Profit-driven marketing

It is one of the most common and costly errors. With an approach like that, chances are good you will create a product nobody needs. The last thing you want to do is waste all your effort and precious funds on a product with no demand. A lot of tech startups consider the creation of an innovative product to be an essential part of the deal, but it is the mindset of the 1960s. It probably made sense back then, but these days in the 21st century, not many businesses fit into that concept, especially startups. The most important goal is for the market to accept your product.

Your product has to have exceptional value to it. If your product solves problems you think consumers have and not those they have, you’re just creating another thing that is “kinda” good to have. Solve the issues consumers have. That creates significant value for them and the higher the value, the higher your profit margin can be since it makes consumers more willing to pay for such products.

You can’t sell what consumers don’t consider to be necessary.

Over 40% of startups that aspire to bring new solutions to the world either don’t perform market tests or do it improperly.

Saying and buying are different things. Receiving a promise to buy your product is not feedback. Real feedback comes with the money consumers pay. It is remarkable what they do with your product and not what they say. Market testing is impossible without your clients paying for your product.

Once your clients well receive you well, the rest will follow media coverage, investors and sales. Too often startups concentrate mainly on attracting the attention of investors. They focus on pitching their idea and putting on a show — sadly, some investors approve and even take a liking to it.

Yes, investors are prominent, but aim for consumers instead — make sure your product has value.

The global research indicated zero startups without competition.

Those of you who are familiar to marketing know that there are direct and indirect competitors. In case your startup works on an innovative product you won’t have direct competitors until someone copies you. On the other hand, if your startup works on solving an existing problem, chances are good there already are existing methods to solve it. The latter are your indirect competitors. Even a client’s decision to ignore your product is an indirect competitor. Interviews of founders of startups showed they conduct a very shallow competition analysis. The author recommends asking yourself questions and finding out who you compete with instead of nurturing the illusion of a competition-free market.

Really? In reality, that’s just called “hope marketing,” and it means you mostly do nothing but hope for the best. Years ago, Eric Ries, the author of ‘The Lean Startup’ already outlined three of the fundamental growth mechanisms. The sooner you apply one of them, the better. You should take action and be careful with hopes.

About 66% of interviewed startup owners stated they wish to benefit from growth hacking — a strategy, in which every decision is exclusively growth-oriented. At the same time, only half of those startups made sure their product meets market needs. You need a foundation for growth. Make sure your product has value, work on the cross- and upsell strategies.

Not all marketing tools require lots of money. The author recommends taking some time to read a couple of books on “rogue marketing.” The research showed that out of 47,9% of startups already present on the market only 17,4% had a consistent marketing plan and only 39,4% developed their brand and product positioning.

Positioning and marketing plans require effort, not money! And remember that every investor wants to see traction. Investors need proof that your business model is viable and durable, and you cannot prove it without marketing. It’s okay if you don’t want to spend large sums of money on marketing on early stages, but you can develop marketing plans and even commence marketing experiments to find out if your product meets market needs, to gather required data, choose suitable growth mechanism and test your distribution channels. Later you can prepare a sophisticated marketing plan factoring in potential profit and start looking for investors to make it work.

As Jonikas notices it’s not working anymore. Big launch strategy may work well for traditional business, but startups better avoid it. It usually leads only to unnecessary expenses and a lack of sales. Startups are innovative, and they need to perform a reality check on their product value: if it satisfies market needs if first clients purchase the product if there are tech evangelists among those people. Startups should test their distribution channels and choose the right growth engine. Don’t forget feedback first.

Sounds like madness, right? Unfortunately, a great many startups fall victim to this.

They spend funds provided by investors on things that add no value to neither a product nor their business. Startup founder gains nothing by paying himself a high salary, renting comfortable modern office space or participating in major events. Yes, there are personal gains, but it is at best. In reality, it just burns the funds your investor gave you and provides no real benefits for your startup. The faster you burn money, the less time you have left to make your startup into a profitable business. Learn to distinguish between the money your startup receives and the money it earns. Stop wasting money and invest in what is profitable and benefits your business.