10 Things Easier to See from a Startup than a CPG



When I was a brand manager at P&G, a marketing leader on a rotation on the Walmart customer team wrote a simple “one pager” entitled “10 things easier to see from Bentonville” 6 or 12 months into his assignment that was widely circulated and stuck with me as I moved from marketing to customer marketing and beyond. Over five years later, I recalled that notion whilst I was working on a start up in London, and realized that while there were so many skills and frameworks I learned at P&G and McKinsey that helped me set up my business, there were other things I learned when I rolled up my sleeves (and paid for things with my own budget, not my GMs, and one with fewer commas and zeros in it). So here goes…


This lesson applies to understanding the market, shaping the business plan and ultimately bringing the business to life. An entrepreneur is building a business off an idea, a product or a gap in the market that (s)he sees. It’s important for him/her to recognize what he knows, doesn’t know and needs to know. And then quickly get help to fill in the gap. In the early stages of market understanding and business planning, prioritize what gaps needed to be filled quickly – (s)he doesn’t have the time or resources to understand everything and assess every risk. Likewise, when the plan is translated into an operating business, the entrepreneur needs to understand what skills (s)he brings to the table (and doesn’t). My marketing background lent itself to the business’s merchandising, and led me to outsource more operational elements (e.g., order fulfillment) that were out of my skill set. The same logic is true for individual marketers and brand teams. TIP: As you review individual projects, business reviews and workplans, and the collective work of the team, isolate what you know, don’t know and need to know and make the critical “make” vs. “buy” decisions about how you allocate time: do you do the work yourself or do you outsource it to experts and focus on what you can do best?


The benefit of being a start-up is that you get to create your infrastructure from scratch. This is not an easy task, and indeed for most start-ups it is an iterative one, and for some not a successful endeavour. I liked the notion of the “lean start up” from Steve Blank’sHBR article “Turn A Great Idea Into A Great Business” (May, 2013). Now the reality is most CPGs have well-defined organizational structures and business processes, some to the point of operating as conceptual straight jackets, the very kind that kill innovation. Even at “big” companies, like P&G and L’Oreal, there are always brands that tinker successfully with the “corporate-recommended” business model to drive innovation and success in the market. TIP: I’d invite any brand manager or MD to start with their team (i.e., their immediate span of control) and revisit what are their key activities, key relationships, and key partners and resources and re-map these to better deliver their value proposition to the end customer. Then, engage the next circle of partners (e.g., market research, R&D, finance, sales, etc.) and look at ways to better optimize the design to enable the business.


P&G and McKinsey are both well known for their depth of talent. I would have “official” mentors assigned to me to manage the “people processes” and some of these were good, and some not as good. But in every company I’ve worked in, I’ve always had “informal” mentors whom I could reach out to in order to shape and bounce ideas off of. Ten years out of business school, I found I was able to “cherry pick” from my LinkedIn network to shape my business idea with a great group of mentors:

  • The former CEO of a leading CPG gave me the push to “go do it.”
  • A senior agency exec who was based in London helped me understand the British market.
  • A McKinsey alum who ran a successful retail start-up served as a “sparring partner.”
  • A business school professor’s course helped structure the business via design thinking.
  • A friend who led a start-up in Silicon Valley helped me understand the realities of start-up life.

Mentors matter because they can provide a key role in helping you shape, reshape and iterate your ideas. They look at the world differently than you and they’ve had different experiences than you have. And a key thing people miss in understanding the entrepreneur’s experience is the loneliness of it. At the beginning, a start-up is just one, or maybe two people, or at most a small team and an idea. Mentors give the entrepreneur a set of “ears” when they need someone to talk to. Likewise, they are people the entrepreneur can talk to about issues or concerns that they feel more vulnerable about and may not want to share with others. TIP: In any business environment, it’s important to maintain a stable of solid mentors. Assess the current state of your mentors and what you want to do near and long term; then think about who could potentially make good mentors to fill in the gaps.


In a start up, you really have to manage for the short term (to deliver cash) and the long term (to determine where the next wave of growth will come from). In bigger companies, with more staff, people (individually or collectively) tend to manage to different horizons: short term (in times of crises), the medium term (when focused on this year’s sales goal) or long term (for “visionaries”) or where the short and medium terms are in good stead and there is more capacity for long term planning. Of course, “pendulum swings” can make any company, big or small, switch gears. From my seat, start-ups have an innate need to focus on the short and long term concurrently. Obviously, given the failure rate of start-ups, that is not to say that many or all succeed at either or both. But the sense of ownership that an entrepreneur has requires him/her to ask, “What do I need to do today to drive sales ‘today’? And what do I need to get done to prepare for ‘tomorrow’?” In the mix of brand team meetings and agency workshops, that clarity is often lost at many larger firms. TIP: Review what you need to do ‘today’ AND ‘tomorrow’ and prioritize those items, then all other items will prioritize themselves.


Almost everyone is familiar with the notion of “burn rates,” and how this leads to the demise of many start-ups (mine included). However on a big brand, cosseted with $20MM+ media plans and $50MM+ budgets (and more), budget decisions are different. Generally, the linkage between these decisions and individuals’ compensation are very remote. Even if managers are “rewarded” or “business results,” it’s a pretty loose linkage. So “ownership” of business results is really more a conceptual thing than a business reality, and too many managers are thus distanced from the impact of their decision-making. For startups, it’s very different. As many startups are “bootstrapping” (that is, self-funded), the investment decisions are coming directly out of the entrepreneur’s wallet, so every dollar/pound is critically analyzed before it is spent. It’s hard to directly transfer this mindset into a CPG, but it’s a key value to try to instill. TIP: As you review your budgets, think through every choice and determine whether this is a “smart use” of your money. That doesn’t mean that everything needs to have an ROI associated, but it does mean that every dollar/pound needs to be spent with purpose: simply put, is there something else that’s better to spend the money on? Or, more provocatively, is it better to just save the money for future investments?


Whether your start-up is a café or a website, start-ups typically have a level of customer intimacy that keeps them in touch with the customer. You obsess over each interaction, order, website visit seeking to understanding as much as you can from it. What’s the basket size? What’s in the basket? What “should” be in the basket, but isn’t? On my website, I could watch customers while they were on the site. And I could chat with them at this very moment. And when they ordered, in one click I could click on the address and Google would take me to a map and a street view of their home! Were those posh pots going to a simple home or a Duke’s castle? All of this data was available to me on day one, and I wasn’t even paying anything extra for it. Think about this is the context of debates over investing in “big data.” (I just had to be careful not to extrapolate too freely from the small sample size. Each order is really a “case study,” after all.) Typically brands have some definition of a target and profiling of her product usage and attitudes. However that knowledge is typically filed off in a “brand book” somewhere. And oftentimes, it’s really limited to data and observations, not real insights. TIP: Use the data you have to drive to the “so whats?” about your customer/shopper to improve your marketing. Focus on the gaps in your knowledge and determine the best way to answer them: get in store and in the homes of your consumer to understand why she shops the way she does and uses your products how she does.


Traditional CPGs are used to dealing with varied “trial” and “repeat” levels and long “purchase cycles.” Likewise, websites are used to dealing with low “conversion rate.” All eyes turn to how to “close the sale,” in the language of shopper marketers. Debates center around “Should I promote?” “If so, how much?” I remember when I did pop ups and would hear women say “I wouldn’t buy it for myself… but I love it!” (there’s a bit of an anti-splurge culture in the U.K.) and I felt like it was the equivalent of hearing in CPG focus groups “I’d use it for vacations or the guest bathroom,” which meant I’d sell two boxes. Now for start-ups, customer urgency is critical, because it drives sales… cash. But CPGs have the advantage that if they can get this right, they have scale. TIP: Determine which business metrics are most easily influenced and drive the business, as one simple movement on a key business metric amplified across their business can drive meaningful results.


At the end of the day, your business is a brand. You need to know what it stands for in the minds of consumers. Startups don’t have the luxury of big “brand equity” studies, but they do have the benefit of being directly in touch with consumers, whether it be at events or “pop ups” or in the day to day operations of returning customers emails and calls. I did some research for an established start up that had never really done traditional market research. In a series of one-on-one interviews, I helped them develop a better understanding of what the brand stood for and, equally importantly, what it did not, helping them thinking about what they should do as they expanded. TIP: Constantly stay abreast of what your brand does (and does not) stand for in the hearts and minds of consumers; likewise, understand how they view the competition, and hone your messaging to better connect with the target.

  1. INVESTING IN IDEAS.When you’re working on a start up, you are essentially investing in a series of ideas. Whether to spend more money on tactic or another. Or to launch this line of products over another. Many entrepreneurs will go with their “gut.” Some will gather what data they can to shape their decision. The reality, though, is that the pool of available data can be generally thin. Plus few start-ups have funds set aside for market research (and if they think about it, they view it as an expense vs. an investment). At larger companies, the opposite is true. They are drowned in piles of data from research reports. The key challenge (for both CPGs and entrepreneurs) is to better understand “what is the right data (and amount thereof) to make a sound business decision?” The reality is that the romanticized notion of an entrepreneur’s “gut” is really not that different from a general manager’s sense of “pattern recognition.” In essence, both have built up instinctive, informed knowledge bases, albeit very different ones. In both cases, the decision maker needs to be armed with the right data to make the right decision. TIP: Get the right data to make the right decision.
  2. SPECIFICITY MATTERS. As I transitioned from “corporate” to “start up” space, I increasingly remembered how much specificity mattered: well-honed briefs enabled great work; great design delivered on a few key elements; laser-focused insights drove business-building work. It was not just about making choices, and deliberate choices, but very specific choices. And at the same time I realized that a lot of the advice that agencies and experts were giving marketers was superficial, and unhelpful.
  • “Win on search.” “Agreed. How?”I would ask. Silence ensued.
  • “Drive facebook likes.” “How much are they worth?”to which I would receive more silence.
  • “Create an experience for your customer.” (Don’t even get me started on that one. No one who has said that to a client actually has, they just recycle the same 10 case studies of the Burberry Regent Street Store and Whole Foods.)

It’s interesting to me how many talking heads get by on a toolkit of such banalities and have never been challenged as to whether the emperor behind their statements has any clothes. Now, working in a startup gives you a new found experience in the value of specificity. You are forced to make very specific decisions. Do you test A vs. B vs. C? Do you buy these search terms vs. those? Do you say this vs. that in with the 150 character constraints of a Google ad? How do you communicate the idea to your target? TIP: As you think about your work end-to-end (from brief to creative to execution), thing about the critical role of specificity and to making it pitch perfect for communicating the benefit to the target (and of course in a way that does not alienate your agency partners).

BONUS POINT: DISTRIBUTION IS DESTINY. At a leading CPG, you pretty much take for granted that your new product will scan at Walmarts or Tescos across the country day one of sales and quickly build distribution nationwide in just a few months. For a startup, you are your distribution network. It might start with a website or a standalone store, but your number one priority is to gain distribution – whether it be driving traffic to your site, or store or tackling every “alternative distribution channel” that you can access. Distribution drives sales. Sales generate cash. Cash is your lifeblood. TIP: So if you’re at a CPG, you need to fully understand what your distribution forecast looks like and how you can influence it, before just waiting for the sales to (not) come in. For example, ask, “What does it take to grow the business at retailer X?” Or “are there ways to grow a certain channel with limited effort?” And better to ask proactively than to wait for the fire drill.



Reprinted with Permission.

Image credit: CC by Kate Ter Haar

About the author: James Black

James Black is a marketing and insights consultant and freelancer based in New York.  He has 10+ years in marketing and sales experience across P&G, McKinsey and L’Oreal.  Most recently, he founded and led a retail start-up, Black & Puryear Ltd., in the U.K., where he served as Director and Chief Curator.  At L’Oreal, James was head of shopper insights, where he identified and shaped shopper insights to drive greater connection between consumers and L’Oreal’s portfolio of beauty brands across channels.  At McKinsey, he worked in the firm’s Marketing & Sales practices, advising clients on marketing topics across B2B, packaged good and retail clients.  At P&G, he working in both traditional brand management roles as well as in the company’s marketing centre of excellence, studying best practices.  He has an AB from Harvard in Government and an MBA from the Darden School of Business (University of Virginia).

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