Wednesday, October 13, 2021

26 of the Most Common Startup Challenges


 

Following yesterday's blog post, today I list the 26 most common startup challenges. 

  1. Having the right idea – building something someone wants
  2. Understanding your business’ unique value proposition
    • Confirming customer need / marketplace gap
  3. Listening to and acting on customer feedback
  4. Thinking too small
  5. Taking the first leap – knowing where to start
  6. Assuming you need a lot of money right away
  7. Money / fundraising
  8. Cash flow management
  9. Chasing investors over customers
  10. Trying to do it alone
  11. Finding / hiring the right people
  12. The founders
  13. Not researching competitors
  14. Competitors’ actions / competitive responses
  15. Planning & focus
  16. Scaling up
  17. Unrealistic expectations
  18. Remaining within one's comfort zone
  19. Self-doubt and fear of failure
  20. Inability or unwillingness to pivot when necessary
  21. Failing to ask for help
  22. Lack of mentorship
  23. Time management
  24. Customer acquisition / sales
  25. Marketing mistakes
  26. Customer retention


Tuesday, October 12, 2021

Start-ups and Unique Value Propositions


I haven't written a blog post in a while because I have been consumed with a new role (in addition to my brand strategy consulting). I am a part-time new venture coach for RIT's Venture Creations Incubator. In this role, I am coaching and consulting with nine start-up companies, mostly in technology spaces.

There has a been a lot written about start-up challenges ranging from insufficient capital and not having the right team in place to inadequate business plans and a lack of focus. But I have discovered an equally big problem, the absence of a unique value proposition. In fact some companies have created products in search of markets. That is, they have products they want to sell, but they have not identified the right markets for those products and in many cases don't even know what problems those products might help solve. 

While unique value propositions start with target market identification and understanding key customer benefits, they also need to address the "unique" part of the proposition. Are they addressing those customer needs in unique and relevant ways? 

Related to this, I find that many companies understand product functions and features, but not experiential, emotional and self-expressive customer benefits. And they seldom think about or communicate the values that they share with their customers. That is, they focus on the functional aspects of their product offering, not the emotional aspects of their brand. In fact, they seldom think about the customer in terms of their anxieties and fears including the perceived risks associated with switching from a known product or vendor to an unknown one. 

And, if the product is entirely new with no known predecessor, the start-up may have an even greater problem of explaining what the product is and how it works. This argues for a carefully thought-through elevator speech.

All of this requires customer targeting and customer insight, the latter being gained through marketing research including qualitative research and eventually beta testing and usability / user interface testing. 

Which ultimately gets back to branding.

Friday, May 14, 2021

Repositioning Through Labels


It is fascinating to me how politicians and political parties use labels to position or reposition bills, ideas, agendas, actions or groups of people. For example, children who arrived in the US illegally at a very young age are called either dreamers or illegal aliens depending on which political party is talking about them. The Affordable Care Act was renamed Obamacare by its rivals. When asked in surveys, some people say they support the Affordable Care Act but not Obamacare. Depending on which political party is talking about it, many states are in the process of either voter suppression or insuring election integrity. New York State passed the SAFE (Secure Ammunition and Firearms Enforcement) Act, a gun regulation law. I have seen several signs in my neighborhood that say, Repeal the SAFE Act, but who wants to repeal a SAFE Act?

Defund the police doesn't sound good at all. It is a terrible label, especially when it really refers to reallocating or redirecting funds from the police to other types of first responders that are better equipped to deal with mental health and other issues.

Conservatives have called liberals snowflakes and liberals have called conservatives deplorables. Is a Black Lives Matters gathering a march, a protest or a riot? It depends on the news station to which you listen. Was the event of January 6, 2021 at the US Capital an insurrection or a march? Again, it depends on the news station to which you listen. Republicans stoke fear among their base by using the term socialism, which is now laden with all sorts of negative meanings if you are Republican. And Democrats fear fascism and have referred to former President Trump as a fascist

Democrats coined the phrase The Big Lie to refer to Donald Trump's denial of his defeat to President Biden in the 2020 presidential election. Donald Trump is now hijacking that term, The Big Lie, and twisting it to mean the lie that Joe Biden was legitimately elected as president. 

Related to The Big Lie is Stop the Steal, a catchy phrase used by Donald Trump supporters indicating that they thought the election had been stolen.

When it comes to abortion, it is either about the right to choose or the right to life

And who in their right mind would like a cancel culture? Coastal elites are despised by many people but no wonder because some coastal elites talk about where those people live as flyover country.

And Republicans like to call the Democratic party the Democrat party and some conservative publications shorten Democrat to Dem because it doesn't sound as worthy of respect. But some Democrats refer to neo-conservatives as neo-cons because it has more negative connotations. Republicans have tried to demonize the term liberal, but many liberals are very proud of the term and what it stands for. 

And then there are some military labels. Which is more palatable? 50 troops were lost today, 50 soldiers lost their lives today or 50 people were killed today? And how about peacekeeper missiles? I guess I shouldn't be concerned if I see one heading straight toward me. 

And now there is a newly popular pejorative term (actually coined in 1970), microaggressions. Doesn't sound very good, does it?

The whole point of this blog post is to demonstrate how word choice matters and that labels can turn people on or turn them off. This is a common tactic in politics and now that most news sources are so slanted in one direction or the other, different groups use different terms to refer to the same thing. Usually one term is derogatory while the other one is inspiring, encouraging two different views of reality.


Tuesday, April 27, 2021

Research Must Precede Strategy

Marketing research must precede brand strategy -- period. The best strategies are based on extensive research. Qualitative research can provide insights regarding beliefs, values, attitudes, hopes, fears, anxieties, dreams and other core motivations. It can also help you understand how the category is perceived and how each of the brands in the category are perceived. Customer segmentation studies can help you dimensionalise your market and discover the most lucrative customer segments for your brand. Brand positioning research can help you understand what your brand stands for and whether and to whom that matters. It can also help you discover competitors' vulnerabilities and brand positioning gaps and opportunities. There is also brand equity research, brand asset mapping, brand extension studies, logo research, advertising effectiveness studies, and more. 

I have successfully crafted strategy for more than 200 well-known brands. From that experience, I can tell you that there is a direct correlation between the quality of a brand's strategy and the amount and quality of research that preceded it. It's that simple. Sometimes clients want me to help them craft the strategy without the research. That is a mistake. So, consider this to be an admonition from a veteran of the process. 

For a complete course on brand research, follow this LINK

Anatomy of a Marketing Plan


A marketing plan is a request for funds in return for a promised level of incremental revenues, unit sales, market share or profits. One can develop marketing plans for products, services, market segments or brands. The critical components of a marketing plan includes the following:

  • Summary
  • Objectives (attract new consumers, create new uses, increase share of requirements, incent trial, encourage repeat purchase, encourage add-on purchase, increase awareness, increase loyalty, change value perception, increase emotional bond, extend into new product and service categories, etc.)
  • Situation Analysis
  • Market analysis
  • Competitive context
  • Customer profile (segments, needs, attitudes, behaviors, insights, etc.)
  • Strategies and tactics (touching upon all key marketing components that will be used: product, packaging, pricing, distribution, advertising, publicity, sales promotion, social media, selling, etc.). Be specific.
  • Operations considerations (impact on plant capacity, need for new assets, etc.)
  • Financial projections
  • Pro forma profit and loss statements, balance sheets, cash flows, etc.
  • Including funds required to execute plan
  • Supporting customer research (qualitative research, concept testing, volumetric modeling, market test results, etc.)
  • Risks and contingency plans

Wednesday, March 17, 2021

Brands & Browser Functionality


I normally do not post about something as tactical as this, but it has a huge impact on brand perception. Recently, as I have been approached by companies trying to sell me their services, I have found several of them do not have websites that work on my Safari browser. Logins don't work. Navigation does not work. Text is overlapped. I try my Firefox browser. The same result. DuckDuckGo. The same result. I approach them about this. They tell me their website works best (no, only works) on a Google Chrome browser. But I work from a MacBook Air and an iPhone. I do not want to load yet another browser on both devices. And, just in case you are wondering, I have the latest versions of the browsers that I do use, so it is not that.

How can I perceive a company to be professional and worthy of doing business with if its website does not work using common browsers. It gets worse. There are companies whose websites are not set up to work well on mobile devices. Most online platforms and web development tools make it easy to create mobile-friendly versions of websites. It is not rocket science. 

Don't even try to solicit business if your website doesn't work using common browsers or mobile devices. You will waste the potential customer's time and you will create a very negative brand perception. How can companies think this is acceptable in today's world?

If you outsource development and maintenance of your website (which most companies do), make sure the website is compatible with all major browsers and mobile devices. 

Tuesday, March 16, 2021

Do you know how non-customers perceive your brand?

To be efficient in marketing spending, brands usually focus on their best customers first and then on their other customers. Typical objectives are to increase their customers' individual average transactions (IAT), spending and share of wallet. They often also want to increase customer loyalty. Less often, brands allocate marketing resources to communicating with potential customers, especially if one of their top objectives is to increase their base. Sales-driven organizations sometimes error on the side of bringing in new customers at the expense of constantly earning the loyalty of current customers, but this is an expensive proposition and one that is difficult to sustain in the long-run.

But I am increasingly witnessing this problem among brands. They know how to speak to their current customers well but they have not invested enough in understanding how to speak to non-customers. This is especially problematic if the non-customers are potential customers or if their current customer base is shrinking. These organizations become insular, only interacting with current customers and only understanding how current customers perceive them. Often, they only communicate through customer-specific channels and publications, failing to communicate or influence the brand narrative in other forums. Further, they do not invest in marketing research focused on non-customers who could become customers. Because of this, they really don't understand why those people have not become customers. 

I have found that some of the deepest insights come from non-customers and former customers. If you understand how they perceive your brand you can better position your brand to retain current customers and attract new ones. 

Don't make the mistake of understanding and communicating only with those who are closest to your brand. Don't become an organizational echo chamber. Much can be learned from understanding and communicating with those who are not part of your brand's family but who could be if you tried to better understand their concerns, needs and perceptions.