Kellblog covers topics related to starting, leading, and scaling enterprise software startups including company strategy, financing strategy, go-to-market strategy, sales, marketing, positioning, messaging, and metrics
After a negative customer experience on a recent fishing trip an old friend of mine said, “I judge people by the quality of their apologies.” Interesting idea, I thought.
This led to a discussion about the apology given to us by the proprietor of the ranch at which we stayed, roughly summarized as: “this only happened because it’s the end of a long, hard season, and there are things — things I can’t tell you about — that took a lot out of me.”
I, being something of a sucker, bought it — pardon the expression — hook, line, and sinker. “Oh you poor man, I hope you get through this.”
My friend, who is somewhat more skeptical, responded differently: “He didn’t really own it. He literally blamed it on something that he declared secret and couldn’t tell us about. And does that really matter anyway? Do we really care why something undesirable happened? Or do we want him to just own the mistake and apologize for it?”
This led to a conversation where I came up with these simple elements of a good apology.
Hear it. Let the customer talk. Hear what they say. Don’t interrupt. Don’t get defensive. Listen. When they’re done, repeat it back: “I understand that the door flew open, Fluffy flew out, and that terrified everyone.” Or, “I understand that the software repeatedly crashed and was basically unusable during your end-user onboarding session and that was horribly embarrassing for you personally and a waste of time and money for the company.”
Own it. Admit the mistake and say it was your fault. “I didn’t attach the schmidget properly and because of that the door flew open. It was my mistake.” In a tech context, “I’m sorry that the release was not adequately tested and caused the software to crash repeatedly during your user onboarding session.”
Apologize for it. Say, “I am sorry.” Don’t ask anyone to accept that apology as it feels you’re asking for absolution. You’re not. You’re apologizing.
Avoid deflection or transference. Don’t say, “I’m sorry that you didn’t notice the schmidget was not attached.” Or, “I’m sorry that you chose to hold your training the day after a major, new release.” Doing this is the opposite of owning it. Avoid at all costs any apology that starts with, “I’m sorry you were offended by.”
Optionally, say how you feel about it. “I feel terrible that your cat flew out the open door (but was happily uninjured).” Or, “I feel terrible that we hung you out to dry in front of your end users, especially after you went to bat to help us win the deal.”
Optionally, tell them what you’re doing about it. Some people will care about this and want to know how you’re preventing this from happening to others. Some won’t. Read the room. “I’m going to revise our departure checklist to add schmidget attachment.” Or, “I’m going to fly to India, show the team your picture, tell them how much you did to support us, and then tell them how this impacted you.” (This, by the way, is a real example and I did fly to India the next week and do precisely that.)
Don’t quibble over details. If it’s an online product review and it says, “the schmidget was not attached on the 20-foot vehicle,” do not reply, “our vehicles are 19 feet.” If you worry that failing to do this concedes incorrect facts, then say, “Some details notwithstanding, the important part here is the cat flew out the door, and we are deeply sorry about Fluffy and the trauma she endured.”
Optionally, offer compensation. Not everyone wants compensation. For some, it’s about principle. For others, it’s about ensuring future clients don’t have the same problem. For others, it’s all about compensation. For others still, it’s about putting some wood behind the apology arrow. Read the room. Ensure the compensation matches the problem: “I’m offering you a free day with our top guide on your next trip out.” If you’re unsure, you can offer in the hypothetical: “would it help if I were to offer you blank?” Avoid proposing illogical compensation: “I’ll give you two free days from the same plumber who misinstalled the pipes that flooded your house in the first place.” (No thanks!)
Finally, thank the customer for their business. “You are important to our company, that’s why I wanted to make this apology to you personally. And thank you for being a customer.”
I worked with a sales VP who began every customer conversation by saying, “thank you for being a customer.” It’s not a bad way to end one, either.
Carta, an otherwise boring company solving a mundane-if-important problem, managed to get itself in the news this past week for all the wrong reasons. The fiasco was the result of CEO Henry Ward writing a post on recent negative press that was presumably intended to inoculate his audience, but instead backfired spectacularly. Headlines in the past week:
Because our purpose is to take a few communications lessons from this PR mess, I’m not going to dig into the story itself. Instead, we’re going to study what I guess happened — and there are some big guesses here — and then make four recommendations that could prevent something like this from happening at your startup. Note that these recommendations will work even if my guesses are entirely off the mark.
My Guess as to What Happened
I decided to write this post because the key mistake, the Medium post, is one I could have seen myself making. So I felt some empathy with the author for deciding to write it, if not much agreement with the angle. Why? Because I like learning and then sharing what I’ve learned. I don’t like to gloss over things, I like to go into detail. I like to explain things. Turns out that’s a great habit for an industry blogger, but for a CEO, not so much. There is a standard playbook for communications crises and writing a post like this is definitely not included.
I also felt empathy for the desire to communicate to your employees. This is increasingly frustrating in today’s world because you must assume that any internal all-hands email can and likely will be released externally. Therefore, you need to write any internal all-hands email as if it’s going to be released externally. Now, the dangerous logic: well, if you’re going to write it as if it’s going to be released externally, then why not just publish it yourself? I feel like this is perhaps the path this post took. Quote:
I know other CEOs have to deal with this so I wanted to share what I shared with employees in case it’s helpful for other CEOs thinking through similar problems.
Sharing this with employees was dangerous because it might well have leaked. But publishing it yourself to create a backfire was darn-near (and might well prove) career suicidal. And it’s definitely not helpful for other CEOs. In fact, other CEOs should use it as a counter-example.
But here’s the part where I have zero empathy. Leading with a quote like this:
To anyone sophisticated in communications and when used in this context, this quote means one thing: “I have no idea how to deal with the press and am bitter about it because I keep not getting the result I want.”
Period. That’s all it means.
No CMO could ever think this way. They wouldn’t last a month in their job. But founders, and some CFOs, think this way: “I’m not the problem. They’re the problem.” Instead of viewing the media [1] as a world they must learn to navigate — and ideally turn to their advantage — they let one or two early setbacks bruise their ego and never get back on the horse. Thus, they never learn how to ride it. [2]
I worked with one, pretty accomplished, public company CFO who’d always say: “I hate the media, they always misquote me.” Which again translates to me as: “I have no idea how to work with the media.” Were you really misquoted or did you actually say something you regret? Did they trick you into thinking the interview was over and slide in one more “what do you really think” question? Did you “buy the question” and end up getting indirectly quoted? [3]
Who hurt you?
Perhaps some have the luxury of writing off the media as “sensationalized noise” written by people with “perversely distorted” incentives. But no CMO possibly can. And no founder/CEO should either.
What should you do instead? Follow these four rules:
Hire communications professionals and listen to them.
Learn the rules of the game.
Use the right spokesperson for the content.
Build a few key relationships.
Hire Communications Professionals and Listen to Them
It’s hard to imagine that any communications professional approved of Carta’s chosen communication strategy of attacking the press via a long blog post that calls the press biased, accuses them of doxxing, says they build their careers on company “takedowns,” debates facts on seemingly pending legal cases, and calls a former employee “a misogynist and racist.” Among other things.
This, simply, is not how it’s done. For many reasons. The CEO debases himself, effectively dragging himself through the mud. The attack on the press will limit future relationships with journalists. And I’m guessing the lawyers are not in love with this strategy, either. But more than anything, you amplify the negative story. You give it a second life. A second news cycle. And now people like me are even editorializing about it.
Anyone who says “all PR is good PR,” never worked in public relations. Or they did and tried to use that to dodge an executive screaming at them — as I have been screamed at: “how, how, … how did you let this happen?”
All PR is not good PR. This is not a good story for Carta. With the stroke of his pen, the CEO transformed this story from a sadly mundane “yet another tech sexual discrimination case” [4] to a fiery “CEO writes nutty blog post” [5].
Learn the Rules of the Game
In three words: get media training.
While I generally don’t recommend using your PR firm for media training, you can and should ask them for referrals. The best media trainers are often independents, typically retired journalists who teach you the tricks used on the other side of the interview table. The older and more curmudgeonly, the better. Ask me about the time the media trainer said he tricked a nun into naming a murder suspect by closing his notebook and pretending the interview was over. Yes, that’s who you want training you.
In my opinion, the Brits have the toughest press, so I generally prefer British media trainers when you can find them. Though, that might be over-preparation to deal with the local tech blog.
But no matter who you get it from, get it. Do it every year. Find the firm you like best. Make their program your standard spokesperson certification. But do it.
The most important benefit here is indirect. You’re getting your company to understand and admit that working with the media is playing a game with rules, and the better you understand those rules and the more you practice, the better you play.
That indirectly prevents the Carta rant. You don’t think to blame the media for being the media, because you understand that dealing with the media is part of your job and you understand the rules of the game. You don’t start interviews bitter, you start dialed-in. And you don’t take matters into your own hands to try and right a perceived media wrong. You work with the media.
Use the Right Spokesperson for the Content
Even if there were some big media fuss here, the CEO’s post would still be the wrong answer because you’re not matching the spokeperson to the content.
If there were a pure media problem, the most you should consider is a post from the VP of communications to discuss the Fortune story. (And they’d almost certainly refuse to do it, so see the “listen” part of point one.) But the principle is to match the spokesperson to the content. If we’re discussing a problem in media relations, then let the VP of communications handle it. Perhaps a better example is who should answer an all-hands question about the Fortune story? The VP of communications.
If you’re worried about customers, the most you should consider is an email from your chief customer officer to the customer base saying something like: “you may have seen story X, we take any allegations of Y seriously, we are looking into them and will act accordingly once our investigation is complete. Meantime, we continue to be focused on meeting your needs and building our company. If you have any questions, call your CSM or AE. Thank you for being a customer.”
While I know some CEOs like to be all over everything, in every detail, and show everyone that fact (and I was perhaps one of them), the CEO should address CEO-level issues and other issues should be delegated. The CHRO should address HR issues. The CMO and/or VP of communications should address media. The general counsel should address legal. When the CEO addresses an issue, it has the effect of elevating the issue. That can be powerful if you want to demonstrate your commitment to a new direction. It can backfire when addressing “negative press.” [6]
Build a Few Key Relationships
Finally, once you understand the media game, I think every founder/CEO should “adopt” a handful of key journalists and/or industry analysts. That means they meet with them periodically and work to build personal, long-lasting relationships. They can provide information on background. They can share scuttlebutt. They can get dinner after the meeting or event.
This has two benefits. First, it helps the founder/CEO develop a deeper understanding of the media world, such as the pressures and constraints of the journalist or analyst job. Second, it helps build a relationship that might buy you a reference or a quote in a story, a mention in an analyst report, a few millimeters on a quadrant or wave, or simply the benefit of the doubt when the company is under attack. As well as a friend with whom to have a beer twenty years later — as I still do with a few.
In this post, I’ve offered four recommendations for how your startup can run a better communications program and avoid problems like those currently faced by Carta. I hope you follow them.
# # #
Notes
[1] By media here, I mean to include not only the traditional press and blogs, but also industry analysts and thought leaders, and eventually financial analysts. Basically, anyone thinking about, speaking about, and/or writing about your company.
[2] I’ve been blessed to have worked with some great media trainers over the years, including Martin Banks and David Tebbutt. I also took the Salesforce media certification program whose final exam rivaled only the road test for my French driver’s license in its degree of difficulty and anxiety production.
[3] Buying the question refers to letting the journalist put words in your mouth. Example: “Dave, so are you saying that Oracle is evil?” Any answer other than a clear, “no” will likely result in an article that says Dave said Oracle was evil. Note the absence of a direct double-quote, the hint that I didn’t actually say it. (Yes, that’s fair under most rules of enagement.)
[4] I don’t subscribe to Fortune so I’m assuming that’s the story based on the lede. And no, societally, it’s not a good thing that such stories are run-of-the-mill. But from a Carta PR perspective, it could have been. Think: “oh, another one did it.” That’s not breaking news. That’s not man bites dog. Unfortunately, “CEO writes story that fuels negative news cycle” is.
[5] These are not actual quotes. I am using double quotes to contain the story concepts.
[6] Note that I’m making a deliberate distinction between “the Fortune story” and “the allegations within the Fortune story.” “How did we get bad press and what are we supposed to say about it,” is a media/comms question and questions about allegations of sexual discrimination and/or harassment are a CHRO issue. Personally, I think culture is a CEO issue, so to the extent the allegations are cultural more than episodic, they quickly become a CEO issue for internal comms.
In my capacity as an EIR at London-based Balderton Capital, I spoke earlier today at SaaStock in Dublin on What Founders Need To Know About Product Marketing. In the session, we discussed four key questions:
What is product marketing? (Surprisingly vague and varied.)
How do you know if someone’s good at it? (Surprisingly difficult.)
To whom should it report? (There are three good options.)
How can you support product marketing? (A question too few founder/CEOs ask.)
This presentation briskly runs through these four questions with particular emphasis on the first two. Since product marketing is both critically important and frequently misunderstood, please take a minute to click through this and see if anything resonates. Once a video is available of the session, I will share it here.
I’ve embedded the slides below as a PNG carousel. You can download a PDF of them to see the detail. If we Baldertonize them, we’ll post that (surely more attractive and professional) version to the Balderton Build blog. Meantime, here goes:
Thanks to everyone who attended and to Alex Theuma, David Umpleby, and SaaStock for inviting me.
When a company is transitioning from founder-led sales (FLS) to sales-led sales (SLS), you hear the word “playbook” a lot. For early-stage companies, this rubs me the wrong way because when I hear playbook, it conjures up an image of:
A large sales enablement team
A hefty three-ring binder full of paper (or its digital equivalent)
A formal onboarding program that teaches playbook contents
And perhaps a formal sales process (e.g., MEDDIC) or methodology
That’s all great when you’re $100M+ in ARR and you’re trying to institutionalize a model that you know works — from repeated experience with scores of reps over many quarters. But for an early-stage company with less than a dozen reps and that’s still highly dependent on the founder(s) to sell software, it’s overkill.
So when these companies say they need a playbook my retort is, “no you don’t — you don’t need a playbook; you just need a handful of plays.”
What is a Playbook?
While the term gets bandied about, few seem to define it. Many companies will tell you how to make a sales playbook. For example, Pipedrive does so in a not-so-mere 4,500 words. But if the how-to-make-one guide is nine, single-spaced pages, then how big are the playbooks themselves? Usually, big. Per Pipedrive:
A sales playbook is a document that outlines your sales processes, procedures, and best practices. By following the strategies in a playbook, sales reps can increase their productivity, improve their win rates and drive revenue growth for the company. Sales playbooks typically include […] target customer profiles, stages of the sales process, how to handle customer objections, sales methodologies, sales tools and technologies, key performance indicators (KPIs), and strategic objectives.
Pipedrive’s how-to guide is a fine piece of work. It’s just way too heavy for early-stage startups. These startups can’t make large playbooks, nor should they. They don’t have the resources to build them, but far more importantly, they don’t know what to say — they simply don’t have enough experience to know what works across a wide range of buyers and situations. Sure, you can pay an intern to fill in templates, but you don’t have quality content.
That said, what’s my definition of a playbook?
A playbook is a collection of plays.
What is a Play?
My definition begs the question: what, then, is a play? So let’s define that, too.
A play is a series of steps to make in a given situation to help you win a deal.
The keywords are:
Steps: the things that the sales team needs to do. While different team members may do different things at different times, the quarterback of the deal is always the seller.
Situation: the situation for which the play is designed. For example, you might have play for leaving a deal that you don’t think is qualified (the Polite Walk Away) or for saving a deal you know you’re losing (the Hail Mary).
Win: the purpose of the play is to win the deal. As James Mason said of lawyers in The Verdict, “you’re not paid to do your best, you’re paid to win.” The same is true is in sales. The purpose of the play is to win.
An Example Play
Because I find the notion of play still somewhat amorphous, I’ll provide a concrete example.
Situation. You sell BI tools. You are competing against a hot competitor with a slick user interface that’s generally preferred by end-users to your own. One feature, in particular, gets audible wows when demoed. Your product and engineering team has recently released a similar but inferior version of that feature to help. Because the competitor knows they will win in end-user demos, they encourage selection committees to “let the users decide” by having a large end-user demo near the conclusion of the selection process. Your competitor calls their play the “End Run” because they’re running around the IT group charged with the selection to the end-users.
Steps. You take the following steps in this situation.
Build or re-use the slickest available demo of the product that you can find.
Request an end-user demo session for your company, too, justified by basic process fairness.
Demonstrate the “wow” feature several times. Know that you are likely to still lose with the end-users, but that’s not the point. You are trying to minimize the perceived gap and convince the end-users that — even if they don’t see your solution as “best” — that it’s certainly “good enough” to get the job done.
Call a meeting with the IT team to discuss security and administration. Convince them of the importance of security and the cost of administration. Show that your product, rightfully, is superior in both these areas.
Get IT to reframe the end-user vote as “input” (versus “selection”) and that they should ask the end-users two questions: which is your preferred solution and can both solutions do the job?
Win the deal when IT selects your product based on security and adminstration with the end-users’ consent that your solution is good enough to do the job.
That is a play. It’s not complicated. It’s easily taught. You can and should build tools to support its execution — e.g., the wow demo and a security and adminstration white paper.
Plays Are Applied Marketing
Are plays marketing or sales? While plays are always executed by sales, I think of building plays as applied marketing. We start with what we know about the customer and market. We add what we know about the competition — both in terms of product strengths/weaknesses and common sales tactics. Then we apply that knowledge into making a play (i.e., a series of steps) to beat them.
What Plays Do You Need?
I tihnk most startups need 3 or 4 plays, each of which can be described in less than a page (if not a single paragraph):
Replicate success. This is your primary play. If you have a few big insurance companies using your product for use-case X, then you need a play for replicating that. Who to call. What to ask. What to say. How to tell the story of your existing references. How to overcome objections. How to close.
Replace BigCo. If you have newer, better, faster, cheaper technology than an established (now “legacy”) vendor, you need a play for how to replace them. Who to call. What to ask. What to say. How to qualify. How to win. When to give up.
Beat archrival startup. If you have a head-to-head startup rival, you’ll need a play for how to beat them. This is usually a mix of product differentiators tied to use-cases combined with vision/roadmap to address objections along with strong messaging on safety, company/investor quality, and early market leadership.
Polite walk alway. As an early-stage startup you should walk away from plenty of deals, so you should get good at it. The deals you qualify out today are next year’s opportunities so treat them well and get good at slow nurture.
I decided to take a quick break from SaaS metrics after doing a matched set of conference presentations in the past two months (strategic at SaaStr Annual and tactical at SaaS Metrics Palooza) — and that’s not to mention starting the SaaS Talk podcast with my “metrics brother” Ray Rike.
So I thought I’d take a moment, switch gears, and go back to my roots by talking not just about marketing, but product marketing at the upcoming SaaStock conference in Dublin. I thought I could add the most value by educating people on this often-misunderstood function that is always important, but can be particularly critical in the early days of building a SaaS company.
My session, entitled What Founders Need To Know About Product Marketing, will be on Tuesday, October 17th on the Scale Stage at 2:20pm. In the session, we’ll discuss four key questions:
What is product marketing?
How do you know if someone is good at product marketing?
To whom should product marketing report?
How can you support product marketing?
If you’re a founder, any C-level executive, product leader or manager, or heck, even a product marketer yourself, I hope you’ll be able to attend this session. Either way, I’ll post my slides shortly after the presentation and SaaStock usually makes a video generally available a bit after the show.
I’m Dave Kellogg, advisor, director, blogger, and podcaster. I am an EIR at Balderton Capital and principal of my own eponymous consulting business.
I bring an uncommon perspective to enterprise software, having more than ten years’ experience in each of the CEO, CMO, and independent director roles in companies from zero to over $1B in revenues.
From 2012 to 2018, I was CEO of Host Analytics, where we quintupled ARR while halving customer acquisition costs, ultimately selling the company in a private equity transaction.
Previously, I was SVP/GM of the $500M Service Cloud business at Salesforce; CEO of MarkLogic, which we grew from zero to $80M over six years; and CMO at Business Objects for nearly a decade as we grew from $30M to over $1B in revenues.
I love disruptive startups and and have had the pleasure of working in varied capacities with companies including Bluecore, FloQast, Gainsight, Hex, Logikcull, MongoDB, Pigment, Recorded Future, Tableau, and Unaric.
I currently serve on the boards of Cyber Guru, Light, Scoro, TechWolf, and Vic.ai. I have previously served on boards including Alation, Aster Data, Granular, Nuxeo, Profisee, and SMA Technologies.
