Category Archives: Marketing

The Oft-Maligned Operating Partner and the Use of Tension Questions in Market Research

This post is going to get a little weird because it’s going to do two things at once.

  • Discuss an interesting, if dated, survey [1] I found on the sometimes tense relationship between CEOs and PE operating partners (and other senior advisors like executives in residence) [2].
  • Demonstrate how it makes great use of tension questions to make the report more interesting and reveal the drama in what could be an otherwise dry subject.

The former should interest executives of VC/PE-backed companies who want to work better with their advisors and, of course, to such advisors themselves. The latter should interest all marketers, but particularly those responsible for the periodic PR market studies [2] that many companies produce (e.g., Collibra’s Data Intelligence Index, Atomico’s State of European Tech, or Pigment’s Office of the CFO Report).

I love these studies because you can get not a two-fer, but a three-fer, in terms of benefits:

  • Thought leadership, via leading discussion of emerging ideas (e.g., ask CFOs about their AI strategy)
  • Increased market awareness, via promotion of the survey report
  • Stronger positioning. For example, Collibra’s index supports their migration from data governance (their historical roots) to a broader and more modern positioning in data intelligence.

And that’s not to mention the MQLs if you use your report as gated asset. Or any proprietary insights you gather from questions where you don’t publish the answers. Goosebumps. I love these things.

This report starts with some gem quotes that cut to the heart of the problem:

Most CEOs have little/no prior experience with this type of relationship. At the extreme, there can be mistrust, miscommunication, competitiveness, and misalignment — all of which distract from the value creation agenda.

Friction between CEOs and operating partners might be an unavoidable human condition. This relationship is unlike any other in the business world. It would be interesting to ask CEOs to draw where the operating partner fits within the context of their organization chart. We all know they are likely to draw the Board above them and all employees below them. But where would they draw the operating partner …As a sub-component of the Board above them? As a peer? As an independent advisor working for them?

But the real strength of this report is its use of tension questions, where you ask two groups about the same issue and then spotlight tensions between them. We don’t have to go far to find one:

They asked both CEOs and operating partners about operating partner NPS. They then compared CEO actuals with operating partner expectations and, bang, right at the outset, we have a gap you could drive a truck through. 39% of CEOs are detractors whereas operating partners expected only 3% detractors. Operating partners think they have a respectable NPS of 41, whereas CEOs report a dismal, actual NPS of -3.

Conclusion: operating partners have no idea what CEOs think of them. That’s a tension question at work.

But we’ve only just started the bus. Let’s back it up over the operating partners by looking at value added.

About 70% of operating partners think they add “significant value” through their work, while only 20% of CEOs do. Zero percent of operating partners think they add only “little value,” but nearly 30% of CEOs do. Brutal as this survey is, they forgot a category that might have made it worse: negative value-add. The minimum value-add from a helper isn’t zero. It’s negative. Some would-be help actually slows you down.

Note that these tension questions are not manipulative or loaded. They’re fair questions that simply shine a bright light on an actual tension. That’s what makes them great.

Now, let’s twist the knife by looking at the cost/benefit of operating partners.

Around half of CEOs think that operating partners don’t bring enough value to offset their perceived cost.  Ten times more operating partners than CEOs think that operating partners bring 10x+ their cost in value.

I’m ready to re-title this report: The Blissful Ignorance of Operating Partners.

They then move on to open-ended questions and verbatim responses. These are an important part of all surveys, but particularly so with tension surveys. We’ve identifed one or more massive gaps. Now, what do we want to do about them?

Here, they ask the CEOs:

What one suggestion would you make to operating partners/senior advisors to help them be more effective in creating value for your business?

And we get some great answers:

Focus on building a relationship of trust with the CEO, not dispensing advice being the deal partner’s operations spy.

Prioritize what actually creates value and listen to what management wants your help with.

They should be a resource to the CEO, not the board.

As someone who works as an advisor, I’d note that you don’t always get a choice in deciding whether the CEO or the board is your customer. For example, in my work with Balderton, I position myself as “a free service brought to you by Balderton Capital,” hopefully clearly communicating that while Balderton is paying me, I am working for you. That said, Balderton is paying me, so if you tell me you plan to destroy the company I may need to mention that to them.

These relationships can be inherently complex. They are simpler on the control-oriented PE side [4], where it’s not, “I work for one of the many investors,” but instead, “I work for the owners.” If you want to eliminate this complexity entirely, you can hire advisors directly, which many early-stage VC companies do [5]. That said, VC/PE advisors are often high caliber, fully booked, and expensive, so working through your investors may be the only way to access the ones you want.

Back to the survey, they then took some verbatims from companies with a good relationships between the CEO and the operating partner. Quotes:

Trust is essential. There are no “go arounds,” no undermining the leadership team.

Operating partners and the CEO talk candidly about the rules of engagement and communication protocols — including what not to do.

Every conversation is confidential and to be kept between the CEO and the operating partner (not shared with the Board or the management team).

Finally, they give the operating partners a chance to tell their side of the working-better-together story. Quotes:

Work collaboratively with the operating partners. [Theres is] zero payback in defending that you are already doing it right.

That we are there to help create equity value, which is in all our interests, and therefore a partnership approach is key — on both sides.

Trust us to have the discretion to keep certain conversations and information privileged.

As an advisor, I think the last point is key and if a CEO is concerned, an explicit conversation can usually help.

As a marketer, I loved this survey. It picked a great topic and executed against it well, with some awesome tension question and well-chosen verbatims. I can only guess why they didn’t run it annually and I personally wish they did — half the fun with this type of survey is watching how things change over time.

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[1] This thing is not easy to find online. You can find some old references to it, but Blue Ridge Partners seems to have archived it off their website. Perhaps they felt it was outdated, or maybe they stirred the pot too hard. Since there is no copyright notice of any kind in the report, I’ve uploaded it here (highlighting mine), so you can see it.

[2] It’s dated (2018) but my hunch is the core issues haven’t changed that much.

[3] I don’t know what else to call them. They are definitionally market research, but they aren’t run with the primary intent of learning more about the market. They are typically run by PR/comms for purely marketing reasons. New insights can be a by-product, but they’re not the primary point.

[4] The side of PE where they buy a controlling stake of the company and which, I believe, is the primary focus of this report.

[5] Often done with equity compensation via a YC FAST advisor agreement to simplify the process.

Some Marketers Use Data to End Conversations; Others Use Data to Start Them

Be the second kind.

The other day I was meeting with an advisory client [1], talking with the CMO and a handful of go-to-market team members. We started to discuss marketing, topics like product positioning and the website. So I asked for some feedback.

I displayed the company’s website alongside a competitor’s and asked, “which do you like better? And why?”

I asked for feedback on product positioning, too. Since the company works in a somewhat ill-defined category, it can credibly position either as an XYZ or a PDQ. I noted that the competitor chose PDQ while we had chosen XYZ, and again asked for feedback.

I knew darn well that the positioning had been extensively debated at the e-team and board level. I also knew the marketing team was strongly quantitative and did a lot of testing and measurement. But I just wanted to hear what the people had to say.

Because there were potential power distance issues [2], I wanted to make everyone feel more comfortable. So I said, “I’m just looking for your opinions, there are no wrong answers.”

Turns out there were.

The CMO jumped in explaining why, despite their initial feedback, our website was better and how everything had been tested and that opinions didn’t matter, only conversion rates did.

The CMO continued, explaining why XYZ was superior to PDQ, that we’d A/B tested both, and XYZ outperformed PDQ on conversions. Opinions didn’t matter, only conversion rates did.

Just in case a dying ember of life still burned in the conversation, the CMO snuffed it out by explaining that the homepage itself didn’t matter — and therefore really wasn’t worth talking about — because most of our traffic didn’t arrive on the homepage, but on scores of landing pages customized to specific paid or organic search terms.

Silence followed.

While I certainly flubbed the pre-meeting sync-up [3], this is an example of how some marketers use data to end conversations — when I think they should use data to start them.

Ending Conversations with Data

Killing conversations with data is easy. Use the data you have (ideally, that the audience has never seen) to tell them they’re wrong. We’ve tested this. We have the data. Trust the science. You are wrong. Case closed.

Once in a while, you do need to end conversations with data. For example, at the end of a long decision-making process where you have reviewed the data, had numerous conversations about it, and need to make a final decision. That’s fine. I’m not saying to never use data to end conversations.

What I’m saying is don’t use data to stifle a conversation. To cut one short. Or to avoid one entirely. Why do some marketers do this? It certainly varies by case, but I think some of the key reasons are:

  • They forget that sales is the customer. If you view someone as your customer, you should want to listen to them any chance you get. Any time. About anything [4].
  • They want to keep control. While boxing out people is a great short-term strategy to maintain control, it’s a great long-term strategy to find yourself needing new employment.
  • They don’t want their apple cart upset. Particularly towards the end of a major project, marketers often close their ears to feedback because they get more focused on project completion than on project success. They become unveilers.
  • They get offended. Don’t you think we tested this? Don’t you think we looked at the competitor’s positioning? Basically, don’t you think we know how to do our job? I get it. But marketing is not a sport for the thin-skinned.
  • You hit a nerve. Maybe there’s baggage attached to the issue, they’re having a bad day, or they’re just tired of debate. These aren’t valid reasons to shut down conversations, but we’re all human. Marketers need to learn to manage these feelings. See note [5] for how I learned this.

I follow two principles that help me avoid these problems.

  • Always be curious. My curiosity about their opinions must trump any potential sting in their response. If forced to choose between ignorance and hurt feelings, I’ll take the hurt feelings every time.
  • Defensiveness kills communication. I know of no better way to stop all communication than to interrupt someone providing feedback with a defensive explanation. When you’re talking, you’re not listening.

Starting Conversations with Data

I like to start conversations with data. For example, on the XYZ vs. PDQ positioning question, you can run a few focus groups to discuss it [6]. You can do some market research, such as surveys [7]. You can add some keyword research. And a summary of how industry analysts and competitors position the space. Then you package that up into a short summary presentation [8] and run a series of internal meetings where you tee up discussions with the data — with both the groups you must meet (e.g., the exec staff) and with anyone willing to make the time and effort (e.g., town halls).

You’re not keeping the data under your cloak and using it as a secret weapon to silence opposition. You’re gathering the information you can afford to gather, packaging it up nicely, and having a series of open discussions about it.

That’s the way to start conversations with data. And people will love it when you do.

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[1] While my desire to tell a given story in Kellblog is sometimes triggered by a single event, in order to preserve anonymity, be able to speak more generally, and spice-up things, I quickly adapt and meld such stories with dozens of others I’ve experienced over the years. Readers sometimes tell me, “I think I was in that meeting” — and they might well have been — but please don’t be surprised if the tale I tell is not a precise recounting. My goal is not to precisely describe a single experience, but instead to take lessons from the sum-total of them.

[2] A senior advisor and a CMO have quite a bit more power in an organization than a CSM or a seller. Thus, communication transparency can suffer. How much it suffers is a function of both organizational and national culture.

[3] And I’ll own that. My bad. Improvisation, as they say, only looks easy. Good improvisation usually happens among people who play together often and have a shared understanding of the underlying context and structure. Here, I tried to improvise a feedback exercise with someone with whom I rarely play, and we ended up stepping all over each other.

[4] I say this because some people only want feedback when they’re ready for it. Think: this is not a good time in our product lifeycle or campaign development cycle. Or, I can only accept feedback right now through this channel. When it comes to customers and feedback, it should be: at any time in any place. How you action it may vary based on where you are in a lifecycle, but listen first and explain those constraints later.

[5] I once had the good fortune of starting a marketing job on the day of a QBR where I got to watch my predecessor present the marketing update to the sales leadership. The whole thing got defensive very fast, the marketer bobbing and weaving, ducking blows, and having a few deer-headlight moments. I still remember the meeting and thinking one thing to myself: I never want to be that person. (Or more specifically, since they were a fine person, I never want to be in that place, in that situation.)

[6] While you can spend a lot of money on this, you can also spend a little or even none. For example, calling a couple of Zoom meetings to discuss things with trusted customers and prospects.

[7] Again, you can spend $25K to $50K on a study or you can make your own survey and mail it out. I’m not saying the data you get will be scientifically valid, but that’s not the point here. We’re not trying to prove anything with the data or make a decision on it alone. We’re trying to bring data to the conversation so we can have a better one.

[8] Spending 10 to 15 minutes of a 60 to 90-minute session teeing up the discussion, and the rest of it asking a few well-crafted questions and listening to the answers.

Slides from Five Ways to Get Product and Marketing Working Together

Last week in London, fellow Balderton EIR David Vismans and I held a joint meeting to discuss the working relationship (or moreover, the lack thereof) between product and marketing organizations.

David is a career product leader, who worked for over 8 years leading product at  I am a former CEO and CMO who still considers himself to have 100% marketing DNA.  So, we were both well able to represent our functions.  Additionally, because I am a B2B person and David is mostly a B2C person that added another dimension of difference for us to explore.

In the session, which was held as an interactive workshop for Balderton portfolio companies, we described the problem, shared a few war stories as examples, and then discussed the five things companies can do to get their product and marketing teams working better together.

  • Foster a culture of collaboration and respect.  This begins at the top.  Do not apply the old adage that “good fences make good neighbors,” and wall the teams off from each other.  (David had a great story where security literally kept them from visiting each other’s floors.)  Instead, do what we say in point 3, below.
  • Drive together for both PMF and PCF (product-channel fit), an idea that David brought.  This means the teams should work together to build and sell a product that solves a problem for a person (i.e., my definition of PMF) in conjunction with finding a way to economically reach that person (i.e., PCF).  David provided a few examples where he believes you could get PMF fairly easily (e.g., a hotel booking site for people traveling with dogs or who need chargers for electric cars), but have a hard time economically finding customers due to the need to compete with large vendors for contested search terms in paid channels.
  • Build a high-level interaction model.  That sounds fancy but it just means make a one-page table with three rows:  lifecycle phase, product responsibilities, and marketing responsibilities.  Taking the time to make this – typically done in a few meetings of a working group — sets expectations on both sides.  It avoids the common problem of ten people bringing expectations from ten different prior employers, which usually results in everyone being disappointed all the time.
  • Adapt your model with stage and scale.  We both like the Ansoff matrix and David uses it as a framework to adapt the product/marketing collaboration model.  He argues that the more you’re in “keep on keeping on” mode (box 1), the more is known, and the higher the fence between product and marketing can be.  But in boxes 2 and 3 you are working with one unknown dimension and that requires more collaboration.  Box 4, where both product and market unknown, is basically like starting a new company and requires maximum collaboration. (I largely, but not entirely, agree. My primary argument being that in Box 1, marketing will be more focused on features to differentiate and win deals than product usually is.)
  • When it comes time for your second album, don’t forget your roots.  I think as companies grow they forget how they innovated in the past, they forget the processes they used in the early days and end up, for example, localizing a new product into 10 languages on its initial release – because that’s what we do now with all products.   

Thanks to everyone who attended the session.  I’ve embedded the slides below.  They are available in PDF here (so the links on the resources page work).  Balderton is producing a summary of the event as well, which I’ll link to once it’s up.

Four Lessons From the Carta Communications Train Wreck

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:

The catalyst for all this seemed to be, in particular, an article in Fortune entitled Inside the mounting litigation and high turnover at startup unicorn Carta.

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.

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[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.

Slides from SaaStock: What Founders Need to Know About Product Marketing

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.