How to tackle the challenges startups are facing today
Between changing attitudes to work and crafting strategies to ensure your product or service is adopted by as many people as possible, there’s a lot to think about. To shed some light on what exactly those challenges are and what you can do as a startup to arm yourself to overcome them, we interviewed 5&Vine founder and CMO Rahul Raj. You can read the answers below.
What are some of the challenges startups face today?
There are a number of challenges startups need to be prepared for in today’s landscape.
First, talent. Currently, there’s a shift taking place with America’s working Millennials spurred by the effects of the pandemic. In short, it concerns people abandoning the security of their office jobs to start their own businesses, pursue passions or develop side hustles. It’s been branded as the YOLO economy so, whether you’re looking to hire new talent or retain the team you’ve already got in place, it isn’t something to ignore. It’s something to acknowledge, consider and, if you’re a true Challenger, use to good advantage.
Second, leadership. For startups, the hiring process is time-consuming, costly, with risk. If you have specific aims in mind but are feeling either unsure how you’re going to deliver in a specified timeframe or don’t have the budget to hire a CMO full-time, a fractional CMO is an ideal solution. Not only do they reduce your risk long-term by refining or redefining your marketing strategy, but are much more cost-effective than a full-time hire.
Third, incumbents incubating innovation. RBC Ventures is one such example. Intrapreneurship is becoming more and more popular. It gives Goliaths an upper hand but makes it all the more important that you have amazing talent and leadership.
Fourth, crowded channels. In the past, running paid ads on social media was a reliable, cost effective way to get in front of customers.Over the last couple of years that’s changed, with once helpful tools becoming overused and too expensive. As Andrew Chen, general partner at Andreessen Horowitz, rightfully pointed out, going hard on just paid advertising is an addiction startups need to break. The cost of acquiring customers through paid social ads is getting too expensive to depend on for healthy growth. Startups in 2021 need to revisit organic growth, and pay equal attention to owned and earned media to complement their paid strategy. A solid foundation of evergreen content, amplified with an organic social media strategy, loyal customer community, and a strong PR narrative takes the pressure off of paid channels to solely deliver results.
Equally, why does the world need innovative startups right now?
The world needs innovation and startups that challenge the status quo, now more than ever. Whether it’s shifting mindsets after a global pandemic, standing up against racism and prejudice or rethinking your practices so they’re more sustainable, the planet needs innovative startups.
We’re also living in a time when 83% of millennials want companies to align with their values and 76% want CEOs to speak out on issues they care about. It’s never been more pressing for startups to showcase their political position and take a stand on the issues that matter.
What are the signs to look for in a startup that it might be time to get outside help?
There are a number of reasons you might look to hire a fractional CMO, and a number of signs to look for before doing so.
First, growth. If your startup isn’t growing at the speed you envisioned or you’re encountering roadblock after roadblock, it might be time to get outside help. With fractional CMOs, time is of the essence. Because of their knowledge of the landscape and track record of success, they can enter the business and quickly identify the challenges holding it back, also reducing your risk in the long-term.
Another sign to look for is whether you’re getting the sense your marketing strategy isn’t working or there’s an absence of leadership in that department. A fractional CMO can offer an outside perspective, a fresh take, and embed themselves in the team to see how your brand fits within the bigger picture.
If a startup wants to work with an agency like 5&Vine, how would that work?
In order to build a Challenger, startups need to think like a Challenger. Our approach to collaboration celebrates that, and seeks to bring out its best.
We’ll embark on a first date, which will include a free 60 minute meeting where we see if we have chemistry. We’ll use this time to discuss your business, our approach, and whether we can work together to solve the challenges you have.
If there’s chemistry, we’ll go on a second date. This involves 2-5 days of paid work, depending on the size of your team and the stage of your business. If that’s a success for both of us, we engage.
To date, our team has helped startups attain exits and scaleups drive user growth that’s generated over $1.2bn in follow-on financing. We’ve also led a number of successful rebrands, built scalable acquisition models, designed new websites, and developed new revenue streams.
What are some of the specific services 5&Vine offers when it comes to startups?
5&Vine is a full-service marketing agency led by an experienced startup CMO, with a team of experts when it comes to growth, paid acquisition, branding, organic social, content, and design.
For that reason, we use our Challenger Playbook to help startups in a number of areas, including:
Crafting long and short-term strategies that align with their goals, advance social good and displace incumbents to win market share.
Go-to-market expertise, helping brands define their value proposition and position it for a win.
Leading and scaling growth via campaigns that convert and leverage data to deliver results.
Social media, content and advocate campaign development to strengthen storytelling, provide more on-ramps and encourage retention.
Branding, from name and logo development to marketing collateral and web design.
Team building and mentorship, so startups can unlock their potential.
It’s important to note that all of those services are tied together under one mission: to help startups disrupt their sectors and grow. We understand the change you want to realize at a micro and macro level, and take steps to help you make that a reality.
I heard startups shouldn’t work with agencies, why is that?
Often, agencies get a bad reputation because it seems like they’re chasing a monthly retainer and, once they have that, don’t have to put in the same intensity of work. There’s also the idea that agencies being removed from the core startup take more effort to keep in the loop and can miss important updates.
At 5&Vine, we don’t work like incumbent agencies. We treat every client’s budget like our own money, care deeply about seeing our clients win and entrench ourselves into their teams to become one of them, rather than cutting and running.
If you could offer three tips for startups in 2021, what would they be?
Figure out a way to have fungible resources, where you can scale teams up and down thoughtfully. Investors are always looking for lean teams so it reduces their risk exposure. When you’re doing so, ensure you’re hiring with diversity, both in terms of thought and experience, so people are fulfilled by lateral moves across a business.
Focus on annual recurring revenue. This is typically achieved through subscriptions and finding a product market fit that can create repeat purchases so it’s not a constant acquisition game.
Build a viral loop from the outset. When someone signs up for your product, is there a prompt to invite friends? Does your product or service become better with other people? How can you feed that viral loop? Our team has deep insight into building audiences, driving engagement, and integrating growth into product development including generating viral loops to reduce an addiction to paid media.
For more of Rahul’s insight, check out our Q&A on fractional CMOs, their impact, and whether it’s time to hire one here.