Link to CB Insights "Why Startups Fail" https://www.cbinsights.com/research/report/startup-failure-reasons-top/

Hi, welcome to Effective Businesses with me Jakub Kosmowski. As this is the first episode let me share a little bit of a backstory and a goal of this podcast. Don't worry, I will take only 2 minutes and there will be some practical knowledge later on so stick around and we will go straight to value. This podcast will focus on sharing knowledge, conducting interviews and adding value and what makes businesses effective. The lens through which we will look at it is everything in marketing, management and brand management. It is a shame that resources are lost and I want to bring the best practices to as many founders, marketers, managers and CEOs as possible. I will have solo episodes, shorter or longer interviews or whatever the format will be the best for a given topic. The main goal is to help businesses have the best possible chance in the market.

A little bit about myself, I am a marketer with over 19 years of experience in different roles across many markets. I have served for big corporations but also consulted for smaller startups and privately owned companies. It is clear that many of these businesses have similar issues. There might be differences in execution, resources available and specific tactics but fundamental rules are the same.

Generally it comes down to 4 reasons that I experienced during my career that show me how the companies struggle.

1. Lack of skills. Depth of knowledge has been replaced by speed and vagueness and it touches founders as well. They lack fundamental business knowledge and what comes with that also marketing knowledge that puts their startup on a losing position.

2. Lack of properly structured marketing department that drives growth. Marketing and marketers only focus on the last stage of their work which is communication. There is far more to be done on a more strategic level.

3. Lack of brand management knowledge. Brands don't see or know the benefits of a strong brand. This is a major contributor to many of them ending up in highly competitive markets with price wars squeezing their margins.

4. Lack of customer insight that can drive business growth. The companies have no clear way of communicating with the market and customers. Companies don't want to spend the time and money on it and they are losing an important source of knowledge for their business.

So these drove me to launch this podcast. When it comes to audience there are two main groups I want to bring value to. First are the marketers to show them that marketing has a bigger potential and influence. In a best case scenario they will become smarter, more competent and will be able to deliver better value which will make them more valuable for the clients and organizations they work for which down the line might mean that they will earn more money. The marketing now has been brought to an only communications department where in fact it has a bigger impact than only advertising and communication. I want to bring the tools to marketers in a form of knowledge to be able to have these discussions on a higher level and bring more impact. Because when it comes down to it the higher the strategic level and the bigger the problems you solve the more valuable you are. I believe that with new trends and new technology they became obsessed with it leaving fundamental education and marketing rules on the table and it's a pity because they can still bring a lot of value by really implementing those rules into their organization they work for. And that leads me to the second group I want to provide value to and these are founders and managers on the higher managerial positions in different organizations across many categories. I want to give them full view of what marketing is capable and what good marketing looks like. By good I mean real fundamental marketing, I mean the one which drives growth for the organizations. They shouldn't settle on marketing department that just creates pretty pictures. Marketing has potential to drive meaningful growth and it should be used in that way. This marketing can bring results and help companies grow. So in summary I'm trying to serve marketers, I'm trying to help them to come up to boardrooms, have these difficult discussions and on the other side I want to help businesses, founders and managers to show them what good marketing looks like and what good marketing is capable of delivering and that's my mission. I'm agnostic to segments and categories as I've worked across many of them and I think there is still big potential in marketing knowledge which is still disconnected from categories. Once you have fundamentals settled then you can dive deeper into categories and specific tactics but that can come later. Now let's get to value as I promised. So what started it all was data which I found and I'm going to share in my show notes but it was titled why startups fail and it was a post mortem of almost 120 startups which were asked what are some of the reasons that you failed. I will read it to you now and then we can all consider how much of it actually is driven by marketing. These points are coming from startups but I think even bigger and more mature organizations can find their issues on the list. So top reasons startups fail. Number one, run out of cash, failed to raise new capital 38%, no market need 35%, get out competed 20%, flawed business model 19%, legal challenges 18%, pricing cost issues 15%, not the right team 14%, product mistimed 10%, poor product 8%, disharmony among team and investors 7%, pivot gone bad 6%, burned out, lack passion 5%. And you can find this table and full graphics on my show notes. As you can see, marketing has a bigger impact than we've expected. In the modern view of marketing, it comes down to advertising only but as we can see from the table, at least six from these reasons were marketing issues. Marketing could have helped with demand, with competition, pricing, product and a few more. If the founder would know what marketing really can deliver, he would know exactly what is the level of market demand for his product through market research. He would be able to tell what are some gaps that his or her startup could fill. They would know the correct pricing because again, the market would tell them. Market is usually the best source of information and feedback. So in reality, the startup never got a chance to be correctly evaluated. I believe that's a waste because with proper marketing, the outcome could have been different for their startup. I give huge respect to founders as it takes courage to start something. Often people who found startups out of passion and out of the drive for bringing new solution to the market can really change how we live with products and services that really make it easier for us. But that doesn't mean that the idea will be enough by itself. It takes business knowledge and lack of it might mean that they don't have a real chance of succeeding. Even though that in theory, the idea was great. With this outcome, they can't really tell if the product or service is bad or was it only their lack of knowledge and bad marketing. So here are some takeaways that might be useful for startup founders and owners. 1. Invest in good marketing talent or advisors. They can help you with much more than just advertising. 2. Set up clear objectives and scope of work for marketing department. They should be responsible for business. 3. Invest in long-term brand building activities. It will pay out dividends in the future. 4. Reach to your customers often for insights, for feedback. Talk to them and observe them. They are the best sources of knowledge. That's it for this episode and thanks for joining and I see you for the next one. As a reminder, new episodes will come Tuesday and Friday and they will come with a lot of knowledge and I want to provide you with as much value as possible. So if you have any inputs, questions, suggestions or whatever else that ever comes up to your mind, don't hesitate to send it to me.

Make sure to subscribe and if you need more information, visit effectivebusinesses.co That's effectivebusinesses.co for show notes and more information.

Until the next one.