What startups should know in 2021
Startup Grind trends we had to share
by Lenka Davis
As always, there were some very inspirational and informative talks at this year’s virtual Startup Grind 2021 Global event. Questions that attendees were asking highlighted what was top of mind for everyone. It’s clear that startups have a lot to think about and juggle. Not the least of which is their marketing and funding. Both of these topics were discussed in several sessions. And then there’s the focus on what social mission is your business supporting, are you embracing diversity, all of which might be missing from your business plan. It’s enough to send you scrolling through your favorite meme channel to clear your mind. Let’s break it down.
1. What is marketing for startups?
As I listened to presentations I was struck by a common thread. Startups understand they need to know exactly where to start their marketing, what social channels, platforms, or formats to use. They may not know exactly where to start or how to get there. These questions came in the format of where and how to focus their marketing. How do they find the right social media channels, influencers, etc. Presenters had fun and insightful nuggets of examples that worked for them. The missing link between the presenter’s examples and startup founders' marketing needs was that every business is unique enough that it needs to build its own marketing foundation. The first step in doing this is creating a clear primary customer persona.
Marketing is not just advertising, in fact you don’t want to do advertising until you do some pre-launch set up, and you know who you are advertising to and why. Laura Holliday, past CMO for Rent the Runway and now consulting for Depop, clarified this first critical step by advising to put your product out there to “tighten your target”. Create your primary customer persona by interviewing your first or potential customers. Talking to who you think wants your product will lead you to who actually does. And that is who you should target in your marketing. In her example, for a health app SoShe, they thought the target was parents-to-be and as they drilled down they found that actually it was educated expectant parents and finally found that marketing to the midwife they picked was their target market. For in depth steps on how to create a primary persona read our Product Market fit blog.
2. What does funding look like for 2021?
When to bootstrap and when to get first round funding, that is the question. The benefits of bootstrapping is that fundraising does not become a distraction and you can focus on your business. Jaime Schmidt, founder of Schmidt’s Naturals took this approach and it worked for her. In the beginning, she took on work that was related to her goals while running Schmidt’s Naturals. She produced her product in her kitchen and sold it at the farmer’s market, just like Diana Trout, HealthAde kombucha founder. Read about her and other startup problems here. Her approach was to put her money back into her business and thus was able to keep on track with her vision. A vast majority of businesses start bootstrapped, so have a plan for funding and have a pitch deck ready.
The benefits of early stage investors is that you not only have a team of experts to rely on for advice, but some funds also provide a community of complementary businesses that are all targeted towards serving a common market. This makes it more scalable for the VCs and allows the businesses to use their community for assistance and support. The investment firms that focus on the early stage startups will take on businesses that range from a person who has an idea with no revenue and no product, to someone raising over a million dollars.
Getting funded depends on your goal aligning with the team running the capital fund. Goals such as growing customers vs growing profitability. As with your product you want to find the right investor fit, the right “founder/market fit”. Hayley Barna, founder of Birchbox and partner at First Round Capital, recommends founders should have investors that are just as enthusiastic about what they are doing as they are. Ask the right questions, evaluate the team, the market they are in, and the products they have in their portfolio.
3. What you may be missing in your startup plan
As unique as 2020 was, and 2021 is turning out to be, there has been good that has come out of these years. The good is companies are focusing on DEI: diversity, equity and inclusion. In 2040 America will be a minority majority and brands need to think about their future customers, prepare for them and position their brands to appeal to all customers. These are points made by Albrey Brown, who leads DEI at Airtable. In addition to Albrey, NextDoor co-founder, Prakash Janakiraman stated that 28% of people do not know a single neighbor by name. NextDoor is solving the problem of declining community in our neighborhoods. Interestingly, NextDoor found that their first customer base was older, female-oriented, and those that were making purchase decisions. Also, in the global market, NextDoor understands that neighborhoods are very different. As companies, the focus on DEI and community helps to lead the way to product adoption and company growth. As you are writing up your business plan, include a section on how you will address diversity for culture and gender, and also global communities for when you expand. You can also read our article on community.
If you need help with when and where to start marketing, understanding your product/market fit, or looking to broaden the appeal of your product, contact us for a free 30 minute consultation.
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Fun Fact
Stacy Abrams not only is a prominent politician, but also is an entrepreneur that has started several businesses that help communities. She co-founded Nourish, a beverage business that focuses on infants and toddlers drinks. She is CEO of SageWorks, a legal consulting firm and NOWaccount Network Corp, a fintech company that helps small businesses by buying their invoices so they can get paid sooner. And, she is an award winning author under the pen name Selena Montgomery of romantic suspense novels.
Lenka Davis is a Managing Partner at Fly to Soar. She has worked in marketing, managing projects and building tools in the high-tech industry for Fortune 100 companies and also ran her own business. Follow Lenka and the Fly to Soar Team on Instagram @flytosoarcompany
