Entrepreneurial Marketing

Ted Finch
Chief Marketing Officer Titan Solutions Group

Overview
‡ ‡ ‡ ‡ ‡ Objectives Background Marketing defined The marketing organization A Plan of action
± Strategy ± Tactics ± 4 p¶s ± Operation

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 handpicked 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 internally²and are often spun off (like my current company). ± All startups use a similar marketing process
‡ By the way, these slides will be a little ³text heavy´ so you can refer back to them later

Background
‡ ‡ 21 years of marketing. 7 years consumer marketing in entertainment industry. 14 years high-tech marketing. Sold the company²was 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.

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Later formed an internal startup²´publishing´ 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 rebooting acquired company marketing. Chief Marketing Officer at Titan Solutions Group. Currently creating a software startup division²intend to take public. Founder of ³Chanimal ± The Ultimate Resource for Software Marketing´ at www.chanimal.com. 8 years old and over 53 meg and 250+ pages of content.

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

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

by engineering (usually an engineering founder with an idea). validate. development and tripwires . before the first marketing person is hired. and soon starts the real process over to properly refine it ± hence the usual better 2nd release ± Engineering driven companies use ³field of dreams´ marketing.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. ³What do you want (and are willing to pay for). promotions and sales into the market ± Too often the product is created first. If you build it« ± Market driven companies ask. Marketing then applies ³reality therapy. position. price and profitably drive product through development. the stages of startup/marketing dept.´ promotes what they¶ve got. and then they build it´ ‡ The following org charts show a standard marketing organization.

channels. inhouse work. Creative Services Research Assistant Research Firm Build. As the organization grows. align Product Training Mgr Chart represents functions that exist within a marketing organization. MarCom Director. Price Channel Marketing Mgr Markeing Alliance Mgr Director. international. Areas ³plump´ from this point on depending on the # of products. Product Mgmt Admin Admin Marketing Operations Product Marketing Mgr International Marketing Product Marketing Mgr Promotion Event Marketing Trade Show House Marketing Research Public Relations PR Agency On-line Omsbudsman Ads / Direct Response Webmaster Mgr. multiple functions are handled by one person. buy. Production / Traffic Graphics Designer Outside Design Copywriter . etc. and the workload increases. each area is handled by a specialist.Marketing Organization VP Marketing Product Definition. In startups.

define program. B s I t l 1. validated and into development Wordsmith positioning.Early Organization Tit l ti s r Hiring order ft r Tit l ti s Tit r r ic s Tit Tit i ri l ti s & rt Q cs r rk ti r l s ( ir ct l s) 3 ct ( r r ct) 1 r ( r r ti s) 2 rk ti lli ( r ct/ r l c s )4 ct rk ti s rc . on-line. 4. collateral (packaging. 5. 3. 2. copywriting) Start pre-sales Formal alliances to ensure complete product Setup channel kit. Get the product defined. early recruiting -li ir ct s s rtisi ts r ic si riti c t ( rk ti l t) .

reseller. prepare for press release. line up promotions. This is a self-funding model. External funding may accelerate the process (but actually shouldn¶t ± unless entering a hyper competitive market) .Next Stage Organization Tit l ti s r Tit l ti s Tit r r ic s Tit ft r Tit i ri l ti s & r rt Q cs r ct r ( r ct) 1 r ct rk ti s rc .8 l s rs -5 -6 -li / -7 ir ct s s rtisi ts r ic si riti c t ( 5. setup portals (press. customer) 8. B s I t l r ( r rk ti ls ( ir ct l s) 3 ti s) 2 rk ti lli c s ( r ct/ r ) 4 l l rk ti t) . Setup on-line presense. setup and initial promotions come first. Start recruiting in mass Definition. Start analyst meetings. Additional sales to pre-sell product and start long sell-in 6. The rest of the positions are filled as the product is launched. product launch 7. product information.

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. ‡ At this time. ‡ This is also the time that the original entrepreneurial ³do it all´ skills may bottleneck the company growth if they don¶t evolve. The team must diversify and specialist must be hired (or be ready to step up internally). until they get through this transition so they can move to the next level.Sage Tip: Organizational Chasm ‡ Having personally gone through this stage six times (and having consulted multiple companies). the workload is usually too great for the initial marketing individuals. 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.

with about 400 marketing people. Plus. since this position has to be specialized. having come up through the ranks with similar non-marketing backgrounds). customer support. However. They can also train and mentor existing folks with templates. Management seems to know the least about the roles of marketing and typically fill the department with engineers. At multiple GE divisions (industrial systems ± not consumer goods). product marketing. you name it. ³Real´ marketing professionals. that are skilled (and practiced) at all 4 of the marketing P¶s are rare. don¶t know much about marketing (having no formal marketing education (school or books). only a handful had any marketing training. alliances or channel marketing background. At Motorola Semi-Conductor Sector. most of marketing was from support and engineering²with only 1 business degree within the entire group. Also. I¶ve spent much of my time mentoring teams²many became world class (such as the team that launched Netscape Navigator. they can chew up a market and eat competitors for lunch and can easily recognize big holes to capitalize to help their startup succeed. graduate degree with marketing emphasis. and usually only knew marketing communications--no formal pricing. sales and consumer marketing experience²to apply to technical products. processes and example. To top it off. interns. most VPs of Marketing that I work with. accounting. Best background. they throw in a graphic artist. ‡ ‡ ‡ . the oldest had been out of college for 18 months).Observations ‡ ‡ Marketing has a mixed reputation²often deserved. technical undergraduate (or aptitude). Other ³marketing´ VP¶s were technical lightweights. sales.

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

line by line) ‡ Note: it contains information to level set the executive team on terms and processes . It helps level set the team and establishes the stages and high-level target deadlines. and require it of each team member. I always start with a plan of action.Start with a Plan of Action ‡ In a start-up (internal or external). ‡ I will take you through my actual plan of action for actual live work (nothing confidential. and proceeds to the business and marketing plan (with a lot of definition/validation work up front). ‡ This is a high-level action plan that sets the framework for how you are going to proceed. Personally. could go into a Gantt chart. ‡ The 2nd step estimates the time frames. but this is the ³real´ process ± you are seeing how it is done.

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

Strategy ‡ Identify the ³uncontrollables´ (competition. . existing segmentation). economy. market size. market demand. marketing mix (4 ³P¶s´ (product. promotion) to achieve our overall financial objectives (including sustainable financial growth). regulations. and decide how to address them with the items we can control (product positioning. price. placement.

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

net versus Notes). price. timing.Situational Analysis ‡ Market environment ± Define our current and future space (hi-level. OEM¶s. ‡ SWAT analysis ± Technological issues ‡ Preferred platforms (. current impact on home sales. supply chain. hurt us (financing. usability. where should we play later) ± Competition ‡ Identify current and potential competitors . distribution and sales. latest technical options.ranked ‡ Review product (install. security installation. Identify holes. etc. alliances. trends ± Economic issues ‡ State of the economy. where do we want to play now. promotions.) . features²everything a prospect would see). dynamics of sales to software systems adoption ± Social political issues ‡ New regulation that will help.

platform)? Easy to identify and characterize? Easy to reach. sophistication. 100.Situational Analysis ‡ ± ± Market size Compile list of top 10. 25. 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. find and promote to? Individual segments large enough to be profitable? Are all buyers in same segment responsive to similar promotions? ± ± ± ± .

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 .

Growth Potential ‡ Market share ± Percentage .justification ± Gaining ‡ Sales forecast ± By product ± By segment ± By region ± By distribution .Strategy .

Product/Company Positioning ‡ The APEX of strategic analysis ± how do we expect to compete and grow in this space? ‡ What is our product¶s key differentiators. unique value and positioning? . unique value and positioning? ‡ What is our company¶s key differentiators.

by product. sales growth. alliance. etc. competitive positioning. by account.Marketing Mix ± 4 P¶s ‡ Product ± Product type. on-line. buy/build or align ‡ Price ± ± ± ± Objectives (marketshare. ROI. service and peripherals) ‡ Placement ± Direct or indirect ‡ Promotions ± PR. long-term profit) Strategy (22 options ± floor. benefits. name. advertising. parity. time & conditions) Levels (volume break points. Structure (which products. direct response. cross-benefit. site license. penetration. events . features.

phone calls. 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. QA. webinar ± Survey prospects. analyst. enhancement request) Competition (more detailed analysis ± summary) Review. resellers and have them prioritize suggested features . support. features ± Analyst. bugs. installation. roundtables. webinar). learn. sales) ± Current customers (CIO. platform. roundtable (person. phone. 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. trade show meetings. test for usability. consultants and resellers ± Prospects » Focus groups.Product ‡ Review current product (install. demo) ‡ Product definition ± ± ± ± Existing product fixes (usability.

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. look and feel. logos. speed. concurrency Interface/integration requirements w/3rd party hardware and software Prioritized according to a phased roadmap ± Name product (review naming conventions. buy strategy ± Market Requirements Document (MRD) ‡ Formal as necessary to create the product (less formal. usage guidelines) . follow 5 step process). Warning: Never release name until press release. follow 5 step process) ± Create brand identity (name. less time. messaging. more hands-on) ± ± ± ± ± ± Functional characteristics Use case scenarios Usability requirements Performance capacity. ± Name division (review naming conventions. align. Not necessary until the product is defined.

positioning. ± Name product (review naming conventions. 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). Never release name until the press release (or we don¶t have ³news´). usage guidelines) . ‡ Review naming conventions (budget. division. 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. until the product is defined (have not even solidified its positioning until then²which may come into play with the naming). messaging. abstract/descriptive/suggestive (etc. Always use code name. follow 5 step process) ± Create brand identity (name.).Product ‡ Brand identity ± Not necessary to name the product. look and feel. logos. etc.

versus build ‡ Review and validate our architecture to ensure modularity. 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 .Product Development ‡ Get alliance or OEM agreement w/timeline for anything we align. standards.

not ours) ‡ Understand the overall cost (software. customization.Strategy ‡ Price distinguishes our offering from the competition and similar products. ‡ Review pricing for competitive and similar like products ‡ Review prospect¶s 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.Price . maintenance) . support. It communicates our value proposition and influences buying behavior.

installation. OEM pricing. international pricing. update price matrix. reseller discounts. alliance pricing. price versus ³cost´ . etc. short/long-term profit. reduce to simple. ‡ Pricing structure ± Which products need to be priced ‡ Software. ‡ Pricing strategy ± Floor pricing.Pricing ‡ Pricing objectives ± Marketshare. sales growth. penetration. crossbenefit (razor/blade ± software vs. sample (NFR) pricing. exception policies ‡ Price sales dialogues ± price savings build-up. gratis items. competitive upgrades. etc. support. return on investment. customization). price taker/maker (pariy). professional services. maintenance ± Time and conditions ‡ Pricing levels ± New customer matrix. premium.

etc.Sales ‡ Direct vs.) ± Create and populate field database ± Setup field sales lead dissemination and follow-up system ± ± ± ± ± . Indirect ± trip wires ‡ Direct sales ± company initiative Hire a ³hands on´ sales director/manager Setup sales compensation. sales training) ± Setup field systems (contact mgmt. market. customers. bonus program Recruit appropriate sales people and/or hire rep firm Prepare sales kits (see collateral) Train sales people (product.Placement . commission.

Sales ‡ Indirect ± Program setup ‡ Program definition ± reseller levels w/benefits and requirements ‡ Setup co-op. checklist. bbs²collaboration.Placement . training materials. etc.ongoing . reseller prices. collateral samples. type. customer PowerPoint. physical and/or on-line training) ± Reseller promotions and Co-op/MDF management . lead dissemination and follow-up ‡ Contact and recruit (PR. training requirements. mdf policies and guidelines ‡ Reseller kit w/program descriptions ± Intro letter. ± Recruit resellers Setup distribution agreements (Ingram. direct mail. temp firm. roadshow. overview of program. Reseller PowerPoint. reseller-centric events) ‡ ‡ ‡ ‡ ± Reseller training (certification. reseller application and agreement. product reviews. Tech Data) Identify target resellers (size. product info. part numbers. VARVision. levels. markets) Setup contact database and compile list Setup initial reseller database (password protected. alliance resellers. contact information.

Promotions ‡ PR (1/7th the cost. organizations) ± Identify and compile target publications ± Identify target trade events ‡ Create master calendar ‡ Create reviewer¶s guide . consultants. cautions) Establish policies (flaming. database and calendar ± Identify and compile industry influencers (analyst. routing) Setup crisis management process ± External PR ± hire PR firm ± Internal PR ‡ Build target list. spokesperson. 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.

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 company¶s unique value Place success and case stories On-line ombsbudsman ‡ Follow-up and tracking ± Read. correct all mistakes ± Setup clipping service. bulletin board ± communicate ± Calculate response and value (Media Quality Quotient Analysis) . clip books.

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

order form. agreement. benefits and requirements ‡ Create alliance policies (screening criteria. link web sites. issue alliance press release. NDA. process) ‡ Setup ³self-serve´ alliance info for non-top 25 and above ‡ Alliance kit ± Intro. etc. prepare an alliance promotions plan and follow-up .Promotions ‡ Alliance marketing ± Setup & definition stage ‡ Define objectives ‡ Identify potential alliances based on product. calendar. contact next 25 ± Development. alliance PowerPoint. top 25 and self-serve (compile contacts) ‡ Define the levels. Titan sales script and presentation (cross-selling). contacts. benefits. exchange demo software/training materials. sign agreement. setup workshop dates. sales and promotions stage ‡ Complete alliance workshop. alliance portal ± Recruiting stage ‡ Contact top 10. ‡ Prioritize alliances into top 10 (most of your time spent). hi-level roadmap. logo usage. add to alliance portal. workshop agenda. complimentary sales contacts.

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

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 .Promotions ‡ Event marketing ± Roadshow for resellers and prospects ‡ Prospects 1st half.

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 Reviewer¶s guide 35 mm slides.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 .jpg of key executives and products Logo usage guidelines . Web versions Hi-res .

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

Return $2. Expense: $338.8 million. Return: $513k Customer & Reseller Conference ± customer. Advertising ± new product announcements. Expense: $416k (50% new verticals) Return $1. Expense: $144k + PR Manager (contractor). Required to sell the products. consultant and reseller support. reseller and press meetings²only ASIS µ03. credibility and awareness. presell on-going releases.9 million. Events ± generate leads. Collateral ± product catalog. generate leads for sales and resellers. $110 other divisions). consultant. sell more through existing resellers (increase recommendation rate). price lists. data sheets. . reseller sales kits. Expense: $160k + Channel Mgr Return $4.Budget Summary ± Expense/ROI ‡ ‡ ‡ ‡ ‡ ‡ Channel Marketing ± recruit new resellers. CD¶s (support material). customer. Return: Cost. Expense: $394. Promotional PR ± generate leads. etc.3 million. Expense: $320k ($320 CASI.

$5k ROI: Needed to run campaign ± Events ‡ Reseller Roadshow (10 cities.Channel Marketing ‡ Promotions ± Direct Response ‡ 2.000 targeted locations ± $8k ± ROI: 2. .$25k ± ROI: 10 cities x 25 resellers/each x 10% conversion = 25 resellers x $100k = $2. $80k less contribution) .5 million ± Reseller Collateral ((brochure. binders) (2.000 x 5% response = 100 leads x 10% conversion = 10 resellers x $100k/reseller/1st year = $1 million ‡ Reseller database list .000 x $50/ea)) $100k ‡ ROI ± Necessary to run the program.

but it works and should be helpful in jump-starting your future startup efforts. 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. it was condensed). ‡ This process helped create the world¶s largest services company (launching over 400 products and over 1 million promotions) ‡ This process helped companies like HP. . Motorola. Corel. Microsoft. The process is not secret.Summary ‡ This process is exactly how products like Netscape Navigator were published and launched. and not particularly brainy (besides.

. check out practical. examples of how to do product research. budget templates. It has over 53 megabytes and 250+ pages of FREE real-world startup tips and tricks (sample marketing plans.com. 20 years of high-tech marketing disasters. Chanimal ± The Ultimate Resource for Software Marketing at www.Resources ‡ To find out more.).´ Some of us lived through many of the mistakes this book references. check out ³In Search of Stupidity. ³The Product Marketing Manager¶s Handbook for Software Marketing´ by Rick Chapman. packaging guidelines. It is compiled content from some of the best high-tech marketing folks in the world and is all free. ‡ Also.chanimal. visit my industry resource. etc. We can all learn a lot from seeing what didn¶t work. ‡ Also. real-world books like.

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