Scientists not wafflers: What we can learn from startup marketers

Entrepreneurial startups are riskier than established companies because they’re attempting to generate a return by doing something that hasn’t been done before. They are trying to satisfy unmet, unarticulated needs. This means that while startup marketers may have a vision they very strongly believe in, ultimately, they are guessing.

And guessing is okay. Just ask Einstein, Curie and Turing.

Anyone who’s ever tried to break new ground has had to guess. Or to continue the science theme, they’ve had to generate hypotheses.

What counts is the quality of one’s guess, accurately testing it to see if it was a good guess, and the response if it wasn’t — the foundational steps of the scientific method.

In startups there is no alternative to guessing. If you don’t guess, you don’t eat. If you guess wrong, you better learn quick and re-guess right. Accordingly, startups breed scientists as marketers because they blend knowledge, creativity, and logic. All are required to generate good guesses and to formulate experiments to test them.

But what of established firms? What type of marketers do they breed?

All about risk

Professor Don O’Sullivan of the Melbourne Business School says firms breed marketers in response to the way they balance risk and return.

Unlike in startups, in established firms there are risk appetite options. You can take less risk and accept less return. You can take high risk and go for high return. Sometimes, you can even spot opportunities for high return, with relatively low risk.  

In companies with low appetite for risk, strategy is used as a tool to rule out bad choices. Managers evaluate proposals by questioning risk. These firms attract market forecasters as marketers. These are marketers who are experts at knowing the ‘numbers’ of their category and managing the marketing mix to reduce risk.

Sometimes, firms stumble on market opportunities where high return is on the table for relatively low risk. These are usually windfall scenarios created by external shocks. Think of Young Henry’s, an independent craft brewer in Sydney who made use of its high-grade, high-alcohol ethanol to shift from blending gin to hand sanitiser during the outbreak of the pandemic. These firms require project managers as marketers. The growth is there, it’s simply the firm that can best implement its agile methodology that wins.

Occasionally, firms believe they can cheat the linear relationship between risk and return. They challenge their team with big goals. They look for high returns with low risk. These firms attract wafflers as marketers. They make claims that anything old is dead. They bamboozle boards with jargon, which is exactly why CEOs of these firms hire them. They claim uplifts without establishing causal links. For a little while, they escape scrutiny.

Another version of the high return, low risk firm is that which asks for high return but is not prepared to take risk. They ask their marketers to generate high returns without giving them the keys to the risky parts of the marketing mix like product, price, and distribution. They ask their marketers to make cosmetic changes to their product in a futile effort to disguise its fundamental failings or more crudely, to put lipstick on a pig. These firms attract artists as marketers. Those who are only allowed to play with the logo, the colour palette, the strap line but not the actual product.

Companies tend to attract and breed typologies of marketers that match their appetite to risk. Overperforming companies though, attract and breed typologies of marketers who match their appetite for experimentation.  In its study of more than 10,000 marketers in over 60 countries, Insights2020 research (conducted by Kantar Vermeer), found that overperforming companies are three times as likely as underperformers to embrace a culture of experimentation.

Experimentation should not be confused with just having piles of data. Roger Martin and A.G. Lafely, who wrote Playing to Win: How to do Strategy, say data is nothing without logic — the creation of assumptions about the causal relationships in a market. Data, if collected and interpreted in the right way can help verify our logic but it isn’t logic in and of itself. It tells us if our guesses at causal relationships are right.

Does your organisation have a culture of logic and experimentation? Does it have marketers who are trained in the art of logic and the science of experimentation? If it doesn’t, maybe tap the shoulder of a marketer with experience in an entrepreneurial startup. Chances are they will innately understand that their job is to identify causal relationships and exploit them for their firm’s benefit. Anything else is just art, project management, forecasting or waffle.

Gavin MacMillan is the managing director of Ogilvy Melbourne, with has 21 years of experience working in leading, global agencies.