|Musings from Jay Weintraub, Customer Acquisition Strategist. Currently, Founder of Grow.co. Previously Founder of LeadsCon.
Technology companies have by their definition been about technology. So, who better to start and build such a company than a technologist? Prior to the internet, though, most pure technology companies had, if not a business/sales founder, a business/sales executive as part of the core team. Why? Because no one would see or use the technology if they didn't. It would still be in the garage where it was first built.
The internet changed the paradigm. Take Google. It too could not exist were it not for stellar technology, but it did not have or need as part of the very early team a face to the business that evangelized and sold Google to the outside world. As the shift to mobile and social really took steam, the recipe for startup success in digital was forever changed. It was all API versus ANI (a bad telephony reference).
Sales people in classic tech companies were never seen quite on the same level as tech, but the new paradigm turned sales people into second class citizens in some firms, a different species at others. There are early Google sales executives worth eight and nine figures, but they were only laughing after going to the bank.
In this paradigm shift was lost a universal truth. Every company needs sales. It's a matter of when, not if. Many companies will fail because they assumed they wouldn't or their "when" was too late.
A handful of businesses can scale without sales. And that number is far higher than ever before. But that doesn't mean they don't need sales, and unfortunately, that some companies can get to scale without sales has caused certain people to assume they won't need sales.
If there is one thing I have learned, in more companies than some tech-minded folks will think, sales beats good technology every day. Like ideas, the best product does not always win. In fact rarely is there a product where a better version doesn't exist. The moat in these cases is based on people - either people who sold that product, or people who use that product. People make the difference.
I remember talking to a company that wanted to get into lead gen. They thought they could buy traffic better and cheaper. They also thought they could optimize how they worked, all because of technology. Six months later, we caught up. They had better tech, but they weren't winning. They couldn't understand how another company was beating them. The answer was sales. The other company made $40/lead where they made $20/lead. Optimize all you want, but even an impressive 20% improvement won't make up for a 2x difference in the starting point.
Time and again, I have seen this scenario. A company I met with recently has a rather average product. Yet, they are the market leader. It is painful how underwhelming their product is compared to what is available. Why are they ahead? Sales.
Sales is not saying one can have or should have a bad product. But, as we know, good sales can certainly sell a bad product. A bad product won't make for a sustainable business, and in the above scenarios, neither are a bad product. They are just far from the best.
If you are a tech company, go ahead and build an equally impressive sales team. You will need it. If you are selling technology or are a tech company but not a Facebook, then you already know that you need the best sales around... or you wish you had known.
(Originally published on November 6, 2014)
Google. Apple. Facebook. Yahoo. Twitter. AOL. Amazon. The list of big companies that choose to buy their way into a product or market rather than build it themselves. And these are just tech companies. What about Berkshire Hathaway? Merck? GE?
The tech industry is a fun one to ponder because here are companies with arguably some of the smartest people working for them and with at times limitless resources. So why then would they want to buy when they can certainly build for less? Not only can they build for less, but many, like Facebook or Google, have the built in network effects to instantly scale what they've built. Just look at Facebook Messenger.
Build versus buy is a question that still has me shaking my head at wonder, and while I have partially lived it, yesterday, I had the chance to talk to two entrepreneurs who used to be intrapreneurs. They shared their personal experiences of what it is like trying to build internally and why they left.
The two entrepreneurs are not from the tech industry but the events industry. It is an industry that I have grown to love, even though in our tech centric world, saying you create events causes those high on the tech juice to look at you with a mix of sympathy and bewilderment, as though they are trying not to say out loud, "Oh you poor thing. Could you not get into a tech company?"
Assuming for a moment that some of those outside of tech have valid insights on business, I thought I would share what for me are two really interesting reasons why companies buy. They are reasons that until recently I didn't have enough insight or exposure to understand, and these intra-turned-entre-preneurs represent one of each.
There Is No "I" in Bureaucracy but there is "Money"
Big company bureaucracy is a pretty obvious reason why entrepreneurs leave. But the "bureaucracy" is often not just a function of size. It's usually about money and increasing or at least protecting their valuation. We're not talking about the valuations based off non-financial metrics like users or market potential but those based off revenue and earnings… something large event companies do very well.
So, we'll use an example from the events world. New events are like any business. They require investment, and very rarely do they make money on the first go round. Compounding things, rarely will you know from the gate whether something is worth doing again. Assume then that a large events company wants to launch a new brand, and for simplicity's sake every test will cost them $100,000. If they allow ten tests (which could be five shows for two years or 10 for one year), that is $1.0 mm in costs. If they are valued at 10x earnings, that $1.0mm off their bottom line, represents $10mm off their valuation.
Yet, if they purchase even a marginally profitable company for $10mm, even though they have technically spent $10mm, their valuation doesn't just stay the same, it can increase. And, given that their business is one of real revenues, it means they most likely have access to debt at attractive rates so that they can spend this money against future earnings (from the acquired company) rather than using their own cash.
It may sound simplistic, perhaps selfish, but if someone makes a company a lot of money, at some point in their career, they will start to weigh the value they feel they have created against the value they have received in return.
This is such a slippery slope, full of ego, entitlement, and exaggeration. But, for every number of those who do add value but are clearly smoking something with respect to what they feel they deserve, there are those who are truly capable of creating shareholder value from scratch in a new entity with them being a much larger shareholder.
Shareholder value is of course revenue but equity, and if someone is special and able to create both, then a company is truly lucky. But, that existing company structure almost always is the downfall, as it is virtually impossible to manage the company's valuation and pay the person in some direct fashion (without then hurting the valuation). The same way that food at a restaurant has baked into not just the food costs but all other overhead, a company at scale has to use the value created to distribute across the whole company even if one person plays an outsized role.
If you are not first, you aren't exactly last, but you aren't ever going to get a straight percentage upside. Each incremental dollar created means less directly to you. It's slightly perverse, but it's the reward a company gets and you get, but only if it is your company.
My thanks to these two business builders for sharing.
What made the last hour of the U.S. Open so special was not who won, although the statistics of Jordan Spieth’s victory may never be matched in our lifetime (youngest to win the U.S. Open since the legendary Bobby Jones in 1923, the youngest to win two majors since Gene Sarazen in 1922, the only player since Tiger to win four pro tournaments since 1940, and the youngest ever to win the first two majors in a row). What made that last hour so special were the multiple, intersecting story lines of players that all had something unique to contribute, but none of them individually had the star power of a Tiger during his prime to dominate or distract from the narrative.
In that final hour three names really stood out — Dustin Johnson (“D.J.”), Jordan Spieth, and Louis Oosthuizen. The most remarkable golf actually belonged to Oosthuizen, whose round was so epic it is almost hard to describe and harder to appreciate if a non-golfer. This is a guy who when teeing up on his final nine holes was nine shots off the lead. He did what golfers only dream of, let alone on a course that was not only difficult but among the most maddening and publicly bemoaned by players ever.
To put Oosthuizen’s round into perspective, we start with the “birdie,” which is when a player completes a hole taking one stroke fewer than the goal, i.e., “par.” There are golfers who go their entire life without a birdie. And really good golfers (non-pros) are happy to get one or two a round. Sometimes pros only make one or two a round. Oosthuizen made six in his last seven holes including a stretch of five in a row, on this course of all courses (see bemoaning above), on his final nine holes of the final day of one of golf’s biggest tournaments, including one on the last hole, which, as was the case all day for him, he had to earn — no super long hitting setting up a seemingly guaranteed birdies the way Tiger, Phil, Bubba, and D.J. have made viewers almost accustomed.
Being initially so far behind in score and playing ahead of the two groups with which the lead was held all day, Oosthuizen’s quiet brilliance might have gone unnoticed had it not been for that last hole. After stringing together the aforementioned five straight birdies, he was standing on the tee of 18th now only two shots off the lead, thanks to some stumbling by the leaders. By the time Oosthuizen finished the 18th, our two leaders had dropped back even further, and with that birdie 4 on the on the par 5 last hole Oosthuizen was now tied for the lead and in the enviable position of being finished. In his final nine holes, he went from nine shots back to one that needed to be beat. It’s hard to ask for more as a viewer.
D.J. and Jordan also played their parts to perfection. Entering his final nine holes D.J., enjoyed a two shot lead and was playing seemingly untouchable golf. But as we entered that final hour, we saw D.J., go from two shots up to two shots back. There were no major mistakes — a few good putts that didn’t find the bottom of hole. Yet, these minor misses arguably telegraphed the gut wrenching finish we witnessed during that final stretch.
As mentioned, D.J. didn’t do anything wrong when he bogeyed three out of four holes early into his final nine holes. The ball just didn’t go in the hole. That happens a lot in golf. Three makable puts. Three near misses.
Nothing in golf is crueler than traveling hundreds of yards in two strokes only to then take more than that on a surface measured in feet. And, nothing is crueler on the green than short putts. The putting stroke shares only inches in common with the swing used with one’s thirteen other clubs. And the tiniest of undesired and unintended movements during the stroke means the difference between the sound of relief and the groans of anguish from ball passing just by but not falling into the cup. The sounds of anguish are almost guaranteed given the putting stroke’s reliance on muscles prone to high degrees of variability in a no stress environment. Imagine these same muscles in an environment where emotions are running so high one can hardly think, let alone think straight.
Alas the greens are the least interesting to watch as a spectator and make for rarely enjoyable highlights without the context of the shots that preceded them. But, what happens on the green has an outsized impact on everything that happens next. A missed put is not simply an additional stroke on the score card. Missed putts have a bat phone to the brain’s confidence center and just one missed putt is often the catalyst for not just future missed putts but all sorts of distracted thinking and frustration laced swings known to wreak havoc to players novice and elite.
All of which sets the stage for D.J. and the 18th. After three misses that for mortals would qualify as impossibly infuriating and confidence questioning, D.J. makes a tremendous birdie on the very difficult 17th hold. This means he enters the 18th tied for the lead. Up on the tee he has no way to know that Jordan Spieth is on the green putting for eagle (the term used to describe a potential score two shots under par). Despite the stress and pressure, D.J. hits a fantastic tee shot. By the time he arrives at his ball, though, he has gone from tied to one shot behind Jordan who two putted for a birdie and the outright lead.
In a superhuman display of talent under pressure, D.J. knocks his second shot on the green, leaving himself an even shorter putt for eagle (the 18th is a par 5) than Jordan had. All of the sudden, D.J. has gone from two shots up to two shots back to tied to one shot back to having a real chance to win the tournament. The collective minds of those watching flash back to other last hole victories, of the ball dropping, and mass celebration erupting as a result of golfer’s dreams everywhere realized. We picture the usually stoic D.J. showing us his version of the fist pump, hat toss, or spread eagle jump. In the back of our minds, we have already prepared ourselves for 18 hole playoff that would happen if he simply two putts for birdie.
In all of our imagining of D.J.’s final put or putts, nowhere did we picture seeing a slippery first putt run five feet by, leaving a slightly uphill curving devil in not just length but putting surface condition. All of the sudden the inevitable tie becomes slightly less inevitable. And as D.J. sets up, is it our imagination or his routine a touch rushed? Memories of holes not long past enter our minds, perhaps even probably his. And before we are prepared, the tying putt slides by. It is over. Jordan Spieth has won. D.J. finishes one behind in a tie for second but leaving a stunned crowd and shocked fans worldwide. No winning putt. No tying putt. Just a three putt from a length just over twice his own height in front of millions, readily available not just in mental replay but digital. All of that work, decades of preparation, his for the taking. Gone in mere seconds. Never to be just like that again.
The player who is probably more upset than any is Patrick Reed. He was tied for the lead at the start of this final four holes of greatness. A very wayward tee shot on 15 had him entering 16 two shots off the lead. Near misses on the putting green meant he stayed their and was not a factor in the final hour’s drama. While so close — he was literally tied for the lead on the final four holes of the final day on one of golf’s greatest stages — no one but him will most likely remember just how close he came. And because no one was considering him as a contender, no one was really talking about him when he dropped behind in that last leg.
For D.J. this is the second near miss in a U.S. Open due to what can perhaps best be described as brain farts. But he has shown he can get there and has the game to win a major. The far harder scenario is when one may never get that close again. In cases like this a pressure laden brain fart could fester and hinder what talent suggests will be a successful tenure on tour. That is far more insidious than knowing you have what it takes but not converting when having the opportunity.
The problem here is that everyone three putts. In fact every single pro three putted at least once on this crazy course. Only one person though three putted on the last hole of the last day where a one-putt meant victory and a two-putt meant a tie for first. That is what makes this situation and golf so unique. It is not a lack of skill that caused this to happen. It is something else, something 100% situational.
While pro golfers putt in competition roughly 130 times per tournament, they have a first putt on the last hole only four times per tournament. And even though there are some forty plus tournaments yearly, the U.S. Open happens only once per year. That means any player has only one chance to put on the last hole of the last day. And the odds of playing in the last group and having that final putt be a chance to win (and tie with a two putt) will come around zero times for the vast majority of professional golfers. That is why Patrick Reed could justifiably feel the most let down, because the odds of being tied for the lead on the last day with four holes to play is not that much greater.
As for D.J., what makes his particular three putt so challenging to overcome is that he did not get beat by another player. Compare this to the other player to come in second, Oosthuizen. His second place will feel far sweeter because he wasn’t even supposed to be in contention. You could argue that he was outplayed, but regardless, when it comes to D.J. he beat himself, which like the existence of short putts, is another unique cruelty to golf.
What happens next will be an amazing study in fortitude, will, and leadership. D.J. appears to be the type of player who will shrug this off and win again. He is such a talent and, my guess, wired mentally in a way where he both won’t dwell and won’t become a trivia fact. His is a devastating loss and no doubt the butt of jokes for a long time, but at least by being able to contend again, he won’t have the weight on his shoulders the way a series ended error in a Game 7 of a World Series does.
I hope that we will have the opportunity to hear how D.J. speaks to himself. Does he reinforce how great he played, how amazing the experience was? Does he genuinely feel as though another chance will exist, or does he punish himself for a mistake he would never normally make? Does he replay the scene countless times, becoming increasingly tense and angry? He may do all, but his ability to focus on how well his training paid off to get him there, on the great birdie on 17, the absolute clutch shots that put him in the drivers seat on 18, those are the things that will dictate how he plays ongoing.
Like a well funded startup, D.J. has to play in the future as though it will all work out, as though he has not just the talent but plenty of time to achieve the goal. And he truly has to believe it will happen, that this was but a blip. Even if he doesn’t win a Major, he has to believe he will and then train like he will. He has to continue to put himself in position, and to use this experience to create an even more unflappable routine he can employ when in future pressure-filled situations. He has to know that he can use this become dominant. He has to view all of this not as a confidence breaker but a confidence builder — let it provide him clarity on where to focus, where to improve. His job as a golfer is not just the physical game but once again always believe he will improve and that he is not any one single putt or set of scores. That’s all of our jobs though. And, if someone can overcome this on one of the most public of stages, we should know we can do it too.
This post originally appeared on LinkedIn.
If you have written
posts a single post on LinkedIn's publishing platform, you too received a personalized looking but ultimately impersonal email from one of the editors on March 16th, the start of the most recent TED.
The email begins,
We love that you’re publishing here and wanted to suggest another idea for a post. TED, that annual confab of big ideas, begins soon. Would you consider writing a post timed to the event? We know readers will be paying attention to the news around TED.
At first, I thought I had been contacted because I actually know a thing or two about tech and events. In fact, one of the “questions” in the outreach email was, “Are conferences like TED still useful? How do you personally make the most of them?”
Alas, far from a personal invitation and attempt to help inspire those who write, the no-reply from email and ending which reads, “Note: We are sending you these story ideas because you’ve published at least once on LinkedIn. If you would no longer like to receive emails like this, please click the unsubscribe link at the bottom of this email.” Sadly, I guess the editor's enthusiastic mention of looking forward to reading what I write may not be the case.
The real reason I was disappointed in the arguably disingenuous content bait email is that I thought someone other than me actually cared about my response to “If you were to take the stage and give your own TED talk, what would you focus on? What’s your idea worth spreading? Feel free to think big, but also be specific (and use examples!).”
For quite some time now, I have been trying to create that pithy yet still true way of articulating the interplay between “what” and “who.”
My "what" was a particular performance marketing skillset. That is what I learned while at Advertising.com, and it was that skillset that made me valuable to Oversee.net whom I joined as one of its first employees. That knowhow played a key role in my writing and ultimately in being able to found LeadsCon.
I knew "who" mattered, but my aha moment came the third year of LeadsCon, when someone asked, “Why should we attend. It’s not as though you know more than we do now.” The thing is. They were right. What I knew about lead gen was no longer a competitive advantage. It began to be who I knew and what I knew as a result of those interactions that was the value-add to others.
All of which brings us to an article in Fortune on angel investor extraordinaire Chris Sacca, who went from out of job to billionaire in less than a decade. How? It’s the perhaps ultimate story of what getting you in the door but whomaking ultimate the difference.
Chris Sacca trained to be a lawyer, and that knowledge of the law got him hired at Google in 2003. He made a few million at Google through his being an early employee and the company's stock market success. For us mortals, a few million qualifies as rich, but compared to billions, perhaps not.
So where did the billions come from? Because of who, namely who also worked at Google during that same time, one of them being Evan Williams, a Twitter Co-Founder. That relationship paved the way to Chris being an investor before anyone knew about Twitter.
Think Chris' ability to invest had anything to do with his knowledge of the law? And was it the legal know how that landed him the chance to help Evan Williams sell $400,000,000 worth of pre-IPO stock?
What about being an early investor in Instagram or Uber? Or being offered the chance to invest before almost anyone else from what have become some of the most talked about companies, including Meerkat?
Perhaps he saved money on legal fees with his knowledge of the law, but his continued success has nothing to do with what got him hired in the first place.
And, I guarantee that all the other billionaires in his circle, if we read their story, we will find instances of who making a much bigger impact than anything they knew.