John Greathouse: What This Dive Bar Can Teach Startups About (Not) Marketing
JOHN GREATHOUSE: Dirty Franks is a dive bar located in Philadelphia, which is also home of The Wharton School. Although only a short Uber ride away, it is seldom frequented by the business students. Too bad. They would be well served to study Dirty Franks marketing plan, which has withstood the test of time.
Brand Building the Old Fashion Way
During my days at Wharton, the bar had no name, no sign — no indication of what lay behind its grimy front door. Fortunately, one of my hip roommates had the guts to enter Franks, thus turning me onto its retro authenticity.
Opened shortly after prohibition, the locals dubbed it “Franks”. A few decades later, the no-name bar had morphed to “Dirty Franks” with no apostrophe and the name stuck, as did the bar’s not-so-friendly catchphrase, “Cash Only.”
Franks didn’t need a sign, let alone a marketing budget. Locals within walking distance knew it was a refuge for serious drinkers who were looking for a no-frills environment to quaff cheap liquor.
Hurry Up and Stop Marketing
Entrepreneur and noted investor Brad Feld unwittingly echoed Franks approach to marketing when, during a discussion with me, he declared, “Companies should focus on building amazing products. If you have amazing products, the marketing of those products is trivial.”
I am not suggesting that startups follow Franks lack of a marketing strategy throughout their lifespan. Classic marketing certainly has its role in the maturation of a startup. However, in its early stages, aggressive marketing can actually cloud the assessment of whether or not a venture is achieving a sustainable product/market fit. In such cases, entrepreneurs risk confusing marketing traction with product traction.
For this reason, we at Rincon Venture Partners look for companies which are scaling sales, despite the absence of a marketing budget. For instance, at the time we invested in The Resumator, purveyor of software which facilitates the hiring process, the company had spent less than $10,000 on marketing. Even so, it had acquired hundreds of customers and a meaningful amount of recurring revenue due to its product’s merits, not a clever marketing campaign.
It may be frustrating to watch your competitors confuse the market by loudly making promises that their solutions cannot support. The proprietor of Dirty Franks didn’t have a Wharton degree, but he nonetheless realized that the key to marketing isn’t to sell your brand with a deluge of ads. Rather, it involves delivering a product your target customers want, at a price they can afford, which yields you a reasonable profit.