” in your inbox every Saturday morning, all you need to do is subscribe.

Startups and the Art of Storytelling

As brand journalism and content marketing become more engrained into the way that companies do business, storytelling is clearly becoming more important.

There are a couple of reasons why this is the case. First, good stories are interesting, attractive and compelling. Second, brands will need to become better storytellers as content marketing becomes table stakes. When everyone’s telling stories, you need to be better at it to rise above the crowd – something we’re seeing in social media.

So, how do brands tell good stories?

It starts by being customer-centric, which means looking at what the customer wants to read, listen and watch as opposed to what a brands want to tell them. It’s a slightly differently perspective but surprisingly difficult for many brands who think that consumers like it when they babble on about features.

Truth be told, consumers really don’t care about your products, other than whether they help make their lives better, easier, more profitable, etc. There are many choices for consumers who can pick from products offering  the same features.

What consumers want is how you’re going to help them. What are the most biggest benefits of using your product? Mint, for example, helps the consumer “understand what’s going on with your money”. Freshbooks “makes billing painless”. WattPad helps you “connect with stories”.

For good storytelling to happen, it starts by taking an inside out perspective. Then, brands can begin to create narratives that are engaging and add value.

Once a brand embraces this approach, they can start to create content that resonates. Depending on the target audiences, it could be blog posts, videos, case studies, white papers, e-books or slide decks. And, of course, brands need a Website that tells an easy to understand story with clear benefits and calls to action.

Not not all content has to be dramatic or have a bad guy or hero. But it should be accessible and engaging in some way, and easily flow so it doesn’t feel like work. Some of it has to do with good writing and video production, and some of it has to do with design and production quality.

There are a few other considerations for good storytelling.

One, you need an editorial strategy that takes into account a company’s goals and objectives (e.g. drive leads and sales), the resources and budget, and how much content the target audiences are willing to consume.

Second, brands need a realistic tactical execution plan that lets them create a steady flow of content that makes storytelling a persistent and sustainable part of how the business operates. It makes no sense to come out of the gate swinging, and then lose your storytelling enthusiasm.

Third, brands can never lose sight of the fact people like stories. And, like children, they will read the same story over and over again if the stories are interesting and compelling.

For more thoughts, here’s a blog post by David Meerman Scott. For people attending the mesh conference, Knock Twice’s Kyle Monson will be doing a keynote presentation about brand journalism on May 16.

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Should Startups Use Consultants?

Earlier this week, the New York Times’ “You’re the Boss” column asked whether small and fast-growing businesses should hire consultants.

The author, Clifford Oxford, opined that consultants should mostly be kept away:

“This is the human factor of growth, and quite frankly, most consultants contaminate the whole place. Keep them out of this part of the business. Think about snakes in a wood pile. In fact, go back and find that 10-foot pole and grow without them.”

As a consultant who provides marketing services to startups, I think Oxford is wrong because it doesn’t reflect the value that consultants can offer at the right time for the right price.

One of the crucial considerations for startups, especially early-stage ones, is they need to be strategic and selective about how they spend money. There are parts of the business that demand a full-time employee because they’re core to the company’s operations. At the same time, there is a lot of stuff that needs to get done but doesn’t necessarily need a full-time, part-time or contract employee.

Instead, a startup can look to a consultant to fill an important gap on a project basis to achieve a key deliverable or milestone. In hiring a consultant (or hired gun), the startup can tap into someone’s experience, expertise and network to get exactly what it needs when it’s needed. It does not have to be a long-term or expensive relationship but it can provide both parties with what they need.

So when should a consultant be hired by a startup?

For many startups, the interest in a consultant begins when they have a problem to solve or a task that has to get done. At this point, they can try to have someone internally do it or look to hire someone if the position needs to be filled right away. Another option is finding someone (aka a consultant) who can come in for a set period of time (let’s say one to six months) to provide strategy and tactical assistance.

The key is determining what kind of help is needed, and then finding someone who has the experience and track record to fill that need. And you have to find someone who shares your values, passion and vision. That’s the first big step.

Next, a startup has to find a consultant who thinks strategically and performs tactically. A startup does not, under any circumstances, need a consultant who puts together fancy strategic recommendations, and then leaves the startup to execute. To me, that’s a half-ass job that provides little value, and gives consultants a bad name.

Third, a consultant needs to drink the Kool-Aid. While they don’t work for the startup, they need to feel like they’re part of the team, even if it’s for a short period of time. As well, the startup has to feel and know the consultant has a vested interest in their success, not just getting paid for consulting services.

So what about fees?

The image of consultants is they’re blood-sucking, money-hungry wolves. That may be true for some but it’s a sweeping generalization. A good consultant who wants to work with your startup should recognize the budget limitations and accept the reality that working for reasonable fees is part of the opportunity cost.

If a consultant wants to make large hourly rates, they should work for a big corporation. If they want to work with startups, they need to take a different approach – one that takes into account a startup’s potential and the buzz around their business and sector.

Truth be told, it can be hard for a startup to hire a consultant who meets the above criteria. The reality, however, is there are a lot of good consultants who can meet the needs of startups and, in the process, deliver a win-win proposition.

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