A few days ago, Steve Pockross released a new episode of his Yes, And Marketing podcast on which he interviews a series of “eclectic and enlivening” marketers where “your weird shower thoughts and disparate liberal arts references take a road trip.” I was last week’s featured guest, and I don’t think the episode fails to deliver on its rather unusual promise.
Steve posted a nice summary of the session which lays out the topics we discussed including:
Long vs. short copy and how to correctly apply David Ogilvy’s “long copy sells” adage.
Content marketing, and when to write C+ deliverables vs. A+ deliverables, and how to be explicit about that in planning. (Lest you end with straight Bs.)
What to look for in a CMO for a startup, particularly if they’re potentially joining from a large company and you’re worried they may struggle in a startup environment.
Aligning sales and marketing, a perennial favorite topic, but this time both from the CMO and the individual marketer perspective.
The importance of rigorous definitions in messaging, and how you can use them to turn gray messages into black-and-white messages.
Walking the benefits stack by repeatedly asking “so what?” and not being afraid to do so.
Never forgetting the kiss, i.e., the ultimate benefit from the point of view of the customer, in your marketing.
Thanks to Steve for having me, to Crispin Read for referring me (his episode is well worth a listen), and to all of you who find the time to listen. While I’ve been doing a lot of podcast interviews of late, like the Grateful Dead, I promise that each show is different. And this one’s a barn burner.
Please join us for tomorrow’s SaaS Product Power Breakfast with entrepreneur and venture capitalist Paul Jozefak, CEO of Receeve (an all-in-one platform for collections and recovery), on how to use SaaS as a layer atop legacy systems to prove return on investment (ROI) and smooth the customer’s transition before setting out to rip and replace them.
This is an interesting strategy that I’ve seen numerous times in SaaS and it cuts to core product strategy issues, most notably, to what extent and in what timeframe do you “design in” versus “design out” the underlying technology.
In addition to both impromptu and (hopefully some) audience questions, we’ll be asking Paul:
Why layer on top in your target segment?
Are there any risks to layering?
What are your customers trying to accomplish when it comes to working with Receeve?
Where is technology in the segment headed?
What hurdles do you hit with decision makers?
Thomas has not been feeling well so, while he’s slated to be our lead interviewer tomorrow, I may end up taking the lead on this episode.
I sometimes get asked about how to structure an enterprise software marketing organization and the relative roles of product marketing vs. competitive analysis. In this post, I’ll share my (somewhat contrarian) thoughts on this topic.
My first job in marketing, which served as my bridge from a technical to a sales-and-marketing career, was as a competitive analyst. Specifically, I was the dedicated Sybase competitive analyst at Ingres in the late 1980s, in a corporate job, but working out of the New York City sales office. Because, at the time, Sybase was a strong new entrant with a beachhead strategy in financial services, this was rough equivalent of working for the Wehrmacht on Omaha Beach on D-Day. I learned not only by watching Sybase’s market invasion, but more importantly by watching how the local reps [1] and corporate [2] responded to it.
I’m a huge believer in competitive analysis, which probably started when I first heard this quote watching Patton as an adolescent:
“Rommel, you magnificent bastard, I read your book!” [3]
While Gekko doesn’t use my favorite quote for these purposes [4], his reference to the book was very much in vogue at the time, and probably why I first read it. My favorite quote from The Art of War is this one:
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
Regular readers know I believe the mission of marketing is to make sales easier. So the question becomes: in enterprise software, how do we structure product marketing and competitive in the best way to do just that?
First, let’s review some common mistakes:
Not specializing competitive, instead declaring that each product marketing manager (PMM) will cover their respective competitors. Too much scope, too little focus.
Understaffing competitive. Even in organizations where competitive exists as its own team, it’s not uncommon to see a ratio of 5-10 PMMs per competitive analyst in terms of staffing. This is too unbalanced.
Chartering competitive as strategic. While I often euphemize the competitive team as “strategic marketing” or “market intelligence,” that’s not supposed to actually change their mission into some think tank. They exist to help sales win deals. Don’t let your competitive team get so lofty that they view deal support as pedestrian.
Putting competitive under product marketing. This both blurs the focus and, more importantly, eliminates a healthy tension [5]. If your messaging doesn’t work in the field, the CMO should want to hear about it early (e.g., in their own staff meeting) and have a chance to fix it before it escalates to the corporate QBR and a potential sales attack on marketing in front of the CEO.
Putting competitive in the field. This happens when marketing abdicates responsibility for producing sales-ready competitive materials and someone else picks up the ball, usually the sales productivity team, but sometimes field marketing [6]. This disconnects corporate product marketing from the realities of the field, which is not healthy.
Now, let’s tell you how I think structuring these departments.
Product marketing exists to build messaging and content [7] that describe the features and benefits of the product [8]. The job is to articulate. They are experts in products.
Competitive analysis exists to research competitors, devise plays, and build tools to help sales win deals. The job is to win. They are experts in the competitors.
As long as we’re in movie quote mode, here’s one of my favorite quotes from James Mason’s character in The Verdict [9]:
I’d prepared a case and old man White said to me, “How did you do?” And, uh, I said, “Did my best.” And he said, “You’re not paid to do your best. You’re paid to win.”
While he was speaking to about lawyers, he might as well have been speaking to competitive: you’re paid to win.
That’s why I believe competitive needs to be holistic and play-oriented. Simply put, take everything you know about a competitor — e.g., products, leadership, history, tactics — and devise plays that will help you win against them. Then train sales on how to run those plays and supp0rt them in so doing.
If you adopt this mindset you end up with an organization where:
Product marketing and competitive are separate functions, both reporting directly to the CMO
Product marketing is product-oriented, focused on articulation of features and benefits
Competitive is competitor-oriented, focused on using all available information to create plays that win deals and support sales in executing them
Product marketing staffing is driven by the number of products you’re covering
Competitive staffing is driven by the number of competitors you’re covering (and at what depth level or tier).
You end up with a ratio of more like 3:1 than 10:1 when it comes to the relative staffing of product marketing and competitive
You think of these organizations as a matrix:
# # #
Notes
[1] In the case of the reps, their response was to walk away from financial services deals because they knew they were likely to lose. This, of course, had the effect of making it easier for Sybase to enter the market. The smart reps went to Westchester and Long Island and sold in other verticals. The dumb ones battled Sybase on Wall Street, lost deals, missed mortgage payments, broke marriages, and got fired — all for doing what the c0mpany strategically should have wanted them to do: to slow down the invasion. A classic case of micro and macro non-alignment of interests.
[2] The corporate response was to blame sales management. Rather than seeing the situation as a strategic problem where an enemy was breaking through lines with an integrated strategy (e.g., partners), they chose to see it as an operational or execution problem. Think: we’re hiring bad reps in NYC and losing a lot deals — fire the sales manager and get some new talent in there.
[3] Good Strategy, Bad Strategy tells the presumably more common inverse tale, where during the Gulf War in 1991 General Schwarzkopf was widely credited with a left-hook strategy described as “surprise,” “secret,” and “brilliant,” that was clearly published in the US Army Field Manual 100-5 saying the following, complete with an illustration of a left hook.
Envelopment avoids the enemy’s front, where its forces are most protected and his fires most easily concentrated. Instead, while fixing the defender’s attention forward by supporting or diversionary attacks, the attacker maneuvers his main effort around or over the enemy’s defenses to strike at his flanks and rear.
[4] Gekko refers to: “Every battle is won before it’s ever fought.”
[5] Organization design is all about creating and managing healthy tensions. Such tensions are a key reason why I like marketing reporting to the CEO (and not sales), customer success reporting to the CEO (and not the CRO/sales), and engineering reporting to the CEO (and not product), for a few examples.
[6] At one point, way back, Oracle had a huge market intelligence organization, but housed within Americas Marketing, a field marketing organization.
[7] Content being collateral (e.g., web content, white papers, e-books), presentations (internal and external), and demonstrations — all built around communicating the key messages in their messaging blueprint.
[9] It’s not lost on me that the character was morally bankrupt and was implicitly saying to win at any and all costs. But I nevertheless still love the quote. (And yes, win within normal legal and societal constraints! But win.)
As you may know, I have been experimenting with Clubhouse over roughly the past six months in several capacities: as a regular user, an occasional audience participant/questioner, and as the host of a regular room I’ve been running with Thomas Otter, the SaaS Product Power Breakfast.
I love to get involved with new social media platforms early because I’m interested in new forms of media (and the often subtle differences they bring), I enjoy watching early evolution of the products and their usage (e.g., the invention of hashtags or URL shortening on Twitter, the applause convention [1], speaking protocols [2], or the use of Instagram DMs on Clubhouse [3]), I like watching the minimum viable product (MVP) questions play out in real time, and I love to see strategy at work.
So, in that light, here is my quick critique of Clubhouse intended as both critical and constructive.
As a startup- and media-watcher, I’m of the opinion that, after raising money at a $4B valuation in April (and with maybe 50 total employees at the time), Clubhouse appears to have lost significant momentum in the past several months. Why?
The pandemic is winding down. I think Clubhouse got a significant pandemic tailwind when people were locked in, Zoomed out, and looking for new ways to connect with other humans.
Certain communities returned to IRL mode, notably comedians, one of several core Clubhouse communities. Some of my favorite rooms were in Leah Lamarr’sHot on the Mike club and it appears that many of thoseoutstandingcomedians are back working at physical clubs. That’s great for them, but not for me — as a Clubhouse user I can’t just login when I’m free and easily find a great comedy room as I once could.
It’s hard to reliably find live content. The key difference between podcasts and Clubhouse rooms is the serendipity of live content (e.g., when I stumbled into a room with John Mayer) and the potential for interactivity [4]. Without those two things, I can just listen to a recorded podcast. If you can’t find content, what good is the app? It becomes like cable TV — 500 channels, but nothing to watch. Every day I am less enthusiastic about firing up the app because I think I’ll either spend half my time looking for something [5] or fail entirely.
The app doesn’t get the most basic thing right: language. While I do listen to content in two languages, the app is constantly showing rooms in my hallway with titles (and dialog) in languages that I don’t speak.
The app has no room-search functionality. The single most basic, MVP-level feature is (still) missing: search in-progress rooms by keyword (or topic) in the title or description. Not there. Stunning.
The follow paradigm is wrong. Content discovery is based primarily on people, not topics. Using myself as an example, I like: enterprise software, the Grateful Dead, French language, comedy, startups, mathematics, and philosophy. Just because you like enterprise software doesn’t mean you like the Grateful Dead or topology. While the app notionally supports topics, they appear ignored in composing your hallway [6].
The app does not appear to learn. While the app does not appear to learn what I like in formulating suggestions in the hallway, it does appear to learn some bad lessons: e.g., if you actually stumble into a single Russian room it seems to suggest them endlessly.
The app breaks trust in machine learning. In an era of sophisticated users, I’m OK to hide-room numerous times in order to teach the app my preferences. While hide-room didn’t appear to actually do anything (yet), I was confident that at some point they’d leverage that data to improve my experience. Then one day hide-room seems to have simply disappeared from the app, so all that teaching appears to have been wasted. That breaks my trust. Don’t ask me questions if you’re going to throw away the answers.
The app is gameable in odd ways. It appears that long-running rooms get some advantage in hallway prioritization so there are people who run rooms for days on end (e.g., Scenes From an Airport Terminal) that pollute my hallway, and that now I can’t even hide. If the app were focused on topics and not people and duration, they could eliminate this.
The community has too many hucksters and charlatans. Everyone seems to be a millionaire, successfully running five companies, a great venture investor, and yet still somehow need $99 from you to take their masterclass. Just reading the bios of the moderators in many rooms makes me feel vaguely ill. Hearing the advice these people give to would-be entrepreneurs makes me feel worse. Don’t get me wrong, some rooms are amazing and offer an experience you can find nowhere else. But a lot of Clubhouse feels like the vapid self-help section of a bookstore. Oh, and don’t forget your laser eyes before going into the crypto rooms.
What to do about it?
Strategically, Clubhouse seems to have missed the systematic expansion memo (e.g., Amazon from books to DVDs to cameras and onward, or Facebook from Harvard students to Ivy League students to College students to broader groups). I think their decision to port the app to Android before coming even close to completing it (e.g., content discovery, search) was a big mistake. They need to focus on completing the app first. Get to MVP before porting the app.
Systematic expansion includes not only product but community. Just as they need to prioritize their product features to complete the product in a logical order, they need to decide which communities they want to serve (and, no, “creators” is not a sufficiently focused community definition). I think comedians may be gone for good because the time that people want to hear them is precisely the time they are out at work. But there are lots and lots of communities on Clubhouse they can try to develop (e.g., Silicon Valley VC/startups which had an early focus but seems to have faded away, crypto, activism, real estate, investing). Just pick some and complete the app for them.
Appoint community mangers. In addition to product managers to drive functionality, appoint and empower community managers and not just to makes rules about content [7] but to help build the community in a given topic area. Just as retailers have category managers (someone responsible for, e.g., swimwear at a business level) so should Clubhouse have community managers.
Play for your users, not your VCs. Existing users definitionally were not pushing for Android. I’m guessing the VCs were — so they could continue to show great adoption. But what good is great adoption if, after using the app a few times, everyone drops off because they can’t find anything they want to listen to? Without great content on the app, there is no need for the app.
Stay in touch and on the ground. One of my favorite rooms was cofounder Paul Davison’s weekly introduction [8] for new members (on Thursday evenings) that I assume he’s still running. I know he runs a weekly Town Hall as well. Paul is a great spokesperson, communicator, and listener and I love that he stays in such direct touch with his user base. They just need to add some more systematic strategic focus atop that and some Geoffrey Moore 101 to go with it — complete the app, use-case by use-case and don’t get stretched too far, too fast in the process.
# # #
Notes
[1] Muting and unmuting your microphone in rapid succession
[2] Examples: Pull-to-refresh (PTR) order. Or the “this is Dave and I am done speaking” protocol, which is seemingly for several reasons including: to identify speakers in rooms with large numbers of moderators where you may not be able to find the speaker (e.g., if they are buried three screens down), as a basic courtesy protocol, and for accessibility reasons for people who are unable see the grey ring indicating speaker identity.
[3] A great example of not needlessly building DMs a feature, but instead supporting profiles that link to Instagram and the community quickly embracing Instagram as the default DM method on Clubhouse.
[4] If you want to raise your hand and ask a question and are so selected — itself another issue as I’d been in numerous rooms where people said they waited literally for hours
[5] And because Clubhouse can be and is often best done while multi-tasking, it needs to be fast and easy to find something, e.g., when you’re hopping on the treadmill.
[6] The app suggests if you’re not finding content you want to “follow more people” — not to like more topics.
[7] The narrow definition of community manager is about making and enforcing rules for rooms, dealing with reported speakers, etc. While such activity is important, it’s table stakes — a community manager should be far more than a security guard, but instead a leader trying to build the community, drive membership, foster and promote rooms, etc.
[8] Even though it was notionally an “introduction” I attended for several weeks just to hear Paul talk about the app and his vision.
Our theme for tomorrow’s episode is how to manage the transition from traditional open source to true cloud native, something relatively few companies have done, and a transition that Evan has overseen at Influx Data.
We’ll cover questions including:
A primer on the traditional open source model
What it means to be true cloud native
How to approach the transition to true cloud native
Perils and pitfalls in the transition
Organizational (and people) change in the transition
Licensing implications, including protecting the open source from cloud hyperscalers and while trying not to alienate the traditional open source community
Influx Data is a category leader that has raised about $120M from top-tier investors. Evan has a spectacular background, having been founder/CEO of Aventail for about a decade, CEO of iPass for half a decade, the member of numerous boards, and having serving 5+ years at Influx Data. I’m super excited to have him on the show. See you there!
I’m Dave Kellogg, advisor, director, consultant, angel investor, and blogger focused on enterprise software startups. I am an executive-in-residence (EIR) at Balderton Capital and principal of my own eponymous consulting business.
I bring an uncommon perspective to startup challenges having 10 years’ experience at each of the CEO, CMO, and independent director levels across 10+ companies ranging in size from zero to over $1B in revenues.
From 2012 to 2018, I was CEO of cloud EPM vendor Host Analytics, where we quintupled ARR while halving customer acquisition costs in a competitive market, ultimately selling the company in a private equity transaction.
Previously, I was SVP/GM of the $500M Service Cloud business at Salesforce; CEO of NoSQL database provider MarkLogic, which we grew from zero to $80M over 6 years; and CMO at Business Objects for nearly a decade as we grew from $30M to over $1B in revenues. I started my career in technical and product marketing positions at Ingres and Versant.
I love disruption, startups, and Silicon Valley and have had the pleasure of working in varied capacities with companies including Bluecore, Cyral, FloQast, GainSight, MongoDB, Recorded Future, and Tableau.
I currently sit on the boards of Alation (data intelligence), Scoro (work management), and SMA Technologies (workload automation).
I previously sat on the boards of Granular (agtech, acquired by DuPont), Aster Data (big data, acquired by Teradata), and Nuxeo (content services, acquired by Hyland), and Profisee (MDM, exited to Pamlico).
I periodically speak to strategy and entrepreneurship classes at the Haas School of Business (UC Berkeley) and Hautes Études Commerciales de Paris (HEC).
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