Category Archives: Best Practices

Posted On February 13th, 2018 by Crowded Ocean

How startups can avoid post-launch depression

The concept of the “trough of sorrow”, coined by Y Combinator’s Paul Graham, has clicked with Silicon Valley in a big way because it describes the very real trap that many startups encounter as they enter the market. They’ve invested so much time and money in the launch that they neglected to consider all the steps needed to maintain and leverage that momentum. It’s like two parents in the hospital nursery looking over the top of their baby at each other and wondering: Now what do we do?

The trough can be avoided with smart planning focused on content, lead conversion and nurturing with appropriate contingency planning. And you better be planning and executing on all these fronts, because in the first Board meeting after the launch, where you’re anticipating nothing but praise for your highly successful launch, the Board is going to give you your moment in the sun and then ask the same question as the parents of that newborn: Now what are you going to do?

It’s natural for market interest in your company to diminish to some degree in the weeks and months after your launch. But just as you went from 0 to 60 in the past two months, there’s no reason to go from 60 back to 0. This post-launch period is probably the first time that Sales and Marketing are coming under tough Board scrutiny—and it’s a time of transition for the founders as well. The creation process is over—we’re now in the growth phase. Which means everyone will be asking about numbers: lead pipeline and revenue first and foremost but also website traffic stats, lead status, and metrics. So you better be prepared.

Here are five steps to take to help you avoid ‘post-launch depression’:

  1. A 90-day plan: Easier said than done, but no startup team should claim they are ready to launch without a subsequent 90-day sales and marketing plan in place. The quarter after launch should be a fundamental component of the launch plan, its goal being not the interest generated by the launch into awareness, building inbound traffic, leads, and mindshare.
  2. Contingency planning: Every startup should have earmarked cash reserves to weather any post-launch setbacks. For example, what if the two offers you made to customers at launch don’t drive the clicks and conversions you forecast? If customers respond to door #1, rather than doors #1 and #2, do you have the money and resources ready to quickly tack with a new offer, content and promotion? Or, what if your competition leaps out unexpectedly with a new product that is similar to yours but 25% cheaper? Did you do some “what if” thinking prior to launch to help you mobilize a response quickly?
  3. Salute three chiefs: It’s a nice—and accurate—saying about early startups, that ‘Sales is everyone’s job.’ But ‘sales’ is one thing: revenue is another. In this post-launch phase you need a ‘Chief Revenue Officer’ (and it may be you): someone who is driving the sales process and making the company aware of where it stands vs. its revenue goals (which should be shared internally). That CRO should be a customer of the next ‘Chief’: your Chief Content Officer. This person should be continuing to add to the content on your website—fleshing out your market profile. But, more importantly, s/he should be generating fresh content that Sales can use to remain in touch with early customers, advancing the sales process by delivering new content that deepens their understanding and highlights the benefits of your product or service. Finally, someone on your startup team needs to be your “Chief Culture Officer” to keep a watchful eye on how the culture of your startup is evolving. That way, you can ensure that the attributes you aspire to are reinforced and even strengthened as your team expands. The Chief Culture Officer should be a team player who is tapped to “report in” periodically on how the culture is evolving and who can flag concerns for the leadership team.
  4. Content, content, content: As we said in our book, a startup can never have enough content. And that’s especially true post-launch. But with planning, you can build out a reservoir of content to support your demand gen programs, lead nurturing efforts, as well as content that can be quickly customized for new priorities that pop up.
  5. Listen, test, measure, and iterate: After launch, the path to customer traction also depends upon an iterative approach to messages, materials and focus. In other words, test what’s been done to date (and what response it generated), then tune your plan. Successful startup teams go into launch with the idea of listening, testing, measuring feedback and iterating their sales focus, content and tools based upon feedback and learning from the launch.Launch is a milestone in the long life of your company. Don’t make the mistake of thinking of it as the finish line.

Posted On January 30th, 2018 by Crowded Ocean

Startup CEOs: Overpay for initial employees

As 2017 ended, a number of forums asked startup CEOs the most valuable lessons they’d learned in their first forays into leadership. And the topic that came up the most was attracting and retaining those key initial employees.

The bottom line they discovered—and that we’ve seen in our work with nearly 50 startups—is that the days of the starry-eyed, ‘anything for the company’ employee are over. It’s a jungle out there—and the big animals (Google, Facebook, Apple) are offering both job security and top-dollar salaries.

So what’s a startup CEO to do? Well, first off, the one advantage you have over the Big Boys is founder’s equity. For many early/critical employees the romance of the startup is still there—especially if it’s complemented by stock. So use your equity both generously and wisely to attract—and most importantly, to retain—those critical employees.

Finally, at the risk of sounding like Dr. Phil, know your prospects’ “currency”—what matters most to them. If it is, in fact, currency itself, then you’re screwed, since you can’t compete with the Big Boys. But take a look at the imaginative practices of other companies (such as Netflix’s self-policing vacation policy) and put them to use in creating the kind of culture and environment that will make you attractive—initially and in the long term.

Posted On January 23rd, 2018 by Crowded Ocean

The Pros and Cons of Startup Interns

As a startup CEO, if your first thought when you hear the term ‘intern’ is ‘free labor’, think again. Interns—whether graduating college students looking for that first job or students getting credit—are a great resource. But only if managed directly and continuously. And there’s the rub.

Any intern, even those who may have interned before at another company, have to learn two things: the job and how the job fits into the company’s overall objectives. The latter is perhaps a one-time lesson from you, the CEO; the former is an ongoing process.

And that’s where the problem lies. Startups, for the most part, run lean and mean, which means that resources are scarce. If tutoring/training an intern is a quick, one-time process for your precocious self-learner, then great: you’ve got a good resource. But if it takes repeated training and coaching, think again.

More importantly, many key startup employees are inner-directed personalities (in other words, nerds with limited social skills). Which means they’re not the best trainers or coaches. Which can lead to frustrated interns who are either non-productive (don’t know the job and just churn) or requiring an ongoing level of maintenance that the startup can’t afford.

Posted On January 18th, 2018 by Crowded Ocean

Decision-Making: the essential cultural trait of startups

There is no single prescription for success for leaders of early-stage companies. Personality-wise, founders can range from transparent to ultra-secretive. Culturally, they can create perk-rich environments or go with Spartan surroundings. And when it comes to their leadership style, startup founders can choose from a number of successful models, from the consensus-driven to the dictatorial.

But there is one area in a startup’s early history that is a major determinant for long-term success: how decisions are made and communicated to the company. Because those initial decisions are critical, not just from a business or product perspective, but in terms of the cultural tone it sets.

Company-building experience trumps technical brilliance

It’s sometimes hard to say what brings employees to a specific startup: it can range from the track record of the founders to job titles to dress codes or the length of their commute. And of course, equity is always a factor. But regardless of the initial draw, none of those things will have staying power if each employee in the company doesn’t understand, contribute to, and feel a part in advancing the vision/mission of the company. Which brings us back to the decision process.

Decision-making is not for everyone

In an early-stage startup, every employee is heavily invested, emotionally and financially. Which translates into their believing that they should have a voice in company decisions. But herein lies the problem: most early-stage employees shouldn’t be involved in the decision-making process. Which poses a major problem for the first-time CEO.

For work-life balance and economic reasons, many of our startup companies are going ‘virtual’, with employee locations scattered around the globe. Managing these employees and making them feel a part of both the culture and the decisions shaping the company’s future is an ongoing challenge. Employing free tools like Skype and Google Hangouts, we encourage our startups from Day One to hold regular town hall meetings so that information is shared and so that the implications of decisions can filter across the entire team, regardless of location.

Good decisions come from diverse teams

This communication and collaboration is essential, since while good decisions can occasionally come from a single individual, in the long term the best decisions come from well-informed, diverse teams. Data shows that diverse teams make better decisions because different backgrounds and ways of thinking lead to better outcomes. In another study of the accuracy of decision making of groups, when participants were in diverse company, their answers were 58 percent more accurate.

Challenges to Participative Decision-Making

Despite the compelling data and logic behind adopting an open and participative decision-making culture, achieving it in today’s startup environment can be challenging for these reasons:

  • Early employees are often “narrowly brilliant” in their particular technical domain (aka “nerds”) with limited general business experience in building successful organizations that make and communicate decisions;
  • The structure of many startups today is “virtual”, with many key employees hired because of their domain expertise and track record. But vital team members working remotely can be a huge obstacle to communication and participation;
  • Instilling “ownership” across the team, from top to bottom, is a trait that startup leaders want to foster and reward, but only if it’s genuine. Ownership that’s recognized and rewarded typically makes people work harder. Even if a CEO is seriously top-down in his/her decision-making, we encourage them to find areas of genuine ownership, however narrow, for each employee.
  • Startups are always on. Critical business decisions regarding priorities like market segment focus or hiring decisions require real business experience, and often, there’s very little time for discussion. Getting participation from the right decision makers (with real-world company-building experience) is what counts.
  • It doesn’t matter if a CEO models him/herself on Hitler or Gandhi, as long as employees feel that their voices are heard and their ideas are fairly considered and evaluated. But CEOs need to distinguish encouraging participation across the team in a decision from assigning the ultimate responsibility and accountability for the decision.

The difference between participation and communication

Given the limited business sense and remote locations of many of their early employees, CEOs have an obligation to their investors—even to the employees themselves—to limit how actively they open up participation by employees in the company’s early decisions. Instead, we caution CEOs to open up participation in the “direction” of the company. But, cynical though it may sound, it is possible to “look” participative (through communication tactics like regular “town hall” meetings of all employees; published company business goals on Google docs and posted performance “actuals” against goals) while keeping the decision-making firmly in the hands of the management team. Because, ultimately, if employees feel like their ideas are appreciated and considered, and if decisions and their results are announced on a regular basis, employees will feel engaged in their company rather than cynically excluded from the decision making process.

Fake It ‘Til You Make It

It should be the goal of every startup to have a participative decision-making culture. But in the early stages we encourage our CEO’s to “fake it, ‘til you make it.” And as the company grows, and you’re able to hire professional managers who can build strong teams, your culture of “participative” decision-making will hopefully transition from altruistic goal to active reality.

Posted On January 10th, 2018 by Crowded Ocean

Startup CMOs Are Today’s Executive Unicorns

Virtually every industry has some version of the saying: “You want it fast. You want it cheap. And you want it good (or ‘of high quality’). Pick any two. That saying applies to one of the most valuable and strategic positions on the executive staff today: The CMO. And it also explains why everyone from Venture Capitalists to corporate recruiters refer to quality CMOs as ‘unicorns’, as in ‘impossible to find.’

Why is the CMO such a difficult job to fill? Much of that is attributable to the changing nature of Marketing. In the old days Marketing was a qualitative, or “feel” discipline: there were no real measurable standards. And so the CMO (called a ‘VP of Marketing’ in the past) was someone with a good feel for the market, who knew what strategies to adopt, what ads to develop, and how to communicate the intangibles of their value to the leaders in the executive and Board rooms.

But in the past two decades Marketing has transitioned from ‘feel’ to fact. Software platforms such as Marketo have created a tangible, measurable dimension to Marketing that never existed in the past. So the CMO, who might have been the only primarily right-brain (creative-focused) executive on the staff in the past, is now most likely as left-brain as the rest of his/her executive peers. According to the 2016-2017 survey by Gartner, enterprise marketing budgets as a percent of revenue continue to rise with a lot of growth driven by the shift to data-driven digital marketing investments. And yet the CMO has to still be able to recognize and manage individuals of a highly right-brain nature—and to communicate and sell their output to the higher-ups.

And that is only part of what makes CMOs so unique—and rare. In high tech companies, the CMO needs to be, in essence, a 3-headed beast:

  • Head One is steeped in product to the point that the CMO is welcome in engineering and product management discussions and is active in shaping the product roadmap.
  • Head Two is strong in traditional product marketing steeped in customer needs, technology integrations, trends and issues, and able to drill down on specific use cases or applications to help translate customer needs to product management/engineering.
  • Head Three is strong in both traditional “corporate marketing” and its derivative, “digital marketing,” with its proliferation of tools, channels, content marketing, and metrics.

Good luck finding a CMO with all of these qualities. Because individuals with all of the above often have a different job title: CEO.

In the world that we inhabit—technology startups—the CMO is often the last hired and the first fired. Why? In addition to all of the above, there is the issue of sequence. Founders often do the Product marketing themselves and then bring in a CMO with strong go-to-market, Corporate Marketing skills to launch the company and generate early sales success. But once that launch takes place, the need for those skills diminish and the need for a product- and technology-centric CMO rise. Which often means the initial CMO is shown the door—or demoted.

On the flip side, if the company goes with a product- or technology-centric as their initial CMO, that person has probably never launched a company or developed an initial go-to-market strategy. Which means they’re just as likely to be shown the door as their Corporate Marketing peer.

So the challenge for today’s CEO isn’t always finding the right CMO—it’s keeping and developing them once they’re hired. Which means recognizing their orientations (right-brain vs. left-brain; product vs. corporate marketing), helping them develop the sides where they are weaker, and hopefully winding up with a unicorn of unique and lasting value.

Posted On December 22nd, 2017 by Crowded Ocean

How is “momentum” part of a startup’s “secret sauce”?

When a startup team is heading into launch, ‘momentum’ can be that intangible ingredient that helps fill in gaps in execution, blurs missteps and invigorates a team that is flagging from staff shortages, high expectations and competitive pressures.

Success, according to the “Yoda of Silicon Valley”, Sam Altman, CEO of startup accelerator Y Combinator is:

something like idea times product times execution times team times luck, where luck is a random number between zero and ten thousand.”

In other words, who the hell knows. Or, if someone did know the secret to a winning startup, there’d be an algorithm for that.

This 2016 article in the New York Times contrasts the “mojo” of social media favorite Snapchat to the tumbling fame (and valuation) of Twitter. In the recent past, it was Google vs. Yahoo or Slack vs. Hipchat. The point that matters is that momentum can be a powerful force that helps accelerate success in startup teams.

So how do you foster momentum across your team? From our vantage point as CMO guns-for-hire, teams with momentum share a few basic attributes that are always modeled by the founders. These may not be all of the steps to momentum, but they are our top favorites:

  • Goal setting: Everyone on the team knows what the company goals are and how their own job goals support those goals.
  • Accountability: Maybe it’s an individual or maybe it’s a team but there’s an owner for every deliverable and it’s understood across the organization, from top to bottom.
  • No excuses: When mistakes are made, they are acknowledged and the team pulls together to fix them and move on. No finger pointing. No blame.
  • No assholes: When there’s a new-hire who’s a bad fit, culturally, or who brings a toxic style to the office, they never last long. Mistakes in hiring happen, unfortunately. But life is too short to tolerate them.

Posted On December 14th, 2017 by Crowded Ocean

Four reasons to invest in a “soft launch” of your startup

Launch day for a startup is a major milestone for the entire team – founders, investors, customers, partners, suppliers, employees and their families.

In the world of technology startups, launch day is typically when a startup steps out “officially” (out of stealth, out of beta) to make its product or service widely available. Launch says the startup is ready to stand up to public evaluation and scrutiny of its product and value; typically, it is also when the team has invested in PR to generate favorable coverage and inbound traffic to garner visibility that can turn into new business.

But sometimes a startup team chooses a “soft launch.”

So what is a “soft launch” and why do it?

A soft launch is usually phase one of a two-phase launch that involves a greater focus on the company than on the product. It may focus primarily on the founding team, its space and the funding it has received. It may also involve a “limited” release of the product but without significant details.

Here are four motivations for a soft launch:

Recruiting – startups, especially in the super-heated and super-competitive job market of Silicon Valley, will often “soft launch” in order to use the visibility it generates to be able to recruit top talent to build out their team.

Competition – with an ear to the ground, a startup may believe that a competitor is going to beat it to market. In order to be first – to define the market need on their terms and to set the stage for why their technology is superior – many startups will launch in two phases, with a soft launch intended to blunt the competition and relegate them to followers.

Buzz-building – to be the shiny new thing in tech – even in a less sexy, geeky market segment – can be a very valuable, momentum-building period. Social media and press buzz can help a startup accelerate recruiting, fundraising and customer development.

Enterprise-ready – large enterprises are more sophisticated these days about the value of new technology from young startups. But that doesn’t mean they want to risk a vital portion of their IT operation and budget on a product from a newly minted startup. But, the market validation and favorable coverage by analysts and press of a soft-launch can convey a great deal of legitimacy to a young startup that can help it close pivotal deals with early-adopter, brand-name enterprise customers.

 

Posted On December 12th, 2017 by Crowded Ocean

3 new terms in startup-land

Have you heard of these new terms?

Capsule network: an advanced approach to AI that researchers are using, instead of traditional neural networks, to teach computers to “see” and recognize objects in the same way that humans do.

Ambient AI: industry insiders predict that the addition of AI development tools into cloud computing platforms will automate machine learning and accelerate the development of new software applications and services.

Blank-check IPOs: According to this article in the Silicon Valley Business Journal, “blank check IPO” firms are designed to help the companies they buy go public without all of the cost and disclosures of doing an investor road show and IPO themselves.

Posted On November 28th, 2017 by Crowded Ocean

Anatomy of a Successful Startup Launch

Ask anyone in Silicon Valley and they’ve got their theory about how to launch a startup. There are plenty of startup founders (Slack, Atlassian) and industry watchers who will proudly boast that you can launch a unicorn without marketing. But then there are the 90 percent of startups that have to dig in and build their customers and grow their enterprise click by click, demo by demo, free trial by free trial.

Here’s our advice for the 90 percent:

1 – launch with a cross-functional team – According to a feature in the Harvard Business Review, 75% of cross-functional teams are dysfunctional. That stat caught our eye because the heart of every successful startup launch is the launch team—which by its very nature is cross-functional. That’s product, support, sales, marketing, and the CEO/founder coming together to introduce a new solution that solves a real pain point. The dependencies, tradeoffs and decisions that need to be made to meet the goals of launch can be made faster and more effectively with a cross-functional team. And with an experienced marketing pro chairing the team, your startup can banish dysfunction.

2- tops-down support is essential – if you want your launch to happen fast, be sure to include the CEO or co-founder on the cross-functional launch team. The CEO is a member of the launch team, not its leader. The leader is your head of marketing or CMO. You want the CEO there to reinforce the importance of goals, deadlines and accountability, and when tough decisions need to be made, it’s easier when the CEO is at the table not coding or pitching new customers. Without the CEO engaged, the CMO will likely have to spend more time socializing options and hunting down decisions and less time getting everything done.

3 banish pixel polishing – part of the Steve Jobs legacy is his famous (and infamous) attention to the details of Apple product design that bordered on obsession, a habit we call “pixel polishing.” Now Jonathan Ive and Elon Musk are celebrated for their same rabid focus on product details — admirable but a huge obstacle for a startup preparing to launch. A startup team in launch mode doesn’t have the time or the money to afford to do any pixel-polishing. Just say no to pixel polishing and yes to “good enough.”

4 – beware nomadic board members– when board members start chiming in to “help” give feedback on messaging and marketing strategy, that’s often problematic. In fact, when we see board members dropping in to the startup’s offices frequently prior to launch, it’s usually a red flag. That often signals that the CEO is not strong enough to manage his board out of the way of his team. In launch mode, feedback can be hugely valuable. But, it’s better to get feedback from early customers, not board members.

5 – bring PR to the table early — there are strategic PR firms that can participate “upstream” with startup founders to nail down the positioning and messaging that’s core to launch. They can bring their experienced outsider perspective to build a solid story that will attract attention and followers among media, analysts and industry influencers. Then, there are “downstream” PR firms that are waiting to be handed the story. Hire the former, not the latter. Launch is too important not to invest in hiring an experienced PR team that will challenge assumptions, build and test the message and advocate their point of view at the table.

6 it’s never too early to build content – when a launch is delayed, it’s usually one of three reasons: product issues, customer problems, content delays. You can never have enough content and the way to avoid delaying the launch because of late or missing content is to start launch planning early. No, you don’t want to start drafting content before the messaging and customer targets are baked. But since iteration is a way of life in startup marketing, start drafting content early to hit your deadlines.

7 website UX trumps brand – if the founder starts talking about favorite brand colors and fonts, that’s another red flag. The most important thing for your launch website is designing the information architecture and content to drive conversions. Yes, design is integral to a successful site. Yes, building your brand is a process that starts with launch. But you need to focus on content and conversions first, or you’ll wander off into discussions of fonts and colors. See dangers of pixel polishing above.

8 anticipate the trough — before you launch, be sure to have at least two months of demand gen programs defined, funded and queued. Otherwise, you run the risk of allowing all of the visibility, brand awareness and site traffic from early adopters to vaporize. To leverage the blood, sweat and tears of launch and leverage early market momentum to build early sales, avoid the post-launch trough with smart planning.

 

Posted On November 21st, 2017 by Crowded Ocean

3 everyday lies you will hear at startups

Celebrated Venture Capitalist Ben Horowitz 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.

  1. 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 than 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.