Entrepreneurial Marketing UT TedFinch

8/2/2019 Entrepreneurial Marketing UT TedFinch

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Entrepreneurial Marketing

Ted FinchChief Marketing Officer

Titan Solutions Group


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Overview

Objectives Background

Marketing defined

The marketing organization

A Plan of action

Strategy

Tactics4 ps

Operation


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Objectives

To explain how to setup marketing at a high-techstartup, 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


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Background 21 years of marketing. 7 years consumer marketing in entertainment industry. 14 years

high-tech marketing. Sold the companywas acquiredfive times.

First high-tech external from scratch startup in 89, VP of sales and marketing, original13 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 manymore). Industry mercenarieslaunched 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 owned by Tom Clancy)--RedStorm 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 startupdivisionintend to take public.

Founder of Chanimal The Ultimate Resource for Software Marketing atwww.chanimal.com. 8 years old and over 53 meg and 250+ pages of content.
http://www.chanimal.com/http://www.chanimal.com/


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Marketing Defined

Often marketing is referred to as advertising, pr,collateralthe promotional arm of the company

Marketing is providing satisfaction. To providethat satisfaction, marketers study their target

customers to find out what they want, designproducts or services to satisfy those wants,appropriately price, promote, distribute, andsupport that offering, and monitor customer

satisfaction to fine tune their product (and thenstart all over again with the next release).

Basically, marketing is finding a need and fillingit.


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Marketing Defined

Marketing includes strategy (determining what todo) 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.)


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Organization

Always start with the marketingperiod (even before engineeringsoyou 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 ishired. Marketing then applies reality therapy, promotes what theyve

got, and soon starts the real process over to properly refine ithence 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


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Marketing Organization

Admin

Trade Show House

Event Marketing

PR AgencyOn-line Omsbudsman

Public Relations

Ads / Direct Response

Webmaster

Production / Traffic

Outside Design

Graphics Designer

Copywriter

Mgr, Creative Services

Director, MarCom

Admin

Product Marketing Mgr

Product Marketing Mgr

Research Firm

Research Assistant

Marketing Research

Director, Product Mgmt Channel Marketing Mgr

Markeing Alliance Mgr

Marketing Operations

International Marketing

Product Training Mgr

VP Marketing

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.

Product Definition, Price

Build, buy, alignPromotion


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Early Organization

Titan Solutions Titan Pro Services

SupportQADocs

EngineeringTitan Solutions & Pro

Product MarketingResearch, Bus Intel

Product Manager(Product) 1

PROn-line - WebDirect Response

AdvertisingEventsGraphic DesignCopywritingAgency Mgmt

MarCom(Promotions) 2

Marketing Alliances(Product/Promo) 4

Channel Marketing(Channel Mgmt)

Marketing Sales(Direct Sales) 3

Titan Software


1. Get the product defined, validated and intodevelopment

2. Wordsmith positioning, collateral (packaging, on-line,

copywriting)

3. Start pre-sales

4. Formal alliances to ensure complete product

5. Setup channel kit, define program, early recruiting

Hiring order


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Next Stage Organization

Titan Solutions Titan Pro Services

SupportQADocs

EngineeringTitan Solutions & Pro

Product MarketingResearch, Bus Intel

Product Manager(Product) 1

PR - 6

On-line/Web - 7

Direct ResponseAdvertisingEventsGraphic Design

CopywritingAgency Mgmt

MarCom(Promotions) 2

Marketing Alliances(Product/Promo) 4

Channel Marketing(Channel Mgmt) - 8

Marketing

Sales Person - 5

Sales(Direct Sales) 3

Titan Software


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)


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Sage Tip: Organizational Chasm

Having personally gone through this stage six times (and havingconsulted 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.


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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 agraphic artist, since this position has to be specialized.

Also, mostVPs of Marketing that I work with, dont know much about marketing(having no formal marketing education (school or books), having come up through theranks with similar non-marketing backgrounds).

At Motorola Semi-Conductor Sector, with about 400 marketing people, only a handfulhad any marketing training.

At multiple GE divisions (industrial systemsnot consumer goods), most of marketingwas from support and engineeringwith only 1 business degree within the entire group.Other marketing VPs were technical lightweights, and usually only knew marketingcommunications--no formal pricing, product marketing, alliances or channel marketingbackground. Best background, technical undergraduate (or aptitude), graduate degreewith 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 caneasily recognize big holes to capitalize to help their startup succeed. They can also trainand mentor existing folks with templates, processes and example. Ive spent much ofmy time mentoring teamsmany became world class (such as the team that launchedNetscape Navigator, the oldest had been out of college for 18 months).


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OverviewPlan of Action

Setup (equipment, hook up, create plan of action, internal assessment)

Strategy

Situational analysismarket strategy

Market environment (competition, economy, regulations, etc.), Marketsegments, 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, supportsummarized in Marketing Plan


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Start with a Plan of Action

In a start-up (internal or external), I always start with aplan of action. Personally, and require it of each teammember.

This is a high-level action plan that sets the framework forhow 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 marketingplan (with a lot of definition/validation work up front).

I will take you through my actual plan of action for actuallive work (nothing confidential, but this is the realprocessyou are seeing how it is done, line by line)

Note: it contains information to level set the executiveteam on terms and processes


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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.


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Strategy

Identify the uncontrollables (competition,economy, regulations, market demand,

market size, existing segmentation), and

decide how to address them with the itemswe can control (product positioning,

marketing mix (4 Ps (product, price,

placement, promotion) to achieve our

overall financial objectives (including

sustainable financial growth).


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Formal Plans

Business PlanMarketing plan is a subset of overall business

plan covering the market section.

I will work internally to further delegate so wecan meet our timeframe.

Marketing plan will dove tail with financials

and projections.


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Situational Analysis

Market environment Define our current and future space (hi-level, where do we want toplay now, where should we play later)

Competition

Identify current and potential competitors - ranked

Review product (install, timing, usability, featureseverything aprospect 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.)


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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 segments5 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?


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Organizational Strategy

Growth or ConsolidationConsolidation strategies

Determine course of action for existing product

(harvesting, pruning, retrenchment, divestment)

Growth strategies

Market penetrationbetter ingress into existing

markets

Product developmentchange product orperception

Market developmentfind growth in new markets

Diversificationintroduce new products


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Strategy - Growth Potential

Market sharePercentage - justification

Gaining

Sales forecastBy product

By segment

By regionBy distribution


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Product/Company Positioning

The APEX of strategic analysishow dowe 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?


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Marketing Mix4 Ps

Product

Product type, name, features, benefits, competitive positioning, buy/build

or align

Price

Objectives (marketshare, ROI, sales growth, long-term profit)

Strategy (22 optionsfloor, 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


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Product

Review current product (install, learn, demo)

Product definition

Existing product fixes (usability, bugs, enhancement request)

Competition (more detailed analysissummary)

Review, evaluate and contact potential alliances (align or build)

New product research (or shortcut and summarize any existing)

Decisionsif we believe we know most of the requirements based onprevious product, we can proceed until we receive early validation and thenmove into Market Requirements Document (MRD)

Secondaryreviews and reports

Primaryqualitative 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


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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 necessaryuntil 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)


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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 namedo 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)


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Product Development

Get alliance or OEM agreement w/timeline foranything 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


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Price - Strategy

Price distinguishes our offering from the competition andsimilar 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 alternativeapplication (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)


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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/bladesoftware 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, alliancepricing, OEM pricing, sample (NFR) pricing, reseller discounts,international pricing, gratis items, exception policies

Price sales dialoguesprice savings build-up, reduce to simple, priceversus cost


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Placement - Sales

Direct vs. Indirecttrip wires Direct salescompany 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, salestraining)

Setup field systems (contact mgmt, etc.) Create and populate field database

Setup field sales lead dissemination and follow-upsystem


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Placement - Sales

Indirect

Program setup

Program definitionreseller 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-linetraining)

Reseller promotions and Co-op/MDF management - ongoing


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Promotions

PR (1/7th the cost, 15 times more believablealways 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 PRhire 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


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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 eventsas 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 boardcommunicate

Calculate response and value (Media Quality Quotient Analysis)


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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


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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, orderform, contacts, workshop agenda, alliance PowerPoint, Titan sales script andpresentation (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 toalliance portal, exchange demo software/training materials, prepare an alliancepromotions plan and follow-up


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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 andeditorial 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


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Promotions

Event marketingRoadshow 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


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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


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Marketing Budget

To be added, depending on programs andability to use existing resources

Process, first we create the promotions withthe expected ROI, then we get sign-off

Note: Be prepared to sell your budget, byfirst selling and getting agreement that your

promotions are needed. Under funding(and over funding) is death to your productyou must cost justify


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Budget SummaryExpense/ROI

Channel Marketingrecruit new resellers, sell more through existing resellers

(increase recommendation rate). Expense: $160k + Channel Mgr Return $4.9million.

Advertisingnew product announcements, generate leads for sales and resellers.

Expense: $416k (50% new verticals) Return $1.8 million.

Promotional PRgenerate leads, credibility and awareness. Expense: $144k + PR

Manager (contractor). Return $2.3 million.

Eventsgenerate leads, customer, consultant, reseller and press meetingsonly

ASIS 03. Expense: $338. Return: $513k

Customer & Reseller Conferencecustomer, consultant and reseller support, pre-

sell on-going releases. Expense: $320k ($320 CASI, $110 other divisions).

Collateralproduct catalog, price lists, CDs (support material), reseller sales kits,

data sheets, etc. Expense: $394. Return: Cost. Required to sell the products.


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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

ROINecessary to run the program.


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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.


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Resources

To find out more, visit my industry resource, ChanimalThe 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 mistakesthis book references. We can all learn a lot from seeing what didnt

work.
http://www.chanimal.com/http://www.chanimal.com/


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Any Questions?

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