The vital role of Marketing Strategy in Bioscience start-up success
A successful start-up will go through various stages, from initial idea and business plan development to product launch and market penetration. In order to succeed, Bioscience start-ups must secure funding. This usually requires demonstrating a clear path to profitability within a reasonable time frame. Developing a marketing strategy early on is vital to attract investment, acquire customers, and drive long-term growth for these start-ups.
Building investor confidence
Running out of cash or being unable to raise funding is the most significant reason for start-ups failing according to CBInsights (1).
The current funding environment is particularly challenging. A recent report in Bioprocess online (2) claimed that early-stage financing for small and midsize biotechs had declined significantly in 2022 with venture capital investment and IPO activity remaining stagnant in early 2023.
To raise investment and fuel growth, start-ups must convince investors of the market potential and also provide concrete evidence of demand. Investors evaluate a business's long-term viability based on its ability to acquire customers and drive towards profitability.
Targeting the right audience
Start-ups need to identify their target market and show how they will attract and engage customers, even at the product concept stage. A well-developed marketing plan, created early on, needs to include customer research to clarify the target audience, their needs, and the messaging that resonates with them and provide a demand generation roadmap. Investors expect to see a clear strategy for acquiring customers to indicate the potential for sustained momentum and profitability.
Educating and persuading customers
While generating awareness is important, start-ups must also invest in educating potential customers about their new product or service especially if it is novel or requires customers to change their behaviour. It is important to recognize that adopting a new product involves trade-offs for customers, as they must give up some benefits of their existing products or ways of working. Having a clear value proposition to show how the product solves the customer’s pain points or addresses their needs with compelling messaging is crucial to help drive customer adoption. This should be part of the early marketing strategy development.
Building brand credibility
Establishing a strong brand presence is crucial for Bioscience start-ups in a crowded and often poorly differentiated market. The marketing strategy plays a central role in building the brand and relationships with customers. The marketing strategy should show how the start-up will differentiate its brand, proactively cultivate brand awareness and credibility and acquire a loyal customer base.
The investors' perspective
Investors are keen to see evidence of a start-up's ability to consistently and predictably acquire new customers. A cohesive strategic marketing plan becomes crucial to demonstrate how marketing will drive effective demand generation. For start-ups lacking internal marketing expertise, a pragmatic approach is to engage a marketing expert who can tailor a plan to your particular needs.
Bioscience start-ups that have a well-written marketing strategy at the outset, before series A funding, can lead to a better valuation and smoother funding rounds. By developing a comprehensive marketing plan, start-ups can demonstrate that they can mitigate risks and position themselves for growth. In addition to securing funding a comprehensive marketing plan can help start-ups to navigate the competitive landscape, position themselves effectively, acquire customers systematically and drive profitability, increasing their chances of long-term success.
Sources:
1. https://www.cbinsights.com/research/report/startup-failure-reasons-top/
(Accessed on 17 July 2023)
2. Financing For Emerging Biotechs: Recent Trends & Predictions For 2023, By Rich Ramko and Ashwin Singhania, EY https://www.bioprocessonline.com/doc/financing-for-emerging-biotechs-recent-trends-predictions-for-0001
(Accessed on 17 July 2023)