Startup Blog

This morning I attended a breakfast meeting for the marketing VPs at the portfolio companies of General Catalyst (they led the HubSpot A round investment).  The major topic of discussion was what was on our minds.  The GC folks were trying to get a feeling for what speakers and panels would be good to include in a marketing event aimed at helping their portfolio companies.

The general consensus around the table was the following top topics:

• Getting more with less - What are best practices on using viral marketing and internet marketing to generate more inbound leads at a low cost?
• Getting more out of your database - How can you use lead nurturing and other practices to convert more leads into opportunities?
• Finding good vendors - How can you easily get honest reviews and pricing information on services companies for web design, PR, advertising agencies, etc.?
• Product management for web 2.0 and Saas - How do you find good people and what are the best practices for product management for software as a service and web 2.0 products?

What's on your mind?  Leave a comment below.

Seth Godin is a marketing genius, and I normally agree with him on most everything.  I am a giant Seth fanboy, and even have a photo of me with him.  So, don't interpret this as Seth-bashing.  I just think he called this issue wrong.

 

Seth Godin wrote an article called Ads are the New Online Tip Jar that basically asked blog and website readers to click on ads to support bloggers in what amounts to "Pity Clicks".

 

This is a short sighted and bad idea that actually does not help anyone.  Here is what would happen if people started to actually go with this "Pity Click" program.

 

Why Seth Godin's "Pity Clicks" are Bad Idea

1. Blogs would get a short term boost in revenue from the additional clicks.
2. Advertisers would see that these useless "pity clicks" did not buy anything or register for anything on their website, making them (the ads and clicks) pretty useless.
3. Advertisers would see their ROI drop from these ads, causing them to either cancel the ads or negotiate lower prices.
4. Bloggers would see ad revenue drop because they asked for "pity clicks" on their ads.
5. We end up back where we started.

A business (like a blog) needs to figure out how to both create value and capture value.  Many blogs create value (for their readers) but have not figured out how to capture it.  The reason why ad revenue on most websites is low is because banner ads don't work!  Marketers need to use more inbound marketing, and many people are discovering this and using fewer banner ads.

Seth Godin's idea for "Pity Clicks" might be clever, but it is not sustainable in the long term and does not make sense to me.  What do you think?

Last week I spent a bunch of time in the San Francisco Bay Area.  I spoke at Online Market World about blogging, I attended the Tech Target ROI summit, I was at the Pro Marketers marketing meetup (you can meet me tomorrow, Oct 7 in Boston), and I met individually with a bunch of folks through Twitter, Facebook and email.  [mvolpe70.gooruze.com]

During this trip, I met and spoke with over 50 marketers of all different types, some were short chats, some were longer conversations.  here are my observations on wha was on these marketers minds:

1. Learning about inbound marketing.  Many marketing experts were interested in learning about SEO, blogging, social media, landing page optimization and marketing analytics.  (If you want to learn about these topics, watch these free marketing webinars.)
2. Concerns about the economy.  None of the marketers I talked to had actually seen a slowdown in business.  The "recession" seems to just be on Wall Street, at leat for now.  but it was on everyone's mind and people were worried about the future.
3. Not much social media.  Given that I am a heavy user of Twitter, Facebook, LinkedIn and other forms of social media (StumbleUpon, YouTube, Flickr, Hi5, and more...) I really expected the tech-heavy, lead-user bay area to be teaching me a ton about social media and introducing me to new tools.  That was not the case.  I actually had more Twitter followers than everyone I met, except for one person.  The people I met with did not seem that interested in using social media as a lead generation tool.
4. Fascination with SEO.  While I did not get many questions about SEO, I got tons of questions about SEO.  I talked to lots of people about Website Grader, and gave out lots of SEO advice.  it was great to see so many people thinking about a core part of inbound marketing.

What do you think?  What is the vibe of marketing in the San Francisco Bay Area today?

I got this voicemail from a telemarketer hired by Marketing Profs.  Of course I did not answer the call because I did not recognize the number on caller ID, and I knew it was a telemarketer.

What I thought was interesting about the message was how obvious it was that he was just mailing it in and did not care about the content of the message at all.  He was trying to leave as many of these voicemails as possible and get his job done.

Someone in marketing spent a lot of time preparing that script and it is pretty well written.  But put into the hands of a $9 an hour telemarketer who has no idea what any of the words mean or what the evnt is about, it loses all passion and emotion and is just a mess of words strung together.  This voicemail makes the event sound pretty boring and unremarkable.

Do you use telemarketers?  Why?  Do you worry about the lack of emotion in their messages? 

Note: I love Marketing Profs.  Just not all the telemarketing calls and junk mail they send.

I recently wrote about how much the new Mircosoft TV ads suck.  But, now I see they have some new ads that are much better.

They are not funny, but they do counter the Mac vs. PC ads, and they do show pretty successfully that PC users are cool people doing cool stuff.  Sure, their money would be better spent making cool products that people actually like, but if they can't do that at least their ads are a bit better.

We're holding a Tweetup / Meetup / Gathering on Sunday 9/7 at 6pm at Tommy Doyle's in Kendall Square to kick off the Inbound Marketing Summit (#IMS08).  This is open to ALL, you don't need to have bought a ticket to http://www.inboundmarketingsummit.com/ to attend the reception Sunday evening.

Twitter message: http://twitter.com/mvolpe/statuses/909453707

Facebook event: http://www.facebook.com/event.php?eid=25511137661

Will I see you there?

What should a VP of Marketing get paid at a technology startup company? I have some data below from a well respected compensation survey of a large number of tech startups. Please note, all of this data is for non-founders. If you are a founder of the company, your equity is higher (and sometimes cash pay is lower).

Percentile	Cash Compensation	Stock Option %
80%	$225,000	1.65%
60%	$200,000	1.25%
40%	$175,000	1.00%
20%	$160,000	0.75%

You should check out the summary compensation report developed from the raw data that I used. You will also notice that I broke the data into four quartiles. Everyone wants to be in the top quartile, but that is not statistically possible. So, what separates the more highly paid from the less highly paid VPs of Marketing? I have a list of the factors I think are most important below. Your mileage may vary.

Factors Determining VP of Marketing Pay / Compensation Scale

1. More experience = more pay. As a younger marketing VP, I feel weird about saying this, but I do think that people with more experience can justify a higher pay package. She or he has seen the movie before and will anticipate challenges more.
2. More analytical = more pay. Many marketers are more emotional than analytical. All marketers need some level of emotional feel to be effective - not every decision has numerical data available - but for most tech startups, lead genration and analyical practices are critical, and a purely brand/emotion based marketer is not going to bring the proper skills to the team. Brand is nothing without leads and new customers at a startup tech company.
3. Domain expertise = higher pay. Clearly if you have some expertise in the particular domain that the startup is serving, you can justify getting a higher level of compensation.
4. More customers in the market = higher pay. Let's be honest, marketing is not required to be a core competency of every company. For instance, at a company that is targeting the CTOs of just Fortune 100 companies, getting new customers really is largely a sales effort - the market of potential users is well defined, and lead generation is more of an activity to support sales than something truly strategic. Sure, there is still a huge branding, messaging and positioning game, but without lead gen you have removed a big posrtion of the marketing challenge. Plus, if you think about the importance and big pay that top tier consumer marketers get, it makes sense to say that the larger the number of potential customers the more of a marketing challenge it becomes.
5. A marketing-related product = higher pay. Companies that sell a product that has to do with marketing (email marketing software, web design, CRM, etc.) should more highly value a VP of Marketing because of the strategic input into the company. If you are selling data-storage hardware, then the VP Marketing does not have a more special skill for knowing the customer than some other folks in the company. But if you are selling to other Marketing VPs, then your own Marketing VP is a useful resource - because he or she is also a prospect / customer.
6. Better company = better pay. The hotter the company that higher the pay should be. This might sound counterintuitive, but I believe in it strongly. Why? Because hot tech startups demand a lot from employees, and also demand an A+ team - this is true for a VP of Marketing as well. If things are going well, things will move fast, and having a VP of Marketing that can change and adapt
7. Rare skills = more pay. If the company desires rare skills in their head of marketing, such as experience with mobile marketing, or knowledge of SEO, or expertise in international markets, they should expect to pay more for these skills.

Special thanks to two friends who are in the process of acquiring new jobs. Both of you made me think about this issue and inspired the blog post. I won't mention your names, but I think you know who you are. :)

Do you have other thoughts on VP of Marketing compensation at startup tech companies? Leave a comment below.

Marketing has been making a slow progression from art to science over the years. It started when "direct mail" or "database marketing" people began doing direct mail and catalogs and measuring the results. With the advent of the Internet, it became more attractive to be an analytical marketer, as email marketing grew in popularity.  That was probably the birth of "scientific marketing". Now with some technological advances and new understanding of how to leverage the Internet in marketing, there is a growing feeling that pretty much all of marketing should be analytical. But, most marketing people still have questions like:

• Why does sales think all the leads are so crappy?
• How come it is so hard to measure all my different marketing programs?
• How can I use a Blog to better market my company?
• How valuable is my web traffic?
• What do all these web stats actually mean for my business?
• How can I measure social media marketing?

If you have ever felt like this, check out this article about marketing challenges on the HubSpot Internet Marketing Blog.  You can also check out this video about closed loop marketing, to learn what you can do to try to be more scientific about your marketing.

Playboy is missing a huge marketing opportunity on Facebook.  You can think what you want about the company and what they sell.  This article is about marketing only. 

I was surprised to see that one of my 200+ friends became a "fan" of Playboy on Facebook - for those of you not into Facebook yet, I know this because on Facebook you get a news feed of what your friends are up to, and when a friend becomes a fan of something, you get a notification.  Being a fan of a company is sort of like becoming friends with a person.  Companies are starting to create a business page on Facebook (see this article about creating a company or business page on Facebook for free) and then people can become fans.  This allows the company to send messages to the fans and post new information on the page that notifies the fans of changes.

My company, HubSpot, which does Internet marketing, recently created a page on Facebook and we have over 120 fans so far.  Playboy also has a page, and they have over 1700 fans.  Pretty cool.  Except here is the problem.  There is almost nothing on the page.  Playboy, a huge media company - meaning that their job is to publish content - has almost no content on Facebook.  They are very rapidly letting down their 1700 fans.

 

What should Playboy post on Facebook?  Well certainly nothing too "adult", but they could post a bunch of things that would be perfect for Facebook.

How Playboy Should Use Facebook, But Isn't

1. All the Playboy Bunnies should have profiles.  Playboy should help its models maintain Facebook profiles, and they should be fans of Playboy.  They could join under professional names, to maintain their privacy, but allowing the fans to interact with the Playboy bunnies ads a whole level of personal interaction never possible in a mass scale before.  This is a great way to engage your fan base.
2. Add events.Playboy makes a lot of money allowing other brands to use the Playboy brand (Dewars Scotch has thrown "Playboy Parties" in a number of cities before)  What if these events were virtual? Or what if they used Facebook to promote live events?  This could be a powerful way to quickly, cheaply and easily promote events.
3. More photos.  I mean, what really is Playboy without photos.  Of course they don't want to give away stuff they charge for, but all they have posted now is one album with 6 photos.  This is like posting 6 words from an entire set of encyclopedias.  Post some more photos!!!  You probably have a trillion photos in your archives.   
4. Develop a Facebook App.  By developing an application, Playboy could further engage the Facebook community. There are lots of ideas for a Facebook App for Playboy - voting for your favorite Playboy bunny, something interactive that helped you live the Playboy lifestyle, some way to interact with Hugh Hefner.  Lots of ideas, so little time.

I hope this article has given people at companies besides Playboy some ideas of how they can use Facebook for marketing.  And, I also hope it makes you think about launching something before you are ready when it can disappoint over a thousand of your fans.

Finally, if anyone from Playboy is reading this and would like to hire me as a consultant to talk through more details on what you should be doing on Facebook, contact me using the contact form at http://www.mikevolpe.com/

IKEA seems to have some trouble producing a map of the US. Look at this image from this page on their website.
Pretty weird. It sort of resembles the US, but Maine looks like it is stretched way out, and Florida has a funny shape as well. You wouldn't think it would be too hard to find a reasonable image of the US for a website, there are thousands of them out there. I guess we should cut them a break. I bet most Americans can't even find Sweden on a map.

Any good sales person knows that you don't give the same sales pitch to every prospect. You customize your materials and presentation to what the prospect wants to hear based on a bunch of factors (industry, experience, business challenges, etc.). You can also get custom golf clubs made for you, and it costs about the same as a similar set of "normal" clubs. And Cafe Press has made a whole business out of making apparel and promotional merchandise one at a time. Finally, there are technologies to allow billboards to change content based on time of day and weather conditions. So, if the web is the new and best medium for marketing and sales, and software and web pages are just code that can be altered easily and automatically by computers... why do so few websites customize content based on who is using the website? The answer is because there are no good tools to allow most businesses to do this easily. For those of you who know me well, you know that I am joining a startup, and this is one of the problems we will be addressing. You can check out the HubSpot online marketing website to learn more.

The Internet has long promised to make marketing more of a science and less of an art. Unfortunately this promise has been pretty un-fulfilled. There is still no good way to really measure everything you want using a simple service or tool. I've been doing marketing for a number of years now. When I was at a dot-com startup in 1999, I built models to analyze all of our Internet advertising (banners, text links, and some pay per click with GoTo.com) and launched an affiliate program. What I loved about this type of marketing was that you could analyze it and know the ROI on each program. What I did not like was that the majority of our sales were not traceable to a specific marketing event. My dot-com (gazoontite.com) also had a print catalog business and retail stores. So, for much of the revenue from those channels, and a good portion of the revenue from the web as well, we had no idea what really caused someone to buy. This problem of tracking marketing ROI gets even more complicated when you understand that people visit your website multiple times and become a lead by filling out a form multiple times and also view your marketing online and offline multiple times. And then what happens if part of the sale is completed offline. My current company, SolidWorks, a 3D CAD software company, does a lot of lead generation through online and offline programs, but all of our sales are completed offline by a great network of hundreds of resellers around the globe. Trying to figure out which particular marketing program (or combination or series of programs) really made someone become a customer is a pretty complicated multivariate analysis, made harder by the fact that it is difficult to get data for many of the variables. At my current company we face many of these challenges and more, and have done the best we can to overcome them, given the tools that exist today. Unfortunately the problem is a big one and we have only scratched the surface. All this brings me back to my first point... There is still no good way to really measure all your marketing activities using a simple service or tool. But the good news is that there are some people working on the problem.

• HubSpot online marketing - Dharmesh Shah (OnStartups, a blog about tech startups) and Brian Halligan (HubSpot Marketing Blog) both discussed today some of these challenges, and their company HubSpot is building online marketing tools for small companies.
• SEM Director - Donna Bogatin discusses on her blog a presentation from the CEO of SEM Director, Russ Mann. These seem like pretty lofty goals, and I am surprised by their strategy of targeting Fortune 500 companies since the sales cycle is long, and these companies have complicated requirements and a lot of legacy systems that are difficult to deal with. But, the problem they are targeting is real.

Who will build the holy grail of marketing? I'm not sure. But anyone who gets us closer will make marketing more of a science and less of an art, which makes me happy.