Creating the next billion-dollar company is an accolade most marketers would like to lay claim to, but the chances of finding one are on a par with finding a unicorn, which is why the mythical creature has recently become synonymous with this kind of business.
There are, however, more reliable ways of identifying companies that are already gaining momentum but need outside help to get to the next level of growth, according to serial entrepreneur and former angel investor Sherry Coutu, who spoke to Marketing Week following The Marketing Society’s annual conference.
“Often we get excited about the big or little companies and forget about those which are working away [in the middle], as they get lost in the noise,” she says.
There were more than 600,000 startups registered in the UK in 2015, according to Startup Britain, but Coutu says “how about focusing attention on the 10,000 businesses that are doing amazing things? Marketers can transform these companies’ ability to explain what they have to the rest of the world.”
Coutu, who is also a government advisor on economic growth, classes these businesses as ‘scale-ups’. Although she says they have the “persona of a startup”, they tend to be at a different stage in their life cycle.
“A scale-up is a startup that displays characteristics to help it grow fast and keep on growing,” explains Coutu. “They often don’t have marketers working for them, because they’ve been so focused on creating the product, but once the product is finalised [a] marketer with the right training and understanding can make a huge difference. They can help them go from 20% growth to 1,000%.”
Although marketing is important for startups, Coutu insists it is “essential” for scale-ups.
“A product may be right in England, which is a small country, but [these businesses] need to get it right everywhere else,” she says. “To do that they need a marketer who has [the right] experience and skill set to help take [the brand] to other countries.”
Coutu believes UK marketers in particular need to focus their attention on scale-ups because as a nation we are overly obsessed with companies at the beginning of their journey, which could hinder long-term growth.
“Other countries focus on startups with momentum, which are growing fast, but the UK tends to focus on startups that nobody knows. We have to do something to help those companies that could be unicorns become unicorns. It is the scale-ups that really need help – they need skills, contracts and the right people to work for them.”
She adds that if you chase a scale-up rather than a startup, “it is a thousand times more likely that you will succeed” as the product is already proven.
“It’s quite risky going to a startup, but not that risky going to a scale-up because customers are already buying these products – and that’s with bad brand messaging,” she says.
Once an entrepreneur has figured out how to make their product work and honed the proposition, it is then critical to communicate how it is benefitting the first 10,000 customers, and how it is going to help the next 10 milllion, she explains.
“That’s what marketers do. They take the crazy ideas and clunky products and make them understandable to the mass market. You go from focusing on the early adopters to crafting a message that the rest of the world can understand.”
Identifying the right audience
As the programmers and entrepreneurs who run scale-ups are so focused on their product, they often struggle to fully understand their target audience, she says, which is another area marketers can make a difference. “The science and understanding of marketing and the need to focus on customers and individual segments means [marketers] can help [scale-ups] go places they just wouldn’t go otherwise. You can’t do it without marketers – it’s a huge skills gap in the UK.”
Coutu adds: “You need data-driven marketers because in the fast-growing world that we’re part of, you need data science to target properly.”
If a marketer is working for a large corporation, one way they can identify scale-ups is by looking at the emerging brands their company is already doing business with.
Coutu also advises marketers, particularly in local government, to ask the right questions. “Find out who your bosses are meeting with – are they meeting large shrinking companies or medium-sized growing companies? Let them know that you’re interested in who they’re meeting and that you’re keen to hear about particularly innovative companies.”
Although there are many advantages for marketers looking to make the leap from an established large business to a young, fast-growing company, many remain unsure whether it will be a wise career move but this attitude desperately needs changing, says Coutu.
“It will be no [bad] thing for your career. If it doesn’t work out, nobody will [penalise] you for having tried,” she says.
On a personal level, Coutu believes it is important for marketers to identify businesses that they genuinely care about as they will find the work more meaningful. “On a humanity level, you can also see the impact of what you’re doing much more clearly when you’re working on a small company that’s growing,” she says. “It’s more fun.”
The opportunity to make a real difference and turn a scale-up into a profitable business with future growth potential is something which Coutu urges marketers to consider no matter what their background is.
“If marketers are feeling slightly grumpy about where they are working, they should do themselves a favour and look for the next Apple or unicorn rather than choosing a safe, big company like one of the banks,” she advises. “Change the world, go somewhere exciting.”