Sales & Marketing

Pink Slime, Pivots and “The Lean Startup”

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So it turns out we’ve been eating “pink slime” all our lives. The reason that this has been going on so long is a combination of our own willful ignorance (admit it: you didn’t really want to know what the “beef” in “100% beef” was, did you?), stubbornness (“Tell your Consumer Report to shut up.”) and the beef industry’s skillful use of euphemisms. But as my partner Carol and I were discussing this most recent PR fiasco, we realized that all these components, in some fashion, are present in our work with startups.

Let’s start with the euphemisms. The first is “Pivot.” When we first encountered the term, it was VC for “screw-up” (or worse). Recently, it’s gotten a more positive spin, as in “fresh start” or “rapid response.” But it also means you didn’t get it right the first time. For a product, that’s both understandable and acceptable. For a company, less so. Although our core business is working with startups in the post-funding/pre-launch phase, about 30 percent of our business now comes from Pivots.

What’s behind these Pivots? In some cases it’s just a matter of companies smartly responding to shifting markets. But too often it’s a combination of the factors mentioned above — willful ignorance and stubbornness — and two recent marketing developments: moving all marketing online and the new Marketing It Book, “The Lean Startup.” Let’s take each in turn.

Everything online

There’s something about the old days of five to10 years ago when print collateral and presentations on flash drives felt important or permanent, since you couldn’t call your client and get them back. So companies historically invested more time and resources in core positioning and go-to-market strategies as well as their supporting sales messages and materials.

But today’s website is yesterday’s white board: it’s cheap to change, it’s forgiving and erasable (unless your prospects use the Wayback Machine), and it’s Now. Startups, encouraged by their investors and boards to “get something out there,” now will enter the market with the “minimal viable product” and post with half-baked positions with little supporting material (or customer validation), and then say they’ll be (back to our euphemisms) “nimble and responsive” in what the market has to say.

The problem with this approach is twofold:

  1. Your early adopters and pioneers (the ones who are reading your initial website and content) have far more initial influence than their numbers indicate. If they’re seeing incomplete or erroneous positioning, you’ve lost your most influential advocate.
  2. Given the pace and demands of startups, the ”pivoting” (gathering and assessing market feedback, then recrafting your site and materials) work often gets delayed. Which means that the incomplete or erroneous materials stay up longer and continue to do damage. So much for “nimble.”’

“The Lean Startup”

To be clear, we think “The Lean Startup” is an excellent and valuable book. If you’ve read it. Which most of our startup clients haven’t. Instead, they’ve heard enough about it to sum it up this way: “Throw things at the wall and see what sticks. Then respond quickly.” (See Everything Online, above)

So our” nimblest” (and we’ve found that our laziest clients use “nimble” the most) clients often vote to forego the hard work of defining, then articulating, then creating their positioning, messaging and supporting materials. Which leads to lazy, vague positioning and messaging that, due to the other pressures of running a startup, stay out there too long. Which leads to a confused market, stalled sales — and the eventual Pivot.

One more thing about “The Lean Startup” — it’s more product centric (mostly Web apps) than company centric. And in that context we believe in the “build/measure/learn” model. But if you’re using that process to determine what kind of company you are and what market space you’re in, you’re not nimble; you’re indecisive.

Which is where the willful ignorance and stubbornness come in. The problem with most technology startups is that their founders are too technical. They’ve built this new, astounding technology. They know how it works. But that’s different from knowing what it actually is, what it does and who it can do it for. To make this point with new clients, we review what we call “the Technology Hierarchy” in the initial meeting:

  • Step One is Texahydrochlorophine (or whatever their secret technology is)
  • Step Two is “whiter teeth”
  • Step Three is “more dates”
  • Step Four is “get lucky.”

Most of our clients, when we begin working with them, start with Step One — Texahydrochlorophine — and get stuck somewhere around whiter teeth. The successful companies, we explain, are those that know what “get lucky” looks like for their target market and who work backwards from there.

When we start an engagement with a new client, we require that the founders and the core players — especially Sales — participate in a four-part workshop that we call PMB (Positioning/Messaging/Branding). We explain the importance of this process with the old nautical adage that it’s cheaper and easier to fix a boat in dry dock than in the water, and it’s cheaper and easier to fix a boat in the harbor than in the open sea. Startups start out in dry dock; the PMB workshop, done right, keeps them from becoming Pivots.

The PMB involves a complex process that analyzes markets, technology foundation, core differentiators and early sales traction. But ultimately it comes down to two questions: 1) So What? and 2) Who Cares?

We always start with the “So What” because it has to do with the technology that our founders have created, putting them on familiar ground. We get them to articulate their core technology differentiator, then move up the Technology Hierarchy —“ So your technology is based on texahydroclorophine. So what? How does that lead to ‘Get Lucky?’ And Who Cares?”

If the core differentiator is different for its own sake, we stop the workshop until we can establish the core business advantages and core targets that people will care about. Then we shift to what it actually does. When we combine product functionality with Who Cares, we sometimes find that our initial market and application is faulty — for example, that the network diagnostics solution is actually going to find more fertile ground with application managers. These insights won’t happen if the founding team holds on to a “we know best” attitude.

The PMB workshop is only the beginning. The positioning, messaging and initial branding that emerge have to be tested in the market, specifically for a complete lap through the sales cycle. Then it’s time to reassess — and, if necessary, realign. Done right and regularly, these adjustments take place in the harbor and can happen quickly and have immediate impact. More importantly, they avoid what no company wants — an open-water Pivot.

Tom Hogan is founder and creative partner at Crowded Ocean, the one-stop marketing firm for technology startups, established in 2008. The original creative director at Oracle, Tom has been VP of Corporate Marketing at such companies as Oracle, Borland, Lucent as well as startup VitalSigns Software. Crowded Ocean specializes in positioning, virtually staffing and launching startups, then guiding them through their initial sales cycle. Crowded Ocean has helped launch over 25 companies including AdMob, Palo Alto Networks, Clearwell, Nimble Storage, Thrutu and Sumo Logic. Tom can be reached at tom@crowdedocean.com. Follow Crowded Ocean at @crowdedocean or at http://www.crowdedocean.com/blog/.

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