More on this book
Kindle Notes & Highlights
Marketing has become ...
This highlight has been truncated due to consecutive passage length restrictions.
freemium business model. In this model, a company uses the product itself as the marketing tool and offers a free version.
B2C companies typically do not have a sales force—or if they do, it’s a sales force focused on selling to advertisers rather than end users.
I mean comparing the customer acquisition costs (CAC) with the lifetime value of the customer (LTV).
cohort analysis—organizing customer behavior data into related groups and analyzing each group, or cohort, to determine trends over time.
An MQL is handed over to the sales team and then goes through a further qualification process to be accepted by Sales as a sales accepted lead (SAL). After the sales team has worked a lead long enough to determine it has a high potential of closing, it becomes a sales qualified lead (SQL).
The reason venture capitalists are so focused on network effects in startups is that they can result in a “winner-take-all” market dynamic where the largest networks become so much more valuable than their competition that there is no reason to join one of the smaller networks.
Goal Setting in Marketing Logistically, here’s how Marketing’s goals get set. When the annual plan gets developed, it gets broken up by quarters. The CEO hands out goals and then turns to the head of Sales and says, “What’s our revenue number going to be?” The head of Sales then picks a number, and the CEO proceeds to negotiate, pushing it higher or lower, depending on the circumstance (most typically higher!). The head of Sales then turns to Marketing and says, “If we’re going to sign up $5 million in revenue, then based on our typical conversion rate from past years, that means you need to
...more
If the company misses its numbers, the first person to typically get fired is the head of Sales.
What appeals to me about startups is being part of the “becoming” of something. Becoming is always more interesting than became. There’s a personal reward to be found in helping define, shape, and grow something. If seeing your thumbprint on a company matters to you, then startups may be an attractive career. I didn’t go into startups thinking about this aspect of the reward, nor did I realize that long after an exit, there emerges an incredibly deep connection with the people who left their thumbprint alongside yours—but these deeply personal experiences are very much part of the startup
...more
It’s a bias toward action coupled with a willingness and courage to fail. The attractiveness of each of these qualities is inversely proportional to company size.
Conversely, larger companies are ruled by yellow lights. A great idea can be derailed because, at the margins, it crosses into another group’s territory or requires a different function’s resources. Protectionist behavior tends to increase as a company grows and failure is typically less tolerated in larger companies, yet readily encouraged in smaller companies.
Imagine how many times you have received a cold email or telephone call at home. It’s annoying every single time, right? Trying to sell something by way of cold calls results in a very low hit rate. Compare that to watching an interesting webinar or responding to a piece of educational content like a downloadable white paper or compelling video. Suddenly, the person on the receiving end becomes a highly qualified lead, and you can hand that person over to a salesperson to set up a meeting, who can then have a much higher chance of closing a sale.
I think the best marketers at startups also have design chops and analytical chops.
This combination of “left brain” (logical) and “right brain” (intuitive) attributes is a hard portfolio of skills to find, but people who can develop those skills are the magic of StartUpLand.
Books •Shah, Dharmesh, and Brian Halligan. Inbound Marketing (Hoboken, NJ: Wiley & Sons, 2014). The two founders of HubSpot have written the seminal book on inbound marketing and demand generation. •Scott, David Meerman. The New Rules of Marketing and PR (Hoboken, NJ: Wiley & Sons, 2015). This book provides a terrific review of modern marketing techniques across social and content marketing. •Moore, Geoffrey. Crossing the Chasm (New York: Harper Collins, 1991). A classic book on marketing to early markets. Still regarded as the bible of startup marketing and market development.
“If there’s one number every founder should always know, it’s the company’s growth rate … if you want to understand startups, understand growth.”
The growth manager’s job has three core components: •To define the company’s growth plan •To coordinate and execute growth programs •To optimize the revenue funnel
growth teams invest a significant portion of their resources to create the infrastructure that enables the analysis of user behavior, scientific experimentation, and targeted promotions. Measuring user experiences across product experiences and fragmented third-party systems (like advertising platforms, e-commerce systems, customer support interactions, and email marketing) is a challenge most companies face, and no other function is better positioned to coordinate the collection of the meaningful data streams than Growth.
Companies that haven’t yet found product/market fit are generally focused on iterating on the product, refining the value proposition while also searching for repeatable acquisition channels that attract customers who can give important feedback for improving the product.
Ellis, Sean, and Morgan Brown. Hacking Growth
Salespeople are the first line of gathering information about market requirements. They talk to customers every day and listen to what the customers’ needs are, what problems they’re trying to solve. Salespeople watch their customers’ environments, keep track of what the competition is doing, and stay on top of industry trends.
I believe deeply that Sales is a very noble endeavor and a worthy place for people to start their careers. If you are looking to join a startup and have the grit and determination to succeed, Sales is a great entry point. First, it’s a fantastic way to learn and to build your career close to the revenue, close to the customer. You’re accountable to a number, so it offers a clear-cut way to track your successes and develop a track record of hitting your goals. Anytime you want to rise up in any organization, that closeness to the revenue and crisp accountability is invaluable.
The core function of a company is to earn profit by solving customer problems by providing valuable solutions. This is what salespeople do literally every day. If the salesperson is successful, the company is successful—because
Sales is very tangible and very directly linked to the success of the company.
The sales process could be telephone-based sales. It could be email-based sales. It could be heavily marketing oriented in terms of content marketing, pushing a lot of content out there to get people engaged to get demos done. At some point, somebody needs to sell.
To maximize revenue, a company needs to reach out to prospects, pilots, and—in some cases—free users and say, Hey, I notice your customer needs are … And you seem to have liked and used that free product. You would probably benefit from our paid product. Here’s why. Here’s the value proposition.
To start, sales organizations fall into two main types: outside sales, often called field sales, and inside sales.
As the field salesperson, also sometimes referred to as the outside salesperson, you’re sort of the BPOC—the big person on campus. You’re the one bringing in the big deals, and the whole company is hanging on them. Others will ask what they can do to help you, whether or not the product needs to change, whether the CEO needs to fly across the country to meet with the customer, whether the CTO can help answer a prospect’s technical questions. They’ll ask if the marketing team needs to pitch in to answer an RFP, and if the service team needs to show up to talk about an implementation plan. It’s
...more
Sometimes, the outside salesperson is the highest-paid executive in the company.
Sales is a bit like having the ball at the end of a basketball game, down by one, and you’re the one taking the final shot as the clock winds down.
best salespeople are more sophisticated than that stereotype. The best ones, in my experience, are strategic thinkers on behalf of the customer and love solving their problems and helping them become successful (in fact, there is a particular sales technique, where the salesperson focuses on addressing a customer problem more generally rather than just pushing a particular product, known as solution selling). Further, effective salespeople are great listeners, and that doesn’t just benefit the customer: the insight a salesperson brings back to the company is invaluable. Some companies find the
...more
Many of us conflate things that are scary (flying in combat, joining a startup, buying a company) with things that are dangerous (not preparing before a flight, working in a setting that isn’t fulfilling because you want safety). Many things that aren’t scary are in fact dangerous. Joining a startup that is serving a constituency you care about, systematically pursuing product/market fit, and one in which you can contribute to is scary, but it’s not dangerous.
handers in order to succeed in Sales. The answer is no. You can be a cerebral, strategic, thoughtful, introverted person and be a fantastic salesperson. You just have to pick the type of business model that is conducive to that.
So Product says, What happened yesterday when you spoke with Pepsi? How did that demo go? Oh really? They asked for that feature? You heard that one of our competitors responded in a different way and that the price was different than our pricing structure? That’s really interesting. Let me take that back and think about that.
I want to know the growth trajectory, and what the company’s going to look like next year. All of that falls on the CEO, who turns to the VP of Sales, who (often behind the scenes) turns to the Director of Sales Operations and says, What do you think we can do next year? How are we doing this quarter? Are we going to hit our number or not? How does it feel? This information then goes back up to the CEO and board, who set the public’s expectations.
You are at the hub of the revenue-generating machine for the company. Your actions have enormous effect and influence on revenue generation. So stakes are very high, and your impact is very high.
Acquiring new customers is expensive; on the other hand, long-standing customers who renew year in and year out are very profitable. Thus, the lifeblood of scaling startups is customer retention.
Consider the idea of hunters and gatherers. The salespeople are the hunters—they hunt, they kill the prey, and they bring the prey back to the camp. The gatherers, meanwhile, handle the skinning, cook the meat, and gather the fruits from the harvest to complete the meal. This is the account manager.
Salespeople get paid to hunt. They don’t focus on the long-term success of accounts. If they spent all their time hand-holding customers, they would have no time to go out to get the next sale, to hit the next quarter’s numbers.
The salespeople should be pushing the frontier, moving forward, acquiring new customers. The account management team should be back at home nurturing, supporting the existing customers, helping them be successful, and then ensuring renewal and perhaps even expansion.
In the early days of a B2B startup (this doesn’t so much apply in B2C situations, where there is zero customization per user), a startup’s pitch goes like this: Here’s what our product does, here are the features, here is the functionality, here are its benefits, and here’s why you should buy it. That is, the company’s job is to figure out how the product solves the customer’s problem. As a market matures, and as a startup matures, it shifts toward selling solutions. This means solving the problem for the customer. The product is now part of a toolkit; the thing being sold is now a solution to
...more
Over the last ten years, IBM has shifted from being a software products company to being a services and solutions company. They go to a big retailer and say, We’re going to set you up to be an e-commerce juggernaut. You’ll use three or four of our products and two of our partners’ products as part of your solution, and we’ll stitch them all together and integrate it all into your environment and customize it to be just right for you.
For Sales, in the jungle phase, you are mostly doing expeditionary and evangelical sales—you are breaking new ground and trying to sort out the sales formula. In the dirt-road phase, you look more for repeatability, and you begin to find your groove and develop processes. In the highway phase, you get to optimize and scale; it’s time to build up the machine.
Hence, what a sales role looks like changes over time. In the early days, you’re more like a product manager who happens to sell; later, you’re a salesperson who happens to provide product feedback.
If you’re somebody who enjoys the figuring-it-out stage, then you want to be in Sales in the earliest phases of a company’s development. If you don’t like figuring it out—if you’d like things to be figured out for you, and to just do the work—t...
This highlight has been truncated due to consecutive passage length restrictions.
Let’s imagine an SaaS startup. At first, the founders do the selling; one of the cofounders leads the sales efforts personally. This is very early in the sales learning curve. They’re trying to learn how to sell, and even how to describe the product in the first place. They’re learning what their buyers need and what their environment looks like. They’re in an exploratory phase. Over time, they hire a few salespeople—often initially an outside salesperson and maybe an inside salesperson, depending on the business model and how expensive the product is.
Companies tend to add salespeople at the point when they think those added salespeople can be productive. Salespeople are very expensive, and when a startup invests in them, they start paying their salaries immediately, but the salespeople need to be trained over a three- or six-month period before becoming productive. In other words, companies go into a cash hole whenever they hire a new salesperson. Recognizing this initial cost, the startup has to evaluate whether it can justify the investment of a new salesperson each time they hire one. Will that person pay back in six months? In nine
...more
Sometimes you want to invest more in marketing to generate more leads to make the existing sales team more productive as opposed to hiring more salespeople who are going to spread the leads too thinly across the team. What does this all mean to you? It means you want to be savvy about evaluating and understanding what stage a startup is in when you are considering joining it.
