When you are marketing in a startup, you are trying to discover who your best customers are.
However, marketing in a business in scale-up mode can be a different beast. The product-market fit has been established and you already know who your best customers are. Scale-ups are often trying to grow the top line. Fast.
Having enjoyed playing leading marketing roles in both situations, the big differences that pop into my mind are:
1) Marketing Specialization
The marketing goal in a startup is to help or lead the search for a repeatable and scalable business model. Marketing efforts are often focussed on discovering the ‘engine of growth’ for the business.
Growth indicators could include customer (paying) acquisition, revenue growth, or increase in number of users. It could be a combination of these indicators as well. E.g.: Facebook did not worry about revenue growth during the startup phase when they focussed on the number of users instead.
Startups usually operate under pressure to figure out their growth engine with as few resources as possible. The focus on ‘lean’ practices leads to hiring of ‘full-stack’ employees who can do multiple things including marketing. It is not uncommon to see startup founders double up as marketers.
During the transition from startup to scale-up, the change in marketing goals calls for specialist skill-sets. The marketing focus shifts to quickly and efficiently scaling up the repeatable sales or customer acquisition model.
To do so, the business has to double-down on the growth engine. If your primary growth engine is say, organic traffic, you may need to find a way increase organic traffic by acquiring additional SEO and Content Marketing skill-sets within the organization.
Of course, business goals may decide that even with additional resources, organic traffic is not sufficient to meet time-sensitive business objectives and revenue targets. So marketing activity may decide to focus on additional engines of growth to meet sales targets. E.g.: A paid search expert may be added to the team to accelerate customer acquisition related sales numbers.
Additional growth engines could also just mean new geographical markets which may not require the same expertise as your primary growth engine.
2) Marketing Experimentation
Risk is often inherent in the iterative process of figuring out who your best customers are. As such, startups are not fettered by the chance of disturbing the ‘status quo’ of a stable customer base. With a very small customer base and yet-to-be-proven business model, startups can focus on taking risks that can lead to that ‘A-ha’ moment that points to a scalable business.
Experimentation is often a norm in startup marketing even with an experienced marketer to mitigate some risks.
On the other hand, a business that’s scaling up depends on experience to determine what growth engine to focus on. After all, the trial and errors of the startup phase have helped the startup figure out what works and what doesn’t. This knowledge may also reduce the room for marketing experimentation. With a bigger customer base, there is less room for error.
To optimize the user experience, your marketing team will rely on other departments like technical support, operations, etc. This allows less time for the ‘random’ marketing experiments and more time to fine-tuning the marketing machine.
Of course, it is always important to allocate some resources from your scale-up marketing budget towards some startup type experimentation. After all, you will need to keep innovating even though your primary focus is on growing the top line. This will ensure that your marketing activities help you retain that competitive edge in the market.
3) Marketing Processes and Hierarchies
With a small startup team on the product-market fit discovery journey, set processes can be more a hindrance than help. It would be easier to just check who is free that day to help you with a piece of marketing content or collateral, for example.
A flat organizational hierarchy is ideal when your marketing team is testing out various concepts to find out what sticks. This informal structure and flexibility is conducive to the team-spirit needed to hustle your way to discovering the ideal customer.
However, operational efficiency becomes increasingly important as you hit the scale-up phase. The ability to efficiently prioritize, delegate, record, track, and analyze marketing activities becomes process dependent.
As your scale-up adds overlapping layers of both specialist marketing talent and marketing channels to the mix, you will need to establish some type of responsibility driven hierarchy within the marketing structure. The larger the team the more the need for managers.
Back in 2001, Larry Page (Google co-founder) decided to fire all the managers overseeing engineers. He explained that he thought managers were unnecessary.
That did not last long. Resources ended up getting misallocated. There was redundancy, and people didn’t get needed feedback. So the company started hiring product managers again.
4) Marketing Leadership
The informal startup culture is forgiving of scant marketing leadership skills. After all, the simplicity of running one or two people teams is very different from the skills needed to hire, manage, and motivate bigger teams.
A startup does not always need to align sales and marketing activity. However, most scale-up marketing needs are always coupled with revenue generation responsibilities. In a scale-up, it is important to align sales and marketing activities for optimized growth focus. Marketing in a scale-up needs to behave more like revenue centers than cost centers.
“Sales and marketing misalignment is the primary driver in failure to scale.” – Kauffman Founders School.
This brings unique leadership challenges both in terms of vision and execution.
For example, a newly hired scale-up marketing specialist may have to educate and coach both horizontally and vertically within the organization. The success of implementation of new marketing concepts and methodologies could hinge on the awareness (even if limited) of these concepts across the organization.
Obviously, this means that the ‘people’ aspect plays a bigger role than ever in scale-up marketing success. You might have to patiently coach and guide your traditional sales team to understand the benefits of using marketing and sales automation to improve sales results.
These leadership abilities in organizational transformation may well be the most important difference between marketing in a startup vs. a scale-up, especially since this ability casts its dominant shadow above the three other points above.
Scaling-up is challenging
The above are some of the important points of differentiation as you move from a startup, entrepreneurial business model of marketing to building a replicable, scalable distribution machine that will allow you to efficiently grow your business.
It is possible however, that your current marketing activities include a hybrid of both startup marketing as well as scale-up model marketing. This indicates that you are transitioning towards a scale-up model.
Not to take credit away from startups, but scale-up growth requires as much or more amounts of energy and dedication along with huge smarts.
In its basic form scaling up is about execution. But its success is very dependent on a forward-looking policy, as well as improved culture and leadership.
What’s your experience with startup marketing and scale-up marketing? Do you have any other important points to elaborate on?