Huge Newsweek Article for Xobni

Newsweek published an article today that clearly positions Xobni as the leader among companies addressing the ubiquitous issue of “dissatisfaction with swelling inboxes.”

Xobni co-founder Matt Brezina has some great quotes throughout the article, but this one is the best “We’re at the front of the pack.  And we’ve got a target on our back.”

The article points out that Bill Gates called Xobni “the next generation of social networking.” Relationship based email management is going to be a huge space and this Newsweek article should help ensure that Xobni leads the conversation as the category picks up steam.

Demand Harvesting – The Easiest Driver for Startups

I always begin a new startup marketing assignment by looking for any untapped existing demand.  Demand harvesting is much easier than demand creation – and it has a faster sales cycle.  You don’t have to convince someone they need your category of product, you just need to be easier to find/buy and have a better value proposition than the other guys.

The first question to ask is “where would someone seek my product category?”  Twenty years ago the most obvious answer would have been the yellow pages, but today it is Google.   A lot of information has been published on getting the most out of SEO or SEM and there are also many experts you can tap in this area. Beyond Google, I’ve found it is helpful to survey existing users for other places they would potentially look.   It’s great news when discover healthy demand for your product category.

The next step is to analyze the solutions competing for that demand.  The best situation is to discover heavy unmet demand and no competition.  That is about as likely as winning the lottery, so don’t count on it.  More realistically, there will be a few companies with varying offers competing for that demand.  In this case, you should hope for weak execution from these existing competitors.  If you can be significantly more effective at extracting money from each prospect, you can afford a more prominent promotion at the initial point of connection and begin capturing market share.

If you discover that the existing competitors are executing well, you’ll have to differentiate your offer with a better value proposition for at least a segment of the existing prospects.  This was the situation in my last company.  We faced a well entrenched competitor who was harvesting the majority of existing demand and spending millions every month creating new demand.  Rather than simply trying to out-execute them (they were extremely efficient), we decided to counter with a free-to-premium offer.

This gave us a high response rate among existing main category searchers but also played into a new trend that had been developing over the last few years.   In discovering a new expensive software solution, many prospective customers now check for free alternatives.   For this new segment of demand, we quickly became the dominant market player.  Once we had these users engaged on the free product, we could patiently upsell various complementary premium services.

Whether competing for existing demand or creating a brand new product category, you’ll eventually have to begin creating demand.  This is a much more difficult and unpredictable art that I’ll cover in a future post.

Why I Love Silicon Valley

Silicon Valley has a contagious energy unique from any place I’ve previously worked. New York City was close, but it wasn’t focused on the tech industry.  Palo Alto is the epicenter of this energy, but it spreads all the way into San Francisco, where I’ve been living for the last three weeks.

While the energy hits you right away, it’s the network that is the real value.  After just a few weeks I’ve already developed more valuable relationships than I did in 3 years in Boston.  For me, the best part of these relationships is exchanging marketing experiences.  Every meeting with another entrepreneur or startup marketing leader yields new insights into powerful marketing drivers.  And it is always a two way exchange of information.  Meetings end with a genuine desire to get together again soon and enthusiasm about all the new tactics we’ll bring back to our ventures to test.

David Weiden from Khosla Ventures has made the most valuable introductions.  And these introductions spread well beyond Silicon Valley.  Yesterday I met with Jamie Siminoff, a serial entrepreneur based in LA with multiple successful ventures already under his belt.  Jamie is one of the sharpest marketers I’ve ever met, despite never carrying a marketing title (he’s been the founder and CEO of his ventures).

Michael Mullany has been another great introduction from David Weiden.  Michael was the early VP Marketing at VM Ware, which went public in 2007 and is currently valued at $23 billion.  His knowledge around product marketing blows me away.  Given my core-competency in customer acquisition, we always have a great exchange of information that inspires new tactics for each of us to try.   We plan to bring other successful startup marketing leaders into our conversations which will surely generate additional insights and relationships.

Finally, David Weiden made the introduction to Xobni, where I am currently engaged in the traction stage of marketing.  The Xobni team is extremely sharp and I’m sure will be part of my relationship network for years to come.  Once again, while no one else at Xobni carries a marketing title, they’ve already added new marketing tactics to my arsenal.

Amazing it took me so long to move to Silicon Valley; especially since I went to college only about an hour away at UC Davis.

Bill Gates Demos Xobni in this Morning’s Keynote

We’ve had an exciting morning at Xobni.  Bill Gates demoed Xobni at the Microsoft Office Developers Conference, calling it the next generation of social networking.  A more practical comment was that he credited Xobni as helping you understand the richness of different types of relationships so that you can manage those relationships.

Below is a link to the portion where he demos Xobni:

OnStartups Article: Big Bang Vs Darwin Marketing for Startups

Here is an excellent blog post from OnStartups that compares a Darwinian evolutionary marketing approach to a Big Bang approach.  It’s from way back in July, but I found both the article and comments to be insightful:

I agree with the article that a Darwinian evolutionary approach is right way to get a startup out of the gate.  However, the article fails to mention the importance of eventually stepping on the gas by investing in high growth drivers.   Billion dollar companies aren’t created by only focusing on the downside.   

If you’ve done your job right during the iterative evolutionary stage, you’ll have a very efficient acquisition funnel, strong value proposition and a product/service that delivers on the promise of your value proposition.  This makes it much easier to fund profitable outbound marketing campaigns.  With the right tracking system in place, you will be able to identify strong ROI campaigns and cut the losers.  Nothing with a positive ROI is expensive if your pockets are deep enough.  If you have scalable positive ROI marketing opportunities that can’t be funded, it’s probably time for another round of financing.  In this situation, it will be much easier than earlier rounds of funding.

My marketing budget at successful startups grew to millions of dollars per month, the majority of which generated a tracked positive return (the exception being for a small testing budget that was necessary for pushing the envelope into new growth drivers).   Contrary to one of the comments, PR was a great investment when we transitioned into high growth mode.  Trend analysis and surveys indicated that the $20,000+/month spent on PR generated by far our best ROI.  

In my latest startup I will conserve funds as much as possible while we iterate through the evolutionary launch process.  But eventually we will need to shift into a much more aggressive spending mode to reach our full potential.