Marketing and The Bubble
For the first few years that I was in the "web world," 1997-2001, there was a dangerous and obvious bias in startups toward sales and marketing - and branding in particular. But, in the past few years, that pendulum has swung to the equally dangerous paradigm that product is everything.
And then he shows this great graphic:
I totally agree with Rand that VCs and entrepreneurs learned the hard way in the last bubble that spending a ton of money on marketing didn't guarantee success. More likely it guaranteed failure. And I am certain that experience has caused me and my partners to view marketing oriented startups with a fair bit of caution.
It may also be true that the same VCs and entrepreneurs have gone too far in our collective disdain for marketing. That is essentially the argument Rand makes in his post and he makes it well, with some cameos by USV portfolio companies.
Another post written in response to my marketing post is this one by Alan Patrick. Alan paints a different picture. He doesn't see the pendulum swinging away from the behaviors of the last bubble. He sees it swinging back toward them:
One of the things that defines a bubble is that too much money chases too few assets (in this case decent startups) - but the market abhors a vacuum, so the next thing is a flurry of production of new (me-too startup) assets to fund - so more startup teams leaving MBA school, more First Tuesdays, more Incubators, the start of funding at silly values "off the slide deck" - and it means a vast increase in startups also scrabbling around in the darwinian mire that one has to kick off the slippery ladder to get one's own hands on the rungs - and that means more and more shouting.
More shouting certainly isn't the kind of marketing I want to fund, and it is exactly the kind of marketing we all funded in the last bubble.
I'm sitting here mulling over the irony of two very different reactions to the same post, both of which I'm in agreement with. We are in a challenging phase in the cycle for sure. And marketing is a weapon that startups will need to use to get noticed in a very crowded and competitive environment. I just hope they use it smartly and well.