Derek Lidow: Premature Marketing Can Mean Premature Death for Startups

Excerpt from the Wall Street Journal Article, "Premature Marketing Can Mean Premature Death for Startups," by Derek Lidow

Fixating on marketing in the early stages of a startup is a potentially fatal mistake. Entrepreneurs’ top priority must be on completing the initial three stages of every successful startup: customer validation, value proposition validation and scaling.

In stage one of a startup, focus on capturing the first real customer. Many entrepreneurs confuse their idea for a new product or service with what a customer would actually buy. Prototypes may be produced and marketing plans crafted. But until you have a paying customer, all you know for sure is that the offering is not perfect. When you capture that first customer you will find out just how imperfect it is–and what refinements are needed. It took me six months to find a customer that finally was willing to pay for the first service of iSuppli, the company I founded in 1999.

In essence, the first stage should be devoted to generating the facts necessary to test whether real customers want to buy or not. Time and money spent on marketing is an unnecessary and sometimes fatal burden. Simply put: marketing too soon increases the chances that the firm will run out of money. Keep reading >>