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Posted On March 5th, 2018 by Crowded Ocean

New words in startup-land: March 2018 edition

We like new words and jargon that bubbles up in Silicon Valley. Have you heard of these?

Sinkholing: Wired Magazine explains the cyber security tactic of sinkholing: “Sinkholes are workhorse tools used in day-to-day network management, research, and threat analysis, but they occasionally play a crucial role in containing dramatic threats.”

Deepfakes: The Washington Post explains that new face-swapping technology is enabling spammers to create pornography with the face of a celebrity or prominent figure.

Retrocausality: New Scientist examines the idea that the future can influence the present. Silicon Valley thinkers are embracing it.

Big Cloud: That’s Amazon Web Services, Google Cloud and Microsoft Azure, of course. Check out this feature in Geekwire on the impact of Big Cloud.

Posted On February 22nd, 2018 by Crowded Ocean

Focus on content, conversions, competition

An excerpt from The Ultimate Startup Guide

In their earliest days, startups either have no website or have a thin site consisting of ‘brochure-ware’. The purposes of this site are two-fold: 1) to attract potential employees, and 2) to attract the interest of early influencers by creating a sense of anticipation or by, sometimes literally, featuring a “watch this space” advertisement for something big coming later.

But as our clients get ready to launch, the website has to morph from a billboard into a powerful sales tool. Which brings us back to the mantra of ‘content, conversions, and competition.’

It’s almost always the content that lags

In StartupLand you can never have enough content. For written (not rich media) content, that means well-crafted, easily accessible, easily shareable, visually-rich content that drives your message home for your different targets (buyer, partner, analyst, etc.) that moves them through the sales cycle. That’s why we urge every client to start as early as possible to lay out a plan for content (one that reflects your sales cycle and conversion points) so that there is ample time to write, edit and review your content and to ensure that every piece is designed to move a prospect to the next stage in the sales process.

Planning more time for content, somewhat conversely, also allows for your content to “gel” so that each piece of content can be shorter, pithier and more substantive. In this ADHD world, where 12-page papers have been replaced by 6-pagers and 8-minute videos are now never more than 2 minutes in length, every content creator knows that it takes more time to create a shorter piece than its larger counterpart. And remember that it’s quality content in the age of inbound marketing that will enable your company to attract and engage prospects. Finally, start early: more time will allow your content team (both internal and external to your startup) to plan for ways to repurpose, say, that 5-7-page white paper into blog posts, contributed articles, and perhaps newsletter copy.

When it comes to creating a new website for launch, it’s almost always the content that lags, not the design or coding. That’s another reason why we recommend startups begin development early. And after launch, it’s axiomatic that there’s never enough content to be able to offer prospects new, fresh information in support of sales or to be able to stay top of mind with relevant, timely content in support of building thought leadership for your brand.

Why a startup focuses on conversions

When a startup is ready to build a true business-centric website, we steer our clients to start with conversions as part of building a solid structural plan for the site that will scale as your startup grows. A conversion is the click or tap that brings your target customer to a specific step in the sales cycle. Even though it’s early days, articulate that cycle as specifically as possible, either based on initial customer response or the path you want them to take. At every step, ask: what action do you want your target to take next and how can I facilitate it? And then, what content do you have to offer to move your target to the next step in the sales process? In other words, how do you convert a website visitor into a sales prospect as quickly as possible? By starting with a focus on conversions, startups are making their website a customer acquisition and growth strategy, rather than just an expression of their brand.

Because every startup uses content to tell a story on its website, compelling the visitor to take the journey you want them to take and to consume the content you want them to consume requires a plan. And that plan needs to address content and conversions, which we’ve just covered, as well as site navigation and the “under the hood” structure. The plan for your website should be developed in concert with a web design and development pro who has the experience to help you build your site in phases, from stealth to launch to sales acceleration. For that, you want to choose a web design partner with a track record of success who is steeped in best practices of both information architecture and web design. Your goal should be to build a site that can scale with your startup, rather than one that becomes disposable because it was built without a plan.

Your website pro should bring a breadth of best practices covering design, usability and accessibility. Elements of your site plan will include, for example, establishing and following an essential but basic SEO strategy of URL structure, keywords and on-page and off-page link-building to ensure your target customers can find your company online. It will include items such as consistent use of structural items like title and meta tags; calls-to-action, sharing widgets to promote the spread of your content; decisions on the use of flash and animation in content that can impact the accessibility of content by some users; what content you will give away versus “gate” behind a form capture that you will require. Working with a solid website pro will yield a well-structured site that will optimize the experience on your website for all your stakeholders. And you should be able to measure that experience in terms of overall traffic, time on site, page load times, bounce rates, etc.

Competition: their claims and their offers

Saying ‘we don’t have any competition’ might sound good at the start, but consider this: if you don’t have any competition, you don’t have a market. And you need that market: customers want to be able to find you; investors want to know the size of your market and who else is in it. Your website can play an important role in this process: your audience knows you have competition and they’re looking for ways to compare, contrast and decide. Your website can either be delusional (we have no competition) or help your customer/investor understand your market better and your unique place in it.

Part of your website design is studying and accounting for the competition. That doesn’t mean having a section on the site that contrasts you directly with them (though, if you’ve got a clear feature-by-feature advantage that’s an advisable route to go), but it means knowing what they’re claiming, how their site is structured, what they’re offering—and how all that stacks up against your website and underlying process. It’s easy, after months or years of slogging through internal product development and early customer support issues, to stay inwardly focused on what you’ve developed and how it works best. But it’s the lazy startup that stays inwardly focused: you simply can’t afford it in today’s fast-changing market. Track your competition and respond quickly and forcefully, starting with your website

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.