Hot Chip 2: David and Goliath
The appetite among marketers to get close to the tech city scene is such that one enterprising chap is selling Shoreditch tours. I’m not sure how you measure the ROI of looking at Google Campus from the outside, but it tells me the days of shrinking marketing budgets are over.
Many marketers from big brands are dead keen to engage with tech start-ups. Even for the digital native, it’s hard to feel truly up to speed with marketing innovation, particularly digital and mobile-enabled marketing practices, when you have a busy day job. Secondly, there’s a desire for people in large corporates to be exposed to entrepreneurial attitudes and behaviour. The corporate hope seems to be that some of the entrepreneurial spirit will rub off. A few corporates also want to invest via their venturing arms in the tech scene. Naturally, agencies too want to keep abreast of developments and perhaps take an early stake in the next big thing.
Entrepreneurs are usually delighted to meet with corporate people, as they generally welcome all input, hope for new contacts, and assess everyone they meet as a possible investor, wise counsel or prospective client. Most of these encounters are one-night stands, however, since most people with day jobs don’t have time for more, and those without formal employment can’t afford to hang out with start-ups giving free advice.
It can be a total waste of time on both sides. Meeting a bunch of start-ups doing things unrelated to their sector and irrelevant to marketing practitioners soon loses its shine. Start-ups enjoy the attention of people whom they may perceive to have budgets and therefore potential value to them, but mostly it comes to naught.
Done right, though, it can be valuable to both parties, even when no money changes hands. In Collider, the interaction is structured to make it efficient. All the start-ups have to be doing something that will help businesses connect with their marketplace. Brands and start-ups take part in a speed-dating session, so the brands can see what interests them. They may then want to act as a mentor and business coach, and some even pilot the start-up’s service in their business. There’s a business benefit and some personal reward, as well as a taste of the entrepreneurial life. Occasionally the brand person goes off to start or join a tech business, but this is rare. More typically they share their knowledge of how big businesses work, and take away some inspiration about the art of the possible.
Here are my tips for marketers get the most out of the tech start-up revolution on our doorstep.
Be very selective
Find a forum where the start-ups have a common focus which suits you – there are a few like Collider doing madtech; others are sector-focused, like healthcare or gaming. Don’t be flattered into spending time giving advice unless it’s to a start-up whose activity is relevant to your business or your job.
Play it cool
Some of these entrepreneurs are brilliant technically and quite naïve on how big companies work and clueless on corporate-speak. They may totally misread the signals. I worked with a couple of guys who honestly thought the senior manager who said, “Get in touch if you come to London” was giving a strong buying signal. It could be an expression of interest, but it could just as easily be a polite fobbing off. So if you say “Our business is looking to invest in this sort of thing”, you may give the poor chaps false hope. It can seem exciting, but keep your head and play it cool. Then they’re less likely to latch onto you and pester you.
Be cruel to be kind
Don’t be afraid to say no, and say it loud, clear and soon. This is a kindness to the start-up. Even if you’re going steady, break up if you need to. Then you’re both free to see other people. One of the most damaging things I’ve seen is little businesses hanging on, waiting for a yes from a big business. When they typically only have six months’ cash, waiting in vain is very expensive. I know one that spent six months getting agreement from a large business, which said “Yes yes yes yes” at several stages, then “no”. By the end they had run out of cash and had to fold. Another small business was promised investment by the UK subsidiary, which took months to turn into no from somewhere else.
Make them keep it simple
Don’t worry about the tech – few of us are expert there, and it’s not where they need advice. Instead, challenge them to simplify their message, to articulate a clear proposition in terms that anyone would understand. (This is beautifully covered in The Mom Test by Rob Fitzpatrick.) It’s your best chance of finding new businesses that can be useful to you. Many of these entrepreneurs can talk about tech and algorithms and whatever, but it’s all for nothing if they can’t express simply the problem they solve for their customers. I have found this to be amazingly helpful to them – and to me. The to and fro of this conversation helps to identify what a tech start-up can do, for me or for others. With a customer painpoint as the focus, I can learn about the tech in a way that’s relevant. It’s also the best way to know which things compete – not because they have similar tech but because they address similar painpoints.
With these four principles, you can go boldly into any incubator in the country without fear of neglecting your day job.
Read more from Fiona in our Clubhouse.