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The Real Challenges of Startup Marketing

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Startup marketing is challenging. If you’ve come from larger or more established company background as many of you will, you may be used to relatively stable working environments. Startup marketing doesn’t operate in this, comfortable, fixed, luxurious environment. This is not only with respect to burn rates and cash runways, but also in the way you will have to work to develop your understanding of your customer, your available marketing channels and everything in between. The level of unknown and the flux between all these unknowns is huge, sometimes overwhelming. However, by being systematic and having a process in place you can win, and win big.

Status quo? What status quo?

Startups are highly dynamic environments so many aspects of the business are rapidly changeable. Tech startups can now make changes to their product in real time, changing pricing structures manually or programmatically, turn advertising off here, on there and so forth. Never before has the status quo been so non-existent.

Couple all of this combined  with low volumes of customer data and you have a potential cacophony of information from which to make decisions.

Decision making is just your best guess

Low volumes of customer data terrify me. When you have small sample sizes, outliers carry disproportionate amounts of weight. You won’t even know which data points are the outliers yet, exacerbating the problem. Companies have the ability to make terrible decisions based on outliers.

One question that regularly gets raised is: “how do I know when I have enough data to make this decision?”. It’s a tricky one to answer. The statistician in me wants to delay the response until I’ve got a significance level of 95%. However, startups rarely can wait this long.

It is time to get comfortable with the fact that the decision you’re going to make is really just your best guess. There is a subtle nuance between allowing data to guide you (relying on 95%+ significance), and making decisions that can be justified using the data available. The first one is easy. It is achievable by anyone with the required sample size and a deft hand at Excel. The second one less so. Justifying your decision making requires you to ask the right question of your limited data, get a result, perhaps test the significance (although a lot of the time this might freak you out). Accept the potential for it to be wrong. Regardless of outcome, use the result to further inform your inherent knowledge about the question to make a decision one way or another. When you have low data you need to gather all the information about a scenario possible and use your judgement to make a call.

This is a tough gig by the way – as a startup marketer you’re being asked to make decision based off limited data in a highly dynamic environment. Lots of the time you’re going to make a ‘wrong’ decision. Paradoxically this is where the dynamic nature of startups will help you as it will allow you to correct your course and avoid that Titanic sized iceberg before it is too late.

A section about metaphorical escalators (bear with me…)

One mistake I often see is a company resting on its marketing laurels. It’s a moment when the company has typically found a marketing channel that has sufficient scope to grow the business and the CPA is in line with expectations. At this point there is sometimes a process of optimisation of the channel in question, and in other cases the channel is just left to itself. This is bad.

Visualise this scenario by thinking of two escalators side-by-side going at slightly different speeds. You’re on the faster one and your friend is ahead of you on the slower one. You get on the escalator and immediately start making ground on your friend. You represent your marketing efforts and your friend represents a marketing channel (i.e. Facebook ads, Adwords etc). Importantly, both are moving independently of each other.

When you and your friend align next to each other on the escalator you have a channel that is working efficiently. Now, knowing that you’re moving at different speeds you are aware that you need to optimise this channel. You can do this by taking a step backwards every so often to maintain your alignment next to each other. You can keep doing this for a while, and until you reach the end of the escalator otherwise known as your marketing channel efficiency inflection point, that’s a great scalable channel.

Now what happens if you speed up the escalators? When you do this you’re effectively pushing the channel harder, driving more from it at an accelerated rate. All seems good if you can optimise yourself at the same rate (although there will be a point where you can’t and fall over backwards – don’t try this at home). However, the end of the escalator approaches faster, meaning you have less time in this channel until you reach your maximum scale whilst maintaining efficiency.

If you only have one channel, this looks fairly simple. However, in reality you’re going to need to spool up some more escalators in case one escalator breaks down. Bringing more escalators online is akin to performing marketing channel diversification. Similar to financial portfolio diversification this aims to act as a bit of an insurance policy if one channel decides to stop working effectively. Another way of saying this is “don’t put all your eggs in one basket”.

Framework for escalator maintenance contiguous marketing

The steps below should ensure that your marketing never reaches the end of the escalator, and that if your escalator malfunctions you’ve got some backups in play.

These first two steps, A & B, are crucial to perform before you go to market.

  1. Establish your personas
  2. Find pockets of high audience density

The next 6 steps should cycle, to ensure you’re adding to your list of channels before any stop working.

  1. Channel test – using the rapid-fire technique
  2. Establish a first channel
  3. Begin optimising that channel (to prove it can indeed be optimised)
  4. Channel test – using the rapid-fire technique
  5. Watch out for scalability issues in your first channel
  6. Launch new channel

 

  • Repeat 1-6 (forever, and ever, and ever-ever…)

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About the Author

This article was written by Thomas MacThomas of the Path Forward. The Path Forward was developed by Forward Partners, a VC platform that invests in the best ideas and brilliant people. Forward Partners devised The Path Forward to help their founders validate their ideas, build a product, achieve traction, hire a team and raise follow on funding all in the space of 12 months. The Path Forward is a fantastic startup framework for you to utilise as an early stage founder or operator. The framework clearly defines startup creation as being comprised of three steps. The first step of this framework involves understanding customer’s needs.Tom is Head of Marketing at Forward Partners. He is an award winning growth marketer, having gained experience heading up the marketing function at high growth daily deals site Wowcher, online gaming firm William Hill Online and more recently the mobile app Bizzby. Tom helps our startups with marketing strategy and support, everything from PPC all the way through to TV.

Entrepreneurship

Women on Top in Tech – Daphne Ng, CEO of JEDTrade

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(Women on Top in Tech is a series about Women Founders, CEOs, and Leaders in technology. It aims to amplify and bring to the fore diversity in leadership in technology.)

Daphne Ng is the CEO of JEDTrade, a blockchain technology company focused on trade, supply chain, and financial inclusion projects in ASEAN. She is also the Scretary-General at ACCESS and Exco. of Singapore Fintech Association

What makes you do what you do?
I was introduced to blockchain technology in 2016 after I left my corporate banking career after 10 years. It was my mentor who first got me interested in this technology, which I then went on to delve further into, on its potential applications in the lending and trade finance space – domains where I came from.

How did you rise in the industry you are in?
Being in the space for 2 years and actively involved in the ecosystem, I was able to bring on the projects, network and a good degree of thought leadership in this vertical. Early on in the startup journey, our team faced many challenges. And to me, the key to rising above failures are two essential factors – resilience and support. While resilience is innate, I received a lot of help be it in terms of connections or advice. ‘Nobody succeeds without help’ rings very true for me.

Why did you take on this role/start this startup especially since this is perhaps a stretch or challenge for you (or viewed as one since you are not the usual leadership demographics)?
From the start, I focused on my domain expertise in trade finance and the application construct of how blockchain and DLT can be applied to these use cases. Also, my strategy from the start was to build a technology company made up of 80% tech and engineers, which is also our key competitive advantage today. At the end of the day, deliverables are about strategy and execution, which includes building and leading an ‘A’ team.

Do you have a mentor that you look up to in your industries or did you look for one or how did that work?
I have many mentors, which includes our company advisors (all of whom are well-known in this industry) and mostly informal mentors I meet via my connections, and on various occasions and circumstances. Creating opportunities also means putting myself in the right place, at the right time. And in my case, these were mostly organic and genuine friendships formed from the initial connection.

How did you make a match if you and how did you end up being mentored by him?
To me, a match in values is very important. It also takes humility to ask for help and be willing to listen to advice, which is important in order for mentorships to be successful – be it formal or informal.

Now as a leader how do you spot, develop, keep, grow and support your talent?
I love this question! I am passionate about building strong teams and helping my people grow. I abide by the 3Rs when identifying talents: resourcefulness, resilience and right values. And then I invest in the ‘potential’ and this means giving them room to lead, make decisions and take risks.

Do you consciously or unconsciously support diversity and why?
My support of diverse talents, skillsets and characters can be seen in the make-up of our core team – all helming specific roles and each bringing their own value to the table. We need the sum of all parts to build a great company.

What is your take on what it takes to be a great leader in your industry and as a general rule of thumb?
Great leaders emerge in times of failures and challenges, never abandoning the team, and always putting the team’s interests before her own. And I consciously live by these mottos every day.

Advice for others?
My advice to other entrepreneurs: be resolute and dare to be different. If you are going to follow others, then you will end up on the same path as them. No right or wrong; but I would rather chart my own path. This June, we are officially launching our blockchain project, Jupiter Chain (www.jupiterchain.tech), which have garnered much interest in the industry, even before we made it public. We believe this project is the epitome of marrying innovation with practical implementation, and we want to be the first to truly operationalize blockchain for our ecosystem projects in this region.


If you’d like to get in touch with Daphne Ng, please feel free to reach out to her on LinkedIn: https://www.linkedin.com/in/daphne-ng-%E9%BB%84%E7%91%9E%E7%8E%B2/

To learn more about JEDTrade, please click here.

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Callum Connects

Jace Koh, Founder of U Ventures

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Jace Koh believes cash flow is the lifeblood of your business. Understanding it will enhance your ability to run and manage your business.

What’s your story?
My name is Jace Koh and I am the Founder of U Ventures. I’ve always been inclined towards investment and entrepreneurship. I’ve played a hand in starting businesses across these industries – professional services, cloud integration, software and music. I believe that succeeding in business is tough, but that’s what makes the rewards even sweeter.

What excites you most about your industry?
Everything excites me. These are my beliefs:

  • Why is accounting important?
    The accounting department is the heart. Cash flow is like blood stream, it pumps blood to various parts of the body like cash flow is pumped to various departments and/or functions in a business. It is vital to the life and death of the business.
  • Is accounting boring?
    Accountants are artists too. They paint the numbers the way they want them to be.
  • What makes a good accountant?
    A good accountant can tell you a story about the business by looking at the numbers.
  • Why is budgeting and projection important?
    Accountants are like fortune tellers, they can predict the numbers and if you wish to understand your business and make informed decisions, feel free to speak to our friendly consultants to secure a meeting.

What’s your connection to Asia?
I was born and raised in Singapore, and here’s where I want to be.

Favourite city in Asia for business and why?
Singapore is my favourite city. We have great legal systems in place, good security and people with integrity. Most importantly, we have a government that fosters a good environment for doing business. I recently went for a cultural exchange programme in Hong Kong to learn more about their startups. I found out that the Hong Kong government generally only supports local business owners in terms of grants. They’ve recently been more lenient and changed the eligibility to include all businesses that have at least 50% local shareholding. But comparing that to Singapore, the government only requires a 30% local shareholding to obtain government support. In the early days of starting a business, all the support you can get is precious. It’s great that we have a government that understands that.

What’s the best piece of advice you ever received?
The best time ever to plant a tree was 10 years ago as the tree would have grown so big to provide you with shelter and all. When is the next best time to plant a tree? It is today. Because in 10 years time, the tree would have grown big enough to provide you shelter and all.

Who inspires you?
Jack Ma. His journey to success is one of the most inspiring as it proves that with determination and great foresight, even the poorest can turn their lives around. I personally relate to his story a lot, and this is my favourite quote from him, “If you don’t give up, you still have a chance. Giving up is the greatest failure.”

What have you just learnt recently that blew you away?
I’ve faced multiple rejections throughout my business journey, and recently came across a fact on Jack Ma about how he was once rejected for 32 different jobs. It resonated very deeply and taught me the importance of tenacity, especially during tough times.

If you had your time again, what would you do differently?
Nothing. I live a life with no regrets. Everything I do, regardless of whether it is right or wrong, happy or sad, and regardless of outcome, it’s a lesson with something to take away.

How do you unwind?
I love to pamper myself through retail therapy and going for spas. I also make a conscious effort to take time off work to have a break outside to unwind as well as to uncloud my mind. This moment of reflection from time to time helps me see more clearly on how I can improve myself.

Favourite Asian destination for relaxation? Why?
Taiwan! Good food with no language barriers and the people are great!

Everyone in business should read this book:
I don’t really read books. Mostly, I learn from my daily life and interactions with hundreds of other business owners. To me, people tell the most interesting stories.

Shameless plug for your business:
We’re not just corporate secretaries, we’re “business doctors.”
U Ventures is a Xero certified advisory firm that goes beyond traditional accounting services to provide solutions for your business. You can reach us on our website: http://uventures.com.sg/

How can people connect with you?
Converse to connect. You can reach me via email at [email protected] or alternatively, on LinkedIn here: https://www.linkedin.com/in/jacekoh/

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started,
built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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