The recurring theme of the power of word-of-mouth marketing came several times for me yesterday. My day started out with an email from Raj Bhargava, the CEO of StillSecure, that pointed to an unsolicited positive review of StillSecure’s StrataGuard product on an end-user’s blog. Later in the morning, I had a meeting with a new consumer product company with a cool invention that was created by a friend / neighbor. They had built 25 prototypes and had 24 of the 25 users of the prototypes rave about the product. At the end of the day I had a meeting with a $400k two person software company that is trying to figure out how to accelerate their growth.
I had the word-of-mouth theme in my head from the StillSecure product review post. In my first meeting, I listened as the entrepreneurs told me they needed a $2 million financing to do the first production run of the product (1,000 units) done, get a marketing guy hired, do “marketing”, build channel relationships, and see if things worked. If they did, they either needed $0m of additional financing or $8m of additional financing, depending on how they rolled out the next wave of marketing.
In the second meeting, the founder told me that of all the marketing approaches he tried (trade shows, print ads, cold call of industry lists), the only one that was working effectively was Google AdSense. In this meeting, he suggested that he was going to try a bunch of new (and the same) things. When I probed, I found out that his existing customers are ecstatic with the product, the company has plenty of leads, but he can’t figure out how to motivate the leads to quickly turn into customers.
In both cases, I kept hearing the word “marketing” used generically. I despise the word “marketing” – it’s often the weakest link in a startup company. “Marketing” is vague and non-specific, often poorly executed and measured, and usually a huge waste of money relative to the output. Oh – and while there are plenty of “tried and true” approaches (that any marketing consulting would be happy to charge you plenty of money to explain to you) – the effective approaches have been evolving a lot lately, especially as user-generated content becomes ubiquitious.
Several years ago, I suggested to my portfolio companies that they fire their VP of Marketing and hire a VP of Demand Generation (it could be the same person if the VP of Marketing was willing to accept a quota and meaningful, measurable variable compensation.) Hopefully, this VP of Demand Generation understands the incredible power of having your customers so happy with your product that they’ll talk about it online. To see an example of this, FeedBurner has been doing a great job of highlighting this with their Publisher Buzz blog where they link to posts from “people who kind of dig FeedBurner.”
I suggested to both companies that I met with that they stop talking about “marketing” and instead focus on getting their existing customers to tell the world about their product through blogs, references, online interviews, and at cocktail parties (these are both products that the target customer will ultimately start talking to a friend about over a drink).
Try something – for 24 hours, substitute the phrase “lead generation” for “marketing” in every conversation you have and see what happens.