For startups, cash isn’t just king, it’s your oxygen. However, unlike oxygen, which is free and around us in abundance, it’s expensive oxygen in an air-tight room. Oxygen here is finite, every move or effort of exertion burns through more of it.

Do nothing, die.

Do something in an attempt to break through the walls and you could die even faster.

Sounds like deciding to spend on marketing, right?

In today’s complex business landscape, where obtaining consumer time and attention is an arduous task, finding an opportunity to gain some market share from other startups vying for the same, or against well entrenched and well-resourced market leaders, does the old adage of needing to speculate to accumulate still ring true?

What are the basics which ensure that cash into marketing is going to be an investment, not a cost?

1. Establish clear objectives

It may seem obvious, but these are often overlooked or the KPIs are not clear. For any business you want to be driving sales, especially if cash flow is tight. Those sales enable you to survive, but also give you more oxygen to expand. Brand advertising, for example, is massively important for scale-up growth, but you need to be clear on what that type of marketing will deliver to the business in the short vs. medium to longer term. Setting clear, measurable objectives helps in designing a campaign that can meet these goals and makes it easier to assess effectiveness and make adjustments later on.

2. Know your audience

Understanding who your sweet spot target audience is can make or break your marketing efforts. If you can identify your ‘super user’ – those that really have an affinity for your brand and love your product and service – you’ll want to understand their characteristics, attitudes and behaviours. You can then look at finding more of this lookalike audience. As you scaleup (depending on your business and offering) you’ll often have to expand away from your super users into new growth audiences who may just be buying your product or using your service without ever having any emotive feeling towards your brand. Get them spending with you, drive cashflow, and then you can convert them to advocates thereafter.

3. Start small and test

Don’t put all your budget into one big campaign, especially not at the start. Create smaller, trial campaigns to test different aspects of your marketing strategy such as key messages, platforms, and formats (e.g. images vs. videos). Use A/B testing to find out what works best and optimise based on actual data. This methodical approach prevents large-scale financial commitments to unproven tactics. Even non-digital, mass market media can be used in a test and learn approach.

4. Focus on ROI

Always calculate the potential return on investment (ROI) for any paid marketing effort. This isn't just about tracking money spent versus money made; consider other key performance indicators (KPIs) that contribute to financial success like customer lifetime value, conversion rates, and cost per lead. Use analytics and tracking tools to monitor these metrics closely and adjust tactics accordingly to maximise ROI.

5. Create compelling content

The content of your ads needs to resonate with the audience. It should be engaging, informative, and relevant, providing value that encourages viewers to take the next step. Ensure your calls to action (CTAs) are clear and compelling. Be creative – sometimes, unique or unconventional ads can perform better than safe, standard ones.

6. Monitor and optimise continuously

Paid marketing is not a set-it-and-forget-it deal. Continuously analyse the performance of your ads and make adjustments as needed. Look for trends in the data that indicate whether certain aspects of your campaign should be enhanced, scaled back, or discontinued. Also, remember point one: if you don’t think some marketing is working, what were the success metrics you originally put in front of it? Were they correct?

7. Set a realistic budget

Decide how much you can afford to spend on paid marketing in relation to other business costs and potential returns. It's important that this budget is realistic and sustainable over time, even if initial campaigns don't yield strong results.

9. Learn and adapt

Finally, view every campaign as a learning opportunity. If a campaign didn’t perform as expected, dig into the why and learn from it. Marketing is always evolving, and flexibility and adaptability are key traits of successful marketing strategies, especially for startups.

10. Create growth circles

At Wake The Bear, for our startups and scaleups, we look to create marketing driven growth circles. These are effectively marketing investment circles that start relatively small for the business, using only the cashflow the business can tolerate to invest, but as the marketing of each round of investment delivers payback in ROI, the size of the growth circle subsequently increases as more investment can then be added in. This series of growth circles can help take your business from hand-to-mouth marketing where you may only know your marketing budget for the month once you know sales from the previous, to being able to build and scale the business more rapidly with higher investments in both performance and brand marketing.

The bottom line

Navigating the realms of cashflow protection and marketing investment is no mean feat. It demands a blend of discipline, creativity, and a dash of daring. ‘Speculate to accumulate’ still rings true, but let's refine it: speculate wisely to accumulate sustainably. It's about making judicious bets, not gambling your future.

For those grappling with this balancing act, remember you're not alone. The road of entrepreneurship is fraught with challenges, but it's also paved with opportunities for those willing to learn, adapt, and persevere. So, to all entrepreneurs, roll up your sleeves, make those calculated moves, and watch your ventures flourish.