So HootSuite just raised a $165 million Series B
(led by Insight Venture Partners
, with participation from Accel Partners
and existing investor, OMERS Ventures
). To put it in context, $165m is an IPO-sized financing (Marketo raised $80m in theirs
; Tableau $254m). This is huge validation not only for HootSuite
, but also for marketing technologies as a whole
. The space has been hot for quite some time, starting with a spate of acquisitions in the social listening / widget / ads space --
Buddy Media (Salesforce), Radian6 (Salesforce), Context Optional (Adobe)--and continuing with recent activity in marketing automation and analytics: Eloqua (Oracle), ExactTarget/Pardot (Salesforce), Marketo (IPO), Tableau (IPO), EdgeSpring (Salesforce) and Neolane (Adobe). So HootSuite's continued growth and success must also be understood in light of the continued Marketing Cloud Wars between Salesforce, Oracle and Adobe. So what's going on here?
Simply put, customer-facing technologies are changing rapidly (the Internet, mobile and social), which is causing buying behavior to change, enabling and necessitating the need for a new marketing technology stack
. HootSuite -- if it continues to dominate its space -- might well be a kingmaker in the battle to consolidate this stack. (From personal observation, it seems the majority of CMOs we've talked to at BrightFunnel are using HootSuite; there is tremendous value in this #1 market share rank).
What's mind-boggling about HootSuite's meteoric rise
is that it only just celebrated its 4th birthday
. As an entrepreneur, it's certainly an inspiring and humbling success story. It appears that next, they've got their eyes set on world domination: “This capital gives us additional resources to expand quickly and strategically into new markets, innovate rapidly, and deliver on our vision around the world” - Ryan Holmes, CEO of HootSuite
Too often, it's said that B2B marketers aren't good at being creative. That we can't be funny and effective at the same time. To those critics, I say: boo! And I want to present a brilliant counterpoint. No, not my alma mater Salesforce. Sure, Marc Benioff is a genius enterprise marketer -- unlike, say, his sporting-event management-challenged mentor -- but that example is tired.
I wanted to give the example of an emerging technology company, BlueJeans (aka Blue Jeans Network)
that's made 3 exemplary moves for an enterprise tech company. This is a great case study for any emerging enterprise company:(1) "Roominator" video - TechCrunch ran an interesting story profiling their latest marketing campaign. You have to watch the video to understand. I LOL'd (at the Blue Rhino moment, to be precise). I almost cried (at the baby). I was afraid for the protagonist (choosing between The Wife and The Boss). Why is it brilliant? Because it hits the technology buyer with EMOTION. Instead of talking about boring video conferencing technology, it gets at the universal trade-off between Work and Life we all face. It's memorable. It's funny. Just watch it. I'm not saying every CMO should go hire professional actors and writers to create a similarly slick video. But learn from its smart messaging. (Sell whiter teeth, not peroxide-laced toothpaste. Don't make your premium sushi sound like dead fish).(2) Work From Home Positioning (and subsequent Yahoo trend-surfing) - BlueJeans Network has positioned themselves as a Work From Home solution, which everyone can relate to (and is a secular, growing trend); vs. another player in a crowded-sounding space like "video-conferencing." Not only that, they effectively and tastefully trend-surfed the minor scandal at Yahoo related to Marissa Mayer's comments on WFH.(3) Company name - The company name itself is a smart play on the value of the product. It's not "RemoteVid" networks. It's BlueJeans. Love it or hate it as a name, you know what it stands for. What this suggests is that even the technical founders of the company were savvy about marketing and positioning from inception.Any emerging enterprise technology or SaaS company can learn from their example. Great example of creative and effective B2B marketing. Let's celebrate it.
TechCrunch just published an interesting post, "Rating the Venture Capitalists,"
which rates the top VCs, based not on LP returns, but instead, based on how successful their portfolio companies are in raising the next round of funding. Not a perfect measure, to be sure, but something that adds to the conversation (anything that adds more data/transparency is a good thing).
The piece rates a number of top venture capitalists and angels highly, including the following as their top ten:
- Foundation Capital
- InterWest Partners
- Flybridge Capital
- Marc Andreesen
- Naval Ravikant
- Atlas Venture
- Flagship Ventures
- Jeff Clavier
- Andreesen Horowitz
- Foundry Group
My response to the post is generally positive. Any data that brings transparency to evaluating VC performance (from an entrepreneur's perspective, not LP) is a great thing. Too often, the only metrics used to evaluate investors are returns, which is at best loosely correlated with founder-friendliness and at worst orthogonal to it (i.e. if they make their returns "buying low" or getting 40% of your company). A couple of challenges I see with the author's analysis:
(1) Series A/B is not standard b/w VCs
. Some VCs are making it a practice to cherry pick earlier Series A deals as a matter of survival/competitive advantage. I.e., betting on the company to "grow into" a $15m Pre, let's say vs. investing at a time other VCs would agree to that valuation (I bet some of your Top 10 VCs above fall in that category.
(2) Series A/B bar is a moving target
. Since Series A is fast becoming the new Series B, what you really need to compare is 2 years ago Series A with this year's Seed rounds etc. Obviously not possible/ lots of conflating factors, but something to think about.
(3) Less hyped investors can be better value
. My personal learning (from successfully raising a seed round for BrightFunnel
) is that just as with candidates, or anything else, finding unheralded jewels-in-the-rough is the way to go. I like value, not overhyped brands. So why not find that super value added newer fund, or that up-and-coming hungry Principal, vs. buying last decade's track record. Sure it's work, but it's probably worth it. So many of the 100k-twitter-follower investors are all fluff, no substance. Or they have substance, but they're scaling their investing by spending very little time with angel/seed investments. In other words, by getting a greater Share of Time from an investor, you are essentially getting more value, but they are almost certainly getting worse returns, because they can place fewer bets. But with the best angels, and some VCs, that's ok, because they're acting like quasi-founders: believing in the vision, wanting to create something new, vs. just looking to return more money and raise a bigger fund, and get rich off the management fee.
, best known as the founder of startup incubator YCombinator
, just published yet another epic essay
, this time on Startup Investing Trends
. As an entrepreneur who has recently fundraised, this piece really resonated with me. It seems to me that this essay -- taken alongside another fantastic post
this weekend, "A Venture SLA"
, by Naval Ravikant
-- summarizes a lot of what I think can be improved in the startup fundraising ecosystem. In fact, as I read Paul's essay with breathless exuberance, I tweeted out
several quotes-- 13, to be exact, sometimes with a word or two of editorial -- that I thought were particularly on point. (Avid readers of this here artisan blog will remember that I've performed similar services for lazy would-be readers of long form essays before, most notably my 16 Tweet Summary of Time Magazine's Bitter Pill
Begun, the Marketing Cloud wars have.Today, Salesforce.com announced the acquisition of ExactTarget for $2.5 billion. SALESFORCE EXACTTARGET ACQUISITION FAQ:Why is Salesforce.com buying ExactTarget?
Marc Benioff has publicly stated
that the marketing cloud is a big priority for him. Just over 90 days ago, he said: “We need to buy more marketing companies. We want to be the company you turn to for sales, service, marketing and the platform.”
Well for once, you can't blame him for talking too far into his roadmap. Why Does Salesforce.com Care About Marketing?
Marketing matters to Salesforce because they want to get the massive dollars that brands and retailers spend on marketing. There is simply a much larger addressable market if you solve the needs of marketers versus merely focusing on sales people. As we know, the CMO IT stack is a mess
, and Salesforce intends to help sort it all out (and make a buck or two in the process).
Salesforce is specifically focusing on B2C marketing, because that's where they are weak -- Salesforce CRM is not used by brands. In fact, Salesforce established Retail as a target segment a few years ago. And it's no secret that it wants to go after brand marketers -- it acquired Radian6
and subsequently bought BuddyMedia
for that exact purpose.Who is Salesforce at War With?
The answer that question always starts with Oracle. Besides Salesforce, Oracle is a prominent proponent of their own Marketing Cloud
. They acquired Eloqua
in December 2012, of course. Additionally, Adobe is the third horse in the race. Arguably, they have the most fleshed-out marketing cloud -- thanks to acquisitions such as Omniture
and Efficient Frontie
r -- but paradoxically they're the most quiet about their aspirations.But You Said Salesforce Would Buy Marketo?!
I was wrong. The nice thing for Salesforce in this acquisition is that ExactTarget has already bought Pardo
t, a Marketo and Eloqua competitor. So they are getting a two-for-one deal.Author: Nadim Hossain is CEO of BrightFunnel, and formerly the chief marketing officer of PowerReviews (acquired by Bazaarvoice).
Chief marketing officers (CMOs), unlike other line-of-business executives, are in a unique quandary. Their responsibilities span across the customer journey--from awareness to engagement to sales--which makes it difficult to obtain C-level insights. Unlike sales, finance or HR functions, for example, marketing has no natural "atomic unit" which can easily roll up from individual to team to division and eventually up to the whole enterprise. As a result, even the most basic, existential questions--such as "how did we do last month?"
--are often difficult to answer. And paradoxically, the massive wave of new marketing applications
only makes the problem worse.
No Atomic Unit
Marketing, by necessity is a diverse function, encompassing artists and quants under the same roof. But ultimately, its mission is to drive future revenues. Unfortunately, the only metrics readily available to marketers are interim ones -- such as traffic, leads, awareness, followers and attendees. This lack of visibility into the true impact of marketing spend frustrates both CMOs and their executive peers.
Ironically, this makes CMOs more similar to CIOs than it does to their line-of-business peers. CIOs have long dealt with disparate metrics such as cost, speed, innovation and security. Where the similarities end is that CIOs have many tools at their disposal to measure and manage their universe, whereas CMOs do not.
An Eight Billion Dollar Gorilla Has Yet to Emerge
Software vendors have emerged to provide CxO insights to sales, finance, HR and IT executives. But the same cannot be said for CMOs. The market simply wasn't mature enough 5 or 10 years ago, and the CMO IT stack
had yet to emerge.
The New CMO IT Stack Only Makes Things Worse
The good news is that we are now seeing a massive wave of new marketing applications emerge
. This helps sub-functions within marketing--such as the demand generation team or the social media team--do their jobs better. The bad news is that it only makes the CMO's job harder, as they now have even more data to track.
The Marketing Cloud Wars Will Sort This Out
As companies like Salesforce
battle for the hearts and minds of the CMO, it will be interesting to watch what solutions emerge to solve this pressing problem. In the meantime, go to your local CMO, give them a big hug and say "I understand now. You're flying completely blind."
I ran across an interesting post on the rise of inside sales teams in startups
, by Scott Irwin
, a General Partner at SaaS and enterprise-savvy VC Rembrandt Venture Partners
. He notes that "inside sales jobs are growing at 15X the rate of outside sales roles."
That's an eye-opening data point, and if you like at job openings in the software industry, seems to pass reality check.
In a nutshell, inside sales is high-velocity sales: no travel, shorter sales cycles (<90 days), and lower price points (<$100k/year). Inside sales has given rise to successful companies Salesforce.com
, and new challengers such as Box
and even the aptly named InsideSales.com
. But What Does Inside Sales Mean for Marketing?
A common mistake is to draw a parallel between inside sales and inbound marketing
. It's not that simple. Inbound marketing -- by itself -- is poor man's marketing. Pure inbound marketing is a great concept for a corner florist or neighborhood butcher. If you've come to this blog, that's not you. For marketing professionals growing high value (i.e. high multiple of sales) enterprises, time is money. Waiting patiently for leads to trickle in isn't -- by itself -- a smart approach, especially if you're a venture-backed company. What's needed, instead, is what I call High Velocity Marketing (HVM), which is expressed, simply as follows: HVM = Inbound Marketing + Outbound Demand Generation
Thinking of marketing as high-velocity, rather than inbound, is a lot healthier -- and effective -- approach to marketing for inside sales-driven companies.
In other words, rather than creating a high quality webinar, with a name brand customer advocate, let's say, and waiting for people to find it through search and word of mouth alone, what a high-velocity marketer needs to do is to quickly get that content promoted to the right people.
Ironically, this is a consumer marketing problem -- "how do I get a person to see my media?" B2C companies, of course, are generally all high-velocity in nature (unless you're buying a Gulfstream
, but that's high velocity of an entirely different kind). For a B2B marketer, the idea isn't to engage someone and serve an ad to them, but instead, it's to get them to take a high-value action, such as a meeting with an inside sales rep.
Purely inbound marketing is an awful way to to solve that problem
. It would be like throwing a party and only relying on people to stumble upon it, without making the effort to promote it through emailed invitations. Likewise, promoting B2B marketing content through paid channels is critical to High-Velocity Marketing. The distinction is as follows:Inbound Marketing = blog posts, downloadable assets, etc. Outbound Demand Gen = distribution via newsletters, display ads, etc.
Note that unlike penny wise, pound foolish inbound marketing approaches, the distinction isn't about paid vs. unpaid. Ultimately, you pay for your inbound marketing (whether it's done by an employee or an outside professional), same as you do for outbound marketing (whether you rent a list, or spend time/money building one over the course of years).
I, for one, welcome the new era of High-Velocity Marketing. It makes B2B marketers more of a revenue function, and therefore more critical to the organization. And it's also more fun.
Naturally, my first reaction was that there must be some grade inflation going on here -- perhaps a few categories had been invented, or perhaps the definition of "marketing technology" stretched to include more companies than reality would warrant. What I found, instead, surprised me: the mass of vendors included appeared to be quite legitimate.
So my skepticism turned to nerdy joy -- finally here was visual proof for what I've known at a gut level, as well as through sometimes painful experiences: we are being crushed under the weight of so many marketing tools. Yes, many of these tools are amazing advances, and they are supposed to enable and inspire us, but at the end of the day, they are making decisions harder, not easier, and are not helping CMOs and their direct reports gain truly actionable insights.
And they're not helping disparate marketing teams -- the quants and the artists -- collaborate or gain a common view of the customer. And they're certainly not doing enough to help CEOs and Boards of Directors with the timely insights needed to instill confidence in the right actions, plans and budgets. That task will have to be taken on by the next wave of marketing technology innovators.
I just wanted to watch more dry demos of IT software
. Instead, YouTube insists that I watch a boob video
. Can this possibly be what CMOs -- in this case, Splunk
's Steven Sommer
-- want for their brands?
For those not familiar with the company, Splunk enjoyed one of the hottest IPO's of 2012
, even tripping up NYSE's circuit breakers
due to intense trading. Yet the dynamic nature of social media, and in particular online video, is such that they find themselves peer-positioned with a featured video whose preview is of a woman holding her breasts.
To be clear, the promoted video
is a harmless one -- a Thai commercial that's found new life -- and 33 million views -- on YouTube. There are two real problems with it. First of all, it's just not that funny. If you want funny, you should turn your attention to videos of Japanese cats jumping into boxes
(how that's gotten only 8 million views is anybody's guess).
More importantly, the Thai commercial -- while appropriate for a fun-loving brand of "slimming Green tea" -- is completely distracting and utterly irrelevant to, say, a mild-mannered IT director's quest for the right tools to "collect data from tens of thousands of sources, search analyze and alert...all the while scaling to big data proportions on commodity hardware." Surely even the most steely-nerved prospective customer, hell-bent on taming their machine data, will be tempted to take a break from signing that Purchase Order for Splunk 4.3
-- a big step up from the already "ground-breaking" 4.0 and 4.2 releases though it may be -- and instead watch a humorous Thai commercial.
No CMO in their right mind would want that experience for their customers. This is bad news for YouTube
, and good news for Vimeo
and others. As video matures as a content medium for B2B marketers, they'll have to give more thought to how their customers and prospects experience their brand. And one that's known for its Big Data innovation
and having a CEO twice Mark Zuckerberg's age
is unlikely to go for this type of funny.