Tag: Startup

Categories
Uncategorized

My 2018 Book Report

A year ago today, I challenged myself to read err listen to more books in 2018. Thanks to a long commute and Audible, I hit my goal. Here’s a quick review of all the new books I read in 2018 (in alphabetical order) with my unscientific rating at the end.

Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou

This is the sad story of Elizabeth Holmes and Theranos.

Holmes isn’t exactly a sympathetic character having willingly put lives at stake by delivering inaccurate labs results to patients. But she had a big vision, and was making good progress towards it — albeit more slowly than apparently she was willing to accept. Had she played by the same rules as, you know, every other healthcare startup, Theranos would be on a much different path.

But she didn’t play by the rules. She lied. Defrauded investors. Put lives at risk.

To Holmes and her co-conspirator COO boyfriend Sunny Balwani, the illusion of success and the paper wealth it created were more important than the truth. Bad Blood highlights everything wrong with the current win at all costs mentality that permeates Silicon Valley.

10/10

Brotopia: Breaking Up the Boys’ Club of Silicon Valley by Emily Chang

I already knew most of the stories — Chris Sacca’s weird hot tub meetings. Susan Fowler’s awful experience at Uber. The creepy abuse of power from investors like Dave McClure and Justin Caldbeck. James Damore’s manifesto.

Taken individually they are a series of really, really bad decisions made by men. Assembled together by Emily Chang, it paints a clear picture of the signifcant obstacles faced by women and minorities in tech. From minor daily annoyances to outright harassment and criminal behavior, women in tech have had to put up with a lot of unnecessary shit. The irony pointed out by Chang is that the numbers show companies who hire more women in leadership positions perform better.

8/10

Can’t Hurt Me: Master Your Mind and Defy the Odds by David Goggins

David Goggins is an enduarance athlete and retired Navy Seal. He has completed two Navy SEAL Hell Weeks, run 100 miles in 19 hours, run 135 miles in just under 26 hours, done over 4,000 pull-ups in 24 hours (a Guinness World Record), and completed the Ironman World Championships in just over 11 hours.

He’s absolutely crazy. Or is he?

One of the first points Goggins makes in Can’t Hurt Me is that “motivation is crap.” That’s because motivation disappears at the first sign of adversity. Goggins calls this the 40% rule — where we stop physical and mental pursuits way before hitting our actual capacity. There’s a reserve tank within, and only by pushing and breaking limits can we reach full potential.

To break through, Goggins calls on his mental “cookie jar” containing every setback he’s overcome in his life. And there’s lot of setbacks for him to draw upon. Goggins embraces pain and suffering to “callus his mind”.

Yeah, he’s pretty much the toughest man alive.

8/10

Dopesick by Beth Macy

Dopesick chronicles the opoid crisis told through stories of addicts and dealers in a small Virginia suburb. It’s the spiritual successor to the brilliant book Dreamland from Sam Quinones.

The introduction of OxyContin in 1996 affected society in ways we’re just now beginning to understand. Dreamland chronicled the ground zero of the opioid crisis — Central Appalachia. Dopesick expands on the story of how the crisis came into the suburbs, often through the I-70/I-81 corridor known as “Heroin Highway.”

The stories are so real and tragic. The injured high school football star who is prescribed painkillers but becomes addicted and dies of an overdose. The young addicts who are forced into dealing & prositution to support their habit. It’s trivially easy to get addicted and for many reasons, almost impossible to get clean for good. Dopesick makes it clear that the opiod crisis is getting worse, not better.

There are no easy answers. Opiates play an important role in pain management. For many, they are a godsend. But something has to change. Shame on Purdue phrama for bringing a product to market that was trivial to abuse. Shame on the doctors who overprescribed strong opiates for minor conditions. Shame on the pill mills who made opiates as easy to get as Skittles.

8/10

It Doesn’t Have to Be Crazy at Work by Jason Fried and David Heinemeier Hansson

Okay, so I’m torn on this one.

A lot of the advice make sense: It should be less crazy and more calm at work. “Growth at all costs” is a pretty shitty way to build a business. I hate it when people add me to random meetings with no context. Remote is the future of work. And Gary Vaynerchuk bothers me sometimes too. But stuff like this, I just don’t know:

How about something really audacious: No targets, no goals. You can absolutely run a great business without a single goal. You don’t need something fake to do something real. And, if you must have a goal, how about just staying in business; or, serving your customers well; or, being a delightful place to work.

Or

If you can’t fit everything you want to do within 40 hours per week, you need to get better at picking what to do, not working longer hours…. when you cut out what’s unnecessary, you’re left with what you need.

It Doesn’t Have to Be Crazy and Work received great reviews from the general press, but my tech friends and I are more skeptical.

It’s a good read and there are some great actionable ideas in here. In particular I love the Office Hours concept, and I’m going to try it in 2019. But where’s the how? Where are the other examples beyond Basecamp? Does this only work at an n=1 sample size?

Basecamp feels a bit like the successful neighborhood store of tech companies. They built a business that works great… for Basecamp. But I’m not sure it would work for my company or yours. To be fair, Basecamp is honest about this.

But I think sometimes achieving great things requires sacrifice. A maybe a little crazy. Ask David Goggins about that.

6/10

Lost and Founder: A Painfully Honest Field Guide to the Startup World by Rand Fishkin

In Lost and Founder, Rand shares the story of Moz and what it’s really like to build and scale a startup. I really enjoyed the book and the cheat codes he provides based on the successes and failures he experienced building Moz to over $45m in revenue.

Rand teaches lessons through the lens of failure, which makes them much more real and actionable. Chances are that your startup looks a lot more like Moz than it does Slack, Atlassian, HubSpot, and the other hypergrowth rocket ship unicorn startups that you are likely to hear about at the SaaStr conference.

Stories like Moz need to be told loud and proud.

7/10

Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs by John Doerr

The OKRs concept came from legendary leader Andy Grove at Intel. Doerr saw the impact of OKRs when he worked for Grove at Intel. While at Intel, Andy Grove first implemented OKRs for “Operation Crush” — a project to achieve market dominance by taking down top competitor Motorola.

Doerr shared Grove’s OKR brainchild with more than 50 of his Kleiner Perkins portfolio companies, most notably Google. I’ve never worked at a company that’s used OKRs, but I’ve always been interested in learning more how they worked. And now I know.

7/10

Open: An Autobiography by Andre Agassi

I was there when Agassi first burst onto the tennis scene at the Stratton Mountain tournament in 1987. I was a young kid watching in awe as a 17 year old Agassi almost took down world number 1 Ivan Lendl with his huge topspin forhand. And huge hair! And huge personality!

Roger Federer is easily the best tennis player of all time and my personal favorite player will always be the great John McEnroe. But Agassi is right up there. I geeked out on all the tennis stories of his rise — fall — and rise again. Three things stuck out to me:

  • Sadly, Agassi hated tennis. It was work to him from the minute he landed at the Nick Bollettieri Academy.
  • Agassi used crystal meth during 1997, the worst year of his career. Wait, what?
  • And yes, his (in)famous hair was part toupee. Shaving his head was one of the most joyous moments in his life.

8/10

Principals: Life and Work by Ray Dalio

I’ll be honest. I had no idea who Ray Dalio was or what Bridgewater Associates did. The second is especially embarrassing as Bridgewater Associates is a long-time RapidMiner user.

I do now.

Wow, this is probably the best business book I’ve ever read. It really spoke to me.

In 1975, Ray Dalio founded investment firm Bridgewater Associates out of his two-bedroom apartment in New York City. Dalio started as a moderately successful commodity trader. After a few starts and stops, he learned that by analyzing historical patterns he could create machines that take inputs from the entire supply-chain of a commodoity — like a pork belly — and predict what will happen next and make better decisions.

Everything in business and life can be turned into a system.

Dalio’s Bridgewater operates on a principle called “idea meritocracy” — employing systems and methods to the best ideas come to make the best decisions. To do this requires “radical honesty”: Everyone has to be honest about their strengths and weaknesses in order to deliver the best inputs to the system. Each Bridgewater employee has a baseball card that lists their strengths and weaknesses across over 100 datapoints.

Dalio’s documents everything he believes in for both work and life as his “principals”. Here’s a good example of the type of insight you’ll read:

Just read it.

10/10 (David Goggins could get behind this!)

Shoe Dog: A Memoir by the Creator of Nike by Phil Knight

Shoe Dog is the story of the early days at Nike. It’s the anti-Valley success story. There were no insane growth hacks or unicorn funding rounds. Just the perseverance and grit of the “shoe dog” — Nike founder and Phil Knight.

Knight turned his running side-hustle passion project into a $30 billion business. Knight himself is worth $33b or so.

9/10 (Goggins approved)

The Autobiography of Gucci Mane by Gucci Mane

East Atlanta’s Radric Delantic Davis aka Gucci Mane is the founding father of trap music. He’s sold drugs, and been addicted to them. He’s been arrested many times. He was charged with murder (later dropped). He started writing his memoir while in federal prison.

It’s a fascinating story of drug-dealer-turned-rap-god. Gucci Mane began selling drugs in the seventh grade. By the time he released his first single So Icey in 2005, he had already been arrested and jailed twice.

Rap was his only path out.

7/10

Total Recall: My Unbelievably True Life Story by Arnold Schwarzenegger

At 23 hrs and 21 mins this was easily the longest book I listened to in 2018. It was also one of the best.

Total Recall is truly an incredible story that boils down to simply setting goals with unrelenting focus on achieving them. NO ONE has a track record like Arnold. He simply refused to start at the bottom and work his way up like everyone else.

✅ Top bodybuilder on the planet

✅ Real estate mogul

✅ Top movie star

✅ Marry a Kennedy

✅ Governor of California

Look Arnold is flawed. You may not like his politics. Or the fact that he cheated on his wife + had a child with his housekeeper (he covers both extensively in this book). But before reading the book I didn’t appreciate Arnold’s ambition, motivation, and intelligence.

9/10

Categories
Uncategorized

Bad Bros and Bad Blood: a Summer Vacation Book Report

Hey kids: I know you hate all that summer reading you get assigned at the end of every school year. But when you grow up, you’ll discover that reading books is actually the best part of your summer vacation.

Here’s what I read on my summer vacation.

Brotopia — by Emily Chang

I already knew most of the stories — Chris Sacca’s weird hot tub meetings. Susan Fowler’s horrible experience working at Uber. The creepy abuse of power from investors like Dave McClure and Justin Caldbeck. James Damore’s manifesto. Taken individually, they are a series of really, really bad decisions made by men. Assembled together by Emily Chang, it paints a clear picture of the signifcant obstacles faced by women and minorities in tech. From minor daily annoyances to outright harassment and criminal behavior, women in tech have had to put up with a lot of unnecessary shit. The irony pointed out by Chang is that the numbers show companies who hire more women in leadership positions perform better.

One thing that really stuck out for me in Brotopia is the idea of hiring for cultural fit or — hiring people you’d want to get a beer with after work. In the real world, this translates to “hire someone exactly like you”. Chang proposes explicitly hiring for “cultural addition” i.e. people who can bring diverse experiences and perspectives. That makes a lot of sense to me.

While brainstorming writing this post, I wanted to think bro culture is less pervasive in the Boston tech ecosystem than in the Bay Area. But just last week, the MassTLC technology association announced the nominees for it’s annual leadership awards. There were 15 nominees in the category of CEO, CMO, and CTO of the year. Zero women.

(By the way MassTLC I’ll help you out: Carol Myers of Rapid7 should be the CMO of the year, every year).

Lost and Founder — by Rand Fishkin

In Lost and Founder, Rand shares the story of Moz and what it’s really like to build and scale a startup. I really enjoyed the book and the “cheat codes” he provides based on the successes and failures he experienced building Moz to over $45m in revenue.

Spoiler alert: it’s not always unicorns and rainbows.

The prevailing narrative is that every tech company is a hypergrowth rocketship that’s going to triple triple double double double their way to unicorn status. Yeah, on occasion this happens i.e. Box, Slack, Zendesk.

It’s happening at Drift right now.

But at vast majority of startups look more like Moz. Moz is a clearly a successful company. They’ve built a great product that users love. At $45m, they have significant scale. They are even profitable! But Rand admits he led the company through a series of bad decisions over the years, including:

  • Launching a slew of new of product initatives that failed.
  • Prioritizing investor feedback over customer feedback.
  • Failed “growth hacks” and that brought in a bunch of new users… who all subsequently churned and distracted the company.
  • Turning down a $25m acquisition offer from HubSpot. Note, that at HubSpot’s current stock price, Rand would have been worth at least a bazallion dollars by now had he taken the deal.

In the end, Rand left Moz — and it seemingly it wasn’t his decision. He seems like a solid guy, and I’m sure he’ll be a better entrepreneur after going through this experience. Thanks to Rand Fishkin for sharing these candid stories.

Bad Blood — by John Carreyrou

Okay, so this was the book I was most interested in reading on vacation. Once I started, I couldn’t put it down.

Bad Blood is the story of Elizabeth Holmes and Theranos, the company she founded after dropping out of Stanford. If you’ve been paying attention, you know this story did not end well. Theranos is now all but over, and Elizabeth Holmes is currently facing a number of criminal charges.

Elizabeth Holmes was a brilliant narcissist with a vision that one day, a single prick of the finger would bring blood testing into every household. Holmes and her arrogant COO boyfriend Sunny Balwani created an extraordinary illusion of success, faking out everyone from Walgreens to investors who gave her $400m a $9b valuation. She created a Jobs-ian reality distortion field.

All without a product.

Well, Theranos did have a couple of products. Their first product was a device that could run a few blood tests, but it often didn’t work, and it couldn’t completely replace everything you’d get done in a real lab. So Theranos ended up creating their own lab to analyze blood using tried-and-true Siemens blood testing equipment. The Theranos innovation was modifying the Siemans equioment it to handle the significantly reduced blood volume captured by their pinprick device.

Of course the Theranos modification introduced a really big problem: the results weren’t accurate. Walgreens rolled out Theranos to stores in Arizona, and delivered tens of thousands of inaccurate labs results to customers. It took brilliant investigative journalism from Carreyrou to unravel the the insane amount of investor fraud and criminal behavior happening at Theranos.

My wife has spent her career in biotech working with the FDA on new drug applications. It often takes decades for companies to commercialize medical research to the point where it can be put into the hands of customers. This is real life and death stuff, but Theranos treated it like an a form of a beta SaaS application. They purposely avoided both the FDA and the Centers for Medicare & Medicaid Services, both of whom are charted to protect consumers from evil companies like Theranos.

To Holmes and Balwani, the illusion of success and the paper wealth it created was more important than the truth. Bad Blood highlights everything wrong with the current “win at all costs” mentality that permeates the Valley.

I experienced a similar situation after joining Autonomy in 2008. At the time, Autonomy was a tech powerhouse, well on its way to a billion in revenue. Autonomy sold to HP in 2011 for a massive $11b valuation. But less than a year later, HP had to write off a huge chunk of the aquisition over “accounting improprieties” and last month Autonomy’s former CFO Sushovan Hussain was convicted on a series of felony charges related to the acqusition. Like Theranos, Autonomy formed a distorted reality where low margin hardware could be sold as high margin software, and where deals sold to resellers never had to make it to the end customer to be booked as revenue.

Autonomy employees knew that something was way off, but the power of the distortion field was strong. I suspect Theranos employees look back and see many of the same warning signs I saw.

In the end, I feel like the Theranos story should have ended much differently.

Look, Holmes isn’t exactly a sympathetic character having willingly put lives at stake by delivering inaccurate labs results. But she had a big vision, and was making good progress towards it — albeit more slowly than apparently she was willing to accept. But had she played by the same rules as, you know, every other healthcare startup, Theranos would be on a much different path.

Shoe Dog — by Phil Knight

I saved the most inspiring and grounded story for last.

Shoe Dog is the story of the early days at Nike. It’s the anti-Valley success story. There were no insane growth hacks or unicorn funding rounds. Just the perseverance and grit of the “shoe dog” — Nike founder and Phil Knight.

Nike started out as Blue Ribbon with a $50 loan from his father. Blue Ribbon became the sole distributor of the Onitsuka (now ASICS) Tiger. Knight faced a series of obstacles, ranging from terminated bank loans to a lawsuit that could (maybe should?) have crushed Nike before it even got started.

Today, Nike sales top $30 billion and Nike’s swoosh is one of the most recognized logos on the planet. Knight himself is worth $33.7b.

Not bad for a guy who built his business initially as a passion project.

Go buy the book and read it. If you don’t like it, let me know and I’ll refund the cost 🙂

Categories
Uncategorized

Your Best Startup Strategy is Better Execution

It’s the most wonderful time of the year. No, not that time. The other one. The time where your startup gets together and starts planning for the upcoming year. Some of you have already finished this process, but with my fiscal year ending in January, I’m currently in the midst of it.

That’s why this article from Sarah Hodges on how to run better management team offsites caught my attention.

In particular, I loved this quote from former colleague and friend Thomas Erickson, the former CEO of Acquia.

Make sure that a focus on execution remains front and center. Have a regular “execution” meeting and less regular “strategy” meetings.

— Tom Erickson, CEO, Acquia & Co-Founding Pillar

👆💯

I’ve often thought that as leaders, we focus too much on strategy and not enough on execution. Peter Drucker once said culture eats strategy for breakfast, and I agree. I think organizations with a culture of getting shit done win. I’ll take a relentless executor over a “strategic marketer” any day.

I know there is a larger debate around strategy vs. execution. At larger companies, planning, strategy, and execution are seperate disciplines. But my experience comes from working at startups who don’t have the luxury of dedicated teams augmented by management consultants, so finding the right balance is important. Focus too much on strategy, and you’ll end up with a lot of great looking PowerPoints but metrics that look more like 〰 or 📉.

Set the Corporate Strategy Annually

Having worked for Tom for ~3 years, I’ve experienced how he found the right balance between strategy and execution.

Once a year in November, Tom brought the entire extended leadership team together to run a three day activity called the Goal Deployment Process, or GDP as we called it. This process was used to identify the most important issues for Acquia to tackle in the upcoming year, prioritized by their potential impact. It was a team exercise where Tom laid out the three year objectives for the company, and we worked backwards into all the things that would need to happen for us to get there.

The outcome of the GDP was a list of ten or so strategic cross-functional initiatives for the upcoming year, with clear definition of ownership, metrics, and specific actions to take. Here’s a look at what one of them looked like:

The robust planning process drove alignment on the most important items to the company. The GDP actions were often tweaked and metrics were redefined, but very rarely did we decide to abandon any completely during the year. Many of the important milestones in Acquia’s growth came as a result of the GDP process.

Drive Daily Execution

But the most important part of the GDP process wasn’t the annual meeting, it was how it affected daily priorities across the company.

Each owner of the GDP was expected to drive their actions across the company. To make an impact, the GDP leader had to structure their day to make sure they were impacting each of the cross-functional actions they owned. Every month, the extended leadership team would get together to review the metrics. We used a spreadsheet with the plan and actual result, with color coding to highlight areas we were performing under expection.

It was simple and effective. Every month, GDP leaders had to provide an honest assessment of how well (or not) we were able to drive improvements. Too much red? You aren’t executing well. Too much green? You probably set your goals wrong. Note that with Tom, I learned (the hard way) that it was better to have more yellow and red than green.

Tom ran the weekly executive leadership meeting at Acquia the same way. Every Monday morning, he brought the exec team together to review a spreadsheet containing a running list of the most important actions across each department in the company. These were usually less cross functional than the GDP, but still important to the success of the company.

This list forced each executive to provide a weekly assessment of where they were at on important deliverables. This simple format wasn’t appropriate for managing the details of the actions, but it was an easy way for the exec team to track progress, and if something were blocked, it could be addressed directly in this meeting.

Anything that fell in the strategy bucket in the weekly meetings was noted, but not addressed as a part of this meeting. Tom kept the meeting all about execution.

You need a strategy for better execution

Here’s the thing: execution is hard and its a grind. But like anything, being great at execution is daily hard work. There were times that I hated the GDP process, and all of the time it took to drive actions and report on results. But looking back on it, I realize that it was one of the main reasons why Acquia grew as fast as it did under Tom’s leadership.

Chances are at your startup, you’ve already got a good enough strategy in place. You know your customers, and you’ve built business model. You’ve got product market fit and a go-to-market in place. But do you have a strategy for getting better at execution?

If you don’t, that should be a big topic for your 2018 planning process.

Categories
Uncategorized

Predictive Account Based Inbound Agile Marketing Automation

We’ve hit peak Account Based Marketing.

I’ve received 5 emails this week from vendors extolling the virtues of ABM. I’ve been invited to one dinner, two lunches, received a $50 Amazon gift card, and was told by Marketo that “According to 97% of marketers, account-based marketing (ABM) achieved a higher ROI than other marketing initiatives.”

Everyone is “flipping their funnel” using Account Based Marketing and I’m missing out. Or am I?

Ok. Let’s say I buy that number from Marketo (or something close to it). That still doesn’t mean that Account Based Marketing is right for me. Maybe I’m a proud member of the 3% who think ABM is probably great for lots of organizations, but not for mine? Note that none of those BDRs who invited me to dinner tried to make the case why my company (RapidMiner) would benefit from ABM in the first place.You know you are at the top of a hype cycle when its acceptable to market “the thing” — and not what the thing delivers, or why you should care.

The truth is that really great companies almost never follow someone else’s playbook, at least not verbatim. Salesforce, Slack, Atlassian, and HubSpot, didn’t follow trends, they created them. They went right when everyone else was going left. They were the 3%.

The ABM phenomenon got me thinking about what makes marketers so susceptible to trends? Maybe it’s that we like being marketed to? We appreciate masterfully executed campaigns like Flip my Funnel and Account Based Everything. We certainly like belonging to a tribe — being part of a movement. Ever been to the Dreamforce or Inbound? There’s clearly comfort in numbers. There’s nothing inherently wrong with following a trend, but it’s almost never as easy to pull it off as the trend-makers make it seem.

For example, how many “Appropriate person?” emails have you received+deleted this week? I wouldn’t know, because I created a rule to delete them a long time ago.

The book Predictable Revenue by Aaron Ross taught this approach to outbound sales teams and it absolutely worked for many of the most successful tech companies on the planet — until it didn’t. By then, the trend makers had already moved. on while the trend followers continue to blast templated emails to tuned-out audiences like me to this day.

E-Meet me?

Vendors know the power of trends and the momentum they create. It’s not a coincidence that ABM vendors are teaming up to support the movement. ABM vendor Terminus founded the “Flip My Funnel” community alongside a number of competitors. Even traditionally laggard analysts like Gartner are jumping on board the ABM hype train.

But trends come and go. Ask anyone over 40 how tech marketing worked before AdWords and marketing automation, and it will sound a lot like ABM. Tech marketers in the 90s and early 2000s didn’t have the luxury of the low cost distrubution channels that we have today, so focusing on accounts was the only way to go.

Sure, it was much harder to do ABM then, and the advent of all the new ABM companies make it much easier to do ABM at scale today. Still ABM isn’t new, and it worked then for the same reasons it works now.

Look, I’m not against ABM or any particular marketing tactic. Brandon Redlinger of Engagio lays out some great advice for organizations considering ABM. I’m just against flocking to a trend because everyone else is. There aren’t any growth shortcuts or get rich quick schemes. As I’ve said before, study these trends. Learn from them. Be inspired by them. Implement some of them. But don’t blindly follow them just because you think everyone else is.

And don’t be afraid to be a part of the 3%.

Categories
Uncategorized

When Marketing Personas Fail

Marketing personas are those fictional people with the clever names like Statistical Stephen at RapidMiner or Marketing Mary at HubSpot. Personas are formed through extensive quantative and qualitative research, and who represent the ideal prospects for your product.

Goofy names aside, complete getting alignment across your target personas and more broadly across your entire customer segmentation strategy is perhaps the single most important thing to get right at a growth tech company. But what often happens is that the whimsical personas created by marketing never really leave the PowerPoint slide they were created on, and aren’t truely embraced by the entire organization as they should be.

See if this complete fictitious scenario sounds familiar at your company…

Marketing is asked to update the core company personas, so they go out and do extensive customer research and come up with three primary personas the company should be targeting. They develop differentiated messaging for each that eloquently connects customer need back to the product. Playbooks are created, sales is enabled, and demand is generated. So far, so good.

But sales isn’t totally bought in. They watched the training session from marketing, and while they found some of the material and persona work to be helpful they have a quota to hit this quarter. So, they continue to go after prospects who don’t really fit the personas defined by marketing, perhaps brands they recognize, companies a rep has sold to in the past, or maybe the sales team is organized by verticals that are no longer a good fit. For whatever reason, sales isn’t fully aligned so they continue to chase a different set of targets than were identified by marketing.

Meanwhile, customer success was unfortunately not involved in the marketing persona definitions. Had they been, they would have pointed out a fatal flaw in the persona development: that one of the target personas has a high churn rate. The persona looks like a great fit from an customer acquisition perspective, but when you follow the persona through renewal and expansion, signing them up is just not worth the effort.

Finally, product and engineering continued to build product and shape the roadmap through entirely different conversations with sales, marketing, and customer success. They may even have their own persona definitions outside of marketing.

None of this happens at your company because you are fully aligned, right? Yeah, probably not.

As I mentioned before, I believe that getting alignment across the entire organization on customer segmentation is the single most important thing a tech company can do to scale. And the CMO needs to be the change agent that gets everyone — marketing, sales, product, engineering, customer success — on the same page, and keeps them there.

Brian Halligan of HubSpot tells a great story of misalignment and the resulting “optionality tax” paid by companies who aren’t fully aligned in the story of Mary Marketer.

In the early days of HubSpot, they sold to two primary personas: Owner Ollie, who represented HubSpot’s really small (< 10 employees) market segment and Mary Marketer, who represented someone in the marketing department of a larger SMB company.

For years at HubSpot we debated our target market persona. We had one camp that wanted to build our offering for Owner Ollie, a small business owner with less than 10 employees and no full time marketer. We had another camp that wanted to build our offering for Mary Marketer, a marketing manager who worked in a company between 10 and 1000 employees.

I was a HubSpot customer during the Owner Ollie days. The product was a jumbled mess of SEO and social tools with a touch of email marketing, landing pages, and reporting mixed-in. You could see there was massive potential, and the product was iterating fast. But still it was confusing to me, because as the CMO of a 250 person tech company at the time I had a much different set of needs than the owner of a plumbing supply store somewhere in the Midwest.

For HubSpot to thrive, they had to choose and eliminiate the optionality tax. And they chose Mary. Here’s how Brian Halligan describes the magic that came through focus:

By picking Mary, our marketers could now build content that attracted her and stopped watering our blog (and other assets) down with business owner content.

By this time, HubSpot already had an army of content creators, and now they were entirely focused on the needs of Mary. This let HubSpot distance themselves in the crowded space of content marketing best-practices.

By picking Mary, our sales reps only were rotated leads from companies between 10 and 1000 employees (lead scoring works, btw), honed their value proposition on how to help Mary grow, and largely forgot about Ollie.

Sales immediately got onboard with the Mary decision, simplying their qualification and narrowing their messaging approach.

By picking Mary, our product folks could laser focus on delighting Mary and stop splitting the baby on the UI and feature set they were building for both. If someone suggested an Ollie feature, they’d simply say “no” and move on — no more hand wringing.

The product team could focus on improving the user experience and addressing the feature gaps that prevented HubSpot from selling to more Mary’s.

And lastly because they were so focused on the needs of Mary, it led to a huge decrease in customer churn and got HubSpot over the magical 100% revenue retention number that is so important for high growth SaaS companies.

The Marketing Mary decision at HubSpot fully aligned marketing, sales, customer success and product. The results speak from themselves: every single metric went up through complete alignment and the focus that came with it:

https://thinkgrowth.org/hubspot-s-playbook-for-going-from-startup-to-scale-up-29ab85d3a3e1#.ntv1a4p5p

So how do you get a company fully aligned and keep them there? It takes hard work. Personas aren’t a “one and done” activity. The can’t just exist in a PowerPoint slide or a printed picture that hangs on a wall. The CMO must constantly keep them updated and relentlessly focus on making sure the entire organization remains in agreement on the qualitative and quantatative measurements of what makes a good persona for your company.

This elevates the CMO into a much more strategic role in the organization, something Dave Kellogg from Host Analyics touches on in his post The Evolution of Marketing Thanks to SaaS.

https://kellblog.com/2017/02/09/the-evolution-of-marketing-thanks-to-saas/?

Tomorrow, as more marketers will be measured on the health of the overall ARR pool, they will be focused on cost-effectively generating not just opportunities-that-close but opportunities that turn into the best long-term customers. (This quadrant helps you do just that.)

And that’s exactly where we need to be.

Here’s some additional reading the topic of segmentation and personas:

How to Design Marketing Campaigns: The Importance of Market Segmentation by Myk Pono

The Importance Of Segmentation For Your SaaS Startup by Tom Tunguz

Categories
Uncategorized

A Primer on Developer Marketing

TL;DR marketing to developers is hard, and you are probably doing it wrong.

The unstoppable rise of the developer

My former Acquia colleague David Churbuck introduced me to RedMonk’s Steve O’Grady and his 2014 book about how developers are taking over the world, called The New Kingmakers. The idea is that successful companies empower developers to solve problems instead of getting in their way by dictating legacy technology and process.

It sounds obvious now, but it wasn’t so long ago that everyone who sold technology started at the top of an organization, typically the CIO, and worked their way down. Important technology decisions were made on the golf course or at the steakhouse, and companies like Oracle, IBM, and SAP sold billions of dollars of enterprise software this way for decades.

But the explosion of open source and cloud changed everything. Instead of waiting for technology to be handed down by the CIO, developers could now pick whatever best product they wanted, and quick deploy them on AWS, Heroku, DigitalOcean, etc. We even coined the term Shadow IT to describe the stealth adoption of unsanctioned technology. O’Grady captures this disconnect nicely in a Venn diagram:

The New Kingmakers

So while the balance of power has clearly shifted to developers, many enterprise technology marketers continue to chase the CIO with old school enterprise software marketing tactics. Does this sound familiar:

First, we’ll create a whitepaper and put it befind a form. Then we’ll spam errr syndicate it to a bunch of opt-in(ish) email lists. Then our BDRs will call them Schedule a demo. Profit!

Ditch your traditional tech marketing playbook

One of easiest ways to fail at developer marketing is to fall in love with marketing best practices that were formed by companies who don’t sell to developers.

I’ll be honest: I’m jealous of my peers at companies like HubSpot and Marketo who market to marketers. It just seems so much easier. I know how CMOs are measured — how we buy — the language we use. I’m a good proxy for marketing to other CMOs. But I’m a horrible proxy for marketing to developers. I’m reasonably technical; I was a CS major, ran technical sales at a few enterprise software companies, and I’m currently the de-facto WordPress developer at RapidMiner. But I’ve never had to deploy code hundreds of time a day, scale a React.js application, or secure a bunch of Docker containers.

So just running the traditional one sized fits all tech marketing playbook isn’t going to work. The developer audience is particularly wary, and as O’Grady puts it:

Developers have, out of necessity, built up an immunity to traditional marketing tactics. Print ad placement doesn’t work because they spend most of their time online. Online advertising is ineffective because they block ads. Forced registration for white papers fails because they don’t care about your high level whitepapers. Media messaging is ineffective because the developers know more about the technologies than the reporters do. Analyst webinars are ignored for similar reasons. And if you throw a conference featuring your executives talking about their projects, expect your WiFi to crash as developers tune out the talk and hack their way through the sessions.

Respect the community

GitHub has millions of users. Over 100,000 users contribute to Drupal. MongoDB has been downloaded 20,000,000 times. RapidMiner has over 70,000 active users a month. The single most important factor in the growth of companies who sell to developers is the strength of the community. Even Microsoft gets this, open sourcing the hugely popular .NET framework to encourage even more adoption.

But successful developer communities aren’t built by marketing, and sometimes happen in spite of it. They almost always form organically around a product/project that developers love to use, combined with a a shared sense of purpose by the community to do something meaningful.

The danger comes in treating your developer community like a CRM or marketing automation system. Don’t expect that you can convert them with a lead form, “nuture” them with emails, harass them into taking a demo, and close. This approach works to a point, but it won’t the create the kind of sustainable value that comes from having a world-class developer brand.

Go into your developer marketing efforts knowing that many of the positive effects of building a strong developer brand are frustatingly hard to measure. But at the end of the day, developers only really trust other developers. You’ll have to have some patience to get the measurement right, and have conviction in the connection between longer term brand investments and the advocacy and revenue that comes from them.

Great marketing starts with great documentation, and deeply technical content

Your product might be the most important innovation since Sir Tim Berners-Lee’s World Wide Web, but if no one understands how to use it, you’ll quickly become irrelevant. Treat great documentation the same way you treat building a great user experience. It’s that important.

For example, Twilio, Stripe, and Soundcloud all have amazing (and up to date, that’s really important) documentation, complete with thorough tutorials across multiple languages, getting started guides, detailed API overviews, working examples, and more. Their documentation makes it easy (and fun) to use their products and APIs.

And their documentation is easy to find and use. When I ran marketing at Acquia, we had all of our excellent product documentation behind the dreaded lead form, much to the dismay of the engineering team. I argued for it, because this form was one of the best sources of “leads” without consideration for the negative impact it would have on our developer brand.

Every few months or so, Acquia’s head of engineering would ask if we’d consider un-gating the documentation. And each time I refused, armed with the data showing how many leads were sourced via the documentation form.

But I was way wrong; the kind of mistake you make when you overweight short term goals like leads with long term objectives like brand building. Eventually we did the right thing and liberated all of our great documentation and you know what? All the developers who converted via our documentation forms ended up converting somewhere else on our site — webinars, product trials, etc — if they were really interested. None of our metrics went down.

Outside of documentation, creating great developer content requires deep focus and commitment. Developers aren’t going to read your lightweight ebooks and “10 awesome ways to speed your React.js app” listicles. Your content should try to be three things:

  1. Relevant. Is your topic relevant to your developer audience? Bring your own developers / experts / and community into the ideation process. It’s amazing how quickly you can fill a content calendar by just asking your users what they would like to read.
  2. Honest. Marketers love to spin. We love to write about all the game-changing, paradigm-shifting stuff our products do. But developers don’t grade marketing on the strength of our superlatives, they want to know what you really do.
  3. Actionable. Will the reader do something different or try something new as a result of your content?

For example, before the launch of Drupal 8 last year we turned a series of blog posts from Acquia’s Angie webchick Byron into the 40-page Ultimate Guide to Drupal 8. It’s still a popular resource for developers looking to move to Drupal 8, and it checks all three boxes.

Another example comes from Codeship, a continuious integration startup in Boston. With a tiny marketing team, they have built a blog newsletter subscription of over 65,000 users by providing detailed technical content on a wide range of topics. Some content is specific to Codeship, a lot of it isn’t. But all of it has been vetted for technical depth and accuracy, and is highly relevant to their developer audience.

The type of content doesn’t really matter — blogs, webinars, podcasts, etc. all can work. RapidMiner regularly gets over 2,000 people to register for our monthly webinars on data science. Andreessen Horowitz runs a great podcast on a variety of technical topics. Just make sure your content is relevant, honest, and actionable and it will do well.

Eliminate all your bullshit messaging

Most marketing copy is awful. The aforementioned David Churbuck of Acquia has a great perspective on the straight talk that is missing from marketing. David is former journalist, and the founder of forbes.com:

As a corporate communicator, a so-called “content marketer,” I have a conflicted view of the disease as both a carrier and critic. Without casting stones inside my own house, let me just say that I fight a constant, daily war against the forces of derivative babble-speak, and think, after over a decade within the walls of corporate communications (after two spent in journalism), that I understand the source of the pestilence.

David blames our jargon-laden bullshit addiction on the symbiotic relationship between: 1) the press, and their need to oversimplify complex technology 2) industry-analysts who reward vendors who speak with a common language and 3) Google, and our insatiable need to rank for every possible search keyword.

If you are really marketing to developers, then you need to write for them too. In plain English. Without hyperbole. And buzzwords. Developers want specifics. They want to know what you do, and don’t do, and exactly how you do it differently than whatever approach they are using today.

Take a look at your product page. Does it cover the specific technical details of your product, or does it regurgitate phrases that you are trying to rank for on Google or industry analyst-speak?

My colleague Ingo, the founder and President of RapidMiner, reminds me of this daily: there are over 1500 operators in RapidMiner Studio, but you’d never know it because we’ve buried them on our site. Our goal is to use product pages to narrow someone quickly into detailed technical documentation, tutorials, samples, etc. It shoudn’t take more than two clicks from the homepage to learn about exactly how RapidMiner does logistic regression or deep learning.

Note that the total bullshit filter doesn’t have to apply to your your mission/vision statement. It’s okay to aspire to inspire. For example, Kubernetes is “an open-source system for automating deployment, scaling, and management of containerized applications.” Yeah, that’s exactly what it is. But Nginx provides the more visionary “Flawless Application Delivery for the Modern Web”. But get to an Nginx product page, and you are one click away from the deeply technical content developers expect, like this on the Nginx Content Cache.

Lastly, if you are really the leading platform for something, you don’t really need to say it. And lets all agree to stop using “seamless integration”. There has to be a better way.

Make events a core part of your strategy, but do them differently

Developers love events. They are happy to spend their nights and weekends networking with their peers. Decisions that used to get made on the golf course are now being made over the weekend at camps, cons, and meetups. But your developer event strategy has to be more thoughtful than just sponsoring a tradeshow and staffing it with your sales team.

In some cases, you’ll have to do the traditional big tradeshows. If you sell security software, you’ll need to be at the RSA Conference because all your competitors will be there. If you are in the AWS ecosystem, you’ll probably sponsor re:Invent because of the huge developer audience. But don’t just staff your booth full of eager BDRs looking to scan “leads”. Make sure your booth is staffed with people who can answer technical questions and connect with the audience.

But there are lots of other ways to use events to reach developers without the high cost of big tradeshows.

Hold your own conference. Holding your first user conference is scary. You’ve got to build an audience from scratch. It’s expensive. You’ll struggle to get sponsors. You’re entire marketing team will be all hands on deck for months making it happen. But it’s so worth it, and it gets a little bit easier every year.

Jason M. Lemkin of SaaStr suggests that companies hold their first conference once they get to 100 customers or so, and I agree.

Participate in community events and meetups. The easiest way to get started with events is to find and supports the ones that are already happening. Chances are, there are already well established events happening around your product, and they would love to have someone on your technical team participate. Set aside some of your marketing budget to cover travel and arm your expert with plenty of swag.

Be creative, and have fun. You probably don’t have an unlimited marketing budget with and the ability to write a $500,000 check to become the Mega-diamond sponsor of every tradeshow. And thats okay, because brainpower and creativity scale much better than a marketing budget. Here are two good examples of creative developer campaigns:

  1. New Relic has given out well over 100,000 t-shirts, and credits them for a lot of their early traction. Seriously. Never underestimate the impact a brilliant developer wearing your t-shirt can have on a movement.
  2. DigitalOcean, in partnership with GitHub, runs an annual Hacktoberfest event to encourage contribution to open source. Make 4 pull requests from a bunch of open source projects and you’ll be rewarded with a fancy limited-edition Hacktoberfest t-shirt.

Why you should find a developer evangelist

Steve Francia was the Chief Developer Advocate of MongoDB, where he was responsible for the developer experience of MongoDB and led a large team of developer evangelists. He was an early employee and his evangelism team had a huge impact on the early traction of MongoDB.

What does a developer evangelist do? Their job is to lead the grassroots adoption of technology in a quest to win the hearts and minds of developers. There are lots of ways for evangelists reach developers — ranging from speaking at conferences to blogging code samples to participating in developer communities. Evangelists address the the trust gap that developers have with traditional marketing, and they provide unique insights back into the product team as they are often the closest to the users.

Whether or not they live in marketing doesn’t really matter, and they really shouldn’t. I’ve been lucky to work with two great developer evangelists over the past few years. eGandalf aka James Stout was a developer evangelist on my team at EPIServer. James was initially a customer and active participant in the EPIServer developer community forums. We hired James on the marketing team to increase engagement with our developer and partner community, through providing everything from direct mentoring and coaching to code samples and working applications for customers. James led our highly successly Office Hours program, a weekly Google Hangout covering a broad range of topics for EPIServer developers.

Even a single evangelist hire can make a difference. And the best ones aren’t made, they are found. Chances are there is someone already on your technical team who is playing this role, and would love to make the transition. So go find yours.

Categories
Uncategorized

When Sales and Marketing Best Practices Become Average Practices

No one got fired for buying IBM?

In the 80s, IBM dominated tech from the desktop to the datacenter.

Buyers often picked IBM because they were safe choice, not the right choice. It didn’t matter. Buying IBM became the accepted best practice for CIOs. It was an emotional decision, not a rational one. People generally don’t like taking risks, and IBM was the easy, safe choice. Of course this mentality led to high costs and failed IT projects, but at least no one got fired making a decision to buy IBM. Or did they? More on that later.

The same best practice phenomenon is happening today in sales and marketing. Most tech companies run the same sales and marketing playbook, including the Sirius Decisions lead waterfall, the sales specialization + BDR model taught by Aaron Ross in Predictable Revenue, inbound marketing from HubSpot, and so on.

Study these best practices. Learn from them. Be inspired by them. Implement some of them. But don’t blindly follow them just because you think everyone else is, because that makes them just average practices.

For example, the current BDR tactic du-jour gone wrong — the meme-laden breakup email. I know breakup emails sometimes work; they certainly got my attention when I first started getting them. But they are no longer fun or funny when I get tens of them a week.

Don’t follow the playbook. Be the playbook.

Truly great companies almost always pave their own way. They take best practices and make them even better practices.

The difference between copying a playbook and being inspired by one is understanding. If you really understand the problem you’re trying to solve, and there’s someone else doing it better than you, then by all means copy their idea but do it better. Make it yours. Good artists borrow, great artists steal.

For example, Salesforce re-invented growth for the SaaS era, as explained in great detail (111 plays!) by Marc Benioff in Behind the Cloud. Box later took the Salesforce playbook and adapted it to their land+expand freemium model. Companies like Slack and InVision succeed with a relentless focus on building beautiful, usable products, matched to a sales and marketing model that’s about eliminating friction in the buying process, not creating it.

But if you are implementing a best practice just because it’s the new thing that all of the hot startups and thought leaders are writing about, then take a step back and study the problem more or you’ll probably end up with something much closer to average than best.

In the end, people actually did end up getting fired over buying IBM. The 90s saw the accelerated rise of companies like Microsoft, Oracle, Intel, and eventually open source. Companies who held on to the IBM status quo for too long were exposed to competitors who could do things better/cheaper/faster with superior technology. The safe choice suddenly became the risky choice. The best practice became the average practice.

Categories
Uncategorized

Is Specialization Bad for Startup Marketing?

We’re starting to run a Scrumban process in RapidMiner marketing. Scrumban is a great way accelerate output by creating more transparency around priorities in the hectic world of startup marketing. We’ve got our Scrumban board, with all colorful kanbans beautifully laid out into various columns.

RapidMiner’s Scrumban board, blurred

As we get into Scrumban, we often find outselves blocked by kanbans that require specialized expertise. For example, our product marketing team is swamped with important messaging and enablement work. They can quickly become a blocker for the demand generation and events teams who require messaging for campaigns and tradeshow booths.

Our team structure is pretty typical of tech marketing. We’re a team of 7, and as our CMO I’m still pretty hands on with things. While I’m not particularly great at anything, I’m pretty good at lots of things. And I’m certainly not afraid to push myself out of my comfort zone to learn new things. In the Scrumban process I’m able to pickup any kanban and do my best to move it forward.

In a startup like RapidMiner, versatility is really important. Marcelo Calbucci coined the term Full-Stack Marketer, a reference to the full-stack developer who is equally comfortable working on back-end and front-end development projects. The full-stack marketer needs to be equally comfortable with writing content, optimizing for SEO, executing a campaign, expanding reach with PR, enabling the sales team, review metrics, etc.

Now it’s really hard to be great at everything, but maybe that’s not the point? Functional specialization becomes more important as companies scale, but for startups marketers being locked into the job description you were hired for limits your ability to impact the business. And maybe more importantly develop your own skills, especially if you’d like to run marketing someday.

The path to CMO is paved by versatility.

Categories
Uncategorized

You’ve been asked to cut your marketing budget. Now what?

Unicorpses. Layoffs. Bursting bubbles. Winter is coming. Every day there’s a new story on the 2016 techpocalypse.

Having lived through the 2000 dot com crash, this is nothing like it. But something has changed, so let’s start with a quick recap of how we got here. Starting in late 2012, tech companies began to raise massive funding rounds to chase growth. Here’s a chart put together by Tom Tunguz showing how the stock market once rewarded high growth tech companies:

http://tomtunguz.com/2013-ipo-characteristics/

Most of these companies are SaaS, which requires access to a huge amount of funding to run the business. Back in 2013 and 2014, money was plentiful. Private SaaS companies were able to raise hundreds of millions of dollars on the back of business plans that promised huge growth. And the market was so hot that non traditional investors — people like Wellington Management and Fidelity — jumped into the private company financing mix, often at much higher valuations than traditional venture investors were paying.

The most publicized example is Box, who grew revenue 110% in the year prior to their IPO but famously spent about 137% of its revenue in sales in marketing (over $170m!) to fuel the massive growth. The idea was that the SaaS unit economics of Box would eventually lead to a highly profitable business, where Box would a) “Land and expand” to keep net renewal rates well above 100% b) Lower sales and marketing costs to a more reasonable 35–40% of revenue range. While Box had to delay their IPO, ultimately they spun a compelling enough story to close nearly 70% higher on their first day of trading at close to a $3b valuation. But as we’ve learned in early 2016, markets go up, and markets go down. Box now trades at less than its IPO price, even though it continues to grow.

Nearly all of the tech IPOs from the past couple of years are currently trading below their IPO price. Private company valuation have taken an even bigger hit as they had further to fall due to the unusually high multiples they received in the recent past. Today, investors are no longer funding the grow-at-all-costs mentality of the past few years. They now expect companies to actually make money, or at least be able to paint a clear path to cash flow breakeven. While well funded public and private companies can hunker down and invest for the long term, not every company has a war chest of cash on the balance sheet.

So CEOs who once had access to unlimited private financing and/or a welcoming IPO market now must operate within the constraint of a reasonable burn rate… slowing hiring, cutting expenses, increasing gross margins, selling more…

And yes, cutting marketing programs.

Marketing programs are one of the few levers CEOs can quickly scale up and down. If you’ve been asked to look at cutting your marketing budget, here’s where’s to start:

Thank your CEO. CEOs are constantly faced with impossibly difficult decisions. Telling a high performing organization that they need to scale back can damage team morale. But as Heidi Roizen of venture firm DJF puts it:

You know what hurts morale even more than cost- cutting and layoffs? Going out of business.

Be transparent with your team. You can’t hide smaller budgets from your team, so include them in the budgeting process and help them understand the new constraints.

And maybe send them this post 🙂

Scale with brainpower, not budget. Rapidly growing marketing budgets creates bad behavior. People begin to equate their value to the company with the size of their budget, and makes it easier to spend on programs with questionable ROI. Pragmatic cuts to the marketing budget will help bring great clarity and focus back to your team, and eliminate the fiefdoms that sometimes form around budgets.

Most importantly, reduced budgets are a chance for your team to apply their brainpower, through developing new approaches, responsibilities and skills that might have been hidden by a bloated budget.

Eliminate the stuff you won’t measure. Marketing has gotten much better at measuring our impact on the business, and we’re pretty good at looking at how marketing spend across different channels drives leads, pipeline, and bookings. But there are still questionable “brand” investments we make that we’re not great at measuring — like PR. Jason Lemkin of Storm Ventures wrote a great post on how he measured PR at Echosign.

If you can’t commit to measuring your brand investments, then scale them way back. Or put much more effort into assessing their impact on the business and hold yourself accountable.

Stop buying leads. Joe Chernov of InsightSquared recently published a fantastic article on the rise of account-based marketing and marketing’s unhealthy obsession with the MQL. Many marketing departments operate on a spreadsheet model that sets MQL targets based on revenue goals and historical conversion metrics. That’s great, you should absolutely create that model. But your spreadsheet model is going to show that you need to create an unsustainable number of MQLs each quarter. This puts pressure on marketing to run expensive cost-per-lead programs to hit the lead commit. These less qualified leads then make your conversion rates worse, leading to your spreadsheet model telling you that you need even more leads next quarter.

This approach is broken. As Joe puts it:

Sales teams don’t need a torrent of minimally qualified leads; they need air cover.

Investing in account-based marketing is potentially a much more effective way for you to reach the companies who can actually buy your product. And it will help you better align sales and marketing by focusing efforts on a specific set of companies.

Take a hard look at events. Events can be difficult to scale back because they are often planned months or years in advance. But if you look closely, I bet you’ll find ways to cut back 10–20% from your budget without impacting the quality. People come to events to learn and network, so focus on the quality of your content and assembling the right people.