New years always herald prognostications from all quarters (comes with the territory) and of course 2017 is no exception. CB Insights noted that 2016 was not a good year in unicorn land & 7 Unicorns Stumbled, and that it looks grim for 2017. In fact, they noted, deals to unicorns were lower last year than in any year since 2012.
They also pointed out that a group of unicorns is called a fondle.
Before we read the tea leaves, good to look at some of the problems, including the fact that Silicon Valley doesn’t have a lot of respect for marketing, and considering that one of their very favorite mantras is ‘Fail Fast,’ well, disregarding marketing will certainly help to accomplish that, if that’s the idea:
- According to Mark Evans, Startups That Avoid Marketing Are Doomed to Fail, noting that “By diligently avoiding marketing, startups are counting on consumers to magically discover their products. It’s the classic and flawed “if we build it, they will come” approach to business.”
- How Silicon Valley’s bias against marketing obliterates value, time, and technical brilliance everywhere it goes “In which the tech industry’s stigma against marketing creates a self-fulfilling prophecy that leaves a trail of failed products, fire sales, and wasted years in its wake…Silicon Valley distrusts marketing, demeans it, and devalues the people who practice it,” writes Dan Kaplan
- Marketing is not sales. They’re two completely different buckets.
- Revenue Model. Yes, we know. Boring. You’ve heard this before. But always good to have one, and investor money isn’t that, Medium being the latest case in point and here’s an excellent read for you: Venture capital is going to murder Medium. “$132,000,000 is a lot of money after all, and that’s how much venture capital Medium has been dipped in. Before having a prayer or a song about how to turn into that multi-billion-dollar business it must to satisfy the required rate of return,” writes Basecamp founder David Hansson. ”We are shifting our resources and attention to defining a new model for writers and creators to be rewarded, based on the value they’re creating for people. And toward building a transformational product for curious humans who want to get smarter about the world every day,” explained founder Ev Williams. “It is too soon to say exactly what this will look like.” “Wut?,” says Hansson, “Five years is not enough time to think about how we should make any money in a way congruent with our founding values? That just doesn’t compute.”
Ok, so it took Amazon six years to reach profitability, but the then-bookseller was amazing at marketing, knocking Barnes & Noble et al out of the ring, and eventually making dosh. Something the Medium founder didn’t quite manage with Twitter, either, which he also cofounded, and which also reached unicorn status, thanks to the IPO, although the stock is not doing very well at the moment.
In his article, Dan Kaplan suggest, “check out this chart, which a research company called CB Insights put together from an analysis of 101 “post-mortem” essays from founders of failed startups. Of the top 20 reasons startup founders cited for their failures, weak marketing foundations account for 8 of them… Of the remaining 11, another 3 are connected to weak marketing foundations in various degrees… when you break it down, 40% of the fatal issues that lead startups to fail sprout directly from weak marketing foundations, while another 15% connect to weak marketing foundations in meaningful ways.
“What’s frequently missing amidst all the talk about getting more people to try your product are clear insights into identifying your market’s most painful unsolved problems and unmet needs, ensuring your product actually solves and addresses them, and creating messages and systems that reliably generate qualified leads, sales, repeat sales, and profits,” Kaplan points out.
That’s called ‘marketing.’ And when you hear ‘product/market fit’? Yes, you reach that market through…marketing!!!
Unicorns aren’t generally known for their staying power. You don’t see too many of the real things walking the planet, what to speak of the number of tech companies that are falling from the ranks. Time to pay attention to marketing, which is often viewed as a loss leader, rather than a profit center, until you consider that at the end of the day, that’s a big part of the ballgame: getting out that message that will help fill those seats – something many a one-time unicorn did not seem to understand, which, when you think about it, would make them not so much part of the fondle of unicorns, but, considering the press adulation that they amassed in their time, rather little more than an exaltation of larks. Onward and forward.