Here’s a common scenario I see with some early stage tech startups…

Incredibly smart/tech-savvy people start a company around a cool idea. These founders build amazing tools/products that demonstrate their concept and their abilities. At this point they might decide they need to get funding. And, what will they use the money for? Often times, the word “marketing” will show up near the top of their funding needs (Sales and Business Development are also near the top, but that’s another post). Seems reasonable enough, right? I mean how else are people going to know about your company/product without marketing?

The trouble begins when you start to dig a little deeper on the “marketing” bullet point. The founders often won’t have a marketing plan yet. No problem they will explain, part of the funding will go towards hiring a marketing person. The basic thinking here is “we don’t know anything about marketing so we will hire someone who does.” If you are a startup CEO, and you think you are going to hire your way in to good marketing, I’ve got news for you: you are almost certainly going to fail. Why? I could write an entire book on this topic, but let’s start with a few basic points:

1) Marketing is not a bolt-on component of your company that you can outsource to another person. Marketing is an integral part of every decision the company makes. In my opinion, it is critical that the CEO drive the core marketing strategy in the early stages because all the major decisions around the company, the product and marketing are interrelated. A good marketing person can only help execute a plan that is based upon a strong vision that is set by the CEO. Hiring a marketing person before you know your marketing strategy is like hiring a developer before you know what platform/technology you are using to build your product.

2) If you don’t know anything about marketing, the odds that you can hire a good marketing person are pretty slim. Sure, a blind squirrel can occasionally find a nut, but I wouldn’t fund a business that was based upon such a rare occurrence. You can certainly get referrals from people you trust and respect. But, unless the person that is being recommended is coming from an identical business and you are planning to steel the previous employer’s marketing strategy (see point #1) there is little reason to believe the recommended person will be a good fit for your company/strategy.

3) If you don’t have a solid marketing strategy, your new marketing hire is either going to drive you crazy or accomplish absolutely nothing or both. If your new hire is motivated to do a good job, they will be constantly peppering you with questions you can’t yet answer in order to get some direction. You’ll be reacting to questions instead of developing a good strategy. If your new hire is bad, they will just sit back and wait for you. Either way, you lose.

So, how do you avoid this common mistake? Like a lot of growth opportunities it starts with self-awareness and acceptance. Once you accept your current understanding of the subject and you recognize the fact that you have to embrace marketing as your responsibility, you can learn quickly and make rapid progress on building an effective strategy for your company.

More thought on marketing strategy coming soon…

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16 Responses to News To Startup CEOs: You Can’t Outsource Marketing

  1. Brant Cooper says:

    With all due respect, this is a bit much. While I agree CEOs often don’t understand marketing and waste a lot of money on the wrong marketing tactics and marketers, I’m not sure that means the CEO needs to be the CMO, too.

    hiring a marketing person before you know your marketing strategy is like hiring a developer before you know what platform/technology you are using to build your product.

    Or, hiring a marketing person to formulate and execute a marketing strategy is like hiring a developer to choose the best platform/technology and to develop the product.

    I agree that it is imperative that entrepreneurs take it upon themselves to understand marketing better. It’s difficult to find the right marketing resources if you believe PR = Marketing = Advertising = Branding = Logo + Slogan, etc.

    I am also the first to admit that marketing discussions are often dominated by Madison Avenue, touchy-feely tactics, MLM, and affiliate spam. Did I mention yet that I can increase your twitter followers by 16,000 by tomorrow for free?

    Hell, why I am disagreeing with you? Just today I tweeted: if you ask me #1 confusion re: mktg, is what 2 do when. CEOs hire “mkters” who “do their thing” detached from biz obj & co. stage #mktgFAIL

    I guess my point is: CEOs need to learn more about marketing not necessarily to be the CMO, too, but to better understand what resources are needed and what they should expect, and that plans be based on current objectives and where the is in its development.

    A good marketing person can grok the business idea, help the CEO articulate the vision, and help formulate best-guesses as to what the strategy should be, and execute a process-oriented, metrics-driven plan that leads the way toward learning where the customers are, what they need, where to find them, how to convert them, and ultimately how to scale the business.

    Brant Cooper

    • Chris Moody says:

      Brant, Thanks for you comments. I suspect we agree more than we disagree. My post is really about EARLY stage startups. Ultimately most companies need a CMO as they mature (some much sooner than others). I definitely don’t like the idea of a CEO who acts as the CMO as a long term solution. My main point is that some early stage CEOs don’t even stop to think about marketing. They assume they will outsource it from the start and that is a mistake in my opinion.

  2. Dammit! Stop turning our conversations into blog posts! Haha.

    Very true, though. I’m glad I’ve wrapped my head around this, and I’m taking charge now. Feels good.

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  4. Mediamum says:

    Great job! As a startup co-founder in charge of marketing, I fully support everything you’ve said. It’s very hard, however, to explain this to others. I see founders influenced by pretend ‘experts’ who diss the necessity of marketing metrics, objectives and ROI. Identifying your strategy, tactics and following through with monitoring and evaluation are key elements to success.

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  6. @joelandren says:

    I’m going to have to disagree with you wholeheartedly on a number of points.

    #1

    A good marketing person can only help execute a plan that is based upon a strong vision that is set by the CEO. Hiring a marketing person before you know your marketing strategy is like hiring a developer before you know what platform/technology you are using to build your product.

    No, you’ve got it exactly backwards. It’s like non-technical founder hiring a CTO to determine what’s the best platform for performance and scalability. What you’re proposing is akin to non-technical founder determining that he wants use a .NET platform and then going out and finding a .NET developer.

    #2

    If you don’t know anything about marketing, the odds that you can hire a good marketing person are pretty slim.

    If you are a CEO who can’t hire your way to good marketing, then you have very little chance to develop a good marketing strategy yourself. The key in the hiring process is not seeing who had the biggest successes and hiring them. The key is to understand and evaluate the marketer’s acumen in assessing the company’s strengths and weaknesses in relation to the market and then crafting a plan that accentuates the positive.

    As a startup CEO, you probably are great at the first part, because it’s your product/business, but that doesn’t mean you adept at the second.

    #3

    If you don’t have a solid marketing strategy, your new marketing hire is either going to drive you crazy or accomplish absolutely nothing or both.

    Wha??!?? Their whole job is to develop a marketing strategy, not to execute one.

    Like a lot of growth opportunities it starts with self-awareness and acceptance.

    We finally agree, but here’s something a startup CEO should understand. Do what you’re good at and delegate the rest to people you trust. If have a technical background, double as the CTO. If you have a product background, double as the CPO. But if you don’t have a marketing background, don’t double as CMO, because many wonderful startups have failed because they have a CEO who thinks they can do marketing.

    • Chris Moody says:

      Joe, thanks for your comments. I’m not trying to eliminate or disrespect the role of marketers. Actually, all of my customers work in marketing and I have great respect for them. I really think we are talking about two fundamentally different things. The point of my post is that many EARLY stage CEOs won’t even know the fundamentals of who their target customer should be at the time they go to seek funding. Bringing on a CMO at this point is too early. If the CMO is going to make decisions about “who is our customer”, the CMO should be the CEO.

      I think your .NET example illustrates the difference in what we are discussing. If you are the CEO of a early (pre-funding) stage tech startup, I believe you should have knowledge and opinion about what technology platform is selected. To decide that you don’t know anything about technology and so you are going to outsource all technology decisions to a CTO would be a big mistake. If technology is going to drive your company, and you are the CEO…you better know something about technology.

      Thanks again.

  7. Mike McClure says:

    At the very early stages, there are other avenues to pursue that don’t involve hiring a marketing person (totally agree with #3!).

    There’s your advisory board, peers, mentors, consultants and even competitors. Someone on that list will surely have advice for helping you build your marketing plan; one that is well integrated with your product and its development.

    Using these resources can get you to a place where your marketing hire won’t stand idle or drive you crazy.

    Mike

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  9. Joel Andren (@joelandren) says:

    Hi Chris,

    I’m with you 100% that a startup founder should learn as much about marketing and be as involved as possible in setting direction.

    My concern is that more often than not a startup CEO chooses a marketing plan and strategic direction based on the product they want to build (or think they have) rather than the product the customer wants. This happens because they are in love with their idea and their vision.Telling someone like this to take control of marketing is a recipe of disaster.

    However, if the startup CEO is interested in customer development and clearly defines a feedback loop and makes product and marketing decisions based on feedback rather than vision, then I think they are much more likely to be successful.

    -Joel

  10. sim stewart says:

    Thanks for the post Chris, I can really relate to what you’re saying. We’re about to launch a new website and the marketing is proving to be more complicated than expected. Originally we thought we could outsource marketing but we’ve yet to find anyone that can add real value and direction. We’ve reached the conclusion that we’re going to have to do it ourselves for the short to medium term future.

    Another factor that complicates things is that a lot of what we’re doing is trial and error. Just look at Twitter, they’re changing the service in reaction to what the users want. It’s difficult to build coherent marketing strategies for services that are in constant evolution.

    Sim

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