As we exchanged our business cards, the title read Chief Evangelist and Co-Founder! What caught my attention was the card that had a smooth finish with elegant design and embossed logo. With a smile, he introduced his company as a technology focused startup that got $2 million funding recently.
My logical question to this Chief Evangelist was what made him splurge the VC money to sponsor this much-touted event. With a bemused grin on his face, his answer was quite interesting – “I am here to build my brand, showcase my product and get validated by people visiting this event.” Puzzled, I asked, “Did the VCs allocate so much cash to burn for marketing events like these when you could have done easily leveraging social media techniques?”
Reluctantly he said, “My Head of Marketing was keen to sponsor.” Now when he said “Head of Marketing” I was not at all surprised because events always made marketing folks look good!
As I went to see around, I saw other startups too that had splurged their money in sponsorships!
I thought if it was all about validating their ideas and products, they could have used social channels effectively at a fraction of cost! After speaking to the startup founders, here is the list of things they can shun:
- 1. Shun sponsoring events to validate ideas/products: There is no point in sponsoring events only to validate your ideas and products. Big companies put up their stalls for variety of reasons – you don’t need to follow them! Startups need to be extra cautious on where they want to spend their dime. What you want to do in the event needs to be clear, but certainly not for validating ideas.
- 2. Do not hire a full-fledged Marketing role: If you want to hire someone only for marketing, just avoid it. If you must, see if that person can don multiple roles, like sales, proposal creation, etc. There is absolutely no need for startups to go for a full-fledged marketing role even if you have got $2 million funding unless your business is into media and entertainment.
- 3. Limit full-time engagement with PR agency: Practicing austerity is not easy when you are funded! You will eventually end up allocating marketing dollars for a PR agency that may not be required at that stage. I’m not saying you don’t need a PR agency at all, but your social media presence can potentially act as a formidable PR tool. However, make friends with journalists, send them interesting tidbits about your company and become their soundboard of latest trends. Journalists like to be hounded! .
- 4. Eschew from procuring costly database tools and CMS: The gentleman I was talking to at the event mentioned that they procured a costly database by paying up $40K and another $55K for a CMS tool. I reckoned that going by the scale and volume of transactions they would be doing for the next 5 years, they would not be consuming more than 50%. I also figured out that they spent over $100K on marketing tools keeping in view the future in mind. While it is appreciated that they seemed futuristic, it would have made a lot of sense if they had bought CRM tools or for that matter sales intelligence tools.
- 5. Avoid building unnecessary content assets: My personal take is that while content assets are important only if they are focused on products and innovation. The event I was mentioning about earlier on saw a deluge of brochures strewn across the floor and a lot of them had gone into dustbins. Startups should avoid spending money on building corporate collaterals because buyers trust their innovation capability more than the people behind the startups. Let’s say Tim Cook quits his job at Apple and floats his own company. His personal branding may weigh higher initially but it needs to quickly ramp up products to maintain credibility.
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