Marketing the Icons of Innovation
The best entrepreneurs can get capital from many sources — so how do venture capital firms differentiate and compete to work with the best startups? To win this fierce talent war, and to give their own portfolio companies the best chance of success, many top VCs are now offering much more than just money. This includes a full menu of in-house capabilities, ranging from PR and marketing to UX design and recruiting services.
On Nov. 8, Bateman Group, Mindshare PR, Lewis Pulse, Kulesa Faul and Boca Communications hosted the seventh discussion in our ongoing Penthouse Panel series of events tackling technology and communications issues in Silicon Valley. Keeping with the venture capital theme, our client green technology VC firm, Greenstart, graciously hosted the event at its loft office space in downtown San Francisco. As attendees arrived, small teams of startups participating in Greenstart’s program were busy working, completely oblivious to the gathering crowd around them — go figure!
Liz Gannes, Senior Editor at AllThingsDigital, moderated the panel featuring in-house communications experts from five of the top VC firms in the Valley:
Christina Lee, Communications Partner, Kleiner Perkins Caufield Byers
Rachel Barge, Partner, Greenstart
Kamini Ramani, VP of Marketing, Mayfield Fund
Nicole Pack, VP of Communications, Venrock
Pamela Mahoney, Venture Development, Mohr Davidow
Liz did an excellent job leading a compelling discussion examining the current state of PR and marketing inside Silicon Valley’s most successful VC firms. Each of the panelists wears many hats at their firms, but their primary role is to build the brand of their firm. They all agreed that there is no shortage of sources for content and ideas—from the investors themselves and their portfolio companies to the firms’ ongoing activities, there is a sea of content they can work with to spread the word about their brands. In-house marketers at VC firms also frequently work directly with the entrepreneurs themselves. Because most entrepreneurs are technologists at heart, they look to the in-house marketers to position their technologies for the market for the first time and ensure their messages resonate with their respective audiences. Net-net: There’s never a dull moment!
I’ve summarized what I thought were the most salient lessons learned from the discussion here. But if you were there, please respond with a comment to provide your thoughts on what you learned!
1. Marketing is not trendy; it’s simply good business.
When asked why marketing within VC firms has gained more attention recently, the panelists had a mixed view on the situation. On the one hand, what they’re doing isn’t completely new. But on the other hand, the explosion of social media and increased transparency among businesses has caused VCs to take a more open approach to marketing.
“There are a number of VCs that have been doing this for a very long time because it’s simply a matter of business,” said Mahoney.
Pack added that “many startups have always relied on their VCs to recommend PR agencies. There has always been a partnership between marketing and VCs in this respect. But in the last six months, there has definitely been this dash for hiring marketing people.”
There are some VC firms that have never had in-house marketing, but others have been doing this all along. All the panelists agreed that Andreessen Horowitz (notably Margit Wennmachers) deserves credit for pushing the trend forward. The young firm has three in-house marketing people and a PR agency and has been very active in marketing its brand, investors and portfolio companies in its short lifespan of less than four years.
2. Good PR is not magic dust that works if you throw money at it. It takes hard work from everyone — the VP of Marketing, the CEO and other executives, and the agency.
“I always tell startups that PR is a major investment that has to happen at the highest levels,” said Lee. “A lot of people think a PR agency is going to just make things happen. But the press wants to hear from CEOs and founders. So they have to be willing to participate entirely. At first, I thought this advice was pretty simple, but after having to tell more than 30 companies the same thing, I’ve come to accept that there is still a lot of education that needs to happen to teach entrepreneurs about marketing.”
“I tell my portfolio companies, ‘When you’re looking at a PR agency, don’t think first about the money,”” said Mahoney. “The people you hire are most important. The magic happens when you find people who are truly passionate about what you do and are willing to invest their personal time into immersing themselves in your industry.”
3. PR has a time and a place.
“A lot of entrepreneurs come to me and say ‘I want some PR,’ and I always ask them ‘Why?’” said Barge. “Unless PR is going to be tied directly to a business goal, you probably shouldn’t be spending time on it.”
This especially applies to Series A companies, who should be more focused at that stage on building their product and making it market-ready than getting too far ahead of themselves in building mass brand awareness. “If you can talk to people about the company/product/idea and make it relevant, then you’re ready for PR,” explained Mahoney.
4. It’s the people who build a business and feed the stories.
Lee made a very good point that, in the end, it’s the people who build the business, which is why VCs have become more transparent in recent years. Deals aren’t going on behind closed doors anymore. Telling the world who your investors are is akin to a badge of honor for entrepreneurs. So it’s important that VCs are visible and have a known brand.
Just as VCs look beyond the technology or product when they decide to invest in a startup and take just as much stock in the people behind the product, the entrepreneurs themselves are evaluating their investors in a similar fashion. “It’s important to share who we are, and what we bring to the startup community,” said Lee. “Kleiner has been around for 40 years, but there are some newer partners so we have a combination of old and new guard that makes up our team.”
All-in-all, some great advice and a really inspiring discussion. Please add to the comments with your thoughts on the event!