At one venture-backed startup where I used to work, you could score $20,000 in cash by referring in a software developer or product designer candidate who made it over their insanely high bar and got hired. But if you referred a marketer who also hurdled that insanely high bar? You got 1/4th of that.
That’s right: $5,000 for marketers, $20,000 for product designers and developers.
The message was clear: the leaders of this company believed that brilliant people who design great products and write great code are 4X harder to find and 4X more valuable than their counterparts in marketing.
You might make the argument that it’s far easier for venture-backed startups to find and hire exceptional marketers than it is for them to hire exceptional developers and designers. But if you made that argument, you would almost definitely be wrong.
Because generally speaking, we ain’t so great at it.
Spend a few hours exploring the landscape of tech startups and many big tech cos alike and you’ll discover a wasteland of mediocre marketing.
- Big launches for new products or major features that explode in mid air and fail completely or fall far short of their goals.
- Websites full of vague, “aspirational,” and feature-driven messaging and weak calls-to-action (“The best way to do X!” “The Future of Y!” Sign Up For FREE!”).
- Blogs, updated 2-5/week, packed with articles that have earned few social shares, zero inbound links, and unconvincing reasons to opt-in (“Enter your email and never miss a post!”).
- Landing pages using undifferentiated headlines (“The Definitive Guide To X!”) to present boring offers gated behind opt-in forms with way too many fields.
- Email campaigns that go on and on about the companies’ products (ME! ME! ME!) before asking the recipient to sign up, buy something, or “hop on the phone for a quick call?”
- Advertisements on Google and Facebook that point straight to the company’s homepage, sending dozens, even hundreds of clicks that cost from $1-15 EACH right down the drain.
- New user experiences that leave the majority of new users dissatisfied, confused, and lost and then ask them to invite their teammates or friends.
- Pricing pages and packaging strategies that have been unchanged and unquestioned for months and years, leaving insane amounts of cash on the table.
Against this wasteland backdrop, you see tech marketers giving each other virtual high-fives for the huge spike in traffic their sites got from a corporate practical joke that went viral, or the awesome open rates and click-throughs they saw on their last email campaigns.
You see eight blog posts on the latest tactics and hacks for growth through customer acquisition for every one post about activation, retention, or monetization. The ratio is even worse against articles on nailing the strategic foundations.
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.
The outcome of all of this is captured nicely by this Twitter exchange between Los Angeles-based Venture Capitalist, Mark Suster, and Bay Area entrepreneur, Dave Morin.
Which dovetails perfectly into problem #3:
Our anti-marketing bias has created a self-fulfilling prophecy
Here’s how the self-fulfilling prophecy of mediocre marketing fulfills itself in 7 stages:
- Silicon Valley’s leaders believe marketing is lame, inorganic, and founded on lies, and make their beliefs loud and clear.
- Great marketers don’t want to go where their skills are undervalued and maligned, so most of them focus their talents and energies on more hospitable industries and regions.
- Great mentorship for junior marketers in Silicon Valley is scarce, and ambitious people who COULD be great marketers and want to work in tech choose other avenues for their careers.
- The median quality of marketers in the tech talent pool stays low, and the tech companies who hire from it end up with marketers who underperform or even do damage.
- Meanwhile, many of the industries that welcome talented marketers with open arms and big paychecks actually are founded on and perpetuated by lies. And because plenty of human beings who are faced with a choice between big paychecks and solid ethics choose the cash, much of the most effective marketing in the world ends up in the service of these lies.
- Thanks to stages 4 and 5, The Valley’s pre-existing bias against marketing gets confirmed.
- Wash, rinse, repeat.
You get the idea: thanks to the self-fulfilling prophecy of a negative bias, the tech industry’s stigma against marketing has created a desert of marketing mediocrity and called it “making the world a better place.”
And while you might stumble across the occasional oasis of marketing brilliance in this desert, there’s a strong chance you’ll suffer the ravages of dehydration first.
The consequences across the ecosystem range from crazy expensive to seriously brutal.
Let’s walk through the impacts on every major player in this ecosystem, one-by-one:
Keystone tech companies (like Google, Facebook, Netflix, even Amazon)
The pillars of the tech industry regularly spend millions of dollars and years of collective engineering time on big expensive products that either fall far short of their ambitious goals or totally fail.
Here are just a few examples from recent years:
These products were all planned, designed, and engineered by extremely intelligent people. The people who scripted and coordinated their launch announcements (remember the parachuters with Google Glass?) were all highly creative and competent.
Yet despite the substantial brainpower, time, and money then went into these launches, each of them exploded in mid-air, vaporizing massive quantities of money, time, and technical brilliance right along with them.
So what went wrong? All of these products failed in different ways, but the core reason behind every failure was the same: they were built and launched on weak marketing foundations. I’ll explore these foundations in a future post
For now, let’s move on to the next part of the ecosystem that gets ravaged by mediocre marketing:
Venture-backed startups (and all the people involved)
The first and most obvious impact on venture-backed startups is total failure.
Silicon Valley’s acceptance of failure is one of its most admirable and valuable qualities. But when a venture-backed startup implodes, ends its life in a fire-sale or an “acqui-hire,” it’s not just the millions or tens of millions of dollars of venture capital that burns to ash.
Sure, that money could have created more impact somewhere else, but the biggest loss here is the vaporized time, energy, brainpower and sacrifice of the people involved.
For founders, who walk a lonely, exhausting road even when their startups are doing well, the total failure of the dream is merciless. In the pursuit of their dreams, they often relegate their families, friends, and even their physical and mental well-being to the backseat.
And in the end? After enduring brutal hours and the burdens of leadership for years, sacrificing time with friends and loved ones, they let down their team, their investors, and everyone close who made sacrifices in the name of the dream.
For employees (especially early ones), who work harder hours and more frequent weekends and nights for less cash compensation than their big company counterparts, a startup’s collapse turns those long hours and promises of upside into dust.
Angel investors and venture capitalists
Angels lose whatever personal money and time they spent investing in, advising, or helping a failed startup.
And when a general partner at a VC firm puts millions of dollars into a startup and that startup finds its way off a cliff, that partner loses more than just the funds’ money. Sure, placing losing bets is part of the VC game. But when you take millions of dollars entrusted to your fund by the firm’s LPs and vaporize it, your credibility in the partnership takes a hit.
Take too many hits like that, and the most promising founders start going elsewhere for cash. And eventually, even a partnership with a decades-long legacy of excellence can find its reputation falling apart.
But startups fail all the time for all kinds of reasons. What’s marketing got to do with it?
Yes, startups fail for many reasons that have little or nothing to do with marketing.
Sometimes, founders go too big too fast, prioritizing explosive growth before the economics make sense. Other times, they get too high on traction, hype, and buzz, let their egos spiral out of control, and make terrible decisions as a result. And occasionally, founders just blow their Kickstarter money on strippers and fancy cars.
But 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.
- No market need
- Got outcompeted
- Pricing/cost issues
- Poor marketing
- Ignoring customers
- Mistimed product
- Pivot gone bad
- Failed to pivot
Of the remaining 11, another 3 are connected to weak marketing foundations in various degrees:
- Need/lacked a business model
- No financing/investor interest
- Lost focus
To recap: 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.
Of course, paving the way to total catastrophic meltdown is not the only way the mediocre marketing drains the tech industry’s blood.
Here are a few more:
Burning cash with massively wasteful advertising practices.
While plenty of venture-backed startups don’t spend a ton on paid ads, way too many of those that do send way too many expensive clicks straight into the toilet.
The most common way to do this: Sending paid clicks from Google and Facebook straight to a homepage. I once watched a Series C company with a$250M+ valuation apply this “strategy” to throw anywhere between $25-30K of their investors’ money in the trash EVERY MONTH.
And this company is far from alone. It’s not even the worst example I’ve seen! In fact, for a full year (I checked!), a well-known tech unicorn was sending $5-8 clicks to a page with literally nothing on it but its logo and a signup form.
Blowing a big part of the marketing budget on PR.
I am fully in favor of going all-out with PR when you have the sophistication and systems in place to make it pay off.
But a good PR agency runs anywhere from $15-30K PER MONTH.
And yes, getting positive write-ups up in TechCrunch, The New York Times, and their ilk feels great for you and your team. Even when you don’t have the right systems in place, a solid PR campaign can generate awareness, create a a few good leads, and bring in potential recruits.
But it’s worth asking yourself: is that $45-90K per quarter you’re spending on PR reliably turning into at least $100-200K per quarter in returns? Sure, it’s possible that it does.
But very often, it does not.
Leaving millions of dollars in potential revenue on the table with every big launch.
The losses from less-than-stellar launches are harder to measure than a $20K monthly PR budget and $30K in Google and Facebook Ads that never come close to recouping their costs. But more often than not, I see venture-backed startups launching awesome new products and features without an equally awesome campaign behind them.
At some point soon, I’ll go much deeper into this. But for now, I’ll just say that in the last six months alone, I’ve watched three different entrepreneurs in markets outside of tech execute product launches that brought in $2-3 million dollars in five days or less.
A significant percentage of these sales came from first-time customers, many of whom will go on to buy more of these entrepreneurs’ products. And here’s the real kicker: most of these entrepreneurs were RE-LAUNCHING slightly-modified versions of products they’d already launched before.
So if these entrepreneurs–who have less than 20 full-time employees–can bring in 7-figures in 5 days with a single product, imagine how much cash most venture-backed startups leave on table every time they launch something new.
In some ways, the profession of marketing brought the stigma onto itself.
Yes, it’s entirely true that for as long as the mass market has been a thing, there have been marketers out there making themselves and their paymasters rich persuading people to buy snake oil. The worst part? Some of them are actually REALLY GOOD AT IT.
Indeed, many of history’s most brilliant marketing strategies, compelling sales messages, and flawlessly-executed advertising campaigns were researched, conceived, and crafted to persuade consumers to believe things that were lies, buy things they didn’t need, and do things that were actually bad for them.
So if you want to know how and why human beings came to believe that:
- Smoking cigarettes would make them cool
- Facial creams would keep them young
- A bowl of industrially-processed starches is the breakfast of champions
- 42 ounces of carbonated liquid sugar is the ideal complement to a reheated hamburger and 7 ounces of fried potatoes
- A “billionaire” reality-TV star with zero grasp of subtlety, a penchant for lying, and autocratic tendencies would give them back their dignity
You don’t have to look much farther than the brilliant marketing, copywriting, and advertising campaigns that instilled and perpetuated these beliefs. Given this context, Larry Page’s perception that the marketing profession was founded on the ability to lie isn’t insane.
But it’s also not the whole story. After all, there are two sides of The Force.
Yes, there are plenty of Dark Side marketers and advertisers willing to leverage exaggerations, manipulations, and lies to transform humanity’s innate desires and deep-seated needs into demand for useless and/or harmful products. But many of the underlying skills that these marketers use to sell us lies (like empathy, analysis, a deep understanding of human psychology, and knack for spotting market trends before anyone else) have a dual use.
On the Light Side, there are marketers who apply their skills to discover a market’s biggest unmet needs, most painful problems, and unfulfilled desires and use what they find to market and sell products and services that solve and address them. The best of this breed make healthy incomes for themselves solving real, painful, expensive problems for people in markets of all stripes.
Here are just a few examples:
- Brennan Dunn has built a 7-figure business showing freelancers how to use positioning strategy and marketing automation to charge what they’re worth and generate a healthy pipeline of leads and sales.
- Ryan Levesque created a methodology for discovering the 3-5 biggest problems in a given market, segmenting new leads into “buckets” based on those problems, and tailoring the marketing and sales messages they receive accordingly. The last time Levesque launched his online course that teaches his methodology, he pulled in more than $3,000,000 in a single week.
- Ryan Deiss runs DigitalMarketer, a $25M+ company that teaches many of the latest and greatest online marketing tactics to beginning and intermediate marketers and agency owners. And while Deiss’s marketing messages occasionally overpromise, much of the content DigitialMarketer produces is pure gold. Recently, he launched DigitalMarketerHQ to help marketing execs turn their teams into lead and sales-generating machines. Last I checked, Uber was a customer.
There are plenty more of these, and all of them contradict the tech industry’s twin archetypes of marketers as underperforming pushers of vanity metrics/evil genius con artists exploiting our emotions to convince us of their lies.
Conclusion: Let’s make marketing great again…for the first time.
When world-class tech CEOs demean marketers as liars, they’re mistaking the Dark Side for the entire Force. And when brilliant investors conflate the entire discipline of marketing with PR, advertising, and customer acquisition, they’re missing the forrest for the trees. But when ambitious founders with technical backgrounds hear these things from the icons of their industry, they tend to believe what they hear.
The result is a vicious cycle that sucks in unbelievable amounts of value, time, and technical brilliance and leaves an ugly trail of failed products, down-rounds, acqui-hires, fire sales, and wasted years of brilliant lives in its wake.
We can do better.