All language subtitles for Harvard i-lab Startup Secrets Part 4 Going To Market - Michael Skok [English (auto-generated)] [DownloadYoutubeSubtitles.com]

[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