How to Build a Marketing Function During the Early Stage of Your Startup Don't settle for an agency doing grunt work and simply taking orders; make sure they can proactively define a marketing strategy to get you several steps further on the growth path.

Companies gaining traction in the early-to-mid growth stages have a few common marketing attributes: they're seeing good returns in paid media, they have some resources to deploy, and they're facing a dilemma of building an in-house team or hiring an agency to help them scale.

I'm CEO and founder of a marketing agency — I'll put that out there right up front. Yes, that means I have a bias toward brands at this stage hiring agencies, but it also means I've seen plenty of brands over-invest where they shouldn't and under-invest in the places that will actually move the needle.

This article will cover a few considerations for how to build a marketing function at this stage: core competencies you must have covered, how to address common mistakes and how to gauge the pros and cons of agencies and in-housing.

Related: 6 Key Roles to Build an Efficient Marketing Team

Must-have competencies of early-stage growth marketing

Companies of every maturity stage are generally focusing their advertising spend on Google and Meta (and perhaps LinkedIn, if you're B2B). There's a good reason for this: between those channels, which still account for nearly 50% of all digital advertising spend, you have huge audiences and engagement capabilities at every point in the funnel. All told, that's a perfect focal point for companies in the early stages of growth.

So what competencies do you need to have on hand to make the most of these channels? It's a surprisingly long list:

• Fluency in bidding and audience levers on each channel
• Creative production and testing at scale
• Experience with tracking and tagging
• Martech fluency (GA4, CRM and email platforms at minimum)
• Channel contacts who can help with insights and access to early betas
• The ability to look at budget holistically (attribution modeling, media mix modeling, lift testing)

Even if your in-house resources can account for the first few points (which would put you far ahead of the curve), I almost guarantee you're spending inefficiently within your current channels. The ability to do native-to-platform lift studies and advanced analyses that look at incrementality and marginal return is a difference-maker at any stage – but particularly at this stage, when every dollar of spend and your burn rate should be under scrutiny. This is especially true in 2023, as the gap between Series B and C funding rounds has widened, and Series C funds are much harder to come by.

Related: 3 Marketing Fails That Demonstrate The Importance of Fundamentals

How to reduce mistakes in early-stage growth marketing

At this growth stage, striking a balance between being too cautious and moving too quickly is key, and it's hard to do. It's a state of being for early-stage marketers, particularly those with VCs or private equity investors scrutinizing the use of their investment dollars, to feel the crunch of time and budget in bringing a product or service to the mainstream.

The common mistakes I see at this stage involve spending where a channel/product or channel/audience fit hasn't been firmly established; spending to acquire customers who would have purchased anyway; ignoring current customers in the rush to acquire new ones; and tying up resources in unnecessarily long commitments.

Related: Should Your Small Business Hire a Marketing Agency or Build a Marketing Team?

Early-stage growth marketing: the agency/in-house debate

If none of the above mistakes apply to you, and if your marketing team can account for all the core competencies I listed, your biggest takeaway should be giving those team members whatever they ask to stay with your company. You don't need to pay for an agency, and you should feel secure in knowing that your marketing team has a more thorough understanding of and investment in your company's goals, objectives and philosophies than any agency will.

If, on the other hand, you know your team is too small or stretched too thin to cover the above, or you would value the perspective of an objective third party on your approach to meeting your business goals, it's time to start researching potential agency partners. If you're at that step, look for agencies with a strong perspective on customer retention and demonstrated experience in driving scale and efficiency within your vertical, and ask them to analyze your current media mix setup.

If you've chosen your shortlist well, each agency will be able to demonstrate the potential value of working with them. The right agency partner will work with you on contract terms that will keep you from tying up too many funds over the long term (and for what it's worth, something that every agency owner has learned during economic dips is that it's much easier logistically, financially and emotionally to fire an agency than to fire a colleague). But don't settle for an agency doing grunt work and simply taking orders; make sure they can proactively define a strategy to get you several steps further on the growth path and demonstrate a holistic understanding of the challenges in your space.

What's next

Growth at this stage is a high-speed blend of action, analysis and planning to enable future growth. It's a tough blend for fully resourced teams and an even tougher ask of teams trying to assess hiring needs on the fly. Whether it's an outside party or expertise already baked into your team, a resource with the time and perspective to help you plan for the year ahead, not just the week to come, is essential to longer-term growth.

Speaking of longer-term growth, I'll close the series with a look at an ideal marketing function for established brands – remember, it's harder to stay on the mountaintop than to get there.