Dreaming about starting a business? Before you do anything, focus on marketing

Having a good product or service to sell is not enough - marketing capabilities are critical for establishing ventures in a dynamic environment.

 (photo credit: INGIMAGE)
(photo credit: INGIMAGE)

A study conducted by a team of international researchers from Israel, the US and Canada reveals that marketing capabilities are not only a catalyst for achieving a competitive advantage for existing ventures, but are actually an essential factor distinguishing between entrepreneurs and non-entrepreneurs. This means that such capabilities are of key significance in the preliminary stages that come before the establishment of the venture.

Having a good product or service to sell is not enough – marketing capabilities are critical as a catalyst for establishing ventures in a dynamic environment. These abilities include a deep understanding of the market, which involves the quick and accurate identification of trends as they are happening, market messages and opportunities.

In the study led by Prof. Dafna Kariv of Reichman University’s Adelson School of Entrepreneurship in Herzliya, which was conducted recently and published in the International Journal of Entrepreneurial Behavior & Research, 2,000 respondents from Canada were asked to indicate the degree of their ambition to become entrepreneurs in the years to come.

How was the study conducted?

The respondents were divided into three groups: the first comprised those with entrepreneurial ambitions who were already entrepreneurs; the second consisted of people with entrepreneurial ambitions who were salaried employees who had not yet realized their ambition; and the third comprised employees who did not have entrepreneurial ambitions.

 Photo of Prof. Dafna Kariv (credit: GILAD KAVALERCHIK) Photo of Prof. Dafna Kariv (credit: GILAD KAVALERCHIK)

The respondents from each of the groups were asked to assess their marketing capabilities using a broad set of questions, such as: “I have the skills and knowledge in the field of marketing and the market necessary to start a business”; “I have the ability to bring in experts who will work with me in order to start a business;” and “I have the resources needed to start a business.”

They were also asked whether they used their ecosystem to help realize their ambition to become entrepreneurs – for example by utilizing government funds, accelerators, mentors and the like.

The findings showed that those who said they had strong marketing capabilities succeeded in turning their entrepreneurial ambitions into a real venture, and those who did not have strong marketing abilities, though they had entrepreneurial aspirations, were unable to realize their ambition and remained employees in their places of work.

Prof. Kariv commented: “Our findings stress the importance of marketing capabilities from the early stages of venture creation, even prior to its establishment. These findings are of great value because they reveal a new, untapped aspect in entrepreneurship research, referring to the ‘timing’ of the activation of marketing capabilities in the business creation process.”

Those with strong marketing capabilities capitalized on their ecosystem in a more targeted manner and took advantage of the knowledge, networking and mentoring opportunities offered by the ecosystem for the development of their venture. Their marketing capabilities thus boosted their search for help from the ecosystem, making it possible to launch the venture.

Those who saw the venture they were interested in developing from the “eyes of their market” eventually started a business. They focused on how the customers would benefit from the product or service they wanted to offer and immediately tried to recruit assistance from the ecosystem to realize their ambitions and launch a business.

In contrast, those whose focus was not oriented to the market, for example, those who saw the heart of their venture as being “at the forefront of technology,” “a venture that fights climate problems” or “a business that I have always dreamed of developing” – that is, a focus that does not place the customer at the forefront but instead focuses on other values – did not show the same understanding of the need to look for help from the ecosystem in order to develop a project.

In fact, they were “suspicious” of assistance from the ecosystem, fearing that it would not benefit them, that their ideas would be copied, and more. As a result, they failed to realize their ambitions to be entrepreneurs and instead remained salaried employees.