Most technology start-ups are focused on technology; this is natural. However, successful technology start-ups also focus on finding and keeping customers – the lifeblood of any business. To find and keep customers, companies must design and develop a sound marketing strategy and a sales execution plan.

At Rocket Ventures we see hundreds of entrepreneurs and start-up companies each year. Most of these entrepreneurs possess the required passion, persistence and conviction to launch a new business. However, the successful entrepreneurs have these essential traits and they know how to market and sell their products or services.

The first and perhaps the most important predictor of success start with the marketing strategy. Performing a rigorous market assessment is a critical first step in understanding the potential for business success. Having the knowledge of the industry and the specific market demographics, dynamics, trends, competition and customers provides a realistic view of the opportunity. Then, developing a segmentation plan further refines your focus by identifying those un-served or under-served market opportunities. Next, successful entrepreneurs target the ideal customer groups within that segment – and become so intimately knowledgeable of the targeted customer that they know more about their problems than their customers do, and can provide the right solutions to solve their problems. Finally, once targeted, success comes from positioning your product or service with the most competitive set of deliverables that both provide value and differentiate your company and its products from all other competitive offerings.

Now that you have developed a well-defined and effective market strategy, the next important element to success is designing and developing an effective and consistent sales execution plan. There is no company success without the sale - generating top line revenue. We see many start-ups fail because they don’t pay attention to sales! Most new technology start-ups bring exciting new products and services to complex customer organizations. These new products and services typically represent change to the status-quo. And this change may often be viewed as a real threat. So, the need for a well developed and consistent sales plan and process is essential to selling successfully and achieving company scalability.

In complex organizations, many buying influences are involved in the purchase of new technologies – particularly for those new products or services representing significant change from the current offerings. These buying influences have roles to play in the buying decision process. So, the need to first identify who these buying influences are, and then understand their role or motivation in the process is critical. In effect, every complex sale has 4 buying influences. First and most importantly is the economic buying influence. This is the key person who controls the budget and expenditures. This person requires a return on investment for the organization. It is essential to reach this person – who usually is at a higher level within the organization. Next, every complex sale must include the user buying influence - the person or persons who have to use or supervise the use of your new products. Making sure your product or service is understood and satisfies the user buying influence is also critical. Additionally, in every complex sale, there is also the technical buying influence – the person (s) whose role is to screen out products or services that don’t meet specific requirements, pricing guidelines or standards (including such functions as purchasing, quality control, legal). These are the “gatekeepers” and they must be satisfied as well. Finally, in every complex sale, the successful companies identify a coach – that person within the organization who has influence with other buying influencers, and wants you to win. They help you navigate through the complex organization by guiding you with your strategy, pricing, and networking with the right buying influences. Again, in a complex sale, all 4 buying influences must be reached and then convinced of the value of your product or service.

In summary, having great products or services, and possessing the passion, persistence and conviction are all important elements of success. Real, sustained and scalable success, however, comes from leveraging these great products and personal strengths with a well designed market strategy and effective sales execution plan.

Greg Knudson
Director, Rocket Ventures
knudson@rgp.org

Speculating when the economy might rebound does little to change the existing conditions of this global financial crisis. More valuable is recognizing and capitalizing on opportunities which arise. As severe and stressful as these economic times are to individuals, businesses and communities, we have discovered a silver lining.

Over the past year, more and more people have expressed a desire and taken direct action in starting entrepreneurial ventures, both locally and nationwide. Since 2008, Rocket Ventures has already helped start and commercialize more than 50 technology-based companies in Northwest Ohio.

This is not surprising, as more people are forced to seek out new avenues for money due to corporate layoffs and cutbacks. We encourage anyone considering a new technology-oriented business to call Rocket Ventures or Launch to get answers and information on the viability of their idea. Now is the time!

The Regional Growth Partnership’s Launch and Rocket Ventures programs, supported in large part by the State of Ohio’s Third Frontier program, provide the resources, support and opportunities to startups, particularly those forced to look for nontraditional sources of funding.

The development of such a knowledge-based economy will ultimately accelerate the growth and creation of new business, helping carry our region to new heights.

Steve Weathers,
President and CEO, Regional Growth Partnership and Rocket Ventures
weathers@rgp.org

One of the most difficult aspects of preparing a business plan is the development of powerful financial statements.

If the statements are too grandiose, they lose creditability. For example, if they are what is commonly called “hockey sticks” the sophisticated financial analyst who is reviewing the statements will immediately discount the soundness of the business plan. A “hockey stick” projection is one where the revenues for the first one or two years are relatively modest, and then in the third, fourth and fifth year they shoot up spectacularly. On the other hand, if the projections are understated you may not be able to attract investment because the potential investors will not look favorably on the opportunity. The answer is to be very thorough in preparing your projections so they reflect the written content of your business plan.

An often overlooked aspect of financial statements is cash flow. How much money will you need each month to meet your anticipated obligations? Cash flow to a start up is the most important financial management task. Each month there must be sufficient cash to meet your obligations. Focus on the uses of cash each day. Avoid unnecessary expenditures. We have several cash flow projection sheets we can make available. These will forecast your cash needs for the following 6-8 weeks which allows you to plan the needs and uses of that scarcest of resources cash.

Finally, be accurate in forecasting your needs for getting to market. Venture capital firms and other investors react badly to unanticipated cash calls. If you forecast your total investment needs to be $500,000 and they turn out to be $1,000,000 two unpleasant things happen. First you will find that raising the additional amount will cost you dearly. The amount of equity the second $500,000 will demand will be high. Primarily because the investor will know you are desperate, and because your lack of foresight casts doubt on your management knowledge. Secondly, those investors who took a chance on you in the early rounds will find the value of their investment severely impacted. It may wipe out all or most all of it. You don’t want to be responsible for that. So be realistic.

Examine your needs, consult with those who have done it before to get their insights. Bob Savage, who manages our Rocket Venture Investment Fund, and other funds constantly reminds us, “it takes twice as long and costs twice as much as you think”. That is a good rule of thumb to follow.

Jon Klotz
Entrepreneur in Residence, Rocket Ventures
klotz@rgp.org

In 2005, the Regional Growth Partnership (RGP) implemented an editorial marketing program designed to attract national media attention to the successes and assets of our region. This new initiative broke from a previous national marketing program focused on print advertising.

Research and surveys found that corporate level decision makers and national site consultants ranked editorial news as one of the top two primary mediums for gathering information on specific communities. Print advertising ranked low as a source for information. The primary reason is credibility – a company or community does not pay for the content a reporter writes in a news story.

Those results convinced the RGP to move dollars away from national print advertising to editorial marketing. The strategy behind editorial marketing is to directly target national reporters, communicating intriguing news a reporter might consider for a story.

Over the last two years, this program has generated astounding results for the RGP – and the region. Primarily focused on our regional strength in the solar industry, Northwest Ohio has been prominently featured in such national media outlets as Newsweek, The Wall Street Journal, CNN, Fox Business News and ABC World News. In total, the program has produced more than 50 national placements in print and broadcast media, with an advertising equivalency exceeding $2.3 million.

The immediate benefit of this program is outstanding publicity for northwest Ohio, which is now recognized nationally as a leader in solar research and development. Ultimately, the expectation of this program is to attain greater investment, jobs and wealth to our community, and venture capital to our Rocket Ventures clients.

John Gibney
Director, Communications/Marketing, Regional Growth Partnership
gibney@rgp.org