Enterprise lead & demand generation for early stage companies

/ Robert Pease / Leave a comment

I connected with a good friend a couple weeks ago who asked me for my thoughts on enterprise lead and demand generation for early stage companies.  I am way overdue in getting back to him and over the weekend ended up pulling together a pretty lengthy write up on the topic.  In addition to finally getting back to him, I thought I would share it here over a few posts starting with #1, #2, and #3 below.

I am a firm believer in building a layered approach to lead and demand generation where simultaneous programs are running over time to build awareness and generate interest.  Obviously, your results will be better if you have achieved product/market fit and know who you are targeting.  If you are still figuring this out, you can use these efforts to include/exclude targets and learn along the way.  Just make sure to watch your budget and ensure there is institutional patience to go through the process.

For this exercise, I came up with fourteen areas that can be used ranked based on degree of "touch" and, in many cases, dollars required:

   1. Brokered introductions
   2. Partner marketing
   3. Direct outreach & appointment setting
   4. Tele-prospecting/tele-surveys
   5. Guaranteed lead generation programs
   6. Sponsored email blasts
   7. On-line advertising
   8. Email newsletter nurture programs
   9. Direct mail
  10. Events
  11. Market awareness – self generated
  12. Market awareness – through a PR firm
  13. Analysts
  14. Print advertising

1. Brokered introductions

  • The elusive warm introduction that gets you to the decision maker who has the budget and is open to doing business with someone they have never heard of.  It does happen…but rarely.
  • These types of relationships are important if you are looking for your first deals.
  • Some VC firms can broker these discussions based on their relationships or find you the person who use to be the SVP of something important at BigCo who knows the CEO at BigCo.  Be prepared to pay 10% of the deal value if something closes.
  • You may also be able to find folks that are willing to walk you into opportunities for a cut as well.  These may be independent sales reps, retired/out of work major account managers, etc.  Be prepared to be disappointed so don't pay a retainer, pay a commission.
  • There are firms that provide services like this as well.  Their models vary but generally include some type of retainer plus commission percentage
  • Searching on "sales acceleration" or the like will turn up some options
  • Also take a look at companies like Landmark Ventures, Insight Ventures, or the Roundtable Network which is security focused

2.  Partner marketing

  • Bar none, partner leads are the most qualified you can get.  If you don’t have partners, get some
  • Keep in mind partnering is time and resource consuming.  It can also be perilous so don't put all your eggs in one basket
  • A referral selling agreement is a must have in the legal docs arsenal.  It should be short and sweet that allows both parties to get paid if they refer business to each other.  Either a fixed dollar amount per deal or something like 8-10%.  Maybe has a co-marketing or press release agreement as well.
  • Companies that you combine with to offer a whole solution will be more amenable to referral agreements and I believe they are the first step to securing reseller/OEM type deals because it allows both parties to formally work together and test the market.
  • Reseller/OEM relationships are more complex w/ VARs and resellers wanting 20-40% depending on how far they carry the deal.

3. Direct outreach & appointment setting

  • This can be done with a dedicated inside sales person or contracted consultant.  Consider compensation tied to meetings secured, those that convert to forecasted deal, and/or those that convert to close
  • This can also be done with a 3rd party although I have never seen this work well.  It will, however, rapidly generate sales pipeline activity.  They generally get the right people to the phone but rarely qualify them as interested buyers. 
  • Lean on your own sales team to prospect and set appointments themselves.  A territory/major account plan can help with this.  Hoover's is the standby contact manager but check out Jigsaw for more meaningful/relevant contacts. 

Til the cows come home

/ Robert Pease / Leave a comment

I admittedly have not been watching the circus taking place in Washington, DC about ratings agencies and the role they played in our current financial cluster on display in front of Mr. Waxman's House Oversight & Government Reform Committee.  That said, it seems eerily reminiscent of the last period of excess, Wall Street "greed", and financial services run amok.

Anybody remember Henry Blodget (now of Silicon Alley Insider), Jack Grubman, equity research conflicts of interest, and the smoking gun emails?  After a $1.5 billion settlement, no shortage of new rules (Sarbanes-Oxely for starters), loads of additional people, process, and technology for compliance, and a focus on removing conflicts of interest, we found our next problem where we weren't looking – bond/credit ratings.

Here's an instant messenger exchange from Standard & Poor's. Note the "it could be structured by cows and we would rate it" remark.

Those of us who appreciate and frequently use sarcasm in our daily lives understand why this phrase was used – that's the way it is done, so do it.
The good news is that all the technology and compliance investments of the past several years made sure this exchange was logged and archived for ediscovery purposes.  The bad news is that putting rules and controls in place that do not view the problem systemically (if at all) are bound to fail.  It's not the fault of Moody's or S&P any more than Enron's house of cards was Arthur Andersen's fault.

No instant replay in election of US President

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After being bombarded with all sorts of official and unofficial 'news' about the race to be the next President of the United States this evening as I sifted through my RSS feeds, a few things occurred to me. 

1. Each candidate (and their surrogates) has their version of events, why they are better, why the other one is worse, and the way forward for America.  I subscribe to both candidates' blogs (Obama & McCain) and suggest you do as well if you have a tolerance for spin and marketing (an election is, after all, a marketing campaign).  Also tap into Politico for some perspective.

2. Much like when a close (or not so close) play happens in a football game and all the fans both at home and in the stands see it through their team preference, the same is happening and will happen this election.  One person's down by contact is another person's fumble.

3. In the closing weeks of this election, the rhetoric and nastiness will intensify.  After all, this is a pretty significant job and the winner commands a great deal of power.  The good news is that the Obama campaign will probably single handily stave off a recession in the advertising market as they put their cash hoard to work.

In a football game, the fans boo and then go back to watching the game convinced they saw it better than the guys on the field and the review team in the replay booth – but the final call is the final call.  In this election, there will definitely be some booing by the defeated team and, unfortunately, we have no replay booth. 

Just a Constitution, a process, and our optimism (I hope) as a country.  I think this is closer than the "polls" indicate and we need to be prepared for that reality as a country.  Surveys, polls, and numbers are suspect things but are useful tools in a marketing campaign (see point #1 above).  If you read one, consider the source, look at the sample, and use it as one of many data points over time.  I still remember the 2000 election and seeing the aforementioned pieces actually work (in a bar in Boston believe it or not) as well as the US population getting an eduction on what the electoral college was all about.  One side won and one side lost, but the process works.

Get a grip

/ Robert Pease / 1 Comment

Many of the blogs I read and other sources of information I tap on a daily basis have been consumed with the "tough love" coming from several established venture capital firms like Sequoia and Benchmark.  I'm not going to rehash it here as it has been beaten to death at this point.  I am, however, going to weigh in on the fact that the message is not new but rather overdue. 

Here's a few hard truths that apply to start-up/early stage companies no matter what the broader economy looks like:

  1. If you don't have a business model, you don't have a business.  If this is the first time this has occurred to you, you were going to fail (or get fired) anyway.
  2. Cash is the most cherished resource you have especially when you are not self-supported (by your own revenue).  How you burn it should be governed by looking at every dollar you spend as your last.
  3. If you are old school enough to have an actual business model, the projections you have made with regard to uptake/revenue/adoption will take twice as long and equal half what you think.  And that is in a positive economic environment.
  4. An entrepreneur I admire once told me that someone has to look at your product and decide to take money out of their pocket and hand it to you because they think it is worth buying.  If this hasn't occurred to you or you haven't visualized how this would happen, see point #1 above.

We do have a few shreds of capitalism left here in the US and this is one – not
all companies succeed.  Quite frankly, venture-backed companies are
even riskier as you are betting on a market that may or may not materialize or has
materialized and there are now loads of competitors vying to dominate
it.

Regardless of the stage of company where you work, your job is always on the bubble (that's for you Dad).  That does not mean that you are teetering on the fire list every day but it does mean that a job is not an entitlement, it is an opportunity.  If you squander that opportunity, you will no longer have a job.  Losing that job can be based on your own performance, management performance, or macro-economic factors beyond your control.  Maybe not fair, but reality.

Basic business principles endure and always rule the day whether you are running 30x leverage in a hedge fund or building the next "it" product or service.  Brad Feld has some good thoughts on his blog including this post.  I am also embedding the much ballyhooed Sequoia Capital presentation below:

Sequoia Capital on startups and the economic downturnhttp://static.slideshare.net/swf/ssplayer2.swf?doc=sequoia-1223625495238287-9&stripped_title=sequoia-capital-on-startups-and-the-economic-downturn-presentation

View SlideShare presentation or Upload your own. (tags: depression recession)

Art with Heart

/ Robert Pease / Leave a comment

I was fortunate enough to start my morning with several hundred other folks at the Sheraton in downtown Seattle at the Color of Hope breakfast in support of Art with Heart.  Good friend and Gist CEO TA McCann introduced me to this organization and I must say I am very impressed.

Their mission is to "empower youth in crisis through therapeutic books and programs that foster self-expression."  It's about using art to help kids through difficult times and the program was really well done.  Check out the site to learn more and get involved.

Dawg Dash this morning

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I did my part to try to help the Huskies salvage a miserable football season by participating in the Dawg Dash 10K on the University of Washington campus this morning.  This was the 23rd year for the race but my first time.

It was great to hang out on the field before and after the race.  Results aren't up yet, but my Timex Ironman watch showed me an unofficial 50ish minute finish time.  Not too shabby given my desire to take it a bit easy today (no athletic vendetta at play today).

Some calm and clear perspective on the current economic turmoil

/ Robert Pease / Leave a comment

I have been a fan of Charles Schwab & Co. for many years and use many of their financial products and services.  I thought this was a worthwhile bit of content to share and it is available on the public portion of their site. 

Their point of view – doomsday fears are overblown.

Have you stopped to think a moment about all the writers, analysts, pundits, journalists, etc. who so liberally use the word "depression" these days with such apparent expertise are the same ones who said nothing leading up to the current gyrations?  They don't know any more than you or I (and in some cases less) and are chasing ratings/subscribers/viewers.  The more dire the diagnosis, the more you tune in.  Take it with a grain of salt.

Read the whole thing from Schwab as it does a nice job comparing and contrasting where we were then vs. where we are now and calls out the following points as reasons to believe:

1.  'Jobless recovery' (from previous decline period means fewer reductions this time around)
2.  Fiscal policy (government focused on stimulus)
3.  Globalization (no protectionist mindset)
4.  The FDIC (it exists this time around)
5.  Money supply (Fed adding liquidity this time around)
6.  Housing near bottom (not there yet but falling less)
7.  Emergency Economic Stabilization Act (US Treasury steps in as a buyer)

No doubt, this is going to continue to be ugly for a while and the new sport of calling the bottom of the market decline needs to be replaced by nausea and vomiting before we really get there.  My view is positive in the long-term based on belief in the US and US economy.  I can't think any other way.