Startups are the fuel to today’s economy. Unfortunately, startups also have one of the lowest survival rates. In fact, 9 out of 10 startup businesses fail. As a business owner myself, I can sympathize with the immense amount of work that goes into starting a business from scratch. It’s a monumental task, I’ll admit. And perhaps one that never really ends. Even today, at our ten-year anniversary mark, I still feel we’re a startup.
So the big question is – why do so many startups fail? Is it due to a lack of vision? Lack of capital? As a marketer, I have observed many young startups fall and rise in a matter of months. In my opinion, it’s traditional marketing that has failed them. Here’s the route they should be taking in order to have a fighting chance at success:
The Traditional Marketing Funnel
The traditional marketing funnel, the one we were taught back in school, is based on the concept that advertisers or marketers have to make a case for a product or service. It’s the old advertising concept of making people want to buy stuff. So once you’ve created the next big thing, it’s all about creating awareness and interest in your product so people will adopt or purchase your product.
This concept works well for established brands that have a following and wide recognition: all they have to do is tell the world they’ve come up with something new and exciting. However, this model isn’t feasible for a brand new startup.
In our marketing agency, we have often seen startups lose precious capital by investing it all into broad awareness campaigns. After all, blanketing the Internet with your ads will only get you so far.
The Startup Marketing Funnel
Given the poor success rate of startups, it’s important for any new entrepreneur to rethink the usual strategies. The traditional marketing funnel is almost a path to destruction for many startups strapped for cash. After all, all your hard-earned money and energy is invested into growing awareness, which oftentimes leads to learning that perhaps that “next big thing” wouldn’t become so big after all.