“It’s feeling like 2002 again.”
This is the sentiment coming from many VCs and start-ups investors. The stock market plunge after years of high valuations and bear market tech optimism certainly have both founders and investors feeling gun shy and skittish. And this particular dip feels like the investible burst of a tech bubble that has been building for years.
Investors are revoking term sheets and looking more closely at bottom line performance, EBITDA, margins and efficiency. Which start-ups will weather the upcoming storm?
Meanwhile, founders are also hesitating and asking themselves hard questions.
“Should I rescind the offer I just made to that C-level candidate?”
“Should we cut our marketing budget?”
“What if we can’t raise a round this Fall?”
“Should we consider lay offs?”
As a former head of Marketing at multiple start-ups – and now founder of a start-up myself – I’m no stranger to helping founders figure out how to keep growing and thriving in recession.
Here are a few tips for early stage founders who are trying to balance growth with maintenance of a healthy bottom line:
- Focus on the opportunities. Every recession is fertile ground for savvy investors and inventive founders, and it can be a great time to pivot or launch something new. Air BNB launched in 2008. So did Asana. Venmo launched in 2007, and Square in 2009. A recession forces you to focus on business fundamentals and your path to profitability, and can make your company more resilient and successful in the long term. If you’re a B2B SaaS company, ask yourself how this recession is affecting your prospects and clients. What fresh problems can you help them solve? What is keeping them up at night, and how can you help them sleep better? Should you be adjusting your product roadmap to seize a new opportunity? It’s easy to focus on your own worries. But the companies that focus on the worries of their customers are the ones who will win.
- More spear fishing, less net-casting. Your marketing budget is going to be more limited. That doesn’t mean you stop marketing. You can’t afford to stop growing, and this is not the time to stall your growth. But your marketing needs to be precise and targeted, and as efficient as possible. And 2022 is best time in history for precision marketing. We’ve never had more data and analytics to work with. How well do you know your buyer persona? Their emotions, their personality, their buying triggers, their needs and pain points? Where are they spending time online? What are they searching for on Google? Are there any signals you’ve been able to identify that would indicate your persona is more likely to buy, and ready for your product or services? Get as precise as possible. A small list of 100 prospects with a high likelihood of needing your product or service is worth a lot more on a budget than an expensive tradeshow booth.
- Make the message matter. Let’s say you have that golden list of 100 perfect prospects. How do you convert 10 of them into annual contracts? This is where the brand promise – and the experience – becomes a game changer for your business. Catch their attention with a compelling, creative message. Create a moment they remember and a message they won’t forget. Sure, the message matters to you, but does it matter to them? How do you know? Promise them that your product will solve a problem, and make sure your promise is compelling, differentiating and true. Bonus points if the problem you’re solving is tied to their bottom line or helping them grow more efficiently – it is a recession, after all.
- Prioritize the bottom of the funnel. The entire funnel is important. Yes, you want your brand to be ubiquitous and a household name. But in a downturn, when you’re tightening the purse strings, you should focus on the bottom of the funnel where customers are more likely to be ready to buy. SEO, paid search advertising should be a priority. Any place and time that a person is actively looking to solve the problem your company solves is where you should prioritize your marketing spend and effort. Remember that the devil – and the glory – is in the details. A/B test ad copy, landing page headlines and images, CTA buttons. Continuously test and optimize for conversions with all of your ads. This is the best place to focus your energy, money and time when your budget is limited.
- Consider CMO-as-a-Service instead of a hire. You may be considering a Director or VP level hire who has been around the block, IPO’d a company or helped a well known brand reach success. But it’s hard to attract a person like that when you’re early stage. And in a recession, it’s hard to afford a person like that, too. Beyond the negotiation for top dollar salary and shares, you know they’re going to put a plan together in the first 90 that includes an ask for even more – a bigger direct marketing budget and more team members to execute on their recommendations. Consider that for the cost of a senior marketing hire, you could be leasing an entire marketing department that starts generating leads for you within 3 months, creating content and campaigns that convert. And you can get the expertise of that CMO-who-has-IPO’d, to boot.
At Rocket Fuel Labs, we help early stage start-ups accelerate growth with proven playbooks for B2B SaaS demand generation and a team of seasoned start-up marketing specialists with decades of experience to help early stage start-ups move faster, more efficiently and more effectively. Our clients include companies from seed stage to Series C, and we do more than just throw qualified leads over the wall. We provide full revenue and marketing operations support, a bottoms-up marketing plan that ladders up to top down revenue goals, list building and segmentation, and full execution of SEO, SEM, Content and direct marketing to help our clients achieve – and exceed – their goals. And not just lead goals. Revenue goals. What can be more important in a downturn than that?
Hit us up if you want to hit your numbers.