Unstoppable Club

I listened to another fantastic podcast episode of Exit 5 by Dave Gerhardt on my way to work this morning. Dave was chatting with his guest, Jason Lemkin, the founder of SaaStr. Jason runs SaaStr.com, the world’s largest community for SaaS executives, founders, and entrepreneurs, and SaaStr Annual, the world’s largest SaaS community event.

I first heard about Jason ten years ago when I joined Adobe. Jason was the co-founder and CEO of Ecosign, a cloud-based service that allows users to sign, send, track, and manage electronic signatures. In 2011, Adobe acquired Ecosign and renamed the product as Adobe Sign. Jason is a well-known entrepreneur, VC, and a SaaS community leader. He is particularly popular among the SaaS founders and sales and marketing community.

At the beginning of the podcast, Jason expresses his frustrations about hiring. He says people need a six-member crew to run a podcast, and he doesn’t understand why. Many folks run podcasts by themselves, including Exit 5’s host Dave. The fact is, six people cost a lot of money, and your podcast needs to make a million to cover their salaries. 

I talk to a lot of early-stage tech startup founders. Raising money is more challenging than ever. The last couple of years have been tough on founders. The new funding is far few. The easy capital days are behind us. So, Jason suggests hiring leaders who aren’t just good at getting things done but also get involved and do the work when you are small and optimize your every spend.

One of the common mistakes Marketing leaders often make is to stretch too thin by investing time and resources across every possible marketing tactic.

Let’s accept it. Marketing is a tool kit. One of the common mistakes Marketing leaders often make is to stretch too thin by investing time and resources across every possible marketing tactic. The truth is, your business may not need all the tools. In most cases, prioritizing one or two key metrics is good enough at the early stage. Besides, it is hard to get good marketing leads with multiple specializations. And, when you are that small, you don’t have the luxury to hire too many people for marketing. So, until the ARR (annual recurring revenue) crosses 10 million dollars, it makes sense to double down on 1-2 tactics and make them deliver real impact.

Jason says everyone, including an eighteen-month experience marketing manager, writes their title as marketing strategist on Linkedin. However, they are not willing to do the work. They are unwilling to write a press release, an email copy, or a product newsletter. Everyone needs a team. They are reluctant to run their campaign in HubSpot and build the list alone. 

In an early-stage startup, often the founders work by themselves, product and engineering leaders build themselves, and sales leaders close deals by themselves. Why would a marketing leader alone get a budget to hire and develop a team? A startup that raised a couple of million dollars as seed capital cannot afford five marketing people and five agencies working for them. 

Jason highlights in the podcast that, most often, startup CEOs /founders don’t know what to ask their marketing hires in the interviews. And that is because many of them don’t know what marketing does. Many CROs and sales leaders don’t know how to work with marketing. 

If you have 1000+ customers, you need a very different set of marketing tools functioning /solving your problems vs if you have 10 customers. At an early stage, in most cases, you need a couple of marketing tools (tactics) focused on limited opportunities. Jason says until you have a 10 million dollar marketing budget, don’t rush into hiring senior executive level positions such as CMOs and spend money on team expansions. You don’t need it. 

Once you have that kind of budget, you’re expected to drive many things to impact the brand, the market, and the industry, and at that point, you may need a complete set of tools from your marketing kit.

Jason says the marketing leaders interviewed by startup founders /CEOs must ask a simple question: What do you expect marketing to do? And if the answer doesn’t align with the marketing leader’s vision, expertise, and interests, he /should stand up and say, hey, this is not for me, but I will be happy to recommend /refer someone who can do a great job. 

Don’t torture yourself just because you need a job and then grow frustrated in your role.

Don’t torture yourself just because you need a job and then grow frustrated in your role. The outcome is a disaster when there is a great CEO, a great executive, and a mismatch. Asking questions and getting them to force rank them is a great way to understand /get clarity on the priorities and expectations. 

Regarding whether or not Marketing should report to a CRO (head of sales), Jason said it is a terrible idea as these two functions can have two different charters, and deciding in favor or against marketing can be tricky. CEOs tucking marketing and CS under CRO may be lazy and don’t want too many one-on-ones on their calendar or don’t know how to leverage marketing effectively.

My takeaways from the podcast are:

1. Founders must do their homework and not rush into hiring a senior marketing leader because the cost of a bad hire can be very high.
2. While hiring a marketing leader, ensure the leader is comfortable and interested in doing the work themselves. Those leaders need a six-member team and another half a dozen agencies. And that may not work for your million dollar If the alignment is missing, it would be a lose-lose proposition.
3. Focus on one or two tactics instead of spreading too thin in marketing tactics. Prioritizing one or two key metrics is good enough at the early stage. 
4. If a marketing leader wants to join a startup, ask the CEO about his /her expectations. Don’t accept an offer just because of the money. It can be a torture later on. 

I will be curious to learn your points of view on these points. Let me know your thoughts by commenting below.