Effectiveness of Marketing Tactics Chart

I saw this chart in the Executive Summary for a new Marketing Sherpa report called 2011B2B Marketing BenchMark Report. I've only read the summary but I thought this chart was interesting:

Here's some related data that I also found interesting:
The growing trend of utilizing inbound marketing tactics is demonstrated in the above chart on the effectiveness of marketing tactics, where the top four tactics are generally inbound in nature and two of the three least effective tactics are outbound.

Social media is undervalued in terms of effectiveness and this is a result of the infancy of this marketing tactic and the low level of experience organizations have in execution when compared to more seasoned marketing tactics. As B2B marketers become more mature with their social marketing practices, their perceptions on the effectiveness of this tactic will improve.

Art of The Lean Startup

I haven't put anything up here in a while as I'm mostly using Twitter these days, but this one is definitely worth sharing. Om Malik has created a terrific visual represenatation (in the form of a cartoon!) of the lean startup world. Worth a read and pass it along - its 10 pages but well worth the time.

Art of The Lean Startup

View more documents from Om Malik.

Tech Startups Don’t Need the Valley Unless They Need VC

This is a topic I'm spending a lot of time looking at these days: Do startups really need Silicon Valley? While the concepts of innovation continue to expand into new places every day, the startup infrastructure to support that innovation isn't really in place outside of Silicon Valley. Be sure to click through to the article for the interview with Mike Maples Sr.

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http://gigaom.com/2009/03/15/tech-startups-dont-need-the-valley-unless-they-need-vc/

Tech Startups Don’t Need the Valley Unless They Need VC
By Stacey Higginbotham Mar. 15, 2009, 7:00pm PDT

At South by Southwest Interactive today, panelists from the Bay Area; Madison, Wisc.; Beijing; and Austin, Texas, debated the value of building your startup in the Valley, and the corrupting influence of venture capital on technology startups. The panel came to the conclusion that, if you want to build big and build fast, then you need to go to the Valley. However, few companies need to build big and fast.

The panel didn’t break any new ground with its discussion on the Bay Area’s proximity to capital, abundant talent and reverence of startup culture. However, cracks are beginning to show, as startups need less venture capital, California’s economy worsens and as the reverence of a startup culture that celebrates the go-big-or-go-home way of creating a startup fades.

The Bay Area startup ethos that calls for millions in venture funding and a giant business built in three to five years may be on the wane as the venture world faces its own tectonic shifts (see video below). “The model of tech getting used to VCs throwing crazy amounts of money at them is just crazy,” says Mike Maples, Sr., an angel investor who formerly worked at Microsoft and has funded several businesses.

Panelist Penelope Trunk, founder of the Brazen Careerist, who started her company in Madison, Wisc., called the VC model shallow and limiting for an entrepreneur. She pointed out that the traditional startup culture embraced by Silicon Valley comes at a personal cost that makes it hard for women and those with families to become entrepreneurs, and she championed building a business that generates sales and grows organically.

Panelist Kaiser Kuo, a business consultant in China, echoed the call to bootstrap, saying, “VCs should be the funding source of last resort.”

I walked away thinking the big debate for entrepreneurs is less about where you start a company, than an effort to reclaim the word “startup” for entrepreneurs who bootstrap their technology business — in or outside of the Valley. Many of these companies get less PR (they can’t always afford it), but they will likely become increasingly relevant as the downturn forces a realignment of the venture industry and forces entrepreneurs to build a startup that can make it as a business from day one.


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Get advice from a VC on securing early stage financing

This is a great article with sound, hands on advice for folks looking to secure early stage venture capital. It has lists of key quesitons you must be able to answer and has a very practical approach to what needs to be in place. This isn't the end all be all of information, but its a succinct, clear place to start!

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A VC’s tips on securing seed and series A financing
February 12, 2010 Carl Showalter 6 Comments

(Editor’s note: Carl Showalter is a general partner with Opus Capital. He submitted this story to VentureBeat.)

While the economy is finally showing signs of life, securing capital for early-stage ventures hasn’t gotten any easier- so it seems timely to let start-up owners in on the criteria by which they will be judged.

Each year our firm typically reviews more than 2,500 companies seeking seed or Series A funding and invests in between six and twelve. Here’s how we judge a young company’s viability.
First of all, we evaluate deals on three axes: The team, the market and the technology or product.

• We want a team with domain expertise in the market space—individuals who can see the opportunities in that market before they are apparent to others and can use that vision to become early movers in the market.
• We want the company to be targeting a market that is nascent or even nonexistent. It needs to be a market the entrepreneurs believe will, at some point, grow rapidly, creating an opportunity for the company to move faster than any incumbents.
• The company needs to have a product with some level of defensibility – something that’s not easily replicable once the market becomes more obvious to others.

In addition to these primary criteria, there also has to be a scalable business model that can generate interesting valuation multiples over time. Having a good way to make money is not enough; a high-growth market to support it and a team and product that can take advantage of that market opportunity are essential.

The next step is to ask hard questions across these three axes. If you’re in the hunt for capital, here are some of the questions you’re likely to hear:

Team

1. Can the founding team succinctly and consistently articulate the company’s business opportunity?
2. Can they succeed in an unstructured environment? Are they comfortable with uncertainty? If the founders are from large companies, it’s helpful if they have some sort of track record in taking risks or starting something new.
3. Do they have a demonstrated ability to stay focused on the critical objectives?
   
4. Do they have the ability to challenge conventional wisdom and think differently? This is perhaps one of the most significant hallmarks of an outstanding entrepreneur.
   
5. Do they have a roadmap for the company culture? Surprisingly, many founders never consider this.
   
6. Do they understand the value of frugality and the need to ruthlessly prioritize spending?
   
7. Do they have realistic expectations of their positions in the organization and how that will evolve? In other words, are they comfortable with potentially not being a chief executive? This very issue can break up even the best of companies.
   
8. Is there a shared vision for the future of the company and its liquidity event? In this economic climate it’s more important than ever that company founders are focused on building a company for the long term.

Market

1. Is there a market that can grow exponentially to create an opportunity for a new entrant? “Exponentially” is key here. Solid growth may just not be fast enough to enable success.
   
2. Is there a scalable business model?
   
3. Is there a low-cost go-to-market plan relying on reasonable and realistic distribution channels? Lack of low-cost and scalable distribution is another small company killer. Are there large partners who could help reduce the cost of customer acquisition?
   
4. Are there three or less startup competitors vs. many?
   
5. Has there been some validation of the market opportunity, whether through a pilot or beta, or through research? Actual testing or feedback on a prototype by customers is always preferred, but for systems and semiconductor companies, research may have to suffice.
   
6. Do they have the ability to capture the imagination of investors as to why this could be a really large market opportunity? Are they convincing as to why they could be the market leader in the space? If they can’t capture the imagination of investors, it’s unlikely they can capture significant market share with customers.

Product

1. Is it simple to articulate and understand?
2. Is there a clear value proposition about the pain point or problem it’s solving and why this product or technology will uniquely address that need? There must be enough of a problem that customers are willing to risk buying from a startup.
3. Is there intellectual property or at least some “secret sauce” that makes it defensible? Patentable concepts are desired but not required.
4. Is the intellectual property free and clear from previous employers or others?
5. For a company selling a product, are the projected gross margins more than 50 percent?
6. Will the product be available within 12 to 18 months? Product should be in development, not just at research stage.

Despite what could still be considered a tough fundraising environment, early-stage venture capital investing is alive and well. If your start up meets the criteria outlined here, you should have no problem securing funding.

Interesting article from WSJ on Leadership styles

Leadership is a topic I talk with startups about regularly. Most folks don't recognize it as a discipline and don't take the time to learn more about building their leadership skillsets. Here's a quick overview of leadership styles from the WSJ that hopefully will get you to think a bit more about the importance and value of leadership.
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http://online.wsj.com/article/SB10001424052748704041504575045163417674970.html?mod=e2tw

FEBRUARY 4, 2010, 12:32 P.M. ET
Which of These Six Leadership Styles Works Best?
By ALAN MURRAY

Leadership is a big, vague, amorphous topic. We can write about great leaders at great length. But practically speaking, how do you become one?

A good start is to focus on leadership styles. Daniel Goleman, who popularized the notion of "emotional intelligence," has described the following six different styles that leaders use to motivate others.

Our view is these are not mutually exclusive. You don't need to adopt one and ignore the others. Rather, the best leaders move among these styles, using the one that meets the needs of the moment. Think of them all as part of your management repertoire.

Adapted from the forthcoming book, THE WALL STREET JOURNAL ESSENTIAL GUIDE TO MANAGEMENT: Lasting Lessons for the Best Leadership Minds of Our Time, by Alan Murray. Copyright 2010 by Dow Jones & Co. To be published in August by HarperBusiness, an imprint of HarperCollins Publishers.

Visionary. This style is most appropriate when an organization needs a new direction. Its goal is to move people towards a new set of shared dreams. "Visionary leaders articulate where a group is going, but not how it will get there – setting people free to innovate, experiment, take calculated risks," writes Goleman.

Coaching. This one-on-one style focuses on developing individuals, showing them how to improve their performance, and helping to connect their goals to the goals of the organization. Coaching works best with employees who show initiative and want more professional development. But it can backfire if it's perceived as "micromanaging" an employee, and undermines his or her self-confidence.

Affiliative. This style emphasizes the importance of team work, and creates harmony in a group by connecting people to each other. It's particular valuable when you need to improve team harmony, increase morale, and repair communication or repair broken trust in an organization." But it has its drawbacks. An excessive emphasis on group praise can allow poor performance to go uncorrected, and lead employees to believe that mediocrity will be tolerated.

Democratic. This style draws on people's knowledge and skills, and creates a group commitment to the resulting goals. It works best when the direction the organization should take is unclear, and the leader needs to tap the collective wisdom of the group. The consensus building approach can be disastrous in times of crisis, however, when urgent events demand quick decisions.

Pacesetting. In this style, the leader sets high standards for performance. He or she is obsessive about doing things better and faster, and asks the same of everyone. But Goleman warns this style should be used sparingly, because it can undercut morale and make people feel as if they are failing. "Our data shows that, more often than not, pacesetting poisons the climate," he writes.

Commanding. This is the classic model of "military" style leadership – probably the most often used, but the least often effective. Because it rarely involves praise and frequently employs criticism, it can undercut morale and job satisfaction. Still, in crisis situations, when an urgent turnaround is needed, it can be an effective approach.

Note that what distinguishes each leadership style above is not the personal characteristics of the leader, but rather the nature and needs of those who are being led. As James MacGregor Burns argued in his path-breaking 1978 book, Leadership: "Leadership over human beings is exercised when persons with certain motives and purposes mobilize, in competition or conflict with others, institutional, political, psychological and other resources so as to arouse, engage and satisfy the motives of followers."

Unlike "naked power wielding," he writes, "leadership is thus inseparable from followers' needs and goals."

The good leader, in other words, must understand what motivates those he or she wishes to lead.

10 Things MBA Schools Won't Teach You as a Startup

Some amusing words of wisdon from Dharmesh (who can teach you alot - check out his blog! As someone who's involved in teaching MBA Entrepreneurship at UC Berkeley, I can tell you this is only the beginning!

Startups: 10 Things MBA Schools Won't Teach You

1. No amount of strategic planning will ever substitute for managing your cash flow. Financial statements are great. The most important one is your bank account statement.

2. There are always more things to do than there is time to do them. Startups are a continuous exercise in deciding what not to do. You can sometimes win by just not doing things faster than your competition.

3. Sleep is that time you’re working on startup problems with your eyes closed.

4. It helps not to call people “human resources”. They’re people. And, as it turns out, people like to be treated like people. Go figure.

5. No amount of academic theories on efficient pricing will prepare you completely for what people will actually do. Finding the “optimal” price is really hard. In the meantime, remember that a sub-optimal price is a lot better than no price at all.

6. Price discrimination (in an economic sense) is a wonderful thing. Except that it often ignores the real costs in terms of organizational complexity. Every time you add a new product or product option a small part of your company dies.

7. There are an infinite number of ways to spend money on marketing. You have no idea what’s actually going to work. The idea is to experiment broadly and learn lessons cheaply. On a related note, no amount of MBA marketing classes will prepare you for the day that you have to produce leads in order to close sales. As it turns out, marketing is about more than product feature matrices and the right shade of blue for your logo.

8. To recruit the best people, fair compensation and equity are only a start. Company culture and a demonstrated passion for your vision is hugely important. (Oh, and your vision should be on the larger path to truth, justice and overall goodness). Your vision should not involve harming kittens. They’re adorable. [insert gratuitious kitten photo here]

9. There’s a lot of value to being likable. Good things happen when people like you. When people like you, bad things have less of a chance of being fatal. I advise being likable. That’s why I advise against being an investment banker after getting an MBA. (I also advise against being an investment banker before getting an MBA).

10. Advanced game theory is exceptionally useful. Basic game theory is dangerous — because it assumes that you’re dealing with a bunch of rational “players”. It’s like trying to design a real car that’s going to be driven on a theoretically frictionless surface, with no air resistance and no idiots on the road.

What are your top startup lessons learned that even the top MBA schools don't teach?