Entrepreneur

When should you turn on the marketing faucet?

(Editor’s note: Chris Drake is CEO and founder of FireHost, Inc., a secure Web hosting company. He submitted this story to VentureBeat.)

In business, “turning on the faucet” is a metaphor for flooding your market with the full spectrum of marketing and business development. It’s an important step in your company’s maturity. Take it too early and you’ll misrepresent your service. Take it too late, though, and you’ve missed the boat.

My entrepreneurial “a-ha moment” came when I was running TargetScope, an interactive marketing and web development company. We were successful, but then the website of one of our biggest clients (a very large, very well known turkey company) was hacked … the day before Thanksgiving 2007.

It was a critical time for our client, and we (the development team) scrambled to help get their site back online. We realized instantly the potential for a vastly larger business opportunity — secure web hosting.

We pursued that, but more than two years passed before we turned on the faucet. Knowing when the timing is right, I learned, came down to six factors.

Get the product in shape – We made the decision to become a secure managed hosting company in 2007 and spent the next year working on the business. During that year, we didn’t launch our website. We didn’t deploy a complex search marketing strategy or ad campaign. We just focused on the hosting solution to ensure it could fulfill the needs of websites in peril.

Start pounding the pavement – Every entrepreneur convinces him or herself that launching a business is a chicken and egg game. You believe you need marketing to get customers, and customers to get investors so you can afford marketing.

That’s sad and lazy when you can get customers the old fashioned way: By pounding the pavement and talking to people about their business needs. If the CEO personally calls on several prospects and can’t close a deal, then your product isn’t ready (or your product is a dud). It’s not the easy route, but it is the effective route.

We won several clients this way, but more importantly, we learned a metric ton about what we were doing wrong. That’s why it’s necessary to be in business before you launch the business. Don’t issue a press release; don’t sign up for a tradeshow; don’t commit a penny to media coverage until you have a proven solution with happy customers to back you up.

Set your sights – When we started down this new path, we focused on just one customer profile – companies whose websites have been (or are being) hacked. We knew we had a solution that was appropriate for a wide array of businesses, but we ignored them. We didn’t call them. We had anointed ourselves the “white knights,” and searched for companies who had experienced the devastation of cybercrime.

We screwed up.

It took six months to realize we’d set our sights on the wrong target and another six months to get it right. We needed to position as the web host that prevents the hack. This was an important lesson that taught us to define a target market, conquer it and then expand horizons. You may be surprised by where you find your most lucrative clientele.

Prepare for liftoff – So you’ve got clients signing up. You’re discovering the most lucrative target market. The “system” is working smoothly. It’s time to launch? Not quite.

Ask yourself, “If we received 100 orders in 24 hours, could we handle it?” Answer honestly because this could make or break your future. Make sure you have sufficient levels of automation in place to receive, process, fulfill and sustain orders.

Make a splash (or a belly flop) – Two years after the great turkey hack of 2007, we had a few hundred customers and a new name for our business venture, FireHost. By then, we were becoming known among our key user base as a secure, affordable managed hosting solution. We were now ready to turn on the faucet.

At the end of the day, knowing when to turn on the faucet can be just as risky as anything else in business. Plan the best you can, hedge your bets, and remember: The quickest way to kill a startup is to market a bad product. Make sure you have a proven model first and turn on the faucet second.


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