August 24th, 2010 2

When to Make it Rain (in Marketing)

In business, “turning on the faucet” is a metaphor for flooding a target market with the full spectrum of marketing and business development. It’s when you formally say, “Here we are world! Watch us take over.” Preempted by a series of conscious decisions, you must strategically deploy the full arsenal of tactics at just the right time to achieve success. If you go too early, you’ll misrepresent your service. Too late, and you’ve missed the boat.

My “a-ha moment” came when I was running TargetScope, an interactive marketing and web development company. We were successful (by our own measures), and the company had a growing customer base and profit margin. I thought I would continue down this path, then the website of one of our biggest clients (a very large, very well known turkey company) was hacked… the day before Thanksgiving 2007.

It was a critical time for our client, and we (the development team) were scrambling to help get their site back online. We realized instantly the potential for a vastly larger business opportunity – secure web hosting. Even though we’d made the decision to head down this new path, we didn’t stop TargetScope (as you know it) in the weeks or even months that followed.

More than two years passed before we turned on the faucet and publicly entered the web hosting scene. How did we know the time was right? How do you know when to open the floodgates?

Typical, type-A entrepreneurs will move as fast as possible, and your team will require that energy and drive to make it to the finish line. My warning, however, is not to throw caution to the wind and put the cart before the horse. There are some conscious checkpoints that must be addressed along the way to help ensure your success.

Get the Product in Shape

We made the decision to become a secure managed hosting company in 2007 and spent almost every minute of the next full year questioning what it takes to get there. Quibbling over the “grand scheme of things” bought us the time required to physically and technically build a secure hosting infrastructure – the backbone, the technology, the network, the guts.

During that year, we didn’t launch our website. We didn’t deploy a complex search marketing strategy or ad campaign. We just focused on the hosting solution to ensure it could fulfill the needs of websites in peril.

Start Pounding the Pavement

Every entrepreneur convinces him(or her)self that launching a business is a chicken and egg game. “We need marketing to get customers!” you cry, and when the media budget runs out or doesn’t come in, you wave the white flag of defeat. Game over.

That’s sad and lazy when you can get customers the old fashioned way. By pounding the pavement and <gasp> talking to people about their business needs. It’s a great test, and it’s one you need to do first hand. If you the CEO personally call on several prospects and can’t close a deal after coating them in passion, confidence, your spiel and a fair price, then your product isn’t ready, or your product is not in fact the greatest thing since sliced bread. Thank goodness you found this out before pouring seven figures into a marketing campaign!

I will admit that pounding the pavement is not the easy route; it’s the effective route. When we were confident our secure hosting configuration was a viable, marketable business solution, we started pounding the pavement.

We won several clients and learned a metric ton about what we were doing wrong, and the latter is why it’s necessary to be in business before you launch the business. I’m serious. Don’t issue a press release; don’t sign up for a tradeshow; don’t commit a penny to media coverage until you have a proven solution with happy customers to back you up.

Set Your Sights

Version one of our secure hosting brand focused on one customer profile – companies whose websites have been (or are being) hacked. We knew we had a premium, secure hosting solution that was affordable for a wide array of businesses, but we ignored them. We didn’t call them. We never once tried positioning our hosting service as a preventative solution. We had anointed ourselves the “white knights,” “the good guys” and searched for companies who have experienced the devastation of cybercrime so we could swoop in to save the day.

It took six months to realize we’d set our sights on the wrong target and another six months “getting it right.” This is an important lesson. Take some time to iron out the kinks on a smattering of clients’ valuable feedback. Define your target market. Conquer it. Then expand your horizons. You may be surprised by where you find your most lucrative clientele.

Prepare for Liftoff

Clients are signing up. You’re discovering the most lucrative target market. The “system” is working smoothly. It’s time to launch. Not quite.

Ask yourself, “If we received 100 orders in 24 hours, could we handle it?” Answer honestly because this could make or break your future. Make sure you have sufficient levels of automation in place to receive, process, fulfill, and sustain orders and serve customers with as little manual intervention as possible.

Make a Splash (or a belly flop)

Two years after the great turkey hack or 2007, we had a few hundred customers and a new name for our business venture. FireHost became the secure hosting solution for companies of all sizes who are seeking shelter from malicious hacker networks before their website or web application is compromised.

We were ready to turn on the faucet, but we could only afford a trickle. To really launch our company, we needed marketing dollars. Big marketing dollars.

We raised $2MM in series A funding and spent it as conservatively and “smartly” as we could. So should you. My advice? Only make commitments you can fulfill, and market with money you can afford to lose. In reality, if you have a great product, you won’t need to spend much in the beginning. And if your product or service isn’t absolutely awesome, you should really go back to the drawing board before making a splash.

Wash, Rinse, Repeat, and Be Open to Try New Shampoo

Moving the spigot from a trickle to a torrential downpour really means communicating the problem and educating the market with everything in your power. Wild, thriving success may not happen right away, and that’s okay. In my opinion, it’s best to start slowly. It buys you some extra time to unmask the enigma by proving the concept of your marketing plan, physical presence, and brand image.

At the end of the day, knowing when to turn on the faucet can be just as risky as anything else in business. Plan the best you can, hedge your bets, and remember: The quickest way to kill a startup is to market a bad product. Make sure you have a proven model first and turn on the faucet second.

A version of this article appeared in VentureBeat on 08/24/2010.

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