Dave McClure, founding partner of 500 Startups, tells it like he sees it. Last week, during his presentation at the International Startup Festival in Montreal, phrases like “You are geeks” and “You will die” shot out amidst a litany of swear words. No apologies, no sugar-coating; just the bald fact that “this is how it goes.” And the buzzing young crowd ate it up.
But the head of the Silicon Valley-based seed fund and tech-startup accelerator, which has invested in hundreds of companies all over the world, had a bigger point to make. McClure believes that, as marketers and entrepreneurs, we have not shifted our behaviour enough to become successful “growth hackers,” or online marketers. “Marketing has dramatically changed in the last five to 10 years,” he told the gathered entrepreneurs. Without skills in selling and promoting online, it is unlikely for business ventures to be profitable in the future, or even to obtain initial investment.
Marketing behaviours must change because people’s behaviours have changed. “There are a lot of people online… [spending] a shitload of time,” he said. At night, we may still turn on the TV, but most of us multitask in front of it with a smartphone, tablet or laptop—and we are becoming more and more engaged with these devices.
McClure stressed that marketers have more access than ever to potential customers, as well as to in-depth consumer information. The internet affords the “ability to test customer reaction in close to real time.” If you run an online ad, you will know its success within days, not months, and it will cost you a fraction of the price of traditional radio, print or TV advertising. The unfortunate reality, however, is that most marketers have been slow to take full advantage of online media.
McClure ran through three abilities all online marketers need:
1. Focus on the marketing part, especially the research. It’s all about how you deliver the market to the product, not how you deliver the product to the market (which remains the realm of “the geeks”), he said.
2. Target campaigns to precise markets through a variety of online channels, including email, paid search and paid social ads. A new product might not show profit at the start, but you still have to invest in its marketing, using realistic revenue forecasts as your benchmark. Failure to take this step makes you “an idiot,” McClure concluded.
3. Set measurement objectives and profitability metrics for your online marketing and make sure you are profitable in scale. You can’t just throw money at the Internet and hope it sticks. If not, McClure says, “most of you will die.”
Only once you have mastered the new marketing methods—search, social, mobile and even messaging and video marketing—can you confidently invest in more traditional avenues to expand your reach and be on a multichannel basis. “Bottom line,” said McClure, “this is how it goes: if you can’t handle these three marketing must-haves, hire someone who can.”
Click through Dave Mcclure’s slides from his presentation: Beating the Series A Crunch