Marketing might not be what you are thinking (Rebuttal to Fred Wilson)

Fred Wilson has a great blog post arguing startups should not spend money on marketing until you are winning and “every marginal customer” counts. Go read his entire blog post because it’s really good and then come back here for the rebuttal.
Let me be clear that Mr. Wilson knows a lot more about startups then I do, but there are two things that bug me on that post. One is just semantic, the other is in defense of marketing.

 

Point #1: What is Marketing?

 

He’s using the word marketing in a very loose way to mostly mean advertising and other customer acquisition strategies. He knows that marketing is more than that. But a lot of people don’t. So, a less experienced entrepreneur (or even a less experienced VC) will not understand the difference between “marketing” and “marketing” and soon you’ll see people quoting Fred Wilson without context as saying “Don’t spend any money on marketing”. It’s the same way that people use quotes like “Hire slow, fire fast”, “Only hire A-players”, or “Build a viral product” without any understand of what it means.

 

For the record, Marketing includes everything in between marketing research, branding and identity, customer development, pricing strategy, advertising, PR, promotions, SEO / SEM, social media, events, etc. Since time is money, time spent on any of those activities is money spent on marketing. If you have a Director of Marketing, Community Manager, printed fliers or sent press releases you are spending on marketing. Mr. Wilson knows that and he even wrote about on his post. He’s arguing against you going to Google and spending $5 to acquire new customers through advertising without any clue as to what the life-time value of that customer is. Which brings me to my next point…

 

Point #2: Eat everything on your plate!

 

When Google launched AdWords I went and bought many keywords for my mom’s business. The first week, she got two new major clients bringing thousands of dollars of recurring revenue every month. Total cost? Just about $10 or so. The same thing when Facebook first launched their Advertising platform. I’d buy ads for everything that I thought would be useful to me, on my case, I bought ads to promote Seattle 2.0, our offerings and our events. Now those ads are expensive, at a $2.00-3.00 CPC, but back then they were pennies!

 

I think buying advertising is a great *complementary* strategy to grow your business, but not *the* strategy. I’m a believer that both in food and in marketing, you should always be eating a bit of everything. Unless you have a crystal ball, you don’t know which things will be better or worse, or have better return or less return. Just try a little bit of everything. My recommendation is to always keep an Ad campaign running on Google, all the time. Always use Twitter, Facebook, Yelp, Quora, Plancast, LinkedIn as a regular marketing tool.

 

The social dynamics that are involved are so complex, that a simple feature or change by any of these services can make your business explode in growth because you already knew how to explore it and you are one of the first ones to understand the new value and buy it while it’s cheap (even free).

HIGH TECH COMPUTER HON HAI PRECISION IND HYNIX SEMICONDUCTOR INFOSYS TECHNOLOGIES INTERNATIONAL BUSINESS MACHINES