High-Tech Start-Up: How to Attract Investors & Prepare for the First VC Meeting

THINK LIKE A BANKER!

When preparing for meetings with VCs to hopefully gain funding your high-tech start-up, it is important to understand your audience.  VCs are investment bankers.  They all want to know:

  • What is the likelihood that they will get a return on their investment?
  • When will they get a return on their investment?
  • How much will that return on investment be?

VCs review hundreds and thousands of companies to make just a few investments each year.  Here are the 5 top criteria they evaluate to decide whether or not to invest.

  1. Competitive Differentiation.  All VCs want to know in the first few minutes of the meeting exactly what you do and what makes it both unique and compelling.  This is more than just an elevator pitch.  It must be framed with the competitive landscape in the select target market(s).  If you are unable to articulate this clearly and succinctly, they will tune out and start checking their watches.
  2. Team.  Once the VCs believe that your offering is compelling, their second question is whether the company can execute.  Ideally, they look for a complete senior management team who have worked together before and have been successful in a start-up before.  It’s the very reason that it’s so hard to get funded for the first time.  Though you may not meet all these criteria, you must convince them that you have assembled a team that can make this happen.
  3. Traction.  VCs expect that you will have much more than a demo or proof of concept.  Whether your offering is B2B or B2C, they want to see a significant number of existing customers or users.  They expect your company to be generating and growing revenue over time.   Without traction it is nearly impossible to get funded.  Significant traction immediately reduces their risk, makes them more likely to invest and improves your terms.
  4. Market Opportunity.    VCs love money, so the bigger the opportunity, seemingly the better.  Not always the case.  Many focus on niche plays rather than broad plays so they can minimize risk.  In contrast, CEOs know that it’s just as much work to run a company whether the opportunity is small or big, so they tend to think big.  If you do have a broad play offering, capture a target market or market a subset of the offering to illustrate ROI.  For example, WebEx was built as a revolutionary communication platform, but monetized it by selling a conferencing service.
  5.  Time and Money.  VCs want to see that friends and family believe in you and your company and have provided an initial seed round.  They want to know exactly why you are raising a specific amount of money for the “A” round and how exactly that money will be spent.  When will that initial round run out?   What will you do then?  When will the company become profitable?  What is the exit strategy?  When will we get our money back?

There will be more preparation for your first meeting.  You will need to submit an executive summary and perhaps a slide deck that will include the above and more.  You should be prepared to demonstrate your offering at the meeting.  Submit the materials in advance, and make sure that in the meeting that you are hard hitting on the 5 items that matter most to investors!

Test Your Value Proposition in 3 Simple Steps

A surefire approach to increasing sales!

Prospective customers all want the answer to the same exact question; what do you do and how do you do it better than your competitors?  Every sales representative or distribution channel for your business needs to clearly articulate the value proposition to each target market.

Marketers spend hours, days and weeks in workshops and meetings to carefully develop the perfect elevator pitch.  Then, the company prepares messaging, presentations, campaigns and more to test their theories.  This process is not only time consuming but typically yields at best “hit or miss” results.

Isn’t there a simpler, surefire way to get it right?  Yes, with these 3 simple steps:

1. Create a competitive matrix for each target market.

  • Company profiles, i.e. revenue, locations, # employees, # customers, target markets, sales distribution channels, partner strategies, service and support.
  • Company offerings, i.e. key features, functionality, ease of use, ease of deployment, delivery mechanism, security, pricing.

2. Develop a customer satisfaction survey with open-end and closed questions.

OPEN:  What problem do you solve for them?  How do they use your offering?  Why did they select you versus your competitors?   What do they like about your offering, what don’t they like?  What improvements would they like to see?   What do they like or not like about your company, support, and service?

CLOSED: Can you stack rank certain features/ functionality of the offering?  Do you see certain features or functionality as unique?  Can you rank your overall customer experience?  Can you grade specific service or support calls?

3. Interview your existing customer base

Your best source of feedback, validation or refinement of your competitive advantage/value proposition is right at your feet: your existing customers.  They have already been through the sales process with your company and your competitors, and they selected you!  They are typically friendly, knowledgeable and willing to share the information you need most.  Ask for just 15 minutes and mention that you will be using the feedback to make improvements for them.  Evaluate your results carefully, because existing customers will teach you exactly how to market and sell to new customers, and we all seek the best approach to acquire new customers.

The good news here is that the existing customer base is the lowest cost and most effective way for marketing leaders to corroborate or better articulate competitive differentiators and value propositions.  In fact, listening to existing customers, prospects and targets, keeping your ear to the ground continuously, is the very best way to achieve your goals.

So, what if you don’t have an existing customer base?  Obviously there is the focus group approach, on-line or in person.  Choose a group that is currently using a competitor and ask why.  Ask them the same feature/functionality questions, pricing questions that you would ask an existing customer.  The more narrow and focused your approach, the better the results.

Good luck and good selling!

Industry Association Success: 5 Steps to a Winning Value Proposition

This week’s Persuasive Marketing Blog Post features marketing veteran, Susan Lowe, who has a rich background in helping start-ups and big-league companies, like Microsoft, HP, Toshiba, Juniper Networks and Logitech, establish and maintain effective industry alliances and associations.  In this article, Susan shares great tips that will help alliances develop a meaningful value proposition — which is a key foundation for marketing success.

There are few things more critical to the success of an association (profit or non-profit) than a well-defined value proposition.  Before any messaging or marketing communications plans are created, the value proposition must be developed and tested.  While there is much written about the importance of value propositions, defining one is not always an easy exercise — and for that reason this step in the strategic marketing processes is typically poorly executed or worse skipped completely. Don’t shy away from the task.  Your ability to articulate a clear and resonating value proposition will ultimately define your level of success (or failure).

The importance of a well-defined industry association value proposition

Whether the association is in the planning stages, growth phase or is an on going organization, it is important to define the value proposition for both the retention and recruitment of members.  Remember that the cost of membership is not only annual dues it also includes commitment of company resources (may be business, engineering or marketing), investment of time and potentially the company’s brand image.  For such investment, the value proposition must convey to a potential member that by joining they are ensured greater success and will be a part of something material then if they had not joined at all.

5 Steps to defining your association’s value proposition

A good value proposition can be articulated in a sentence or two, no more than ten words.  Most important, it should be specific, clear and concise. 

  1. Form a Committee.  The committee should include key board members, advisory council members, and functional VPs.  Don’t make it too large, 5-8 is a good number.  Have someone from marketing participate on the committee which should help with writing the value proposition.
  2. Schedule Committee Meetings.   These meetings should focus only on defining the Value Proposition.  Don’t try to cover other business at the same meeting.  Limit distractions.Plan that the entire process will most likely take several meetings and set aside 3 hours for the first meeting.  After the first meeting, you will have a good idea of the time needed for subsequent meetings.
  3. Prepare in Advance.  Before the first meeting, have committee members do some up front work and prepare responses to the following questions.  It will help make your meeting more productive and make better use of the time.
    • What is your association good at doing?  What is your specialty?
    • Clearly define the target membership and their needs and wants.  You may have different targets that should align with different membership levels.  Each target should be defined and may have unique value propositions.
    • What need is the organization filling in the industry?  What problem is it trying to solve?
    • Are there other organizations that are in the same space?  Who are the competitors and what are they good at?  What sets your association apart from them and what is distinctive about what you offer members and the industry?
    • If you have a Value Proposition, does it still hold true?  And is there a perceived value at each membership level?
    • Will a member or potential member company be at a disadvantage if they do not join your association?  Will they be able to influence more and succeed quicker if a member?
  4. Test.  This is a key step. On-line questionnaires, surveys and interviews and are good ways to see if the value proposition resonates with your members.
  5. Communicate.  Once the Value Proposition is defined and tested, marketing can create launch plans, develop messages, key benefits statements, communications and member retention and recruitment programs.

Ask Your Customers What They Want. Then Deliver It.

This week’s Persuasive Marketing Blog Post features marketing pro, Susan Lowe, who has a rich background in product marketing with companies ranging from start-ups to large enterprise companies.  She shares great tips for utilizing online surveys to keep customers happy and loyal to your products.

Susan LoweAs good marketers, we should never forget that our job is to bring products or services to the marketplace (B2B or B2C) that fulfill needs and customers want to buy. Of course, our work doesn’t end once the product or service launches. We must continually assess whether those products or services are actually meeting our customers’ needs and to what level of satisfaction.  Adding to the importance of finding out how customers’ assess our product is that their needs may change over time.  We don’t want to miss out on a new opportunity – or worse – lose business to a competitor that makes it their practice to know what the customer is thinking.

Today’s online survey tools provide an easy and cost-effective way to find out what customers think about a company, service levels, products, overall satisfaction and to uncover unmet needs.  Surveys also provide a method by which to confirm your own beliefs about customers’ perceptions.  Once you’ve decided to move forward with an online survey, it is important to set objectives and determine the information you want to obtain from the survey.  Helpful tips and guidance are available at most survey tool websites that can then assist you with planning the survey and developing the questions.  In addition, you will find it useful to send at least one test survey within your organization before sending the live survey to customers.  Running a test allows you to weed out poorly worded questions, measure actual time to complete the survey and provides the opportunity to edit and refine the survey content.

Now you’ve sent the survey and collected the responses from your customers.  What’s next?   The survey results will have a meaningful and positive impact on your business, only if your company is ready to respond to the feedback and take any necessary actions.  The survey information will do your company little good if it is only shown as data points in department presentations.  Based on the results, identify problem areas that need to be addressed immediately and those that are longer-term. Develop an immediate and longer-term plan to address areas for improvement.

Next, communicate to your customers your plans for improvement based on their survey feedback.  They want to know that you are listening and their time was not wasted.  Now you are ready to put together a ‘task’ force that is responsible for executing to the plan and measuring results.  This team will hold meetings, review the plan, set goals, agree on tactics and actions, assign ownership, and set timelines to complete.

When and how frequently should you survey customers? Be pro-active not reactive.  Find out what your customers think early on during product concept and regularly throughout the lifecycle.  It is a continuous process.  Make it a part of your best practice to know what your customers think about you and make improvements as needed.   If you’re not proactive and fall behind in getting customer feedback, it can cost you loyalty, profits and customers.

Keys to Successful Customer Surveys

  1. Identify your goals and objectives and determine what information you want to attain from the survey.
  2. Develop survey questions based on what you want to find out – online tools are available to help you plan the survey and develop the questions.
  3. Ask your customers early on and throughout your relationship what they think about you.
  4. Respond timely to customer feedback.
  5. Develop a plan to address customer responses.  Communicate the plan.
  6. Put a task force together responsible for implementing the plan and measuring improvements.

The Interim CMO: A Smart Approach to Successful Start-up High Tech Marketing

Recently Attain Marketing joined forces with AgileValue, a Silicon Valley- based consulting firm focused on helping technology companies launch new companies and products, to provide a full range of start-up marketing services. In this blog post, Susan Knorr, AgileValue Principal with over 20 years of experience in executive sales and marketing management, talks about the value of the interim CMO, an innovative approach to start up marketing that helps young companies, or companies in transition, leverage executive level marketing talent on a consultant basis.  As discussed in a previous blog post with financial services pro Charlie O’Rourke, outsourcing marketing is a good way to deal with budget restraints while staying competitive in a sluggish economy.   Smart companies know they should not forgo their marketing activities – especially if they plan on establishing healthy longevity in their business, so they see outsourced marketing, like an Interim CMO, as a great way to leverage talent and stay proactive.

Susan KnorrMany high-technology companies start the marketing process too late. They build new products/services based upon a cool idea and technology innovation hoping the buyers will come.

However, all companies need to analyze the market opportunity for new products. Is there a genuine need? How should the new product/service be positioned competitively to win in each potential target market segment?  Bottomline, companies must answer three key questions:  Will they buy? Will they buy from me? Will they buy from me now?

And they need this assistance before the product/service is developed.  In fact, for companies to succeed, a marketing plan is needed while product development plans are still on the drawing board.  Sure, it could be the next Facebook, but in reality chances are less than 5% that a new company will succeed.  Further, these statistics also apply to new product offerings in existing companies.  Many companies typically rely on one bread-and-butter product to generate revenue, but a second “hit” is elusive.

If it makes sense that marketing should occur before (if not in parallel with) product development, why do so many companies wait until the end of the development process to get started?  One reason may simply be a belief in the old adage that says “if we build it, people will come”.  Really?  Still, another common reason is lack of funding to hire the marketing staff required before and during the development process.  Funds are spent on engineering resources without a strategy as to how the product will be marketed or sold. Often, the product languishes before becoming profitable.

More than ever, companies striving for success must consider just how costly it is to build a new company, product or service that won’t succeed.

So what can companies do to maximize their success rate when introducing a new product/service?  One solution is to outsource the marketing function by employing an interim CMO, a strategy that greatly reduces overhead costs while improving the overall potential for success.

5 Must-Have Start-Up High Tech Marketing Activities

Given limited resources, what are the top activities that should take place and where can companies derive the biggest bang for their buck?  Here are 5 essential marketing activities for securing VC funds, launching new companies and introducing new products.

  • Market Opportunity Assessment.  A basic assessment should include needs analysis, market sizing and detailed profiling of key competitors.  This analysis serves as a validation of the product/service offering given the competitive landscape.
  • Investor Package Development.  Investors are most interested in: What is the market opportunity? What are the funding requirements? How will funds be used? What is the exit strategy?  The investor package includes an executive summary, presentation, revenue model, revenue projections, costs, staffing, exit strategy and time frame.
  • Sales Distribution Planning.  Ideally, a good sales distribution plan brings together sales and marketing.  It identifies the target market segments, how to reach those target markets and how to sell to them.  Sales distribution can include direct, indirect, channel partner, retail, third-party and online sales.  Effective sales distribution plans also identify the relative importance of inbound vs. outbound lead generation.
  • Go-to-Market Strategy.   Companies need to come out of the gate quickly with new offerings without breaking the bank.  This includes creating buzz and generating leads.  The strategy may include product launch, PR, events, advertising, search engine optimization, social networking and marketing campaigns.  Once again, it is important to determine how leads and revenue will be generated from inbound and/or outbound marketing.
  • Market Messaging.  This can include product naming, tagline, elevator pitch, product/service descriptors and pitches.   It is important to have specific market messaging for each target market.  In addition, the messaging must be clear, succinct and compelling.  It must communicate what exactly is unique about the product/service and why it is better than competitive offerings.  It cannot be bland or indicate a “me too” solution to potential customers.

In conclusion, it’s never too early to start the marketing function for any new company, product or service.  An interim CMO can help the process by providing the assistance needed, when it is needed, and at an affordable cost.

Product Management and Marketing: Can’t We All Just Get Along?

For this blog post I’ve asked long time friend and colleague, Robert Lonadier to share his insights on the role of product management and the dynamics of its relationship with marketing. Robert’s career spans the gamut of IT hardware, software, and services with an impressive record of achievement as both a product management and product marketing professional – he currently serves as a Senior Product Manager at EMC.
The roles of product management and product marketing have evolved considerably in the 20+ years that I have practiced them. Early in my career, product management and product marketing were largely left to their own devices. Thinking that the positions and function were somehow temporary, we were left to pretty much do as we pleased. Product Management’s job was to tell the engineer’s what the build. “Develop the requirements” they would say. But where to look for the source of the inspiration on what customer’s really wanted? “Talk to Sales and Marketing, they are the ones closest to the customer”.

And the textbooks were not much value, either. They either focused on consumer product management; large numbers of customer’s whose preferences were measured in tenths of a percentage of market share. Does anyone remember the Cola Wars? It’s no surprise these techniques did not transfer over well. A few innovative researchers, including Eric von Hippel of the Sloan School of Management, looked at how lead users identify the source of innovation, often in very surprising and unpredictable ways. Product Marketing grew out of the need to support sales. Help make Sales go more smoothly by greasing the skids. Provide “air cover” to Sales. It really took the classic microprocessor battles of the late 1970s (a good read on the subject is “Marketing High Technology” by William Davidow) for Product Marketing to hit its stride

Given how the disciplines evolved, product management and product marketing often have an uneasy relationship. So many functions can easily fall into each other’s bucket. There is even a well-respected product management body of knowledge called “Pragmatic Marketing”. So, it’s no surprise that many practitioners are confused about the proper roles between the two functions. And management is not making this easier by often times lumping the functions together and not properly defining the roles.

Product Management and Marketing’s Guide to Harmonious Co-Existence

So, what is a product manager and product marketer to do? Here are a few suggestions:

  • Communicate, communicate, communicate. Reach out to your product marketing/product management counterpart(s). Do not wait for management to step in and suggest this. Seize the initiative.
  • Clarify the roles and responsibilities up front. Especially if there is nothing already documented.
  • Be flexible. Depending on the skill level and capability of your product management/marketing counterpart, you may need to adjust what your contribution is in order to ensure that there are no gaps.
  • Remember you’re both on the same team and the real goal is to help your company reach its sales numbers.

The future of both disciplines is bright as the roles of product management and product marketing are critical to the development and marketing of successful products.  Companies that can clearly define and embrace both roles are more likely to see better overall results in bringing sellable products to market.

Interview with Charlie O’Rourke on The Pros and Cons of Outsourcing

Interview with Charlie O’Rourke, Financial Services Leader, former SVP of First Data and currently Chief Technology Strategist with the Fotec Group: “The Pros and Cons of Outsourcing”

Recent industry surveys reveal that more businesses are using outsourced services as a means of cost-cutting and potentially a strategic business productivity tool.  In these studies, executives said they believe outsourcing can provide many benefits, including access to a valuable talent pool where a company may lack expertise.

We asked Charlie O’Rourke, one of the financial industry’s most respected and successful veterans, to give his insights around the growing outsourcing trend and provide some tips on how a company can be successful leveraging outsourced services while avoiding potential pitfalls.

Attain Marketing: We’ve seen more companies looking to outsourced services as a way of achieving their business objectives.   In your opinion, is this a good trend for businesses and what benefits can they gain by outsourcing?

O’Rourke: Yes, I believe those companies that prepare themselves for outsourcing can benefit immensely as part of an overall business strategy.

First, let me clarify what I mean for our purposes here today.  To me “outsourcing” is a practice used by companies of contracting out some of their business functions to an external provider.  For the purpose of this discussion, I am referring to outsourcing as the utilization of hired resources inside U.S. borders.

While I agree there are benefits that a business can gain from outsourcing, there are also potentially huge downside risks of incorporating outsourcing without proper evaluation of its practice within a company.

Outsourcing is not something a company should embark upon simply for cost savings, recommendations from others, or without a critical eye toward the potential outcomes and whether outsourcing fits within their overall business strategy.

I realize expense reduction is often a very significant factor.  However, other considerations are just as or even more important.  A proper corporate outsourcing readiness evaluation would include, among other things, assessment of the company’s strengths and weaknesses, core competencies, culture, traditions, and vision for the future.  When a company’s strategies are well defined and aligned with a vision toward the future, they will include how to utilize outside resources to augment and complement business objectives.

If there is no strategy and strict oversight, outsourcing may end up costing your business more in the end.  Additionally, it could possibly destroy effectiveness in other areas such as agility, flexibility, customer service quality and competitive advantage.

However, if consistent with its strategic objectives, incorporating outsourcing of appropriate business functions can provide a company with the ability to better focus on its core business and gain competitive advantage at the same time.

Attain Marketing: Should businesses have concerns about outsourcing certain business functions?  In other words, are there “best practices” around outsourcing?

O’Rourke: Someone once told me that if everyone is adopting a “best practice” you can bet that it is no longer the best.  Now that the “best practice” is well understood, it is a perfect opportunity for consultants to provide textbook solutions and cookbook remedies while extracting nice fees for their services.

Mindlessly following “best practices” because they have been used at a Fortune 500 company, are the newest fad, everyone is adopting them or they are the rage for consultants nowadays, may not be in a company’s best interest.  Each strategic and tactical practice needs an evaluation with a critical eye on your company objectives.  Specifically, the practice should fit strategically, operationally, and culturally in your company.

It is unwise to “copy” or “clone” another organization’s recipes in terms of strategy, business theory, management tools or technologies.  Only when you understand your culture, values, purpose, strengths, and direction should you consider which business functions are eligible for outsourcing.

Each company has unique requirements and needs to evaluate which practices are “best” for its business, culture, and customers.

If I were to give general guidelines for outsourcing, I would say companies should retain their core functions in house and then look to outsourcing those business functions that are noncore.  That is the simplest guideline I can give.  Although often difficult and time consuming, proceeding without a diligent assessment will guarantee less than optimum results and possibly failure.

Attain Marketing: What are some of the business functions that are best suited for outsourcing?

O’Rourke: Given some of the caveats above, some logical places (unless of course a core competency) to look may include functions in human resources, administration, accounting, marketing, public relations, communications and legal.

There will be many others depending on the company and each business will have to decide on the criticality and impact of outsourcing in a particular area.

Attain Marketing: Being marketers, of course Attain is interested in your thoughts about outsourced marketing and PR services.  Are there advantages?

O’Rourke: I believe companies like Attain can definitely enhance a company’s marketing, media relations, and communications capability.

Small companies are obviously going to benefit quite a bit by using companies like Attain because they typically do not have sufficient, or in many cases, any expertise, talent and skills to effectively perform many of the required functions in these areas.

In the case of larger companies, the ability to utilize outside marketing expertise often times yields tremendous advantages.

I believe a company can achieve optimum outsourcing success when it embeds the resourced personnel with their internal employees.  They assimilate into the culture and have the same objectives as others in the corporation.  They understand the company values, culture, strategies as well as the industry, the business, and the company’s products and services.  They serve as an expert member of teams, departments, or divisions of the company.

Attain Marketing: Well said Charlie, and many thanks for the unsolicited plug ;-).

I’d like to add, potential advantages gained through an outsourced marketing team include access to an expanded list of analyst and media contacts, specialized public relations and marketing tools – as well as expanded services that may be limited or not be available at all within a company.

In addition, an outsourced team of marketing/PR specialists can provide an expanded scope of services in the categories of lead generation, sales support, social marketing, communications and media relations – possibly at the same cost as one or two internal employees who are providing a more limited scope of services defined by their specific role.

Any last thoughts?

O’Rourke: Companies that are too quick to outsource business functions as solely an expense reduction often suffer negative consequences.  Lower cost is always alluring but results may be much different than expected.  Companies should adopt an outsourcing plan that fits within their overall strategies.  This will yield results that are consistent with their direction and that do not negatively affect the company.

Again, I want to emphasize that company culture is very important.  Culture is often overlooked in the total equation.  The ability of a company to accept outsiders and embed them into the business is crucial.  Outsourcing will fit in some cultures but not in others.

I believe outsourced marketing is an area that makes sense, especially when outsourced personnel become an extension of the client’s in-house marketing, public relations, and public relations teams.

Attain Marketing: Many thanks, Charlie, we appreciate your input.

Today we’re seeing many companies turning to outsourcing as a way to deal with budget restraints while staying competitive in a sluggish economy.   Smart companies know that they can’t stop their marketing activities – especially if they plan on establishing healthy longevity in their business, so they see outsourced services as a great way to leverage talent and stay proactive.

Building Blocks for a Successful Investor Presentation

Building Blocks2010 has been an exciting year for technology innovators as we have seen venture capital investments flow back into the market. As a result many of our clients find themselves in the process of courting investors to fund their new ventures.  Thus the topic of “how to put together a successful investor presentation” has been top of mind.  Today’s blog provides guidelines for putting your best foot forward with a polished and persuasive presentation that will help quickly grab the attention of potential investors.

Before you start your presentation it is important to consider the motivations of the audience you are addressing and align your messaging appropriately. Venture capitalists invest in companies that they believe have the best chance of producing a return on investment, so the sole purpose of your introductory presentation is to convince them that an attractive market opportunity exists and that your company is well positioned to capture a large percentage of that market share.

It is important to remember that investors are not first and foremost a technical audience. To grab this audience’s attention you must first sell them on the potential revenue opportunity in the market/s in which your company is serving. After you establish the attractiveness of the market, they need to clearly understand the value proposition of your company, the solution you bring to market and why you have an advantage over other companies in the space.  What they don’t need at this stage is a technology drill down with complicated charts or confusing industry jargon.

Most important, you must not come across as a solution looking for a problem. Your business needs to be solving problems for its customers. Investors rarely fund companies that provide “nice to have” products and/or services. Potential investors must be convinced that the demand your solution is real, in that the target market cannot grow without your product/solution.

The following is a suggested outline to help you structure a successful investor presentation. The ideal presentation should be about 30 minutes and allow for Q&A to drill down on topic areas most interesting to the specific investor/s.

  1. Market Need and Business Model – This is the most important slide and needs to capture the investor’s attention right out of the starting gate. State what problem your solution solves and how you make money from it. How critical is the market problem and what is the impact of your solution?  Highlight market buzz words and trends.
  2. Industry and Market Overview – Overall size of the target market, growth, and expected penetration. Include references to industry analyst reports or other 3rd party sources for credibility.
  3. Product and/or Service Offering – What do you offer, how do they solve the customer’s problem, what validation do you have of their acceptance by potential customers and their effectiveness?
  4. The Management Team – Who are they, what are their areas of expertise, and their past successes. Include your key managers, directors, and advisers. The strength of your management team is absolutely critical to your business success and your ability to raise investment capital.
  5. Strategic Partners – Partners bring credibility (especially big name partners) so be sure to include any company that has bought into your vision tor will help you establish a competitive advantage.
  6. Competition – Who are they and what kind (large incumbents, other startups, substitute solutions)? What are their strengths and weaknesses? What are the barriers of entry in general to new competitors in your market?
  7. Competitive Advantage – Explain your sustainable competitive advantage and how you differentiate yourself. What barriers to entry have you already overcome that will make it more difficult for other competitors to enter the market? Will you be able to patent your technology to defend territory?
  8. Marketing Strategy – How will you sell and market your solution? How do you make money? What are your sales and distribution channels? What markets will you target? Who is the buyer?  What key problems are you solving for the target customer?
  9. Financial Expectations – What is your basic financial strategy in terms of revenue streams and margins? What is the plan (path) for making the business profitable? When will the business be self sustaining (cash flow positive)? Why are your revenues forecast to increase each year?
  10. Funding Request – How much has already been raised (invested) in the company? Who are the current investors, their ownership shares, and composition? How much funding are you seeking now? What valuation are you assuming for the company for this funding request? Discuss any future rounds of capital that the company expects to require. Have a detailed slide of how you arrived at the valuation available for the Q&A session.
  11. Use of Funds – How will you use the funds (be detailed), when do you forecast the various expenditures to occur, and how much?
  12. Exit Strategy – What is the planned exit strategy and when? If the plan is a sale then who are the likely buyers and why? What is the forecast valuation of the company at the exit point? What is the investors expected return on their investment?

With renewed interest in technology innovation by investors, it’s a great time to pursue funding – just make sure your first meeting/presentation is a good one – with the number of companies vying for money, it may be the only opportunity you have.

What Burger King and Microsoft have in Common: A Customer Centric Approach to Product Marketing

CrownA few weeks ago, I participated in a Webex with CompuCom. I was actually impressed. Their presentation on Microsoft licensing was excellent. They had all of the elements of Microsoft’s latest licensing options packaged together in a consistently formatted, modular structured, and seamlessly flowing presentation. Several different SME’s presented each module, including one presenter from Microsoft financing.

With Windows 7 gaining momentum and virtualization now mainstream, every IT manager is getting educated on how Microsoft’s models will impact their IT operations and, just as important, their IT budgets. I’ve got to hand it to Microsoft. It looks like they’ve delivered a string of winners with Windows 7, Windows Server 2008 R2, Hyper-V, and Office 2010. But what puts them within reach (within budget), and what puts Microsoft over the top, is their financing options for enterprises.

In essence, the Microsoft financing presenter said, “Have it your way.” Yes, they do offer their standard financing packages but (and this is a big BUT), if one of those doesn’t fit, tell them how you want to do it and they’ll work with you. This is a play right out of Burger King’s marketing playbook and makes them very appealing to cash-conscious IT managers. Brilliant? – maybe so.

What’s most appealing is the option to structure your financing in the way that you prefer. This “have it your way” approach gives the IT manager a lot of flexibility to meet the needs of their enterprise, yet maintain their conservative budgets in a still somewhat questionable economy. From an IT Manager’s perspective, it’s the best of both worlds. We get to deploy the latest software and keep the budget under control.

I hope this customer centric approach by Microsoft signals the start of a new trend in technology product marketing – where vendors actually listen and respond to the needs of their customers. What a great concept. If other technology vendors would follow suit, they may be able to make more sales and we could have the IT infrastructure revamped and ready for the full economic recovery when it finally arrives. That’s what I call a win-win proposition.

How Not to Name Your B2B Technology Company

Let’s be honest, the perfect company name can’t make a bad business model succeed, nor will a bad name cause a good business model to fail. And yet, when all things are equal, going to market with a memorable and compelling company name is like swimming with the current – it’s just plain easier.

A wisely chosen name requires fewer repetitions (and therefore less effort and marketing dollars) to promote. This is typically considered a good thing when you are a resource and budget strapped start-up.

So finding the perfect company name is easy, right? Absolutely! Anyone can do it – well that is until you do a bit of research and realize none of your brilliant ideas seem to be available.  The Internet age has led to a boom in technology start-ups and a bust on available brands.

This lack of availability has led to an onslaught of meaningless made up names (Twitter, Vonage, Skype) and inventive brands where basic grammar and spelling rules need not apply (eBay’s rogue “B”, reCAPTCHA’s runaway caps lock, Flickr’s missing vowel). There are many examples of success within these categories, but that doesn’t necessarily mean it is the right approach for your start-up. Your competitive position, marketing budget/resources and company goals are just a few of the factors to consider before naming your company according to the latest branding fad.

The Branding Creative Process: How to Get Started

Brand names can be developed and categorized in lots of ways – branding firm Igor offers a useful naming guide, which beaks down the categories into the following: Invented, Functional, Experiential and Evocative.

  • Invented brands typically include names built upon Latin roots (Agilent, Alliant) or poetically constructed names that are based on rhythm and the experience of saying them (Google, Kleenex)
  • Functional brands are asked to perform only one task: explain to the world the business that you are in (AllTheWeb, FriendFeed)
  • Experiential brands offer a direct connection to something real without being overly task oriented (Explorer, Safari)
  • Evocative brands differ from others in that they evoke the positioning of a company or product, rather than describing a function or a direct experience (Yahoo!, Apple).

There are no absolutes in naming – for every followed or broken branding “rule” lurks a failure or inexplicable success. However, we typically advise our business-to-business technology start-up clients (who lack either the budget or desire to hire a traditional branding firm) to skip the invented and functional names in preference for the experiential or evocative approach. Why? Because these methods typically produce a memorable name that inherently speaks to the value of the offering on an emotional, human cord without being overly cutesy, costing too much to promote or limiting future growth.

Swim with the Current: Choose a Compelling Company Name

If you decide to go it alone and name your new technology company internally, the following checklist can help you gauge whether the brand names you are considering may help or deter your marketing efforts. While there will always be exceptions to these rules, if you answer “Yes” to one or more of these questions, you may want to re-think your company name (unless you have the advertising budget of a Xerox or IBM, then by all means ditch this list and name the company whatever the heck you like – and call us, we’d love to help you spend some of that budget promoting that new brand ;)):

  1. Does the name have any negative associations? Be sure to consider all the intricacies of meaning beyond the intended usage. To start, do an Internet and news search to see what comes up. If you are selling into multiple markets or on a global basis, you need consider the negative associations across all target market languages and possible pronunciations.
  2. Is it difficult to pronounce? Write the name down and put it in front of 10-15 of your friends or colleagues. Ask them to read the name back to you. If two or more of them looks at the name in a confused manner or stumbles to read the name correctly, it may be red flag. A name that is difficult to say is difficult to remember. This means it will require a larger marketing budget to get the name to stick with target audiences. The ideal name is short and sweet. It rolls off the tongue. This typically means it will have two or three syllables (or even one).
  3. Does the name sound too technical? Hint: if your name is an abbreviation, acronym or contains roman numerals, it may be “too” technical. Remember the best brands speak directly to the value of the offering on an emotional level and make the brand memorable… strings of letters, numbers and technology jargon offer no emotive value and can pigeon hole your company as an out of touch technology vendor versus a visionary solution provider.
  4. Does the name sound similar to an established competitor? The goal of branding is to differentiate yourself from your competitors, not make yourself indistinguishable. Having a name with the same or similar keywords can cause market confusion and produce unintended results.  One of our clients, whose name started with same word as two of its competitors, was referred to in articles and reports collectively with its competitors and all were ridiculed for their lack of creativity. This is not a branding battle worth fighting if it can be avoided.
  5. Were you forced to pick a name by a deadline? People often don’t give themselves enough time to pick the perfect brand. Coming up with a great name takes time.  Perhaps the ideal name can just come to you as an epiphany, but more often than not you need to be more systematic and objective in your naming process. If you have to have a name by next Friday, you’re probably going to miss out on a lot of creative and compelling possibilities.
  6. Does the name explain a function of your offering? Naming your company after a single task or function of your offering can limit future growth if you decide to expand your offering or take a new approach based on market feedback. In addition, a functional name is typically derived from a limited number of industry keywords – and your competitors are probably already using these words. In the end, you can find yourself with a name that offers little, if any competitive positioning. If you have chosen a functional name, perform an Internet search to gauge competitive usage before you commit to the name.
  7. Does it infringe on existing names or trademarks? Infringement can be widely interpreted by some, even if you think challengers would be wrong or outright ridiculous to question your trademark application, it is best to do your research. The United States Patent and Trademark Office offers a searchable database of registered and pending trademark applications, as well as, helpful guides on the ins and outs of the trademark process.

Your Turn: Share Your Branding Advice

This list is compiled based on my ringside view from our marketing firm. I’m sure the list can be expanded upon and improved, so please feel free to agree, disagree or weigh in with your own branding experiences.