I don’t write alot or express opinions on VC world because franky, I don’t know much about the financial side. I did almost flunk my accounting class once.
I was listening to this Podcast with A16Z General Manager Scott Kupor while in transit via the TTC the other day and some things jumped at me:
The cost of ‘money’ has been low so companies are staying private longer but that also means founders/early employees have ‘paper wealth’ but not actual cash. They sell equity when fund-raising and from the VC prespective it makes them ‘less committed’ to really taking the company big and providing returns. As a business owner (bootstrapped) I do ‘take money out’ to pay for mortgage, food, day care. I can’t imagine not being able to access the value (in the form of money) I’ve created to live a decent life. Perhaps I am reading into it wrong. Also it’s funny how they call it liquidity and not cash. Why is the cost of borrowing money low? I am not an economist but low interests. Have thoughts on it? I’d love to hear it. Hit reply or tweet me!
A16Z has 170 full time people on staff. Compared to Benchmark which only has 20 or so. They run A16Z has a ‘company’ and provide value added services. Sort of the Incubator/Accelerator model where young companies have access to mentors. I spent some time at the AC in Waterloo - difference being a16z likely has a roster of top notch advisors/operators compared to some gov / semi private incubators. This is the circle of virtue the that fuels the Valley. More VC’s are becoming value added because SoftBank will always come in with a bigger cheque.
On a semi related note - Slack is down 12% (probably because of an hour downtime in July) which sent the work spaces into a tail spin. Life as a public company & selling to actual businesses vs startups is a different challenge. I have a love it/hate it with Slack but I don’t think it’ll actually kill email.
Its 2019 and we still (as an industry) debate about what marketing is & what the role of marketing is. Even today we debate about things like:
Startup News @startupnwsGrowth Hacking vs. Growth Marketing: definitions, differences & use cases https://t.co/P8uwFyvEhf #GrowthHacking
I had a very interesting chat with Geoffery over at Hubdoc. Disclosure, I worked with Hubdoc Feb - Oct 2018 as an external agent.
He said something profound that I’ve come to realize as well. We never buy a product because we read a post (i.e. content) or saw an ad. We do buy a product/service when the pain arises. Marketing should build mindshare because we build affinity for brands through marketing (paid, organic, referral, OOH etc) and when the time comes, we purchase products/services which we like or feel connected to (see Woke Washing by CBC Ideas - great episode).
As Geoffery put it:
Its purpose should be to create awareness/mind share, not demand. Nobody is going to buy your product because you executed a killer campaign or have the best paid strategy. People buy and look for products when they feel pain. Our jobs as marketers is to make sure that when that time comes, they choose us.
Or like I said it:
It capture demand. Not create it. Have to look at "triggers" or job to be done or whatever the frack you call it
This is especially true today where there’s so many similar products, its hard to win based on a winning feature or use case. Martech is the perfect example - there’s a gazillion things out there that do similar things or the same but mind-share becomes the differentiator. This DOES not mean direct response / conversion is dead - but brand supports it. Almost like why your Adwords Campaigns for your branded terms will always convert at a much higher rate then your generic ones.
But can you put up an ad like this:
Jason Fried @jasonfriedWhen Google puts 4 paid ads ahead of the first organic result for your own brand name, you’re forced to pay up if you want to be found. It’s a shakedown. It’s ransom. But at least we can have fun with it. Search for Basecamp and you may see this attached ad. https://t.co/c0oYaBuahL
Probably not. Basecamp has built a reputation on being contrarian in many ways. Adwords activism is something only they can likely pull off.
The morals of bidding on your own company name and if that makes Google morally bankrupt or its just how the market plays - is a longer discussion. But I think Basecamp is a very loyal audience so they really did not need to put up that ad just to capture clicks.
Coming back to this for a hot second
I do *think* Data/Attribution agencies SHOULD be a thing. The reason I think they are not is because:
1) It’s alot of infrastructure work required in setting up things right.
2) It’s a long term commitment and most agencies work in project/ short-term retainer models.
The model that work on when doing data/analytics/attribution work is more around setting up the inputs/outputs to map the business & ensure clean data with some setup (Campaigns, Bizbile, GA) and education on top. The challenge is making people give a shit & actually look at the data to make decisions and ensuring the numbers are reliable plus taken into context.
The model for attribution/data agencies I think would be more bundled around Tools/Implementation (think Segment + Salesforce) & workshops/trainings. At the end of the day no one knows your business as well as you do.
Tying back to the conversation with Geoffery, this reminded me of something that’s been in the back of my head for a while & we briefly talked about:
As an external consultant, it’s not my area/expertise to do customer research & I would argue it’s hard to as an external agent. The company/founders etc should have a deep understanding of the product, customer, market, competitors etc. As an external agent, you can only facilitate it not provide it. The bulk of the work should still be with the company itself. I sat through a Positioning workshop with April Dunford at Guestlogix (a client) & never did she once pretend to have the answers. Instead she walked the internal folks through her framework to help them come up the answers. I’ve seen external ‘consultants’ try to do brand narrative, positioning in a vacuum or try to present the definitive answers but IMO that’s bound to fail & be a collosal waste of time and money.
Andrew Chen @andrewchenI am not a fan of relying on SEO, when you’re a brand new startup. Unfortunately, it’s just too slow. It takes time to build reputation, to build enough buzz to get meaningful traffic, and a lot of effort to generate a ton of content
Till next time.
p.s: Typos? Opinions? way off my lawn? Hit reply.