Harvard i-lab | Startup Secrets: Go to Market Strategies

we are wrapping up our workshop season uh tonight uh with uh michael scott's uh startup secrets series i can't say that um he has been a phenomenal contributor to the ilab so i do need to take a moment to thank michael for all for all his hard work and everything he's contributed to the ilab his workshops um as you know if you've been to any of them are incredibly amazing and uh they're so content rich and it's um hitting upon all of the important components of starting a company so incredible resource that we have so

thank you michael um and so i'm just going to quickly turn it over to him so he can get through all of this amazing content if uh you are here for the first time michael scott serial entrepreneur very successful turned venture capitalist um has a tremendous uh amount of knowledge in this space and uh is uh incredibly wise when it comes to what it takes to start a company so i will turn it over to michael scock i always feel like after jody's introduced me it's all going to be downhill from there it's uh it's

hard to live up to that kind of introduction but hopefully we're going to have a lot of fun this evening and i do feel like this is going to be the most fun of the sessions because we've got such great guests but also because it's a wrap up in many ways and a lot of the elements that we've talked about in the other pieces of the startup series are going to come together tonight now that doesn't mean to say that for those of you who weren't here for those other sessions you're going to be left

out and i'm going to explain how you can get access to all that content too thanks to the ilab and the great work that they're providing here but first of all very importantly i want to welcome our guests so one of them is at least planned to be late but the other three are here so we are lucky enough to have an alphabetical order from a period mark laurian and he was previously svp over at uh spot fire and and working as part of the tibco group so mark if you just want to raise a

hand and say hi so who knows who you are uh welcome uh we have from demandware uh james driscoll who's our head of marketing there and jameis will be uh no no uh uh surprise to some of you who've seen his great work at the eye lab before and then our guest tonight from um hubspot our ceo brian halligan brian if you just want to raise a hand so who knows who you are too welcome so delighted to have you here um a bit of fun later on my brother actually hopefully will show up when

he gets through traffic is going to cover one of his favorite subjects which is part of the building a sales and marketing machine so i think you'll really enjoy that too so between us what we're going to try to do is to bring to life a framework around what the various different elements are of building a go to market strategy but it's a huge subject and so i just want to make sure that you know all of this content is available in much more detail on the website and i've had a lot of questions over

the last few weeks from many of you have attended the previous workshops about how do you find what content when's it updated and all of that so i'm going to take you through a quick tour of that and by the way lest i forget it for those of you want to tweet about our guests all their twitter handles are there and the usual ilab stuff's always up the top so you can get at that stuff okay so quick tour on the website itself um and forgive me while we take a moment on this you basically

if you go to the site you can find absolutely anything by going to the top menus and under startup secrets is every single one of the labs so for example if you went to the go to market section you will find a write-up which i've actually printed out for you tonight to make it nice and easy but at the top of that right up is the url if you want to go to it online and the idea here is that there's way more content being built now that we can actually capture in one session so

for example for those of you who were here last year for the series we had a number of other great guests who covered things such as brand channel and distribution we also talked about some of the key areas such as for example how this relates to your business model and so forth all of that is available as resources on that page and i'm not going to cover those tonight we're going to instead get into fresh material from our current guest stars and so you'll find that detail here and i'll refer to it where i can

but the idea is that we'll get more and more content up there for those of you who want to keep checking uh we'll put a sign up form because i've had that request from people so you can get uh notified when there is new content so thanks for all the interest i really appreciate there's been a lot of fantastic comments back we'll try to respond to them all on the site and keep the content coming and thanks to our guests for contributing more this evening okay let's jump in so always um as you've probably heard

me say the goal of these startup secret series is to provide you a framework so that's not the answers and nor is it the detail of everything that you might do to build a go-to-market strategy in fact as you probably have heard me say if you've been here before what i really tried to do with this series was to think about what would it have been like if 30 years ago as an entrepreneur i could have got some mentorship from somebody who could fast forward me through all the mistakes i made and believe me there

were plenty of those there's plenty of scar tissue to prove that but instead could actually share with me some frameworks to think about the things that might be worth you know challenging myself to plan ahead of time to deal with as a startup and so in the go to market uh space it's a pretty big framework it turns out this is a pretty big part of the execution for most startups now i'll say ahead of time that this is a framework that's mostly based around my own experience of b2b and mostly in software but as

most of you have fed back to me there are a number of you for example who want to do not-for-profit uh and ngo-type things and and have interest in a broader sense so we've got case studies on that uh for example diagnostics for all who was here for one of the workshops that case study is up on the site now uh we also had if you remember one laptop the child for those of you here that case study is going up shortly and i'll continue to build the not-for-profit and other case studies and i want

to thank people like aloe can encourage others of you who are in the audience who want to contribute to those case studies to come share them with me we'll put them into the framework and we'll try to bring this to life for those of you doing this in a not-for-profit way but what i will tell you is a very simple thing in this framework there's basically a cycle that people go through of figuring out how to find you from awareness all the way through how to purchase you and that's what's on the left-hand side and

there are basic tools associated with that the old world used to be all about um outbound marketing and we're really excited to have brian halligan whose firm hubspot was one of the pioneers in the whole science of inbound marketing which didn't even exist when i was you know embarrassed to admit my age here you know back 31 years ago starting my companies but that's the point about this this is a living breathing thing and there's no answer here it's just some things to think about so we're going to talk tonight consistently about you know what's

the way to to optimize as a startup the inbound versus outbound uh and again we're lucky enough to have mark lauren here who's going to actually post what we actually have posted already his case study on outbound because there isn't time to go through it all tonight but what we said was there's a bare minimum of things we wanted you to think about and these are they first of all you really need to think about what your brand is and what you represent so we're going to cover that secondly you've got to figure out you

know what channel do you want to take that through and again that's almost invariably figuring out where you're going to focus on target segments of the marketplace that you can be successful in and then i'm going to cover a couple of startup secrets that i learned the hard way around personas and really getting very clear about who you're dealing with at what stage in the cell cycle and then the bottom line which is really quite fun gets a lot of focus this evening intentionally which is it's all very well to be executing on your marketing

program but the hardest part about marketing is often measuring it it's actually figuring out what's effective and the many famous quotes about this but i'll just get to the bottom line here there is no substitute for measuring and iterating on your marketing program so we'll talk a little bit about how you do that and how you might measure it and what are some of the ways that you can make this effective for you so that's our framework for tonight and uh it breaks down into the following agenda i'm going to start with some strategic things

like the brand and positioning and then we're going to get into some tactical things like how to run that marketing and sales cycle and then we're lucky enough to have as i said a couple of guests to talk through some of the execution of this all right jumping right in then we talked about this in the first workshop your brand is one of the most important things that you can define very early on in a startup but the question is why and for many for many people it's as obvious as well your brand is obviously

what you want people to recognize you for well if you're coke that's very easy but if you're a startup and you're joe blow enterprises then you know it's not that easy and in fact presenting a business card as a startup is the first challenge you have is that you don't have credibility until you build that brand so how can you get effective and what i'm going to suggest here is that this is really a science unto itself this is in fact something that you really have to think hard about in the same way that you

think about are you a diet coke or are you a diet pepsi lover do you buy apple or you buy dell and what do you want to represent do you want to represent yourself as the premium brand with high margins or do you want to represent yourself as the you know high volume low margin brand and there are many different things that fall out of that like i said this is a big subject so this is one of the pieces of content that we're not going to go into in depth tonight this is on the

website we covered it in depth last time so you'll find a full explanation of this you also find us talking about some of the fun brands in the consumer world like nike uh some of the ones in the tech world like zipcar so that's all online and it's uh you can go to it from that handout i gave you the things i want to point out tonight uh that are easy for us to just think about and we'll tee up our first guest which is jameis from demandware is that almost all of us have heard

of the idea of a vision and for those of you who are here for that company formation session we talk about it in depth well brand does start with your vision although the slightly different thing in the brand world is it's really about what are you changing in the world what is it that you're trying to make an impact with a little bit different than how you're building your company although the two of course are very closely aligned and then the second key part is the promise what do we promise to customers at the most

fundamental level so what is if you think about thinking about this something that we've covered that that might add to this value proposition and we cover the value proposition in that whole workshop so the value proposition relates very closely to promise and then the piece that gets very interesting and exciting that jameis is going to bring to life is the attributes of your brand what actually makes this a brand that people can get behind and ultimately that's expressed in emotion personality and style so i've glass glass uh sorry glossed over that quite quickly intentionally because

we're gonna bring it to life as i said with um you know what jameis said but i do want to bring out one key thing that i hope will help every one of you as a startup there's a starting point that's really really simple it's about you that is to say you the founders are going to be the brand whether you like it or not by the way so get ready for that i mean people will identify the startup of you as what you bring to the the uh the marketplace especially when you don't have

a product initially and you're going out effectively to pitch yourself so think about how you the founders your team and your culture and some of the things that we talked about in for the company formation session can be embodied in your brand because it's actually one of the most truly realistic and authentic parts of what becomes a startup's brand and so thinking about that early will help you formulate what it is that people will take away from you and then how you execute is actually what people will measure you on you know you can claim

all the things you want in the world but if you don't deliver on high value for example nobody's going to attribute that to your brand likewise if you don't deliver on great customer service and you're trying to make that as a promise that's not going to be consistent and we'll talk about how that important that is so to bring this to life i happen to be in the boardroom of a public company of mine demandware and so i'm going to tell you right now because it's public we can't disclose all of this information on the

site and we had a real live case study sure enough uh we were at the demand web board meeting and we were talking about a company that's now you know an eight year overnight success having gone public this year could evolve its prime its brand what could we do to move the needle now that we've become a substantive company uh with market leadership position to really accelerate the next stage of our brand so with that i'd like to introduce jameis to uh bring it to life and tell us how did he do it thank you

michael can everyone hear me okay it's a chronic fear as a marketer that you're not heard so it's the kind of thing that i like to check whenever i start talking so thank you for the intro i'm here to talk about a living case study so this is ongoing right now and what i want to do is take you through some of the rationale that we had about our branding and take you through some of the you know analysis that we did and then ultimately show you a couple of instances about how we're starting to

execute it um and the execution is not yet live so you guys are getting a sneak peek at a lot of this let's bounce this along one more good so um as michael said earlier early stage when you're a smaller organization it's very easy to sort of deal with branding particularly when you're in a marketing organization of just a couple of people because you are the brand and you can make these brand choices along the way and you just sort of know instinctively whether something's what you want to represent or not but as you grow

as an organization and as in in our case we got a much larger platform now with a much larger microphone it was time for us to look back and really institutionalize the brand you know what are the brand attributes of us that we wanted to build equity around as we execute in lots of different markets and so what we did is we looked back at and did an analysis with our customers and the broader market to get a sense for what are the attributes that we're known for and also what are the challenges that we

have in the marketplace and what are the things that we're trying to get done and i'd summarize it simply by saying that we're here to try and change the criteria in the buying cycle so demandware in this case as an e-commerce platform company was selling into a market where there was already sort of a software space but we were doing this in a very different way which was to deliver this as an on-demand service so our goal in our marketing and in our branding is to help the market change its mind and change its perspective

about how it evaluates us and thinks about us so this is overall for us about how do we build on what we've done and change the change the criteria you know for us it was about and i'm not going to go through each one of these things but a sense of both moving from how we had marketed in the past and also how buyers thought about it to this new set of things that we wanted them to consider you know from cost to advantage from managing software to growing the business for mid-sized companies to really

the sense of high-growth brands and so our challenge was how do we then sort of move from the left-hand side all the way over to the right and get people to think about things differently when we did an analysis of the market what we saw was that everybody for the most part was playing in the blue boxes where everyone was talking about either e-commerce or technology and talking about it as either features or benefits and occasionally we'd see people that were moving to the upper right and the upper the lower right and the upper left

but what there is was this great opportunity in the green squares where there was this intersection of what are the rewards that individual buyers want you know what are their aspirations what are their goals and how do those align with the big objectives of these large retail organizations which is really around the brand and their marketing so what's that intersection between the reward for the individual and the broader objectives of the business and that's where we saw and think there's a tremendous opportunity to brand the company differently so i'll explain that a little bit more

what this meant for us was we needed to move around and move beyond some of the broad claims that we were making the marketplace and really substantiate them not just moving the claims of our software but also talk about what it was going to do for individuals personally we think one of the great opportunities in enterprise software now is to start talking about the emotional side of software right what does software allow someone to do to fulfill their own dreams their own ambitions their own goals we think about this in consumer technology all the time

apple of course is the case study for this where we use iphones because they're cool well couldn't enterprise software be cool you know we're spending a lot of times as buyers here and this is we're making strategic bets here couldn't we make enterprise software something that individual buyers would aspire to and want and the ultimate success of that would be if they were in the cocktail party or talking to their peers and they were saying you know i'm using demandware right and that was that sign of sort of personal expression so to get to that

level of sort of emotional connection to buyers we wanted to position the company around a lot of their ambitions and goals and dreams to sort of get to that word of mouth and sense of pride that people have when they're really connected to a product so one of the things that we looked at was when it comes to positioning branding it's not just about you know how the customer feels about you but how does the product or how does the brand make them feel about themselves and so in the case you see here here's a

you know a kitten looking in a mirror and seeing a lion we want the buyers to sort of have that sense of you know what they think about themselves is reflected back uh based on the selections that they make right so that's what we're trying to get to and michael talked earlier about the actors we look at as sort of somewhat who are the actors that we see in the buying cycle from the head of e-commerce to the ceo or cmo to i.t or finance you know and what are their sort of rational reasons for

buying um you know there's a long-standing axiom in in marketing which is people buy on emotion but justify with fact so these are generally the facts that people think about when they justify a purchase whether it's finance wants better economics or the ceo is talking about the growth of the business but what they're really thinking about are sort of the emotional quotient behind that what are the things that they really sort of want to feel about themselves whether it's i.t wants to feel like they have a much stronger seat at the table or the ecommerce

person wants to build their career to be able to move up to the ceo level or ceo really wants to be you know thought of as a leader to watch our goal in the branding is to sort of attach ourselves to those aspirations that they have so that when they think about their career growth they attach that to our brand okay so our brand promise the you know the pillar in which we're really building comes down to this concept of potential right that we as a company and a provider are are the means that they're

going to use to achieve whatever their dreams are right their potential as individuals their potential as brand we want them to think about us as the canvas in which they're going to write them or paint that masterpiece so that's largely what's behind our brand strategy is to attach ourselves to their dreams so the customer benefits from this in a couple different ways you know when e-commerce traditionally has been you know thought of with very big software infrastructure and laborious processes what we're coming to is a sense of look if you if you can think it

you can do it if you have an idea you can put it into action right no matter there's no limits there's no worries there's no no no surprises there's a sense of if you have a dream you can do it and to sense that freedom and give people the give the buyers the sense that geez this is this is the right thing for me to invoke all my great dreams i just need the right tools for that so our promise rests on really four basic pillars and i'm not going to walk through each one in

detail but the sense of innovation we can help them innovate faster and better simplicity it's not hard it's easy partnership we're in it with them for the long haul and performance and that we're here to support their ongoing success so underneath each of that of that major promises this four are four major pillars if if if you will that we continue to pivot to and articulate to let them know that this is what underpins what we do and why we make the claims we do so i'm going to skip a little bit into some of

the sort of advertising and give you a sneak peek on how this brand is starting starting to roll out if you go to our website now you'll see it's very black right but so now you're going to see a couple of different colors and i'm going to explain in concept a couple of things that we're doing here to sort of bring that brand to life first you'll notice is the colors green and gray green as innovation growth gray as steel strength you'll notice that the customer's brand imagery is portrayed heavily it's not about us it's

about the customer's brand so you'll see that everywhere in all of our our ads and our marketing is it's not about us it's about them and in the language here we have is we'll you'll see a pattern coming up which is the customer always comes first their brand and their comparative verbs which is whatever they view is important to them those the verbs we use comparatively we do it better we help them do it better with is a statement of partnership and we come last right as the partner so this is a repetitive formula that

we use in all of our our marketing to sort of help convince and show the brand that it's about them it's about their brand it's about their goals and we're here as an enabling partner we're here to help them amplify whatever it is that they want in a new website that you'll see soon this is starting to roll out even more so the statement you'll see on the on the home page is great brands have great ideas we help make them possible right so it's that sense of complimenting the user complementing the viewer complimenting them

on the strength of their brand and what their ambition is and just to let them know that if they want that we're the partner for them and more examples of that that i showed earlier you know perialus or lanzand these are all the comparatives that we're starting to roll out now what we think is a position of strength for us is these brands are willing to let us use their brand which is pretty rare in software so instead of us talking about our features and our functions we're here to show who are the partners that

we work with and how they're willing to let us use their brand which is a tremendous statement of partnership and that rings loudly in the marketplace so in summary what i'd say is when you think about branding a lot of times we often as marketers stop at features and benefits and we think that's where it goes the ultimate measure of this is when you get to the reward right what is the emotional quotient that a buyer looks at because that's the thing that really people sort of resonate with and it creates this sort of emotional

connection people always justify with fact but when you sort of strike the emotional cord it's a tremendous advantage and that's really where the power and strength of brand comes from okay terrific thank you very much james so what's great about that hopefully is it brings to life some of the real challenges but i'm sure all of you would love to fast forward straight to the point that jamie says to be able to talk about customers as partners to you but the reality is many of us are going to start in a very different place we

aren't even going to have our first customers and so where do you start you haven't even got a customer maybe you haven't even got a product and you've got to figure out how to get to that pla place that jameis was articulating so clearly there well before i give you that answer i just want to point out something that actually uh the demandware promise was made very early on uh you know literally as i said eight years ago and it wasn't really any different it's just that we didn't have the customers to back it up

so we made a lot of those same brand promises and had many of those same attributes around simplicity empowerment etc it's just that we've now reached a point where we can actually talk about them with a customer viewpoint and customer voice and bring that emotion to the full so let's jump to what you might think about it's one word consistent startups think they've got to have 10 different things that they go sell in order to sort of overcome the customer's objection actually the opposite is true what you want is to find the one simple thing

it's often referred to that a customer can attach to that they say wow okay that's different so we're going to talk about that in different forms tonight but the point being at the start if you can pick at the earliest point and play in in time in your business what it is that you're going to represent and stick with it consistently then the more likely it is that will actually resonate with people so we've already talked about this there are values that you probably have built in your culture those things we talked about for example

discussed do your customers come first do people come first do you stand for service for example or do you stand for technology these are key decisions that you make early on you can bring these into your brand very early on and you can make them part of how you represent yourself then what comes out of this which is so important i've mentioned it already in terms of execution is that if you are reliably delivering on those promises you will get known for being a simple and obviously highly disruptive vendor if you're enabling new capabilities and

so the trick here is for you to identify these things on as as early as possible and try to stick with them as be and be as consistent as possible that's the one thing that a startup can be accountable for right from the get-go now for those of you who weren't here at the uh culture workshop there's a whole section where we talk about values and teasing them out and it's a fun thing to do i actually recommend that you do the same thing for this except not internally you go and do it externally go

spend some time with your first select set of customers and have the discussion with them about what are the things that they actually are looking for that are not represented in the marketplace that you might be bringing to them that will stand out as the first set of values that makes them want to do business with you so that's the mistake i usually find startups doing they're doing this in the lab whereas what you want to be doing is doing this in the field and asking your customers what's missing if you can do that and

if you can pull out some of the items sorry the attributes and the the opportunities that are out there and distill them into something that is authentically what you can bring to market and that you're going to represent you're going to be starting in a good place so hopefully that makes sense as a first startup secret now to put this in perspective um i have a second startup secret with you for you which is start how you mean to end who recognizes that logo this is a test to see is awake all right dumb question

hopefully everybody does although it has changed but not much right all it's done is lost its color believe it or not apple started their branding statement in 1977 that's a long time ago it even predates me which is kind of cool uh so the fun part about this is actually i remember this discussion very well when we were all you know going through the process of figuring out how to launch my first company which was you know selling applications on the apple ii which was you know so how do we relate to this thing you

know what what is apple all about well they had this one magical term any of you heard the word impute anybody care to to mention what impute means does anybody know i'd never heard of it i had to go look it up but it turns out it's been critical in apple's branding impute is basically saying that whatever your product or service is apple will impute the value of it which means immediately make you aware of the value of it and so if you notice when you open an apple product even the packaging is imputing the

value of apple's product being clear and simple and very straightforward and right out of the box delivering value that's what they're trying to impute they're trying to make sure right from the get-go one of their brand promises which is this just instant value comes across from the packaging so i'm not saying you have to be apple but the point is apple didn't go back 10 years later and say oh we should you know impute the value of our products and make everything simple right from the get-go they made that decision and mike markler who actually

did this was very key in the early stages even though jobs always gets the recognition in bringing this discipline into apple and if you read the story which is a fun one you'll see that it really reflected quite significantly early on in even product design and that's of course what we're here to talk about is how does it reflect in everything you do so hopefully that's given you a sense of why brand is important and why it's very strategic and where you might start which is hopefully with a vision to where you'll end so let's

move on to our second section this one is actually i think very straightforward but at the same time also very fundamental it's all about positioning now hands up who thinks that they could position their startup absolutely uniquely today anybody go ahead you've got a new way to do compensation do you have any competitors not that we're aware of that are direct competition okay that is a very valid statement now let me ask you another question and by the way thank you for being so bold to step up i always appreciate it um are there other

people solving the problem of compensation in the marketplace today are there people solving the same problem as you today in the marketplace uh yes there are okay so there are other players does the caster customer have suddenly a new budget therefore for what you're doing or are they going to have to find money from an existing budget they will have to find money from an existing budget where an incremental improvement on what's out there already there now okay you said we are cutting helping them cut costs so we're actually a cost saving proposition rather than

a study problem very helpful okay so thank you very much what i'm going to do is just take that example and tell you this is the biggest challenge i hear over and over again with startups which is in other words it's you're not unique in this in this problem we think we've got something unique but guess what we're in a category that already exists where there's a finite amount of dollars that we've got to compete for that basically means we're going to fight it out with everybody so this section is all about well how do

you actually avoid fighting it out with everybody let's see we can answer your question what you're trying to do in the first part of positioning is occupy a distinct place in a potential customer's mind so if the customer like can identify that what you do is unique you're in a great place but if they say oh there's 10 other vendors who help with compensation we've got a challenge and that's where you go on to the second thing which is to say well what unique white space can i find in the marketplace now for those of

you here in the value prop session we actually spent a bunch of time discussing this and so i'm not going to go through this all again you can find it again on the website we talked about how can you write that out in a way that at least positions you for a unique set of customers with a product that is differentiated that does something that's not been done before unlike the other competitors and talks a little bit about the whole product in other words the entire solution that you delivered to to make that possible so

with that in mind i want to bring mark up uh from his experience at spot fire as part of the tibco organization to talk a little bit about how did he do this and then i'll come and generalize it and try to address your opportunity mark welcome thank you michael um you know positioning statements like this they may look academic when you're in the audience looking at these frameworks but i can tell you they're far from academic you really do need to to get a handle on how you're going to you know how do you

want to position and how do you want to differentiate your your product or solution out there and i think you should go through this early and often frankly you know particularly when you know when you're forming when you're launching when you're pivoting a lot of organizations you know when you start a startup you know the the ultimate path that you're on is very unlikely to be the one that you start on so when you sense that the organization is going to go through a change is going to try to reach a different market a different

buyer come up with a new solution i think it's good and healthy to go through these these sorts of exercises in fact i'm going through one with a new management team that i'm on tomorrow i've been with one of michael's portfolio companies for about two weeks and our organization is going through a pretty significant pivot you know we're changing the profile and the persona that we go after so what do you think happens these things unwind right when you when you when you try to reach a new buyer you're thinking about the value that you

offer you have to go through and think about each line each word in this framework should be meaningful and mean something and i think when you get it right they're so aligned with the opportunity and the value that you're conveying in the market and the differentiation over a competitor that if you were to read it from a competitor's standpoint the whole thing would fall apart it wouldn't make sense so mark just to give people a bit of an opportunity to get a sense of it what did spotify do and why was this tough for you

and how did you solve the problem here yeah good question so spotfire um was a private company were acquired by tibco in 2007. about 2005 we went through a very significant pivot i had recently joined the company we were targeting mostly scientific users in the data visualization space right so we were selling to small teams of people scientists you know people in corners of organizations we wanted to pivot and go after the executive ranks we wanted to sell into the business intelligence space which had you know bigger budgets bigger dollars we believe we could get

more scale we thought the product itself would be able to serve those needs but we were virtually unknown in that space anybody who knew that brand thought about us as a scientific and a technical and a technical product and as often as the case as founders or early stage people you love the features so people tend to gravitate to talking about what the product or the solution does not what it does for the target buyer so when you go through exercises like this you want to think about who are we really really trying to reach

there may be a number of personas but you have to pick one you can't segment too tight especially in an early stage organization so who are we trying to go after what keeps them up at night what are they dissatisfied with that's going to be enough for them to call us back or to do a web search to try to find us or to respond to an outbound you know email or call or something like that how is our approach different than the competition what lines can we take that our nearest competitor can't and as

michael had pointed out often when you're an early stage company you're solving things that are being approached by other companies as well and we've just got a different take on it and for us we were going up against cognos and business objects in hyperion really well-funded organizations you know big marketing budgets we were never going to get there by saying that we were another business intelligence tool we took a slightly different angle which was around focusing on the value of decisions that people would make in a product using spotfire we could help people make better

decisions and that was the value statement and i'd say you know jameis's points were right on that was the elements of the brand we were fun to use we were easy we would enable users to make better smarter decisions in every corner of the company and that's what we ended up really focusing on the you know on this on the positioning statement and we as a management team fought through this thing it was ugly thank you very much mark so hopefully that gives you and by the way the business intelligence space that mark was competing

for was a very very noisy space with very big players and yet mark's team was very successful at finding their unique positioning and being very successful at building the business around it yeah question did you have to rebrand it to so that people now thought of spot fire as something for the business and for the recent scientists oh yes yeah yeah we uh we there was definitely a rebranding effort for sure and i think you know going through the same process that james had outlined but for me it started here we weren't going to move

forward until we had alignment on the management team here when we did that then we started going out in concentric orbits and talking with the organization but everybody in the company was tested on this literally the ceo would get in your face if you couldn't recite this this framework and i mean that you have to believe it that strongly and then things like branding and campaigns and programs fall in line they're much easier to scale up because you're you're kind of singing from the hymnal here if you will so back to that point earlier on

one of the things that this discipline provides is a consistent framework again that consistent word being the key one for you to think about everything you do in your marketing which is why i say bring it up so early on now again for those of you who weren't here for the value proposition session we spent a ton of time talking about this framework and how you build the various different components of it so that's up on the site but this is how it ends up playing out in positioning now i promised i'd answer the question

for the gentleman he was bold enough to step up and say you know he's doing something unique in the uh compensation world but uh i would i don't want to put this on you right away and i wouldn't try to get you to instantly articulate it that way although if you want to you're welcome to stand up and say how you might define that up to you do you want to take a try go for it all right let's go after app for ceos and upper management at midsize and large enterprise who are having trouble

driving behavior for their employees our approach is to integrate into existing meetings to calculate impact of every employee using regular weekly light minimal overhead approach that i should have actually segmented that calculates impact in a way that everyone perceives us fair and can be connected to compensation unlike existing approaches which include performance evaluation approaches that everybody hates everybody likes our approach their setup is a new approach to performance management and compensation that all participants appealing fair treatment improved engagement and ultimately better performance for all players i got to tell you to pull that off in

front of all you guys uh you know on the spot that was very impressive it really was so thank you very much i think you're going to do great i don't know what i'm going to say at this point other than you know great great starting point it really is excellent well here's the thing about this you'll probably be doing it for the next five or six or seven or eight years until finally you can stand up and people go what's the name of your company by the way fair fair fair setup until everybody says

oh yeah fair setup i know those guys they do the best compensation system on the planet and it'll happen if you persist with that i think you can get there but that's ultimately what happens right if i say coke to you i don't have to explain anything about it being a soft drink or fizzy or tasty you already know what it is but it took a lot of money to get there and so that's why what we're doing right now is we're trying to figure out how do you get there from the starting point that

will make it most effective for you so let me jump in and start to add some value hopefully as opposed to just asking audience the questions the first thing that i see that startups miss is this everybody always thinks about that differentiation in terms of technology it's great that you might have a technology differentiation in many instances it's a great starting point especially if it's a highly disruptive technology but it doesn't have to be just about technology you could have some incredibly compelling differentiation just by figuring out a segment that's never been served before so

for example compensation is extremely complicated in the insurance industry there's a lot of different channels it goes through there's a lot of different people have to take a piece out of it and there's a lot of different ways that that calculation causes so many problems that it gave rise to a whole new set of companies we don't have to go into all that example but that wasn't a completely new segment that gave opportunity for the business you're in i would recommend that any business try to find that first segment that nobody else is targeting that

could be your differentiation right there the second thing is to find some kind of barrier to entry because believe me once the big guys figure out you're on to something interesting they're going to come after you so what is it that could be the barrier to entry again most startups approach this and say well we've got a better technology great but if it's just better faster cheaper somebody's going to come after you and spend more money to figure out how to compete with you or at scale and so that isn't a good answer either but

what's interesting is that there are many things and we've talked about one of them if you were in our business model session that is very difficult for the existing incumbents to come after in fact the larger they are the more likely they are to be titanically slow at responding and one of them is business model if you create a disruptive business model that creates a an innovator's dilemma the great book i encourage you to read if you haven't read it from clayton christensen you will see that this is an example where even independent of your

technology if you come for example with an open source solution the way our case study acquia did at the last uh discussion and offer free versus where people are spending literally millions of dollars and therefore are becoming dependent as a business on getting millions of dollars from their sales force and in margin to support their overhead you will disrupt them nothing to do with the technology to do the business model and then last but not least what we want to try to find is something that becomes sustainable to you and again what i hear a

lot of the time is well we've got ip and patents it's great nothing wrong with that but i'll tell you there are so many examples of where startups have better ip and even patents around it but do you really have the energy and the resources to compete with an apple or a google or a microsoft or whoever it might be in your in your business uh eli lilly if you're you know in the pharma space no you don't and so even though you might have what it takes are you really going to press it wouldn't

it be better if you came at it with a completely different approach and you had for example the first network because you'd given away your product free of existing compensation users that was providing a completely different way to benchmark that nobody'd ever done before and that gave you a competitive advantage compared to anybody else that was there because it was free open and now fully exploited and your core ip ended up being not technology at all but data completely different game that would be defensible because nobody else had it so i really encourage you not

to get stuck in the trap of approaching everything with a technology bias but instead to think about these key areas as to how to define or redefine the competition in a way that puts you in a position to win so how do you map that well again for those of you here for the perfect pitch i go into this in more detail but it's up on the web again what i like to do particularly because we're at harvard by the way is come up with a 2x2 and think about the high low and this diagram

is pretty simple it's really about mapping your competitors you might use for example bubble sizing to represent their relative size but the important point here becomes the axes and the axes are always something that people put up in exact ways that we just talked about well we're faster or better or we're cheaper it's okay but it doesn't work in the long run what we want however we get there is to find this white space that nobody else is occupying that's what we're talking about i recommend the thing you really spend time on is this it's

the barriers the barriers should literally cause the competition to say they can't move from where they are to where you are so what's an example is your software sas yes okay every on-premises solution that's not architected for multi-tenant remote development customization etc is going to find it really hard to move into the cloud and be offered as a service so on-premise and sas is a great example of a barrier for anybody in the software world who knows what i'm talking about here i can tell you it's very difficult that is the entire premise on which

a company called demandware that just presented got to be worth you know nearly a billion dollars why because the existing incumbents who were offering e-commerce stacks which was a lot of technology that was sold on premise required people to go and build all that technology and customize it and guess what retailers and merchants don't do that what they spend their time doing is trying to distinguish their brand merchandise and market better and they don't want to deal with all that technology so that's all pain to them whereas the gain should be getting straight online and

customizing the site to their brand's look and feel that's all demandware did one fundamental barrier between the two though which is one's on premise and the other one is obviously uh in the cloud so those are the kinds of barriers we're looking for here and you've already got one which is great obviously we can think of a couple and i mentioned before they might be business model uh or they might be different axes here then that gives you a chance to put yourself in a position where you will be unique and defensible now the white

space thing is what we're going to talk about next how do you find that white space what is it that makes it possible for you to have some unique position and this is really all about the third key part of the workshop targeting and segmentation so why is this important well if i could define the perfect startup storm it would look like this you would have a disruptive business business model the way we talked about in that session you would certainly have a disruptive technology but you would also have a new market and some great

way to approach it in a go-to-market sense and in the at the middle of that there would be a tremendous opportunity for you but before i get into the opportunity here's the piece that i want everybody to make sure they don't lose tonight most startups are really struggling with the amount of resource they have to go after any market so let's ask the obvious question is it better to go after a big market or a small market anybody more yep i'm not going to challenge you again but yeah big okay let's have your viewpoint for

big if you're going to go into market and somebody's going to compete into this market you'd rather take a big space and even if you occupy a meaningful amount of it it's it's a substantial market for you i think that's a great answer you were going to say somebody else say small go ahead say it's small for a startup because if you can own that one small market you can start to tap into other markets after you you know sort of broadcast your value proposition one very good yep very good anybody else want to chime

in before we move on obviously what two very different viewpoints there right i actually think they're both right but the trick is to figure out how and where and when they're both right so the real challenge is as i posed right at the beginning if you're a startup you have very little resource to do a lot with and so if you're going after a large market you want to serve all the needs of a large market you're going to be very very challenged because no matter what anybody says large markets will have diverse needs by

definition very rare it's not the case but if you can define a nice small segment and that's the key word so if i'd been fair i would have said big market small segment then your product market fit your packaging and pricing your channels of distribution to reach it and your messaging communication can be that much more focused on those unique needs and so you'll be much more effective with a limited amount of resources yet i will tell you again challenge each of yourselves to think about this early on because it's one of the biggest problems

i see with startups is they start way too broad and then all of these things are challenged not just building the right product but then how do you price it and package it for all these different varieties of people within this big market also how do you pick the right channel point uh channel and distribution point to get it leveraged through and what should be the message in communication when all these different needs are out there it's really tough but if you can segment to the point where you've only got one particular target then you

can message directly and so forth and so that's why this is such an important model and it's why i actually really want you to think about a new way of thinking about uh this value prop as we talked about it before all the things to recap that you were here for those of you here that we talked about discontinuous defensible disruptive solutions those all still apply but remember we said there are four u's those of you here unworkable unavoidable urgent problems are the best to solve and the last one was underserved in an underserved market

where there isn't a really good solution right now now if you put those back together again what you end up with here is a model that is right at the core of this something that i think all star startups should look for but i don't invent all the terminology in this world and i'm sure many of you read or heard of um eric reese's book where he talks about the minimal viable product so the minimum viable product is something that obviously comes from figuring out what's the minimum you can do for your customer but i

would argue that the minimum viable segment is just as important but the minimum viable segment overlap with your product will make it possible for you to target a much smaller area and i don't hear anywhere near enough work going on in this area when i see startups getting going they spend all their time saying okay how can we get the basic functionality right but if you don't know who it's for what does it mean doesn't mean anything if you know exactly the persona of the person for whom you're solving that problem by segmenting this way

you can nail it but this is usually left out so mvp is important mvs is just as important and i really encourage you to spend time understanding that so what is a minimal viable segment how do you get that how do you find that this is the next startup secret it's one simple thing it's a common set of needs so a lot of people tell me oh no no i've got a segment it's finance or even better still i've figured it out within finance insurance okay you know what it might be that but what if

those people in insurance have a completely different set of needs you know person to person you probably haven't found a segment but by contrast i've seen some great products that span right across industries you know insurance banking and completely different applications maybe even sales and marketing but they have a common set of needs and that might be for example very close customer intimacy might be as basic as that that's what you're looking for you're looking for a place where the customers when they sit down and say hey did you use this product they can say

yeah i love that and the common need kicks in and say oh well i better try it then and when you deliver on it they reference each other and say yeah i had a fantastic experience then the next guy says well then i should try it as opposed to well that's great but doesn't meet my needs so why should i bother trying it and that's where the dissonance occurs is if you haven't figured out your segment to be these same needs but by contrast if you get this working you'll get this reference ability happening customers

talking to each other saying yeah it met my need oh it met yours too it meant yours too oh wow these guys must be the leader in this segment hey big deal and you end up having your initial beach head and to the gentleman who raised it earlier dead right it becomes the place where you can build because you've now got credibility with a set of customers and that let me tell you from 30 years of experience is the biggest challenge that startup has is getting that first set of referenceable customers to say yeah you

delivered on your promise that brand you stand for bang on it's actually making me more successful as a customer so let's dig in a little bit more i've already given you a bit of a clue on this the typical answer and a startup has is to talk to think about this in vertical terms there's nothing wrong with that you know maybe you have a perfect solution for uh you know automotive or government there's nothing wrong with that at all it's also possible to think about this in completely different dimensions and i'm just giving some examples

size for example you mentioned this thank you in your you know a bold attempt to obviously get through the positioning statement that you were going after a certain size in the marketplace that's totally appropriate too but again what if we could get to a much more specific need that everybody has i.e let's stick with the conversation example if people had to get their compensation approved in a certain way to meet regulations that might span across a bunch of industries but if it was something that had never been done before and that users could reference each

other it could be really interesting so sometimes these are talked about as diagonals because they cut across industries it doesn't matter what your terminology is the key thing is getting these consistent needs and so i really encourage you not to give up on segmentation until you can answer that problem and not to get distracted by verticals or sizes or anything else they may play an important part in your segmentation but in the end you need to look a couple of customers in the eye and say do you both agree that you have the same need

and then if they do you're onto a winner so there's a lot more detail on this on the website i'm specifically skipping it tonight uh just to give our guests more time but what you'll find we talk about up there uh in one of the case examples is how do you find a critical need because back to the value proposition you know finding something that is urgent and underserved etc all the other four years that we talked about is much more interesting obviously than just finding one that you know people not not in a hurry

to solve or it's not that painful for them so that's up on the website i encourage you to spend some time looking at it we cover this particular case example so what's the startup secret out of this i wish i could distill this word even more that i'm going to share it with you focus everybody's looking at me like yeah does anybody think there's any more important word for startup okay either i will put you to sleep or nobody's going to challenge there must be at least one more word that's more important money i don't

know well okay you don't need to challenge me i really don't think there is it turns out the biggest challenge that we see with every startup is obviously figuring out where to focus uh and thinking about that beach beachhead but why because the number one problem i see literally the number one problem i see in execution with a startup is people try to go too big too fast and they end up contracting on failure so just think about this for a second which would you rather expand on success or contract on failure i mean yet

this is the number one issue we run into people spend way too much time with a grand vision and starting on too broad a market opportunity with not a clear enough defined value proposition that's positioned correctly to a minimum viable segment to start to build that initial set of referenceable customers that can make the success and you said it earlier thank you you're dead on so it sounds so simple but it is the most important thing that i'd encourage each of you to try to find a chance to do now last time i give this

session i had a bunch of people send me email afterwards and said that's great but you talked all about vision and we've got to have a big vision and what do you what do you mean you're talking about both sides of your mouth here so i've put a new post on the site it's called vision versus execution and it answers that question at least in terms of thinking about the two the bottom line is on it that you need both they just have a different time scale your starting point needs to be incredibly focused your

vision in the long term for years out can be as broad as you like defining you know how you're going to dominate the world in the future but don't go to customers with a vision and try to sell it go to the customers with the first set of needs that you can answer uniquely well and then talk to them about if they're seeing that success how they might enjoy the vision with you that will will hopefully answer the question that i got many many times in email but thanks for the question for everybody who threw

it in there all right well we've got through the strategic session and now we're going to get to the piece that hopefully gives you some tangible basis to think about how do you go about addressing what we talked about which is the sales and marketing cycle and this is a cycle that many people define in different ways it doesn't really matter what i've got here as the terms i'm not trying to be specific about these except to say that almost every buying cycle starts with somebody finding you getting awareness of you and goes through some

set of steps like interest in you understanding what your proposition is engaging with you to figure it out trialling it in some way to see if it really delivers and ultimately hopefully purchasing it well if it does all those things if you do all those things excuse me you will obviously find a way at some point to be you know building some repeatability what we're going to talk about now is a couple of things i've learned along the way that typically gets skipped over the first is personifying it so this is like the next level

down from segmentation and again i often hear people completely skip this so i'm going to come up with a couple of terms here that make it easy for you to remember hopefully the word i use is actors and that is to say there are various different stages that the customer goes through when they're dealing with you so think about actors on a stage just that's the reason i came up with that analogy and the customer actors are very different through this cycle in fact it's usually what people forget so for example right at the top

of the cycle if you're an early stage startup you'll often be dealing with visionaries these are people who are looking for competitive advantage from this breakout proposition that you've got visionaries are great but there are very few visionaries who sign checks unfortunately not always the case i mean you might get lucky and it's something obviously you can find it it's great what you'll usually find is the guy who writes the check is actually an economic buyer and maybe again if you're lucky he's the decision maker but he probably has a boss too especially selling to

large enterprises or even if you're not even if you're in a not-for-profit and you're trying to sell to for example a foreign government trust me this gets even more complicated uh which is one of our case studies so what i encourage you to do is figure out well who are you dealing with are you dealing with visionaries are you dealing with technocrats people who actually evaluate the technology the people who have to operate it to actually operationalize this to get it working the influences which is sometimes different again the people who have if you like

the political clout in the organization the economic buyer or the decision maker and again i'm not trying to say these are the only categories but it's just to get you to think about the kinds of actors you'll be dealing with and why it becomes important is that do you really think you're gonna have the same message for all these people i see lots of heads shaking why not go ahead because they're motivated by different things absolutely the the guy who's at the visionary is probably trying to get some competitive advantage in his you know thought

process to convince people that he's on the right track this guy down here probably doesn't give a damn about that he's just very focused on some kpis that he's got to meet to get you know paid off at the end of the quarter and he's he's probably feeling this guy's a nuisance so the very different motivations here uh the guy who's operating is not at all interested in how much it necessarily costs he's essentially does it run efficiently and and think about this guy he doesn't even give damn with his technologies better he just wants

to know that it's cheaper and faster and all those other things that makes it possible for him to get the best deal they're just different motivations and yet again i see the startup world obviously you know approaching this and saying well we've got a great value proposition but they're not thinking through how they're going to apply at these various different stages now one of the things i want to point out is that the bottom line the purchase is actually made ultimately by everybody coming together and we refer to that as the decision making unit the

dmu and good sales people know what a dmu is they figure this out early but i encourage you as well to be thinking about this who is the dmu who's the group of people that when they come together will ultimately say yeah we've got to buy this and once you figure out what that group is and what the politics are you'll figure out how to get to the next key startup secret and that is how do you qualify early and often can anybody tell me why this is important i mean it's all up on here

but just tell me from your gut instinct happy to ask one of our guests if they want to chime in here why is qualification important early on you don't like the freshman resource thank you jameis geez you should be a vp of marketing and a great company what's going on here is is you know you're taking customers through a lot of different steps so imagine if you take them through all these steps and you find out you really didn't qualify that they have the pain and need and the right decision-making unit to actually take you

to the close wow you just could waste have wasted three six nine sometimes more months and all that resources of precious startup is just lost yet that's what i see happen in most startups they don't spend enough time defining that target segment that minimal viable segment that we talked about against which by the way you qualify the customer to figure out whether they're going to be somebody you can meet the need of and therefore you know there's so much time lost so qualify early save all the time and money up front qualify often because things

change and i really do mean that like as startup times you know basic things happen like your economic buyer changes from position to position in big companies or importantly learn as you're going through this about what isn't isn't working and narrow your segmentation figure out you know what it is that caused somebody to drop out of the sales cycle in fact i think the best questions asked of a startup are why didn't somebody buy not why did they buy so why didn't they buy can help you narrow and then as sales qualifiers people have their

own ways of doing this i'm not going to get into this a whole area of itself whether they call it bant or man act which is what i call it uh figure out who has the money the authority the need the ability uh who's the competition is and in what time scales for example they're going to buy those those are pretty typical criteria that sales people will use to qualify and when you're building your uh initial go to market approach the earlier you can get all those questions into the cycle to figure out you know

who has the money etc the better and that will ultimately lead you to figure out whether you've got a dmu that can actually move the needle any questions before i move on i went very fast through a big subject there but it's such a fundamental one and i'm happy to break out and do another session on another time yeah question at the back so there's elements there that feels like for startup you need to have some very experienced marketing people to understand how to manage those contacts um what would you say about that if you're

in a small team environment some of those pieces there i think and i would ever find somebody who can partner with me who can do that stuff well i think it's great to find experience but i will tell you that if you're opening a brand new marketplace with a brand new product there probably isn't anybody's got any experience and many startups are doing that so that's why we try to bring these frameworks to the fore which is that even in a three-man startup you can start when you do your first set of interviews with customers

qualifying you know who are the people in the organization that make these decisions what are their needs what are their pains what are their challenges etc so yeah of course to answer your question it would be great if you could find that experience but i'm invested in a seed company right now that we haven't even put money into actually that's busy in its earliest stages formulating what its value proposition is and they're actually getting out and doing all of this with customers right now to figure out if they've got a minimal viable product and whether

they've got the right segment so i i don't think you have to be big i think you can start early i don't think you have to be experienced you just have to take this kind of framework and you just have to keep that discipline up and if you do it right it'll fall out as mark said earlier on in terms of something very crisp that you can all say hey this is our value prop this is our positioning this is our brand and this is what we want to stand for that answer your question thanks

great yeah one of them in the middle here uh can we can i go back to the point that you mentioned uh startups should focus on figure out the critical critical needs of consumers how to how do you define a critical need based on my observation there are successful companies that are focusing on the needs that not critical that consumers can leave without it but still successful one very recent example is fab.com yep great example designs to the people i can leave i buy a lot from fab.com i can i can live without all these

designs so that's not solving the critical needs of consumers but they are still successful fantastic question and um i'm going to point you at a resource that's on the site uh under value prop where we talk about aspirational needs uh and some some aspirational needs are not critical they may even be latent uh i.u didn't know that you needed for example you know fab.com to find you this new selection of products and services but once you see it you go wow i wish i had that the other day there's a fantastic example it's the fastest

selling product ever in technology that met a latent aspirational need can anybody name what it is ipod ipad iphone nobody knew we needed a pocket computer that had a gps that could measure every heartbeat that we took every step we were we made etc but once you've got it you're gonna you say wow i'm not giving that up uh so there are plenty of examples of those needs and what we talk about in that section is how to identify them and in a consumer world they're very different than in the business world so there might

be things like you know if you follow maslow's hierarchy of needs there might be social needs for example the date they might be physical needs they might economic needs you know need for recognition responsibility which by the way plays into your compensation example you know people want to be recognized for for doing well so those needs complain as well and and the framework is a is called black and white how do you identify you know uh latent and aspirational needs versus blatant and critical needs so you'll find it on the site but it's a great

question did i at least touch on the right answer if we okay great um i'm gonna if you don't mind i'm gonna hold that question to the end just because i want to keep us on time we've got a bunch of speakers but please do stick around and we'll answer it okay so what we've done here is to cover as i said some of the fundamentals that bring you to the point where you've got to figure out what are you going to do to actually be proactively driving to market and what i'm going to try

to do is give you a framework to think about this so when when i hear startups challenged with you know what is the first set of things i do what's the first set of activities i do you know most people think about oh well i should do some pr that's great that's that hits the awareness thing but then how do you go take it beyond that get interest understanding engagement so the reason i've come up with driving you'll see later on but you are in control of a certain number of things and i call them

gears that enable you to build momentum and if you think about yourself starting in neutral and wanting to get to overdrive where you're just nailing customer after customer then what we've got to think about is how do you do that well the first thing i'm going to tell you is unfortunately the customer controls a lot more than you do a lot more than you do otherwise this would be easy they control the accelerator the brake and the clutch this is kind of like taking your teenage daughter driving right whoops you want to quickly take control

again but unfortunately you can't the reality is the customer has these controls so what are they accelerators are the things the customer needs from one step to the other they don't as it turns out move automatically from awareness to interest you've got to give them a reason to do that you've got to find out how to move them from one step to another so for those of you who are here for the business model session we talked about how you might do that with your product creating slippery products as we talked about them simple low

cost easy to install type products that make it compelling for them think about your own experience since we talked about iphones where you download something from the app store and within one click you start getting value out of it guess what you'll probably keep going with it you'll try to evaluate it and go to the point where if you're getting enough value out of it you'll purchase it but what will be the breaks well it turns out in almost every buying cycle there are a lot of breaks and the things that stop the customer moving

from place to place are many it might be a bad product experience it might be the license is too difficult to evaluate it could be so many things but one of the things i'd ask you as startups not to assume is that it's price that is the weakest excuse of all yeah it can be price but these days it's pretty easy to come up with freemium models so the real challenge is to figure out what's actually stopping the customer and as a startup the thing i'd encourage you to do is one word actually i guess

two on here since i've put it up so strongly actively listen so we hear most startups tell us about how they got their first set of customers i'm actually much more interested here but what were the 20 that you lost along the way and why didn't they buy and what have you learned from that and how do you think you might approach either a targeted segment better as a result of learning that from the sales rejections and what it is that's stopping them because that's going to accelerate your cycle if you can figure out how

to get them to take the break off so spend time on that and ask the hard questions don't just you know skip over the customers that didn't buy they're the ones that really matter and then this is the fun part there's a clutch here too unfortunately customers often put the clutch in and usually they put the clutch in because they don't know what to do next and it's amazing how many startups don't design this funnel as a complete flow in other words think about each step and how each step needs to leads to the next

one so it's really obvious for the customer that if for example you've got an app to stick with that analogy and you want them to purchase something like an add-on in in-app purchase that there's some value for them to do that like for example if they've bought your fit uh you know fitness monitoring that by doing that you can sign them up to a community online which will give them benchmarking against other people are doing it it's a great potential thing but if you don't lead them to that and tell them the benefit of it

they're not going to take that step and it's amazing how many times i see that clutch go in because nobody defined the next step so it's obvious but that's what this is all about trying to make sure the obvious is brought to the fore so the thing that we skipped over was gears once you know what the customer's doing with the accelerator and breaker and clutch the good news is you can put gears into action you can bring your tools to market and the reason i use this analogy is people typically skip many steps it's

just like gears it's very tough to go from step you know neutral to fifth gear or straight to overdrive you can't skip awareness interest understanding engagement and get people to go to purchase maybe you can accelerate it incredibly quickly so that people get an experience that is so great from your product that they go through that cycle even in a few minutes but trust me it will be there people very rarely spontaneously purchase something unless you happen to be looking at a fashion item and they just got to have it so there are always exceptions

to this but certainly in software in the technology world uh it's pretty much true so obviously what we're encouraging you to do is think about what are those gears at every step and how will you work with a customer um through them and for those of you here again to the for the value prop session i talked about a bunch of those uh they're the things that you can give customers clear visibility into such as you mentioned for example you are cost saving right yeah uh so cost savings one of them revenue is even more

powerful if you could show people how they make more money so one of the things about the demandware proposition that was so compelling is that we can show customers how to convert online to generate more revenue from the merchandising and marketing they're already doing as a service that was really what drove that first value proposition for a month rather than cutting cost out of all the infrastructure that was put behind e-commerce yeah that's important but when we told them we could generate more revenue they started paying a lot of attention and then there's all the

obvious things like time people resources etc there's one in there that's particularly applicable to startups just to pause on it anybody see what it is what would be easiest for a startup to sell it's not that obvious go ahead compare them yep dead on why because you're small and agile absolutely figure out what the pain is and address the pain directly without being distracted it's it's well said i couldn't say it any better myself it also turns out that remember we talked about visionaries early on visionaries in early markets are usually looking for competitive advantage

and they're willing to take big risks if you think if they think you can do something that helps them break out and why because they want to obviously look good at that point and if it's really an order of magnitude which is what we talk about in the game pain section or more they're willing to take that risk with you so that's an that's a startup type of um gear that you can gauge if you can figure out how to show people competitive advantage early on it doesn't necessarily play out later on in markets but

certainly very helpful as a startup okay back to the customer side what are the customers um issues that they use as accelerators and break well it turns out it's it's painful even for customers to find startups which is why it's great to have brian here is going to talk about inbound marketing how we changed that but that was one of the biggest problems before the web came along is how did you get people to even see who you were and what you could represent for them so that's a cost um trying obviously your product engaging

with you you know how you buy it whether you make it simple for them to buy or complex to install and integrate and manage and everything else how you deploy it and so forth all these are things that we talked about in the value prop session they turn out to be breaks that the customer will use if it's difficult once you've bought the product to install it if it's difficult to purchase it in volume if it's expensive that's obviously one thing we do but if it turns out breaks it's example really difficult to manage so

i give an example that actually spawned the entire company that mark is here representing a period it turned out it was really fantastic to see the uptake of the initial apps that went out on the ipad to big companies but once they got them out there they couldn't update them except by bringing them all back to to the uh it department plugging them into itunes and updating the app really painful that's not going to work when you're estee lauder and you've got 13 000 kiosks around the world that have got your your ipad deployed with

the latest uh you know uh updates for your cosmetics coming out every week so it just turns out these things are incredibly important think about what might stop your cycle and again the framework here we've been through in the value problem the last one is fun remember i said there's a clutch for those of you who are here in the valley prop session the clutch is the inertia it's the risk of working with a startup at any point it's likely the customer could just drop out and say you know what ah there's too much risk

yeah it's a startup you know this isn't a big enough problem or this is too great a risk and the default that every uh company has is to do nothing so you've got to remember that in a cycle so what is it you're going to do to get them to take the clutch out and let you put a gear in to move them to the next step and be very clear about that if you're going to find that every single step you will help them move all the way through the funnel and the real bottom

line here is unfortunately good enough is good enough and by default if you've got a good enough solution in place you won't look at a startup that's why we always talk about having a gain pain ratio that's got to be at least a 10x to get over the initial inertia of being a startup okay for time's sake i'm going to cover this next section very quickly again those of you here in the last session on business model will remember me talking about core uh the capabilities of really exceptional value that you have the real core

value you have and how do you put multipliers and levers around it these are exactly the things that again help you if for example you've got multipliers around freemium products or channel parts that can help you with the customer relationships or slippery products that make it really easy to buy and try or technology stacks that pull you to market because you're part of a whole product those will accelerate you through the buying cycle and lever examples are things that we're going to hear from brian and david about that are how do you use new tools

like the web and inside sales or even just you know good old high touch product uh support and services to make it easy for the customer to get through without keeping pulling the brake on and what i recommend you do to simplify all this is road test over and over again people typically spend way more time on their product and honing their product than they do road testing and the road test for me is this get out there and check how much time how many people what resources are involved at every step of your cycle

and accelerate as best you can with automation because if you keep having to do this manually it'll never scale so figure out how you're going to automate whether it's with what we're going to talk about inbound marketing or clever things like for example you know better use of crm systems and then figure out what your levers are can you for example get channels that will help you accelerate can you get tools things like videos or podcasts that package instead of every sales rep having to go out every time and pitch put it on the web

figure out how to make it a podcast put it in a self-service portal i didn't put it in this time but last time we talked about companies like symantec you've got literally a quarter of a million customers being helped by actually one of our companies aquia with the self-service portal that provides all the knowledge for them to move through evaluations really powerful and then use the multipliers that we've talked about such as you know slippery products uh and clever packaging to actually make it easy for your value to come right through very quickly so again

more of this um then probably you have time to get into tonight but if you take away nothing else tonight around the cell cycle than the following it is that it's at least as important to road test your go-to-market as it is to test your product and i don't see enough of that being done in startups unfortunately there's way too much spend on the technology and not enough on the go to market so to bring this to life um mark very kindly agreed to share with us what did he do when he was a spot

fire and so mark come on up and share with us how you approach this great thank you so um we had devised this uh this tool or framework called plays it was using a sports analogy so it takes you know lots of different players on the team in order to get down the field as an example and the concept of play for us was how are we going to go to market how are we going to go after a specific market segment focused like a laser beam and and actually execute across the organization cross-functionally we're

going to need help from the marketing team from the pre-sales organization maybe we want changes in the product itself right and how we're going to actually execute our field organization out there to pull this thing off and in the spirit of focus like michael is encouraging us to you know to think about um at the time when i left spot fire we were you know well north of 100 million dollars it was an organization it was playing in a number of different vertical and horizontal markets so we needed the ability to go to market in

each of those focused areas that was all part of that initial positioning statement but even if you're in a small organization you may not have multiple plays to go to market i think there's value in thinking through i'm going to jump through here just in the interest of time there's value in thinking through your go to market strategy and summarizing it in one slide so if you think about the topics that michael was was was hitting on the actors who are we going after what segment are they in what is the very specific audience this

play card that i'm showing you is a one slide summary of how spotfire went to market to reach risk professionals in the financial services industry with our analytics product on the left hand side you're basically defining who are we trying to reach what keeps them up at night what's the core message that helps differentiate our offering and what's the competitive advantage that we bring distinctly over the next best competitor so it's essentially mapping out the market strategy or the go to market strategy on the right hand side we'd force our teams to come up with

the tactical details to pull that off cross-functionally so that this wasn't a marketing led initiative but you'd get even as a small company get people from different domains around the organization share with them the objectives of what you're trying to do what are the accelerators and the brakes and the clutches for your business help people in the organization understand what you're trying to do and you'd be surprised what what creative ideas come you know getting these great ideas from the pre-sales group or the engineering group because they've got an idea of a clutch that you

know that we can help address by bringing and building into some of the go to market plan so we touch on the major categories that you'd expect but again we force it in one page how are we going to create demand for the organization are we going to equip our field organization or channels to capture some of that demand you know what partners need to be enabled what product enhancements need to be built into this and and ultimately pulling all of this together will help you reach that target segment and again in a bigger company

you could have multiple play cards that you would run in a small organization you should be satisfied by getting everybody on the same page and there can be detailed plans behind each one of these things but get people on the same page focus on how you're going to market and make sure you understand all of the levers that you're going to bring to bear to get through the the customer buying cycle mark just a good uh that's great thank you very much how quickly once you've adopted these play cards did you get repeatability and what

were some of the things you got in the way of growth at spotify when you did this you know the it's a great question the challenge that we had was that we were going after a couple of different actors in different markets and they were at different places in their buying cycle so we could literally win clinical trials deal clinical trial deals at will if i could get to the opportunity we could execute so the play looks totally totally different this particular one here was about going into a market raising awareness and helping to you

know build awareness and send it into the pipe the clinical trials play delivered benefits immediately we would measure everything more of an uh of a um of an awareness generating play like this took i mean we would it would take months in order to get demonstrable results coming out of this but we'd measure top of pipe how are things you know falling through the waterfall do we see any uptake early on are we people getting stuck let's inject another customer tool let's inject some other piece of information on the website to help people move down

the move down the waterfall touching on it quick i'm happy to talk in more detail i found these really really helpful to really force decisions along the paths that michael was was outlining so thank you very much mark i think i wanted to to bring out by asking that question is that i would encourage you to be patient with yourselves because a lot of times you think oh well i've you know i've got three months to get a product out the door three months is not a lot of time to road test your go to

market unless you have very short sales cycles which of course i hope you do maybe you can get down to you know days or weeks uh in in terms of sales cycles and maybe minutes but if you don't you've got to be prepared to take the time to do the road testing and give yourself a chance to explore the full sales cycle and that's actually even though you might think it's expensive and i see a lot of startups saying oh god i can't take six months to do that that's so much time it's a stitch

in time saves nine and if you really figure it out early on you figure out how your qualification is going to work it will save you so much money down the track so thank you mark you brought that to life very well all right well the good news is i only have one more section so you can get rid of me and get the guests back on stage but it's a pretty important one this is the results oriented measured executions i call it rome for short so why this is so important is that unfortunately marketing

is the one budget that most people look at and they go well that's discretionary and in many instances it is unless you can prove what it is that's actually being delivered from it in terms of value so this is how i encourage you to do this first of all measure every step you can't manage what you can't measure and the first things you want to think about are obviously what we talked about time people and other resources but what becomes important is conversion rates and all the things that i talked about the accelerators brake and

clutch and gears are things that you should be measuring against how did that move the conversion rate from one step to the other and if you can keep showing that this particular gear whenever you engage it accelerates and causes conversion to go up from two percent to ten percent obviously you'll keep doing it over and over again so that's why we think about it that way to look at it visibly this is really all about figuring out how do you get leads in up the top and a customer at the bottom and so what we're

trying to do is measure the time and resources and conversion rate at every step to figure out what are the steps that make an impact and ultimately at the bottom how much did it cost you to acquire your customer uh in time dollars and resources and you've probably heard this phrase now the cost of acquisition of request of a customer that's really what this is all about and it's it's thinking about all the resources that go into that and what at each step made an impact now as a startup what you're looking for is one

word flow you're looking for a seamlessly linked set of steps where the customer doesn't keep engaging the clutch and you keep going into neutral but where every step is really obvious and it's obvious for them to move uh from for example interest to understanding and how they can then engage with you and then trial your product and buy it and if you do this well it turns out there's a very obvious secret you can't skip this step because if everything's not seamlessly linked the next step will not work which is to reverse engineer it in

other words if you know that keeping it simple 10 of your leads convert to customers i wish it was that uh many companies are way off that but let's say it's 10 then obviously to get 10 customers next week you're going to have to have 100 leads and you're going to know what a various different steps you're going to have to take to move them through from awareness to purchase so it turns out the really exciting thing about this is it is possible to do this much more easily these days than it ever was you

know back 20 30 years ago uh when my brother and i were first trying to do this and that's because the web actually makes it possible to close the loop you can measure every step if you're doing for example all of this online and many companies are doing just that and in fact as a result of that they're effectively reverse engineering the process and saying well what is it that i need to do to build the business that i have and they can pre uh if you like plan the costs and resources and so forth

they're associated with it now when you come to us an investor by the way and you've figured that out can you imagine how much more confidence that fills us with that now that supposedly discretionary line about marketing is actually worth putting a couple of million dollars or 10 million dollars behind because you can show us what it is that moves the needle so this is why this becomes so important so the web changes nearly everything and i just want to point out a couple of things you certainly can measure everything you can create a closed

loop and it's lower cost so that helps with things like you know being able to do what i call the virtual sales and marketing cycle you know you really don't need today to start out thinking about sales people and you know the six-legged sales call with an se and and so forth but what you can do instead is to think about how would you automate everything and create everything as you know webinars or videos and podcasts the negatives are and it's pretty obvious but i want to state it unfortunately as everything's on the web your

competitors also only one click away and so you are going to get cost comparison you know price-based shopping all the kinds of things that go on all the time and so you have to think about that you have to think about how all the things we talked about in competitive positioning play out on the web because all of those become distractions with just one click and then i can't over emphasize this enough i hear companies a lot particularly when they're selling more complex products skip the reality of trying to do this without learning the customer

interaction for themselves first for example they say oh yeah we're just going to build an affiliate program the affiliates will do this that might work but if you don't first hand experience what the customer goes through in terms of pain of adopting your product and learning for yourself where you've got to improve for example the experience of the product the installation or whatever else you'll never refine it and you'll never move the needle in terms of making that whole flow that we talk about really happen so there's no substitute at the end of the day

for creating relationships and creating experiential learning but the good news is you can do that on the web too most of this can be done you know whether it's via skype or even you know interaction on webinars so there's a lot of things here that are really exciting about this new world and that gives me a great chance to introduce our guest speaker tonight which is brian halligan who pretty much defined this whole term of inbound marketing so welcome brian happy to have you with us how's everybody doing everybody stand up i have atd and

i'm like a caged lion over there put your hands over your head okay stick your right out and do a little shake left out do a little shake sit back down nice job nice job team okay who's heard a hub spot okay cool so we got a crowd that sort of gets it so this this idea of inbound marketing i really like this idea a lot it's a new type of marketing and um there's sort of two observations behind it and the first one's driven um here anyone know who this handsome guy is on the

left famous guy come on you're harvard business school here that's my dad and that's me on the right and if i just i just the first observation that led me to this idea of inbound marketing is just this radical transformation in how humans live and shop and learn there's been this ta this sort of tear in the fabric of the universe around the way work happens the way we all live and shop and learn has radically changed and i think that the difference is showing my dad i think about my dad he got a lot

of mail every night he'd come home at six o'clock i'd sit next to him on the bench and he would have his scotch and water and have a little cheese with crackers and he would open like all his mail and read it i never opened my do you guys ever open your mail there's never anything in there that's useful he we got seven tv stations channel two channel four five seven thirty eight fifty six if you get the rabbit ears just right you can get channel 68 um and he talked on the phone a lot

and just very different from all of us you know i'm on twitter i'm on facebook i'm on linkedin i'm on gmail it's just a radically different way i work and live and shop and learn uh so that's sort of my first observation i sort of came up with my my second observation is that the playbook that marketers use almost all marketers use this um is pretty common in the playbook is we're going to buy a list of email addresses and we're going to you know we're going to bang people over the head an email we're

going to hire a bunch of young and hungry telesales reps and we're going to cold call people we're going to spend a bunch of money on advertising on google adwords or whatever it would be we're going to hire a pr firm to interrupt journalists we're going to do tv as we're going to radio ads that's sort of the marketing playbook and that playbook worked great for my whole career i sort of built my career on that i call it the outbound marketing playbook there's only one problem with that playbook what's the problem what's the problem

what's the problem with that with that playbook i mean it's the opposite of what you guys do i know but what's the problem you're reaching a lot of people who don't want to hear your message people are sick and tired of being marketed too and they're sick and tired of being sold too and they get really good at blocking it out whether that's a dvr at home or it's caller id on your phone blocking the goddamn sales reps out whether it's you've got uh you you've got ad blocker software now that'll block out the google

adwords that doesn't work as well you've got spam protection software and you've got a priority inbox with your gmail it's nearly impossible to reach somebody with the traditional marketing playbook today you need to take that everything you learned in your marketing class here at hbs throw it away doesn't work anymore completely rethink marketing to match the way humans actually shop and learn today and that's what i call uh inbound marketing versus outbound marketing so if you start a new company do it with inbound don't do it with outbound now there's a couple things i really

like about this inbound approach versus the traditional outbound approach with inbound your success is much more about the width of your brain than it is about the with about the width of your wallet big companies have a lot have a big thick wallet and a really thin brain small companies have a big brain thin wallet inbound marketing is great for small businesses so you people at hbs i heard i'm a sloane guy but i heard a rumor the hbs people have big brains and so you guys should be all over this inbound marketing skills because

your success is much more about the width of your brain than the width of your wall you don't really need any money to be successful with inbound marketing second thing i like about inbound marketing is the way it scales so let me let me walk through how i think most venture-backed startup marketing departments work here's how it works everywhere right you get your prior pile of venture capital it's pile sequoia capital they put all adventure in and the marketing guy's like great here's my plan i got my shovel hold on and over here on the

left that that's google adwords uh but it's really a furnace so i got my shovel i got all the money and i throw it into google's mouth and google grows like crazy but you're stuck and you can't grow and it's really hard to get the math work with adwords and this is how a lot of startups try to get the map to work it's adwords and facebook ads just darn hard to make it work if you get it to work you put a dollar in the machine you get like a dollar ten out of the

machine really hard to get that math work the way inbound marketing works is very different let's just say let's just say you're the ceo of ford motor company if you're ceo of ford motor company you've got assets on your balance sheet what are some of the assets on your balance sheet ford motor company assets on the balance sheet factories inventory cash thank you david you're a very good student um things like that now let's say you're vp of marketing or you're the founder of a startup what are the marketing assets you've got solution that's crap

hard tangible asset on your balance sheet if you're a marketer perspective that's horse time or come on okay let me get let me give you a hint links into your website what's another one hbs twitter handle what like your twitter handle twitter followers is that what you said brilliant what else facebook fans number keywords you rank for in google number uh pages on your website those are hard tangible modern marketing assets on your marketing balance sheet and what happens is you create an asset today create a piece of content today and it's a it's an

asset that lasts forever in scales forever it's it it pulls in customers and it lasts forever and it in in pulls in customers essentially forever so it's not like you're renting that asset you own you own this asset you're not renting space on google you're not renting space in some lists you're not renting space on facebook you're creating your own marketing assets to become magnets that pull customers in people with me guys would be cool okay the other thing i like about inbound marketing versus outbound marketing is people hate outbound marketing does anyone like getting

called at home at six o'clock does anyone like getting spam anyone like those television ads sucks inbound marketing is great you create all this content and it's rich content it's informative and it pulls people in and it's engaging so people fall in love with your brand like they fall in love with patagonia or they fall in love with apple or they fall in love with whole foods these brands that people love that's you want to create a lovable modern brand people are really sick of this traditional marketing okay and so how do you do inbound

marketing i've only got a couple minutes here so i'm going to talk about part of it the first thing you need to do as an inbound marketer is is to create tons of content the idea is you got to turn your website into a modern magnet by creating tons of remarkable content blog articles genius brilliant blog articles ebooks webinars things like that and if your blog article is good or your webinar is good or your ebook is good it'll pull people in and the better it is the more retweets they'll get the more facebook likes

it'll get the more links it'll get the longer it will sustain the more leads it'll pull in it'll be really really awesome so the key to being a modern genius marketer creating tons and tons of remarkable content you market you market today think of yourself like disney or fox or cnn like your production studio so think of yourself like a production studio turn your brains into customers what's this who said that you said that what's your name viva your goddamn genius that is the internet what are the dots pages customers they're pages they're they're websites

okay and the big white ones are big websites what are what are the what are the lines between the pages links the more the more links you have the more visitors you'll get the more authority you get the more mojo you get and the way i kind of think about it is links are to the internet as dollars and cents out of the economy how do you get a lot of links into your website good content brilliant content what's your name genius bill's a genius remarkable content here's what you here's what's going to happen you're

going to start your company and your website's going to be like cambridge massachusetts right it's like cambridge mass how many how many airports in cambridge zero how many how many like bus stations real ones none train stations highways a couple two highways you want to turn your website from cambridge massachusetts to new york city how many how many airports in new york city yeah two three whoppers train stations yeah you got penn state a lot of big train stations how many bus stations the bus stations are twitter the train stations are facebook uh the airports

are linked in the highways are links from other websites so to be a remarkable modern great marketing people love that scales you have to be able to create a lot of content anyone know what this is this is i used to live in japan this is the imperial palace in japan and i took this this picture because it reminds me of my favorite philosopher my favorite philosopher is a guy named warren buffett what warren buffett says to his ceos is you want to build a moat around your business you want to build barrier to entry

uh barriers around your business like michael was talking about and the modern moat around your business the way he says that i really like it's like you want to make them out make it really wide make it cold and put sharks in and alligators and wider and colder i think the modern moat around your business i totally agree with michael isn't a patent isn't a trademark it's this inbound marketing stuff how many links into your site how's that growing how many keywords you're ranking for how many facebook fans how many linkedin fans how are you

getting them converting down the funnel that stuff's really hard to replicate and it reminds me of a company that i really like uh called zappos when i think of zappos let's just say i wanted to start a company to compete with zappos and i was gonna you and i were gonna start it we're gonna start we're gonna what's your name we're gonna bury them you and i were gonna bury them we could we could figure out a lot we could get the a good-looking website and hire a designer we can get their funky culture right

we can get the inventory we get the supply chain the thing that's bare for us to compete with is tony shea the ceo he's got six million twitter followers their website's got 500 000 links into it they're they have five million keywords they rank for that's a nearly insurmountable competitive advantage for the two of us to compete with that's what i wish for you an insurmountable competitive advantage go for inbound marketing really works i don't know about you but i feel like i need to rush out and buy something that he's selling whatever it was

i'm buying i'm in too late i think i think a smarter brother got there earlier wait if you want to learn more inbound marketing book you can check out or go to hubspotmarketinggrader.com you put your url in there and it will give you a grade of one to one hundred on how good or bad you are at this stuff and then if you like this stuff i teach you class it's sloan on it's a it's a half semester class you could cross register for it that's him thank you very much we'll try to put all

those links up on the site so everybody can get to them great stuff so there is no question that as people think about this there are a lot of challenges to adopting this model just on its own and there are people who talk about inbound as only being suitable for a certain deal size we don't believe that's the case it's not really to do with deal size it's to do how you approach this thing but it's certainly a question worth posing so as a counterpoint we didn't have time to get into it tonight but mark

was kind enough to produce a document that's up on the site that you can go connect to which is how can you also use this to get the best of all worlds in a hybrid model because there are certainly instances where outbound still makes sense it's not just a you know one size fits all so that can be found online at the resources under go to market outbound marketing and again it's all up on the website if you want to just click on it there so thank you mark for doing that and sorry we didn't

have time to fit it all in tonight by the way yeah be tough to follow that act i'll give you my two steps on that uh giving me the hook no this is good this is what we're here for let's say your salesforce.com or your ibm you've got a big brand and you start cold calling people have heard of your brand they might pick up your phone you're some little startup out of hbs that no one's ever heard of selling performance management software you are really that's an extra special waste of your time um so

i think outbound marketing actually starts work as you get bigger in the early days that they hit that startup excuse them so i feel a debate raging there which we need to get into but but actually i think it's it's a it's a great piece of advice and uh maybe what we'll do is we'll set up that debate for some some fun another time but thank you very much um and thanks mark also for contributing that okay so on the last section here and um uh quite excited to introduce my brother david who's been a

a fan of building this notion of a sales and marketing machine for some time and really has taken what many people used to think of as an art and created a science out of it and i think it's so helpful to hear from him why this is possible because it's not just about size it's back to that thought that brian just articulated so well which is if you use your brain early on you actually really can turn this into a sign so david great to have you here welcome hey good evening everybody pleasure to be

here um so one of the things that i want to do is a little bit um covered by mike but i'm going to cover it again in a slightly different way for you here so if we think about what the basic of a funnel is here i think it's really straightforward you take a bunch of suspects and you put them through a bunch of stages and you hope to get somebody that's a closed deal and once you've got a closed deal you then want to do the reverse part of that which is to try to

expand that so you get the entire usage uh potentially get some upsell uh in that process there and so interesting thing here is if if we were in a perfect world for all of you as marketers you would be able to get all of that done in one single step and how many of you would like it if we could put up a website which looked like this where we put up a small video of our product and told you that it cost nine thousand nine hundred ninety nine dollars and said buy it now so

interesting question here is why does this not work can you ask answer that question for your own particular products if i can grab somebody in the audience who's got a specific startup and a product here to tell this audience here why this would not work for their product yeah because you're not targeting the buyer you're not you're not targeting the the market a specific enough segment to answer their question you're right but imagine for two seconds here that you have got the right buyer who's targeted on the site what stops them from feeling comfortable to

click the button there right then and there go ahead they see the price before i see the video without the product so they're worried about the price they're not sure if they're going to get a return on investment on the money would be one price can scare them for city what is the product trust like how do they know that they can trust your product trust is a fantastic word that was very well done thank you very much so they're very concerned about can they trust you and can they trust your product to actually work

would be a key one yeah there are multiple stakeholders who's going to make decisions excellent thank you very much indeed that's a very good one yeah people usually want to dig deeper and i don't there's nothing else for you to do on this page so there's you can play the video again kind of information so why do they want to dig deeper what what information do they need to find that they're looking to dig deeper for it could be credibility it could be but i think people in the purchase decision make a process that need

multiple cycles of confirmation until they've reached a point that they're confident that this is going to be okay so uh let me you're dead right but the thing that i'm i'm trying to get you to do is to tell me exactly what they're looking for when they do that digging so you have clarity in your mind about precisely what questions they feel they need to have answered before they're going to be comfortable to actually buy your product do you see where i'm going with that yeah from other customers affirmation from other customers why do they

want affirmation from other customers what are they trying to solve there is is this some human emotion that you can think of that that's going to make them feel better about how they want to be in and with whatever is you know and what about fear of failure do you think they might have a fear of failing yeah i think that's one of the big ones is that the looking at other customers takes away some of that fear from them yeah yeah and if social proof in addition that also makes them not have to make

decisions themselves to see that a lot of people with similar needs have succeeded that they can short-circuit their evaluation up and say okay and slightly succeed for me as well yeah that's an excellent recognition there yeah one last one at the back how it can help them out in solving their problems yes exactly is this actually going to solve my problem as opposed to is it merely going to be some cool thing where i can watch some cool video so what i was trying to do there was some pretty simple which is i'm trying to

get you to step out of the way you think about the world and put yourself into a customer's brain to try to understand what's going on in their brain when they are asked to buy your product and if i can recommend this to you i would strongly suggest writing down every one of these points particularly for your product yes so it might be things like is it going to integrate with salesforce.com are my people going to be able to actually work this is there a good return on investment but fear is one of the greatest

things that you've got to overcome fear of failure and fear of of themselves looking like idiots because they brought something into their company that that didn't work uh and overcoming that so that's one of the key things that we want to have is that list of things that have to be satisfied before somebody will buy your product and to me the art of marketing is really figuring out how to take what should have been that one step with the instant buy button and designing the series of steps that will allow you to effectively accomplish answering

each one of those questions for them so when we think about trying to design these steps here michael already covered this for you i have a much simpler buying cycle in him i think his is excellent mine just has three stages in it awareness consideration and purchase let me give you a little example of what we're thinking about here how many of you have gone um let's say you're going to pick up your kid from school and actually i don't think anybody in this room has kids so it's probably not applicable but you've been wandering

around town waiting for a train and you want it into a store without any intention to purchase and within five seconds of getting in the door a salesperson came rushing up to you and started trying to convince you that these sweaters here would look fabulous on you and you really should consider buying them and won't leave you alone and all you really wanted to do is wander around the store can anybody tell me how do they feel when that experience happens to them it's not fun is it right it's not an enjoyable experience to be

sold to so that's a really interesting thing here the more i ask people about this the more clear it becomes that people really don't like to be sold to but let me give you a different example you are out at lunch you accidentally spill your coffee over your sweater you're now in a terrible state you've got to go to an important meeting you run into a store you desperately need another sweater you can't find a salesperson anywhere very irritating right so what's different one you didn't want the salesperson and the other one you did want

the salesperson anybody have an answer as to why they're different they are innate they are in need of the salesperson they need that you're right they have a need um the thing that i believe is really the key is that is that in the one they're actually very early in the buying cycle they don't even have awareness of what they're trying to buy in the other one they're really far down the purchase cycle and they know exactly what they want to buy and the mistake that i think most marketers make is thinking that every single

person who comes to their website and that they meet is actually immediately ready to buy so they need to jump straight into selling to them and they turn them off with this amazingly aggressive pitch to them and it's really the wrong approach and my personal guess is that 80 percent of the people who come to your website aren't ready to buy and really you have to do something else to engage them and build a careful and quiet relationship with them and just hope that you are around at the time when they do actually find that

they have that need and are ready to buy it and that's something which i think most marketers make a terrible mistake of and try to sell too quickly so the other thing that's really interesting here is the concept of triggers in the buying cycle there are for an awful lot of products like an antivirus product it's very hard to sell somebody that until they've actually had a virus or until they've read an article that scared them about a virus or maybe in the case of backup software have you it's hard to sell backup software to

people that haven't actually suffered a loss there's not the motivation there so the triggers that happen and i'd ask you to think about the triggers that specifically cause your buyers to actually figure out they need your product and the thing i'm going to show you in a while here is as a marketer can you cause that trigger to happen that's a very powerful thing if you can because if you if you're able to make that happen you can move them out of a very simple interest stage and actually into the point where they have need

and want to want to move forward here what is the the things that you do at the two different stages of the funnel the top of the final stage top of the funnel is really very simple which is this is when you're dealing with a customer who's who on the farthest left-hand side has no idea that they have a need for your product and on the farthest right hand side is very clear that they have an exact need for your product and there's a spectrum of gray and white in between that and there's different activities

that you would take but my key thing that i want to get across to you here is that when you finish the top of the funnel what you want to be doing i believe is driving them to your website and when you get them to your website you want to get their email address from them because if you don't have their email address or some other connection with them you cannot continue to stay in touch with them and continue to to build a relationship with them there so once you've gone through that stage there you're

going to the next phase which i think is the middle of the funnel and the middle of the funnel is pretty straightforward it's really about determining which people are actually ready to buy and putting attention and focus on them with the qualification phase and those who are not you stick into a big lead nurturing bucket and you want software like hubspot to help you run this and basically the art of doing great lead nurturing is to get very good at segmenting your customers down because the open rates on emails that are generic and broad across

the whole base will be very low but if you can pick people that are in very specific verticals and send them an email saying i know you're a photography company here's how we solve problems for photographers that does very well and similarly for example if you've got somebody who's doing a free trial of your product and you know by using um tracking of which things they've used and which things they haven't used that they've used this feature but not that feature you want to send them an email which says hey i see you've experienced this

part of our product but i would like to encourage you to to look at this and here's a video which shows you the benefits of that and here's how to get into it so that's about where they are in the usage of your product where they are in the sales cycle so being able to segment building up a database that shows you not only the attributes of the person but also all of the things that they've done have they been to your website were they on the page where for example the pricing is the pricing

page is a good indicator that for example they're ready to buy were they on the technical pages that tells you that they're a technical buyer were they on the pages that have got all the customer testimonials that probably tells you they're a business buyer so you treat them differently send them different emails based on that kind of information there if you get to this point here of having a funnel set up one of the key things that we will have done is created a series of steps each step will actually be trying to address one

of these questions that they they had to have addressed when you were asking the question why they didn't buy with the single page website then so what we want to do is uh for the metrics here i'm just going to give you a very simple concept of how to design your metrics for a funnel you're going to measure how many people were in each step and also when you finished that step how many people converted to the next step michael was 100 right one of the key things that i discover when i walk into most

companies is that they haven't connected their activities together so they didn't make a link between the webinar that they held and what they want to do next so we are i assume here designing a completely linked series of actions so when they come out of one they're going to go straight into the next and you want to measure how many actually did convert there so let's take a very simple funnel and show you what that might look like assuming here that we've got visitors coming to a website and we want to convert those into a

trial and out of the trial we're hoping that they're going to convert into a closed deal so in that particular case what we want is how many visitors have we got and we want a trend line showing us that hopefully that's going up and to the right a trend line of how many trials we've got again hopefully going up and to the right and a trend line of how many closed deals and then we want the conversion rate from visitors to trials and the conversion rate from uh trials to close deals so that's the pretty

simple way to tell you how to design your metrics for your funnel and this is one last thing here is you want the overall conversion rate and the reason for this is that different lead sources have very different conversion rates so your facebook ads for example might be completely different to your inbound marketing leads and you need to know that because some of them are going to be good investments and and give you a good payback and others won't so these metrics will help tell you which is working which is not working now once you've

got these metrics in place you will find that every funnel even cisco microsoft oracle etc have blockage points where their funnels aren't working the way that they hope they will do all right so i found i spend a lot of time and have a ton of fun going around at companies and talking to them about their blockage points i spent three hours with one of my portfolio companies doing that just before i came here and what i've discovered is that the the key thing is you want your customers to do something you designed your funnel

the way you wanted it to work and the customers are not motivated to do what you wanted them to do so the step you're asking them for the classic step everybody wants is you want them to come to your website well they don't really have a reason why they want to come to your website you've got to give them a good reason why they want to come to your website once you've got them to the website you want their email address how many of you like giving email addresses to websites this man's shaking his head

aggressively here i think most of you feel the same way why you're worried about getting spam right you hate getting spam email so what we're looking at here maybe give you an example of a investment that i made a long time ago any of you heard of a company called jboss at all a few of you have yeah it's an open source java application server and they had when i first ran into them had not five million downloads of this take place and when i went with them they had a business selling documentation for twenty

seven thousand dollars a month and they were also selling training for it so they were making a couple hundred thousand dollars a quarter with this business and they had a new idea about selling support contracts and i was brought in to kind of look at how do we market this what do we do to create these steps here so the first thing i said to them is where the names of the five million people that downloaded this thing because we want to talk to them and they told me that they tried putting an email form

in front of that download and it had cut the download rate by a factor of 10. so that really clearly brings out you know nobody wants to give their email address there so what we did was pretty simple this is the thing that michael's talked about a little bit but i have a slightly different way of describing it we looked at on this blockage point here there are two key elements that stop people from doing things one of them is friction and the second one is what are their concerns and what we have to do

as marketers is come up with a really super strong motivation that is more powerful than the resistance that they have the friction that they have and the concerns that they have we've got to answer their concerns as well sometimes it's just a matter of telling them that you're not going to spam them and giving them some assurance that they won't have problems but the art here is is getting inside of the customer's head and understanding what's going on in their brain and recognizing other things about them so a little example here is if you want

somebody to come to your website and you don't want to annoy them straight away with selling you need to attract them there with something interesting to them and so the answer to that is get inside of their heads understand the things like what does their boss expect of them at the end of every quarter how do they get graded for good marks if their boss thinks they've done a great job or what do they what do they personally worry about most and maybe use those things that are inside of their brain not your brain as

to what you want to have happen to create the incentives for them here so i'm going to quickly illustrate what we did with jboss was pretty straightforward we took the documentation that they were selling for 27 000. after three months of arguing with them to give it away free they finally gave it away three and it turned on a lead flow of 10 000 leads per month for them which uh created another problem which is that's too many leads for most salespeople to handle but at least it was a a huge start and this basically

fueled the whole business uh from that point onwards there so the documentation was an adequate motivation to overcome the concern about spam there let's have a look at another really good one here which is getting traffic to your website and here i'm going to use bran as an example this is the predecessor to what currently exists which is marketing grader hubspot put up this this site called website grader and it's very cool because all you have to do is literally put in your url for your company name and then if you want to put in

the competitors names and then this thing would run away for a short while and it would spit out an analysis of why your site was good or not good at search engine optimization and the other clever thing about it is it would put a score there now i have to say that my website which is what was graded here got 95 but almost nobody gets 95 the typical score is about 50 to 55 or so and let's go through why does this work well the first thing that's really interesting about this is this is a

free application that gives you a lot of value so because it's free you spread it virally you tell other people about the thing and it gets an awful lot of interest from from your friends as well the second thing that's cool about this is it starts to um present the fact that you're an expert in your field so trust somebody mentioned trust was very important before you buy from somebody within seconds flat this has started to create trust that hubspot is a company that knows what it's talking about and then the other thing that i

love about this is the score is actually a trigger because if you're like most americans and you get a score of 55 you want to improve it so the first question going through your mind is well what step next should i take to get a better score and by the way i think this concept is very usable in almost all businesses which is you can grade a lot of the things that you're selling you can tell the customer you're not up to speed with the best practices in your particular industry and here's why and that

is an inspiration to cause them to feel like they need to do something about it particularly if they feel like there's a chance their boss might find out that they haven't got the best score around and that that might be a problem for them later on there so in essence the quick lessons from that low customer work high value score leverages the trigger builds trust through a clear demonstration of expertise the last thing that i love about this is that this is the notion of using engineering for marketing and i really think this is an

incredibly important thing for many of you because a lot of you have developers in your organizations and developers can build much more valuable things that cause an attraction for customers than marketers can marketers are stuck with things like white papers and videos and stuff like that so we're thinking about when you're considering this is bring your engineering team in on this problem and have them consider it as well so the art of doing this well is to even go down to microsteps a little tiny example i'll give you here i was sitting with a company

called fetchnotes that's a techstars company and i like the entrepreneur there a lot so i was telling him you know to to give me the diagram of his viral loop that he was trying to create and the first thing he said was okay so somebody downloads this app um by the way fetchnotes is just a simple to-do list app on your on your iphone your first thing you get them to do is put in a to-do list item but his problem is that he wants you to use some special features in his product which is

to tag that to-do list item and the issue there immediately with that very first step is most people are not used to tagging their to-do list items and they don't really see why they should because there's no benefit apparent to them yet so my thought for him on that one was where your friction is that there's they don't know they don't know how to do it and they don't know why they should do it so what you need to do is put in-app um messaging so that you can pick up on the fact that they've

entered a to-do list item but not entered a tag and put up a little message which says here's why you should tag and here's what the benefits are once they've done a couple of entries then you want to show them the next thing which is when they get the wow moment which is to click on a filtered list of to-do list items which is get me my work phone calls which is two tags work tag and a phone calls tag and that's the moment when the customer gets the wow moment where they're excited about this

product and suddenly see some benefit from it so what we're doing there is we're micro analyzing each step of your trial breaking them down looking at the friction for them looking at why there's a motivation for somebody to go to the next stage why there's a problem for them go to the next stage and also particularly looking at when do they get the real moment of realization that this trial was successful what did it need to take for me to feel like this was a successful trial i will now continue to use this product and

recommend it to others then so that's my real my real pitch to you here is map out your process from start to finish take that one website where people would have purchased in one thing figure out the series of mini steps and for each mini step connect them to the next mini step and sit and analyze what the friction is and the concerns are write those down and the moment you write them down this is a funny thing i've i've gotten a lot of people to solve the problem the second they put these things down

because they immediately realized ah we could do that to solve that issue or we could make that a lot easier if we simply but they're carrying them around in their head and they think they've done the best they can do but the moment i make them write them down magic happens so there's the the short amount that i can get covered in this amount of time here and thanks so much for your time and attention thanks so much david one of the things that's exciting is to hear that being thought about in a way that

i think everybody could approach those various different steps and i love this last point because um i guess we must be brothers we think similarly here on this one but this is exactly what we were talking about when we did the slippery products analysis which is how do you make the product simple low cost initial prove value quickly etc all those other steps and i couldn't agree more it's an easy way for startups to make a big impact in the go to market so great stuff there are a lot of great slides that david didn't

have chance to cover um so i'm going to encourage two things one is first of all these are all up on the site but also he has a great site great blog called for entrepreneurs.com which i encourage you to visit has a lot of other great materials on this whole subject so we're at the end of our agenda you will be extremely patient this evening and i just want to quickly you know recap by making sure you know this is a big subject and we tried to cover some of the key points on it but

obviously that we couldn't cover absolutely everything in the marketing and sales cycle and all the different strategies and tactics you could take we picked off a few key ones and we ended with the whole discussion about how could you make it all measurable so that you could actually drive this the ones that we didn't cover have been covered in previous classes before and for those of you who didn't get it i encourage you to come and ask me or that or harvard has them here's the handout and again you can just go straight to the

website if you want to get it and it'll have all those other case studies on things like channel and distribution for example which is a big one and one of the most important things that you can drive as a multiplier and i have had a bunch of requests from you which i'll get to i've got a series of classes coming up in the spring people have asked me to connect the dots with the business model they want to talk about whole products strategic partnering so have those case studies lined up for the spring for those

of you want to follow along and there'll be a sign up form for those uh if you just ask either myself or jody so to summarize the key points to remember from this evening are specifically think about managing your brand right from the start that's about you and if you start how you mean to end that'll make a big difference position to be unique we talked about some of the ways to do that not just technology we talked about how important it is to target and segment and as you could hear from david and brian

and actually mark talking about that that's a critical piece there's a good case study that actually jamis did with demandware about how we did that that's on the website and think about driving your marketing and sales cycle we heard some wonderful examples here of how you can do this in such a disruptive way with inbound marketing in a much more appropriate way for startups than just bludgeoning your customers with heavy expensive sales calls and outbound approaches so i think that was very exciting and thank you uh both david and brian and and mark uh for

bringing that to life and jameis in particular for for bringing this to uh into focus in terms of how we position correctly with the right brand but it is ultimately about measuring so if there were one takeaway i'd ask you to do this is the one discipline that typically gets lost it's think about how to get results-oriented measured execution and drive that through iteration in your uh your early days as a startup very few people benchmark early on this and the earlier you benchmark the more you'll build confidence yourself and for everybody you want to

attract into your business to work with this and the more easy it will be for example to attract funding and so just to put this all in perspective you know this whole series is about building an enduring company go to market is we believe one of the most important aspects of execution you can hire the right team you can have a great value prop you can have a fantastic vision but if you don't start executing and connecting with your customers and actually build this piece right everything frankly falls apart so thank you very much to

our guests who have been so generous with their time and putting these resources together and also thanks to the harvard ilab for what's been a tremendous year uh to all the team here who supported this we'll be back next year uh thanks to all your interests and support for that and uh have a great evening and please come and join our guests up the front to ask any more questions appreciate your time