Category Archives: Marketing

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.

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.

The Three Marketing Books All Founder/CEOs Should Read

Few founder/CEOs come from a marketing background; most come from product, many from engineering, and some from sales, service, or consulting.  But few — ironically even in martech companies — grew up in the marketing department and consider marketing home.

When you combine this lack of experience with the the tendency that some marketing leaders and agencies have to deliberately obfuscate marketing, it’s no wonder that most founder/CEOs are somewhat uncomfortable with it.

But what’s a founder/CEO to do about this critical blind spot?  Do you let your CMO and his/her hench-agencies box you out of the marketing department?  No, you can’t.  “Marketing,” as David Packard once famously said, “is too important to be left to the marketing department.”

I recommend solving this problem in two ways:

  • One part hiring:  only hire marketing leaders who are transparent and educational, not those who try to hide behind a dark curtain of agencies, wizardry, and obfuscation.  Remember the Einstein quote:  “if you truly understand something you can explain it to a six-year old.”
  • One part self-education.  Don’t fear marketing, learn about it.  A little bit of fundamental knowledge will take you a long way and build your confidence in marketing conversations.

The problem is where to begin?  Marketing is a broad discipline and there are tens of thousands of books — most of them crap — written about it.  In this post, I’m going to list the three books that every founder/CEO should read about marketing.

I have a bias for classics here because I think founder/CEO types want foundational knowledge on which to build.  Here they are:

  • Positioning by Al Ries and Jack Trout.  Marketers frequently use the word “positioning” and after reading this classic, you’ll know exactly what they mean [1]. While it was originally published in 1981, it still reads well today.  This is all about the battle for the mind, which is the book’s subtitle.
  • Ogilvy on Advertising by David Ogilvy.  Ogilvy was the founder of marketing powerhouse agency Ogilvy and Mather and was the king of Madison Avenue back in the era of Mad Men.  Published in 1963, this book definitely shows signs of age, but the core content is timeless.  It covers everything from research to copy-writing and is probably, all in, my single favorite book on marketing. [2]
  • Crossing the Chasm by Geoffrey Moore.  The textbook classic Silicon Valley book on strategy.  Many people refer to the chasm without evidently having even read the book, so please don’t be one of them.  Published in 1991, it’s the newest of the books on my list, and happily Moore has revised it to keep the examples fresh along the way.

If I had to pick only one book, rather than suggesting original classics I’d revert to a summary, Kotler on Marketing, an overview written by Philip Kotler [3], author of one of the most popular marketing college textbooks, Marketing Management. [4]

If reading any of the above three books leaves you hungry for more (and if I were permitted to recommend just a few follow-up books), I’d offer:

  • As a follow-up to Positioning, I’d recommend The 22 Immutable Laws of Marketing also by Al Ries and Jack Trout and also written in the same accessible style.  This book would place second in the “if I only had one book to recommend” category and while less comprehensive than Kotler it is certainly far more accessible.
  • As a follow-up to Ogilvy on Advertising, and for those who want to get closer to marketing execution (e.g., reviewing content), I’d recommend The Copywriter’s Handbook by Robert Bly.  Most founder/CEOs are clear and logical writers who can get somewhat bamboozled by their marketing teams into approving gibberish copy.  This book will give you a firmer footing in having conversations about web copy, press releases, and marketing campaigns.
  • As a follow-up to Crossing the Chasm, I’d recommend Good Strategy, Bad Strategy, an excellent primer on strategy with case studies of great successes and failures and Blue Ocean Strategy, a great book on how to create uncontested market space and not simply compete in endless slug-fests against numerous competitors — which is particularly relevant in the current era of over-populated and over-funded startups. [5]

As founder/CEO you run the whole company.  But, for good reason, you might sometimes be hesitant to dive into marketing.  Moreover, some marketeers like it that way and may try to box you out of the marketing department.  Read these three books and you’ll have the tools you need to confidently engage in, and add value to, important marketing conversations at your company.

# # #

Notes

[1]  The Wikipedia entry on positioning isn’t a bad start for those in a hurry.

[2] Right from the second sentence, Ogilvy gets to the point:  “When I write an advertisement, I don’t want you to tell me that you find it ‘creative.’   I want you to find it so interesting that you buy the product.”  Love that guy.

[3] Of 4 P’s fame.  Kotler’s 4 P’s defined the marketing mix:  product, place, price, and promotion.

[4] Kotler on Marketing is deliberately not a summarized version of his classic, 700-page textbook, but alas it’s still written by someone who has produced numerous textbooks and nevertheless has a textbook feel.  It’s comprehensive but dry — especially by comparison to the others on this list.

[5] I can’t conclude any post on marketing thoughts and thinkers without a reference to one of the great marketing essays of all time, Marketing Myopia, by Theodore Levitt.  It’s old (published in 1963) and somewhat academic, but very well written and contains many pithy nuggets expressed as only Levitt could.

The Next Chapter

This morning we announced that Vector Capital has closed the acquisition of Host Analytics.  As part of that transaction I have stepped down from my position of CEO at Host Analytics.  To borrow a line from The Lone Ranger, “my work is done here.”  I’ll consult a bit to help with the transition and will remain a friend of and investor in the company.

A Word of Thanks
Before talking about what’s next, let me again thank the folks who made it possible for us to quintuple Host during my tenure all while cutting customer acquisition costs in half, driving a significant increase in dollar retention rates, and making a dramatic increase in net promoter score (NPS).  Thanks to:

  • Our employees, who drove major productivity improvements in virtually all areas and were always committed to our core values of customer success, trust, and teamwork.
  • Our customers, who placed their faith in us, who entrusted us with their overall success and the secure handling of their enormously important data and who, in many cases, helped us develop the business through references and testimonials.
  • Our partners, who worked alongside us to develop the market and make customers successful – and often the most challenging ones at that.
  • Our board of directors, who consistently worked positively and constructively with the team, regardless of whether we were sailing in fair or foul weather.

We Laid the Groundwork for a Bright Future
When Vector’s very talented PR guy did his edits on the closing press release, he decided to conclude it with the following quote:

Mr. Kellogg added, “Host Analytics is a terrific company and it has been an honor lead this dynamic organization.  I firmly believe the company’s best days are ahead.”

When I first read it I thought, “what an odd thing for a departing CEO to say!”  But before jumping to change it, I thought for a bit.  In reality, I do believe it’s true.  Why do Host’s best days lie ahead?  Two reasons.

First, we did an enormous amount of groundwork during my tenure at Host.  The biggest slug of that was on product and specifically on non-functional requirements.  As a fan of Greek mythology, the technical debt I inherited felt like the fifth labor of Hercules, cleaning the Augean stables.  But, like Hercules, we got it done, and in so doing shored up the internals of a functionally excellent product and transformed our Hyderabad operation into a world-class product development center.  The rest of the groundwork was in areas like focusing the organization on the right metrics, building an amazing demand generation machine, creating our Customers for Life organization, running a world-class analyst relations program, creating a culture based on learning and development, and building a team of strong players, all curious about and focused on solving problems for customers.

Second, the market has moved in Host’s direction.  Since I have an affinity for numbers, I’ll explain the market with one single number:  three.  Anaplan’s average sales price is three times Host’s.  Host’s is three times Adaptive’s.  Despite considerable vendor marketing, posturing, positioning, haze, and confusion to the contrary, there are three clear segments in today’s EPM market.

  • Anaplan is expensive, up-market, and focused primarily on operational planning.
  • Adaptive is cheap, down-market, and focused primarily on financial planning.
  • Host is reasonably priced, mid-market, focused primarily on financial planning, with some operational modeling capabilities.

Host serves the vast middle where people don’t want (1) to pay $250K/year in subscription and build a $500K/year center of excellence to support the system or (2) to pay $25K/year only to be nickeled and dimed on downstream services and end up with a tool they outgrow in a few years.

Now, some people don’t like mid-layer strategies and would argue that Host risks getting caught in a squeeze between the other two competitors.  That never bothered me – I can name a dozen other successful SaaS vendors who grew off a mid-market base, including within the finance department where NetSuite created a hugely successful business that eventually sold for $9.3B.

But all that’s about the past.  What’s making things even better going forward?  Two things.

  • Host has significantly improved access to capital under Vector, including the ability to better fund both organic and inorganic growth. Funding?  Check.
  • If Workday is to succeed with its goals in acquiring Adaptive, all rhetoric notwithstanding, Adaptive will have to become a vendor able to deliver high-end, financial-focused EPM for Workday customers.  I believe Workday will succeed at that.  But you can’t be all things to all people; or, to paraphrase SNL, you can’t be a dessert topping and a floor wax.  Similarly, Adaptive can’t be what it will become and what it once was at the same time – the gap is too wide.  As Adaptive undergoes its Workday transformation, the market will switch from three to two layers, leaving both a fertile opening for Host in mid-market and a dramatically reduced risk of any squeeze play.  Relatively uncontested market space?  Check.

Don’t underestimate these developments.  Both these changes are huge.  I have a lot of respect for Vector in seeing them.  They say that Michelangelo could see the statue within the block of marble and unleash it.  I think Vector has clearly seen the potential within Host and will unleash it in the years to come.

What’s Next?
I don’t have any specific plans at this time.  I’m happily working on two fantastic boards already – data catalog pioneer Alation and next-generation content services platform Nuxeo.   I’ll finally have time to write literally scores of blog posts currently stalled on my to-do list.  Over the next few quarters I expect to meet a lot of interesting people, do some consulting, do some angel investing, and perhaps join another board or two.  I’ll surely do another CEO gig at some point.  But I’m not in a rush.

So, if you want to have a coffee at Coupa, a beer at the Old Pro, or – dare I date myself – breakfast at Buck’s, let me know.

Should Your Startup Have a Quota Club? (And How Much to Spend on It.)

December is when most SaaS startups are closing out the year, trying to finalize next year’s operating plan (hint:  I know a software company that can help with that), starting to get a clear view on which salespeople are going to make their number, and thus beginning the process of figuring out who to invite to the annual “Quota Club” (a.k.a. President’s Club, Achiever’s Club, or Sales Club).

In this post, I’ll discuss why Quota Clubs are so controversial and how I learned to think about them after, frankly, way too much time spent in meetings discussing a topic that I view nearly as difficult as religion or politics.

Quota Club is always highly controversial:

  • It’s exclusionary.  Consider this quote my friend Lance Walter heard years ago (I think at Siebel): “the last thing I want at Quota Club is to be lying on a chaise lounge by the pool, roll over, and see some effing marketing guy next to me.”  Moreover, the sales personality tends not to blend well with other departments, so a well-intentioned attempt to send the top documentation writer on a trip with 30 sales people is as likely to be perceived as punishment as it is reward.
  • It’s expensive.  The bill can easily run in the hundreds of thousands of dollars for companies in the tens of millions of annual recurring revenue (ARR) and in the millions for those above that.  That doesn’t help your customer acquisition cost (CAC) ratio.
  • Even the basics of qualification are somehow complicated.  Now, on the face of it, you might that “making quota” would be sufficient to qualify for Quota Club, but in some people’s minds it’s not:  “no, at this company we expect people to make quota, so Quota Club should only be for those at 120% of quota.”  (The idea that maybe quotas are set too low doesn’t seem to occur to these people.)  That’s not to mention minimum attainment rules required to avoid accidents with ramped quotas (e.g., a new rep who sells $400K on a $200K quota.)  Or the intractable problem in decentralized organizations where Country A runs large numbers of junior reps at low quotas while Country B runs small numbers of senior reps at high quotas — so someone who sells $1.25M in Country A attends club while someone who sells $1.75M in Country B does not.
  • Invitations beyond quota-carrying reps (QCRs) are always controversial.  Do consultants who hit their utilization target get invited?  (No.)  Do sales development reps (SDRs) who hit their opportunity goals? (No.)  On what basis do sales consultants (SCs) get invited?  (Depends on SC model.)  Do CSMs who hit their renewals goals?  (Maybe, depends on your customer success model and how much selling they do.)  What about the executive staff?  What about a regional VP or CRO when he/she didn’t make their number?  Who presents the awards to their people?  And this isn’t to mention companies that want to inclusionary and invite some hand-picked top performers from other departments.
  • Guest policies can be surprisingly tricky.  Normally this is simple — each qualifier gets to invite a spouse or partner, with the implication that the company wants to reward the chosen guest for the sacrifices they made while the qualifier was working long hours on the big deal and doing extended travel. What if the guest is a friend as opposed to spouse or partner?  (Well, that’s OK if not quite the intent.)  But what if that friend is coworker?  (Hum, less so.)  What if that friend is another quota-carrying rep who failed to make their number?  (Even harder.)  Or, changing angles, what if their spouse is a sales rep at your top competitor?  What if they run competitive intelligence at your top competitor?
  • Opinions diverge on family policy.   Should qualifiers be encouraged to bring their children?  How about Grandpa to watch them?  Are these family members invited to any events or activities?  Can their pay their own way on the snorkeling cruise if they want to?  Is babysitting covered?  Is the reward for spending too much time away from your family a mandatory vacation away from your family?
  • The business meeting can be a religious issue.  Many sales VPs think Club should be a 100% reward — a complete vacation with no work.  If so, the CFO will take an income tax withholding from each qualifier.  Hence most companies have a business meeting that keeps Club a business affair  — and off the W-2s of the attendees.  Some sales VPs thus think:  do the absolute minimum to stave off the tax man.   More enlightened folks think:  what a great opportunity to meet with our top performers to talk about the business.
  • People can’t even agree on the dress code.  Should the awards dinner be California Casual, Summer Soiree, Creative Black Tie, Brooklyn Formal, or just a regular Black Tie Affair.  (And where do they get these names?)
  • Picking the location is difficult.   The Caribbean isn’t exotic for East Coasters and Hawaii isn’t exotic for West Coasters.  Some people think Clubs should always have a beach location, some think European cities are more exotic.  (By the way, try to find a reliably warm beach location in February or April.)  Should you invest your money in flights to a relatively inexpensive place or get cheaper flights to a more popular and presumably expensive place?  And this isn’t to mention any debates about hotel brands and their significance.
  • In-room gifts can jack up the price.  Club planners seem to love to include special gifts each night.  A welcome bottle of champagne the first night, a beach kit the second, a Tumi backpack the third, and a farewell mini-Margarita kit can quickly add up to $500 in extra cost per qualifier.
  • Planning is intrinsically difficult.   It’s inherently hard to plan when you have 30 QCRs and you’re not sure if 10, 20, or 30 are going to qualify — this is particularly difficult when you plan sales-only Clubs because you have less to fudge in terms of non-QCR attendees.  What do you do mid-year when you’ve planned for 20 and forecast that only 10 are going to make it?  Devalue Club by dropping the qualification bar for some reps or (the same act seen through a diametrically opposed lens) preserve the incentive value of Club by making it a realistic goal for the reps who otherwise had no realistic hope?

Holy Cow, just making this list gets my blood pressure up.  Are we sure we want to do this?  My answer remains yes.

Most startups, once you’re beyond $5M to $10M in ARR, should have some sort of Quota Club.  Here is my advice on how to do it:

  • Define it as the CEO’s club.  You can call it Quota Club or President’s Club, but make it clear to everyone that it’s the CEO’s event.  It’s a big expense (with a huge opportunity to waste a lot of money on top) and it’s full of decisions that are both subjective and polarizing.  Listen to what your current sales VP wants, but make those decisions yourself.
  • Start small.  At MarkLogic our first Quota Club was something like 10-15 people for two nights at the Bellagio in Vegas.
  • Leave room to make it incrementally better each year.  This is what I call Narva’s Rule, after my friend Josh Narva who came up with it.  (By the way, had we better applied his rule, we’d have held the first MarkLogic Club at Caesar’s Palace, saving the Bellagio for the following year — but at least we got the two days part right, leaving room to later expand to three.)  Don’t cover every bite or drink that goes in someone’s mouth in the early years:  folks can get a breakfast croissant at Starbucks or a drink by pool on their own nickel. You don’t need a group breakfast and a pool party to cover it.
  • Be inclusive of other functions.  This lets you recognize a few folks outside of non-quota-carrying sales each year.  (It also makes planning a little easier.)  Don’t be so inclusive that QCR/QCM attendance is less than 50%.  But take all your qualifying QCRs and quota-carrying managers (QCMs).  Add your selected SCs.  Add your qualifying CSMs (according to whatever rules you establish).  Then perhaps add a few folks — based on their helpfulness to sales — maybe from consulting, marketing, product, or salesops.  Helpful e-staff are also good candidates and can benefit from the direct feedback they will get.  Think:  I’d rather run a bit less luxurious event and invite a few more folks from across the company than the converse.
  • Do it at a beach in April, alternating East and West coasts.  Or, if you have a strong ski contingent, alternate between a ski resort in February and a beach in April.  Beware the sales VP will gripe about too much first-quarter time in meetings with a January kickoff and February Club.  But who says you can’t still ski in April?
  • Be family-friendly.  Be clear that kids and family are welcome at the event (at the attendee’s cost) and at most, but not all, activities.  If you have two dinners, make one a bring-the-clan affair and make the awards dinner spouse/guest only.  Let family opt-in to an any easily inclusive activities like snorkel trips. Help folks find and/or pool babysitting.
  • Take the business meeting seriously.  Run the meeting on the morning of day 2.  I like doing attendee surveys in advance (e.g,. via SurveyMonkey) and then doing a detailed review of the results to drive discussion.  This sets the tone that the event is for both fun and business and that the company isn’t going to miss the chance to have a great conversation with its top performers.  Discussing business at Club isn’t a party foul.  It’s part of why you have Club.
  • Stay aligned with event planner, particularly in the early days when you are trying to run a discount event as they will, by default, try to run a standard one.  Skip the bells and whistles like custom event logos, fancy signage, custom beach bags and towels, in-room gifts, and all-meals coverage. Define what your program is going to be and deliver against that expectation.  Then make it better next year.
  • Make and hold to a sensible budget.  Know, top of mind, the total event cost and cost/attendee — and remember that cost/qualifier is about double the cost/attendee, since each qualifier invites a guest.  As part of Narva’s Rule, increase that cost every year. Because I like to make things concrete, I think cost/attendee should range from $2.5K to $5.0K as a function of your typical salesperson’s on-target earnings (OTE) and your company’s lifecycle.  This means the “prize value” of the Quota Club invitation is $5K to $10K, equivalent to a roughly 2-4% bonus against typical OTEs.  On this sort of budget, you can offer a very nice, high-quality event, but you won’t be doing the truly unique, memorable, over-the-top stuff that some CROs like.
  • If you want to have an ultra-club do what we did at BusinessObjects.  While during most of my tenure at BusinessObjects we ran in nice-but-not-crazy mode, towards the end of my tenure there was a movement to make Club truly exceptional and unique.  That first led to discussions on how to trim down Club in order to increase the spend/qualifier, including potentially increasing the attainment bar from 100% to 125% and ending our inclusive philosophy.  I’m glad we didn’t do that.  Instead, we ended up creating an intimate ultra-club as a few days tacked on to the end of Quota Club.  It provided some niche cachet when the attendees were whisked off onto their continuation trip.  It allowed “the movement” to do some truly exceptional things for a small number of people.  Most of all, I think we correctly figured out who the “right people” were — not the one-hit wonder reps who had one big year, but instead the consistent reps around which you truly build a company.  I believe we set 5 years of consecutive Quota Club attainment as the criteria for an invitation to the ultra-club.  I’d invest extra in those people any day of the week.