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MARKETING CLINIC: Killing startups with words

MARKETING CLINIC: Killing startups with words

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The Internet economy has certainly impacted on public relations firms -positively I mean. Those start-up companies and other newer small businesses can't get enough publicity and guidance from the PR gurus out there. They believe faithfully that Presence builds Preference.

According to the US Council of Public Relations Firms, PR firms' revenues rose by 30 per cent last year with those serving the technology industry boasting a 47 per cent increase. Monthly retainers have more than tripled in some cases.

Of course the bloom could wilt at any moment, with the Nasdaq technology stock correction well and truly upon us.

Technology startups, particularly those tied to the Internet, have a development sequence that cries out for good press. And PR people offer the hope of getting it. Traditional startups have an idea and a little capital, go out and find a lot of customers, and sometimes gain a little media attention along the way.

Today's Internet startups, however, begin with an idea, often a lot of capital but hardly any customers, and hope through media coverage, and perhaps small-investor interest, to create a "buzz" for the company itself that will then help sell the product - if there is one.

Many start-up firms won't last. And in hindsight, they'll be seen as more PR pitches than businesses. But for some that do last, PR people will get the credit for helping jump-start the operations.

When talking with PR firms, startups should ask themselves questions such as "What am I hoping the firm can accomplish? Has it achieved such results for others? And if they pull it off, will I be prepared to take advantage of it?" Remember, the PR firms will be asking plenty of questions as well - "Do you have software developers in-house? What's to prevent Arthur Andersen from coming in and going after the same market? What do you have beyond the idea and cool name?"

Tom Gable, founder and CEO of the Gable Groups which has been advising Internet companies on PR since 1994, maintains that many new online ventures are rich in ideas, whiz-bang engineering features and programming genius. But some 80 per cent fail out in the marketplace. Why?

Maybe it's the PR. Understanding the areas where PR and marketing communications can impede rather than enhance the reputation of a startup is worth exploring, so as to put the startup on the road to building a successful image and brand.

Gable notes a number of questionable communications approaches.

1) Pandora's positioning: The business and marketing plans are crammed with every buzzword on earth, yet the new venture isn't clearly differentiated. Jargon alert: If you talk about being first to move with robust, turnkey, best-of-breed, next-generation, leading, scalable, end-to-end solutions, you will ensure that journalists and VCs won't cover or finance the venture.

2) Budget-22: This is the PR equivalent of Catch 22. The CEO wants major global coverage on a neighbourhood budget. Match expectations to budgets or the hard work will end up being lose-lose rather than win-win.

3) Egomaniac expectations: Budget-22 usually leads to demanding Top 100-type coverage (Australian Financial Review, cover of BRW, etc) without looking at the reality of the company and its budget, products, services and size.

4) Creative quagmires: Companies kill creativity by having the wrong people do the writing. A close corollary is editing by committee. You don't ask lawyers to write software code or engineers to prepare legal briefs.

5) Hysteria marketing: Expecting short-term miracles and changing directions faster than a hummingbird at a flower show. The result: diluted budget impact and internal confusion.

6) Dullness, lack of energy, passion and personality: You have stuff, but so does everyone else. Become the Messiah for your concept.

Dolores diez is managing director rivers of communication. Reach her at rivers@hotkey.net.au


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