23 April 2014

Results Also Matter in Startup Land

Decades ago the Ad Land pioneer Rosser Reeves asked, “What do you want from me?  Fine writing?  Or do you want to see the sales curve start moving up?”  We may argue, half a century later, as to how widely Ad Land holds that sentiment.  Startup Land depends on it – or at least depends on the sales curve rising fast enough to beat the burn rate.  

Or does it?

Years ago, Eric Schmidt described Google's business strategy as “URL” -- Ubiquity first, Revenue Later.  That worked for Google, but many venture capitalists who invest in technology seem to take it literally.  There is a lot of money poured into companies that may still be in the red for years, like Amazon, Pinterest and many others.

Dollars and Cents

Sadly, most people in Ad Land are insulated from business results until the moment when agency layoffs are unavoidable.  Agencies have been slow to embrace results and accountability.  One pundit says clients are complicit.

Last of a series
Because Startup Land is for the most part small and nimble, it’s impossible to be insulated from business results.  Everything is very out in the open.  If your company hasn’t gone public, you’re still accountable to your investors, whose money you’re spending to grow the business.  Our investors hold us accountable, and I wouldn’t have it any other way.  

Traveling in these circles, however, I am struck by how few investors really do their homework on the day-to-day operations of the companies they invest in.  Some are far more interested in financial instruments – credit facilities, warrants and the like – than in what makes the sales curve go up.  Many investors love seeing stock prices rise on the possibility of future results.  (Today's news suggests that caution is order.)

Kiss a Lot of Frogs

There’s an old saying, repeated often in Startup Land, that you have to kiss a lot of frogs before getting to the prince.  It applies both to raising capital (which we recently did) and raising the sales curve (which we are always doing).  As I’ve mentioned a couple of times in this series, it’s easy to get impatient.

Impatience may be a virtue, but don’t lose focus.  Whether you’re in Ad Land or Startup Land, focus on delivering results, not just the promise of them.  It's the only way to create real value.

15 April 2014

In Startup Land, Management Really Is Nimble

Maybe it’s just because startup companies are small by definition, but management really is nimble.  In our company, “management” is three people:  the CEO, the CTO and the CMO.

I’m still not sure if we’re nimble because we can be (there are just three of us) or if we have to be (market forces move so quickly these days).  Maybe a little bit of both.  I do know that big companies want to be nimble.  When Google founder Larry Page took over as CEO, he said he wanted “the nimbleness and soul and passion and speed of a startup.”

Interestingly, that quote lists four characteristics that form a sine qua non daisy chain of Startup Land merit badges.  You can’t have any of these without the others.  In other words, you’re not nimble if you don’t have soul or you lack passion or speed.

Dance, Startup Boy, Dance!

Happily, things in Startup Land move much faster than things at a big holding company in Ad Land.  When we took over our little company, it was clear we had to put costs in line with revenue, modify the business model and clean up the code.

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Coming from Ad Land, “costs in line with revenue” is usually a synonym for “employee layoffs” but that wasn’t the case here.  As in many startups, the company was just burning through too much investor cash on things that didn’t really drive the business.  You see those things quickly when there’s no bureaucracy hiding them.

We also very decisively focused the company’s business model.  We’re winding down a legacy business in managing proprietary hardware – call it “owned media” – for institutional advertisers.  We stopped licensing software to clients, which yielded very little revenue and more than a few operational issues.

We inherited an excellent software platform, but like any such platform it needed regular updating.  The CTO started a project, working closely with Marketing, to release new versions every four to six weeks.  This allowed us to prioritize what we needed and get it to market faster, rather than waiting for One Big Release that might come months later.

Some things just can’t get done right away.  You only have so much time and talent available.  For example, we are only just now revising the website.  But we made that decision ourselves versus being held hostage to a corporate process.

Impatience Can Be a Virtue

In the first post of this series we mentioned that Startup Land requires patience, and that’s still true.  Impatience, however, drives nimbleness.  You want to make things happen quickly, so you do. 

To resolve this apparent paradox:  Be impatient with what you can control, and patient with what you can’t.  Which leads to our next post.

10 April 2014

Startup Land, Where Technology and Marketing Work Together

The trade press is filled with articles about how CMOs and CTOs must work together, or how marketing must learn to appreciate tech.  I agree, but there are also a lot of articles stereotyping tech people as numbers-driven geekbots who don’t appreciate how art and science can work together.

Surely you know better than that if you work in Ad Land.  Your colleagues are likely to include technologists, developers, data analysts and more.  In my case it all started in 1996 when we built a new website for one of our clients, and since then it’s been a lot of hardware, software, 1s and 0s all the way.
Third of a series

Working with tech people is important whether you’re in Ad Land or Startup Land, whether you’re a CMO, copywriter or account executive.  You’re in Marketing.  How do you build an effective working relationship with Technology?

How Marketers Can Build an Effective Working Relationship with Technology

The following are my own thoughts, but I also took my CTO to lunch so we could talk them over.
  • Communicate face-to-face.  In fact, lunch with my CTO is an example of my first piece of advice.  Your inner cynic says sure, a tech guy’s idea of face-to-face is Skype.  Actually, Skype is perfectly acceptable if your tech counterpart works in another city.  Think about it, though, don’t you rely too much on email and other electronic communication with your day-to-day colleagues?  Sitting down together gives you the chance to listen patiently.
  • Read and learn.  You’ve got to prepare for those conversations.  Curiosity is a recurring topic of this blog and this five-part series, and it goes double for understanding the role of Technology in your business.  If you hear an unfamiliar technical term, look it up.  If a new social media platform gets traction, try it yourself.  Stay abreast of emerging companies by reading investment news like Term Sheet or Seeking Alpha.  This comes back to those face-to-face conversations.  If you’ve listened well and done your homework, you’ll be able to ask smarter questions and learn even more.  (This also applies to the forming of alliances described in the previous post.)
  • Work together.  All of the above gets applied in the work your company does, but it still doesn’t happen automatically.  My CTO told me of many past experiences where “the business” didn’t articulate their needs nor monitor the outcome.  “Would you send a contractor off to remodel your kitchen and only see the final result four weeks later?” he asked.  Of course not.  For one thing, customer experience depends so much on Technology these days that it’s a moral obligation for Marketing to stay tuned.  Plus, since CMOs will soon spend more on IT than CIOs, we marketers need to be smart shoppers.

The Goal is to Understand How the Business and the Technology Interrelate

In my lunch with the CTO, a constant theme was that the technology only matters in the context of the business.  He went out of his way to point out that the business strategy should dictate the technology strategy.  For marketers, whether in Ad Land or Startup Land, that’s really the point of building an effective working relationship with your technology counterpart:  Understanding how the Business and the Technology interrelate.

Oddly, a couple of hours after our CTO-CMO lunch, a recent hire from Ad Land stopped by my office to ask:  “Are we a media company or a technology company”?  “Both,” I answered.  “Why do you ask?” 

This media planning veteran had seen how much time we spent with the technology, updating the software, discussing how it should be improved, what the impact would be on client transactions, etc., and got the wrong impression.

Actually, she got the right impression:  It’s super important to have those conversations about technology.  A couple of days later she, the CTO and I got together to discuss some business issues and it was a perfect example of how the free flow of thinking between “the business” and “the technology” can make the most of both.

It’s also an example of nimble management, which will be the subject of the next post.

08 April 2014

Startup Land Has No Boundaries

If you’re going from Ad Land to Startup Land, start by going down to the corner of Media and Technology.

Once you’re there, ditch the Ad Land GPS.  Now you’re Lewis and Clark, mapping new territory as best you can.

Games Without Frontiers

Ad Land has generally well-defined borders, with clients, agencies and media staking out the principal territories.  As more specialized marketing disciplines emerged, so did specialized agencies.  For the most part, though, everyone knows who does what.

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Startup Land has no such boundaries.  Technology develops so quickly that new companies and new products come to market all the time.  Many merge or form alliances.  Others go bankrupt or get acquired.  It takes a keen eye to keep track.

In Ad Land people categorize things to understand them, which tends to create new buzzwords.  Sometimes this has the opposite effect when terms like “native advertising” and “content marketing” are used too broadly for anyone to define them.

In Startup Land people are focused on an idea regardless of the silo in which it might belong.  WhatsApp – price tag $19 Billion – is a veritable Ginsu Knife of mobile technology that’s hard to categorize except by the type of protocol it uses, XMPP.

In a way, this should be an ad exec’s dream:  You can name not only your product benefit but also its frame of reference.  That can evolve, too.  When Facebook first emerged, remember that we called it a “microblogging platform”.

Lack of Fences Makes Good Neighbors

Because Startup Land has no boundaries, it is easy to form alliances with other entities.  In fact, it is critical to form those alliances because very few startups work alone.

My little barrio in Startup Land concerns Digital Place-based Media, or the seemingly ubiquitous screens you see in elevators, on the gasoline pump or at the doctor’s office, among dozens of other places.  I realized right away that the future of this medium is engagement – and that we had to search the barrio to find neighbors who could help us.

Going through the same steps outlined in the previous post, we faced our circumstance, worked our network and, cruising through that busy intersection of media and technology, found two companies that can help our existing clients – and help us both find new clients to add to the roster.

Curiosity and Networking Go Together

Startup Land has no boundaries, and that’s a good thing.  If you’re considering going there from Ad Land, don’t bring a GPS.  Do bring a strong sense of curiosity and be ready to walk around a lot.

You won’t have to walk alone, and that’s what we’ll talk about in the next post.

Next:  Startup Land, Where Technology and Marketing Work Together