Harvard i-lab | Startup Secrets Part 4: Going To Market - Michael Skok

[Music] I just wanted to welcome you all back to the iLab for the fourth in our five-part series with five-part series with Michael Scot uh this evening on Startup Secrets tonight we're going to talk about going to Market uh with that I'd like to welcome Michael back uh for this evening's presentation going to Market thanks very much Neil well good evening everybody everybody it's um tough to compete with pizza but I'll try to get us going on U the the agenda this evening uh I want to first of all take a moment to say that this subject is probably one which in of itself could be five parts and so to set your expectations we are going to cover a very few pieces of what might make up a marketing strategy or set of tactics that you would think about uh but in framing it I was lucky enough to have uh a great number of portfolio companies to choose from and I want to introduce you to the two companies that are here tonight that are kind enough to participate in the case study as well as Adam Barry who's an executive in Residence with me who himself is a very well-known marketer in the startup world so uh if I could just do this by having you guys stand up first of all we have jamus uh from demandware and jamus is our CMO he's going to talk a little bit about their case study and we have Brian and Tom from unidesk thank you guys very much for joining and then Adam in the back Adam Barry so hopefully you will all get a chance to meet them because actually everything I say is irrelevant compared to the fact that these guys go make this work day-to-day and get um paid to do that so it's just a pleasure to have them here tonight and I think we'll get a lot out of them so as Neil was saying this is part four of the five-part series and because a number of you have been here before I'm going to try to stitch together the three other pieces that have gone before for those of you that aren't uh familiar with those three pieces I've also put in some Recaps to try to at least bring it together it does mean that unlike the first couple of series there's a lot of material here and I'll tell you right off the bat uh if we go back one slide it's impossible for it all to be in detail here so if you want to look at this you can find it on mj.com um that's been simplified as a place for you to go find each of these places and Harvard has worked with me to put the slides up there and we're going to be get the videos up there in due course so if you don't find all the detail that you're looking for as we go through this or if you've missed some of the previous sessions trust me you'll find it up on the web and you'll be able to get more behind it so with that let's get into the meat of this I'm going to build a framework for you here which in of itself is I think something you can use and the way to think about this framework is that you're going to have a series of steps in your sales cycle that will take you from engaging with a customer or then find ing you all the way down to them buying your software or Hardware or whatever it is you're selling and you're going to want to get to that audience via some strategies and tactics and through whatever Channel and we'll talk more about what the audience is and how important it is to identify that audience and segment it and throughout this I'm going to try to identify for you some of the results that you're going to want to track along the way the metrics you'll use to do that and in the end I'll say the obvious which is that this is all about execution however if you don't know where you're headed any road will get you there and so that's why strategy is so important up front and then the tactics employed are obviously going to be uh at least a piece of what you want to focus on as a startup and for the three that we've picked we've try to pick a mix between strategy in brand and positioning and tactics in things like how you would go to market either directly or indirectly through a channel and then in particular where would you focus your energies uh what targeting and segmenting it's not to say these are the top three or the only three there are many things as I said that we just won't get time to cover tonight but I'll try to actually flesh these out in time either in other uh workshops or in articles on the web for you so let's get started by talking about positioning positioning is an interesting subject because often times people think it's a science but in reality if I said to you where would you position Apple you'd all have an answer to that but it would probably have a position in your mind that's different to the next person's obviously want all of these people to be as similarly viewing you and your brand and how you're positioned and that's the idea behind getting a good position State positioning statement it's occupying a distinct place in your customers minds and hopefully on a consistent basis I also add one piece to it which I think is important which is as a startup you obviously don't want to go and compete where there are 50 other players and so you're trying to position yourself a unique white space where you can own some segment of the market and that's why when we talk about segmenting you'll understand that it's important to try to identify that segment as small as possible so you can be realistic about how you'd apply your resources to it now again I mentioned some of you have already seen this for those of you that haven't in the first workshop on value prop we talked about how do you define your value prop and we use this framework for Target customers who are dissatisfied with etc etc I'm not going to go over all of this again tonight because obviously we covered in the value prop a lot of you built it in that session but the good news is for those of you who were here for that it's exactly the same framework for positioning and I intentionally uh built it in a simplified sense to start off with so it would make it easy for you to move to positioning the thing that's different to what we talked about in the value prop is really these three areas segmentation differentiation and whole product which uh jamus is going to cover for you a little later on what I'd like to do to start off with is take that competition piece and help what I think is a challenge for most startups which is for people to Define what they do uniquely well and I often say that the problem here is people's invention is almost invariably at the Forefront of their mind so they're excited by talking about it in technology terms that's great and it's certainly a starting point but an important part of this is it's not just the technology in fact if you were to find for example a unique targeted Whit space a segment that nobody else adopted that might be your differentiation that you're targeting some Market that nobody's ever gone after before in a way perhaps with goto Market approaches we're going talk about tonight or a business model that we've talked about before that's differentiated so don't just think about your differentiation in terms of Technology think about the segment the business model the approach that you take to that market Etc as ways you can differentiate the next key thing is obviously you're going to come up against competitors who are much bigger than you or they may already be there in some regard or another and in which case what you're trying to do is put barriers to them entering the white space that you find or following your approach and taking a lead after you because they've got more resource so again one of the things um Harvard people I'm sure very familiar with is the great work that was done in the innovator's Dilemma that's an example of how a business model can actually cause somebody who's an existing player not to be able to follow you because you're attacking in many instances the soft undervalue of perhaps the way they've priced or positioned in a Marketplace so a barrier to entry is often not technology again it's often things like business model or again maybe your go market approach so again I encourage you to think about those and then the third thing is really what makes this sustainable because you might initially have a winning strategy to defend some white space but then how do you keep that now what I'll typically hear is IP obviously if you've got tra great technology that's a great starting point patents around that can be great but by the way there's a double-edged sword there because often patents often time patents of course expose your method or apparatus or process but one of the things we talked about if you remember in the in the business model is that there are other things that can be very defensible and sustainable for you like the network if you're Facebook your network is worth more than anything today or if you're an ad Network perhaps it's your data or it may be your process if you've got some clever approach to for example building a product or delivering a service all of those things should be thought of as how you'll build the sustainable positioning in the competition now for those of you who've got to see some of the presentation I'm a big believer in trying to find a way to actually picture these things and so this is really all about building some kind of a uh chart of what capabilities you have the differentiated versus the competitors and I'm just showing the competitors here is ABCD just for Simplicity the first step here is to try to you know think about these guys in terms of their relative size so you might size those bubbles based on who is the larger player in the in the in the marketplace the second thing is then obviously actually very key to me is defining these axes in a way that sets you up to be in the top right so for example you'll typically see people say things like well performance is one and price is another that's a pretty easy starting point is it a good one anybody here care to comment on that performance I mean how often do you hear that probably a lot right anybody think it's a good idea too much pizza in the room definitely okay well we're not going to use price performance on pizza but we could say cheese per square centimeter we could say salami we could say lots of things my point is this when you pick these axes what you're trying to do is first of all position yourself in the top right and that's to get some white space where you can uniquely claim that you have the best price performance we were going to use that or the best cheese per square cimer with salami on it uh but I'm going to go take you one step further and I'm going to actually try to get you to do the following it's actually really easy for somebody to come in and compete if all you say is we put more cheese on our pizzas and salami per square centimeter because all they're going to do is at that point add more themselves and if they can find a way to do it as cheaply as you do frankly you just lost your competitive positioning so what you want to try to do is to find some true barriers as I've put here with the red lines where people cannot cross from one side to the other well what are examples of real barriers I'm going to give you a case study tonight about demandware demandware changed the game in e-commerce because up till this point even if people had better price performance in e-commerce delivery on the web they were the first guys to deliver it on demand so there was no infrastructure whatsoever so this would be on premise and this would be on demand people just couldn't cross that barrier by adding more function or performance they had to rewrite their architectures to be multi-tenant remote development scalable reliable Etc and many many other things and it was literally a barrier to entry for anybody to be able to get into their space to come onto the SAS uh side here I'll let James tell you about the second barrier that they created a little bit later on but it was not just technology it became the entire ecosystem around the platform of demandware that he'll talk about called the link program so they are a great example of a company that ended up creating not only an individual um white space for themselves a unique white space but also some really clear barriers to entry the first of which was on Demand versus on premise and the second of which jamus is going to talk you about which is this complete whole product and solution that they've got in their link program so to summarize on this section I really encourage you not to just look for things that are easy for people to follow you along but to look for True barriers to entry which differentiate you and that make it very difficult for your competition to follow based around those three points I mentioned okay so that's positioning I'm now going to ask Adam to come up and join me as I introduce brand so brand is really a science unto itself and there are many ways people talk about this and so I would just simplify it by saying you have to think about what you want to be as a brand in terms of of something as simple as who you are so are you somebody who drinks Coke or Pepsi why what does that represent to you well that's basically an example of the kind of brand that you've got to think about do you represent one or the other in our business it's probably are youell lowcost provision or you Apple you know premium best product and that's really the essence of of thinking about how brand might come into play in your go to market the thing I want to share with you as a startup is it can get complicated if you get this you know initial set of thoughts about well how would I Define my brand but it's simple as as this to start off with it's about you you the founders are going to be the brand of your company to start off with and what you do to engage with your first customers your first Partners even your your shareholders is going to Define what your brand is and how you execute in literally day-to-day engagement with those people is going to be what people remember remember you for so even if you haven't taken time to Define your brand it will be defined by those kinds of behaviors with that I'd like Adam to give you some sense of how to bring this into more of a scientific approach I see you miking up Adam you ready I think so can you hear me coming up to the front yeah yeah yeah I'll I'll start and keep going so let's talk about brand take a moment and think about a brand that you love or a brand that you think is great and think about what makes it great why is that brand so good all right who wants to share one of these bring it okay stand up tell us your name the brand in one sentence what makes it great really loud my name is nazia and I like d that was my first computer because it was cheap and I could afford it awesome all right somebody else share share don't be shy you're getting graded on this go for it did I saw the sign uhhuh the same the same product great and your name Sergio Sergio all right one more bring it go for it faty my name is faty and brand I like is Mosin they make great like notebooks and B and what I like about the brand is the perfectionism in every detail about the quality giving the size of the paper awesome that's good we got it we got it we got to go fast so uh so brand Brand's an incredibly powerful tool if you have a strong brand it drives sales it gets you into customers it opens up new markets for you it drives Topline Revenue it drives profitability but what is it you know really what is a brand normally when you think brand you think immediately of an expression of the brand so you think about the Nike swish or you think about the iconic Grill on the front of a BMW maybe you think about the unique service that you can get from a company like Nordstrom or the sound that you get in a Harley-Davidson motorcycle all of those are really powerful expressions of brand but they start from something deeper they start from a core idea from a concept I call that a brand Essence it it sits at the center of a brand and all those other things that surround it your name your logo the graphics that you use on your website the voice that you have on the voicemail answering machine the way your website works to service customers all all the ways you touch your customers to your brand they're fundamentally expressions of that brand Essence and as Michael is saying that brand Essence actually starts with you the founder and with the culture of the organization you build around it if what you're trying to create as a brand is inconsistent with your culture as a company it will fall apart it will break as as you get more and more people in it won't be consistent it won't have integrity people won't remember it so how do you how do you define a brand a brand Essence um we don't have time for me to go through this all in detail but I just want to throw out there kind of the Core Concepts that go into a brand Essence there's basically four pieces that you want to work with so the first is a vision now when I talk about a vision I don't mean a vision for your product road map what I mean is a vision for how the world is going to change or how the world is changing as a result of your product or how your product is reacting to that change so to use Nike as an example which started all the way back in the 70s the change that they tackled was the the emergence of the amateur athlete and the and the sort of personal health movement people wanted to be athletic so that's the first piece you have to Vision what is it about the world that you're changing fundamentally second thing is you need a promise in some ways what a brand really represents is a promise to a consumer or to a customer to come back to the Nike example I think Nike's promise is that we will make you and help you perform at your very best if you wear our shoes if you wear our gear you will run as fast as you can you will jump as high as you can you will will achieve your true potential for performance so that's your promise and once you've made that promise try to keep that everywhere you try to keep that in every single interaction every single time and when you break that promise um you pay for it because your customers will know right away the third component are what are called brand attributes and again you can think about these conceptually so they're ideas that underly all the different Expressions that you might have for your brand and there's three levels the the first is your Spike um sometimes people call this one simple thing it's a single core idea that unifies everything you do uh for um for Zipcar they call it freedom I think for Nike again it comes back to the idea of performance or technical performance for Puma it's probably style then there's three or four attributes that make you special they're the things that differentiate you the things that separate you from the pack that make you something unique in terms of what you do so cold fusion product that I worked on for building web applications our key special attribute was speed you could write applications faster with us than anything else but we tried to get that idea of speed everywhere every transaction with us should be fast should be simple should be easy to do and then you have cost of Entry so that depends on the market you know if you're selling cars it's safety if you're selling uh uh database systems it's scalability and reliability there's certain things you have to have to get get in the final piece of a brand is its personality so brand isn't just technical it's emotional you form a connection with people on an emotional level so when I'm thinking about this on a conceptual level I like I like to express this in terms of a personality and it ties back to exactly what Michael said which is you are the brand in your startup Steve Jobs was Apple he was literally a manifestation of Apple um the way he dressed the simplic the focus of it the way he spoke the way he presented things and invented things as if they were magical he was the brand and that very often happens in companies especially in their first 30 or 40 years before they become really institutionalized so one way to think about your brand emotionally is to think about the personality if your brand was a person what would it be like what would their personality be like would they be friendly would they be aggressive like uh um a Larry Ellison uh you know would they be super creative would they be very flexible and easygoing super casual do you think about would they be fun and playful think about their personality and that'll help you think about how to communicate the emotional aspects of your of your brand and then finally think about your brand style and again I like using the metaphor of a person so what would they wear how would they look you know if you're Chanel you're super classy if you're Victoria Secret you're kind of sexy right if you're Oracle it's uh you know your sort of style is very Stark and uh and if you're Apple your style is very elegant so imagine again a person what would they wear how would they look what would their style be so brand is this fundamentally powerful thing everyone here can immediately think of the brands they connect with brand starts with an idea it starts with a core brand Essence then you then find different ways to express that idea 360 degre everywhere everywhere you touch customers and that brand Essence has these sort of four basic components now as anyone who knows me well knows I could go on about this topic for probably another two and a half or three hours before I would need a drink um and then I could keep going uh short of that given that Michael would be really unhappy where I to go down that road um I am going to write a couple articles about this which I'm going to put on my website which I call startup blender so go sign up and uh hopefully you'll see an email from me about that so anyways few thoughts on Brands hopefully it's helpful thank you very much Adam I don't know about you but every time I hear Adam speak I want to go buy whatever it is he's selling and like I suddenly feel like I should go get a pair of Nike shoes and start running and jumping um but I really connect with the way he's approached that and so I asked him to share this with you and he'll put this up on his site too and there's some things there that I think you can connect back to hopefully that we've talked about like for example culture we talked about how you build culture and Company formation that connects very much to Brand uh but just a draw out specifically for tonight consistency great brands are consistent I think somebody already said that when they were talking about Coke it was the first thing they thought of they also represent the values that that your company is all about and again we talked about that in company formation and then ultimately they're reliable if you if you're going to trust a brand it should always keep its promise it should be consistently delivering on what it's it's uh it's offered and I decided will be obvious to pick this but fun to go to look it out this is the original Apple marketing philosophy which if you can't see it at the back was January 3rd 1977 by Mike Mara who was brought in as the adult supervision in those days when jobs was kind of getting the company together and it really didn't ever change you know all this time later Apple still use uses this word which by the way I had to look up I think a lot of people probably did impute which was this notion that Apple's brand would impute the value of the products which means represent them immediately and if you've ever opened up an Apple box the minute you even touch the box it starts representing what Apple wants you to feel as its brand it comes through from the packaging all the way through to the first you know experience of actually touching the product to switching it on and then using it and so I'm going to just leave you with one simple startup secret and that's at the top here that is start how you mean to end because brands are really really tough to change so if you're going to start with a brand with a set of values and principles that you really believe in just like we said this in culture it's probably going to last for a long long time especially if you want it to and you keep it consistent then it can keep getting reinforced so start how you mean to end okay so that's brand let's talk about the last piece for tonight on the Strategic agenda and that's targeting and segmentation this is a really fun way of thinking about this and that is you know what's the perfect startup storm what's going to get your business just immediately to the front of people's minds and I would say it's going to be three things actually it's not just having a great product or great idea with a a breakthrough value prop it's what we talked about last time it's also having a disruptive business model that makes it unbelievably easy for people to engage you and then this is the third and most important piece for this section it's finding this new market opportunity where at this particular point in time there isn't anybody else addressing this particular area of need and if you can do that you're in The Perfect Storm you're in a great place to go make an impact but why s does it make a a difference beyond that well people typically think about segmentation about as targeting a market that's important for product Market fit but it's also if you think about it important for packaging and distribution uh because if you pick a particular product that's luxury high value like Chanel that that uh you were just hearing from Adam about it's going to be sold very differently than thinking about something that is a knockoff t-shirt that comes from Taiwan that doesn't have a brand that's obviously going to go through you know Mass outlets in retail for just broad reach so it's actually incredibly important to think about all of the segmentation aspects in terms of all the ways you'll go to market and ultimately everything I would say in marketing depends on getting a good targeting and segmentation so I'll give you a sense of this using a diagram that you that I just put up but that also relate it back to what you probably hear a lot of in this diagram what I'm really saying is if you have a value proposition could apply to this whole Marketplace that's okay but wouldn't it be better if what you could do is get it really focused on a small segment here where the amount of coverage that you had to have was a lot smaller so think about that for a second if your value prop has to reach thousands of people and apply to all of them it's going to be a lot of work for a startup but if you could T Target it down to one person and you could say oh I know that person really really well and I know exactly what they need it' be very easy to meet their needs so somewhere in between is what we're trying to find and for those of you who weren't here for the value prop session we talked about a number of things finding discontinuous defensible and disruptive value props those are all important but we also talked about finding people who had needs that were unworkable unavoidable and Urgent and we had one under there that is highly relevant to targeting which is in an underserved Market where those needs aren't being met today I'm going to add one last one which is again this notion of uniqueness finding something where you can uniquely serve that need so now what we're looking at in this diagram is you've got a unique value proposition that can meet an undeserved need you're going to end up with a very unique uh in a unique position as a startup to be successful because other people haven't identified that segment and other people haven't got us focused on it to come up with a unique proposition you're going to be better set up for success there are people who obviously have other lingos out there so I'll use the Lean Startup lingo so you might use this if if this is more comfortable to you most people have heard of the minimum viable product actually let's get a show of hands who has heard of MVP okay good so lots of people are reading that material well minimum viable products one thing but as you hear in that discussion of what it takes to build a minimum viable product again the same principle applies if you're trying to meet a minimum of viable product for an entire Market that's going to be a much bigger product than if you pick a small segment of it to actually meet the needs and so again the smaller the segment you pick the easier it's going to be if you to successfully cover it with your first minimum viable product so look for that intersection and this is why segmentation is so important now what is segmentation one of the biggest mistakes people make is to just go down what I would describe as the sort of classic thinking of oh well it's pick a vertical it's Finance or it's government yeah that might be one way but the really key thing to look for is what the customer needs are and lining those up and finding ultimately a segment according to a customer set of needs that are consistent from customer to customer in this particular segment why that's so important is that if you can find five customers who have exactly the same need that to me is a great segment why because if you hit the first guy you know you're going to get the next four and then this comes into play which is incredibly important as you know I'm a student of Jeffree more he'll be here for the end he talks about this almost religiously through his book once that first customer is Met has had their needs met if they happen to know the next guy in fact if they're sitting right next to them guess what they're going to want to do they're going to want to reinforce that they bought a great product to their friend and so they're going to reference each other and then both of them are now talking about and the guy next to is going to get infected by that enthusiasm the next thing you know he buys and this is the whole point about reference selling but you can't reference sell if you didn't segment up front with people who have consistent needs because the guy sitting next to you has got completely different needs you can go on and on and on about how the fact is you absolutely love these Nike sneakers but the guy happens to like skiing and he doesn't run because he's got some kind of a problem with his back not going to work it's just not the same problem set so segmentation is incredibly important for these two reasons and ultimately if you do it right it leads to you dominating a segment which Jeffrey will typically talk about as a beach head and that initial Beach head is incredibly important because once you win a beach head once you win that initial segment you can declare Victory you can say we are the leader in providing sportsware for the amateur Runner etc etc and that point obviously becomes reinforcing of your brand and many other things we're going to talk about so this is why segmentation so important it's particularly important for startups because you don't have the resource to compete broadly so you're going to have to compete in a very focused way so here's the mistake I want you to avoid you'll often hear people tell you I hate to say it I hear it from uh other people in the boardroom too often oh go vertical you know pick Automotive or financial services or government well by the way those aren't verticals in my opinion Financial Services is a whole bunch of verticals Insurance banking Etc but even if you get that right people then say oh just pick size you know are you going off consumer S&B or Enterprise those may be attributes that are important but what I'm really trying to tell you to do is to go way beyond that and drill down to where there are problems and needs that are consistent so for example if you can find a process like regulatory approval it might work across many different verticals farmer Financial Services government they all have regulatory approval they all need it so sometimes people talk about this as a diagonal way to to segment a Marketplace in other words you can go across verticals but with a single problem set where you're meeting consistent needs my point here is it's a about the needs it's about finding a way to get them really clearly identified at the center of what your value prop is that you're addressing okay so the next challenge I've I've often heard from people is okay we can find needs that are consistent if you remember the value prop what I tried to get uh people to understand was the significance of finding something that's urgent and critical so here's an example for you to get a sense of this mobile is hot right now so I get probably not an exaggeration you know dozen or so mobile business plans a month and you'd be amazed What I Hear which is oh yeah we've got a market it's the mobile professional Market okay how big is a mobile professional Market I think it's probably pretty much as big as the market in general these days because everybody would describe themselves in probably some industry or other as a mobile professional okay so let's drill down on that we could look just at say well maybe it's office workers but I'm going to try to get you to see how if you get to think about this and double click on it you can actually get to a interesting Market segment so we could drill down and say well let's go after field workers versus white collar workers we could say let's go after Services people rather than sales people all these people are mobile professionals by the way and then let's pick a segment where they might have a real pain Point like medical medical equipment so servicing medical equipment rather than just office equipment and then and by the way just to pause on that so this would be as an example Pitney Bose and this would be agilant you know to give you a sense of the way companies might fall into these things and then if you're servicing medical equipment why go after medical clinics if you could go after hospitals where you're not just dealing with a diagnostic problem but you're dealing with critical care where lives are at stake now if you start to think about this I'm able to say if I can segment all the way down to this and identify and I haven't gone into this full length of detail but a of well-defined similar needs where we solve Critical Care Problems by enabling hospitals who need medical equipment 24/7 to work and provide the services people in the field with a solution that is mobile okay now I probably doing something really valuable really well focused and actually for a segment where if I can get those needs aligned you'll have some real reference ability because you start saving lives for hospitals people will talk about it uh so that's the way to think about segmentation there are many examples we could we could work through in the workshop and I hope you'll get a chance this evening to engage us on these examples my last but most critical thing that I actually am going to say a prayer for is that each and every one of you when you start your company has the patience with yourself to work through focusing on what that segment is my single biggest challenge literally with startups is that they try to do too much in general that's true and as a startup the challenge is almost invariably Focus just one word focus on what you can do uniquely well for who and that starts with the segmentation that we've just been talking about it also leads to as uh I've just mentioned the ability to create this beach head where you can win so I'm going to try to get you to ask so to answer a question um in your minds to to realize this and every time you're stuck making a decision as a startup I'd encourage you to ask this question how could you focus and in the end which would you rather would you rather expand on success or contract on failure that's the question I want you to ask yourself every time you're at a junction about whether you should go big or get focused because I'll tell you what I see as the number one problem in startups people try to do too much too soon they end up doing none of it well and they end up having to contract on failure as opposed to the really good ones where people start with an incredibly small segment with a very focused minimum viable product they meet that need uniquely well and then even if it's only for one customer they build on it and they get the next customer successful and they reference that one they get the next one successful so it's my wish my hope and even my prayer for you that you find your focus and you figure out how to build on that to Great get get your success going okay enough from me on segmentation what I'd like to do now is introduce uh demandware and jamus who lived this for real uh as a as a business building an opportunity which is huge going after the the massive e-commerce Market jamus how did you segment so we were thinking through uh as Michael said very very large Market um e-commerce selling online who doesn't want to do it right thousands and thousands of entities in North America alone who want to do it and we were at the time about 22 people so we started off with the concept of how do we really how do we really focus in on a place where we can win um we had a couple of guiding principles uh one was get small get big or get out the idea there being pick an area where it was really small and discreet and get really big within that Niche or if you couldn't do that then move on to another Niche but the idea was pick an area where we could win and serve the market distinctly um find a market that was small enough to be actionable so it's the concept of reference selling find an area where everybody knew everybody else it was small enough as at the size of company we were to really get in there and do something great um but it was large enough that if we won it was a meaningful enough company um and think about the questions about could we deliver in there with distinction and if we succeeded ultimately would anybody care right so it's one thing to win a niche but would that Niche open up other niche issues for you so what we did um is we thought about uh not just even verticalized segments but segments within segments within segments um and at some point I'll take you through or you'll have to trust me on this all the spreadsheets we went through to look at the market in a whole variety of different facets not just the normal facets of Revenue size and Industry and all those things but to really get into other sort of hard toin brand attributes around style or growth aspirations um so what we did is we positioned the company around this concept of high growth retailers and Brands right so even within the concept of retail who were the highest and fastest growing retailers and what are those segments that are most sort of applicable to us in our product um and we really focused on those and what we did is we wired account sets that we spent long time over directly into our databases on go to market so our sales team and our marketing teams everyone was aligned around account sets that we knew were highly ref principle um apparel Footwear Cosmetics luxury home lifestyle above certain Revenue sizes within certain segments where individuals knew other individuals and we went after those people and it started with one brand that we would win but then as Michael was saying that one brand would talk to their friends and say I made a great choice I chose this really nice startup they're doing wonderful things and words would spread from there um it worked in cities where you would go after a particular brand in a particular City and once that customer signed on and believe then the whole city would open up for us so this concept of sort of positioning with segmentation built in wiring it right through our operations and then it permeated everything we did on go to market um and that's how we started from where we are you know and uh yeah any questions while we got J up here thanks jamus welcome because we're in a quiet period having just gone public we can't talk about the result results of demandware and everything else but you can go and look it up under the symbol of dwre on Nisa now but thank you jamus for uh covering that I will just tell you that in my opinion sitting on the board there from the earliest days in which we tried to figure this out it was the segmentation that was critical to the early traction of the company and the repeatable success okay with that we've covered a couple of the Strategic items in marketing and what I want to do is try to take you into some tactical pieces because ultimately when you f try to get your first customers all the strategy in the world isn't going to count if you can't execute and engage your customers correctly so in this section I'm going to give you a simple framework to think through and that is how you might think about the sales and marketing cycle or some people would say the marketing and sales cycle depends on which side you sit and which may come first um we certainly debate that a lot at unidesk uh but it's some where along the lines of these five or six things that you're going to encounter how does your customer find you where where do they get awareness of you how do they get interest in you how do they get understanding of what your offering is your value prop is how do they engage you and then how do they trial that solution and ultimately how do they buy it now I'm not saying that these are the steps I'm just saying to you you will craft some of your own steps and in fact in the workshop tonight to get you thinking about this I'm going to ask you to just think of what are your steps can you for example just put up an advert and expect everybody to come and find you and buy your product I doubt it but Sumer in between you know these various different approaches you're going to have a set of steps that will Define your cycle but I want to connect it right away to something we've talked about targeting and segmenting and give you yet another way to include this a notion of segmenting down even one further level so we've talked about targets and segments I'm now going to encourage you to learn about actors some people talk about these as personas or personifying things I don't care about the the language but the reason I choose actors is as follows throughout the SE Sal cycle and marketing cycle I find one of the biggest problems startups Miss is that the actors change throughout what I call the scenes that's why I use the term actors in other words at the top of this funnel in early markets you'll often be selling to a very Visionary buyer somebody who can actually imagine in their own Vision what this unique piece of technology that breakthrough that you you bring is going to do for their business those people are very different than at the bottom of the cycle the guy who signs off on the purchase order trust me they're very rarely the same person unless you're in a selling to a you know a consumer um and you know it's all rolled into one but in B Toc and in large organizations there are many actors As you move through the scenes in your sales cycle you'll typically deal with technocrats who are very focused on for example how this technically fits you'll deal with operators who are going to be responsible for actually running your solution you'll deal with influencers who feel like politically for one reason or another they need to be involved in it you'll and you'll ultimately deal with economic buyers who have obviously the budget and then Authority in the decision maker to give the green light to it and these are just some of the actors and they're just some of the examples I can think of the point to to take into account here is when you think about engaging in your Marketplace and segmenting try and figure out who the actors are try and get to actually un identify all their personalities and all their traits and think about how you will meet their needs throughout the buying cycle because the needs will be totally different in this kind of a a situation starting to Vision than they will as I said trying to get sign off right at the end so at each step of the way think about the scene you're in and the actors you're trying to deal with and put their person personality traits in your mind as to how you meet their needs the next concept I want to introduce to you is the notion of driving startup marketing and sales so I often hear um what I would describe as the sort of Enthusiast in an entrepreneur saying oh yeah I know how I'm going to drive the marketing and sales uh through from start to finish well obviously uh there are people who've learned this discipline for those of you who haven't had that experience I'm going to try to give you a sense of it with that whole image of driving so first of all there are some things you control and I would give you the first uh idea here of in a car controlling the gear you do control the gear you control how to get from neutral to overdrive with the marketing tools and the sales approaches that you take that's the good news the bad news is you do not control the accelerator the break or the clutch and for those of you who've engaged in the Market at large with large C customers you'll probably appreciate this very well so what are the accelerator Blake and clutch and what are the gears let's start with what you do control well first of all gears as I said are really the sales and marketing tools that you might use you'll find this on the website if you don't want to read it I'm just going to walk you through it but I use this analogy because I often hear people say oh we don't need to do awareness and interest we can just get people triing this thing right away if people don't know what you stand for they're not going to try something and it's very unlike uh very much like excuse me a gear in a car you can't shift from one 1 to five it's just not going to work you're going to have to figure out those steps don't try and Skip them as my first piece of advice the second thing is just like if you stay in a gear too long in a car and you over rev the engine you're going to get it overheated the same is true with a customer if you keep trying to sell a customer over and over and over in the same stage you're going to get them frustrated and I'm amazed how many times I see startups saying oh but I've got the best trial here and the best brochure here and the bre you know offer here and all they do doing is in the same stage of the sales cycle they're not moving the car forward they're not moving the customer forward in the sales cycle you've got to find ways As you move the gears as you use those tools to move the customer from stage to stage and then very importantly in this thing the customer will put the clutch in trust me and that will be the moment at which you go hey we've lost control and it'll be because you haven't identified something in their motivations to move from one step to the other and that's when you've got to find a new gear a new marketing or sales tool to move them to the next stage so what does the customer control and how do you help them as I said they control the accelerator The Brak and the clutch the accelerator from the customers Viewpoint is how they actually are motivated from one step to the other so think about this as things we've talked about in the past if you give them a really slippery product something that's really simple lightweight easy to install and I'll take you through those attributes again later that they can U try for themselves in a self-service fashion it's going to accelerate their process of moving from you know trial to purchase similarly what's going to stop them what's going to be the break well if they really don't understand what your solution does and think about the actors that I was talking about not just the technocrat but the guy who's going to operate this thing and then the guy who's actually got to justify it they don't know for example how it's competitively positioned as we talked about or they don't know for example how it's priced and how they'll consume it they're not going to be able to engage with you and get through this whole process my single best piece of advice here is listen actually actively listen the more you can engage with your sales team if you're in marketing or actually for anybody in the organization maybe sit in the cube for example the guy who's doing the dialing smiling and dialing to engage those customers to dissect all the sales objectives everything that might come up as a break in your sales cycle the more you're likely to be successful figuring out how to move the customers from stage to stage and it's actually the best possible food for the company is to hear what stops you what are all the breaks and then lastly listen for the clutch when the customer doesn't know what to do it's not their fault when they've engaged the clutch you have a problem when the stale cycle stalls and it will do over and over again it's your issue to figure out why did it stall what is it that they're looking for what's the next tool they need to move them to the next step and that's really um in many instances inertia and risk of you just being a startup so even if you've got a great solution because you're unknown you're working against the challenge of being something that is a risk to many customers so I talked about this concept before in the uh early stages of these seminars and that is this notion of customers getting gain and pain and we wanted to maximize their gain and reduce their pain in the sales cycle it applies exactly to this model so I'm just going to connect the dots for you for those of you who saw it what you've got here is a series of uh gears that you can apply to help the customer get their gain the earlier that you can show them Revenue cost Savings Time Savings or people or competitive Advantage competitive advantage in many instances for early markets is very key or improvements in the reputation or more likely you are to get them to move from stage to Stage so I try to move what I call instant validation as high as possible instant for example gratification if you're giving them something and an offer and as early as possible the sales cycle on the other side of this all the pain the customer experien is trying to work with you trying to find you in a Marketplace this the sort of awareness piece trying to try engaging with you and try your product that's those are all limits they're all excuse me they're all breaks in the process if you make it difficult for them to buy you because your pricing is complicated or if your packaging is difficult or your license is just difficult to work through these are all things that will slow your sales cycle down if your implementation is too complex or deploying you hasn't been thought about all the this will slow down your sales cycle so you're trying to reduce the breaks and obviously um accelerate U the gain and as I said what the clutch is in this case is something you've got to understand a startup is a risky proposition so there's always inertia to move against the startup and people will look at things like switching costs and what is the alternative which by the way is always do nothing and good enough in many instances good enough if you don't give them a reason to change something they will just go with whatever is good enough and so you got to think about each of these things the way we talked about them in the gain pain ratio during your sales cycle at each stage and if you're finding a a customers engag the clutch and you're not moving go try find a new gear go try to see what you could take off off get them to take the their foot off the clutch and release the brake and you'll find it'll probably be something to do with try a different pricing model or try a different deployment model or try a different packaging model but don't do nothing that's the worst thing don't assume it's the customer's fault it's always yours now because it takes a lot to move somebody from the top of that funnel to the bottom of the funnel this is another of my favorite startup Secrets which again I find amazingly is overlooked which is qualify early and often there's no such thing as overqualification in my book you'd be amazed how many times people are so excited because they got 20 customers to well actually let's be more realistic they got 500 customers to a webinar yes does that mean we're doing great I don't know I honestly don't if all 500 of them when you qualify them don't have the same need or pain as the solution that you're offering you did nothing other than basically just waste time and money at that point to broadcast to people who can't engage with you so qualify often uh and early in what is it that you're actually uh able to offer the customers you're talking to and create um a way to to save all the time and resources that are going to go through the rest of the cycle now things do change so I also encourage you to create lead nurturing programs so in other words somebody might come into the funnel unaware that they have a need uh to engage with you they may not know that they for example need desktop virtualization in the case of of uh unidesk and the management of that but over time as they deploy their desktops in a virtual way they might realize oh my God this is really difficult we have to add these applications and customize for the users we really need management so if you kept them along the way nurtured with education you can often find that you can move them down the track so two simple things there'll be more on this on my blog when I get time marketing qualifiers are exactly what we just talked through do they fit the segment that you've defined if they don't don't waste time on them even though it'll be very tempting because you've got this very narrowly defined segment and now you get loads of Interest that's outside of it be really tempting to go and say oh well it's so close why don't we just try this one don't do it because it's going to take you off message it's going to take you off point it's going to take your R&D the wrong traction and the next thing you know you'll disperse your energy and you won't get that reference ability and repeatability we talked about sales is actually easier there's all sorts of sales programs I happen to to grow up with one called man act which is qualify whether you've got somebody who's got the money the authority the need the ability to do this that's that uh you can compete against and in some time scales that are reasonable to you which in a startup is usually short time scales so if somebody doesn't have all those things in man act they probably shouldn't be in the funnel and that allows you to save that resource not just once for that customer then more importantly again to reapply it to another customer so there's an opportunity cost if you don't do this so bottom line is qualify early and often now again for those of you who were here when we talked about the business model we talked about core and we talked about multipliers and levers I'm going to tie that to this as well all the multipliers actually help you drive faster they are things like how you do tiered pricing whether you come up with a premium model uh how you use your channel and slippery products again so so we'll talk about that all of those things will accelerate your sales cycle if you can get them right on the other side of things you can reduce your brakes with all the levers we talked about in that session using the web using inside sales to reduce the cost of sales obviously if you're only selling a premium product you don't want you know three uh people involved in it you know an expensive outside sales guy and an SE or so forth to do it and then referencing and and through segmentation getting viral of course if you're doing B to C is an incredible way to reduce friction get the brakes off and then some of the things we will talk about today will be whole product and on the on my website um I've put up a special post on Services because it's a significant area where actually believe in not Services can really help reduce the uh cycle time in the sales cycle so for those of you who want to go back and look at this the the uh business model section is up on the site and it'll remind you of all the core and levers but the point is it it flows right into this exact same approach to how to improve the cell cycle so road test we talked about driving what I'm going to encourage you to do for example tonight is when you've got your sales cycle worked out it's just Road tested just continuously iterate around it see how you can reduce the brakes and let the clutch out by taking time people and resources out during the process see how you can accelerate in gear via Automation in that process the more you can automate the cell cycle all the touch points the more you can take out people dependency uh and make it self-service for the customer to engage you from step to step the faster it's going to go and ultimately if you engage those levers like distilling every essence of what moves the customer from one piece to another um and doing it in a way that's very repeatable things like videos and podcasts now on the web make it easy for you to to educate people to move them from awareness to understanding or if they're trying to help themselves in a technical sense put up things like self-service portals or knowledge basis or on the web configurators all this stuff is a way to make your process more repeatable more scalable and to take the friction out of it engaging the levers in the end multipliers also come into play like this if you get this working for you even if you sell up front a very lowcost product or a premium version then you can obviously with Russian doll packaging which some of you remember we talked about you can upsell it you can have different versions of it and so uh working around your core you'll find your value prop also can play very strong into the sales cycle now one concept I keep referring to over and over again for those of you who weren't here is this notion of slippery products so I'm just going to run through it for those of you who didn't see it before slippery products are an example of how Believe It or Not R&D actually drives marketing and sales so you often hear that oh R&D and sales they don't get along actually they can get along famously well now I would say it's still sales responsibility to answer objections and to pick the right segment I was in a board meeting just this morning actually um I won't say who but somebody in the audience knows where this exact thing came up you know you've obviously got to Target the right segment and be selling it in the right way but once you're doing that R&D can make a big difference if they make the product simple low to initial cost easy to install where value is proven really quickly up front and where it plays well with whatever it's going to integrate with it's easy to use where the ri Roi is obvious and it's a why not customers um would want to do this rather than a why would they want a do and the only last thing I'm going to introduce here that we didn't talk about before is the notion of whole product I'm going to get James to come up and talk about it so whole product is something Jeffrey Moore explains very well and rather than cover it in tremendous detail I'll simplify it and just tell you that there are several ways in which your value proposition has to to meet the need that you've set out but if it only meets a part of the need it's not a whole product and so the notion of a whole product is that you have the entire solution to meet whatever your value proposition is to the customer by way of segue um this is a an example of self-service portal that sanch uses in their sales sales and support and it's an example of automation that literally enables semantic to scale in fact specifically they've served 82,000 articles in self-service and that has been provided not by sanch but by nearly a quarter of a million users that semantic doesn't pay to actually solve those problems so that's an example of something working in a very self-service automated scalable way happens to have been built by our company aquer as a portal but the point here is it's an example of what I was looking for earlier something that really reduces the friction makes a very scalable approach now the demandware case study here jamus uh I encourage to give this slide himself but he's too modest so I'll just let him explain the solution uh jamus actually and Zach uh who's here tonight came up with an approach to creating a whole product they called the link program turns out e-commerce is a very complex solution from end to end there are lots of people things sorry things people want to include when they think about e-commerce everything from ratings and reviews to the backend fulfillment and and delivery so we couldn't possibly as a company deliver everything that anybody envisaged in e-commerce so the team came up with the link program and it not only extends the whole product to a broader solution but it fulfills the promise with a number of the pieces that were missing from just demandware and ultimately because of the way they did this it also reduces the cost of integration of those pieces for the customer and reduces the time to deploy so now you can be imod jamus and explain how you did that yeah a marketer that's modest is a rare person um so what I want to do is give a little bit of the backstory behind this as well so one of the things that um as Michael was saying e-commerce is part of I mean there's a whole number of technologies that go into it so if I want to sell to a consumer over the web I need an e-commerce platform I need a way to ship goods I need a way to track I need a way to engage a consumer so many different pieces and one of the breaks that we would see regularly thrown in a sales cycle was demand a piece of the puzzle but not the whole puzzle so invariably there would be other Technologies and folks brought into the sales cycle which would encumber it and slow things down so that was an issue increasingly as you also looked at this as you bring in all these other Technologies it was driving up the cost of integration for the client which was throwing another break into the process because the bill for the client would go up and therefore it would stall and we looked at this and we said all right so how do we address this and the program that we came up with was to rather than us tackle and we started this way I tackle the integration problem for each and every partner so we would point-to-point integration with everyone we said why don't we turn the model on its head and ask all of our partners to integrate with us what was different about us is that because we were an on demand platform the technology never really changed for us so an integration that a partner would do to us once was repeatable across every single client so now what you had was all of these link Partners who wanted to plug into demandware and were pre-building Integrations that we made available to our clients at no cost so now you have lots and lots of Partners out there talking about us plugging into us um giving away those integration assets as a way for them to help get additional clients and that was driving down our cost of implementation and making it more attractive for us as a a provider and a platform so it hit so many different dimensions of our sales Cycles it increased our reach in a Marketplace it made us much more attractive so it hit the multiplier side and then on the lever side it was taking out all types of costs and structure and what was beautiful about it is it was stuff that the ecosystem was willing to do on our behalf because they perceived it to be in their in their interest so this has been one of those Terri terrific disruptive programs because those who sort of compete with us and sell enterprise software have a very difficult time pursuing this program with the type of repeatability and margin that we're able to do it so it's been a wonderful program thus far it's just getting started too it's going to go on from here how many partners do we have now a little over 100 about 115 and and how long did it take you Zach to to get to that number so we launched about uh two years ago um sorry sorry uh so we launched the program about two years ago April 2010 uh I'd say the the early going it was one of those you know very shallow curves and then all of a sudden once you start to prove the value it quickly and now we're we're being a lot more selective this time uh I think the one thing that I'd add to jamus as well is because of our disruptive business model of on demand and shared success another multiplier is the fact that because all of these Technologies are Revenue generating Technologies it actually boosts another uh aspect up for the customer is their revenue generating Technologies added quicker so the time to Market's quicker the time to uh return is quicker and with our shared success model it works even better for us as well so fantastic and James thank you very much so you other questions question you talk about the the CL with the part I'm sure there the with our partner community espe in the beginning St yeah the yeah in the beginning stage sort of recruiting um the question was larger what what what are the clutches that we saw in the partner ecosystem as um and partners are critical for us to actually deploy clients what are some of the breaks that they would throw on is that fair statement so initially as a startup um one of the classic challenges that you face with Partners is they're not really going to invest a lot of time in you until you're proven right so there's a bit of a chicken and egg and that particularly if you have a partner strategy that requires partners there the Vicious Cycle is born um what we found was that through the segmentation we did and our initial go to markets once we had brought on a couple of Marquee clients then it was you had something to go to the partner Community with and talk about that was the that was the primary um issue we initially saw subsequently as we started to do things like link and other things we were showing them how they could have a much more successful and repeatable business on top of demandware and contribute to their margins so they found themselves having uh an added incentive to work with us I answer your question thanks jamus and jamus and Zach will be around to talk later at the workshop too so one of the things we did before was we talked about the life cycle of a customer and I'm just going to try to again relate pulling these pieces together the uh sales cycle is indeed part of the life cycle it's the first part of how a customer sees you um where where they get awareness of you interest and understanding of you and then how they engage and trial you is is sort of the early part of of obviously how you get to know them and then ultimately they buy but that's the beginning and if you remember what we talked about was how important it is to try to understand what customers experience when they actually are flying the product or deploying it and what they're measuring at this point is some of the things that you were just being quizzed on which is you know whether they getting um competitive Advantage payback or Roi and as Zach was saying uh the link program actually helped them get faster Payback faster return on value because it was giving a more complete solution quicker so they're always going to be thinking about those things and my encouraging my encouragement to you at this point is always to put yourself in the customer's shoes and think about what is it that they're thinking of and what what is it that's motivating them uh to use the accelerator rather than the break to move through the step in the cycle then once you get them to buy we talked about this notion that we don't want them to just die at that point a natural cycle we want them to keep reusing rebuilding redeploying and further expanding their use of you and so we talked about the cycle of extending um the re-engagement retrial repurchase and upselling the customer with more and more value and that's something that in many models is actually a critical part of how you extend the life cycle value as I call it um of your customer for a longer and longer period of time so you'll remember me doing this in the business model for those of you didn't see it again it's on the website uh what I want to do here is just mention something that is often overlooked in the sales cycle and that is this notion of Services it turns out at the bottom of the sales cycle when you're engaging a customer and going through trial one of the best ways to do that is through support and services people because in many instances they are not viewed as a threat by the customer salespeople nobody wants to talk to sad but true uh Services people are considered helpful and supportive and obviously by the very nature problem solvers and so they can be incredibly helpful at the end of the sales cycle and also in extending the life life cycle this is a big subject and I will just tell you it's a whole subject unto itself that again I find very few startups understand so this is on the website um here's the URL for it if you don't want to look it up just go to mj.com and I've got this double-edged sword of what I call the seven golden nuggets there for Professional Services and services and the seven deadly sins and I will just tell you that it's something you should really spend a little bit of time to understand whether it applies to your business because if it does it can make a huge impact so that's up on the site for another time for you to see okay drilling down one more level to practical notion of what does it actually mean to execute through this cell cycle it really means most importantly measure every step the time people and resources that are involved in it and at each stage what you're trying to work out is what's the conversion rate if you had 100 people at the top do you end up with 10 at the bottom or one at the bottom and where do people drop out and if you can measure and manage that all the way through it'll help you figure out where to apply your resources so again graphically to think about this you know if you have a very uh small segment and you're successful to some extent you may have a few leads coming in and just you know one customer coming out at the bottom but if you start measuring it and you start measuring the time and resources conversion rate at every step you can figure out how to improve it and break down the cycle into measurable manageable steps and I'm not saying thousands but as many as you can that are measurable and manageable and ultimately figure out at the bottom what is the total dollars time and resources it takes and conversion rate to get a customer at the bottom you're going to be in an extremely strong position to figure out how to build your business so it isn't that complicated it's a it's a a flow diagram but again it's just a discipline what you're looking to do ultimately is widen the funnel and seamlessly link each step with an incentive for a customer to move from step to step in a very easy fashion where there's High conversion rate so you get a lot of customers out the bottom and there is a lot of pure what I would describe as uh science and measurement that goes into this not just magic and I often hear companies say well you know if we spend more we're going to get more I wish that were true the reality is very few sales and marketing processes scale and you're very unlikely to be SC able to scale until you figure out what those steps are so here are uh at least a couple of startup Secrets the first is reverse engineer this process once you know what it costs you to get a customer through it and what your ultimate conversion rate is if you know for example that you get 10 customers out for every hundred in up the top then if you want to get 100 customers that month you need a th000 leads up the top and you know how much it cost you to do that so you know how much you're going to have to spend to do it and if those metrics don't work initially it doesn't matter they very rarely will be predictable to start off with but just the very fact that you're measuring them and you're starting to iterate will help you figure out where obviously you are going to be able to scale and whether you're at the point that it's appropriate to scale and to apply more resources and as a VC this is where most money gets wasted is because people don't work through this and they haven't figured out what is the real conversion rate that's going on and so they spend ahead of their ability to actually convert so obviously try to do what I've said which is measure and manage this and then work out how to reverse engineer the numbers so you can get your process working for you now I'm very lucky to have a real example coming up with unidesk and they're an example of something that has changed dramatically since I started in this business and that is the webs come along and it changes nearly everything it actually makes it possible to measure and manage pretty much everything very easily in a closed loop fashion because you can manage sorry you can measure every click that somebody takes and every movement they take on every piece of interaction that they do with you on the web so it's a fabulous tool and it can help you close the loop it could can also dramatically reduce the cost as a lever in your model because a lot of the things that you used to have to send people on a plane to do you can now do as a webinar or you can package up content as a video or a podcast or whatever it might be so do it take advantage of it I actually think the challenge for the next generation of startup is to have a touchless sales model by which I mean a touchless sales and marketing goto Market model now having said that I did say it changes nearly everything one thing that's actually negative about it is that competitors are also one click away and so you should expect everything to be exposed and be able to compare favorably on the web you should also realize that when you're doing things like a webinar just because You' got somebody showing up on a webinar does not mean they're paying attention uh in fact sadly it often means the exact opposite it means they're doing three other things at once and in the end although I'm a great believer in the web and that it can do so much that I've just described there are some real human factors that come into play the Personal Touch relationships are better done in person not virtually and experiential learning meaning you as a com company engaging your real customers face to face and experiencing what they go through in the sales cycle and what their gain and what their pain is is absolutely vital there is no substitute for that the more you experience that the better you'll figure out what to do even on the web so last um startup secret then on this section is create this closed loop create it in a way that with the web all of the resources and time and dollars that you put into this are actually measured all the way through and so ultimately when you know what your conversion rate is and when you're figuring out what it is that drives this cycle you can do it in a touchless model as to as much as possible via the web and you can drive people without you having to get somebody to pick up the phone or go visit them from awareness to interest to understanding with things like podcasts and videos and training and materials and self-service portals when they're getting into engagement with downloadable trials with document that's wrapped around it Etc because there's an enormous amount you can do here to actually make this a closed loop Now using the web the only thing that I want to caution you on is that again there's a tremendous amount of excitement now around this notion of inbound marketing we're huge Believers in it we have whole investments in in companies like Aqua that are making this possible inbound works for a certain class of sales and I'm not going to pick the numbers here I'm just giving you a sense of it if you've got lowcost selling from zero to say 50 even 100,00 and we've got companies that go beyond that active endpoints is selling quarter of a Million Dollar Deals over the web without outside sales with inbound marketing so these are not absolutes then that's great inbound works great but at some point you will almost invariably find that you need outbound if you're going to build those customer relationships if you're going to have long-term uh bigger account engagements that generate millions of dollars I wouldn't try to press this too far I'd be careful to recognize where that switch over point is it may never exist in your model model in which case congratulations you've cracked that you know touchless model that I'm going after and I think there are going to be companies that do that but don't push it so hard as to forget that actually it's per perfectly appropriate to have an and model to have a hybrid model and in fact that some of the best companies I see now are doing exactly that they find exactly the right point to engage uh on outbound from inbound so with that I'm going to introduce you to one of them unidesk Tom welcome and uh please come and join us and share with us how unidesk has cracked the code and done some of the early Gorilla Marketing by the way I did not do this to Tom yeah he he didn't kick me I'll get up here as fast as my Tor miniscus will allow me to yeah Nike wearing Nikes when I did this yes um so Michael asked me to share some uh concrete uh examples of Gorilla Marketing I'm probably a good choice because uh unidesk is my fifth startup so like you I'm used to having very limited budget to engage in marketing um so uh let's get started see if that works so so your goal should be really to spend you know as as Michael said you don't want to be wasting VC money Michael's money in my case on testing what works Grilla marketing is a great way to experiment and if you're measuring to refine your strategy without spending a lot of money so whether you're selling desktop virtualization software like unidesk is or something else um some of these examples I'm going to show you can really be applied to whatever business you're starting and as I look back uh unes is almost four years old now and we've really applied Gorilla Marketing and uh in social media and web marketing since the Inception of the company so back about four years ago we didn't have a product we uh we had you know we had an idea from our founder so uh we were at the requirements phase and so our goal really was to make sure we built the right product so how do you get feedback from the market to ensure you're going to build the right product well we came up with the idea to use uh surveys and uh you we talked a bit about brand we had our CTO and founder Chris midy um you know Innovation well known for Innovation we kind of try to capture his Essence in the emails that we sent out to the the the lowc cost list that we Acquired and basically we said look uh I'm Chris mgy I have nothing to sell you I'm just looking to get your ideas on how to refine an idea I have to make desktop management uh you know really transform the way the way desktops are managed and all I want to do is you know get get some of your thoughts and ideas and it was amazing that just coming UPF front with that saying I've got no product to sell we got about 75 responses and we had open form questions where people were writing you almost books you know pages and pages of their challenges around desktops and sharing what they wanted to see in an Innovative technology so we use something lowcost Survey Monkey it's still out there today other online survey tools we leveraged our Founders appeal to kind of get that feedback and really understand what the right product was to build so that was in our requirements phase um next was pre-launch so it took us a while to build the product actually longer than we had anticipated um the good news was we didn't uh wait to start blogging and start building our our longtail our search engine optimization our keywords until we had launched we actually started about a year and a half before we had product and I can't emphasize that enough if you've got a compelling personality uh if you've got um good content you've got people who like to write start that right away get people coming to your site share Insight you know be compelling you'll get people coming that'll help build your database it helps create link toos it helps you optimize your search uh for search engine optimization uh you'll have the right terms you'll be drawing people inbound even before you've got product and that's really what happened with unidesk we had a lot of inbound activity even before we had product which made it much easier for us to get beta customers when we finally did have product uh and really all these also mapped to the stages of the selling process uh that Michael's already talked about as well so you see awareness is the stage at now next is launch so we finally had product how do you launch it in the old days um you know uh you hired a PR firm and you did the did the the tour of the press the Press is gone there is no press anymore you're the media your blog you can write whatever you want you've become the new media and also the influential bloggers that cover your space they are the New Media so you've got to identify them early and reach out to them and that's what we did uh we actually reached out to uh the key blogger in the desktop virtualization space we gave gave him an exclusive uh and let him unveil us and as a result he he talked quite a bit about us in those early days uh of course you have to have as Michael said before a unique differentiated position you've got to have a compelling uh brand and idea so that's how we kind of launched ourselves was through uh was through um through attacking the bloggers now we're in the building pipeline phase so what kind of guerilla marketing and by the way these are all you know all zero cost very very low cost doesn't cost really anything other than your time to do these kinds of things uh so next was uh how do we build pipeline how do we educate process ects that unidesk has something that's very very different than anything else that's on the market and so what we did was we have um you know again video editing software we built videos uh our product demos very nicely it's almost appol esque in the way it looks and feels to the end user so we leverage that by taking videos as much as we could and having uh Chris who you see there on the bottom left our chief solu solution architect another compelling personality get up and talk about unidesk and show the product and we landed those on YouTube we put them on LinkedIn we tweeted we blogged we put them everywhere and again that drove more inbound uh uh traffic to our site and really helped with understanding how unes was new and different uh in the market you've got to have strong evangelists and you've got to have crisp scripts you can't get on there and do 35-minute videos he got to be crisp we had two minute shorts we had four or five minute longer versions our longest really our longest version is about 15 minutes and that's got to be the end so now we're in the customer acquisition phase uh again still trying to focus on being lowc cost and um the cool thing that about unidesk is that we have very passionate customers who want to tell their story about their success and Michael already talked about how how how important it is to establish a beach head get references and then have those references tell each other about it well what better way to do that than through webinars where they can get on and broadcast that message to 400 people at a time and so that's what we've done especially in the last year we run webinars every three to four weeks featuring our customers they're the Stars we get up in there and do a very small product pitch or small demo but we let them tell their story and we focus it on verticals we just did one today on Healthcare and really was mostly hospitals and and uh and clinicians and practices that came on board so again if you have passionate customers you want to get other customers to engage and go to trial with your product uh webinars are very lowcost way to to drive that uh you're only paying for a go to meeting or a WebEx subscription fairly low cost and you're spending on vertical response or Constant Contact or new tools like Acton to do the email marketing again they're all on demand pretty low cost uh ways of doing this and the cost per lead becomes very very low and then the last phase is when you're in production you got production customers how do you get more sales how do you get repeat sales of the customers you've already sold to and so um uh like uh the example that Michael just showed of Aquia with semantic we've also just gone live with our forums uh unidesk is based all on Drupal uh the uh the platform by aqua and um as part of that but one of those plugins is a is a forum so so our customers can search our website our blog our knowledge base our support our forums and the website content itself and our search engine goes across all those things because we've we standardized that on that platform and now with our forums we're giving we're pretty much opening them up to anybody that wants to come on and they can see the customer dialogue that's happening with unidesk we put it online what about a week ago we already have 215 posts with you know almost 100 replies on some of these things so they see how Dynamic our community is it gives the customers confidence that gee if I go with unidesk I'm going to be part of this growing community so again um all that requires is you already got the platform you have to have active customers who are going to participate in that uh you've got to moderate the form yourself so it's again it's it's more of your time and uh and then at the end of this all is measure everything everything you do you got to refine it you got to measure it so we've got spreadsheets we track everything we do to refine that funnel and and make sure that you know as we're experimenting we're we're always improving uh our our processes thank you very much a great example in many ways uh unidesk has been a great model of this because they've been extraordinarily effective they're probably one of the very few companies that has always underspent overall versus their original plan and I think it's in large part to the way in which the team has been so clear about from day one how they would manage and measure everything in their marketing so congrats to you guys last thing I'm going to talk about is Channel and I'm pretty much going to hand this right off to again Brian in this case at unidesk um and I will tell you again we only have so much time and you've already been generous with it tonight to cover things so I would simply say it's a whole subject unto itself uh there are many ways to think about channel from resellers to OEM to strategic Partners again if there's interest I'll try to cover these things on the blog or future workshops but one of the things I would encourage you as a startup to immediately distinguish between is when you think about Channel because it's the thing I clearly hear people forget is there are three different ways in fundament terms that a channel works with you it either sells with you so now that's assisted selling or you sell through it or they sell for you and very few people spend enough time understanding what is the dynamic you're looking for from your channel so just to start off with think about those three things and then what I'm going to do is introduce Brian here to come on up and talk to you about their example of how they built their Channel model I think it's more interesting to hear a live case study to support my brother Tom I'll limp too that you don't have to do that I don't have to do that excellent thanks uh thanks Michael quick question uh what's what does the channel care most about what's most important to them it's been said a few times already what do they care about wild guess anybody jamus said it what their customers care about simple what their customer cares about is what the channel wants to spend time on now the challenge is when you're first launching uh and you don't have customer evidence and you want to go recruit a channel not easy to do can be done we'll talk a little bit about how we did it but not easy to do I think Jamie actually used the chicken and egg analogy is sort of the one that comes to mind most often one of the reasons why there were two reasons why we went to channel model when we launched one is that there are five decisions that a customer needs to make either before they purchase unidesk or as they purchase unidesk and two one of the key elements of that it infrastructure that they're making decisions on is a product that's provided from a little company called mware and what we wanted to do is Target and identify those customers and Market specifically to them so with that in mind we naturally identified the top VMware partners that sold that product into the segments that we cared most about I'll speak broadly and then more specifically so State local government higher education but within those segments we cared most about faculty and staff and knowledge workers those are the areas that we could be disruptive for anybody that was considering making an investment in desktop virtualization so once we compiled that list we refined it further and we identified the partners that we thought would would take a chance on an early on a disruptive technology so you wouldn't go after the larger sort of uh partners that had National footprints that had longer onboarding processes you could get to those later think of those as the laggards as it relates to the channel we wanted the early adopters we wanted the regional Boutique partners that prided themselves on bringing value to their customers by introducing new technology so that's something that we did the key is then refine and focus further I think Focus has been used a a few time here a few times here tonight identify the person that the sales team listens to in that partner and Target that individual and that was T typically The Trusted adviser to the sales team that would be in our case it was a technical architect I was laughing actually when jamus you were talking about spreadsheets in the early days had spreadsheets everywhere he came by the cube it was you know listing of all the partners ranking them identifying who we wanted to Target how we wanted to message to them how they performed with VMware what our unique value was going to be you needed to be crisp you had to have your buyer personas baked I mean all of those things needed to be lined so all the things we've been talking about here tonight once we gained the endorsement of the lead technical architect we were then had the permission to engage the sellers what I mean by that is the sellers wouldn't pay attention to you unless you had that endorsement and our goal was to intercept partner Le sales opportunities and interject interject unidesk okay so whether that's going back to customers they had sold to previously or again get involved with the ones that they had in flight and Frankly Speaking Adam I I I loved what you were talking about from a brand perspective our sort of bold statement to the channel is we will not let your customers fail so I know you're taking a chance but we will provide such amazing customer support to your customer we will do all the work we will do all the selling we will do all the support as they work through the free pilot stage and we will make them amazingly successful and they are going to be calling you to tell about that amazing experience that they had and then we will further scale our footprint with that partner and that's the way we trained and you know why we completed training and enablement you have the on demand tools which you can try to get your partners to take advantage of but until they experience a win with you it's very difficult for you to get time with them and if you're getting time with the channel when you don't have customer evidence you probably engage with the wrong partner okay if they have that kind of that kind of time and capacity the other important point is it's all about evidence I think Tom sort of captured that we have been very very fortunate to have an incredibly passionate group of customers and so when we comes time to truly scaling your channel so now you're you're starting to expand engage some of the larger Channel Partners the way that we engage these folks is our so members of my team will call in and they will try to activate or recruit a channel partner we'll do the best we can with the messaging but in some cases they don't want to hear it the follow-up discussion or if we are taking a next step with them we will typically invite one of our customers it's not even one of their customers but one of our customers to that call and they will tell the same story we've been telling but for whatever reason the partner listens so if you can let if you can get customers to deliver your message on your behalf to your channel Partners or or however you go to market right in whatever capacity it'll be amazingly successful it it's all about accelerating um the activity with the partners and the best way to do that is certainly with uh with your customers we're maniacal about measurement I you know and and frankly the channel there's no easy way to manage it I mean no easy way to score it you end up in a spreadsheet inevitably uh but for us at a at a very high level we kind of categorize Partners As A and B A's are the ones that are strategic that we could count on for say 60 to 70% of our Revenue you know however you measure revenues or number of new customers or number of seats sold but these are the organizations that we were locking in with and we were going to make a strategic commitment to and that we would expect the same from that channel partner the other key piece I was sort of noticing here that's not that's actually not listed is then when you think you've measured enough go a level deeper and ask yourself when you look at your top channel partners and you might be impressed by you know a national partner like a presidia or Dell or their contribution and maybe they're in the top five for you and then you have sort of regional Boutique partners that are contributing less but ask yourself what percent of the Mind share do you have from that particular organization is all your success coming from one office or one set of reps or are there opportunities for you to scale so you want to continue to measure down to the unique individual level as opposed to just at the partner account level and lastly repeat the cycle I think uh just in closing here the the piece that you may want to keep in mind our channel is not very good at the social media marketing aspects of thing they're very good at field-based marketing not good at nurturing so they've effectively Outsource that to us so as much as you can you want to get them to share their database their customer list anything and give and then establish a trusted enough relationship that they'll let you nurture them and then you can notify them based on experience on the site and so forth fantastic thank you very much sure on I'll say that again very few people who do it as well as Brian does and he's created a wonderful set of metrics around how to make the channel work for unidesk but he's also done it multiple times before so those of you get a chance in the workshop which we're happily not just about at uh can engage him and just get some sense of that but the channel is a science too so I just want to uh say thank you very much to our presenters I think done a fantastic job helping you get a sense of this but also just recap on where we started out this is a big subject and you've been very patient to uh listen through just a few of the things that we wanted to give you as a sense of where you might start brand positioning direct versus Channel how you'd segment how you'd think about the uh personas and even the actors through these scenes uh and I want to give you one uh last piece here which is while you've heard lots of people say you know if you you measure all this and you're very restive oriented and you execute well uh you'll do great things it's also true that Rome was not built in a day and this is true of how your sales and marketing will play out too be patient with yourself it is really worth being results oriented it's really worth figuring out how to measure everything uh and obviously it depends on execution but it takes time and in fact you saw me put this up before in the process of building a business this is an iterative process you need to do a lot of listening all the way through the sales cycle understanding those objections do a lot of learning from your customers of what's going on also be prepared to lead because customers will not tell you what they need from step to step that's your leadership that's your vision and so forth iterate around things like your product and your proposition or if you like the term pivot around it um and be clear that this also does engage both of the things that we've talked about tonight um business model that we talked about before and and go to market as well as value prop even so to summarize um before we start the workshop go to market is both strategic and tactical we've covered a bit of both um I'd encourage you to start off with uh and positioning just looking for a unique white space when you break into the groups then pick a Target and segment around the customer needs and then manage your brand from the start and finally think about driving you heard all the metaphors around that using accelerators brake clutch Etc uh your marketing and sales cycle and figuring out how you can do that in an iterative process on a patient basis so thank you all very much for being so [Applause] [Music] patient

Channel: Harvard Innovation Labs

Views: 46,792

Keywords: Harvard Innovation Lab, harvard i-lab, Michael Skok, Startup Secrets

Id: 4wyisJvAKBc

Length: 92min 39sec (5559 seconds)

Published: Mon May 07 2012