Name: Tamara Sword
Date: Feb 23, 2024
Marc Andreessen observed an interesting phenomenon in the technology industry.
Start-ups are like sharks.
If they stop swimming, they die.
For start-ups swimming against today’s investment currents, Marc's analogy has never been more true. VC deals are, on average, taking longer. Valuations are trending lower, and debt is more expensive.
It’s a challenging time to be a shark.
So let’s dive down because, under the surface of this one-liner, there are deeper insights that can help founders navigate these choppy waters.
Swimming for a start-up is the act of creating momentum.
In today’s technology market, it is no longer sufficient to be carried passively along by the currents. Start-ups must create momentum and actively push themselves forward if they want to survive.
In the case of a shark, creating momentum - swimming - burns energy, but it’s also the way to find and capture food.
Start-ups are the same. Creating market momentum through marketing and PR burns resources, but it’s also a way to compete for and secure more resource (customer deals and investment.)
We talk a lot about creating momentum here at ThoughtLDR. Momentum can be created internally by building new products, talking to customers, winning deals, hiring people, and raising money. But momentum should also be created externally by talking to the market through marketing, thought leadership and PR.
Creating momentum externally in this way ensures more information flows over your start-up’s gills. You can think about outbound comms like sonar. By sending out pings to the market, you get feedback - information that, once filtered and absorbed, can help you identify where to go next and what to hunt.
From validating whether your positioning resonates with your market to sounding out customer pain points, better decisions and outcomes arise from generating momentum and listening for feedback.
Having momentum isn't enough; you have to be seen to have momentum.
A common mistake many start-ups make is to invest in a bit of PR when they raise money or do a deal — and then go silent.
PR here is used as a tactical one-off, a cost to the business, and not a strategic investment to generate outsized momentum. When PR is seen as a point solution and not a growth strategy, resources ultimately get pulled away or cut entirely as soon as the announcement is made.
Start-ups that think this way run the risk of looking like they’ve lost momentum, even if they are actually moving. And this isn’t just a missed opportunity; it’s a danger to an early-stage company.
Customers are more likely to believe in and buy from companies that have visible, consistent momentum: the companies that consistently bang the marketing and PR drum. A company that enjoys a moment in the sun for their funding round and then disappears back into the shadowy depths may not be a company that prospective customers have faith will deliver — if they even remember the company exists, that is.
So if start-ups are like sharks, your potential customers, investors, and stakeholders are like goldfish. They have a short-term memory.
As we like to say in the UK, yesterday’s news is today’s fish and chips’ wrapper.
Don’t bet on a halo of press coverage around your funding round or last customer deal being on anyone’s radar in three months, or even three weeks.
If your start-up is announcing funding, a significant customer win, or a new strategic partnership, it’s imperative to plan a 6- to 12-month campaign calendar post-announcement. Leverage that spike of interest in your business to create ongoing momentum.
Key hires, product updates, new commercial deals, new premises, customer results — these milestones are all things that you can use to keep market momentum growing.
Near the end of the year, or even end of a quarter? Create a ‘momentum’ press release to re-cover all the wins you’ve achieved over that period and push that to your customers’ industry trade press.
Alternatively, make your own news with market research into your customer problem. Or tap into your founder's vision and place some thought leadership in a media title your customers read on the trends that are impacting them.
Whatever you do, don’t fall into the trap of waiting for the perfect piece of news to emerge from your business. Instead, update the market on every hard-won inch as you move forward.
That way you’ll stay in front of your customers’ minds, build visible market momentum and, crucially, create confidence that your business is swimming in the right direction.