Category Archives: Sales-Based Marketing

Posted On October 12th, 2017 by Crowded Ocean

Startups: Mission, Vision and Purpose statements

Readers of this blog know that we’re not big fans of ‘Mission Statements’. Even for those companies who aspire to—and perhaps even achieve—the goals of their mission, these goals are too often vague and euphemistic. Worse, they’re self-directed, focused inward, rather than out towards the market. In the early phase of building a startup, we practice sales-based marketing* and mission statements rarely helped your sales team open doors with critical early customers which is another reason we’re not in favor of them.

Purpose Statements, not Vision Statements

While we like ‘Vision Statements’, often as an early slide in an investor deck, there is an even better ‘statement’, one that combines Mission and Vision: the ‘Purpose Statement’. It has the benefit of being pragmatic, answering the question “Why are we in business?” More importantly, it has multiple audiences: for investors, a well-written Purpose Statement is more pragmatic than most Vision Statements. And for employees, a CEO can stand in front of a Purpose Statement and say: “This is what we’re all about. If your job isn’t in direct support of this statement, then we either need to change your job’s objectives or change the statement.”

Take a step back

Our suggestion: if your team is laboring over your Vision or Mission statements, take a step back and look at why you started the business in the first place. Then go from there.

* Sales-based marketing: The job of Marketing comes down to 3 words: Make Sales Easier. If it doesn’t initiate new sales, shorten the sales cycle, or make repeat sales easier, don’t do it.

Posted On October 4th, 2017 by Crowded Ocean

More new jargon in startup-land

Flow: to push back on the tyranny of deadlines, email, and interruptions of social media that makes us surrender to our devices, evangelists are encouraging us to pursue “flow” which is a state of being so engaged and concentrated on a single pursuit/thought/project that we lose track of time. In achieving flow, proponents say you can integrate the mind and body into “embodied cognition”.

ICOs: that’s “initial coin offerings” that are an alternative to venture funding. According to this feature in the Wall Street Journal, “the main reason to do an ICO is to use the token as a means of exchange for a real blockchain technology for some tradable digital asset, but many startups are using ICOs just to raise capital,” said Ethan Kurzweil, a partner at Bessemer.

Moral disengagement: when a problem, rule-breaking kid grows up to be an asshole, law-breaking entrepreneur (think Martin Shkreli), researchers call that “moral disengagement”

Backdoor IPO: a “special purpose acquisition company” (SPAC) is an alternative investment path for startups to tap into public market without the roadshow, publicity, etc. For VC-backed companies, a SPAC could restart the IPO pipeline that has been stalled for years. According to this article in the Wall Street Journal, “unlike a traditional IPO, SPACs first raise money through a stock offering and then hunt for a deal on which to spend the funds raised. CNBC explains the role of the SPAC, or so-called “backdoor IPO” here.

Bone conduction audio: Amazon is pioneering a new way for a wireless personal device to be heard without having to insert headphones. First application will be a pair of “smart glasses” (remember “glass-holes”?) that will enable the user to access virtual assistant Alexa.

 

Posted On September 26th, 2017 by Crowded Ocean

How to make your company vision more like a cause

If you want to make your company vision feel more like a cause, write a manifesto. Here is our manifesto for building the ultimate startup.

  1. Hire the core and outsource the rest. Companies that distinguish their core (sales and go-to-market strategy, technology, product roadmap) from what can be outsourced or hired on-demand maximize flexibility in the face of a changing market dynamics and competition. For example, the program mix, orchestration and sequence of the marketing deliverables is what an experienced head of marketing owns. But, he/she can outsource to specialists deliverables such as SEO, content development, PR, event marketing.

 

  1. Pick your board carefully. Experience and true partnership trumps valuation. A team of experienced investors and advisors can help cultivate and coach a good team to become great. Worry about the structure of the deal (liquidity and preference) more than valuation.

 

  1. Leadership comes with a sell-by date. The familiar tropes of successful startup leaders are the demanding dictator with a mercurial temperament; the brilliant engineer with stunted social and leadership skills; the cerebral and brooding visionary. These are stereotypes today because we’ve seen them at the helm of successful startups over and over. But as soon as the sales numbers falter, out goes the leader. Nowhere is the tenure of the CEO more limited than in an early-stage startup. That’s why startup leaders have to constantly, relentlessly be vigilant that it’s the company that must triumph, not the leader.

 

  1. The most important attribute of company culture is how you make decisions. Successful startups understand where they are on the spectrum of company culture. Culture that matters has nothing to do with whether there are bagels on Wednesdays or free neck massages or whether there is a ping-pong or a foos-ball table on site. Successful companies can be consensus-oriented. They can be transparent or secretive. The but the core of the culture that matters is really all about how decisions are made and better decisions come from well-informed, diverse teams. Diversity as a value

 

  1. Team trumps technology. Smart teams can solve product-market fit misfires. So there is nothing more important to long-term success than hiring the right team. Assume you will make hiring mistakes, so recognizing and firing as early as possible is essential. Salute the industry data that shows diverse teams (gender, ethnicity, psychological) make better decisions and seek out diversity from the beginning.

 

  1. Nail down your positioning during your customer development phase. As you invest early in customer development to identify the profile of the target buyer and use case for your new product, build in time to start nailing down your positioning and messaging. Then, it’s the job of the VP of Marketing to bring a toolkit approach, including a knowledge of “best practices,” and a willingness to pilot new ideas and measure the results to figure out what works to gain early market traction for your new product out in the market.

 

  1. Successful marketing is upstream and integrated. There are steps in the agile software development process – frequent sprints, testing, iteration, repeat – that are popularly applied to company building as part of the “lean startup” mantra. But when it comes to marketing, startups still need to integrate marketing across all sales channels and across all functions and this takes experience and the discipline of planning. Protect your go-to-market strategy as “core”, so it can have its greatest impact positioned upstream in the planning process, at the management table, and right along side customer development.

 

  1. Sales-based marketing accelerates customer acquisition. If it doesn’t initiate sales or make repeat-sales easier, don’t’ do it. An almost rabid focus on customer development first, is what helps drive early market traction. But marketing still requires piloting, testing and measurement to figure out what works. There is no “single tool” approach that will accelerate customer acquisition and shorten time to revenue.

 

  1. Launch is one milestone in the process of building a company, not the finish line. Startups say they launch to “legitimize” their business in the eyes of customers. Some startups say that launch is needed to be able to attract the right talent to build their team in a competitive job market. Still others say launch is about wooing future investors and channel partners. Many say it’s all of the above. Bottom line, launch is about investing in getting your story out in the marketplace in a powerful, differentiated, memorable and unified way in order to connect with stakeholders in order to grow and scale your company. Launch is a milestone in the long life of your company. Don’t make the mistake of thinking of it as the finish line.

 

  1. There can never be too much content. Building market awareness and sales preference for your product requires a boatload of content. Your ability to capture the imagination of your target buyer and to break through the market noise requires a steady stream of new, fresh, updated content. Whether it’s written or rich media (audio, image, video), it’s got to be accessible and shareable and increasingly, it has to be personalized and snackable. Equipping your sales team or channel with the right tools to reach your prospect starts with compelling, consistent, quality content.

Posted On September 12th, 2017 by Crowded Ocean

Do you speak Silicon Valley? Test your vocab

Dark UX: the UI architects at sites like Facebook are investing in research and testing of subtle changes with “persuasive technologies” to their site to go beyond “increased engagement” by users to foster non-stop interaction, and critics say addiction. There is a sliding scale of intrusiveness, manipulation and safety attributes to elements of Dark UX say industry watchers.

SPAC: the new “special purpose acquisition vehicle” is an alternative route to public ownership for tech startups. According to this article in the Wall Street Journal, “unlike a traditional IPO, SPACs first raise money through a stock offering and then hunt for a deal on which to spend the funds raised.

Liquid democracy: making the power of the vote a digital capability that is combined with blockchains to make it secure as well as borderless. Theoretically, this would be the system that would allow a voter to delegate their vote to someone to represent them. The New Scientist explains in this article. There is even a Liquid Democracy organization based in Berlin.

Biohacking: the latest craze in self-improvement in Silicon Valley combines intermittent fasting with tracking of vital signs like body composition and blood glucose levels.

Posted On August 29th, 2017 by Crowded Ocean

Why is the CMO role at a startup a turnstile?

Crowded Ocean spoke last week at the annual National Venture Capital Association (NVCA) meeting about a new framework for building an effective marketing program for enterprise startups. We call it marketing-as-a-service (MaaS).

This recent article in VentureBeat explains the MaaS model and how it works off of three basic principles:

  1. Hire the CMO last;
  2. Justify every hire;
  3. Hire only for the core; outsource the rest.

Below are answers to three of the top questions about MaaS that we addressed at the NVCA meeting and also on this new podcast entitled “How to find the right CMO for your startup”:

  1. Isn’t the problem that there is simply a shortage of trained marketing professionals?

Actually, the problem is that there is a different marketing skill set required during different phases of a startup’s life. The first phase is product management which is a highly technical focus on defining the product roadmap. The second phase is corporate marketing to drive the positioning, messaging and launch of the startup with a team of virtual specialists. The third phase is product-marketing, which requires a marketing leader steeped in the industry domain of the startup. A fourth component of marketing is about “instrumenting” marketing to automate and measure elements of marketing like content offers, calls-to-action, demand generation programs. No candidate that we’ve worked with in launching over 45 startups is versed in all four, so we suggest doing Product Management in-house with the founding team, outsourcing the launch to Corporate Marketing specialists, then hiring the CMO.

  1. How can a team of contractors actually deliver at the same level that a startup employee can deliver?

Startups should approach their staffing plans by having to justify every hire, which means hiring only for core capabilities. By understanding what is “core” to your company business and deciding to outsource the rest – particularly during the first two phases – a startup can keep headcount lean and can maximize the flexibility to build out the team after company launch.

  1. Do you have a way to measure the effectiveness of MaaS?

 Let’s start with the negative: The cost of hiring the wrong person to lead marketing, or hiring that person at the wrong time, is immeasurable, from market presence to team morale/retention to initial revenue. With best practices in marketing constantly evolving, Marketing as a Service lets you tap into marketing specialists in everything from web design to video content to email marketing—all without parting with a single headcount. The startup can stay lean, nimble and current while being prepared to iterate based upon data and feedback. Bottom line: the Marketing costs in a company’s earliest stages will be significantly lower than with the traditional Marketing model. And the initial success—however you choose to measure it—will be greater with this lean, focused MaaS approach.

Posted On August 22nd, 2017 by Crowded Ocean

New startup jargon in startup-land

‘Resters and Vesters’:  talented engineers who have lots of unvested shares of stock in privately held but “hot” startups are said to be “coasting” along and not really working that hard.

DNA data storage: researchers have now demonstrated how data can be converted from the 1s and 0s of binary code to the As, Cs, Gs and Ts of human genetic code. Because of that, researchers predict that the space-saving potential of data stored in DNA will be the solution to the enormous need for data storage. Theoretically, DNA storage could provide a cheaper and more environmentally sound alternative to huge server farms. There is a short shelf life to data stored on hard disks, flash drives, mag tape and DVDs, but data stored in DNA is believed to be able to last thousands of years.

Doxxing: according to an article in Recode, doxxing is “searching for and publishing private or identifying information about an individual on the internet, typically with malicious intent.”

Smart dust: according to the Wall Street Journal, this is “tiny, wireless micro-electromechanical systems that can detect measurements such as light and temperature.”

Foiling: the latest sports craze in Silicon Valley – and favored by many tech entrepreneurs – is called hydrofoiling, or foiling for short. The sport combines a small surfboard with rudder, motor and kite.

Posted On August 9th, 2017 by Crowded Ocean

Why startups need a “COO in a box”

For most of our existence, our clients have used the short-hand phrase ‘corporate marketing in a box’ to describe who we are and what we do. While the more accurate description might be ‘Marketing-as-a-Service (MaaS), we’ll answer to either one.

Recently, as more and more services, functions and departments go on an ‘as-needed’ basis, we’re seeing a new function evolve: The COO in a Box. It’s a function that, at least from our perspective, is badly needed at many of our startups.

Think about the standard enterprise startup: it’s usually founded by a core team of technologists, the most business-oriented of whom wants to be a first-time CEO. That’s a lot to handle, especially in terms of learning the ins and outs of sales, marketing, legal, support services, etc. When—and how—they need help will change with each company, but it’s the rare company that doesn’t need some sort of operational support in its early stages.

Here are the two times that we see the COO In a Box as being particularly valuable. The first is right after the launch. Up until that point, our experience is that the team has the capability and focus to do it on their own. Launching a company is an exhausting, all-hands-on-deck initiative, but it also pulls the company together, especially since it has a finite timeline and a nice payoff at the end. The question, post-launch, though, as everyone goes back to their regular jobs is: how are we going to sustain this momentum? That’s when a COO in a Box can help.

The second area usually comes around the Series B timing. The company has launched and had early success. Now it’s time to leverage that success and do the most important thing a new company can do: Scale. Again, the team is probably inexperienced and ill-equipped to scale, but a COO in a Box, if s/he has done this before (and they better have, if they’re marketing themselves as an experienced officer), is the right person to focus and align the company, leaving the CEO to focus on product, long-term planning and vision and the rest of the company to keep the engine going.

 

Posted On July 24th, 2017 by Crowded Ocean

On the radio: startup strategies with Crowded Ocean

Check out Tom and Carol interviewed about The Ultimate Startup Guide:

Listen to KGO Radio 810 Techonomics with host Jason Middleton

  • Part one (11:44 minutes)
  • Part two (19:06 minutes)

Check out more about Techonomics Radio on Facebook.

Posted On July 17th, 2017 by Crowded Ocean

A Manifesto for Startups

The following article by Crowded Ocean partner Tom Hogan originally appeared in AlleyWatch:

When we work with our startup clients to help them position and launch and develop programs for early sales success, one item that we encourage them all to have is a ‘manifesto.’ It’s a core document that explains to the market the original thinking—some of it provocative, some of it just compelling—that went into the company’s founding and original whiteboard sessions. That document can either stand alone on the website or be parsed into a series of articles and blogs.

Taking our own advice, we developed The Crowded Ocean Manifesto, which contains a number of provocative ideas for our startup clients to consider. Here are some excerpts:

Team trumps technology

VCs will tell you they invest in teams first, technology second. Smart, well-functioning teams build smart, well-functioning products. But if something goes wrong, smart teams recognize errors earlier, respond quicker and make better decisions. Smart teams can solve product-market fit misfires. And be guided by the industry data that shows diverse teams (gender, ethnicity, psychological) make better decisions and build more profitable businesses. Make diversity part of your culture from the beginning.

Hire for your core:  outsource the rest

Determine what is core (or ‘essential’ to your success). Be harsh in this determination. Staff to those functions and outsource everything else. On-demand resources are cheaper and usually more experienced than a general in-house hire. For example, the CMO owns building, orchestrating and executing the Marketing or Go to Market plan, but should outsource the specific components, from PR to SEO to content development to event marketing.

Positioning is something you develop with the Market, not something you thrust on it

Your customers—not your Product group—are the ultimate arbiters of what product you should build (and what market you’re in). So as you interact with your early customers, identifying your target buyers and use cases, use that information to develop your positioning and messaging. Then make sure that as Marketing develops and deploys these in core programs, that you continue to check in with your core market and adjust accordingly.

You can create a market segment, but not a new market category

As a startup, you don’t have enough time or money to create a brand new market category for your product. Focus on defining a new market segment and growing from there. Identify the market influencers who can help define or endorse your segment and build market understanding. Don’t try to go it alone.

How you make decisions is critical not only to your emerging culture but your long-term success

Company culture may initially focus on Bagel Wednesdays, free neck massages and a foosball game on site, but it ultimately has to do with how decisions are made—and who makes them. Great CEOs let their employees know what’s going on in company meetings, solicit their input, then ultimately make and implement the decision, communicating to the company clearly and decisively. The company knows that it’s been heard and also has the positive feeling that it’s being led by a confident leader.

You can never have enough content. So plan accordingly

The normal enterprise sale requires a minimum of 7 customer touches. So unless you want your sales reps to be chihuahuas tugging at their customers’ ankles with nothing new in their arsenal, you’ll need to provide Sales with at least 7 pieces of supporting content. Market awareness, inbound traffic, sales preference:  they all start with Content. Develop a steady stream of unique, compelling content that captures the imagination of your target buyer by breaking through the market noise. Whether it’s written or rich media (audio, image, video), your content has to be accessible, shareable and increasingly—it also has to be personalized and brief enough to be consumed in a single sitting.

No one is replaceable, including you

A smart CEO should know going in that the company and market may outgrow his/her capacity to lead it. History shows that by the time a startup has raised its third round of financing, 52% of founding CEO’s have been replaced, most of them fired (or re-deployed) by their own board. Leaders with longevity are self-aware enough to ask for help to close their own gaps. True leaders know they are building a kingdom, not a king. And if they want to remain the king, they listen and learn from their Board and mentors, rather than letting their ‘inner Steve Jobs’ set their leadership style.

Conclusion

Is a Manifesto always right? No. But any company or organization needs to stand for something, to take a position on core issues and live by those beliefs. If the market (and that can include your own employees and Board as well as those you’re selling to) shows you the errors of your way, seek a new way. And when you’re confident that you’ve reached a new level of certainty and execution, modify and re-publish your Manifesto.

Posted On June 28th, 2017 by Crowded Ocean

Startup Hiring: Get Out of the Cocoon!

In today’s increasingly competitive hiring market, the advantage is clearly with the job candidate, not the company. As a result, companies often hire rapidly, only to regret the lack of a strong vetting process later, when the new hire turns out to either be overmatched or a poor cultural fit.

The former is rarely the case when it comes to technical hires, since their peers are generally able to sniff out the overmatched candidate in early interviews. But in roles with broader, less defined boundaries, such as Marketing and Sales, it seems to be easier to make a hiring mistake. Sometimes, it’s that technical founders lack the experience and instincts to successfully hire a non-technical role and this is a problem that VC board members often identify as a common early stumble.

Cultural diversity pays off in building for the next growth stage

One way startup founders can limit their hiring mistakes is to get an outside perspective. A startup runs at a certain pace and has a certain set of values, which often makes it difficult to recognize the potential of a candidate who doesn’t immediately fit into that cocoon-like environment. But consider two things: 1) the candidate who doesn’t immediately fit may broaden the company’s perspective, leading to more success; and 2) that same candidate may be a better fit for the next stage of the company—just when the earlier-stage employees are running out of ceiling.

As we’ve noted in these earlier blog posts, “Diversity in your startup: psychological diversity”, and “When should your startup focus on diversity”, hiring for diversity pays off in smarter decisions and better business. So, whether it’s a Board member or a trusted Friend of the Company (an advisor who has some incentive, such as equity, to dedicate time and effort to the process), broaden your hiring process to get the fullest possible perspective—and the best possible candidate.