In his latest blog, venture capitalist extraordinaire Fred Wilson comes out against marketing budgets in startup environments. His point: if you don’t make products that suck, you won’t need marketing.
Early in a startup you need to acquire your customers for free. Later on, you can spend on customer acquisition. So if you need to acquire customers for free early in a startup, how do you do that?
Just when I thought I understood where he was leading us, Fred then offers eights ideas (I know because he numbered them like a dutiful blogger) for how to “acquire customers for free”.
All of which are marketing ideas.
And most which are not really free because time, attention and energy spent on any business activity impacts the bottom line whether there is a line item devoted to it or not.
But be that as it may, Fred is expressing a commonly held confusion about marketing – that it’s just paid advertising. It’s a fundamental misunderstanding.
Any business activity that is aimed at connecting a market to a company’s product or service is marketing. It doesn’t matter if the connection is earned or paid for…it’s all marketing.
Fred obviously thinks “customer acquisition” activities are important. So my question is: if a company commits itself to his proposed activities (and diverts resources away from other activities like product development), wouldn’t it be better to account for it and be transparent in the budget? And wouldn’t it make more sense for that company to employ a professional to manage it all?
I don’t get it. Have you come across this thinking in your own work?
-Matthew DiGirolamo, Cause Catalysts
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