Incisive Marketing

I had the chance to speak with the founder of a very early stage (pre-funding) startup recently. The company is innovating in a very hot space and is certain to raise capital.

The founder envisions his market opportunity in one of two very different go-to-market strategies. I spent an hour on the phone with him and have a decent understanding of the issues. With my brief look at the opportunity, I came away thinking a blended strategy is more likely to be effective. While this runs counter to the conventional wisdom often given by investors (focus, focus, focus), I suspect the synergy between the two go-to-market strategies outweigh the additional complexity.

The challenge is that this strategy is clearly just my opinion, albeit informed by my experience as a founder and early participant in a number of startups. This entrepreneur has an impressive pedigree earned at several well-respected tech firms and has his opinion as well. How does he decide how he should bring this new offer to market?

More conversations.

For example, I had the good fortune to be a co-founder of a startup that was introducing a new kind of business intelligence technology to manufacturers. We developed a simple prototype to demonstrate the capabilities of the technology, but really had no idea about which business problems we should address with it. We quickly realized that that the best approach would be to have conversations with subject matter experts in a broad array of fields and see what they thought of what we had. We could have engaged a market research firm, but we were financing this venture from our own pockets.

Instead, we secured a major business school alumni list and looked for people who were currently in senior operational roles across many sectors. We set up calls as a “research project” (which it was), and found that more than 90% of the alums were willing to talk with us for 30 minutes or so (regardless of their seniority). We spent a few minutes understanding what their principle challenges were, and then we talked a little about what we had “on the drawing table.” In this non-threatening context, it was amazing what people could see with a little prompting about how they could apply our technology to solve their business problems.

Out of this 3-week effort, we formulated the business strategy, secured our charter customer (a top 5 pharma manufacturer), built our sales pipeline, got endorsements to use for marketing later on, and were able to claim to investors that we personally spoke with nearly 200 executives across a broad array of industries to validate our assertions. By the time we were ready to raise capital, it was a matter of documenting what we had, rather than inventing a story.

That is the power of conversation. Is that market research? Yes.

Can it be outsourced? I don’t think so.