Early Stage Companies

Growth Hacking and the Philosopher’s Stone

Growth HackingThe search for the philosopher’s stone has confounded some of the world’s brightest minds for centuries. Alchemists, from as far back as the 8th-century, have longed for the day when they would be able to mix the right ingredients, in the right way, to create a stone that would not only turn commonplace metals into gold but would render its owner immortal.

Just like the alchemists of the past, today’s marketers are constantly on the hunt for a recipe of tactics that, when combined in the right order, will create a whirlwind of viral growth that accelerates revenue and generates eternal success.

This idea of using low-cost tactics to achieve expectation-shattering revenue is frequently known as “growth hacking.” It’s a buzz phrase that will light up a CMO’s eyes. But, while it is easy to understand why a company wants to integrate growth hacking techniques, few leaders truly know exactly what recipe will achieve alchemic-level results.

Because, unlike the practice of alchemy, which predicted that any person could be victorious by using the same recipe, successful growth hacking is distinctly unique to each and every organization. It can rarely be achieved by reusing the exact formula of another.

So, if there is no universal recipe for achieving viral growth, where do you start in the hunt for revenue gold and organizational immortality?

Download the rest of the ‘Growth Hacking and the Philosopher’s Stone’ whitepaper to learn how you can successfully craft and implement growth hacking campaigns into your digital strategy.

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The Middle - A Followup

Speaking of being in the middle, check out Ben Thompson's post Twitter and What Might Have Been on his Stratechery blog. Money shot:

This was the context for the aforementioned post: advertising works best at scale but 3rd-party apps were peeling away too much of Twitter’s audience. That is why the company made such a big mistake: they didn’t kill 3rd-party apps completely. (my emphasis)

...

The funny/sad thing about this entire episode is that Twitter was clearly trying to bend over backwards for its 3rd-party developers: it was strategically stupid and financially unwise to let them continue to exist, but Twitter left this massive loophole open that limited growth but didn’t kill successful apps like Twitterrific or Tweetbot. And yet, the company was pilloried and tarred with a reputation for being especially unfriendly to developers, a reputation that strongly persists to this day.

Twitter clearly had a strategic direction they wanted to follow, yet muddled it up by still allowing some access to third-party apps.

Twitter got caught in the middle.

By the way, if you aren't a regular reader of Stratechery, you should be - it's chock full of insightful analysis and strategic thinking. I also subscribe to his Daily Update, and it's worth the investment.

A Call for Research Participants

In our work with small, rapidly-growing clients, we have noticed a lack of benchmarks for marketing spend as they evolve from ‘idea to IPO.’ There are some great resources out there for large public companies to gauge themselves and stay up to date with spending trends. Reports from Forrester, Gartner, and IDC are incredibly valuable resource points and we would recommend them to anyone looking for help in creating a marketing budget. However, while these reports provide excellent data and are grand in scope, we feel that they are underserving a very important market. They lack data on high-growth, smaller, fast-paced companies. In other words, startups. We are aiming to solve that. We have set out to field a research study specifically targeted to inform “Pre-IPO”, “Pre-Exit” companies. This is important because startups are different. Year-to-year there is a tremendous amount of change. The current resources available to startup marketing leaders when trying to benchmark their spend are failing to capture that and this report will provide them with more reliable and targeted data that is actionable.

Our report will outline marketing budget trends and spend benchmarks of the startup universe. We are beginning by conducting a brief survey that will break down spend by industry, company size, and company stage. We will then further analyze spend trends by tactics and learn about what strategies might be helping companies meet their revenue targets. This research will be conducted in manner that puts the legitimacy of the data and privacy of our participants in the highest regard. As such, we’ve structured the research to be “double-blind” – thus eliminating the ability to trace specific answers back to individual participants or companies.

We are currently fielding participants for the research and are looking to include as many as we can in the final report. In exchange for participation, all of those involved will receive an advance copy of the final report, which we plan to publish by the end of the year. If you are interested, we ask that you please fill-out this quick sign-up form and pass along to anyone else you think might be interested. We will follow-up with those who fill-out the sign-up form and they can expect to receive the actual survey link from us within the week. If you or someone you know would like more information, please drop a note to me, Richard Dolezalek at richard.dolezalek@seriesc.net or my colleague, John Volkmann at jvolkmann@seriesc.net.

5 W’s and 1 H of Getting Outside the Building

Steve Blank makes a set of simple but critical points in his recent Udacity video about the importance of getting out of the building and talking to customers. As we work with companies of all sizes and maturities at SeriesC, we often field questions about how to get this done, or see leaders who appreciate the need to talk to customers but aren't sure how to start.

There is an art to talking to potential and current customers. The first step is to ask yourself the right questions to find out the who, what, when, where, why, and how of getting the information Talk-to-your-customersyou need. Here is how to get that discussion started.

What? – What is it that you want to learn? This may seem obvious but dive a little deeper. Start by setting a hypothesis. Just like any other study using the scientific method, a hypothesis is necessary to help frame questions and determine the direction research needs to go.

Next, create goals for the study. This should be a list of facts that you would like to know – or, perhaps, things you think you know but would like to validate with outsiders who do know. Like any other goals you have set in the past they need to be SMART (Specific, Measurable, Actionable, Realistic, and Time-based). For example, a goal for a company trying to understand poor reviews in the app store might be to learn which features have been mentioned most frequently in negative reviews in the last 6 months. A goal for a large company trying to bring a new line of business to market may be to validate its hypotheses on what its best customers would most likely embrace in new service offerings.

Who? - Who knows the information you are seeking? Do you need to talk to current customers, potential customers, lost customers, or industry experts? Maybe a mix of all four? Your hypothesis and goals should inform this. You should already have a clue as to who might have answers to your questions about your business. You may find out this clue is wrong once you start talking to people, but your best guess is the right place to start.

There is a big WHO and a small who. The big WHO is your hypothesized target group. The small who is the target sampling of a few who will give you a good representative perspective without breaking the bank on time and resources. The internet has many great tools for helping to select the right size and type of sample to answer your research questions. Or, you could just make some informed gut decisions: Choose a sampling of ten people, aiming for a mix of prospects and customers, segments, or other demographics that matter to you.

How? - How should you talk to your target group? Basic data collection techniques include casual conversation, surveys, experiments, secondary data or research, observation, focus groups and in-depth interviews. In picking the right type of data think backwards from what you want to know. In what form would this information be easiest and most actionable? How important is recording and sharing the feedback within your organization? Would the feedback be more objective if you had a neutral third-party do the interviewing, or are you likely to get better results if you take this person out for coffee in person? Combine the answers with knowledge your target group and you will arrive at how to best collect your data. Don’t become paralyzed if this all seems to difficult to implement. Even a casual conversation can be fruitful. If you’re stuck, just pick up the phone and invite someone to lunch.

Where? - Where is closely related with how. Begin by thinking about where to talk to your target group. Is it easier to reach them through an email survey, at your next client quarterly review, or directly at a retail location? Where are they most likely to give you honest answers and where are they most likely to give you useful answers? The answer might be the same place, but it also might not. Remember to return to your goals when making the decision about the best way to reach your customers.

When? - Set a calendar for your data or information gathering. Plan out how long you expect each step to take and stick to it. Research can be daunting. Having a schedule will help you stay on track. As part of this schedule make sure not to overlook your data collection times. For example, when talking to customers at a retail location try different times of day. By only talking to them during only one window you may be missing out on potential facts that are time specific such as wait times during the lunch-rush or the difference in customers during the week and on weekends. If your customers are enterprise leaders, be respectful of time commitments. Be on time, and take no longer than the time you promised to take.

Why? - To be blunt, you don’t know it all. You never will. And just when you think you do know it all, rest assured that the market will change, and throw what you know back into question. Your best assumptions are only assumptions until they are validated by the people who matter most – the people who are buying what you exist to sell them. So start with smaller questions. Why did I collect this information in the first place? How can it benefit my organization? How can use what I now know to change my strategy to appeal to the right target market?

Hopefully these questions can guide your next marketing research project, whether it’s a simple brave trip out of the building or a full-blown objective study. Need help? Leave us a comment or contact our consultant team.

Top Ten Best Practices for Managing Your Board

One of the most challenging things an entrepreneur must do is communicate effectively with his or her board. After spending countless hours with lots of entrepreneurs helping them prepare for board meetings and working with lots of boards to get what they need from their entrepreneurs, I’ve come up with a list of ten practices that make for good relations with this critical group of experts as you build your product and get it ready to go to market. How many of these do you regularly practice today? Choose the ones where you're deficient, and dig in. You'll get more out of your board relationships, and so will they.

  1. Understand how the board operates. Who is the alpha dog? How do the members communicate with each other? Know who your sponsor is. Respect the structure and fit in.
  2. Organize your thoughts ahead of time. Edit ruthlessly. Be concise. Use pictures, diagrams, infographics to convey messages.
  3. Never surprise your board. Reach out ahead of board meetings and run ideas past people. Use your sponsor to share good news and bad news ahead of board meetings and ALWAYS have a solution in mind if what you are sharing is a problem.
  4. Assign each board member a “role” in your mind to provide advice, counsel, context, whatever, and use them for that. Build a relationship with each one on a specific platform.
  5. Speak Metrics. Your preferred way of communicating may be words or pictures or even voice. But board members, especially venture capitalists,speak metrics. Learn the language and convey your points in it.
  6. Know more about your business than they do. Drop a “golden nugget” or two that they don’t know about your market, your competitors, your industry. Assume that they think you know everything about your business. Add something new each time you meet.
  7. Forecast accurately. A forecast is not a hope. And hope is not a strategy. Use a framework. Be conservative. Meet your forecasts. And if you will not meet them, let the board know ahead of time—why and what you are going to do about it. Start with your sponsor.
  8. Be confident. You are the CEO. There are people’s expectations and money resting on your decisions. Take the responsibility seriously and project accordingly.
  9. Set expectations. Be the voice of reason as it relates to goals and objectives that are first reviewed by and agreed upon by the board—before the clock starts ticking. Then remember to continue to set expectations in every conversation and especially every meeting. What is happening next and how does it fit in the plan and move the company forward?
  10. Provide follow-up that is also well organized, thoughtful and concise. Show your board that you took note of their questions and took the time to get the answers. Send them additional nuggets of good news between board meetings that show progress from the last meeting.

Secret Number 2 to Branding Technology

I talked about the first secret to building a technology brand, aspiration, in my post last week.  I described aspiration as the emotional hook to get your target customers on the line.  The aspiration of your brand is indeed critical, but if you don’t follow it by delivering something meaningful, your customers will drop you like a hot potato.  Deliver something meaningful: sounds easy enough.  But how do you know that a new technology is meaningful?  And more importantly, how do you make sure it stays that way, so you can keep selling your stuff?

The more addictive a product is, the more meaningful it is.  Think of the addictive qualities of your smart phone, your Fitbit, your Facebook account, your Twitter feed, your Netflix views, your Pandora station, your favorite apps.  There’s something inside these products that makes you continue to come back to them and want more.  They are sticky.

Screen Shot 2014-02-11 at 5.53.49 PMAnd that’s the second secret to branding technology: stickiness in the product.  Stickiness is a quality that, for customers, is simply too good to miss and too good to keep to oneself.  And if the stickiness produces the “network effect,” all the better.  It is stickiness that enables a product to go viral.

Don’t think this applies just to consumer products. B2B technologies need to be sticky as well, perhaps now more than ever.  In this BYOD world, you are selling your stuff to people, whether they are wearing an employee hat at the time or not. Products that are clumsy to use, don’t deliver value and create drudgery aren’t long for the B2B world.  They will be supplanted or disrupted by products that are easy and cool to use. If they aren't sticky, they'll be replaced by products that are.

viralHow do you get stickiness in a product? Sometimes (but rarely), it’s luck.  But it should be strategy.  In fact, it’s your job to make it sticky.  Of course you need to be able to identify the appropriate market, describe the product in the most compelling way, figure out how to go to market appropriately and then create some awareness.  Of course you need to connect your brand to the aspiration I talked about in my last post. But before you do that, you should be deeply engaged in the product itself, and build it on a complete understanding of the market and the target customer.  As a marketer or an executive, your job isn’t just to take the product from engineering, give it a good tagline, and then talk it up in the press.   Your job is to make the product sticky.  And to make it sticky, you have to know what the “main addiction” is and test and refine it until you get it right.  If you haven’t read The Lean Start-Up, it’s time to do so.

Here are ten questions you can ask yourself to check the stickiness of your product. 

  1. What is the main addiction?
  2. What is its addiction potential? Have you tested it?
  3. Is it ridiculously easy to use?
  4. Is the design or UI elegant and attractive?
  5. Does it align with a current trend?
  6. Does it continue to deliver more and more over time?
  7. Is it affordable?
  8. Does it create pride of association?
  9. Can it be easily shared with others?
  10. Does it produce a network effect?

If you know the main addiction of your product and understand that potential, and if you can also answer each of the remaining eight questions with a “yes,” knowing why you’ve answered that way, you are well on your way to having a sticky product and going viral.  Not so hard at all. Certainly worthy of aspiration.

The first of two secrets to branding technology

Spending three decades in marketing at the epicenter of technology has taught me a thing or two about how we think here in Silicon Valley and what makes us who we are.  "Innovate or die," as the saying goes.  But recently, I reached a new understanding, and figured out the two secrets to branding this stuff.  By “branding” I mean establishing an innovation in the marketplace and building a brand.  Which, of course, is the goal. Today, I'll share the first of those two secrets. But first a little background. We celebrate our engineers here in the Land of Innovation, but when these guys release their version or product or app or device, it’s the marketers who have to get traction with customers.  So how do you do that?

Screen Shot 2014-01-27 at 11.39.09 AMI think it’s important to recognize, first off, that technology people are different.  We like to try new things.  We embrace change. We participate in crowd-funding of projects and companies.  We early-adopt new devices.  And we have patience with failure, our own as well as others, their companies and their products.

Secondly, we must understand that a customer buying a technology product early in its lifecycle is a “technology person.”  Ok, she probably isn’t an engineer, or a technologist or a rocket scientist.  But you can bet if she’s laying out cold hard cash (or mobile payment of choice) for a product that is touting something new, she “gets it.”  She gets that she’s part of a grand experiment, a Beta tester of sorts, a guinea pig.  And she likes it that way. Being the first to try a new product, to show it off to your co-workers, to brag about waiting in line to get it is all cool.  If you’re a technology person.  In fact, it is so cool that it actually confers admission for you into a sort of virtual “club” for innovators.  And of course, if you’re in the club, the people with whom you hang are likely to be in the club as well so they will also think it’s cool.  Word of mouth ensues—the Holy Grail for technology products.

So, if you’re on the selling side of a new technology, it stands to reason that you will want to sell your widget to other members of the innovators club who will think it’s cool because it’s new, who will be patient with its functionality and who will tell their friends about it.

As a marketer, you’re going to want to capitalize on the natural order of things in this situation.   You’re going to want to get people to try your product and you’re going to want to create word of mouth among other technology people.  Because if you amass a circle of innovators who love your product and tell their friends about it, you will create a bigger circle of early adopters, and if you’re lucky and the product is sticky enough, the word of mouth you generate among early adopters will spread beyond technology people, outside the innovators club and into the real world.  At this point, you’re reaching what we marketers call the early majority, or the mass market.  Success!

But the question is always this.  How do I get members of the innovators club to pay attention to my new technology?  What makes it cool?

Here’s the first secret.  Aspiration. 

MatterhornThe reason innovators and early adopters are attracted to some products and services that are untested in the market is because in some way, they establish an emotional connection with the buyer, one that usually offers the promise of positive change.  The buyer believes that the product or service will change her life in some way and quite possibly the lives of others as well.  Remember, technology people embrace change.  That’s where the aspiration comes in.  If you build a brand that reaches out enough to be aspirational in nature, that promises to change the world in some way, you stand a better chance of attracting innovators and early adopters to it.  And of course if you are successful in attracting innovators and early adopters, you are more likely to make it to the early majority.

Oh, and one more thing.  Technologists innovate to change the world.  They think in terms of vision.  How will the world be different because I was here?  How will my product or service change the way people do things?  The way the world operates?  So if you’re a marketer trying to help a company get its innovation to market, remember that you’re not only selling to innovators and early adopters out there in the marketplace, you’re selling your marketing strategies to the very same kind of technology people you are trying to reach in the real world.  If you start with an aspiration, a goal of changing the world in some way, you will connect with your engineers as well as your target customers and set the stage for building a technology brand.

In my next post, I'll explain the second secret to branding technology. Stay tuned!

Five Truths About Marketing to Millennials (From a Millennial)

fotolia_bridgebuzzcollegestudents1 This is my first blog post for SeriesC. I am a second-stint intern at SeriesC, and also a 21-year-old senior business major concentrating on marketing and management at Trinity University, a small liberal arts school in San Antonio, Texas.

I want to share some insights on marketing to millennials, based on my perspective both as a marketing professional and a millennial consumer. Countless articles and guides are floating around on the Internet about how to market to millennials. From my experience, I assure you that not all of them are steering you in the right direction and not every company knows what they are doing. So how do you navigate the clutter and get to the realistic and useful guides? Here are a few tips and insights:

  1.  Use social right- Everyone will tell you that you need to use social media to reach millennials. Brands can see huge benefits from an effective social media presence, but this advice often neglects to emphasize that first you need to grow your user base and do it in the right target market. If you fail to do this you are wasting your social media investment. Campaigns that create natural buzz and drive traffic to your social pages are the best way to do this quickly. And you don’t have to break the bank to create them. See Louisville Slugger for a great case study on jump-starting organic buzz through social media.
  2. Don’t forget to be lean – A common mistake companies make is jumping to develop a mobile app too early because studies tell them that millennials are using apps. If you are considering doing this, stop and think about lean principles (see another SeriesC blog post on more about this).  All it takes is asking your customers if they want that mobile app that you are building, and just as important, whether there are enough of them who will use it. Yes, millennials are mobile and we do use apps frequently, but for companies that plan to launch their app as a secondary customer destination, it is important to first have enough demand on your primary selling point to support it. Just like any other piece of building a lean company, telling yourself, “If [we] build it, they will come” is not enough.
  3. Help us convince our parents- For products that are expensive and require consumers to go through all the preliminary stages of the buying process (need recognition, information search, and evaluation of alternatives) before making a purchase younger millennials are probably going to need to consult their parents for advice or money. It is not enough to just market to your target customer; you must also have messaging for their key influencer. More often than you might realize, those influencers are Mom and Dad.
  4. Give us a discount- Millennials, especially college students, do not have much disposable income at this point. We love discounts! Companies like Amazon (Student Prime membership with free two day shipping) have done this effectively and seen a huge growth in millennial customers. Do this now and we’ll stay with you when we do have money.
  5. Be authentic – I can’t emphasize this one enough! Just because we are younger than you, it doesn’t mean we were born yesterday. We can see through false claims or attempts to be funny in ways that don’t relate to your brand or product. It’s ok, and in fact encouraged to be creative in marketing to millennials. However, you cannot forget your key messages and brand pillars. Add nuance to your messages; but don’t try to be someone you aren’t.

Our team at SeriesC creates positioning and jumpstarts innovation for established and emerging tech companies daily. If we can help you find your true authentic voice and the ideal messages for millennials, you know where to find us!

The Forgotten Marketing Basics

Elia Freedman has an interesting little rant, The App Store Problem Is Not Price, which has elicited a response by Loren Brichter in the comments and by Marco Arment here. In my experience, if you have to have people try your product to understand the differentiation from competing products, your positioning (and therefore your marketing) isn't fully baked. Or your differentiation doesn't matter to your potential customers.

That being said, it is a reminder of thinking through all aspects of marketing, especially if you plan on making your app available on a crowded place like the App Store or Google Play.

Let's use the old 4P's framework here.  Sure, Apple has locked down Place, but that just makes for an even playing field. It is what it is. Given Apple's inscrutable nature, to count on future changes in the App Store is irrational. As a former sales colleague still likes to say: "hope is not a strategy!"

The real question you should be asking yourself is what you doing with the other 3P's? Elia mention changing Product (differentiation) and perhaps changing Pricing, but then goes off and complains about Loren Brichter and Marco Arment (yes, I'd say that calling what Marco has an "echo chamber" is a bit pejorative), which is more about Promotion.

I'd say yes to all of the above. Don't count on the App Store to change - make your product truly differentiated (and that doesn't mean just layering on "cool," but useless features) and do proper promotion. Marco has invested a lot of time and energy in his blog and podcasts, which, by the way, are forms of promotion.

Yes, it's all about taking care of your marketing basics. By not addressing your Product, Promotion and Place, your Price will indeed suffer.

Measuring Your Company Value - a Holistic Blueprint

True story: A wise CFO was meeting with the rest of his small start-up team, eighteen months (and a few pivots) into the group’s journey as a business.  He was about to report to them on the firm’s financial situation.  “Everything we do is about increasing value for all our stakeholders,” he began.  “Let me show you how we measure that we’re doing that.”

Up came a slide with sixteen simple words:

  • Revenue growth
  • Profit
  • Cash flows
  • Ability to obtain new business and deliver it profitably
  • Intellectual Property

He landed there only briefly, just long enough for the team to grasp the five obvious and easily measured items the slide contained.  Then he flipped to a second slide.

“And then there are the less easily measured, more subjective value drivers,” he said.

The team read the long list together:

  • Size, depth, and breadth of the sales pipeline
  • Share of potential market penetration
  • Quality and depth of the customer portfolio
  • Volume and breadth of the customer portfolio
  • History of repeat and loyal clients
  • Skills, experience, and specific expertise
  • Contacts and network of the team
  • Delivery methods and operating efficiency
  • Reputation
  • Succession plans

There were nods all around the room, a stated appreciation for the holistic approach to defining value, and some good discussion about the group’s resulting priorities.

My immediate impression on seeing this list was to write it down and share it here as a strong example of a business measurement scorecard – applicable to both start-ups and the largest enterprise teams. (Mind you, I’d only moments before it read Paul Graham’s good thoughts on the importance of start-up teams’ focus on doing things that do not scale, so holistic nurturing was on my mind, anyway.)

Are you measuring the health of your business – and the value you deliver to every stakeholder you serve – in terms of this extensive list?  Are you pausing from time to time as a team to discuss performance across the span it represents, and not just looking at cash flows?

Do you have a recommended amendment or addition to this list?