Marketing is Just Sales Without Accountability

Over the course of the last 7 years, I've spent a considerable amount of time managing sales and marketing for my own 2 software companies as well as a web consultancy. I've attended conferences, made sales calls, printed flyers, and schmoozed at investor gatherings. And I've come to believe that marketing is just sales without accountability. Bear with me for a moment.

Marketing is Sales

Both marketing and sales are intended to produce the same end result: make more sales. Marketing is the top of the sales conversion funnel; the first interaction with a potential customer in which good salespeople provide value and make a lasting impression. But let's not loose sight of the end goal: that first contact with a potential customer is fundamentally about sales.

Companies don't sponsor trade conferences and staff booths because they want to spend tens of thousands of dollars on snazzy signs and airfare, they want to make more sales. Companies don't maintain blogs because they want employees to become excellent writers, they want to be noticed for their contributions to their niche and make more sales. Companies don't buy television, print, and radio advertisements because they want to support actors and graphic artists, they (you guessed it) want to make more sales.

Marketing Isn't Measured

The problem with marketing is that it's so far towards the top of the sales funnel that it's difficult to measure. Sales calls either result in a sale or not, so it's natural and easy to measure their effectiveness. It's a lot harder to measure the value of meeting someone new at a trade show. Will the person become a paying customer? Will they refer someone to your business? Will they write about what great work you are doing? Or will they trash you to a potential customer? It's just not something that's obvious or easy to measure.

As a result, businesses and business owners (myself included) simply throw up their hands at some point and start generalizing. "We have to get our name out there somehow, and people watch television, so why don't we try a TV ad?" Or perhaps "We know some of our customers attend the BigConf Trade Show, so let's exhibit this year."

The unspoken rule of marketing is that most of it is wasted effort, but for a myriad of reasons, it's too costly to figure out which part is wasteful. My suspicion is that for companies in established markets, what most folks would recognize as marketing probably is worth the time and energy. Most companies can't prove that, or course, but the fact that they are still around means that they are either spending little enough on marketing  that their failures don't sink the ship, or the marketing efforts are actually paying off.

Stop Marketing and Start Selling

If you work for a tiny company or are building a new product, you can't afford to waste resources on unprofitable marketing or sales. You have to start measuring marketing efforts in the same way that you might measure sales. At this point you might be saying "Yeah, well, that's all fine and dandy, but how the heck do you propose I do that?"

Simple: pick some metrics and start recording data.

Here are some examples of things that I've personally tried:

1. Enter people you meet at trade shows in a CRM and track sales as they come in later.
2. Attach a coupon code to print materials and track how many times the coupon is used.
3. Ask incoming sales leads how they heard about you, be bold and ask for a name if the person is willing to give you that information.

You might now be saying "but I'll never be able to measure activity X!" One striking thing I've noticed about sales is that salesmen and sales departments are loath to invest time or money in anything that can't be tracked. That's a good starting point for marketing too. That doesn't mean you can't do activity X. It just means you have to get creative about tracking it. In cases where you can't find any way conceivable way to track it, that's generally a good indicator that it's not a profitable marketing channel.

Conclusion

You might well choose the wrong metrics to measure the first time around. For instance, the first two years that I attended trade shows for my company, I measured booth traffic. I literally just wrote down how many people talked to me at the booth. It turns out that people visiting the booth didn't predict sales at all. But that data saved us more than more than $10,000 when it came time to exhibit in year three. We had hard numbers that suggested that either 1) it didn't make money for us to attend trade shows or 2) unqualified visits to our booth are not related to making sales to qualified leads. Dodged a bullet there!

Marketing doesn't have to be blind, and when it does, don't do it. Treat marketing like sales, measure everything you can, and in a year or two you should be able to make at least one decision that saves your company $10,000.

Sivers is Right: Customer Service is the New Marketing

This post was originally published on 8/21/2011.

Recently I read an old interview with Derek Sivers about his CDBaby customer support. I've always found his writing educational, but in this interview his closing sentence struck me as particularly true: "customer service is the new marketing." That got me thinking about my own experience with my company and how much we labored to do marketing "right."

We started Skritter on a shoestring to teach Chinese and Japanese. We decided that we would either make money and support ourselves, or stop working on the site. After the first year, the site was generating cash, but not very much. Nick, Scott and I decided we needed to hit marketing hard. We partnered with a great guy in China to help us reach more customers and we set about our marketing.

We began with Adwords. We attended several relevant trade shows. We tried promotions and giveaways on the site. We started Tweeting and developed a strategy for Facebook content. We had two marketing interns in China talking to learners on the streets of Shanghai. We were present at Chinese testing centers, we contacted schools to sell site licenses, we did webinars, distributed print ads, setup an affiliate program, spent serious time on SEO, created a content strategy to improve SERP results, collected quotes from marketing consultants and agencies, redesigned the appearance of the site, and conducted A/B tests.

Throughout all of this, we continued to grow, but our growth curve didn't look a hockey stick, it was the gradual upward movement of a well liked company.

We always made it a priority to bake in tracking to our marketing, and after a year with little to show for our effort, we decided to give it a temporary rest.

That week we watched in amazement as the site kept right on growing, despite negligible marketing outlays. We nervously twiddled our thumbs, waiting for the growth numbers to level out and go into free fall, but that never happened. Instead, Skritter continues growing to this day, and we have strong evidence to suggest that it's because of the way we treat customers.

First, we conducted a poll of our user base and found that more than 35% of our customers had personally been in contact with either Nick, Scott, or I. That meant 1 of every 3 paying customers had traded a personal email or met us face-to-face! Considering the size of the site at the time, that was an astonishing number of customer interactions.

Second, even after months of no marketing, growth continued unabated. Moreover, we continued seeing a trend we hadn't paid much attention to earlier: people arriving at the site and telling us (albeit not in an easily quantifiable way) that they were there because of referrals. This was corroborated by a forgotten poll we had done more than a year before which attributed most new inbound customers overwhelmingly to referrals.

So, while we were trying our best to find scalable marketing solutions, all those hours spent in front of keyboards being sociable and helpful to current customers drove site growth. Our customer service has been our marketing, which directly supports Derek Sivers' opinion.

Marketing doesn't always make sense for companies. Where marketing is concerned there are two schools. The first is the "build it and they will come" school of thought. The second is the "most companies needs marketing" school. We clearly followed the latter and although we are just one data point, when we started my second company,  we took Derek's advice to heart and disregarded marketing at least. When you've only got 5 customers, there's a real temptation to focus all your time and effort on finding more customers. But that's missing the forest for the trees.

In our experience, the key to a larger customer base is the person right in front of you, money in hand, waiting to see how you'll treat them.

Games: The Anti-MVP

This was originally posted on 6/6/2013.

My cofounders and I were sitting in the Mission on a sunny morning, eating crepes and talking with a survey and testing guru about testing business assumptions for our new startup.

"I would be hesitant to sink more than a week or two into the idea without data from customers."

My cofounders and I traded sideways glances. The truth was that we had been working on our new startup for 4 months already. We had been play testing our game for more than a month, but  it would be a while before it was ready for a beta launch .

Our meeting left us feeling uncertain, our previous startup had a minimum viable product ready to ship inside a month; why was this taking so long? It didn't hit us until later on when we were speaking with more experienced game devs.

"You have something ready to play in 4 months? That's great."

We had been operating on the assumption that like a B2B startup website, we could throw something down in a week or two, go to customers, test it, and begin iterating. But games defy MVP release schedules. Nowhere is this better illustrated than in 2D Boy's illuminating blog series about developing World of Goo. It's true that they churned out their first version in a week, but their first game tests (which occurred several months into development) were a mess. At CodeCombat we understand that all too well, unfortunately.

Games must be fun. The primary business assumption of any game is "users will like playing it." It's almost guaranteed that users won't be satisfied playing a two week old MVP. In fact, that's sort of the definition of a minimum viable product: it's rough, unpolished, and easy to change. If you're doing it right, the MVP is difficult to take seriously. By contrast, the quality standard for games has been raised so high that it's often not enough to slap something together to gauge user interest.

The takeaway we've learned is that startups with experience building websites need to step back and redefine their MVP expectations when building a game. It takes longer to make something fun rather than just functional, and unfortunately games are defined by the first term, not the second.

Magic Tricks

Back in my junior year of college, I switched my major from Cinema Studies to Economics. I was sitting in the office of my favorite professor and adviser, a man who had his Economics degree from Harvard. I was asking about post-graduate options.

"I was thinking about maybe getting an MBA one day. Do Oberlin graduates stand a chance of getting into the Harvard MBA program?"

My adviser smiled in a good-humored way. "Honestly George, I don't know how anyone gets into the Harvard MBA program. I think you have to be magic to pull it off."

When I heard those words, my heart sank, but I took the advice to heart. Seven years and two startups later, I still vividly remember that conversation because it crystallized my understanding of how to pull off a seemingly impossible accomplishment: it's a magic trick.

Getting into the Harvard MBA program might embody a magic trick for most people, but magic tricks encompass anything that appears to be impossible on the surface. Retiring at the age of 30, traveling full time while working remotely, being a C-level executive at a Fortune 500 company, or knowing people of repute. All of these accomplishments work to confound explanation and increase the perceived importance of the speaker. After all, only 1 in a million spend our evenings rubbing shoulders with A-list celebrities and our days on the cover of a business magazine. It's unique, it's interesting, and it defies simple explanation.

But it's a mistake to write off such accomplishments as impossible. It's an even bigger mistake to write them off as unimportant or shallow.

I've learned the hard way that when you are an entrepreneur, it is extremely important to quickly impress people you meet. When all you have is a one-month-old company and a smile, people write you off unless you can quickly portray success. Maybe you didn't go to Harvard or MIT, but the more magic tricks you have under your belt, the more investors, customers, and peers will assume you can accomplish your next audacious goal. This is the first step in actually living your life like you want.

Which bring me to choosing magic tricks. I've used common examples above, but your achievements will be most impressive if they are your own. Maybe you want to start a nonprofit mentoring program and positively impact 1,000,000 kids. Maybe you want to make the next greatest search engine. Maybe you want to replace Netflix and bring the world a decent selection of on-demand movies. You need to define what you want to achieve, and then do it. The coolest thing about magic tricks is that they are cumulative: the more you've already done, the more people will believe you can accomplish the next one.

After all, if you've already started the first commercial space program or played basketball with president Obama, or even been accepted to YCombinator on stage, then you can probably do whatever you want.

It's Sad to See Your Startup Turn into a Business

This post was originally published on 2/1/2013.

When I founded Skritter in 2008 with Nick and Scott, we called it a startup. We raised three rounds of funding, hired developers to help scale our team, and attended startup summits, venture capital panels, and meetups filled with aspiring entrepreneurs working on the next big thing. As with all young startups seeking capital, our business plan growth model had us making 30M in profit in 3-5 years as we took the language learning world by storm.

Four and a half years later, Skritter has become a viable, successful, growing company. We have three employees in addition to the founding team, and have provided employment for twice that many along the way. We've proven that our business model generates profit, that it adds value to customer's lives, and that we can achieve product-market fit.

But somewhere along the line, Skritter stopped being a startup and became a business. And while I am deeply proud of our achievements, the change makes me sad.

When you run a startup, you dream big, you think in terms of conquering entire new markets, challenging entrenched competitors, and changing the world in a big way. You work hard, play harder, and forge lifelong relationships with your co-founders.

Businesses, by comparison, are more modest and mundane. Businesses tend to know whom their customers are, they have a good sense of what makes money and what doesn't, and they don't make a habit of re-investing every penny to try and shoot the moon with a new product. Businesses are like middle aged fathers who just want things to run smoothly without too much fuss. Startups are their star-struck sons spouting poetry to their lovers in moonlit gardens.

Startups are just more exciting, vibrant, and entertaining.

But they also have this frustrating tendency to fizzle out, fail, or explode catastrophically. Founders lose their shirts, relationships are ruined, investors are burned, and once stable, gainfully employed founders end up in their parent's basements applying for jobs to cover their credit card debt.

I'm proud of what Nick, Scott, and I have built at Skritter. I'm proud we achieved the dream of building a profitable company. But if you've ever been there for the startup part, the irrational giddiness you get from building something new, you'll know instinctively what I mean when I say it's sad to see your startup turn into a business.