Category Archives: Strategy

Practical Thoughts on Branding for Software Startups

Posted on July 17, 2022 | 4 comments

Who are we?  What does our brand stand for?  What promise does our brand make?  These are some of the questions that quickly come up when thinking about branding.

In general, I think branding is a potential marketing rathole for startups, particularly early-stage ones.  See my post entitled, If Rebranding’s The Answer What Was The Question?

Do want to build a brand?  Go sell some software.  Want to improve your brand perception?  Go sell some software.  Want to have a distinctive brand visual territory?  Go sell some software.  You see the pattern.

Some startups put the cart in front of the horse.  Don’t do that.  Found a company.  Create a product.  Get product-market fit (PMF), i.e., determine some problem you solve for some person with some product.

You don’t need a brand before you have PMF.  Go get PMF.  Go sell some software to prove there’s a market.  Then you can start thinking about branding.  Then people start to wonder about some of those brand-y questions, like who are you and what do you stand for?

In this post, I’ll use a six-point branding framework and share my thoughts on how each element applies (or doesn’t) to startups. After that, I’ll discuss some important brand concepts that don’t explicitly fit in the framwork.

Our framework contains the following elements, which I’ve re-ordered according to their importance to startups:

  • Brand targeting
  • Brand promise
  • Brand positioning
  • Brand identity
  • Brand values
  • Brand voice

Let’s share some quick thoughts on each.

Brand Targeting (Who Do We Sell To?)
This is brandspeak for figuring out who you’re selling to.  Back when I went to b-school, they taught the acronym STP (segment, target, position), which I’ve always liked both for its simplicity and its explicit order:

  • Figure out a mechanism to segment the market — e.g., by company size, by vertical industry, by adjacent systems
  • Target one or more of those segments.  For startups, fewer is better.
  • Position your product to those target segments.

As I’ve always said, the first step in building any presentation is to think about the audience.  If we don’t know who we’re selling to, we don’t know what to say.  For startups, determing the target is an important part of PMF (the person part of person/problem/product), so figuring it out will require some degree of  experimentation (aka, spaghetti throwing or emergent strategy).

Brand Promise (Why Do They Buy From Our Company?)
This is brandspeak for the high-level expression of why someone should buy from your company, often more simply known as the value proposition.  For tech startups they tend to fall into a few patterns.  (I’ll use my semi-informed perception of next-gen EPM vendors as an example.)

  • We are you.  By FP&A for FP&A (e.g., Mosaic, we built it for ourselves at Palantir).
  • We fixed it.  We took the last-generation leader and made it better (e.g., Cube to Adaptive, Pigment to Anaplan)
  • We rebuilt it.  We run on the modern stack with modern technology (e.g., OnPlan to Vena)
  • We verticalized it (e.g., Plannuh for marketing, Place for SaaS)

This is not product positioning; we cover that next.  This is a high-level, one-line statement about why to do business with your company.  Other examples:

  • Skyflow:  what if privacy had an API?
  • Hex:  a modern platform for data science
  • Cyral:  the last line of defense for data

Brand Positioning (Why Do They Buy Our Product?)
This is product positioning.  Many people start with the Geoffrey Moore positioning template, but I think that’s a bit heavy and includes things other than strictly positioning (e.g., targeting).  Ultimately, positioning comes down to answering one of two questions:

  • Why buy one?  (Benefit oriented.)
  • Why buy yours?  (Differentiation oriented.)

Startups who are alone in defining their category need to focus on the first question.  Those in crowded categories (either a new market with several nascent entrants or a more developed category with the usual suspects), the emphasis needs to be on why buy mine.

Some early-stage startups actually need to focus on both, ending up with a dreaded two-phase sales cycle:  first convince the customer to buy one, and then the customer starts a formal evaluation process where you need to convince them to buy yours.  (Try to avoid this by selling to business leaders who can pull the trigger at the end of the first cycle.)

The Brandier Part of the Framework
This is the point in the framework where we go from commonsense startup strategy (with more brand-y naming conventions) to the world of pure branding.  Spending too much energy down here, below this line, can waste valuable time and energy.  Let’s understand what these three elements mean and think about how much to invest in them.  We’ll then conclude the post by talking about some important brand concepts that didn’t explicitly make this six-part framwork.

Brand Identity (Do We Look Like Us?)
This is the world of visual identity — e.g., color palette, logo, fonts, imagery.  This answers the question:  do we look like us?  This is important, but it’s table stakes.  You’ll never win deals by having a better visual identity than another startup, but you might well lose them if you’re seen as unprofessional, cheap, or rinky-dink.  Invest enough to look good and keep up with the Joneses.  But not a penny more.

Brand Values (What Do We Stand For?)
This answers the question:  what do we stand for?  For startups, it’s largely about the company’s culture and values.  While both are often quite important for culture-building and recruiting, for customer buying decisions, well, not so much.  Make an about-us page, tell your origin story, share your mission, and list your values.  From a company-building point of view, the key thing (and the hard part) is living and reinforcing those values.  From a marketing point of view, you’re done.

Brand Voice (Do We Sound Like Us?)
This is the world of tone, and answers the question:  do we sound like us?  For consumer brands, voice matters a lot.  For tech startups, particularly those in enterprise, well, I hate to say it but everyone pretty much sounds the same.  We hire the same agencies, the same copywriters, the same product marketers as everyone else.  So this become table stakes once again:  invest enough to sound like everybody else and let what you’re saying, not how you’re saying it, be the differentiator.

Only one enterprise software company I can think of had a distinctive voice:  Splunk.  It was largely executed through clever slogans like, “finding your faults, just like your mother.”  While I’m sure their marketing team had fun with this, they did it on the side, after doing all the core marketing required to build a great business.  Don’t invert that prioritization.  The easiest way to avoid problems is to put zero effort on differentiation via voice.

Other Important Brand Concepts
There are two important brand concepts that aren’t in the framework explicitly, so I want to talk about them here:  brand awareness and brand perception.

Brand awareness (“What percent have heard of us?”)
Every CMO who has ever heard, “we’re the best-kept secret in the market” from their salesforce or, “you’re a hidden gem,” from your customer base will feel my pain here.

Awareness comes in two basic flavors (i.e., aided, unaided) and there are only two things I know about it:

  • You can never have enough to make everyone happy.  Ever.  Someone will always have an opinion.
  • You absolutely have to measure it.  The only way to fight subjective perception is with data.  So measure it.

In tech, aided awareness is more important than unaided (which is simply a very high bar) and, since larger vendors compete in multiple categories, you must measure awareness within a category.  Don’t ask:  “have you heard of Oracle?”  Ask:  “In the context of CRM tools, have you heard of Oracle?”

In fact, if you’re measuring awareness, don’t stop there.  Ask these whole-funnel questions — about both you and your key competitors — as well:

  • Have you heard of X?
  • Do you have a positive opinion of X?
  • Have you considered buying X?
  • Have you tried X?
  • Have you purchased X?
  • Have you repurchased X?

And then compare what this outside-in research tells you compared to the conversion rates in your CRM funnel.  You might find you’re guilty of navel-gazing.

Brand perceptions (“What do they think of us?”)
In software, once brand awareness is established, three brand perceptions are critical:

  • Market leadership — are we seen as a market leader?  That is, as the safe choice in the market.  This is critical to risk-averse individual buyers and mistake-averse evaluation committees.
  • Thought leadership — are we seen as a thought leader?  A market leader who lacks thought leadership may hold a temporary position atop the market.  The safest purchase has both.  Lack of thought leadership opens attack vectors for new entrants.
  • Technology leader — are we seen as a technology leader?  Strictly speaking leadership is not required, but fast-following is.  Most buyers don’t need you to invent everything — many market leaders, from Oracle to Microsoft to Salesforce — are more fast-followers than leaders — but they do need to believe you are in-touch and evolving.  Tech laggards (e.g., SAP) become targets for replacement.

For more of my thoughts on branding, see my posts on Branded Features, If Branding’s the Answer what was the Question, and The Market Leader Play.

Branding’s fun.  If want to work full time on it, go to a top agency.  If you want it to be a big part of your marketing, work in consumer products as a brand manager.  In tech, well, learn about branding from the best, and then apply it delicately and where needed.

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Posted in Marketing, SaaS, Startups, Strategy

The Top 5 Mistakes European Startups Make in US Expansion

Posted on June 27, 2022 | Leave a comment

This is a cross-post to Kellblog of the first post in a six-part series that I wrote for Balderton Capital as part of my work there.  The first two posts are already up on Balderton’s website, while the remaining four will be rolling out at the rate of about once/week over the next four weeks.

This series was both a lot of work and a lot of fun.  I was able to leverage many of my Balderton colleages (e.g., Bernard, Suranga, Alice, Rob) as well as my other European startup colleagues (e.g., Chris, Eric, James, Fred, Andrew) while drawing on my nine years at Business Objects, five years on the board of Nuxeo, and two years on the board of Scoro, as well as many advisory gigs both within the Balderton portfolio and outside.  Thanks to everyone who helped me as I worked on this series.

Here’s the lead post.  (I am only putting the lead post on Kellblog, and leaving the rest to Balderton.)

International expansion is hard. Expanding internationally means managing differences not only in language and time zone – but in culture, business norms, law, taxation, labor, employment, compensation, and competition. It’s no small undertaking and it’s not for the faint of heart.

But it is nevertheless, absolutely essential. To create a worldwide leader you must, almost definitionally, execute a successful US expansion as part of the process. The US has a massive total available market (TAM), which accounts for between 40% and 50% of worldwide technology spending.

US thought leaders — including industry analyst powerhouses such as Gartner, Forrester, and IDC — define not only the yardstick for evaluating vendors in existing categories, but also new product categories, the trends driving their creation, the hype cycle of technologies behind that, and the “companies to watch” as categories emerge. US customers are demanding, operate at the forefront of many categories, and push their suppliers in a virtuous cycle to advance the cutting edge of functionality, performance, and useability.

Much as Paris is a bellwether for the future of fashion, the US market is a bellwether for technology. And every week is fashion week. To adapt the ancient proverb, it is no longer that, “all roads lead to Rome,” but, when it comes to building a worldwide technology leader, “all roads lead through the US.”

What’s troubling is that if international expansion is hard, US expansion is harder. The US poses numerous, often unique, challenges for a European technology startup.

The market is vast

The US market is vast both in terms of TAM and geography. Segmentation strategies are critical. So is developing a geographic strategy. I often quip that if Geoffrey Moore were English, he might not have needed to Cross the Chasm by intersecting vertical beachheads with geographic industry clusters.

The market is highly competitive

The US market is highly competitive, a statement that is often misunderstood to be about the temperament of US salespeople (who, by the way, generally are), when it’s really just a fact about the number of competitors. Startups typically face more competitors in the US because you have both “the usual suspects” in your home market plus the frequently US-based, next-generation disruptors who have yet to expand to your home country in Europe.

Different buying criteria

US customers tend to buy less on perceived product superiority and on a mix of product and vendor attributes. Ultimately, for most US customers, picking the “best” product isn’t about selecting the product with the best technology, but about picking a vendor who they perceive as safe and who holistically offers the best solution to their problem. That’s easy to say, it’s much harder to internalize.

Industry analysts matter more

While European buyers seem somewhat more independent in their decision-making, US buyers – particularly Fortune 1000 IT departments – routinely rely on advice from an ecosystem of thought leaders and influencers, ranging from major industry analyst firms (e.g., Gartner, Forrester, IDC) to boutique analyst groups specialized by technology or industry (e.g., Dresner Advisory, Outsell) to independent consultants promoting books and methodologies (e.g., Bob Seiner and Non-Invasive Data Governance). Knowing how to work with them can become critical.

Lack of home field advantage

Just as sports teams have an advantage when competing in their home stadium, European startups often have a (sometimes unacknowledged) home country advantage when competing in their home market. Expanding to the US isn’t just Manchester United playing in Stamford Bridge. It’s worse. It’s playing in a stadium on another planet before an audience exclusively composed of opposing fans who neither have heard of your team nor have the ability to locate your home country on a world map.

Unusable customer references

Relevant customer references are a key part of any technology buying process. So you may think you’re in great shape when you arrive in the US with a fantastic set of hard-won enterprise references like Carrefour, Enel, La Poste, RioTinto, StatOil, Tesco, or Total. You quickly learn that those references get you more blank stares than nods. Think: “so who that I might have heard of is using your software?”

Labor market misunderstandings

You will likely face a bidirectional set of misunderstandings with the American labor market. You probably won’t understand the labor market – for example, when it comes to cash compensation, equity expectations, or the interpretation of American resumes. And the labor market probably won’t understand you – for example, when it comes to the basic concept of working at foreign subsidiary of a technology company. I’ve seen US marketing heads incorrectly think they were responsible for global product launches and I’ve seen European technology startups offer US sales candidates options on 10 shares at €2,950 each. Both situations end badly.

Unforced errors

Sometimes, the challenges combine to provoke unforced errors, ultimately, I believe, because of intimidation. The idea of US expansion can be so daunting that sometimes founders conclude basically illogical things like, “we can’t possibly do [something that works for us in Europe] because it’s the US and [manufactured reasons] apply.” So rather than putting their best foot forward in their US market expansion, they launch into one of the toughest markets in the world on their back foot.

A six-post series

This is the first in a six-post series that discusses what I see as the top five mistakes European startups make in approaching USA expansion. While I will write in the first person to reflect that the content is ultimately my opinion, those opinions have been informed not only by my own experience working with and at European startups for the past 25 years, but also by the collective experience of the Balderton team, who have worked with scores of European startups on US expansion.

This work builds upon the ideas of Rob Moffat in his Internationalization Playbook which focuses on when, where, and how to do so, along with a case study and comparison data. Rob also discusses when things go awry, going into depth on some frequently-encountered problems, so in some ways you can consider this series a more recent take on that topic, and one done from the point of view of a different author.

As we discuss the top five mistakes, I hope to not only describe the mistakes and explain why I believe they happen, but also outline the steps you can take, as a European technology startup founder or executive, to avoid them.

TOP FIVE MISTAKES

With that introduction, I believe the top five mistakes European technology startups make in US expansion are:

1. Delaying US expansion

Expanding to the USA is scary, so you delay it and delay it again. You establish artificial thresholds and re-establish them – “we need to be $5M in ARR,” followed by, “no, we need to be $10M,” followed by, “no, we need to be $20M.” Instead of embracing US expansion early, you delay in the name of critical mass or incremental cost. No matter the logic, threadbare or not, the result is the same. The company starts too late, potentially lets US competitors or copycats get established, and now faces an even more difficult expansion in the US.

2. Failing to adapt structure and process as you expand into the US

This might sound esoteric, but it’s not. Many European startups try to add the US as “just another country” without making changes to their core structure or processes. While there are several different models for building a global technology leader with a strong US presence, virtually none of them treat the US as just another country. The mistake is thinking that expanding into the USA will not change you – e.g., how you do things, how you are structured. It will. To be successful, it has to. The question needs to be, “how do we want to change?” and not, “do we need to?”

3. Hiring the wrong people

As alluded earlier, hiring is a veritable minefield and the list of possible mistakes is long. To offer a few popular examples: hiring weak people because you get confused by embellished US resumes, hiring on-the-cheap and building a team of minor-league (i.e., division II) players, or hiring big roles (e.g., general manager) prematurely and filling them with junior people. Overall, these mistakes fall into several broad buckets that we will identify and help you avoid.

4. Underestimating the importance of sales and marketing (S&M)

It’s one thing to say, “the best product doesn’t always win.” It’s another thing to internalize it. It’s yet another to take some perverse pride in it, as many Americans do. Many European founders – often despite saying the right things – fail to both understand and believe in the importance of S&M and still, buried beneath a layer of platitudes they repeat as dogma, believe that they will win the market because they have the best product. Deprogramming is difficult and too often accomplished only by losing in the market. The less painful approach is to focus on two questions that can serve as a North star to keep you on the right path: (i) who gets to define “best” and (ii) how do they define it?

5. Looking and sounding too European

Unless you’re selling cars, wines, or fashion, most Americans will not hear the word “European” as a positive addition to your company’s list of self-describing adjectives. US buyers tend to hear “risky” when you say “European” in the context of technology. While you might think saying “French” is an implicit boast about your company’s amazing engineers, the American buyer will wonder about technical support hours, language fluency of support staff, and the availability of resources in the local ecosystem. Showing up on a sales call with four employees all named Jean-something, having the lead presenter speak with a thick French accent, and showing product screens where bits of French appear in the UI and demo data, will only exacerbate their fears. While successful companies do not necessarily conceal their European origins, nor do they needlessly highlight them.

In the rest of this series, we will cover one mistake per post, diving into more detail on the nature of each mistake and the steps that you can take to avoid making it.  Thank you for reading this introduction and welcome to the series.

You can continue reading the series with the second post, here.

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SaaStr Europa Slides: The Top 5 Mistakes in Scale-Up

Posted on June 7, 2022 | 5 comments

Just a quick post to publish the slides from the talk I gave today at SaaStr Europa in Barcelona on the top 5 mistakes in scale-up.  Thanks so much to everyone who attended, stuck around for the AMA session afterwards, and gave me feedback or asked me questions at the conference.

If you have trouble accessing these, please let me know and I can try to switch file sharing platforms.  I like Slideshare for the embed capability, but I’m told they now paywall off my stuff and I haven’t fully researched how and if I can fix that.  Leave a comment if you have troubles so I’ll know to go look.

Here are the slides:

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Posted in Marketing, SaaS, Sales, Startups, Strategy, VC

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The Board Boss Delusion

Posted on May 20, 2022 | Leave a comment

I talked to a founder a while back who felt like they’d lost a year or two thanks to some strategic distractions foisted upon them by a well-meaning board of directors.  While most startup boards try to follow the Hippocratic Oath, some — like well-meaning but overbearing parents — smother their founders and their companies with love.  This was, in my opinion, such a case.

It wasn’t the first time I’d heard this tale, so I thought I’d write a quick post on the topic, which serves as a follow up to my previous post, Whose Company Is It Anyway?

Most of the writing I’ve done on board relations focuses on the hired CEO for two reasons:

  • That’s the path I personally took, having been a hired CEO at two startups.  I could write about it first hand.
  • I thought it was the harder path.  Alas, the grass is always greener, so I always assumed life was easier for founders because they possessed the irrevocable moral authority of being founder and accompanying invisibility cloak [1] that shield them from the same level of termination risk as a hired CEO [2].

But some founder/CEOs — particularly younger, nicer, and/or first-time ones — suffer from a dangerous delusion that we need to challenge.  When I asked the aforementioned founder how they ended up in this situation, they said this:

“I was younger then.  I was still under the impression that the board were my bosses.”

That’s it.  The board boss delusion:  the belief that a founder/CEO should try to please the board in the same way that an employee wants to please their manager.  Why is this a delusion?

  • The board is not a person.  It’s a committee.  It’s not of one mind.  It may literally be impossible to please everyone, and often is.
  • The board does not want to be the boss.  Despite appearances otherwise, the board always wants the CEO to be boss.  Admittedly that may be more apparent with some boards than others, but even the most idea-generating, directive [3] boards do not want the CEO treating them like the boss.  They’re just adding value by providing ideas.
  • As CEO you are accountable for results, not for pleasing people.  You’re not a director executing someone else’s plan who is rated on execution and congeniality.
  • There is no get out of jail free card.  If a founder/CEO fully executes exactly what a powerful board member said and it fails, they do not get to say, “but, but we agreed that was plan.”  The invariable response if you do:  “you’re the one running the company and you decided to do it.”  It’s on you.  It’s always on you.
  • The board is usually not qualified to be boss.  How many of your board members would make the short list in a search for your replacement?  Some, maybe, even ideal in cases.  But most?  No.
  • The board doesn’t work there.  You spend 50-70 hours/week at the company.  They go to six four-hour board meetings per year and sit on 8-10 other boards.  Informed outsiders?  Yes.  But outsiders.
  • It’s your company.  As a hired CEO it’s metaphorical, as a founder/CEO, it’s literal.  Either way, you need to run it.  The board’s there to challenge you, give you ideas, pattern match, and leverage their networks.  You’re there to run the show.

If you don’t believe me, try one of these ideas:

  • Ask your board members, over a coffee (not in a board meeting), if they want to be treated like the boss.  They will say no.
  • Throw them the keys.  A few of the gutsier founders I know do this when the board gets too directive.  They literally take their car keys out of their pocket and throw them across the table:  “if it looks so easy, you can do it.”  They will throw them back.
  • Ask them to tell you a story about CEOs who got replaced.  Drill into those stories.  Find out whose plan the CEO was executing.  Ask if the board approved the plan.  Ask if the CEO failed executing an agreed-to plan, particularly if they were executing it well but it just wasn’t working, why they got replaced?  They’ll say, in the end the CEO decided to execute it, so it was their plan.

Whose company is it?  Yours.  Run it that way.

Is the board your boss?  No.  And the faster you learn that, the better.

# # #

Notes
[1]  Potentially including actual control provisions.

[2]  I am not saying this is bad, by the way.  Having “it’s my company” moral authority makes founder/CEOs less vulnerable to termination in ways that I believe are more good than bad.  Yes, in the end, if someone is continually failing they need to be replaced. But, on the flip side, if it now takes 13 years (i.e., 52 quarters) to go public, there is a virtually 100% chance of bad periods along the way and, particularly on a VC board where there are N stakeholders with potentially divergent opinions, it can be difficult to survive such downturns without either a protector (i.e., alpha) on the board or the moral authority of being a founder.

[3]  You should do this!  You should do that!

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Posted in CEO, Management, Silicon Valley, Startups, Strategy, VC

Traditional B2B Sales is Dead, Long Live the UCE?

Posted on March 6, 2022 | 12 comments

In the land of disruption, there’s always something dying and something lining up to replace it, so we’re pretty used to hearing things like “on-premise is dead, long live SaaS.”  Sometimes, they’re right.  Despite the 2008-era views of our resident luddite below, SaaS really did kill on-premises.

Sometimes they’re wrong.  Despite years of hearing, “the data warehouse is dead, long live the data lake,” the data warehouse is doing just fine, thanks.  Snowflake can tell you 60 billion reasons why.

Sometimes, they’re both right and wrong.  Data lakes are doing pretty well, too.  Not everything is zero sum.

You don’t hear this just about technologies, but business models, too.

When the Internet eliminated sellers’ monopoly power over information, I heard, “traditional B2B sales is dead, long live facilitating buying processes.”  This was right and wrong.  B2B sales wasn’t dead, it just changed.  When buyers can get more information themselves and advance further without needing sellers, reframing sales as facilitating buying is a good idea.

When product-led growth (PLG) became the rage, you started to hear it again:  “traditional B2B sales is dead, long live PLG.”  While companies like Atlassian really did dispense with traditional B2B sales, other companies — like Zendesk, Slack, and Twilio — showed the power of blending the two models.  Heck, even Atlassian eventually blended them.

I think of PLG as embracing the continuation of a trend already started by the Internet.  In phase one, buyers no longer needed sellers to get basic product information.  (It’s almost hard to believe, but back in the day, if you wanted even a white paper let alone a demo, you had to talk to a seller.)  In phase two, buyers no longer needed sellers to get hands-on product trial.  It’s the same transformation, just applied to the next two phases down the funnel.

While some companies consider trials customers (and ergo need to count them in churn), I think most enterprise startups should consider trials leads, and the ones who do the right things with the product become leads worthy of passing to sales.  Because they’re qualified by product usage and not marketing actions, they’re called PQLs instead of MQLs.  (Ask my friends at Correlated, or any of the new PLG CRMs, to learn more.)

The other day an old friend of mine, now a highfalutin GM at a big-name software company, forwarded me this article, Traditional B2B Sales and Marketing are Becoming Obsolete.  So, anticipating the content, I donned my “it’s PLG and enterprise, not PLG or enterprise,” gloves and got ready to fight.

But I was surprised.  Instead of saying, “B2B sales is dead, long live PLG,” the article threw me a curveball:

“B2B sales is dead, long live the unified commercial engine (UCE).”

Huh.  The what?

Who wrote this, I think?  Ah, it’s some guy from Gartner.  Before I can add, “and they should stick to IT prognostication,” I see that “some guy” is Brent Adamson, coauthor of The Challenger Sale, one of my top five favorite sales books.

Darn.  Now I have to read this eight-page article and figure out what I think.  The rest of this post is the result.

The Article:  Summary and Analysis
The article argues that it’s no longer enough to try and integrate (in the sense of align) sales and marketing, we should instead unify them.  That’s because buyers have more access to information (including hands-on trials), buyers have access to that information via multiple channels (e.g., vendor websites, review sites), and buyers don’t want to interact with salespeople (which is not exactly new, though he argues that younger people want to interact with sellers even less than older ones).

Sales is thus fighting for relevancy in the buying process and seeking to regain customer access.  The linear model is dead, long live the unified model.  In short:

Helping today’s B2B buyers buy isn’t a sales challenge, nearly so much as an information challenge (or, alternatively, an information opportunity).

He begins with motherhood and apple pie:

The companies that best provide customers the information they most urgently seek, specifically through the channels they most clearly prefer, are in a far better position to drive commercial success in today’s rapidly evolving digital commercial landscape.

He moves into rhetoric to amp things up:

While once a relatively accurate proxy for the underlying buying behavior it was meant to approximate, the serial commercial engine is hopelessly out of date — and dangerously out of sync — with how today’s B2B buyers buy.

With a requisite Gartner dash of profundity:

Today’s buyers are not only channel agnostic in terms of behavior, they’re digitally dominant in terms of preference.

I think that means people like to research shit online before buying it.  Got it.  Stipulated.

I always say that any good sales pitch is 80% tee-up and 20% knockdown.  Now, on the receiving end of such a pitch, I need to advise some caution in that approach.  At some point people want to hear your solution; I’m on page 6 of what’s barely 8 pages and still waiting.  It’s always easier to agree on the problem than the solution (e.g., child poverty, wealth inequality, climate change).  It’s why the 80/20 formula works — you get people agreeing with you, sounding smart, heads nodding, and then you shift to a credible solution that drives your agenda.

But you can’t wait too long to shift to the solution (so I should probably revise my rule to 60/40).  And you should introduce the solution from first principles, not via a case study (which you can always present later, as proof). And if you’re going to introduce the solution via a case study anyway, it shouldn’t be a 1300-person company based in Calgary that I’ve never heard of.

Yet, here I am, about to learn how SMART Technologies found the answer to this pervasive problem by “rebuilding it from the ground up.”  But first, I need to learn about SMART Technologies.  I am now at page 6.75 of an 8.25 page article and still not heard the solution.

The answer:  completely dismantle traditional sales, marketing, success, and service altogether and reconfigure them into a unified commercial engine (UCE).

I’m now thinking:

  • Can you partially dismantle something?
  • Can you completely dismantle something without it being altogether?
  • Where did success and service sneak into things?  While I’d certainly, almost definitionally, want to put all customer-facing teams into a unified engine, how is it that success and service are totally omitted from the argument’s tee-up?

You create a UCE by:

Careful mapping of customers’ buying journeys across a range of predictable “jobs to be done” as part of a typical educational technology purchase.

Never one to miss a gratuitous Clayton Christensen reference, I have to observe that while I am big believer in his work and the jobs-to-be-done framework, I think this is something of a misapplication.  Christensen’s point was about innovation — if you think of products as hired instead of bought, and hired to do specific jobs, then you will anchor yourself in the customer’s point of view when contemplating new products and features.  Think:  not how can we make this milkshake tastier, but how can we make this milkshake more effective when it’s hired as a one-handed commuter breakfast.  What we’re talking about at SMART is simply mapping customer journeys.

When you do that careful mapping, this happens (or, at least, this is what happened at SMART):

Through that initiative the team identified five common buying jobs (Learn, Buy, Order/Install, Adopt, Support) and established an internal team specifically deployed to support each one, reassigning nearly every member of legacy marketing, sales, service, and success staff as a result. In all, over 250 team members received new job designations as part of the process.

You can’t do a re-org these days without creating a center of excellence, so SMART created three:

SMART created three centers of excellence, where they consolidated otherwise duplicative efforts across traditional functional boundaries, one for data and analytics, and one for customer insights and positioning, and one for creative and digital experience.

Those, by the way, sound like a good idea.  I like centralized, specialized support teams, particularly in areas where we’re trying to present one face to the customer.

And then, the re-organization:

Finally, the team then deployed their staff in geographically aligned “pods,” where each pod contains members supporting each of the respective five buying jobs. So, the pod for the southeast United States, for example, is made up of combination of individuals tasked with supporting the entire range of customer jobs from Learn to Support across all relevant digital and in-person channels (including third-party distribution).

In short, run your regions in the USA more like you run countries in Europe.

It’s neither a bad idea nor some insanely different approach.  It does create the need, however, for sophisticated regional leaders who are capable of aligning on both dimensions of the matrix.  Concretely:  is the French country marketing manager part of the French team or the marketing team?  Answer:  it’s a trick question.  The answer is both and they need to learn which way to look, when, as they face managerial decisions — e.g., look to the CMO for questions on messaging and positioning, look to the French country manager when prioritizing campaigns and investments.

I’m going to ignore the end of the article where the VPs of sales and marketing proudly introduce themselves “the former heads” of their respective departments, because they both seem to still work at the company and do something, though the article doesn’t say what their new titles and jobs are.  I’ll assume, hype and semantics aside, that they’ve implemented some sort of functional vs. pod matrix.  As one does with countries in Europe.

Before wrapping up, let me challenge some of the more detailed points in the tee-up.

  • Yes, the machine is by default linear.  But that’s just the first pass.
  • Contacts that don’t make it MQL or SQL get put into nurture and nurture is not linear.  Nurture is a popcorn machine where we dump kernels in, expose them to heat, and over time and in a pretty random order, the kernels pop into recycled MQLs.  I’ve run companies where half of all MQLs are recycled.
  • There’s the question of whether we should nurture people or accounts, as we would in account-based marketing.  Nurturing accounts is definitely not linear, it’s like having one popcorn machine per account.
  • There is no 11th Commandment where God said that nurture shalt be digital only.  While a lot of nurture is automated digital, marketers should remember that a nurture track, broadly defined, can also involve live events (e.g., C-level dinners), dimensional marketing (e.g., mailing a coffee-table book or a Moleskine), and live interactions  (e.g., SDR or AE outreach).  Nurture doesn’t definitionally mean a sequence of emails, nor should it.
  • The part of the linear handoff I detest is when sales “waives off” marketing once an opportunity is in play.  This happens less frequently than it used to, but it reveals a deep lack of trust that should be fixed by destroying walls, not erecting them.

I’ll conclude by saying I think the article misses the most important point in organizational design.  When it comes down the game on the field, who calls the plays and the audibles?  Sure, we have a playbook, and we all know the play we’re supposed to be running.  But things have changed.  There’s a new participant in the meeting.  They mentioned a new competitor who we didn’t know was in the deal.

With a group of talented people, they’ll usually be several different and vocal opinions expressed on how to proceed.  The AE may want to reschedule the meeting.  The SC wants to proceed with the demo.  The consultant thinks we shouldn’t be in the deal in the first place.  The sales manager thinks we can win it because the champion has our back.  What do we do?  Who calls the plays and the audibles that modify them?

In my mind, the person with the quota wins.  As the old joke goes about breakfast:  the chicken is participating, but the pig is committed.  In a world where accountability for results legitimizes decision-making authority, it’s not enough to have a pod/commune and say we can all work it out.  Sometimes we can’t.  And often we can’t fast enough.

Whether you call that person the regional pod leader or the country manager, the role needs to exist and they need to take lead on deal strategy. Everything else is a supporting resource.  Which is why I think marketing alignment with sales is enough.  Yes, we need to collaborate and yes we need smart managers to work in the functional/regional matrix.  Yes, in the case of marketing, we need field marketing to ensure ground-level local alignment.

But do we need to reorganize everything into regional pods?  No.  We just need to work together and be aware that buyers have more information, options, and control than ever before.

# # #

End note
The irony is I ran a company in a pod structure, MarkLogic, where we had vertical pods (aka, business units) where we didn’t have sellers, SCs, and consultants.  We had Federal sellers, Federal SCs, and Federal consultants — all working for a VP/GM of Federal.  Ditto for information & media.  But we did it not in the name of “traditional B2B sales is dead because buyers have more information,” but in the name of a vertical go-to-market strategy where we wanted specialization and alignment.  Pods can work.  It’s all about strategy first and organizational design to support strategy.

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