Andreessen Horowitz (a16z), a venture capital firm from Silicon Valley formed in 2009 is considered by many as the goddess of wisdom when it comes to marketing. Consequently, a16z has recently written a newsletter about marketing and how to maximize market potential.
My interpretation in the following report cites my own observations and personal experiences in summary form. You may beg to differ, but either way the topic is of high interest for budding startups. My report provides some scope on the subject while clarifying certain setbacks of marketing in general.
Conventional marketing teaches us to – Go to Market (GTM), push the sale of whatever, whether product or service item by creating the demand, sales, and then finding new prospects over and over again until market saturation is reached. Whereas, Modern Marketing teaches us to – Go to Communities (GTC) to build brand awareness while using alternative and less direct marketing methods for the long haul with greater penetration, wider reach, and potentially stronger relationships. The marketing mix is the way to go.
For entrepreneurs who have failed to find seed capital or angel investors then getting quick returns-on-investment (ROI) are essential to keep a company afloat. Funding is at the forefront of any business. Marketing and sales as a division is key to reaching objectives. The focus is sales to spearhead operational costs such as inventory, salaries, and overheads. Considering these aspects, no income equals no revenue, and as such a new firm could be doomed early on during the development stage if marketing isn't treated seriously..
Alternatively, for an entrepreneur who has secured seed capital or angel investors there is more breathing space to perfect the proposition especially when creating new methods of going to market which can take much planning, design, and implementation. It takes time for a team to gel and perform effectively. Adjustments will need to be made until the final blueprint is ready for market penetration. Nonetheless, marketing and sales will become an indispensable necessity for the company to become prosperous.
It's often said that more than half of new businesses fail during the first year. According to the U.S. Bureau of Labor Statistics (BLS), this isn't necessarily true. Data from the BLS shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more. Gaining a business advantage helps!
Time is of the essence, as time is money. Everything has to run like clockwork. Synchronization plays a fundamental role in the process stages as anything out of place will hinder operations. Learn more about effective marketing in today’s marketplace the Modern Marketing - part 2 in tomorrow's blog.
Take care!
Prof. Carl Boniface
Vocabulary builder:
Beg to differ (expression) = means disagree with someone, as in Mark told me Max was sure to win, but I beg to differ—I don't think he has a chance. This courteous formula for expressing disagreement echoes similar uses of beg in the sense of “ask,” such as I beg your pardon, so used since about 1600.
Budding startup = meaning flourishing new business. If you describe someone as, for example, a budding businessman or a budding artist, you mean that they are starting to succeed or become interested in business or art.
Seed capital = typically comes in smaller amounts of money that a start-up raises from people they know.
Angel investors = generally are experienced business owners and investors who have a high-net-worth and contribute more considerable sums of money.
Gel (v) = If people gel with each other, or if two groups of people gel, they work well together because their skills and personalities fit together well. They have gelled very well with the rest of the side.
Nonetheless (adv) however, nevertheless, even so, on the other hand
Hinder (v) = delay, deter, hamper, incumber, obstruct, impede, hold back