Mad Men Made Mad by Marketing New Normal

On my last trip to San Francisco I happen to catch 10 minutes of Carlie Rose.  Jeff Bezos was being interviewed and there was something he said that I though was particularly significant:

Before if you were making a product, the right business strategy was to put 70% of your attention, energy, and dollars into shouting about a product, and 30% into making a great product. So you could win with a mediocre product, if you were a good enough marketer. That is getting harder to do. The balance of power is shifting toward consumers and away from companies…the individual is empowered… The right way to respond to this if you are a company is to put the vast majority of your energy, attention and dollars into building a great product or service and put a smaller amount into shouting about it, marketing it. If I build a great product or service, my customers will tell each other.

This resonated with inarticulated thoughts then, and it continues to do so.  The implications are huge: costs of getting to market are lower for products that your customers care about; companies should reduce friction in their products, and then reduce it more; social networks are not just valid but the “new normal” in marketing.

Laser Focus

Many VC blogs deal with fund raising and pivoting, but few cover just as important an area: managing a team in a high growth environment, ensuring that everyone knows what the firm stands for and what is expected of them.  It is easier in low growth companies as the challenges are often less dynamic.  High growth, however, needs constant reevaluation of needs, resources and priorities.

I have just returned from the offsite of one of my portfolio companies.  We came away with three simple things: a mission statement, long-term goals, and a set of  tasks for the the next three months and six months.  That does not sound hard, but it took us a day of meetings over two days to hash this out – we all knew it in general, but the meetings allowed us to clearly articulate it to ourselves and others as needed.  No confusion going forward.  At the end, every member of the team felt empowered, and knew exactly what they needed to achieve and what part they could play in the company’s success.  The CEO was able to communicate a laser focus on what the company wants to achieve and achieved buy-in from the entire organization.  Sounds simple enough, but in practice it is rare to see put in action.

For instance, how many start ups have a clearly defined mission statement?  Few, I suspect.  How many of those then articulate the necessary but sufficient goals that have to be met to enable the company to meet its mission?  Fewer.  And, how many of those then sit down and make sure that all the work is directed at tasks and milestones over the next six months to achieve those goals.  Big companies attempt this from time to time, but for startups it is critical as every resource is precious, missteps are costly and  the faster you run the more important this is.

We left the offsite with concrete tasks that we all knew would lead to meeting the company’s goals and be consistent with its mission statement.  Now comes the hard work: execution.

Management can’t simply leave it there.  They need to give everyone in the firm simple metrics to follow and targets related to those metrics that if met will achieve the goals.  Anyone on the team then knows how to measure their work as it relates to the company’s needs.  Again, laser focus.  How do you achieve this?  You make sure that everyone has access to these metrics, everyone has access to everyone else’s metrics and everyone helps everyone else on the team.  It is all about culture and team spirit and when it works amazing things can be done.

I left the offsite with the view that not only the CEO but every employee had a very clear understanding of what was immediately ahead of them and, with that, their chances of success are significantly enhanced.