I was living and working in Boulder at the turn of the century (sounds like such a long time ago), and had the chance to help my dad market his desalination invention to investors. Basically, the invention used the hydrostatic head of a 2000 foot hole (well) to drive sea water through reverse osmosis membranes creating fresh water. Brilliant concept, and I was even able to add a couple ideas to subsequent patents to keep the project alive. But the proof-of-concept well would cost at least a million bucks, as in a million dollars that we did not have. I pitched it to a number of companies including Dupont, the maker of the membranes, and they expressed considerable interest.
Bottom line is that we were never successful in securing the startup capital for the venture although the experience offered a few lessons about the process. The most important lesson was that venture capital is expensive: in this case we would have given up controlling interest in the company. While something is better than nothing, wouldn’t it be better to come up with a startup idea where venture capital was simply not necessary?
As I began imagining a business that I would build, I found it helpful to view myself as a venture capitalist. I would build a company that I would want to invest in at some point. It would have to address the needs of a large target market. It would have to be decidedly unique in a world of me-too’s with a value proposition so strong that it attracted the target market like a magnet. And last but not least, it would have to scale in both directions and at a moments notice.
“Your work is going to fill a large portion of your life and the only way to be satisfied is to do what you believe to be great work. And the only way to do great work is to love what you do.” ~ Steve Jobs
In Eric Ries brilliant book, The Lean Startup, he lays out the three engines of growth for any startup, explaining that all successful companies do at least one of these well with a much smaller subset of companies doing two well.
- sticky – low churn rate; customers remain customers for a very long time
- viral – customers become advocates
- paid – advertising, promotion, marketing, sales expense
In building my agency I decided that we would maximize all three. The imaginary venture capitalist in me would surely appreciate this someday.
To keep customers happy year after year we would have to provide tremendous value in addition to a solid ROI.
We would need to delight our customers to such an extent that they could not stop talking about us. Our best ‘new customers’ would come through the sacrosanct word-of-mouth channel.
As a marketing agency, this one is easy. We will simply become our best customer. Everything we do for our hand-picked clientele we will do for ourselves, from inbound marketing, predictive marketing, video production, platform building and thought leadership strategies to advanced SEO and digital PR strategies. These things are expensive but explosive in effectiveness, and as we grow we will be able to become our best customer.
Sometimes I think how much faster the agency could grow with investor capital. But then I realize owning 100% of any business is such a powerful thing. It all comes down to why we’re in business in the first place. Are we wanting to build something that will endure and have lasting positive effects on the world as a result or do we simply want to build something to sell? Both have their own unique responsibilities and rewards.