Category Archives: Marketing

I’ve Got a Crazy Idea:  How About We Focus on Next-Quarter’s Pipeline?

I’m frankly shocked by how many startups treat pipeline as a monolith.

Sample CMO:  “we’re in great shape because we have a total pipeline of $32M covering a forward-four-quarter (F4Q) sales target of $10M, so 3.2x coverage.  Next slide, please.”

Regardless of your view on the appropriate magic pipeline coverage number (e.g., 2x, 3x, 4x), I’ve got a slew of serious problems with this.  What do I think when someone says this?

“Wait, hang on.  How is that pipeline distributed by quarter?  By stage?  By forecast category?  By salesrep?  You can’t just look at it as a giant lump and declare that you’re in great shape because you have 3x the F4Q coverage.  That’s lazy thinking.  And, by the way, you probably don’t even need 3x  the F4Q target, but you sure as hell need 3x this quarter’s coverage [1] and better be building to start next quarter with 3x as well.  You do understand that sales can starve to death and we can go out of business – the whole time with 3x pipeline coverage — if it’s all pipeline that’s 3 and 4 quarters, out?”

I’ve got a crazy idea.  How about as a first step, we stop looking at annual pipeline [2] and start looking at this-quarter pipeline and, most importantly, next-quarter pipeline?

What people tell me when I say this:  “No, no, Dave.  We can’t do that.  That’s myopic.  You need to look further out.  You can’t drive looking at the hood ornament.  Plus, with a 90-day average sales cycle (ASC) there’s nothing we can do anyway about the short term.  You need to think big picture.”

I then imagine the CMO talking to the head of demandgen:  “Yep, it’s week 1 and we only have 2.1x pipeline coverage.  But with a 90-day sales cycle, there’s nothing we can do.  Looks like we’re going to hit the iceberg.  At least we made our 3x coverage OKR on a rolling basis.  Hey, let’s go grab a flat white.”

I loathe this attitude for several reasons:

  • It’s parochial. The purpose of marketing OKRs is to enable sales to hit sales OKRs.  Who cares if marketing hit its pipeline OKR but sales is nevertheless flying off a cliff?  Marketing just had a poorly chosen OKR.
  • It’s defeatist. If “when the going gets tough, the tough get a flat white” is your motto, you shouldn’t work in startup marketing.
  • It’s wrong. The A in ASC stands for average.  Your average sales cycle.  It’s not your minimum sales cycle.  If your average sales cycle is 90 days [3] then you have lots of deals that close faster than 90 days, so instead of getting a flat white marketing should be focused on finding a bunch of those, pronto [4].

Here’s my crazy idea.  Never look at rolling F4Q pipeline again.  It doesn’t matter.  What you really need to do is start every quarter with 3.0x [5] pipeline.  After all, if you started every quarter with 3.0x pipeline coverage wouldn’t that mean you are teed up for success every quarter?  Instead of focusing on the long-term and hoping the short-term works out, let’s continually focus on the short-term and know the long-term will work out.

This brings to mind Kellogg’s fourth law of startups:  you have to survive short-term in order to exist long-term.

This-Quarter Pipeline
This process starts by looking at the this-quarter (aka, current-quarter) pipeline.  While it’s true that in many companies marketing will have a limited ability to impact the current-quarter pipeline — especially once you’re 5-6 weeks in — you should nevertheless always be looking at current-quarter pipeline and current-quarter pipeline coverage calculated on a to-go basis.  You don’t need 3x the plan number every single week; you need 3x coverage of the to-go number to get to plan.  To-go pipeline coverage provides an indicator of confidence in your forecast (think “just how lucky to do we have to get”) and over time the ratio can be used as an alternative forecasting mechanism [6].

this qtr togo

In the above example, we can see a few interesting patterns.

  • We start the quarter with high coverage, but it quickly becomes clear that’s because the pipeline has not yet been cleaned up. Because salespeople are usually “animals that think in 90-day increments” [7], next quarter is effectively eternity from the point of view of most salesreps, so they tend to dump troubled deals in next-quarter [8] regardless of whether they actually have a next-quarter natural close date.
  • Between weeks 1 and 3, we see $2,250K of current-quarter pipeline vaporize as part of sales’ cleanup. Note that $250K was closed – the best way for dollars to exit the pipeline!  I always do my snapshot pipeline analytics in week 3 to provide enough time for sales to clean up before trying to analyze the data.  (And if it’s not clean by week 3, then you have a different conversation with sales [9].)
  • Going forward, we burn off more pipeline to fall into the 2.6 to 2.8 coverage range but from weeks 5 to 9 we are generally closing and burning off pipeline [10] at the same rate – hence the coverage ratio is running in a stable, if somewhat tight, range.

Next-Quarter Pipeline
Let’s now look at next-quarter pipeline.  While I think sales needs to be focused on this-quarter pipeline and closing it, marketing needs to be primarily focused on next-quarter pipeline and generating it.  Let’s look at an example:

next qtr pipe

Now we can see that next-quarter plan is $3,250K and we start this quarter with $3,500K in next-quarter pipeline or 1.1x coverage.  The 1.1x is nominally scary but do recall we have 12 weeks to generate more next-quarter pipeline before we want to start next quarter with 3x coverage, or a total pipeline of $9,750K.  Once you start tracking this way and build some history, you’ll know what your company’s requirements are.  In my experience, 1.5x next-quarter coverage in week 3 is tight but works [11].

The primary point here is that given:

  • Your knowledge of history and your pipeline coverage requirements
  • Your marketing plans for the current quarter
  • The trends you’re seeing in the data
  • Normal spillover patterns

That marketing should be able to forecast next quarter’s starting pipeline coverage.  So, pipeline coverage isn’t just an iceberg that marketing thinks we’ll hit or miss.  It’s something can marketing can forecast.  And if you can forecast it, then you adjust your plans accordingly to do something about it.

Let’s stick with our example and make a forecast for next-quarter starting pipeline [12]

  • Note that we are generating about $250K of net next-quarter pipeline per week from weeks 4 to 9.
  • Assume that we are continuing at steady-state the programs generating that pipeline and ergo we can assume that over the next four weeks we’ll generate another $1M.
  • Assume we are doing a big webinar that we think will generate another $750K in next-quarter pipeline.
  • Assume that 35% of the surplus this-quarter pipeline slips to next-quarter [13]

If you do this in a spreadsheet, you get the following.  Note that in this example we are forecasting a shortfall of $93K in starting next-quarter pipeline coverage.  Were we forecasting a significant gap, we might divert marketing money into demand generation in order to close the gap.

fc next qtr

All-Quarters Pipeline
Finally, let’s close with how I think about all-quarters pipeline.

all qtr

While I don’t think it’s the primary pipeline metric, I do think it’s worth tracking for several reasons:

  • So you can see if pipeline is evaporating or sloshing. When a $1M forecast deal is lost, it comes out of both current-quarter and all-quarters pipeline.  When it slips, however, current-quarter goes down by $1M but all-quarters stays the same.  By looking at current-quarter, next-quarter, and all-quarters at the same time in a compact space you can get sense for what is happening overall to your pipeline.  There’s nowhere to hide when you’re looking at all-quarters pipeline.
  • So you can get a sense for the size of opportunities in your pipeline.  Note that if you create opportunities with a placeholder value then there’s not much  purpose in doing this (which is just one reason why I don’t recommend creating opportunities with a placeholder value) [14].
  • So you can get a sense of your salesreps’ capacity. The very first number I look at when a company is missing its numbers is opportunities/rep.  In my experience, a typical rep can handle 8-12 current-quarter and 15-20 all-quarters opportunities [15].  If your reps are carrying only 5 opportunities each, I don’t know how they can make their numbers.  If they’re carrying 50, I think either your definition of opportunity is wrong or you need to transfer some budget from marketing to sales and hire more reps.

The spreadsheet I used in this post is available for download here.

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Notes

[1] Assuming you’re in the first few weeks of the quarter, for now.

[2] Which is usually done using forward four quarters.

[3] And ASC follows a normal distribution.

[4] Typically, they are smaller deals, or deals at smaller companies, or upsells to existing customers.  But they’re out there.

[5] Or, whatever your favorite coverage ratio is.  Debating that is not the point of this post.

[6] Once you build up some history you can use coverage ratios to predict sales as a way of triangulating on the forecast.

[7] As a former board member always told me — a quote that rivals “think of salespeople as single-celled organisms driven by their comp plan” in terms of pith.

[8] Or sometimes, fourth-quarter which is another popular pipeline dumping ground.  (As is first-quarter next year for the truly crafty.)

[9] That is, one about how they are going to get their shit together and manage the pipeline better, the first piece of which is getting it clean by week 3, often best accomplished by one or more pipeline scrub meetings in weeks 1 and 2.

[10] Burning off takes one of three forms:  closed/won, lost or no-decision, or slipping to a subsequent quarter.  It’s only really “burned off” from the perspective of the current-quarter in the last case.

[11] This depends massively on your specific business (and sales cycle length) so you really need to build up your own history.

[12] Technically speaking, I’m making a forecast for day-1 pipeline, not week-3 pipeline.  Once you get this down you can use any patterns you want to correct it for week 3, if desired.  In reality, I’d rather uplift from week 3 to get day-1 so I can keep marketing focused on generating pipeline for day-1, even though I know a lot will be burned off before I snapshot my analytics in week 3.

[13] Surplus in the sense that it’s leftover after we use what we need to get to plan.  Such surplus pipeline goes three places:  lost/no-decision, next-quarter, or some future quarter.  I often assume 1/3rd  goes to each as a rule of thumb.

[14] As a matter of principle I don’t think an opportunity should have a value associated with it until a salesrep has socialized a price point with the customer.  (Think:  “you do know it cost about $150K per year to subscribe to this software, right?”)  Perversely, some folks create opportunities in stage 1 with a placeholder value only to later exclude stage 1 opportunities in all pipeline analytics. Doing so gets the same result analytically but is an inferior sales process in my opinion.

[15] Once you’re looking at opportunities/rep, you need to not stop with the average but make a histogram.  An 80-opportunity world where 10 reps have 8 opportunities each is a very different world from one where 2 reps have 30 opportunities each and the other 8 have an average of 2.5.

If Rebranding’s the Answer, What was the Question?

From time to time, every CMO faces a key question:  to brand or not to rebrand?

Often, it’s right after joining a company and you want to make a big splash.  Sometimes, it’s after you’ve been with a company for a while and you and some told-timers are bored with the current branding and want something new.

My general advice to those considering rebranding is “don’t do it” because I think it’s a siren’s call for several reasons:

  • Branding projects are usually big and expensive. They cost a lot money.  Lots of important people get involved, for example, in Post-It oriented workshops to help determine brand values and the real inner spirit of the company.  You’ll need a new corporate identity so everything from business cards to email footers to booth signage to social media icons to collateral layout all needs to get re-done.  And, of course, you’ll need to completely overhaul your website.  It’s easy for a $30M company to spend $400K on a rebranding and not hard for a larger company to spend millions.
  • Branding projects are highly visible. Everyone from customers to board members to employees to spouses to competitors to analysts is going to have an opinion on the new brand.  There’s no opportunity for quiet failure as you’d find with testing a new message or experimental online campaign.  Rebranding is a performance without a net in the center ring of the circus with the whole market watching.
  • Branding projects are risky. Part of the risk comes from the fact that they’re expensive and visible.  When rebranding includes renaming, there’s a whole additional level of risk around the name in terms of unknown meanings and homophones, missed trademark conflicts, problems with URL and/or social media handle availability (e.g., Netflix’s Qwikster debacle), or simply poor choices (e.g., PWC’s renaming to “Monday” [1A]).  Agencies often compound the risk by insisting on keeping everything secretive during the process, resulting in unveilings that tend to work either really well or really badly when they finally occur [1B].  Finally, if you mess up a rebranding project, it’s nearly impossible to walk it back.  When Business Objects did a dubious multi-million-dollar rebranding under the slogan, “Let There Be Light” and literally tried to trademark biblical content, there was no going back.
  • Rebranding is usually not the most important priority of the business. If your sales force is starving for pipeline or the industry analysts aren’t placing you in their leader quadrants, sales probably wants you investing in demand generation or analyst relations, not rebranding.  They’ll see rebranding as marketing for marketing’s sake more designed to impress other marketers (e.g., “we won an award”) than to help the business.  And they’ll see the CMO who led it as “ivory tower” and misaligned with their needs.

For these reasons, we can say that it’s a pretty bold decision for a CMO to undertake a rebranding project.  And CMOs should never forget the maxim about pilots:  “there are old pilots and bold pilots, but no old, bold pilots.”

What is a Brand?
Since brand is a highfalutin word that marketers often toss around with a certain arrogance – as if only they understand its meaning — let’s take a minute to bring branding back down to earth.

In short, a company’s brand involves four things:

  • Name (what I call it)
  • Corporate identity (what it looks like)
  • Brand values (what it stands for)
  • Corporate voice (what it sounds like)

The Joy of Naming
The fact is that in high-tech, naming doesn’t matter much.  Plenty of technology companies have been successful with pretty bad names.  For example, one of today’s hottest companies has one of the worst names ever, MongoDB, which works in English but in several European languages translates roughly to RetardDB [2].

Does anyone believe the success of Red Hat, SAP, or Veeva was due to an outstanding company name?  Or the success of Hashicorp, Zuora, or New Relic – each of which are just twists on the founder’s name [3]?

Pretty much any name that passes these tests works:

  • Short, ideally 3 or fewer syllables (especially if used as product name prefix)
  • No unintended meanings in other languages
  • Clear on trademark conflicts
  • Available URLs and social media handles
  • Easy to pronounce (people avoid saying words they’re not sure how to pronounce)
  • If descriptive, won’t becoming limiting and/or misleading over time [4]
  • If multi-word, doesn’t form an awkward acronym (even if you add I or C for “Inc.” or “Corp.”)

In my opinion, names fall into four buckets:

Bad, due to unintended meanings, pronunciation difficulty, length (too many letters and/or syllables), or being descriptive but misleading.  Examples:  MongoDB, Versant, Business Objects, and Ingres [5].  These can slow you down, but they certainly can’t stop you — which is why, when you compare brand equity to the risk and cost of renaming, it’s usually not worth it to change.  Unless it’s early days, simply accept you have a bad name and move on to more important matters.

Potentially problematic, descriptive but potentially limiting in the mid- or long-term.  Examples:  Microsoft, PeopleSoft, Salesforce.com, VMware, and Zendesk [6].  As the examples show, you can easily overcome the limits of such names, but they’re still not objectively great names in the first place.  These companies have simply overpowered the description in the names and turned them into meaningless brands over time [6A].

Good enough. These are typically meaningless – which is fine – and they obey the above rules well.  If they are descriptive, they’re broad enough to last long-term, given the company’s vision.  Examples: Okta, Veeva, Marketo, Atlassian, Coupa, Intacct, Siebel, Zuora, New Relic, Ooma, Medalia, GainSight, PagerDuty, and FloQast [7].  If you’re doing a renaming, good enough should be your practical goal.

Good.  I think we all like names that are either suggestive or broadly descriptive (and are thus good for the long haul).  Examples:  Anaplan, Oracle, Uber, Workday, Splunk, Kustomer, Airtable, Cisco, and Snowflake [8].  These are hard to find and you can waste a lot of time striving for a good name when you already have several good-enough candidates, and good enough is really all you need.

No discussion of technology naming would be complete without a reference to the epic episode of HBO’s Silicon Valley where Bachman decides to pick a new company name by going to the desert on a “vision quest” and eating psilocybin mushrooms to foster his creativity in so doing (NSFW).

The moral of the naming story is simple. There are bad names and good names and company success seems pretty much uncorrelated to them.  Your goal should be to get a good-enough name and then stop obsessing.

Elements of Corporate Identity
Corporate identity is what you look like, the idea being that I could see your booth from a distance, look at your website from across the room, or see one of your brochures without my glasses on and still know it’s you.

Corporate identity thus deals in defining:

  • Your logo, and its approved derivative forms
  • Your standard color palette
  • Your standard imagery
  • The templates for your website
  • The templates for collateral (e.g., data sheets, white papers)
  • The template for your PowerPoint presentations
  • The templates for business cards and email footers
  • Your social media icons

This is all very graphic design-y and it consists of defining the identity, documenting it in a graphic design manual which can be given other graphic designers to ensure they produce identity-consistent material, re-flowing all existing content into the new templates, and of course, re-implementing your entire website.

This alone can run in the hundreds of thousands of dollars, even when you’re executing on a budget.  And the fact is few people notice it.   Yes, there is a basic professionalism bar that you need to surpass, and a light brand refresh from time to time to fix problems (that really should have been caught on the first go-round) is probably OK.  But spending $1M on a corporate identity makeover is rarely appropriate, welcomed by sales, or a good use of money – unless your image is really, really out of date.

Understanding Brand Values
Quick, what does Coupa stand for?  How about Microsoft?  Or Adobe?  Or New Relic?  What’s the Oracle brand promise when you do business with them?

The reality is that most tech companies don’t stand for anything and don’t deliver much of a brand promise.  You could say the Atlassian stands for developers, FireEye for security, or GainSight for customer success, but that’s more a description of what they do than their brand values.

And Oracle’s brand promise?  Do they have one?  They seem to think it’s all about “simple, authentic, adaptive, …” and such.  If you asked ten Oracle customers about the Oracle brand promise, I think you’d more likely hear:  “they promise to extract as much money from me as they possibly can each year.”

I make a distinction between brand values which are external, customer-facing and usually involve some sort of promise and corporate values which internal, employee-facing, and try to guide employees in decision making.  Yes, there should be some linkage between the two and while virtually all technology companies have corporate values, they are also all too often empty words, not lived day-to-day and not reinforced in the culture [9].

So when it comes to brand values and technology companies, there’s not a lot to talk about.  I think one notable exception is Salesforce.com.  Salesforce understands branding, invests in it, trains new hires on it, and most importantly actually stands for something in the minds of customers.  What does Salesforce stand for?  In my opinion:

  • Philanthropy.  Exhibited both by Benioff personally and, as importantly, in the company’s 1-1-1 model where, among other things, employees get both paid time off (PTO) and volunteer time off (VTO) each year.
  • Trust.  Well ahead of its time and drilled into employees like a mantra, “nothing is more important than the trust of our customers.”

They may stand for other things as well.  But the interesting part is that they actually stand for something, which most technology companies simply don’t.

To understand brand value, it’s thus easier to look at consumer examples.  In my mind, brand value is what you sell in the store.  To pick some controversial examples, in the store, I think Chick-Fil-A sells a quality chicken sandwich.  While the founder had strong religious views which, for example, drove the decision to close on Sundays – I don’t think they’re selling a religious experience.  And when they crossed their wires, they seem to have learned from it, effectively saying they’ll leave policy to government and continue to focus on making quality chicken sandwiches and giving back to the communities in which they operate.

SoulCycle, to stay with controversial examples, on the other hand apparently sells more than a workout, but a lifestyle, or as this Washington Post story put it, “an idealized version of you.”  I’m not a customer so I can’t speak first-hand on this, but it appears that SoulCycle’s value proposition was bigger than a great spin class, selling values that their parent company owner visibly eschewed.  That caused a customer uproar which drew this response.  Quote:

This is about our values. So today, we are responding in the best way we know how—with diversity, inclusion, acceptance, and love.

Speaking with a Consistent Corporate Voice
If you think it’s hard to differentiate on visual identity or brand values, think about how hard it is to define a corporate voice.  It’s really hard.  Few companies do it.  Most companies strive to sound, well, like companies.  They want to be professional.  They want copy written by 50 different people to read and sound like copy written by one.  Towards these ends, companies usually produce Style Guides to drive such consistency, in matters from capitalization to spelling to diction to writing strategies [11].

But it’s rare in my experience to have an enterprise software company sound different from its peers.  Yes, I’d say open source and developer-oriented companies sound a bit different from applications companies.  But the only enterprise software company that I ever noticed having a unique corporate voice was Splunk, back in the day when Steve Sommer was CMO.  Splunk’s copy always had a certain approachable snark that I always enjoyed and that made it pretty unique and recognizable.  Some example Splunk slogans:

  • Finding your faults, just like mom
  • All bat-belt; no tights
  • Winning the war on error
  • CSI: logfiles
  • Take the sh out of IT

But most technology companies sound like technology companies and there’s nothing really wrong with that.  Just be professional and consistent.

To Net It All Out
My proudest accomplishment as a CMO was that in over 10 years I never instigated a major rebranding.  I ran a huge rebranding project — but it was started before I joined — and I’ve run several brand refreshes.

Wholesale rebranding is expensive, visible, and risky.  And it’s rarely the top priority of the business.  So I have a strong presumption-of-guilt bias when it comes to rebranding – it’s something marketing wants to do because marketing likes doing it.

To overcome that presumption, I’ll need to see sales alignment (i.e., they support it as a top priority) and real, hard reasons why it needs to happen.  Remember it’s not only a huge direct cost, but there’s a large opportunity cost as well — the entire time you’re re-implementing your website, re-laying out all your collateral, and refreshing your campaigns, you’re not making new content, collateral, and campaigns.

Looking at rebranding from my four perspectives, I think:

  • Renaming should be undertaken rarely. As we have shown, there are few names that can’t be overcome.  Be good enough.
  • Refreshing corporate identity is appropriate from time to time. Minimize change both to stay recognizable and reduce costs associated with re-implementation – see the delicate evolution of Chick-Fil-A’s logo over 50+ years, below.  Keep changes light.
  • Putting a lot of work into brand values at any enterprise software company below $1B (and arguably above $1B) is probably a waste of time. Yes, you should have corporate values and live them.  If you do, your customers will notice the visible ones and they will form the eventual basis for your brand values, if and when you formally define them.
  • While you should establish (and continually enhance) a written Style Guide early in your marketing evolution, I wouldn’t invest much in defining a corporate voice unless you happen to have a gifted marketer who has the knack.  Odds are you’ll end up sounding like everyone else, anyway, and that’s OK.  It’s technology marketing — differentiate with your message, not your voice.

chick-fil-a-logo-history-512x1024

# # #

Notes
[1A] Think:  “We’re going to meet the guys from Monday on Tuesday.”

[1B] Agencies like unveilings because it makes their life simpler.  Just get the CMO, the CEO, and maybe some small branding committee to say yes and they’re on their way.   They are typically terrified of open voting, town halls, and other such forums to solicit wide input.  If the unveiling fails, the agency can walk away and they were still paid, handsomely in most cases.  You don’t have that luxury.

[2] The name originally comes from the word, huMONGOous.  Apologies for using the R word, but it is the translation and the shock value is kind of the point.

[3]  Founded by Mitchell Hashimoto, Tien Zuo, and Lew Cirne (which is an anagram of New Relic).

[4]  Which is a great argument to avoid descriptive names in the first place.  They’re also harder to register as trademarks.

[5] MongoDB has unintended meanings, Versant and Ingres are non-obvious to pronounce, Business Objects has too many syllables and is misleading-descriptive (to object-oriented programming).

[6] Microsoft meant software for microcomputers and isn’t a great name for server and/or cloud software.  PeopleSoft meant HR software, not a great name for their financials application.  Salesforce now does marketing and service, not just sales.  VMware was about virtual machines and is not a great name as we move into a world of containers and serverless architecture.  Zendesk was a great name for help desk software, but less so for sales.

[6A] Meaningless, not in the sense that the brands don’t mean anything – e.g., saying “Microsoft” evokes meaning and feelings – but in the sense that the original words don’t mean anything.  You don’t immediately think, “the microcomputer software company.”

[7] I’m assuming Marketo wants to stay in marketing, Intacct wants to stay in accounting, and PagerDuty – the most potentially limiting name on this list – wants to stay in pagers and notifications.

[8] Most are self-explanatory, but on the more subtle side, Splunk suggests deep diving a la spelunking and Snowflake suggests data warehouses which are often built using snowflake schemas.

[9] One problem with core values is that they’re often all the same.  For example, these are five of the most common:  teamwork, customer service, lead-by-example, operational excellence, accountability.  This alone tends to hollow them out.

[10] This blog lists the Chick-Fil-A brand message:  part of the community, serving great food, giving back.  They’re selling great chicken sandwiches, not religious experiences.

[11] Example writing strategy:  Avoid using Business Objects in the possessive.  Say:  the people who work at Business Objects, not:  Business Objects’ people.

Ten Ways to Get the Most out of Conferences

I can’t tell you the number of times, as we were tearing down our booth after having had an epic show, that we overheard the guy next door calling back to corporate saying that the show was a “total waste of time” and that the company shouldn’t do it again next year.  Of course, he didn’t say that he:

  • Staffed the booth only during scheduled breaks and went into the hallway to take calls at other times.
  • Sat inside the booth, safely protected from conference attendees by a desk.
  • Spent most of his time looking down at his phone, even during the breaks when attendees were out and about.
  • Didn’t use his pass to attend a single session.
  • Measured the show solely by qualified leads for his territory, discounting company visibility and leads for other territories to zero.

slack boothDoes this actually happen, you think?  Absolutely

All the time.  (And it makes you think twice when you’re on the other end of that phone call – was the show bad or did we execute it poorly?) 

I’m a huge believer in live events and an even bigger believer that you get back what you put into them.  The difference between a great show and a bad show is often, in a word, execution.  In this post, I’ll offer up 10 tips to ensure you get the best out of the conferences you attend.

Ten Ways to Get the Most out of Conferences and Tradeshows

1. Send the right people.  Send folks who can answer questions at the audience’s level or one level above.  Send folks who are impressive.  Send folks who are either naturally extroverts or who can “game face” it for the duration of the show.  Send folks who want to be there either because they’re true believers who want to evangelize the product or because they believe in karma [1].  Send senior people (e.g., founders, C-level) [2] so they can both continue to refine the message and interact with potential customers discussing it.

2. Speak.  Build your baseline credibility in the space by blogging and speaking at lesser conferences.  Then, do your homework on the target event and what the organizers are looking for, and submit a great speaking proposal.  Then push for it to be accepted.  Once it’s accepted, study the audience hard and then give the speech of your life to ensure you get invited back next year.  There’s nothing like being on the program (or possibly even a keynote) to build credibility for you and your company.  And the best part is that speaking a conference is, unlike most everything else, free.

3. If you can afford a booth/stand, get one.  Don’t get fancy here.  Get the cheapest one and then push hard for good placement [3].  While I included a picture of Slack’s Dreamforce booth, which is very fancy for most early-stage startup situations, imagine what Slack could have spent if they wanted to.  For Slack, at Dreamforce, that’s a pretty barebones booth.  (And that’s good — you’re going to get leads and engage with people in your market, not win a design competition.)

4. Stand in front of your booth, not in it.  Expand like an alfresco restaurant onto the sidewalk in spring.  This effectively doubles your booth space.

5. Think guerilla marketing.  What can make the biggest impact at the lowest cost?  I love stickers for this because a clever sticker can get attention and end up on the outside of someone’s laptop generating ongoing visibility.  At Host Analytics, we had great success with many stickers, including this one, which finance people (our audience) simply loved [4].

I LOVE EBITDA

While I love guerilla marketing, remember my definition:  things that get maximum impact at minimum cost.  Staging fake protests or flying airplanes with banners over the show may impress others in the industry, but they’re both expensive and I don’t think they impress customers who are primarily interested not in vendor politics, but in solving business problems.

6. Work the speakers.  Don’t just work the booth (during and outside of scheduled breaks), go to sessions.  Ask questions that highlight your issues (but not specifically your company).  Talk to speakers after their sessions to tee-up a subsequent follow-up call.  Talk to consultant speakers to try and build partnerships and/or fish to referrals.  Perhaps try to convince the speakers to include parts of your message into their speech [5].

7. Avoid “Free Beer Here” Stunts.  If you give away free beer in your booth you’ll get a huge list of leads from the show.  However, this is dumb marketing because you not only buy free beer for lots of unqualified people but worse yet generate a giant haystack of leads that you need to dig through to find the qualified ones — so you end up paying twice for your mistake.  While it’s tempting to want to leave the show with the most card swipes, always remember you’re there to generate visibility, have great conversations, and leave with the most qualified leads — not, not, not the longest list of names.

8. Host a Birds of a Feather (BoF).  Many conferences use BoFs (or equivalents) as a way for people with common interests to meet informally.  Set up via either an online or old-fashioned cork message board, anyone can organize a BoF by posting a note that says “Attention:  All People Interested in Deploying Kubernetes at Large Scale — Let’s Meet in Room 27 at 3PM.”  If your conference doesn’t have BoFs either ask the organizers to start them, or call a BoF anyway if they have any general messaging facility.

9. Everybody works. If you’re big enough to have an events person or contractor, make sure you define their role properly.  They don’t just set up the booth and go back to their room all day.  Everybody works.  If your events person self-limits him/herself by saying “I don’t do content,” then I’d suggest finding another events person.

10.  No whining.  Whenever two anglers pass along a river and one says “how’s the fishing?” the universal response is “good.”  Not so good that they’re going to ask where you’ve been fishing, and not so bad that they’re going to ask what you’ve been using.  Just good.  Be the same way with conferences.  If asked, how it’s going, say “good.”  Ban all discussion and/or whining about the conference until after the conference.  If it’s not going well, whining about isn’t going to help.  If it is going well, you should be out executing, not talking about how great the conference is.  From curtain-up until curtain-down all you should care about is execution.  Once the curtain’s down, then you can debrief — and do so more intelligently having complete information.

Notes

[1] In the sense that, “if I spend time developing leads that might land in other reps’ territories today, that what goes around comes around tomorrow.”

[2] In order to avoid title intimidation or questions about “why is your CEO working the booth” you can have a technical cofounder say “I’m one of the architects of the system” or your CEO say “I’m on the leadership team.”

[3] Build a relationship with the organizers.  Do favors for them and help them if they need you.  Politely ask if anyone has moved, upgraded, or canceled their space.

[4] Again note where execution matters — if the Host Analytics logo were much larger on the sticker, I doubt it would have been so successful.  It’s the sticker’s payload, so the logo has to be there.  Too small and it’s illegible, but too big and no one puts the sticker on their laptop because it feels like a vendor ad and not a clever sticker.

[5] Not in the sense of a free ad, but as genuine content.  Imagine you work at Splunk back in the day and a speaker just gave a talk on using log files for debugging.  Wouldn’t it be great if you could convince her next time to say, “and while there is clearly a lot of value in using log files for debugging, I should mention there is also a potential goldmine of information in log files for general analytics that basically no one is exploiting, and that certain startups, like Splunk, are starting to explore that new and exciting use case.”

Slides From My Presentation at a Private Equity S&M Summit

Just a quick post to share a slide deck I created for a session I did with the top S&M executives at a private equity group’s sales and marketing summit.  We discussed some of my favorite topics, including:

Here are the slides.  Enjoy.

Slides From My Presentation at a Private Equity S&M Summit

Just a quick post to share a slide deck I created for a session I did with the top S&M executives at a private equity group’s sales and marketing summit.  We discussed some of my favorite topics, including:

Here are the slides.  Enjoy.

Communications Lessons from Mayor Pete

Whenever I have the chance to watch a big league politician at work, I always try to study their communications skills in an effort to learn from the best.  In a previous post, I presented what I learned watching Congresswoman Jackie Speier work a room, a pretty amazing sight, in The Introvert’s Guide to Glad-Handing.

Yesterday, I had the chance to watch Mayor Pete in action at a gathering in Palo Alto.  Political views aside [1], the man is a simply outstanding public speaker.  In this post, I’ll share what I learned from watching him work.

  • Don’t be afraid of Q&A.  I’d say Pete spent 1/3rd of his time on his stump speech, and left 2/3rds to “make it a conversation.”  It works.  It engages the crowd.  In tech, I feel like many companies — after one too many embarrassing episodes — now avoid Town Hall formats at employee All Hands meetings, Kickoffs, or User Conferences.  Yes, I’ve heard of [2] and seen [3] a few disasters in my day, but we shouldn’t throw the baby out with the bathwater.  Town Hall format is simply more engaging than a speech.  Moreover, I’d guess that when employees observe leaders who habitually avoid Q&A, they perceive them as afraid to do so.
  • Engage the person who asked the question.  I’ve gotten this one wrong my whole career and it took a politician to teach me.  I’ve always said “answer the question to the audience” (not the person who asked) as a way to avoid getting caught in a bad dialog [4], but I now realize I was wrong.  If you’re a politician you want everyone’s vote, so let’s not dismiss that person/voter too quickly.  Pete inserts a step — engage the person.  Student:  “What are you planning to do if you get bullied by another candidate?”  Pete:  “Well, what do you do at school when someone tries to bully you?”  Student:  “Well, I try to walk away, but sometimes I want to yell back.”  Pete:  “And you seem pretty level-headed to me.”
  • Answer the question for the audience, ideally building off the engagement.  Pete:  “That’s it, isn’t it?  You know you should walk away but you want to yell back.  That’s why it’s so hard.  That’s why it takes discipline.  That’s why I’m thankful that during my service in the Armed Forces that I learned the difference between a real emergency and a political emergency.  Instead of yelling back at the bully you need to …”  Note that when he finishes, he does not look back at the questioner but instead says “next question” and looks to the audience [5].
  • Squat down when addressing children [6].  There were a lot of kids at the event and Pete, somewhat surprisingly, took numerous questions from them.  There were two benefits of this:  (a) the kids tended to ask simple clear questions (e.g., “why are you going to beat rival X”) and (b) the kids introduced a good bit of humor both in their questions and delivery (e.g., “what are the names and the sizes of your dogs?”or “when will there be a ‘girl’ president?”).  I always considered the squat-to-address-children as Princess Diana’s signature move, but this article now credits it to her son, Prince William.  Either way, it’s an empathetic move and helps level the playing field between adult and child.

img_0234.jpg

  • Embrace humor.  Pete seems to be a naturally funny guy, so perhaps it’s not difficult for him, but adding some humor — and flowing with funny situations when they happen — makes the event more engaging and fun.  Child:  “Can I have an even bigger bunny?”  Pete:  “Well how big is your bunny now? [7]  Child:  [sticks arms over head].  Pete:  “That big.  Well.  Uh.  [Pauses.]  Sure.  [Applause and laughter.]  You know there’s always at least one question that you didn’t see coming.” [More laughter.]
  • Use normal diction (i.e., words) [8].  Public speaking, especially in politics, is not the time to show off your vocabulary.  Pete went to Harvard and was a Rhodes Scholar at Oxford.  I’m sure he has a banging vocabulary.  But you’re not trying to prove you’re the smartest person in the room at a Town Hall meeting; you’re trying to get people to like you.  That means no talking down to people and not using fancy words when simple ones will do.  On a few occasions, I heard Pete auto-correcting to a simpler word, after starting a more complex one.
  • No free air-time.  He generally didn’t say the words Trump or Biden.  But he did say things like “we don’t want to go back to the Democratic era of the 1990s just like we don’t want to go back to the current administration’s era of the 1950s.  We want to go forward, …”  He used words like “White House,” “current administration,” or even “current President.”  But he didn’t say Trump.
  • Make it real.  A key part of Pete’s message is that we shouldn’t look at political decisions as some distant, academic, theoretical policy discussion.  We should stay focused on how they affect peoples’ lives.  Pete:  “When we think of climate change, we see imagery of a polar bear or a glacier melting.  I want to change the dialog so we think about floods that are only supposed to happen every 100 years happening only 2 years apart.”  Ditto for a conversation about healthcare where he talked about its impact on his family.  Ditto for a conversion about his marriage that wouldn’t have been possible but for a single supreme court justice’s vote.
  • Tell stories.  Given all the attention story-telling has gotten of late, this one probably goes without saying, but always remember that human beings love stories and that information communicated within the context of a story is much more likely to heard, understood, and remembered than information simply communicated as a set of facts.  Great speakers always communicate and/or reinforce their key messages via a series of stories.  Pete is a highly effectively story-teller and communicated many of his key messages through personal stories.

# # #

Notes

[1]  See my FAQ for my social media policy.  In short, because my Twitter feed is a curated version of everything I read, I tweet on a broad array of subjects which, in the current era, includes politics.  However, I try to keep my blog free from any political content — with one exception:  since politicians are generally highly skilled in marketing communications, I try to learn from them and apply what they can teach us in high-tech. Towards that end, by the way, I always recommend following two people:  Alan Kelly, a high-tech PR maven (the PR guy who put Oracle on the map) who decided to take his game to the big leagues by taking his system to DC and opening a communications firm there and Frank Luntz, a market researcher, pollster, and author of Words that Work.

[2] On “there’s always some engineer not afraid to ask anything” theory, I have heard the story of an All Hands where an engineer asked the CEO what he thought about the VP of Sales having an affair with the VP of Marketing.  OK, that’s awkward for the person who suggested the Town Hall format.

[3] Where at a User Conference when asked why so few women were in Engineering leadership, the VP responded that the company had many women on the team but they tended to work in the “more arts and crafts positions,” which made everyone in the crowd wonder if they were cutting paper flowers with scissors or building software.

[4] “So did that answer your question?”  Response:  “No.  Not at all.  And I have three more.”

[5] If you do, you are silently seeking confirmation (“did that answer your question?”) and potentially inviting the questioner to ask a follow-up question.  If you’re trying to work a room, you want to engage as many different people as possible.

[6] Or those, as you can see in the Princess Diana link, otherwise unable to get up.

[7] Applying the “engage the person” rule.

[8] Yes, that was a touch of deliberate snark.  :-)

The Market Leader Play: How to Run It, How to Respond

Business-to-business (B2B) high technology markets are all about the market and only less so about the technology.  This is primarily driven by corporate buyer conservatism — corporate buyers hate to make mistakes in purchasing technology and, if you’re going to make one, it’s far better to be in the herd with everyone else, collectively fooled, than to be out on your own having picked a runner-up or obscure vendor because you thought they were “better.”  Hence, high-technology markets have strong increasing returns on market leadership.  I learned this live, in the trenches, way back in the day at Ingres.

Uh, Dave, please stop for a second.  Thank you.  Thanks so much for coming out to visit us here at BigCo today.  Before you begin your presentation, we wanted you to know that if you simply convince us that Ingres is as good as Oracle that we’re going to chose Oracle.  In fact, I think you’re going to need to convince us that Ingres is 30% to 40% better than Oracle before we’d realistically consider buying from your company.  You may now go ahead with your presentation.

Much as I hated it on that day, what a great position for Oracle to be in!  Somehow, before the product evaluation cage-fight had even begun, Oracle walked into the cage with a 40% advantage — brought to them by their corporate marketing department, and which was all about market leadership.

Why do corporate buyers care so much about buying from market leaders?

  • Less project risk.  If everyone else is buying X, it must be good enough, certainly, to get the job done.
  • Less embarrassment risk.  If the project does fail and you’re using the leading vendor, it’s much less embarrassing than if you’re on an obscure runner-up.  (“Well, I guess they fooled us all.”) [1]
  • Bigger technology ecosystem.  In theory, market leaders have the most connectors to other systems and the most pre-integrated complementary technologies.
  • Bigger skillset ecosystem.  Trying to find someone with 2+ years of experience with, e.g., Host Analytics or Adaptive Insights is way easier than trying to find someone with 2+ years of experience with Budgeta or Jedox.  More market share means more users means you can find more skilled employees and more skilled partners.
  • Potential to go faster.  Particularly for systems with low purchase and low switching costs, there’s a temptation to bypass an evaluation altogether and just get going.  Think:  “it’s the leader, it’s $35K/year, and it’s not that hard to change — heck, let’s just try it.”

Thus, relatively small differences in perceived or actual market leadership early on can generate a series of increasing returns through which the leading vendor wins more deals because it’s the leader, becomes relatively larger and thus an even more clear leader, then wins yet a higher percentage of deals, and so on.  Life for the leader is good, as the rich get richer.  For the others, life is a series of deals fighting from behind and, as they said in Glenngarry Glenn Ross, second prize really is a set of steak knives.

This is why smart vendors in greenfield markets fight for the market leadership position as if their corporate lives depended on it.  Sometimes, in this game of high-stakes, winner-takes-all poker companies cross boundaries to create a perception of success and leadership that isn’t there. [2]

When run correctly — and legally — the goal of the market leader play (MLP) is to create a halo effect around the company.  So how do you run the market leader play?  It comes down to four areas:

  • Fundraising.  Get the biggest name investors [3], raise the most capital, make the most noise about the capital you’ve raised, and use the money to make a few big-name hires, all in an effort to make it clear that Sand Hill Road has thoroughly evaluated the company and its technology and chosen you to be the leader.
  • Public relations and corporate awareness. Spend a nice chunk of that capital on public relations [4].  Have the CEO speak at the conferences and be quoted or by-line articles in the right tech blogs.  Better yet, hire a ghost-writer to author a book for the CEO as part of positioning him/her as a thought leader in the space.  If applicable, market your company’s culture (which is hopefully already documented in a one-hundred slide deck).  Spend big bucks to hold the biggest user conference in the space (which of course cannot be labeled as a user conferenced but instead an industry event with its own branding).  Use billboards to make sure the Digerati and other, lesser denizens of Silicon Valley know your company’s name.  Think:  shock and awe for any lesser competitor.
  • Growth.  Spend a ton of that capital to hire the biggest sales force, wisely first building out a world-class onboarding and enablement program, and then scaling as aggressively as you can.  In enterprise software new sales = number of reps * some-constant, so let’s make sure the number of reps is growing as fast, and perhaps a little faster, than it wisely should be.  Build out channels to increase the reach of your fast-growing sales force and don’t be cheap, during a market-share grab, about how you pay them.  In the end, Rule of 40 aside, hotness in Silicon Valley is really about one thing:  growth.  So get hot by buying the most customers most quickly. [5]
  • Strategic relationships.  Develop strategic relationships with other leading and/or cool companies on the theory that leaders work with leaders.  These relationships can vary from a simple co-marketing arrangement (e.g., Host Analytics and Floqast) to strategic investments (e.g., Salesforce Ventures invests in Alation) to white label re-sale deals (e.g., NetSuite’s resales of Adaptive Insights as NetSuite Planning), and many others.  But the key is to have the most and best strategic relationships in the category.
  • Denial of differentiation.  While you should always look forward [6] when it comes to external communications, when it comes to competitive analysis keep a keen eye looking backward at your smaller competitors.  When they see you running the market leader play, they will try various moves to differentiate themselves and you must immediately deny all such attempts at differentiation by immediately blocking them.  Back in the day, Oracle did this spectacularly well — Ingres would exhaust itself pumping out new/differentiated product (e.g., Ingres/Star) only to have Oracle immediately announce a blocking product either as a pure futures announcement (e.g., Oracle 8 object handling) or a current product launch with only the thinnest technical support (e.g., Oracle/Star).  Either way, the goal is for the mind of the buyer to think “well the leading vendor now does that (or shortly will), too.”  Denying differentiation gives the customer no compelling reason to buy from a non-leader and exhausts the runners-up in increasing futile and esoteric attempts at differentiation.

So that, in a nutshell, is how creating a leader is done.  But what if, in a five-vendor race, you’re not teed up to be the leader.  You haven’t raised the most capital.  You’re not the biggest or growing the fastest.  Then what are you supposed to do to combat this seemingly air-tight play?

Responding to the Market Leadership Play
I think there are three primary strategic responses to the market leadership play.

  • Out-do.  If you are in the position to simply out-do the flashy competitor, then do it.  Enter the VC arms raise — but like any arms race you must play to win. [7]  Raise more capital than they do, build your sales force faster, get even better strategic relationships and simply out-do them.  Think:  “yes, they were on a roll for a while but we are clearly the leader now.”  Cloudera did this to Hortonworks.
  • Two-horse race.  If you can’t win via out-do, but have a strong ability to keep up [8], then reframe the situation into a two-horse race.  Think:  “no, vendor X is not the leader, this market is clearly a two-horse race.”  While most B2B technology markets converge to one leader, sometimes they converge to two (e.g., Business Objects and Cognos).  Much as in a two-rider breakaway from the peloton, number 1 and 2 can actually work together to distance themselves from the rest.  It requires a certain cooperation (or acceptance) from both vendors to do this strategy, but if you’re chasing someone playing the leadership play you can exhaust their attempts to exhaust you by keeping up at every breakaway attempt.
  • Segment leadership.  If you can’t out-do and you can’t keep up (making the market a two-horse race) then have two options:  be a runner-up in the mainstream market or a be a leader in a segment of it.  If you stay a runner-up in the mainstream market you have the chance of being acquired if the leader rebuffs acquisition attempts.  However, more often than not, when it comes to strategic M&A leaders like to acquire leaders — so a runner-up-but-get-acquired strategy is likely to backfire as you watch the leader, after rebuffing a few takeover attempts, get acquired at a 10x+ multiple.  You might argue that the acquisition of the leader creates a hole in the market which you can then fill (as acquired companies certainly do often disappear within larger acquirers), but (unless you get lucky) that process is likely to take years to unfold.  The other choice is to do an audit of your customers, your product usage, and your skills and focus back on a product or vertical segment to build sustainable leadership there.  While this doesn’t preserve horizontal M&A optionality as well as being a runner-up, it does allow you to build sustained differentiation against the leader in your wheelhouse.

# # #

Notes

[1] Or, more tritely, “no one ever got fired for buying IBM” back in the day (communicated indirectly via ads like this), which might easily translate to “no one ever got fired for buying Oracle” today.

[2] Personally, I feel that companies that I’ve competed against such as MicroStrategy, FAST Search & Transfer, and Autonomy at various points in their history all pushed too hard in order to create an aura of success and leadership.  In all three cases, litigation followed and, in a few cases, C-level executives even went to jail.

[3] Who sometimes have in-house marketing departments to help you run the play.

[4] In accordance with my rule that behind every “marketing genius” is a big marketing budget.  You might argue, in fact, that allocating such a budget the first step of the genius.

[5] And build a strong customer success and professional services team to get those customers happy so they renew.  Ending ARR growth is not just about adding new sales to the bucket, it’s about keeping what’s in the bucket renewing.

[6] That is, never “look back” by mentioning the name of a smaller competitor — as with Lot’s Wife, you might well end up a pillar of salt.

[7] If you’re not committed to raising a $100M round after they raise a $75M round in response to your $50M round, then you shouldn’t be in an arms race.  Quoting The Verdict, “we’re not paid to do our best, we’re paid to win.”  So don’t a pick fight where you can’t.

[8] This could be signalled by responding to the archrival’s $50M round with a $50M round, as opposed to a $75M.