Dropbox, Klaviyo, Lightspeed Commerce: 10 Things that Change in Marketing as you Scale with Light…

To die hard fans that I know that will love my product. I don't need to sell them too much. All I need to do is get my word out to them. And that's your uncontested market space at that point. Right. But as you start to grow, what happens is then you need, you start reaching the limits of what that ICP represents. So you might have started with a very niche place and then you start to think, oh, wait, this, this adjacent audience is also likely going to be interested, but they might not fully understand the value of my product, or they might, the product might not be fully relevant to what they're thinking about. So I call this the ICP Plus. So these people are the ones that need to be educated on what the platform can give them. They're not, they're not thinking about you and making the connection between, wait, this feature means this benefit. They're not making that direct connection. You have to make that connection. But as you become a multi product company, a multi, call it a multi services type of a company, you expand into different product areas, you expand into different revenue streams. You will tap that market out. And so the next one is thinking about what are the, what I would call the late majority customers. So if you think about ICP and icp, they're still your early adopter, late adopters, right in the crossing the chasm type of a curve. And then you hit the point of late majority where these are people who are generally very adverse to switching. They don't want to take the risk of switching. They have way too many switching costs. They're comfortable where they are. They don't have a sense of FOMO about it. They're fine. And this is where you need to really think about how do I create this sense of urgency, how, how do I create the sense of fomo, how do I create the hook and how do I even get in front of them and really sell them the, the value of this? And in some cases you're just nurturing them to a point where it's like, then they realize, oh shit, I, you know, something has changed and now I have to switch. Right. So the first focus area for marketing, in my opinion, in my experience, has always been this early and late adopters because you can really get a lot of value, you can get a lot of momentum out of this. And then once you reach momentum and you hit a certain tipping point in terms of market share, then it starts to go into, it starts to create a machine of its own, a viral machine. So if you Start with that idea that you are really tied at the hip with how you're thinking about the product maturity curve and your customer base. Then the, the second aspect of it becomes okay. When you start to scale up, it's not as simple as thinking, only thinking about how you think about audiences, right? In the previous pro tip I talked, there was only one vector of complexity, which was the audiences, which is this one, the audiences. The product becomes more relevant, the audiences increase. How do you create the growth? But the reality, to be honest, is that lots of things change as we grow. And there are multiple levers of growth, vectors of growth. You could go after different audiences, you could have different. Either you buy different products or you create them, or you even integrate with certain ecosystem partners to expand your footprint. You go into different industries, all of these things and then the Personas is important. Especially if you're an enterprise software, you have likely seen this already. There is no single Persona in your buying journey. If it's, if you're a, if you're a self serve company, it's one thing because it's. Or sorry, if you're a self serve company that's appealing to SMBs, it's one thing because you generally have the budget owner who is also the decision maker. So it's easy. But when you go into enterprise, you have a budget owner, you have an influencer, you have a decision maker, you have a, you know, potentially a finance person who needs to sign off. So you have multiple Personas. And all of a sudden now you're confronted with what does my marketing strategy need to look like for this kind of an enterprise audience, who has this kind of a, who's, who's in this sort of a risk stage, who's looking at this vertical, et cetera, et cetera. And then the last vector of, of growth that creates complexity is the go to market. How you create a go to market motion can make or break your growth cycle. If you get into a self serve motion too early, but you're an enterprise focused company, that match doesn't happen. If you are an enterprise focused software, but you're trying to do everything through field motion, for instance, that motion doesn't work. So you gotta, you, you suddenly start to think about what is my go to market motion here, where do I invest? And that creates complexity as well. And so the biggest problem that I see is, you know, in the quest for taking quick decisions and moving fast, which is the DNA of all good startups, people tend to simplify, oversimplify this complexity and what I would suggest instead is asking these five questions. Instead of oversimplifying or looking at these five and saying I'm just going to pick one of these and optimize the hell out of this. Think about these five questions. What is the big insight that drives urgency? If I'm a software that's appealing to a financial controller in a big enterprise, what's the one big thing that is driving urgency on their part? What is the problem statement that you are trying to be known to solve? What is basically the job to be done? Second thing I would love for everyone to think about is what is the new category you want to dominate? Why do customers care? Is it an existing category? Is it a subcategory? Is it something completely new that we haven't defined for the market yet that we want to go and create? So being very deliberate about new category becomes important. And then the third one is the this, I cannot understate how important this third question is. Which is where do I play versus not play? What are the, you know, the things that I will absolutely not do? I will not do self serve because it is not relevant to me or I won't build a whole field motion or sorry, outbound motion because I, I am going to be a self serve focused business. Where do I not want to play? And then how do I want to win? It could be that I want to win primarily through a partner ecosystem, a really robust ecosystem of integrations. That could be your clear how to win or in. In, you know, some of these companies who have gone to amazing successes have said, I'm just going to focus on inbound marketing as my big lever. So how do you want to win? And then what are the current growth levers that can scale? This is another super important thing there. Every growth lever is going to hit a point of diminishing returns, right? And in the beginning you can get growth but not profitability. And it looks very attractive. But what are the things that can continue to scale? So don't oversimplify complexity. Think about these five questions and then once you really put some effort behind these, the answer starts to get clearer about which of these levers of complexity you want to try to optimize for. So the next one is like kind of leading into, you know, one of those bubbles that you saw in the previous slide. I'm calling it know your motion. But I what people don't, you know, fully, fully realize is there are multiple ways to go to market, right? So PLG is a very well known thing. Bottoms up, self Serve Product led growth. And for those who are not familiar with this, this is basically the idea that your product is so intuitive and so user friendly that people sign in, they self serve their way into signing up for a premium experience and or they, they continue to sign up to add ons and features and they basically use the product on their minimal human intervention. And of course, I mean if you look at some of the biggest successes in the world in SAS like a Slack and Dropbox and Klaviyo, most of them made it so easy for customers to get onto the platform and use the platform that it became truly self serve. So we call it product led growth. Product led growth also has a bunch of different other elements such as how do you. The, the all the experimentation that goes on behind how do you create that experience? Growth hacking, all kinds of different things. So the, the, the thing that is important here to know is this requires a real, real focus on product and analytics and growth minded either marketers or product focused people who can take this, have a vision and make it happen. Then there's on the other side of the spectrum you have sales led growth which is basically the idea that you are having a bunch of touch points. Human touch points. Right. And I think that's also fairly obvious. Now the, the interesting part is that you can create hybrid motions, the PLG and SLG motion. One example we had at Dropbox was this thing called self serve sales assist which was basically people would self serve but their needs were a bit more complex. So at that point we would offer them a way to chat with a human and, or get in touch with a human, request a demo and then that human would convert the sale. All of this is saying at different parts in your company's life cycle, different motions become relevant. And so the most important thing is to make sure that you are really focused on understanding what is relevant to your audience. At what point and where do you think you can scale and focusing on that, I won't touch on this, I think we can skip because I've kind of walked through this. But the knowledge of how you can play around with each of these is going to be important as well. But also keep in mind too some of these are much larger investments, particularly on the let's say the sales led go to market motion. You're talking about hiring people, you know, commission planning, all the kind of stuff. So there's a cost to each of these. And the important thing is to recognize where do you want to scale? Sorry, where do you want to grow? What do you want to be known for where is the growth going to come from and how much is it going to cost and is that balance going to work? The, the next one is so this, it's, it's an interesting one because last a couple of weeks ago I spoke to, you know, a couple the founders, brilliant founders, amazing business and they're, but they're sub $500,000 in, in ARR and they said we want to start building out the brand right away. What do we need to do? Should we invest more in brand? So my answer to that was no. And here's why I think about brand building in two elements. One is there is a top down brand building approach which is basically you're saying I don't care what the market. Sorry, I don't, I don't really want to know. I don't really want to segment the market. I just want to go and raise broad awareness in a specific area. So let's call it a geographic San Francisco Bay Area. I'm going to go increase the awareness in that San Francisco Bay Area. And I know based on some historicals or whatever, there's only a small percentage of people who will actually come, you know, through the funnel and become my closed ones. But I am okay with that because what I want to do is lift the baseline aided and unaided recall in that market very quickly and you know, with, with a bunch of investment. This works for some people. Again it works for companies who are looking to establish themselves in a market very quickly and very, with a, with maximum impact and who also want a halo effect coming out of that kind of investment in a market. Right. Because once you get a spike, you are, you have a halo that sort of keeps going on for a little bit. Where it doesn't work is companies that are scrappy, small, small marketing budgets and who are looking to establish a foothold in a very niche area to begin with. And these are, this is where the bottom up approach to building a brand comes in. Which is basically saying I'm going to go figure out who's my audience. This set of, let's call it accounting professionals. I don't know why I'm calling thinking about accounting today, but let's say accounting professionals that I really just want to go and increase my awareness in. So I go to trade shows, I go to, you know, associations and whatnot, get in front of them. It's a very targeted approach to building a brand that requires more, more investment in understanding the icp, more in really selling the, the value proposition of the product and also it, it means that you get much more deliberate about your product. So my, the advice I gave to, you know, my founders there was focus on thing like designing the brand in the way you want it. Think about the brand identity, the visual identity, the verbal identity, the aesthetic and how you want to come off. But when it comes to building the brand, then take the approach of doing it market by market, audience by audience, versus the top down. Because that is the most sustainable way to build the brand. So as you go through this journey, keep in mind there's the top down and the bottom up. And super important, know which life cycle you're in. Okay. The other consideration here is we are seeing a lot more M and A right now and we probably will continue to see this. And for companies that are thinking about how to acquire and integrate, there is a, in my opinion the, there is a most, the most optimal way to go from being a house of brands, which is basically saying I've acquired this, this and I'm this. Going from a house of brands to a branded house, which is one specific umbrella is this idea of endorsed brand and then converting that to a sub brand and then finally, you know, talking about a branded house. I know we're running short on time, so I'm going to skip this and I'll have more of what this means from a positioning and category creation on my LinkedIn at some point. So, you know, if you, if you're interested, follow me there. The next one is one. You know, one of the growth tips that is frequently under leveraged in my opinion is the ecosystem. The idea of an ecosystem is you have the right partnerships and you have the right set of people who are creating new value for you and for your customers. But it's, it's the, the, the experience I've had is if you don't do this right, it becomes a runaway train. You have a bunch of part, those who are talking about you in potentially the wrong ways. You're starting to become price competitive and that's never a good place to be. And so what I have here is a quick framework, super simple framework to think about. How do you maximize the idea of building an ecosystem? Obviously, you know, like you have to reach new audiences in terms of partnerships. For me, the, it's a very clear distinction between do you go acquire new partners or do you enable the ones that you have. And you know, there's some, some elements of how you create the right connections, have the right stories, have the right branding, have the right communications to do all that stuff. So I'm going to skip through this and get to a little bit more of the soft skill part of how marketing evolves as you think about a company. If you are a marketing leader, then you, you know that your job is actually not just in marketing. You're actually trying to bring a lot of different people in the company together, right? So you are. People have used the idea of a quarterback, people have used the idea of this, this connector. And so that, that's the fairly obvious part about this. But I think what's important is how do you do it becomes important. It's not just the force of your personality that needs to bring these groups together. It's what I call red threads. What is a red thread? A red thread is the set of unifying principles, attributes or whatever you want to call it that gets teams aligned behind the work that you're doing, behind the messaging. So it could be that a couple of your red threads are we are a business that serves complexity. We are a business that serves, that is a market leader in X. So create the red threads that resonate across all these departments and use that to drive the agenda forward for the company in terms of what you want to be known for. Because what you want to be known for is not just a marketing objective, it's a company objective. Product has to show up in the right way, finance has to show up in the right way. Sales has to say the things that you believe the company stands for. Customer success has to have the same voice in how you interact with people. So this idea of a red threads, which I've used in the past, becomes very important to get people aligned. This one is a bit more tactical. You know, every single company that I have been at the, the first job I've had to do is, has been to figure out how to reduce the marketing budget and increase efficiency. There's a lot of detail behind this in terms of the ongoing experimentation that you need in my opinion. Some of our partners like Google and Meta have been, are really good partners in terms of helping understand the ways to create more optimization, et cetera, et cetera. But I just want to focus on three things that I've seen over and over that don't generally happen within companies and these are things that we can control. One is, with all of the latest generative AI stuff, there is so much we can do with AI to drive, to drive optimization, campaign optimization. So please leverage this as much as possible. Lean on your partners, especially if you're spending money with Google and meta. And LinkedIn because there's a ton of things that we can, that can be done here. The second thing that I've seen that doesn't happen, which is very surprising is if you're a sales led organization, these handoff meetings, handoffs need to happen very crisply, cleanly and regularly between sales and marketing. And generally, you know, the, this is like a once in a month people get together and talk about the pipeline. But no, actually you know what the daily or even twice a day type of a cadence works wonders when you're, when you're trying to cut costs and become more efficient. And then constant creative testing. The number of times I've seen content and design not working well with the performance growth team is unbelievable. So, you know, this always needs to be top of mind for any marketing leader who's coming in fresh. This is the, probably one of the most important kind of, you know, slides in this, in this presentation is marketing has to continuously evolve how we position the company and the product. This is a framework that I, this is not mine. I adopted it a while ago. The idea is that there are only three types of companies in the world. There's product focused companies, customer focused companies, and what is called concept focused companies. So if you think about customer. The example that frequently people give is Intuit. Intuit is a very customer focused company in that they really, we look at audiences and design for audiences. A concept company is like a Tesla or an Apple where the founder has a vision and an idea and a concept and it gets built and then there's a whole bunch of product focused companies. So you, you go through the assessment in the diagnostic of what kind of company are you? And based on that we start to create the positioning around what, what do we want to be, what do we want to be known for? Right. My company is in this kind of a cat. Sorry, this, my company is this type of a company. I'm a product focused company. We are in this category which we, where we provide this kind of a solution to these kind of people and these are the benefits we offer and they care about it because of this reason. The, you know, the cultural context. I would actually also add this idea that when we talk about the value proposition we also need to always think about the, the reasons to believe. So we always want to be saying this is why you should believe in me. You know, I, I've shown 30% growth in, in, in efficiency for your competitors. So this is why I can do it for you. Always keeping an eye on these five things and Making sure your positioning is always updated is a very good idea because as if the company is innovating rapidly, the positioning needs to stay in pace with the innovation or else it goes out of whack. All right, the, the last couple of bits. One thing I, I kind of talk about quite often is as you grow the marketing team and I've seen, I've done this mistake in the past is either hiring too many generalists, people who can do a lot, or hiring too many specialists but putting them in silos where they don't kind of, you know, come together and work together. So the important takeaway here is depending on where you are in the evolution of the marketing team, think about the capabilities you want to, you want to have in the team, what kind of headcount and then the what is the unifying framework, say what kind of goals, roles and responsibilities and culture. So even going beyond, I know we are talking about marketing as the, as a, as a thing here, but even going beyond marketing, you know, what I've done with sales and other go to market groups is also exactly this, which is what is the balance of specialists and generalists? And if you bring in generalists, how do you get them to become I shaped and if you bring in specialists, how do you get them to become T shaped? Right? That's, that, that's the, the, the way to think about this. And the last one, this is actually a favorite of mine is the, this idea that are you a map maker or a market creator? A map map maker in my opinion. And there's no right or wrong by the way, both of these lead to success. But as a company, and this is not just marketing as a company, are we charting? We know what the map is. We know, you know, we have a certain amount of share, we want to increase the share. We know where we are going and we just have to go get that share. Or are we in a completely uncontested new category, new space? We don't even know how to define what we have. Customers don't know how to define a solution. And in that case, it's about becoming a market creator, right? If, if anyone is a gamer here, if you remember back to the Zynga days, they created a market, right? But if you contrast that with Electronic Arts, where I worked, we had a very clear path to market leadership and, and we followed it. So there's no right or wrong. It really depends on where you're in the stage of your company growth. So, so are you a map maker or a market creator? And becoming extremely clear, particularly with your founders and the executive team at a company with a board on what's your Persona and what are the moves you want to make. And that's basically brings me to the final which is when you think about when you are going in front of a customer, keep in mind that there are basically only two things, right? There's people who are aware of a problem and they're motivated to solve it, which is your ready access. And then there are the people who are aware of your brand or your product, which is the informed access. Your ready and informed bucket is generally what shows up in your funnel. But then you have the opportunity here of are you going after the people who who know your problem, who know their problem and are motivated to solve it, but don't know your product, which is all about branding, or are you going after the people who know your product but don't know that you can solve it, which is all about positioning. And that'll guide your your decision on where you want to focus your efforts as a company. And that's it. And three things to remember. Product maturity curve determines your marketing strategy. Know your brand, make sure it shows up in our touch points. Your motion go to market motion is super important. That forms the basis of your growth expansion. And with that I think I believe I'm done. I do share a lot of these tips on my LinkedIn, so if anyone's interested, please follow me and I'll try to take this and start to give more context behind each of these tips as well.

Amazing. Thank you so much, Katie. It looks like we may have time for just a few questions and we have a couple that are queued up. If you have a question, please make sure to drop it into because if we run out of time, Katty's happy to take your questions to LinkedIn like she said, so she'd love for you to connect with her there. And Cati, feel free. You can stop your screen share if you want to be able to see some of the faces of folks who are joining from all over the world. We've gotten a lot of folks throughout, so thanks everyone. And our first question is from Giovanna. Giovanna, would you like to come off mute and ask your question to Caddy?

Yes, thank you. So I'm Giovanna Payne. I'm a SaaS fractional CFO. So I work with a couple of SaaS companies. So my question is for a SaaS company that is just under 2 million in annual recruiting revenue, how do we transition from an expensive marketing led growth strategy to a more cost effective approach. I'll give you a little bit of background. So our conversions rates from leads to demo, from demo to sign up are very low, which tells me the sales team needs to show have a little bit more motivation to convert. So my model proves that my conversion rates needs to be about 45% to get that my marketing investment needs to be really high. So we capture like better quality leads. But to do that is getting too expensive. So I have to invest a lot of money to capture better leads so they have better conversion. So I see two problems here. What do I fix first, the marketing to bring me better leads or the sales to have better conversion rates? So in overall I need to reduce my marketing spend and create more efficiency. How do I do that? What would be the three steps that I need to take?

First, so hire a product marketer because it sounds like you have a positioning problem, which is why your salespeople might not actually be. Your salespeople might not be armed with the right messages and the right value propositions to convert the, the people that are coming in through your funnel. So that's super important. The second part, second thing that product marketer will do is help you really refine the audiences you're going after, which will help you spend less money but in the right places. So you're, even when you do performance marketing, you have to be very clear about, you know, what kind of keywords you're bidding on, etc. And that all comes from understanding the market and how, who is looking for what kind of solution, you know, that kind of stuff. So that's, that's one piece of it. I'd say the second piece of it is it doesn't sound like your inbound motion is working yet. Right. And I wouldn't go increase the investment you put in your inbound motion just, just to try to drive more, more revenue. What I would explore further is actually, you know, going back to the partners ecosystem or even looking at your looking at an outbound sales motion. I would explore whether those would give you better ROI in the short term. And I'm not saying you go higher, you know, 15 different reps. I'm saying, you know, get one full stack AE who can start to knock on doors and see if that makes more sense than having inbound and inbound will own. In my opinion, inbound will only work when you already have a critical mass of customers that are using your product and that you can use leverage to do more with them. So you can do more look alikes, you can start to do more of the. You can leverage that base of customers to do more. That's when inbound works. But inbound will not work if you're relatively new to the market and you have very little marketing budget and you're trying to. To attack people, attack customers. Thank you so much. Absolutely.

Hi Caddy, we have a question from Kevin. He's asking for some examples of the red threads that you've used. So maybe could you share an example from Klaviyo, from Dropbox and from Lightspeed?

Yeah, I won't be able to share anything from Lightspeed, unfortunately, but I'd say a couple of examples of red threads would be we are the fastest, we believe we are the fastest product to market in this particular category. So our product velocity is unbeatable. Right. That becomes kind of a red thread that you can rally the team behind or another idea area. Sorry. Another example of a red thread is innovation. We innovate in this particular space to be able to provide this kind of value to customers that they haven't seen before. So these are, these are keep. Think of these as the attributes you want to be known for. You want to be known for scale, you want to be known for innovation, you want to be known for freshness, you want to be known for disruptive thinking. Whatever those things are that, that you want to be known for, that becomes your basis for your red threads.

Great, thank you so much Katie. We are right at the 45 minute mark, Katty, so I think do if you need to hop, we, we can definitely wrap up here.

We can go another couple of minutes. Taylor, no problem.

Okay, that sounds great. David, you have a question. If you'd like to come off mute and Kevin, thanks you for your answer.

Katty, done. Thank you, appreciate that. And Katie, thank you so much for sharing today. I appreciate it. One of the things I wanted to just advise a little concern and maybe more thinking about is the brand component. And you mentioned that brand is not necessarily such an important investment for startup companies. I feel a little to the contrary. I just challenge people to think about it a little bit more. One of the reasons being that these days it is actually very easy to build a company, build a product. There's a lot of copying going on. The market moves very quickly. So features and things that might normally differentiate you from others become a problem. And so establishing a brand, emotionally connecting with people right when they get to your site is actually critical. And so let me break that down from. I don't think logos are that important. But what I do think is a brand advised user experience can create that emotional connection and have people want to join your little tribe and be a part of your organization and believe that you are the ones that can really help them with growth. Does that make some sense?

Yeah. 100 yeah. I think it's. You're calling out a very important distinction that I want to kind of underline if you will which is there is brand strategy is basically two things. One is your. You're creating the brand that you want to show up in the market and then there is the investing behind amplifying your brand. Right. There's. Those are the two different things. The, the first one is not really constrained by money. It's. It is constrained by people and the amount of effort you're going to put into it. You're. This is like elbow grease to some extent. You have to think through what do you want to be like. What's a founder vision, what's the company vision, the cultural context, the all customer truth, all that kind of stuff. And that I think if you can get and this was my advice I shared with the founders is if you get that right, that's stays with you throughout your. And you can build on it. Every year you build on it. You build on it especially when you increase your, your customer base, you increase your, your people, you, you sort of build on it. The second one which is investing in amplifying your brand that we, I mean it's. There is so much confusion about attribution. There's so much confusion about what can, how much you can spend. It's and it becomes such a wide spectrum. It's not always advisable for small companies who are cash constrained in the beginning to think about that not in the traditional way. You could amplify the brand by word of mouth, create meetups, do scrappy stuff but not go and pump $3 million into out of home advertising campaign.

Thank you very much.

Thank you so much for your comment. David. Last question. Katty. And you referenced this a little bit at the beginning when you were talking about kind of the challenges you faced in the past couple of years, in the past 12 months. But we all know 2023 was the year of efficiency, especially for marketers. Would love to hear kind of what's your take on 2024 and what efficiency is going to look like and how it may evolve this year.

Yeah, I think, I mean this is going to sound so cliche but it's all about AI and who gets to Unlock the power of AI to create the most efficient way. David was talking about this like you know the you can potentially use AI for literally everything, right? Content creation, design, video production, storytelling, every possible thing. I in fact met a gentleman who has a techno AI technology firm focused on product marketing and how to create insights. So every possible part of marketing is going to be disrupted with the tools we have, with the generative AI tools we are going to see. And in my opinion, it's become going to become an arms race to see who adopts it first and who uses it in the best way possible first. Who can become the best prompt engineer for ChatGPT? How can we leverage ChatGPT to write the content that you want in the voice and tone that you want? So it's just going to become efficiency as we know it will be taken to the next level and it's going to require everyone constantly learning and experimenting to keep up with it.

Amazing. Well, Caddy, thank you so much for a great presentation and for all your insights. Thanks to everyone for joining. We did get quite a few questions for the slides, so as always, slides are going to be available right after the session, probably later today on slideshare.net Saster and the recording will also be available on YouTube immediately after we wrap. So make sure that you're subscribed to both those channels to check everything out. And Katti, thanks so much for joining us. And then we are back next week for another edition of Workshop Wednesday. We're really excited that we are back with Nick Mehta, co founder and CEO of Gainsight. A couple of weeks ago we had a really amazing session with him where he and Jason were chatting about the future of CS and we got more questions than we could get to in that amount of time. So Nick's back to answer all your questions and more. So please make sure to join into that great customer success session next week. And again, Caddy, thanks so much everyone. Make sure to follow and connect with her on LinkedIn.

Thank you so much Taylor. Thanks everyone for joining in.

Thanks. See everyone next week.