3 everyday lies you will hear at startups

We like the truth-telling in the new book by celebrated VC Ben Horowitz who has called several familiar management mantras “just stupid.” So we thought we would share three comments we hear at startups that are just false – or hopelessly naïve–and then our take on how to interpret them.

handle the truth1.  We have no politics. This timeless adage is complete fiction. Like every family, every startup has its characters, power structures and power plays. The key to success in any organization – large or small – is to balance the effort you spend on your ideas, deliverables and internal advocacy with the time it takes to make sure your ideas and deliverables are completely aligned with the goals of the company. Our advice: In other words, we’ve seen plenty of good ideas die because they weren’t sold and supported by the right folks in the organization. Do your homework on how the organization makes decisions to be sure you’re cultivating support among the key influencers.

 2.   We have a very flat organization. This one makes absolutely no sense. Every startup starts out flat, if only because it’s tough to have a hierarchical org chart when you only have six employees.  But very quickly you’ll have a hierarchy of:  founders; C-level (C_O); V-level (VP of__) and Directors—if not in title then in practice. The founders are the passionate, single-minded believers that raised the money and quit their day jobs to build a new company around a new idea: they get more than one vote. Every startup has people in the organization who, despite the title on their business card, get to weigh in on decisions and influence the outcome.  If you’ve joined a startup and you haven’t figured out how to tap into the founders’ brain trust in order to sell your ideas…well just make sure you keep your resume updated on LinkedIn. Our advice: after you figure out the “what” of your job, don’t get seduced into thinking that you can “just make it happen” by lunging ahead to implement your ideas. Take the time to figure out “how” you’re going to sell your idea and advocate with the key decision makers and influencers on the startup team (the ones with the most votes).

3.   There are no stupid questions.  Actually, there are. Or, put another way, “There are stupid people answering questions.” How many meetings have you been in where a new-hire asks a question that’s just off-the-wall. And, yes, when you’ve just joined an organization, you can slow progress (as well as make a lousy first impression) by jumping in too early. Our advice: if you’re new on the team, get the lay of the land first. Learn the product. Listen a lot. And pay attention to the team that’s customer facing. Then after you’ve gotten integrated into the team, dive in with your questions. That way, you’ll be more credible and you’ll have real context for your questions and observations.

 

Startup marketing: UX and Your Brand

One of the more positive developments we’ve seen in the tech industry is the increased emphasis that companies are putting on the user experience, even to the point of having VPs of UX as part of the management—even founding—team.UX

In most cases, because the VP of UX has a strong visual and design orientation, they’re involved with the early stages of brand development—the logo, the initial website, the color palette for both the product and the company. They come to regard themselves, officially or de facto, as the creator—and keeper—of the brand.

The problem with this hiring sequence (which we think is the right one) is that the VP of UX precedes the VP of Marketing (or CMO) into the company. But ultimately it is the CMO, not the VP of UX, who owns the brand. Which means that one of the first things a new CMO has to do is displace or sideline a key member of the management team, hardly the most auspicious of beginnings.

What we counsel our clients is that it’s the CEO’s job—not the CMO’s—to explain to the VP of UX that, while the engineers at BMW are responsible for delivering a phenomenal driving experience, they don’t own the BMW brand. Marketing does. And to avoid any politics or bruised feelings, the CEO has to have this conversation with the VP of UX at his startup before the CMO sets foot inside the building.

VC’s and Their Startups: Goldilocks at work

We’ve launched almost 30 startups, and worked with almost as many VC firms. In the process we’ve seen a wide variety of ways in which VCs get involved in the companies they’ve funded. But when we look back on them, they seem to fall into three broad categories:

The Hands-Off Banker: These guys invest in companies whose financial prospects look great; then they keep their distance. They are a great resource for financial decisions, but rarely involve themselves in operational or development decisions.

The Hands-On MicromanagerThese guys torture every detail, and in the process torture everyone around them. While they’ve got great operational experience, they don’t give the founders the freedom to make mistakes or grow. And they burn out the teams they work with. The result:  they get a lousy reputation within the startup community and sometimes aren’t invited into the next deal.

The Involved Advisor:  Actually, the majority of our VC partners fall into this category (some more than others). They may have started out in one of the above categories, but experience and lost business have taught them that they don’t have the time or the domain experience to run the company—that the best approach is to be engaged without being dictatorial or so detail-oriented that they run the risk of not being listened to at all, even on the bigger issues. They have strong opinions but are willing to listen to counter-arguments.  In this way they add the value that the founding team hoped it was getting when they went with them in the first place.

More new terms in the land of startup marketing

Memory-parsing software – the hackers responsible for the recent security breach at Target allegedly used memory-parsing software to infect point-of-software systems including cash registers and credit-card swiping machines.

Honey encryption – the new way hackers are lured and caught.

Social learning – startup teams can use the power of social physics to explore and tap into new ideas from social networks and then build upon those ideas for better decision making.

Thick data – companies can harness the power of big data by understanding the full texture of the data, including the emotional and visceral components of how their customers experience their product or brand

Why your startup needs a “no assholes” policy

In a recent interview with a British publication, Suresh Vasudevan, the CEO of Nimble Storage (a former Crowded Ocean client), was asked about hiring practices. His response:Screen Shot 2014-03-22 at 8.50.31 PM  “First, we do not hire jerks. If I can choose between an arrogant rocket scientist and an agreeable guy that I love to work with – that isn’t quite as talented yet, I choose the latter.”

We couldn’t agree more. In the startup world genius is essential, but so is chemistry. So we agree with Suresh:  if you’re trying to build a company for the long run, hire a bunch of good guys (7-8 on a scale to 10) who can work and build together rather than a few asshole 10’s.

Why are there so many assholes in the startup world? It all goes back to Steve Jobs. While we have the same awe for Jobs as the rest of the world, he has validated boorish and bullying behavior. When we confront the assholes with their behavior, they justify it by playing ‘the Jobs card.’  And we have to gently remind them that there was only one Steve Jobs.

The ‘no assholes’ philosophy applies to vendors as well. Over the years some of the best websites Crowded Ocean has helped create have been produced by a single firm. Great work, but it comes with a price:  serious attitude. So when our clients move on to new ventures and contact us and we start talking website, they all say the same thing:  “I’ll never work with that asshole again, no matter how good the work.”

So if you want a short-run company—one built on a single big idea and immediate success—hire a genius asshole. Otherwise, hire good guys who are in it with you for the long run.

 

Lost at sea – can startups stand out at tradeshows?

As a rule, we counsel our startup clients to avoid trade shows in their first year of existence. First off, a trade show can cripple a startup, since it consumes a young company’s lean resources, human and otherwise. trifacta boothSecond, the most they can usually afford is a 10’x10’ booth (usually a rental), which hardly communicates a sense of leadership or longevity.

We normally recommend going to shows where every company gets the same booth and the same opportunity.

How a startup does it right

But there’s an exception to every rule. And in our case that exception was our client Trifacta, the new Big Data player. Five months ago, when we started working with them, and we built the marketing launch timeline, making the annual Strata Conference in February a focus made perfect sense to help scale the company. trifactakeynoteAlong with our PR firm, Lewis PR, we formulated a strategy where we created buzz and expectation during January, launched Trifacta in early February and capped it off at the Strata Conference the following week with a strong mix of investments that would normally run counter to best practices.

Go big or go home

The showcase of the company at Strata included:

  • A 90-min tutorial by two of the founders, luckily sandwiched right before the opening of the exhibit showfloor
  • A sponsorship that included a 10×20 booth and a 40-min speaker session and demo before a capacity crowd of 100+
  • An opening keynote for one of the co-founder and VP of UX before a capacity crowd of 500
  • Special “office hours” for two of the co-founders

After each speaker session the booth was packed, sometimes up to five deep. And the team was able to leverage the annual conference to set its own events: private customer briefings, a private customer dinner, partner meetings and briefings with the media and market analysts.

trifactabreakoutPress coverage grew exponentially, and social media exploded. The client was justifiably ecstatic.

Critical benefits for sales focus and team training

Some of the under-reported benefits of a tradeshow that every experienced marketer appreciates is that a tradeshow catalyzes the team in ways that bring long-term benefits for the company. For example, the Trifacta team is now much better versed at social media best practices after being rallied to use social channels to share new content and market feedback at the tradeshow. Additionally, all of the one-on-one interactions with prospects in the booth have helped to turn a team of mostly engineers into much more sales-focused team. .

So has all of the above changed our minds about trade shows? Not really. Given the limited resources—financial and otherwise—that startups have, we don’t find the ROI there to justify the participation. But there are always exceptions, and in Trifacta’s case we all agreed that we had the opportunity to maximize a ‘perfect marketing storm’. And we did.

The Crowded Ocean Startup Marketing Manifesto

Startup founders and their VC sponsors need a reality check when it comes to finding and hiring their VP of Marketing.  They’re looking for a rock star with skills in all major marketing specialties—from HTML to Marketo to analyst relations to writing their own ad copy. And then they’re surprised when their search takes 6 months and still yields a less than perfect candidate.

What we see, therefore, is the need for clarity on the charter of a successful VP of Marketing. In the age of manifestos, we’ve dubbed this our own Startup Marketing Manifesto:

  • Own the plan; rent the deliverables:  The mix, orchestration and sequence of the marketing deliverables is what an experienced head of marketing can make happen. You can hire specialists – e.g., SEO, video, writing – on demand. But the marketing plan must come from the leader.
  • Sales first; brand second:  Even in the age of UX-centered startups passionate about delivering a consistent and unified user experience, it’s an almost rabid focus on customer development that drives early market traction.
  • Content is your website:  The ability to drive conversions on your website, to nurture leads to sales, and to equip the sales team with the right tools starts with compelling, consistent, quality content.
  • Iterate on your use case, not your message:  Listen to your early customers to inform your message but don’t over-react to feedback from a handful of early wins.
  • Study, pilot and test:  There is no “single tool” approach that will accelerate customer acquisition and shorten time to revenue. It’s the job of the VP of Marketing to bring a toolkit approach, a knowledge of “best practices,” and a willingness to pilot new ideas and measure the results to figure out what works.

We’ve written about manifestos before here. And here’s more on the startup marketing toolkit approach.

 

 

Shit CEOs Say: If you know your market, you don’t need research

Most of our postings for ‘Shit CEOs Say” come from startups, who are creating a company for the first time and can be, in part at least, forgiven for their naivete.This week’s startup marketing gem comes from someone who should have known better: a long-time CEO for a billion-dollar software company.

Years ago, when I was running Corporate Marketing at this juggernaut, we were in the process of changing our advertising agencies. The incoming agency, at that time regarded as the best advertising agency by a long shot, wanted to do some pre/post testing to see how our company was regarded in the market—and what we could do to leverage the strengths and obviate the weaknesses. But the CEO vetoed the project, saying:  “Research only tells you what you already know.”

Years later, we finally did the market research. And the company fared extremely poorly in market perception. I’ll always wonder if we could have changed that had we gone ahead with the research and acted on what we found.

Does your startup need a manifesto?

When a leader writes passionately about what drives him – whether they’re principles, design tenets or “religious beliefs” – the crowd takes note. Sometimes those principles are articulated in a powerful declaration that’s been dubbed a manifesto. Politics is a great breeding ground for manifestos, from Karl Marx to the 36-page manifesto from terrorist mastermind Khalid Sheik Mohammed to the Unabomber.Screen Shot 2014-02-23 at 12.11.41 PM

Recently high-tech companies have gotten into the manifesto game. Currently the crowd is marveling at the “radical purity” of the principles that gave birth to the wildly popular texting app called WhatsApp, purchased by Facebook last week for $19 billion. Those principles are articulated in a handwritten manifesto of the two WhatsApp co-founders.

We favor manifestos over vision statements because they capture the passion that a startup team has for over-turning the status quo. While vision statements have their place, and crafting a vision statement can be a powerful process for a leadership team to undertake, we think a manifesto can really capture the disruptive spirit of a team.Screen Shot 2014-02-23 at 12.14.36 PM

Manifestos are often more genuine because they’re written in the early days of a startup, when the founders have far fewer stakeholders to satisfy. Written from the heart, they capture the zeal of the founding team and make the company feel less like a commercial venture and more like a cause.

As an example, here is the manifesto from Contently.

And here is the manifesto “Revolution: Data + People” from our big data client Trifacta that launched their new data transformation product last week.

And in keeping with the annual tradeshow for security professionals known as RSA that opens this week, here is the notorious hacker manifesto that is a call-to-arms for hackers worldwide.

So consider adding a manifesto to your startup toolkit. You’ll be surprised who joins the cause.

Are we in a “post-launch” era of startup marketing?

The mainstream culture has embraced the “post-PC” era in which computing is on the go and the desktop is no longer the center of computing for mobile workers. With 2014 forecast to be the year in which the number of smartphones and tablets outnumber desktop computers, one could argue the post-PC era is now.Screen Shot 2014-02-17 at 8.22.01 AM

And in case you missed it, global brands like Gucci have embraced a “post-logo” era in which their brand values are more experiential and infused in their products rather than imprinted on them.

All of this “post” era talk got us thinking about how startup launches are changing and asking whether startup marketing has entered into a “post-launch” era?

  • Company vs. product launch:  Depending on a startup’s goals, there is value in a one-two punch of launching the company first, and product second. This timeline can enable a startup to “look real” to risk-averse enterprise buyers during the early days when a startup is nurturing a handful of early customers, iterating on product features based upon early customer feedback, and defining its market focus.
  • Staying stealthy:  However, some startups – particularly those led by serial entrepreneurs with brand-name investors in market sectors like security or big data – see no need for the one-two punch. These teams are satisfied to stay stealthy and to work out their product and market focus out of the glare of the media and market. Often, we work with these startups to define their positioning, build their story, content and sales tools and to take a much slower ramp to launch.
  • Risk-taking CIOs: More and more, VC firms help their startups to directly cultivate early-adopter enterprise customers. In so doing, it turns out there’s less dependency on launch to deliver the market validation that startups need to build their sales momentum and scale their company.
  • Talent wars: The downside of the stealthy approach means it’s harder for a startup to look established to would-be employees, partners and customers. Some say that there’s always been a shortage of talent and that the idea that you have to launch to attract “A” players is false. But experienced startup marketers know that a launch can be a catalyzing event in the life of a company that drives critical decisions and focus.
  • Freeze the sale: If a startup is trying to disrupt the market with a new approach that challenges the status quo but finds itself trailing another new entrant, that could be a reason to push for an early company launch. The focus of the launch becomes to blunt the competitor and buy time for the product development team to deliver.  In this case, if the startup’s product is behind, it’s essential to build a website and PR strategy that is strong on ‘Vision’ and differentiates the company and product from the competition.

The bottom line, when it comes to launching a company, is that the big-time ‘Launch’ died a natural death a while ago. There are multiple flavors of launches—the key is to find the one that fits your product, timing and market.