Mood Shift – What’s a Marketer to Do?
That it has taken this long for the world’s capital markets to recognize the structural deficiencies that have been building for years, bewilders me. But the fear, uncertainty and the volatility that comes with loss of confidence in Western governments’ ability to manage their finances is here to stay for a while. In fact, some make a compelling argument that the recent ‘recovery’ is actually they eye of a storm that started in ’08.
Now, it seems, the drum-beat in start-up land is shifting into a more sobering tune. Here are just two examples:
An enlightening interview of Silicon Valley’s “Undertaker”. Two excerpts:
I’m finding that fundings themselves have created a unique problem. An ever-smaller group of companies is attracting all the financing, including through the IPO market, and once a company gets such a huge concentration of cash, those without as much begin drifting away.
First, consider that over the last 10 years, something like 22,000 companies that have been funded. That’s 2,200 a year. What’s happening is that in the seventh year of the venture life cycle, you better know who you’ll double down on or drop off the boat. Do you think there will be more than 400 exit events a year, meaning IPOs, mergers, and so forth? Maybe. There definitely won’t be 600, though. That leaves 1,500 companies, give or take, that will die. The world can only absorb so much.
And a sobering essay suggesting the capital winds are shifting away from the active funding many startup sectors have enjoyed over the past couple of years:
We’ve enjoyed these years of summer. But winter is coming.
Entrepreneurs should be prepared. Obviously, those who depend on raising money at a specific time in the future should be on their guard. Anyone whose plan is to “raise money in six months” is really saying, “I am planning on no significant financial crises happening six months from now.” I wouldn’t want to be making such specific predictions right about now. As every expert has been saying: if you can raise money on fair terms right now, do it. If you can spend money fueling your engine of growth, do it. If you need to double-down on a major pivot, on a drive to hit product-market fit, do it.
But we have much bigger questions to tackle about what will happen in winter. For example, entrepreneurship will suddenly stop being cool, and go back to being seen as risky, a little crazy, and a little dangerous. Those of us promoting the idea that entrepreneurship is a viable career option need to be ready. Right now, the “startup career” is an easy case to make. It’s going to get harder. We need to be ready.
What’s a Marketer to do? My answer: what you should have been doing all along… go lean and measure everything. Among my favorite phrases is: “You can’t manage what you don’t measure and your can’t measure what you don’t put into existence”. Campaign processes, procedures and workplans all need to be codified and, where possible, automated leveraging low-cost and oftentimes free collaborative, cloudbased tools like Zoho and Google Docs. When you focus your efforts on activities that have the highest probability to positively affect revenue and pinpoint the pipeline (and/or clickstream) metrics that lead up to a revenue event, you will have the ability to defend your efforts (or make adjustments) with hard, ROI-driven facts.
LaunchPad’s practice is built upon helping define and attack new markets based on sound due diligence, a well-thought-out G2M attack plan, and rigorous execution built upon a ‘manage/measure/adjust, then repeat” model. Wherever there is unaddressed market pain- whether in up or down economies- there is an opportunity to create value.