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Mentor’s wisdom: Marketing & the ‘MVP First’ trap

ACE mentors share their advice and wisdom for startups & scale-ups! 

Welcome to the ‘Mentor’s Wisdom’ blog, where ACE mentors discuss topics that entrepreneurs deal with when starting and growing a business.

Salma Houari (MBA) is a Marketing & Innovation expert and passionate about the Startup Ecosystem. Below, she shares how startups can improve their proposition and need state alignment, better scope their macro environment and allow marketing to be the sustainable fuel for their company.


Marketing and the ‘Minimal Viable Product (MVP) First’ trap

‘Marketers; aren’t you guys busy creating a brochure here and a banner there?’, is a sentence I unfortunately hear far too often.

Marketing is what Dr. Philip Kotler defines as; “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unmet needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.” The value Kotler touches upon encompasses a myriad of options such as; reinforcing your existing propositions through new insights and communications, launching a new product/service or launching an existing product/service into a new market.

Creating shared models

Over the years I have worked for several MNC’s on Marketing projects across categories and regions. In the past year I have also started to work with startups out of personal coaching interest as I believe that – together with a robust economic ecosystem – startups are the engine for our economy and society at large. Startups have a strong entrepreneurial appetite, are agile, adaptable, eager to learn and often have a faster route-to-market. Corporations and governmental bodies can learn from them and vice versa. I see a near future where we only seek to create value when being able to complement each other. In with the partnership and creating shared models, and out with silo behavior. But the very thing that allows startups to be so strong and fast can also hinder them from developing a robust proposition, promote the proposition and themselves accordingly and execute properly.

The startups that I have been fortunate to observe and coach are in many occasions initiated based on tremendous passion and product/service knowledge, often very specialized. They have had their initial traction from interested parties including investors and a few orders from first customers. Stimulating entrepreneurship and immediately promoting good ideas is certainly what our economy needs. However, when approached via a specialist lens, we can sometimes overlook the need for marketing in researching our target group or end-user, what the competitive market looks like, how we need to fine-tune the proposition to actually meet the needs of the user and how we can promote the proposition once it has been developed.

A unique product is not enough

When asking startups the following questions; whom are you selling to and what need state are you fulfilling? Or, what is your product and how will you embed it into a sustainable business model? What makes your product so unique versus your competitor? Have you considered looking at the market first and possible feedback on your prototype product?, I am often told:’ We have a unique product that everyone wants to buy. We have seen traction from a few customers and we therefore expect it to increase. Marketing will come in the later stages, we want to get to the MVP first.’ Unfortunately the ‘Build and they will come’ concept does not apply for all of us. In fact, as much as society would like to believe there are companies that have managed to do so, I would like to disagree and challenge this view.

Any proposition out there meets a certain functional or emotional need that has either not been tapped into or has simply been outperformed by another player. If I were to share some of my ‘Marketing Wisdom’ with startups, here is what I would share: Marketing at large should supersede the MVP for various but highly relevant reasons. Market research is the starting point to base your proposition on. These could be derived from insights gained on unmet need states or opportunities, or they could build on your existing vision and mission and therefore your company’s DNA. As Simon Sinek would like to put it: “People don’t buy what you do, they buy why you do it.” Companies are then able to serve that unmet need or allow the end-user to be part of that vision.

The Consumer Journey

When doing market research, start with your end-user, e.g. ‘The Consumer Journey’. In thinking of whom you serve, try to think in different layers. Value end chains often don’t start and end with the end-users. In many occasions, companies have to deal with multiple channels to sell a product. Which parties are you then dealing with and what value can you bring to them before you meet the end-users needs? All these ‘layers’ of market research will allow you to receive feedback and truly understand the unmet needs. This will also allow you to build a price point and ideally a healthy margin that covers the fixed and variable costs associated with selling, marketing the product and serving the multiple channels.

Market research will also allow you to look into what similar propositions are out there. A mistake often made is to solely look at direct competitors and direct competing propositions. Today’s challenge is to look at possible ‘disruptors’ and substitutes that could meet the unmet need via simply a different model. Examples are Airbnb and Uber. Only when scoping out your macro environment will you better understand what propositions have already been presented to the end-user and how you can best fine-tune your MVP to create unique selling points (USPs). Upon defining your USP’s you can define a price point that will feed into the buildup of your product profit & loss account structure (P&L). Finally, scoping out the market will allow the start to forecast a potential demand for the product/service.

Once the market research phase is finalized a startup can properly define the one or two insights they would like to work with, create a value proposition that is aligned with the company’s vision and mission and start to work on the ‘physical’ prototype and MVP of the product. It is advised to present the prototype to a select group of end-users as often as possible to receive feedback on what needs to be improved. Only then a solid MVP can be created. Focus is key here. Do not try to develop too many products/services or add-ons at once. Also, try to specify one or a set of products that could serve a subject end-user, segmentation. Simultaneously, the startup needs to think via which sales channels or platform the product/service can be sold. This can be one channel, multiple or an omni-channel approach. This depends on the business model and availability of channels to market the proposition.

What is the message?

Finally, the mainstream view of marketing – ‘developing brochures’ – comes to place. Through which Marketing and Branding Communication channels will you spread your message (360 degree plan)? What will that message be (content)? And what will the frequency be (tactical, always-on, thematic etc)? As a startup you will not always have the Advertising & Promotions budget that larger MNC’s would have. Try to limit your scope and focus on those marketing channels that will allow for a target message that builds awareness around the category and product first before you dive deeper into actual promotions and re-targeting. Geo- and Socio-demographic targeting is relevant and possibly will allow you to focus your budgets and build a base of potential end-users. As you scale your startup and as revenues grow, your A&P budget will grow as well to match the required marketing investment. Try to maintain a certain percentage of A&P out of your overall P&L, e.g 5%. In line with creating value with other relevant parties such as corporations, governmental bodies, investors etc, try to think of ways to co-create marketing campaigns and leverage each other bases. This is often a win-win for parties. It allows you to minimize budgets and maximize reach.

As practical and ‘Dutch’ as I am, in my startup coaching sessions I often ask a lot of questions with the intent to make sure the plan and proposition are as robust as possible to go Live. As a coach, this does not only allow me to see the skeleton of the plan (Business Model Canvas) but also helps me in detecting blind spots and see where I can be of most value in providing knowledge. Highlighting these blind spots will also help the startups to cover them before launching the product/service.

Want to get more advice on how to run your business from our expert startup mentors? Apply for the ACE Incubation Program to get access to our mentor network!

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