Confusing Marketing with Sales

Despite the vast array of typical MBA definitions of Marketing vs. Sales (i.e., Marketing is selling to groups, sales to individuals; or Marketing is strategic, Sales is tactical), few of us still really understand the difference.

But as a startup CEO it’s a critical difference that needs to be understood. Fortunately, many VCs disagree on the definition, and the need in early stage firms, which forgives a multitude of sins ;-) Many technology startups look more like an engineering team lead by a CEO who does sales and marketing … and often engineering too.

Most good entrepreneurs have a basic fear of letting go and prefer to handle leadership of these functions themselves, at least until the concept is proven. This lean approach is great for cashflow, but there is a point in time where you have to develop muscle tissue in order for the company to grow.

Most founder/CEOs have a pretty clear grasp of the market and a vision for where it will go. Ideally, they wouldn’t have been funded unless they had deep domain expertise in that market either as an engineer, sales or marketing person. It’s very likely that the founder has good sales skills otherwise they wouldn’t have been able to sell the deal and close the funding ;-) Often a founder is so technically brilliant that the VC will fall in love with the technology/founder and fund the deal anyway, knowing that the investors can gather the right team around the founder to make a business.

One of the common startup traps is the great technology, great team with many, many customers but not a whole lot of revenue. A strong sales person can really turn this around--the company has either been totally customer driven and opportunistic in taking whatever sales they can get, or (better) they’ve strategically targeted the key customers, focusing on quality not quantity of revenue, in order to validate their business. The professional sales leader can now come in and monetize all of those initial entrees into the market; they can mine each customer, and generate repeat business across multiple divisions of a large company.

The other case is when the market is emerging (very scary for VCs), so the sales person does not seem necessary. A great sales leader would say if the market hasn’t happened, then you’d better learn to close--genetically engineered sales leaders don’t need marketing or technology to close sales, though of course they had better be selling what we can make … another Blog here :-)

Sales by nature is tactical, all the great marketing in the world won’t help overcome the personality of a particular customer. In the laser business we can be forgiven for confusing sales with marketing because the market tends to be a mile wide but only an inch deep, so a strong sales person must stretch across multiple verticals and ferret out sales from a number of emerging markets. Would marketing be more useful in this scenario? Marketing works best when you have a group to market to--however, deep strategic vision of market is critical especially in this situation because it will enable the company to focus on the particular vertical that marketing feels has the best chance of providing growth. In the meantime, Sales can keep bringing in the orders to feed the company until the market emerges.

All too often success is about the luck of being in the right place at the right time, Sales can enable you to live long enough to get to the right time, and marketing can lead you to the right place ;-)