The aim of marketing is to make selling superfluous

I was preparing to teach my entrepreneurship class about marketing last week and ran across an old blog post of Fred Wilson’s*.

A very experienced and successful entrepreneur came into our office a week ago to pitch his latest company. At the end of his pitch he showed us some numbers. Normally for a raw startup we see almost all product and engineering expenses (headcount). But his plan had a monthly budget for customer acquisition. After he left, we talked about his plan and my partners focused on the customer acquisition number. It bugged us. It felt wrong.

The first comment on the post was from ex-entrepreneur Seth Godin, who said

Marketing ≠ Advertising.

If you redo the post with Advertising throughout, I won’t argue much.

Marketing is the name we use to describe the promises a company makes, the story it tells, the authentic way it delivers on that promise.

Fred didn’t defend his assertion, but he should have. He made an important point that shouldn’t be swept aside: customer acquisition in an early-stage startup needs to cost minimal dollars. And that’s true whether customer acquisition is done through advertising or any other marketing method. Seth Godin is right, but Fred is not wrong. And how could Fred be wrong? He is interacting with companies in the real world, and a good number of them: his assertion is data-driven. The distinction here is primarily semantic.

But the semantic difference is important. Nobody wants entrepreneurs to assume they shouldn’t pay attention to marketing, because they should. But what is marketing? In my class I try to expand the students’ minds beyond thinking marketing is no more than advertising. I teach them the classic Four Ps and add customer relationship management to bring them up to date**. But Peter Drucker, in his Management: Tasks, Responsibilities, Practices, explains it better:

There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available.

Selling here means the company reaching out to persuade. This might be a salesman making a sales call, or it might be any form of marketing. Drucker is distinguishing the marketing that listens to the customer and makes a product they want from the marketing that tells the customer they want the product that is already on offer. If you think about it this way, Fred is absolutely right: the of a pre-product market fit startup is to listen to their customers. This is not a budget line item, it is something the founders do (and spend a good chunk of their time on.) After product-market fit, when there is a scalable, repeatable sales process, is the time to start budgeting for it.

* I emailed him asking him about it, not noticing it was written two and a half years ago and he responded in kind. Everything is now on the web. Or, he thinks I’m senile and was too nice to point it out.
** I’ll blog that class in a few weeks, when I reach it in my class-blogging series.