Picking the Right Startups

Each new startup I help take to market offers many potential rewards but there are risks too. 

The most obvious reward is the financial upside of equity in a successful company.  But there are less tangible benefits like the thrill of being part of a team realizing the potential of their vision.   Probably the most important long-term reward is that each startup success enhances my reputation and opens doors to additional startups with strong potential – while improving the skills I need to maximize these opportunities.  This allows me to continue doing the most enjoyable “job” of my life.

But the risks are very real.  A startup in a bad space with a bad product won’t be much fun to market – and I’ll probably fail.  And when the company flops, it will damage my reputation.  Enough damage to my reputation and I’ll have to figure out a new pursuit.  Of course most people recognize that it’s impossible to have a perfect startup record, but the opportunity cost of committing to the wrong startup means I won’t have the bandwidth to take on a potentially hot company.

Given these rewards and risks, I increasingly find myself evaluating opportunities with a VC-like diligence.  I’ve created an opportunity assessment worksheet that identifies key risks in the business. The standard format makes it easier to compare opportunities.  One of the biggest risks of any business is the inability to raise capital, so early on I set the requirement that I’ll only work with companies that have recently raised a series A or large seed round.  A very good VC can also help improve the odds, as they’ve achieved a better track record with their historical picks (and many would argue their “added value”).

Beyond general business risks, I obviously need to be confident that it is a marketable business and one on which I can make a meaningful impact.  The ideal category is what I refer to as a “disruptor” startup.  These are businesses that enter an existing category with a breakthrough feature or very disruptive pricing model.  My iterative, metrics driven marketing approach is perfect for helping these types of businesses discover their ideal market, differentiate appropriately and identify viable customer acquisition drivers.  Generally these businesses can get substantial traction just by harvesting the existing demand for the category.

Another startup category I often consider is what I call “innovator” startups.  These are much more challenging to take to market, but under certain conditions they are very marketable.  If they solve a specific important problem for a large addressable market and the potential customer lifetime value is high enough, it is generally possible to fund the full demand generation process.   Still, it takes a lot of time to discover the right target users.  Not only do they need to suffer from the problem, your product needs to effectively solve the problem.   Your next big problem is finding a profitable way to reach these target users and messaging they’ll respond to.  These are difficult go to market assignments, but they definitely improve my skills. 

For now I find myself alternating between these types of startups and avoiding those that don’t fall into these categories.


I’ve been toying with names for my advising services that would capture the value I’m offering to startups…  In a nutshell this value is “helping startups more quickly achieve traction and efficient growth momentum.”  Startup-Marketing.com clearly positions me as a startup marketer, but it’s very generic and says little about what I’m trying to do for startups.

On my drive from Palo Alto to San Francisco today I was pondering how I discovered the need to help startups gain traction/momentum – and the name 12in6 struck me.   Before I explain what the name means, I’ll describe how I came up with it.  My “self – how did I get here?” reflection began by remembering the period when I was planning my next move following LogMeIn.  I was reflecting on 10+ years of startup life and wondering “what was the most important marketing activity we did that led to these two NASDAQ IPO filings?”  I realized that the first 6-12 months were the most critical marketing contributions to the long-term success of each company.  I also realized that what took 12 or more months at Uproar.com took only about six months at LogMeIn.  A solid go to market process was the primary difference.  And finally I realized that this go to market process had a ton of room for improvement.

I had my next move figured out.  I would specialize in helping companies plan and execute their go to market strategy.  My process would improve with each startup experience.  I quickly switched my blog from metricsdrivenmarketing.com to startup-marketing.com and continue to evolve/improve the go to market process with each new startup marketing project.

So today (as I was going through this “self – how did I get here?” exercise) I figured out the name.  It’s 12in6 – reflecting that I’m helping startups achieve 12 months of marketing progress in 6 months.  This is a powerful promise since this period generally has a very high capital burn rate – and getting through it more quickly preserves precious capital.  The name is a great conversation starter (based on the WTF factor).  It is also numbers, which highlights my data driven marketing approach.  Even the logo is a no brainer with a 12 inside the 6.

I’ll continue to post to Startup-Marketing.com since it gets a lot of search traffic, but I’ll eventually transition to the new domain 12in6.com.  Fortunately the move will allow me to switch to a better blogging platform too.

The Ideal Startup Marketing Leader

In the last couple weeks I’ve met with CEOs at nearly a dozen well-funded startups desperately in need of a marketing leader.  Many of these companies have expressed a strong desire to work with me on their go to market execution, but one of my key requirements is that they have a marketing leader in place.  This ensures strong knowledge transfer and reduces the need for a long-term engagement with me.

The challenge many of these startups have faced with their hiring is that they were seeking a seasoned marketing leader.   Having led marketing in both early stage ventures and in more established companies, I tell most that they don’t need a seasoned marketing vet.   Experienced marketing execs haven’t rolled up their sleeves and executed for a long time.  The majority of their skills are completely irrelevant in the early go to market stage of a truely innovative startup.  So why pay their required high salary and give up multiple points of equity?

The good news is that for about half the salary and a fraction of the equity they can hire a qualified candidate to be trained and mentored to successfully execute this early marketing stage.  In fact it’s probably easier to train someone with no marketing experience than someone with years of the wrong type of marketing experience.

Of course the right candidate must be dynamic and possess the essential soft skills.  They must be analytical enough to execute a data driven marketing approach and have the discipline to follow a proven go to market process.   Most importantly they must be very curious about discovering how your solution maps to the needs and the buying process of prospective customers.

When the role is positioned correctly, the right candidate will leap at the opportunity.  Nothing is more exciting than being on the ground floor of a hot new startup.  For the next several months they will have the critical responsibility for the planning and execution of the company’s go to market strategy. And (by working with a go to market specialist) they will have guidance and training from someone who has taken multiple companies to market.  It’s important to be honest with them that they may not become the long-term marketing leader, but they are in pole position to get the role.  The ideal candidate will understand that they have everything to gain from this opportunity and nothing to lose.

But how do you find these candidates?  While it would be tempting for me to set up a recruiting business to help startups with this crucial hire, my hands are full with startup marketing advising.  So I’m exploring other ways to address this need/opportunity.  These include working with existing recruiters, partnering with someone who could specialize in filling this type of role, setting up a training boot camp for aspiring startup marketers or some combination of each.  Stay tuned.

Update:   The above recommendations are for startups that have an opening in the marketing leader position. I know many marketing vets, particularly those with strong online marketing skills, that have done exceptionally well with startups.

Check Out Startonomics

You may have noticed that the go to market process I use is heavy on identifying and using the right metrics to build your startup marketing engine.  So it’s not surprising that a conference called Startonomics caught my attention.  The organizers describe it as the following:

“Startonomics is a one-day workshop designed by entrepreneurs for entrepreneurs on how to create simple, actionable metrics for internet startups, and use them to make better product and marketing decisions for long-term growth and success.”

I was even more excited when I was asked to speak at the conference.  A whole conference of other nerds focused on actionable startup metrics.  How could I miss this one?

The conference is October 2nd in San Francisco and is affordable at $295 for entrepreneurs.  Here’s a link if you are interested in attending or learning more.


“Potential” is the most important concept in startup marketing.  Startups are all about creating and then realizing potential.  It is our “true north.”

So what is “potential?”  One definition is “capable of being but not yet in existence.”  From a startup marketing perspective, I define potential as the combination of the size of the market and the intensity of the need for your product as it exists today.

A startup’s potential begins with the vision of the founders.  Generally there is some tweaking of the vision based on research around the actual needs of potential customers and the competitive landscape of alternative solutions.  The right business model can also extend potential by enabling you to cost effectively expand market need through demand generation marketing activities.  Startups seeking VC funding must make sure that their potential is sufficiently large to be interesting to the VC.

Generally marketing leaders don’t join a VC backed company until the initial potential has been established.  It is our job to fully realize this potential.  An effective startup marketer is sickened by the idea of falling short of their startup’s potential.  The only growth that is good enough is growth that rides the line of what is possible.  Anything short of that creates an opportunity for a competitor.  Each additional competitor reduces your potential.

Too often startup marketers push the rest of the company to extend potential through feature enhancements while they are falling well short of the existing potential on the marketing side.  Avoid this vicious cycle of chasing markets without fully reaching the potential of your existing market.

The Best Way to Get Your Startup to Market

Among all the uncertainties startups face, perhaps none is bigger than trying to figure out their go to market strategy.  Should they shell out big bucks and equity to a veteran marketer with domain and startup experience?  Should they take a conservative evolutionary approach or hit the market hard with millions in marketing spending?  Are there some key tasks to execute before aggressively acquiring the first customers?  With all the alternative ways to go to market, it’s no surprise that startups are constantly second guessing their go to market approach and/or their marketing leader.

Over the last few weeks I’ve refined my plans for helping startups address these challenges.  This is mostly based on feedback from several startup founders and VCs, but it’s also based on the time I had to reflect while on vacation.

To recap my “journey” to date, I recently finished a six-month interim VP marketing role at Xobni, which publicly launched its product in May of this year.  Xobni is considered by many to be among the hottest startups in Silicon Valley.  I am now a marketing advisor with Xobni. I limited the fulltime role to six months because of my belief that the first six months of marketing are the most critical to long term success of a startup.  I came to this conclusion following two previous startup roles where I ran marketing for several years from launch to NASDAQ IPO filing. 

It’s important to note that the most important marketing drivers were different in each of my last three startup marketing roles.  It was the process of discovering the most effective drivers that was the same, as well as the steps executed before developing drivers.

While at Xobni I also read “The Four Steps to the Epiphany” which supported my belief that there are patterns that most successful startups follow.  The author, Steve Blank, also reached this conclusion as the founder, CEO or head of marketing at several successful startups. 

As I mentioned in my last post, I plan to use a more leveraged approach with startups going forward.  Each startup must have a passionate, talented marketer in the marketing leadership position and recently raised their series A round of VC financing.  My role will be to help them focus their time and resources on the most impactful projects necessary to bring their company to market.  Because of my previous experience successfully navigating this critical stage, they will have the confidence (both self confidence and from other execs and board members) to aggressively execute an efficient go to market strategy, without most of the second guessing that so often wastes time and energy at startups.

The key development since my last post is that I’ve formalized two specific programs for bringing these companies to market (at different price points). The goal is to concentrate my efforts in the areas where I can add the most value in the least amount of time.  Both programs start with 2-3 days of intensive onsite progress assessment and planning.  Essentially we assess everything that has happened in marketing to date and plan the sequence of what needs to happen over the next six months.  Then we’ll review/refine the execution plans for each of the key projects for the next six months and consider external resources where needed.  Finally we’ll schedule weekly phone calls to monitor progress and help with key challenges.  The higher level plan will also include unlimited email Q&A.

Over the past several weeks I’ve been introduced to about 25 startups (primarily via VCs) that have the right profile.  Clearly this is a niche with a lot more need than I’m capable of meeting. Still, I believe my new approach will enable me to effectively work with up to two new companies per month (initially I’ll cap it at one per month). By limiting myself to companies that are at a very specific stage, I will be able to constantly refine and improve the approach.  Again, I’m focusing on startups that have recently raised their series A funding and have a talented/passionate fulltime marketing leader.  These companies should seek the right balance of conservative and aggressive execution.  It’s very easy to get too aggressive too soon when you have just raised millions of dollars.  But eventually you must be aggressive to realize your full potential. 

You may have noticed that some of my old posts are no longer available on my blog.  Because I view my service as a key competitive advantage for the startups I work with, I’ve decided not to provide this information for free to their competitors through my blog.  This was a difficult decision and hopefully my readers will understand.  I will still post general information about marketing a startup on my blog as well as assessments of effective drivers, but will no longer include detailed posts on process.  I may offer some webcasts in the future where it is easier to control the dissemination of information.   For anyone who is looking for specific reading materials on process, I highly recommend Four Steps to the Epiphany.  My approach incorporates some key element from this book, but obviously there are other things I’ve discovered through my own experience that aren’t covered in the book. 

I’m excited to start with this new leveraged approach at Eventbrite on Monday.

Advisor at Xobni – What Now?

Monday will be my last fulltime day in the interim VP marketing role at Xobni – then I switch to part-time advising.  Xobni’s progress is definitely on the highest end of my expectations when I went into the role.  I’ll miss my day-to-day interaction with the team, but will be on site a couple of afternoons per week to trade jabs.

Many people are asking me “what now?”  Through fall I’ll be working with a few other startups using a more leveraged approach.  I’ll help them set the overall marketing priorities and then provide ongoing assistance refining their go-to-market strategy and executing more challenging marketing projects.   Each startup recently received their series A VC funding and has a smart and scrappy (but less proven) fulltime marketer.

This is a different approach than I took with Xobni, where I was exclusively focused for six months on laying the groundwork for the public launch (May 5th) and building on the post launch momentum.  By focusing on only one startup during this period I’ve been able to re-tune my startup marketing skills.  I now feel more prepared to effectively help multiple startups.

In classic flip/flop fashion of a politician, I’ve change my perspective on whether a part-time consulting approach will work.   Back in March I wrote (http://startup-marketing.com/2008/03/01/the-startup-marketing-launch-process-is-broken.aspx) that a total immersion approach is better than a consulting approach.  While this is probably still the case for the eureka moments of creating innovative customer acquisition programs, it’s less important for laying a foundation to maximize the impact of these programs and developing the overall go-to-market strategy.  If a startup has the right marketing director in place, they should come up with the innovative marketing programs needed to drive growth.  By limiting my time involvement, companies will be able to pay less overall compensation.  And it works out better financially for me as well, especially since I’ll be able to diversify my equity.

I’ve already committed verbally to terms with three companies, but put off figuring out the contracts until I completed my fulltime role with Xobni.  I also postponed meeting with other companies because it would cut into my time at Xobni.  As a result, I have several meetings teed up over the next few weeks with other startups.  I plan to cap my advising/consulting roles to four companies through the fall (in addition to Xobni).  Once I understand my capacity I may add more.

I’m definitely in need of a vacation and excited to be heading to Thailand at the end of next week.

VP Marketing Compensation at Tech Startup

While working on recruiting the next marketing head at Xobni (either VP or director level), I stumbled across a great blog post on the typical compensation packages for VPs of Marketing at Tech Startups: http://www.mikevolpe.com/bid/3858/.  I haven’t downloaded the actual report which may provide more data (you can see it here https://www.compstudy.com/).

 Percentile   Cash Compensation  Stock Option %   
80%   $225,000  1.65%
60%  $200,000  1.25%
40%   $175,000  1.00%
20%  $160,000    0.75% 

Unfortunately Mike’s post doesn’t give many details on compensation by startup stage (I assume these probably weren’t available in the report either).  In my opinion pre-series A has more risk and should give the marketing VP more equity (all other qualifications being equal).  Also 1% of a pre-series A company is worth much less than 1% of the same company after the series C round (because of dilution).

Reading "Once You’re Lucky. Twice You’re Good."

I’ve been reading “Once You’re Lucky. Twice You’re Good.” by Sarah Lacy for the last few days and I’m really enjoying it.  It gives a useful overview of the whole Web 2.0 scene, but mostly I just find it an entertaining read.  It’s amazing how many influential Web 2.0 companies were connected to PayPal alums.   Slide, YouTube and Yelp were all directly connected, and Facebook has early investors that were alums.

The book highlights the value of the Silicon Valley ecosystem for starting new companies.  Without the help of startup vets, Lacy indicates that many talented founders would likely have been ousted from their CEO position by VCs.  Who knows if companies like Facebook would be at their current nosebleed valuations if a seasoned exec were running things?  The passion and vision of a founder often count for more than the experience of a replacement CEO.  Other times this isn’t the case.  Obviously when VCs push for a replacement, they firmly believe it is the best approach for the long-term success of the company.  But sometimes they’re wrong.

Reading about these successful companies has been both inspirational and educational.  It led me to begin an analysis of the fastest growing startups over the last few years and try to reverse engineer the source of their growth.  I’ve been verifying strong growth rates by looking at each company’s Google search trendline and their Alexa chart.  Caution: Sometimes Alexa doesn’t capture the real growth of a company because their pages are https or they are distributing a local application.  In this case, Google trends is a better indicator of user growth.

Most of the highly successful companies have relied on a key viral driver – either viral invites or a self replicating viral presence (think widgets).   I’m hoping to identify new growth drivers around which I can enhance my marketing skills.  I tend to find the shelf-life of many successful online marketing programs is limited, so it’s important to continuously refresh my knowledge.  I’ll post my findings soon.