Oftentimes we look to other startups’ successes and failures as a roadmap for our own ventures. While that’s a smart strategy, I think much can also be learned from outside the startup scene – something we rarely consider. This is an unconventional case study that looks outside of startups to gather useful lessons learned.
Politics aside, Rick Santorum’s recent rise in popularity has been a great feat, and one that deserves a closer analysis. There are three important lessons for bootstrapped startups in Santorum’s story.
As recently as Dec 20, 2011, a Real Clear Politics average had Rick Santorum polling at 8.6% as the likely 2012 GOP nominee. And previous polls rarely had Santorum breaking the double digits mark, if ever. Fourteen days later, on Jan 3, 2012, Rick Santorum placed second in the 2012 GOP Iowa caucus with 24.5% of the votes. He came in second place to the long standing frontrunner by only 8 votes. It was touted as a major accomplishment for Santorum by many.
So, what happened? How did Santorum accomplish this? And what can bootstrapped startups learn from him? Let’s take a closer look.
Case Study: Rick Santorum
Lesson #1: Money Isn’t Everything
In the weeks leading up to the 2012 GOP Iowa caucus, the candidates spent millions of dollars in TV advertisements – a total of about $9.7 million.
Out of that $9.7 million, Rick Santorum spent the least on TV ads, coming in at a little less than $22,000. Compare that to Rick Perry, who alone spent over $4.5 million (and only received 10% of the votes). And even when you take into account money spent by external sources (i.e. not the candidates’ own pocket), Santorum’s total dollar amount spent on TV ads is second to last.
So, clearly, having lots of money at your disposal is not a recipe for success. Money helps, no doubt about it, but money without proper execution won’t get you very far. You need to convert that money into traffic, paying customers, and profit.
Let’s consider an example we’re probably all familiar with: Color.com.
Color raised $41 million pre-launch! That’s an astronomical amount of funding for such an early stage startup. Yet, by all accounts, they have been an absolute failure.
Why they failed is up for debate. There were probably several factors that led to their lackluster results, but why they failed isn’t important (at least not within the context of this blog post). The point is that they had $41 million at their disposal, and still failed.
Compare Color to Balsamiq, a bootstrapped startup that went from $0 to $2M in 27 months. Balsamiq’s success is a result of a great product, good customer service and hard work, which takes us to lesson #2.
Lesson #2: Hard Work Pays Off
Santorum proved that hard work pays off. Of all the 2012 candidates, Santorum spent the most amount of time on the ground in Iowa. He spent a total of 104 days in Iowa. He was one of only two candidates to visit all 99 counties in Iowa. He hosted 381 townhall meetings with the people of Iowa, and took the time to address concerns even if just a single person attended.
As a comparison, Rick Perry spent just 35 days in Iowa. And although he overspent his opponents in TV ads by several million dollars, he only secured 10% of the votes.
Rick Santorum worked hard, very hard, more than any other candidate did in Iowa, and he reaped the rewards.
Persistence and determination go hand in hand with hard work. Just a few days before the caucus, Santorum was polling in the single digits, and was written off by almost everyone. That has to be a demoralizing position to be in. Yet Santorum ignored the negativity and pushed ahead with a positive attitude. His perseverance paid off in a big way.
Patience is key, too. Those that give up easily at the first sign of trouble will never succeed. If it were easy, everyone would do it, right?
Lesson #3: Communicate With Your Audience
You must be a good communicator. You must effectively communicate your value proposition, and play up your strengths. You must be approachable, and willing to listen to your customers. Ask them questions, listen to their concerns, and show them how you can eliminate their pain.
But first, you need to know who your audience is. Who is your ideal customer? And who are you targeting your message to? This is an important first step that is often overlooked, and the answer isn’t always as obvious as we originally assume. If you can get this right, the rest will follow much easier.
Going back to Rick Santorum’s case study, Iowan demographics are well known. Evangelicals and social conservatives regularly make up more than 50% of GOP caucus goers. As a social conservative, Rick Santorum used that to his advantage in a big way.
Santorum spent a big portion of his time in Iowa talking about social issues. He built a cohesive message around social issues, and sold himself as a true social conservative. He compared himself to his competition, and properly explained how he was more of a social conservative than his opponents.
However, this wasn’t a one-way conversation. Santorum didn’t just plaster the airwaves with messages about his values. Instead, he made himself available to the people of Iowa, and discussed issues with them in person. He held 381 townhall meetings, and allowed them to ask him unrehearsed questions and push him for answers that made sense.
Lastly, Santorum garnered the support of key evangelical leaders in Iowa. These influential leaders spoke on his behalf, and steered many evangelicals towards him. Think of this as having testimonials on your sales website from industry leaders.
The End Result
These actions resulted in Santorum being 8 votes shy of first place in Iowa – a tremendous accomplishment for someone whose campaign was on life-support just weeks earlier.
That said, taking into account the volatility of this race, it’s likely Santorum’s popularity will fall – just like his opponents rose and then fell in popularity. I don’t think that makes his recent accomplishments any less admirable, but it is bonus lesson #4: Don’t fall asleep at the wheel.
Following Iowa, Santorum only spent 6 days on the ground in the following state’s primary (New Hampshire), which resulted in a fifth place placement for him. A somewhat recent startup example that comes to mind is Digg. Remember when everyone wanted to be on the front page of Digg?
Disclaimer: Light Point Security, LLC does not endorse Rick Santorum, or his political views. This is just an interesting story that has some lessons for bootstrapped startups.