Develop A Solid Marketing Strategy BEFORE You Begin Paid Marketing
#1 Mistake Entrepreneurs Make is the lack of a strong Marketing Strategy: Venture Capitalists Agree
Dee Power and Brian Hill, authors of “Inside Secrets To Venture Capital” regularly conduct a survey venture of capitalists to better help entrepreneurs. In their latest study, 28% of venture capitalists said the most frequent business plan mistake was a “Lack of Marketing Strategy. Entrepreneurs failed to specify who their customers would be and how they would communicate with them.
One venture capitalist said the mistake is “underestimating the challenge of developing a new market”.
Entrepreneurs Are Product-Focused, Not Marketing-Focused
“Entrepreneurs fall in love with their product and don’t think about how to get people to part with a buck,” Power said. “Marketing isn’t just defining the sales market. It’s defining website techniques, conversion strategies, advertising programs…” developing a killer marketing message, and competitive analysis.
Marketing Strategy 101: Study Your Competition; Know Yourself
Entrepreneurs can learn about their competition through numerous outlets:
- internet searches
- chambers of commerce
- trade associations
- vendors and suppliers
Also, many companies, including possible competitors, list their market focus on their websites. “Never say your company or product has no competition,” she said. “State your competitive advantage in one paragraph. If you can’t, or if it takes more than one paragraph, you really don’t know what it is.”
Right after lack of a marketing plan, the venture capitalists listed “Lack of clarity” as a crucial mistake.
Entrepreneurs often have a business model that makes sense but don’t explain why their companies will be successful, they said. For example, assumptions are too generic and they have an “inability to clearly articulate the value proposition.”
In this survey by Capital Connection, 74 venture capitalists rated the most critical mistakes entrepreneurs make in their business plans:
- Lack of Marketing Strategy (28%)
- Lack of Clarity (21%)
- Unrealistic Assumptions (21%)
- Lack Detail (15%)
- Overly Optimistic (8%)
- Weak Competitive Analysis (7%)
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