Entrepreneurial Marketing

1
Entrepreneurial Marketing

• Ted Finch
• Chief Marketing Officer
• Titan Solutions Group

2
Overview

• Objectives
• Background
• Marketing defined
• The marketing organization
• A Plan of action
• Strategy
• Tactics 4 ps
• Operation

3
Objectives

• To explain how to setup marketing at a high-tech
  startup, which positions and tripwires for when.
• Startups can be external (started from scratch),
  or internal (started from existing company with
  hand-picked team).
• External startups usually require self-funding,
  friends family, angel investors, VC, or public
  funding.
• Internal startups are usually new divisions or
  new companies funded internallyand are often
  spun off (like my current company).
• All startups use a similar marketing process
• By the way, these slides will be a little text
  heavy so you can refer back to them later

4
Background

• 21 years of marketing. 7 years consumer marketing
  in entertainment industry. 14 years high-tech
  marketing. Sold the companywas acquired five
  times.
• First high-tech external from scratch startup in
  89, VP of sales and marketing, original 13
  people grew to over 4,000 people. Sold company.
• Executed over 400 product launches from over 150
  companies (Sony, Microsoft, Ashton Tate, Compaq,
  Adobe, Lotus, IBM, Citrix, Aldus, Corel,
  Autodesk, HP, Intel, Canon, plus many more).
  Industry mercenaries launched entire
  categories. Sold company.
• Later formed an internal startuppublishing
  software. Helped launch a category called the
  Internet. Four world-wide top sellers, including
  Netscape Navigator and AOL. Sold company.
• Formed another internal startup (1/2 owed by us,
  and ½ owned by Tom Clancy)--Red Storm
  Entertainment. Sold company.
• Senior VP at Metrowerks, sold to Motorola. Sat on
  7 person marketing board, headed up 2 billion
  division. Headed marketing at internal startup
  division.
• VP of Marketing at 130 billion GE, highest
  growth sector. Responsible for re-booting
  acquired company marketing.
• Chief Marketing Officer at Titan Solutions Group.
  Currently creating a software startup
  divisionintend to take public.
• Founder of Chanimal The Ultimate Resource for
  Software Marketing at www.chanimal.com. 8 years
  old and over 53 meg and 250 pages of content.

5
Marketing Defined

• Often marketing is referred to as advertising,
  pr, collateral the promotional arm of the
  company
• Marketing is providing satisfaction.  To provide
  that satisfaction, marketers study their target
  customers to find out what they want, design
  products or services to satisfy those wants,
  appropriately price, promote, distribute, and
  support that offering, and monitor customer
  satisfaction to fine tune their product (and then
  start all over again with the next release). 
• Basically, marketing is finding a need and
  filling it.

6
Marketing Defined

• Marketing includes strategy (determining what to
  do) and tactics (determining how to do it)
• The four Ps of the marketing mix is an easy
  framework to remember
• Product (definition, validation, profitability)
• Price (margins, positioning)
• Placement (sales, distribution)
• Sales is a subset of marketing
• Promotion (PR, ads, events, online, etc.)

7
Organization

• Always start with the marketing period (even
  before engineering so you know what engineering
  must do and can hire accordingly)
• Initially you must have product
  marketing/management to define, validate,
  position, price and profitably drive product
  through development, promotions and sales into
  the market
• Too often the product is created first, by
  engineering (usually an engineering founder with
  an idea), before the first marketing person is
  hired. Marketing then applies reality therapy,
  promotes what theyve got, and soon starts the
  real process over to properly refine it hence
  the usual better 2nd release
• Engineering driven companies use field of
  dreams marketing. If you build it
• Market driven companies ask, What do you want
  (and are willing to pay for), and then they build
  it
• The following org charts show a standard
  marketing organization, the stages of
  startup/marketing dept. development and tripwires

8
Marketing Organization
Product Definition, Price
Promotion
Build, buy, align
Chart represents functions that exist within a
marketing organization. In startups, multiple
functions are handled by one person. As the
organization grows, and the workload increases,
each area is handled by a specialist. Areas
plump from this point on depending on the of
products, channels, international, in-house work,
etc.
9
Early Organization
Hiring order

• Get the product defined, validated and into
  development
• Wordsmith positioning, collateral (packaging,
  on-line, copywriting)
• Start pre-sales
• Formal alliances to ensure complete product
• Setup channel kit, define program, early
  recruiting

10
Next Stage Organization
5. Additional sales to pre-sell product and start
long sell-in 6. Start analyst meetings, prepare
for press release, product launch 7. Setup
on-line presense, product information, line up
promotions, setup portals (press, reseller,
customer) 8. Start recruiting in
mass Definition, setup and initial promotions
come first. The rest of the positions are filled
as the product is launched.
This is a self-funding model. External funding
may accelerate the process (but actually
shouldnt unless entering a hyper competitive
market)
11
Sage Tip Organizational Chasm

• Having personally gone through this stage six
  times (and having consulted multiple companies),
  I have found that the marketing generalist
  (wearing multiple hats) stage typically changes
  when the company transitions between 12-20
  million and between 75 to 110 people.
• At this time, the workload is usually too great
  for the initial marketing individuals. The team
  must diversify and specialist must be hired (or
  be ready to step up internally).
• This is also the time that the original
  entrepreneurial do it all skills may bottleneck
  the company growth if they dont evolve, or let
  go (of 2-3 roles) for the group to specialize.
• I have seen some companies move all the way to 50
  million and then stick there like glue, until
  they get through this transition so they can move
  to the next level.

12
Observations

• Marketing has a mixed reputationoften deserved.
  Management seems to know the least about the
  roles of marketing and typically fill the
  department with engineers, customer support,
  sales, accounting, interns, you name it. To top
  it off, they throw in a graphic artist, since
  this position has to be specialized.
• Also, most VPs of Marketing that I work with,
  dont know much about marketing (having no formal
  marketing education (school or books), having
  come up through the ranks with similar
  non-marketing backgrounds).
• At Motorola Semi-Conductor Sector, with about 400
  marketing people, only a handful had any
  marketing training.
• At multiple GE divisions (industrial systems
  not consumer goods), most of marketing was from
  support and engineeringwith only 1 business
  degree within the entire group. Other
  marketing VPs were technical lightweights, and
  usually only knew marketing communications--no
  formal pricing, product marketing, alliances or
  channel marketing background. Best background,
  technical undergraduate (or aptitude), graduate
  degree with marketing emphasis. Plus, sales and
  consumer marketing experienceto apply to
  technical products.
• Real marketing professionals, that are skilled
  (and practiced) at all 4 of the marketing Ps are
  rare. However, they can chew up a market and eat
  competitors for lunch and can easily recognize
  big holes to capitalize to help their startup
  succeed. They can also train and mentor existing
  folks with templates, processes and example.
  Ive spent much of my time mentoring teamsmany
  became world class (such as the team that
  launched Netscape Navigator, the oldest had been
  out of college for 18 months).

13
Overview Plan of Action

• Setup (equipment, hook up, create plan of action,
  internal assessment)
• Strategy
• Situational analysis market strategy
• Market environment (competition, economy,
  regulations, etc.), Market segments, Product
  offering
• Organizational strategy (adoption cycle, growth
  strategy)
• Market size, share (forecast), growth potential,
  product positioning
• Tactics
• Product (product company, build, buy, align,
  positioning, , naming, branding approach)
• Pricing (objectives, strategy, structure, levels)
• Placement (direct, indirect, OEM, channel)
• Promotions (PR, on-line, ads, events)
• Collateral
• Operations
• Goals, budget, organization, support summarized
  in Marketing Plan

14
Start with a Plan of Action

• In a start-up (internal or external), I always
  start with a plan of action. Personally, and
  require it of each team member.
• This is a high-level action plan that sets the
  framework for how you are going to proceed. It
  helps level set the team and establishes the
  stages and high-level target deadlines.
• The 2nd step estimates the time frames, could go
  into a Gantt chart, and proceeds to the business
  and marketing plan (with a lot of
  definition/validation work up front).
• I will take you through my actual plan of action
  for actual live work (nothing confidential, but
  this is the real process you are seeing how
  it is done, line by line)
• Note it contains information to level set the
  executive team on terms and processes

15
Setup Plan of Action

• Done. Setup laptop, network, password, access,
  filing system
• Done. Initial assessment. Competition, market
  size, alliances, budgets, organization,
  collateral
• Done. (need to review sign-off). Plan of
  action. Identify and sequence most of the
  marketing, sales, training, support, and product
  action items to create a commercial software
  division.
• Done. (setup meeting). Hook up with John to parse
  out Business Plan deliverables. Prepare w/Plan.

16
Strategy

• Identify the uncontrollables (competition,
  economy, regulations, market demand, market size,
  existing segmentation), and decide how to address
  them with the items we can control (product
  positioning, marketing mix (4 Ps (product,
  price, placement, promotion) to achieve our
  overall financial objectives (including
  sustainable financial growth).

17
Formal Plans

• Business Plan
• Marketing plan is a subset of overall business
  plan covering the market section.
• I will work internally to further delegate so we
  can meet our timeframe.
• Marketing plan will dove tail with financials and
  projections.

18
Situational Analysis

• Market environment
• Define our current and future space (hi-level,
  where do we want to play now, where should we
  play later)
• Competition
• Identify current and potential competitors -
  ranked
• Review product (install, timing, usability,
  featureseverything a prospect would see), price,
  distribution and sales, promotions, alliances,
  OEMs, supply chain. Identify holes.
• SWAT analysis
• Technological issues
• Preferred platforms (.net versus Notes), latest
  technical options, trends
• Economic issues
• State of the economy, current impact on home
  sales, dynamics of sales to software systems
  adoption
• Social political issues
• New regulation that will help, hurt us
  (financing, security installation, etc.)

19
Situational Analysis

• Market size
• Compile list of top 10, 25, 100, 1000 to evaluate
  size and characteristics
• Compile secondary research (reports) to validate
  sizing
• Market segments 5 questions to evaluate
• Smaller homogeneous subsets of overall
  heterogeneous market (will one product satisfy
  the wants of everyone within the market? (size,
  sophistication, platform)?
• Easy to identify and characterize?
• Easy to reach, find and promote to?
• Individual segments large enough to be
  profitable?
• Are all buyers in same segment responsive to
  similar promotions?

20
Organizational Strategy

• Growth or Consolidation
• Consolidation strategies
• Determine course of action for existing product
  (harvesting, pruning, retrenchment, divestment)
• Growth strategies
• Market penetration better ingress into existing
  markets
• Product development change product or
  perception
• Market development find growth in new markets
• Diversification introduce new products

21
Strategy - Growth Potential

• Market share
• Percentage - justification
• Gaining
• Sales forecast
• By product
• By segment
• By region
• By distribution

22
Product/Company Positioning

• The APEX of strategic analysis how do we expect
  to compete and grow in this space?
• What is our products key differentiators, unique
  value and positioning?
• What is our companys key differentiators, unique
  value and positioning?

23
Marketing Mix 4 Ps

• Product
• Product type, name, features, benefits,
  competitive positioning, buy/build or align
• Price
• Objectives (marketshare, ROI, sales growth,
  long-term profit)
• Strategy (22 options floor, penetration,
  parity, cross-benefit, etc.
• Structure (which products, by account, time
  conditions)
• Levels (volume break points, site license, by
  product, service and peripherals)
• Placement
• Direct or indirect
• Promotions
• PR, advertising, direct response, on-line,
  alliance, events

24
Product

• Review current product (install, learn, demo)
• Product definition
• Existing product fixes (usability, bugs,
  enhancement request)
• Competition (more detailed analysis summary)
• Review, evaluate and contact potential alliances
  (align or build)
• New product research (or shortcut and summarize
  any existing)
• Decisions if we believe we know most of the
  requirements based on previous product, we can
  proceed until we receive early validation and
  then move into Market Requirements Document (MRD)
• Secondary reviews and reports
• Primary qualitative and quantitative (to
  validate frequency)
• Competitive matrix
• Internal assessment (engineering, support, QA,
  sales)
• Current customers (CIO, roundtable (person,
  phone, webinar), test for usability,
  installation, platform, features
• Analyst, consultants and resellers
• Prospects
• Focus groups, trade show meetings, roundtables,
  phone calls, webinar
• Survey prospects, analyst, resellers and have
  them prioritize suggested features

25
Product

• Product definition
• Summarize customer business case
• Identify major problems we need to solve
• Evaluate which can be solved currently
• Create roadmap to address overall needs
• Quantify our savings and in pain
• Positioning (transfer this info to strategy
  section)
• Finalize our build, align, buy strategy
• Market Requirements Document (MRD)
• Formal as necessary to create the product (less
  formal, less time, more hands-on)
• Functional characteristics
• Use case scenarios
• Usability requirements
• Performance capacity, speed, concurrency
• Interface/integration requirements w/3rd party
  hardware and software
• Prioritized according to a phased roadmap
• Name product (review naming conventions, follow 5
  step process). Not necessary until the product
  is defined. Warning Never release name until
  press release.
• Name division (review naming conventions, follow
  5 step process)
• Create brand identity (name, logos, messaging,
  look and feel, usage guidelines)

26
Product

• Brand identity
• Not necessary to name the product, division, etc.
  until the product is defined (have not even
  solidified its positioning until thenwhich may
  come into play with the naming). Always use code
  name. Never release name until the press release
  (or we dont have news).
• Name product (review naming conventions, follow 5
  step process).
• Review naming conventions (budget,
  abstract/descriptive/suggestive (etc.),
  positioning, tag lines)
• Brainstorm for names (that meet objectives and
  finalized conventions)
• Narrow the list and do basic name search
• Conduct basic and quick acid test with
  prospects/customers
• Decide final name candidates, prioritize and
  conduct advanced name and trademark search
• Finalize name do not publish until press
  release
• Name division (review naming conventions, follow
  5 step process)
• Create brand identity (name, logos, messaging,
  look and feel, usage guidelines)

27
Product Development

• Get alliance or OEM agreement w/timeline for
  anything we align, versus build
• Review and validate our architecture to ensure
  modularity, standards, expandability
• Review product specification to ensure it maps to
  MRD
• Formal sign-off (as needed)
• Setup beta sites for testing, pre-sales
• Setup initial usability and benchmarking review
• Product sign-off meeting

28
Price - Strategy

• Price distinguishes our offering from the
  competition and similar products. It communicates
  our value proposition and influences buying
  behavior.
• Review pricing for competitive and similar like
  products
• Review prospects cost for home grown and
  alternative application (how have they been
  getting the job done)
• Review cost for the entire system (looking for
  ways to reduce the overall price, not ours)
• Understand the overall cost (software,
  customization, support, maintenance)

29
Pricing

• Pricing objectives
• Marketshare, return on investment, sales growth,
  short/long-term profit, etc.
• Pricing strategy
• Floor pricing, penetration, price taker/maker
  (pariy), premium, cross-benefit (razor/blade
  software vs. customization), etc.
• Pricing structure
• Which products need to be priced
• Software, professional services, installation,
  support, maintenance
• Time and conditions
• Pricing levels
• New customer matrix, competitive upgrades, update
  price matrix, alliance pricing, OEM pricing,
  sample (NFR) pricing, reseller discounts,
  international pricing, gratis items, exception
  policies
• Price sales dialogues price savings build-up,
  reduce to simple, price versus cost

30
Placement - Sales

• Direct vs. Indirect trip wires
• Direct sales company initiative
• Hire a hands on sales director/manager
• Setup sales compensation, commission, bonus
  program
• Recruit appropriate sales people and/or hire rep
  firm
• Prepare sales kits (see collateral)
• Train sales people (product, market, customers,
  sales training)
• Setup field systems (contact mgmt, etc.)
• Create and populate field database
• Setup field sales lead dissemination and
  follow-up system

31
Placement - Sales

• Indirect
• Program setup
• Program definition reseller levels w/benefits
  and requirements
• Setup co-op, mdf policies and guidelines
• Reseller kit w/program descriptions
• Intro letter, Reseller PowerPoint, checklist,
  reseller application and agreement, levels,
  contact information, reseller prices, part
  numbers, customer PowerPoint, training
  requirements, collateral samples, product
  reviews, etc.
• Recruit resellers
• Setup distribution agreements (Ingram, Tech Data)
• Identify target resellers (size, type, markets)
• Setup contact database and compile list
• Setup initial reseller database (password
  protected, overview of program, product info,
  bbscollaboration, lead dissemination and
  follow-up
• Contact and recruit (PR, alliance resellers,
  direct mail, VARVision, roadshow, temp firm,
  reseller-centric events)
• Reseller training (certification, training
  materials, physical and/or on-line training)
• Reseller promotions and Co-op/MDF management -
  ongoing

32
Promotions

• PR (1/7th the cost, 15 times more believable
  always start with PR!)
• Setup
• Determine objectives and measurement
• Company positioning statements
• 3-5 key talking points division and product
• Company backgrounder
• Internal media training (what to say, cautions)
• Establish policies (flaming, spokesperson,
  routing)
• Setup crisis management process
• External PR hire PR firm
• Internal PR
• Build target list, database and calendar
• Identify and compile industry influencers
  (analyst, consultants, organizations)
• Identify and compile target publications
• Identify target trade events
• Create master calendar
• Create reviewers guide

33
Promotions

• PR
• Internal PR
• Proactive campaigning
• Setup interviews with analyst and key executives
• Follow-up with executives to stay in contact with
  press as experts
• Issue press releases
• Setup press tour (preferably at trade events)
• Speak at trade show events as the industry
  expert
• Write ghost stories and submit to freelance
  writers
• Create white papers to validate companys unique
  value
• Place success and case stories
• On-line ombsbudsman
• Follow-up and tracking
• Read, correct all mistakes
• Setup clipping service, clip books, bulletin
  board communicate
• Calculate response and value (Media Quality
  Quotient Analysis)

34
Promotions

• On-line marketing
• Definition stage
• Solidify objectives, consistent look and feel,
  PR/reseller/alliance portal, buy domain name
• Building stage
• Setup lead portal, product information,
  plan-o-gram and e-commerce
• CD-ROM version, site stats, on-line surveys,
  search engine, Web policy
• Promotion stage
• Metatags key search words, submit to search
  engines, link to/from alliances, organizations,
  op-in list, announce on-line forums, affiliate
  program

35
Promotions

• Alliance marketing
• Setup definition stage
• Define objectives
• Identify potential alliances based on product,
  complimentary sales contacts, etc.
• Prioritize alliances into top 10 (most of your
  time spent), top 25 and self-serve (compile
  contacts)
• Define the levels, benefits and requirements
• Create alliance policies (screening criteria,
  process)
• Setup self-serve alliance info for non-top 25
  and above
• Alliance kit
• Intro, benefits, agreement, NDA, logo usage,
  hi-level roadmap, calendar, order form, contacts,
  workshop agenda, alliance PowerPoint, Titan sales
  script and presentation (cross-selling), alliance
  portal
• Recruiting stage
• Contact top 10, sign agreement, setup workshop
  dates, contact next 25
• Development, sales and promotions stage
• Complete alliance workshop, issue alliance press
  release, link web sites, add to alliance portal,
  exchange demo software/training materials,
  prepare an alliance promotions plan and follow-up

36
Promotions

• Advertising
• Determine objectives
• Review competitors campaigns (if any) Adscope,
  personal clippings
• Determine target audience (buyers, influencer,
  resellers)
• Media selection (order trade pubs, review
  demographics and editorial schedules, initial
  media selection)
• Create ad concept, copy and design (Z format,
  direct response w/offer)
• Determine frequency, negotiate placement, submit
  ads
• Create on-line direct response landing page
• Measure and evaluate media, message and response

37
Promotions

• Event marketing
• Roadshow for resellers and prospects
• Prospects 1st half, resellers 2nd half
• Trade shows
• Attempt to exhibit in alliance booth
• If own
• Determine who will coordinate
• Booth size
• Rent or buy a booth
• Pre-show activities
• Post-show follow-up
• Lead dissemination and follow-up
• Show report

38
Collateral

• Price list and matrix
• Customer PowerPoints
• Reseller program PowerPoints
• Alliance PowerPoints
• Alliance kit
• Product demo script
• Folders w/sticker space
• Product packaging
• Product slick
• Sell sheet (resellers)
• Family brochure (if applicable)
• Press reprints
• Customer testimonials
• Business plan - investors

• Demo CD-ROM / Video
• Case stuides
• White paper
• Sample RFI and RFQ templates
• Competitive matrix (sales version)
• 3rd party add-on book
• Branded give-away items
• PR Reviewers guide
• 35 mm slides, Web versions
• Hi-res .jpg of key executives and products
• Logo usage guidelines

39
Marketing Budget

• To be added, depending on programs and ability to
  use existing resources
• Process, first we create the promotions with the
  expected ROI, then we get sign-off
• Note Be prepared to sell your budget, by first
  selling and getting agreement that your
  promotions are needed. Under funding (and over
  funding) is death to your product you must cost
  justify

40
Budget Summary Expense/ROI

• Channel Marketing recruit new resellers, sell
  more through existing resellers (increase
  recommendation rate). Expense 160k Channel
  Mgr Return 4.9 million.
• Advertising new product announcements, generate
  leads for sales and resellers. Expense 416k
  (50 new verticals) Return 1.8 million.
• Promotional PR generate leads, credibility and
  awareness. Expense 144k PR Manager
  (contractor). Return 2.3 million.
• Events generate leads, customer, consultant,
  reseller and press meetingsonly ASIS 03.
  Expense 338. Return 513k
• Customer Reseller Conference customer,
  consultant and reseller support, pre-sell
  on-going releases. Expense 320k (320 CASI,
  110 other divisions).
• Collateral product catalog, price lists, CDs
  (support material), reseller sales kits, data
  sheets, etc. Expense 394. Return Cost.
  Required to sell the products.

GENERIC EXAMPLE OF POSSIBLE BUDGET INFO
41
Channel Marketing

• Promotions
• Direct Response
• 2,000 targeted locations 8k
• ROI 2,000 x 5 response 100 leads x 10
  conversion 10 resellers x 100k/reseller/1st
  year 1 million
• Reseller database list - 5k ROI Needed to run
  campaign
• Events
• Reseller Roadshow (10 cities, 80k less
  contribution) - 25k
• ROI 10 cities x 25 resellers/each x 10
  conversion 25 resellers x 100k 2.5 million
• Reseller Collateral ((brochure, binders) (2,000 x
  50/ea)) - 100k
• ROI Necessary to run the program.

GENERIC EXAMPLE OF POSSIBLE BUDGET INFO
42
Summary

• This process is exactly how products like
  Netscape Navigator were published and launched.
• This process helped create the worlds largest
  services company (launching over 400 products and
  over 1 million promotions)
• This process helped companies like HP, Corel,
  Microsoft, Motorola, and GE
• There is still a lot of expertise involved in
  knowing how to execute each phase of this plan
  and get a high-tech startup off the ground. The
  process is not secret, and not particularly
  brainy (besides, it was condensed), but it works
  and should be helpful in jump-starting your
  future startup efforts.

43
Resources

• To find out more, visit my industry resource,
  Chanimal The Ultimate Resource for Software
  Marketing at www.chanimal.com. It has over 53
  megabytes and 250 pages of FREE real-world
  startup tips and tricks (sample marketing plans,
  packaging guidelines, examples of how to do
  product research, budget templates, etc.). It is
  compiled content from some of the best high-tech
  marketing folks in the world and is all free.
• Also, check out practical, real-world books like,
  The Product Marketing Managers Handbook for
  Software Marketing by Rick Chapman.
• Also, check out In Search of Stupidity, 20 years
  of high-tech marketing disasters. Some of us
  lived through many of the mistakes this book
  references. We can all learn a lot from seeing
  what didnt work.

44
Any Questions?