Why Your Early-Stage Startup Doesn't Need a Marketing Team

In media, booming startups are often associated with marketing gurus and gods of sales. Overnight success stories make fresh founders hire an expensive marketer from day one, expecting some magic on day two. The reality is, however, more prosaic: there’s a long way from ideation to creating a startup marketing strategy.

The Rocketech experts have decided to dispel the popular myths about early-stage startup marketing and analyze the most common mistakes that can lead to dramatic consequences.

Why Startups Fail

Since 2018, the market intelligence platform CB Insights has been collecting startup failure post-mortems. Their analysts summed up the top twelve reasons why startups fail. Expectedly, most of the new businesses that didn’t make it simply ran out of cash. However, the second frequent reason is no product-market fit.

Many startup marketing mistakes don’t begin with wrong strategies but with a lack of understanding of the target audience’s needs. In today’s people-centric business environments, it’s all about the customer. But when you launch a new product (in this case, the pre-seed and seed funding stages), you simply don’t have this customer yet. 

This misunderstanding often leads to failure. Young founders hire marketers who can’t adjust the strategy to non-existing customers. People just don’t need the product, as the product is the result of the market need.

Moreover, it’s vital to understand how well your product will fit the existing ecosystem and environment. If we have one phone, we’ll have nobody to call. But the entire network’s value increases as the number of applications or sold units grows. If the network effect becomes more complex, the product can take off quickly.

Startups vs. Established Businesses

Some founders believe they need a full-scale marketing strategy before the journey begins. But such elaborate plans fitting established businesses don’t work for startups. Here’s why.

Traditional Businesses Have Certainty

There are step-by-step guides (even in the public domain) on opening a beauty salon, grocery store, or pizzeria. Traditional businesses have defined rules and can use collective knowledge. They have already explored the target audience, found the identity idea, and established the positioning to distinguish themselves from the competitors. They can even predict the revenue fairly accurately.

Startups Have No Ready Solutions

Launching a startup is like treasure hunting when you don’t know where and sometimes what you are looking for. It’s all about hypothesis testing and generating more ideas to test. Predicting what will work out is difficult: early-stage startups are looking for the very formula that will allow them to scale in the future.

Unfinished Products Don’t Need Branding

Founders establish the startup marketing budget and rush to choose the logo, slogan, and communication strategy when they don’t know the customers and their needs yet. There’s only a “raw” product to show investors and introduce to consumers. 

This early positioning may confuse customers as the product will inevitably change. If done right, it will grow and adjust to changing customer needs. Some features will be replaced or altered to the extent that the final version will have little to do with the initial idea. 

Great Expectations

How much should you spend on marketing as a startup? Short answer: it always depends. On the industry, niche, product, and even ambitions. But what’s most important is to remember that marketing should develop as the product (or idea) evolves. In the early stages, many variables create a great deal of uncertainty.

To address this uncertainty, many founders want to hire an experienced marketer who will build a long-term strategy. Many create an entire marketing department at the beginning and expect immediate results.

The tricky part is that even the best marketers’ skills won’t help founders save time or money at this point. It’s not yet the time for launching scaling campaigns, determining segmentation, or designing creative branding promotions. Instead, it’s the showtime for founders and product owners for project discovery and proper market research. 

Discover Your Product

The most important task is understanding which product you should build and who needs it. A startup that releases an irrelevant product will quickly fail. And it doesn’t matter why the market isn’t prepared for the new offer: customers’ pain may not be there yet, or the target audience may not be ready to change consumer behavior.

Here’s a striking example of such irrelevance. A customer doesn’t understand which of their needs the product will address in the future — the marketing team failed to find the audience and target it.

The biggest risk of an early-stage startup failure is to discover that the problem your product can solve either doesn’t exist or interests only a fraction of the market. That’s why product discovery is the first and foremost priority for early-stage startups. It’s a dynamic and crucial process that can be done even with limited resources. 

Many founders have a perfect picture, for example, of a mobile app and want to spend money on creating flashy designs and catchy features already at the beginning. In reality, users don’t pay much attention to design and color schemes if the product solves their problem. And the best (and easiest) way to discover customer pain points is to ask them directly by following the Customer Development approach.

This stage centers around conducting problem interviews and assessing potential profitability based on the answers. It may involve creating prototypes to demonstrate to focus groups or in-depth interviews. The latter may unexpectedly give you a competitive advantage if done right. The main point is to focus on the customer rather than the product itself.

The Importance of a Strong MVP 

The customer needs analysis then becomes the basis for a minimal viable product (MVP), a powerful tool for hypothesis testing. Although this version has limited functionality and sometimes only one (the most important) feature, it’s already the project’s face. 

At this stage, neither investors, customers, nor competitors can see anything but the MVP. Certainly, the stakeholders will listen to the pitch and read any provided documentation. But it’s a short moment for the startup to show the seriousness of intentions and entrepreneurial maturity.

There are only two critical requirements: the MVP must function flawlessly and reflect the product’s features. Sounds easy. However, people always remember if they don’t get the promised functionality and quality. 

Although some entrepreneurs may include CD in the overall startup marketing strategic plan, the product discovery doesn’t require a team of hardcore marketers — there’s no product to market yet. 

By carefully collecting and analyzing the first customer feedback from the released MVP, startups can plan further features and adjust the product to address the market needs directly. Successful scaling of the initial limited product should gradually lead to the full-fledged product being ready for monetization. That’s where you need the marketing team.

Choose Your Strategic Partner

If early-stage startups don’t need marketing departments, then how can they do it right? In an ideal world, at the very beginning, nobody will do a better job than the founder. These are the people who should “feel” the product, know the market, and understand the problem that needs solving.

Although people can do a lot on enthusiasm and ambitions, it’s strategically reasonable to find a trusted tech partner if your idea includes developing a digital product. Since 2015, we’ve been partnering with innovative and creative startups and guiding them throughout the entire journey from product discovery to an established and successful business.

FAQ: Startup Marketing

Q1: Do I need a marketing team for my early-stage startup?

Not necessarily, it depends on your resources and priorities. If you have limited funds or prefer to focus on other aspects of your business initially, you can explore alternative options like outsourcing marketing tasks, hiring freelancers, or implementing lean marketing strategies on your own.

Q2: How important is a startup marketing plan?

A well-defined marketing plan is crucial to guide your efforts and maximize results. It helps you identify your target audience, set goals, outline strategies, and allocate resources effectively. Having a clear roadmap ensures that your marketing activities are purposeful and aligned with your overall business objectives.

Q3: How much should I budget for startup marketing costs?

Start with a conservative budget that aligns with your financial capabilities and gradually increase it as you see results. Consider factors like industry norms, competition, and the scope of your marketing activities to determine a reasonable allocation for marketing expenses.

Q4: What are some of the best startup marketing campaigns I can learn from?

Look into successful startup campaigns like Airbnb, Dropbox, and Duolingo for inspiration and insights. Study their creative strategies, unique value propositions, and customer acquisition techniques to gain valuable lessons that can be applied to your own marketing efforts.

Q5: How can I effectively target my audience with limited resources?

Define your target audience clearly, focusing on specific demographics, interests, or pain points that align with your product or service. Utilize data-driven strategies like social media targeting, keyword research, and customer segmentation to optimize your reach and ensure that your marketing efforts are directed toward the right people.

Q6: When should I consider building an in-house marketing team?

Once your startup has grown, validated its product-market fit, and has the necessary resources, you can consider building an in-house marketing team. This allows for greater control over your marketing activities, the ability to develop long-term strategies, and more efficient collaboration between marketing and other departments within your organization.