Triplets

When you don’t know that you don’t know, it’s a lot different than when you do know that you don’t know.  Knowledge is confidence.  And confidence lets you play fast.                                                             

                                                                                                                                                        – Bill Parcells

bill-parcells-ride

Reflecting on a work life lived in the world of SaaS, it’s compelling how the practices of Product Management, Performance Marketing and Sales have each evolved at a breakneck pace. And how they have become more and more alike in their foundation.

Like Triplets Separated at Birth.

We all know that tectonic trends in data science, predictive analytics and consumerization of IT all present huge opportunities for building the next generation of great software companies.

But each also brings a mandate for entrepreneurial teams to adopt and install data-driven, disciplined — almost scientific — operating cultures in product management, marketing, and sales — to a degree few imagined five short years ago.

This change of state has totally transformed how to look at strategy formation, executive management and daily activities alike in each of these functional areas of an emerging startup.

One of the earliest SaaS companies to “get it” was LogMeIn (Nasdaq: LOGM), where we were and early investor and where I served on the BoD.

In my mind, they were the pioneers and a reigning benchmark for Product, Marketing and Sales launching themselves together into the current generation.

@seanellis (LOGM VPM and now CEO of GrowthHackers/Qualaroo, after having built the growth engines of Dropbox, Lookout, Eventbrite and others),  @andrewfburton (SVP Product and now CEO of Logentries) and ex-SVP Sales Kevin Harrison were all on the same page in driving this manner of thought and practice. Each led by the unified vision of CEO Michael Simon.

Each functional team installed and drove a culture of using data to sample, test, measure and iterate.

And then to re-sample, re-measure, re-test and reiterate — to build user-elegant products, transform performance marketing to aggregate users, optimize funnel and accelerate conversion.  And to refine the link between data, experimentation and execution to drive a world-class, high velocity selling machine.

All incorporated a culture which embraced not just metrics, quant analysis and testing — but also the practice of treating customers —  users — as partners in learning how to rinse and repeat.

Growth Hacking before Growth Hacking.

I spend every day with SaaS companies.  Each is different, yet themes are consistent.

Each strives to strike the right harmony with its users in optimizing the Product/Market fit journey.

Each strives to drive the never-ending journey of experimenting, testing, projecting and tweaking the activity/metrics mix which creates the ultimate growth hacking recipe.

Each strives to experiment, test and adjust their self-service, inside sales and business development models in order to tailor interpretation of high velocity.

Some use predictive and guiding data science technology – like InsideSales.com — to push the envelope towards acceleration.

I often hear some execs and investors claim that they have “the playbook” for Product/Performance Marketing/High Velocity Sales that applies universally to SaaS startups.

They are either misinformed, inexperienced, or misleading.  Hey, I’m being kind.

There is no “playbook”.  No one size that fits all.

But there are cultural and operational principles which form the foundation by which repeatability can be iterated and tested.

Product Management, Performance Marketing and New Age High Velocity selling models — and leadership — now have more in common that many would believe.

Building a culture and selecting teams which are driven to experiments, measurements, tests, analysis — a constant life cycle of iteration.  Using customers as their partners. A culture which recognizes the interdependencies of each of the three functions.

Building great growth and sales engines in line with the products being sold.  And the products coming down the runway.

The great companies – and their CEOs – “get it’ and recruit and select leaders and teams which share a common passion to use data, technology, customers and testing disciplines to hack their way to velocity, scale and greatness.

Selecting a new age Sales VP is to look for qualities not unlike a growth hacking Marketer or best-in-class Product Manager.

Product Management, Performance Marketing, High Velocity Sales.

Like Triplets Separated at Birth.

Lily Pads

Several times over the past several days I’ve been speaking with both entrepreneurs with whom I’m working, as well as those with whom I’m exploring.

Again and again, the subject of balancing opportunity and focus comes up:

  • How to establish a strong first market beachhead. And then to select and execute crisply on a second. And then a third.
  • How to prioritize introductions of products on a roadmap.
  • How to think about planned company acquisitions and the value of a target company’s product as it applies to our company’s core business, assets and values.
  • How to get started on the journey of ideation behind founding a company.

When my thoughts are asked about how to approach these decisions, the conversations — while about completely different subjects relating to companies at very different stages of development — invariably come back to a simple strategic principle I’ve followed for many years.

The Principle of Lily Pads.

lily

What the what?

It’s a concept I’ve incorporated into my personal thinking and advice I’ve offered as an entrepreneur, operator, company leader and investor.

It’s a checkpoint I’ve used on myself in building my career and in building my company partnership portfolio.  And also in helping to build our firm’s technology investment team strategies.

It’s input I give again & again to talented founders, managers and investors:

  1. Aim to be truly competent — and be known for that competence.
  2. Realize real, measurable success in that area of competence.
  3. Weigh the value of adjacencies.
  4. Assess the value of leverage.
  5. Then — and only then — consider expansion to other areas of target focus.

Brilliant Old Schoolers like Geoffrey Moore and his market entry philosophy of “Bowling Pins”  touch upon my principle. Target one market, then the next adjacent one.  Rinse & repeat.

But the Principle of “Lily Pads” — maybe someone can quote me and call it a Law — that would be awesome :) — can be applied to company formation, career development, corporate development, growth hacking, striving for K-factor or Seeking Alpha.

Get established as the best in an area.  But critically — pick the next areas by virtue of not just opportunity — but also the adjacency of  skills, assets, success and reputation.  And the potential leverage of each.

  • Company founding: Is the founding vision broad enough to enable the balance of laser focus and future expansion?
  • M&A: Can the to-be acquired product(s) be sold to the same customers?  Economic Buyers? Through the same selling effort?
  • Product Roadmap prioritization: Beyond business plan benefits, does it leverage existing dev skills & resources? Go-to-Market readiness? Customer support inferences?
  • Career Development: Has one’s experience, body of work, reputation and advisory network yet enabled expansion to broader focus?

On & On.

A pretty simple Principle.  So, OK, maybe not on par with Bernoulli.  And, as potential Laws go, certainly below the pay grade of Metcalfe.

But one that cross-checks for me in my simple mind again & again.

Get really good.  Then think about the merits of the next leap.  Ensure probability of execution by making the leap short.  Drive long-term success by testing, sampling, measuring,  Attain repeatability.  And increase the speed of every leap that follows.

Simple is as simple does.

frog lily

The New World Order of Sales & Marketing

Last week in a small restaurant in San Francisco, 35 founders and thought leaders from the @polarisvc portfolio and beyond gathered for an intimate discussion about the future of sales and marketing.

Or, as I introduced the topic, “The New World Order”.

Led by @InsideSales co-founder @KenKrogue and @GrowthHackers_ @qualaroo founder @SeanEllis, the conversation centered around the criticality of accessing and working with new sources & levels of data.

In other words, of incorporating predictive analytics into the ethos of Sales & Marketing in order to achieve high-velocity sales success.

Ken headlined the discussion outlining the operating model which Oakland Athletics GM Billy Beane of “Moneyball” fame offers to Sales & Marketing.

moneyball-poster

Billy & his Oakland Baseball Ops team changed the way professional sports are played. They transformed and entire industry forever by driving their own New World Order.

Using data, statistics, math and predictive analytics to choose players and make decisions.

The Triumph of Science over 150 years of Art.

It was a fantastic evening where the conversation never stopped, with stories shared, lessons learned, and insights offered well into the night.

The themes of Data Science and Actionable Operational Insights are two of several that drive @polarisvc technology investment strategy.

Transformative SaaS technologies and models which enable true Business Process Innovation are being innovated everywhere.

But in particular — just as we see in the healthcare industry — the sales and marketing industries are being driven towards sweeping change.

In SaaS, consumerization has clearly transformed how product must be designed, and how it must be marketed and sold.

In a world where customer churn can make or break a business, start-ups and multi-billion public companies alike must understand not only “what” of the sales process — but also the why, who, how and when — in order to truly transform themselves and generate breakout efficacy.

It’s here where predictive data, actionable insights, and smart analytics come into play.

Years ago, power officially shifted away from IT to “prosumers” within the enterprise.

Understanding the purchasing behavior of these individuals — and how they share value with their co-workers — drives high velocity sales success.

Like all investors, we take pride in seeking out disruptive technologies.

But disruptive business models — and data-based technologies which enable operating transformation — like high-velocity sales & marketing — are also fundamental to our interest.

Do data science and operational insights really work? Is change management — doing things differently — a destination or an ongoing journey?

Success over time tells the story.

The Oakland Athletics — operating with limited capital assets compared to their competition — are one of the most successful franchises in professional sports over the last decade. They’re at the head of the class in this year’s American league race.

As Ken told the group:

Technology is the lever of young entrepreneurs to make change.

Science tries to explain why technology actually works and whether it can predict further success.

Gone are the days when old school baseball scouts could spot a winning ballplayer by “just looking at him”.

Gone also are the days when old school sales and marketing execs could drive success without precise data, measurement, and predictive platforms to guide, incent and retain a new generation of contributors to success.

There are currently 3x more inside salespeople worldwide than outside salespeople. And the gap is getting wider each year.

Guiding successful outcomes and incenting desired behavior of a new generation of sales workforce is impossible without repeatable, data-driven, technology-enabled processes.

There is not a marketing function than can exist — much less succeed — in generating customer demand without technology-enabled analytics playing a central role in functional culture.

SaaS consumerization, data science, sales transformation, customer acquisition marketing transformation, and actionable operational insights are big themes.

They present opportunities for significant companies to be built. Companies that develop platforms that address the major shifts to the New World Order.

Thanks to all of our entrepreneur partners who came out last week to lend their thoughts to a topic that will truly transform industries.

The Triumph of Science over 150 years of Art.

Gary Swart, Polaris Partner

My Polaris Partners and I am stoked to announce that Gary Swart will be joining us as our Partner.

He’ll  join our Tech Investment Team as Venture Partner, based out of our San Francisco office.

Gary was most recently the CEO of oDesk — the world’s largest online workplace — and chose to become part of the Polaris partnership among many opportunities presented to him from top Silicon Valley firms.

He’s  proven himself to be a respected and well-known entrepreneur, operating executive, and thought leader in SaaS technology, marketplace-building, and the evolving workplace.

He’ll apply his knowledge to help our portfolio companies, source and lead investments and further build out our tech investing practice in Silicon Valley.


Gary_Swart_high-res

 

I’ve been fortunate to have known Gary for nearly 20 years, since he worked on my team at Pure Atria/Rational and led our Corporate Sales efforts.  Gary was an integral part of Rational’s success, and was always one of those guys that one knew was destined for big things — and one that I knew I wanted to someday work with again.

Since that time, he’s gone on to build an incredible career and an incredible company at oDesk.  He led a team that has not only built exceptional shareholder value — including through its recent merger with Elance  — but importantly, a company culture that known for its collaborative teamwork and quality of work environment.

He’s proven it possible to thoughtfully build and lead a company with billions of dollars of value — and build it in a manner that inspires special people to love working with each other.

oDesk is known not only as the world’s largest workplace marketplace, but also a truly special company composed of truly special people.

Gary, as I did 14 years ago, is embarking on his “second career” as an investor, after having spent the first part of his career as an entrepreneur and operating executive.

I know Gary will be super-successful with Polaris.

He’s is passionate about many of the things we and our Polaris Repeat Entrepreneurs are passionate about. He and my partners share many of the same fundamental values and beliefs.

Gary, at his core, is a Coach, Mentor and Builder.

He is a “people person” who has great talents for recruiting, selecting, guiding and developing special talent.

Beyond his work at oDesk, he’s a prolific speaker, widely-followed blogger, and superb people collector who has given much of his time to the entrepreneurial ecosystem around the Silicon Valley, San Francisco and the Stanford communities.

Gary is a mentor to entrepreneurs and students alike, and frequently speaks to groups about the challenges growing businesses face. As an example, in 2013 alone, he gave more than 40 talks to universities, incubators and other organizations fostering entrepreneurship.

Gary’s built a reputation as a thought leader on the future of work, how best to hire and manage teams, and on the rise of the “freelance economy.” He has spoken at the Inc. Leadership Conference, The Economist’s Ideas Economy Panel, SXSW , TechCrunch 50, GigaOM Net:Work, and at HBS — which teaches a case study on oDesk.

His commentary has appeared in a variety of publications including LinkedIn, Forbes, and TechCrunch.  And he’s appeared on TV and radio outlets, including CNBC, BBC, Bloomberg Television, NPR, and the Fox Business Network.

He’ll be a great partner to our companies, to his Polaris partners, and to special entrepreneurs he works with and invests in.

He’ll help extend our California technology footprint — beyond our current 16 tech portfolio companies — add to our super-strong SaaS footprint of 37 companies nationally.  And, very importantly, lead our expertise around marketplace businesses.

He’ll work closely with us as we continue to seek out,  invest in and support transformative business models, technologies and teams alike.

He’ll be a great Partner to us all.