In 2014, I got in on the ground floor of what I thought was a rocket ship. Fling was the fastest-growing app in 2014, and I was pulled in as their chief growth officer, with a handsome compensation package — one that in retrospect should have given me pause. Within 24 hours of arriving in London, I was greeted at the door by a Fling-branded Humvee, which wouldn’t even turn out to be the worst use of the company’s money.
Fling’s marketing team consisted of 20 people, or about 30% of the company. Skeptical that any startup needed a marketing team remotely close to that size, I sat down with each one of them to learn about each individual’s expertise, role and what value they added. Each focused on a particular area — online user acquisition, brand, partnerships, metrics, to name a few. Surprisingly, I found myself impressed with their skill sets, at least on paper.
Nevertheless, my spidey sense was tingling. It’s not that they were lazy or shirked responsibilities; in fact, each seemed like they tried to create value in earnest. But everyone on the team lacked a sense of urgency — the one that drives truly great startups to be thoughtful and careful about understanding why and how things work.
And when resources are seemingly infinite, any expenditure — whether time, money or both — seems like a good idea, so long as the return is net positive. And in isolation, perhaps many (or all of them) yield a positive ROI. The result was a constant cash-burn, despite “doing everything right” — everything was working, but it wasn’t working in a sustainable, manageable way, and I’d ended up buying into the hype. I’d been concerned about marketing bloat, and I was right. The company would eventually go under after burning $21 million.
I knew I was part of it. I could have stopped the bleed. But everything I was doing had a positive outcome — not one I could necessarily quantify or describe, but I knew it was there. We had all the money and time in the world — right up until we didn’t.
Before Fling I’d been scrappy, constantly brushing arms with death running one of the most popular fitness apps in the world perpetually from the end of our runway. After Fling, I’d developed bad habits — by my own hand — and had to force myself through a series of less glamorous but more fulfilling jobs wherein all that really mattered was results.
For me — and I’d say for any marketer — to develop resourcefulness, I needed to have spent significant time in an environment of scarcity, not abundance. This environment is the difference between whether or not a marketer ends up cutting their teeth and growing in their abilities or forever sucking on the teat provided by your friendly neighborhood VC.
And the word “resourcefulness” is a misnomer, containing a beautiful irony of sorts: it’s a trait that only develops when resources are running on empty.
It’s time for you to understand a new term — vanity marketing.
We had all the money and time in the world — right up until we didn’t.
Vanity marketing is a tempting investment for a company. It’s got some vague, ephemeral yet satisfying results — you’ve got a big party, you’ve got a wrapped Humvee, you’ve got something cool to point at, and perhaps you’ll achieve the mythical “virality” that gets a particular thing 10,000 shares or retweets.
You’re popular — a non-specific yet incredibly sexy thing that theoretically would mean that investors would talk to you, or reporters would speak to you, or that you’ve “made it.” It’s a result of the fact that many markets don’t have the level of scrutiny of, say, a sales team applied to them — marketing’s this big, powerful juggernaut where many people survive just by not getting fired.
If premature scaling is the leading killer of startups, marketing is the symptomless cancer that leads to its demise. Marketers with abundance ingrained into their mindset will spend until those resources are no longer there. It’s easy to succeed in marketing by burning capital to grow.
You know how there are some people who are entrepreneurs just so they can say they’re entrepreneurs? I’ve noticed a similar pattern in marketing. Everyone wants to call themselves a “growth hacker,” but no one wants to learn to write SQL or Python.
Why? Because it’s not sexy. Neither is obsessing over metrics like CPM, Average Order Value and cost per unique “add to cart.” What is sexy, though, is spending (other people’s) money to reach new audiences, and pointing at increasingly bigger numbers. The problem is that unless you get your hands dirty, you won’t actually be able to understand whether your marketing efforts command a return. I’ve seen marketers waste hundreds of thousands of dollars with no repercussions. Could you imagine if a salesperson expensed that same amount in sales trips without landing a single client?
Almost every single major startup flameout you’ve seen has had some form of major Vanity Marketing Spend, one totally divorced from, say, the cost of acquiring a single user. If you’re reading this and saying that you’re not one of these marketers, then I’m proud, yet suspicious, of you. It’s fine if you’ve dabbled — a happy hour here, a CES party there — and understood that those were brief attempts to get something that’s unquantifiable. And it’s even stupider if you’ve spent this money “just because everybody else is doing it.”
But the dark truth is that many, many marketing expenditures are totally unquantifiable — they have little to no grounding in reality beyond telling people you’ve spent money.
The boring, consistent marketing you can do — that you can analyze, that you can truly understand the effect of — is so much less interesting than the big, shiny objects. It might not look as impressive, but it’ll work. And it’ll teach you to succeed anywhere.
https://ift.tt/eA8V8J How to stop vanity marketing from killing your startup https://ift.tt/308iZeZ
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