Matt Heinz is an established knowledge leader in sales and marketing for startups in the Puget Sound area. So when we heard he’d written the book Sales for Startups, my colleague Christina Chan and I jumped at the chance to be able to interview him and get some insights into his experience, what’s in the book, and some valuable advice.
Christina: Matt, could you talk a little bit about Heinz Marketing and how you got involved with the start-up community in Seattle?
Matt: Heinz Marketing is a B-to-B marketing shop. We help companies find, manage, and close business both on the marketing and the sales side. That looks different for a lot of organizations. Everyone’s got a different market, a different set of customers, a different go-to-market opportunity. Our responsibility is to come in and help people understand where they should be putting focus, where their primary go-to-market path is, and then if they’re interested we can help them execute that as well.
I’m particularly passionate about the startup community because we have so many people who are passionate about the problems they’re solving. There are some incredibly talented engineers and entrepreneurs that have great ideas that are literally changing the world we live in. They don’t always understand how to take that great idea and bring it to the market. The best marketing you can have is a great product, but products don’t sell themselves. You still have to translate that into some kind of message as well as a go-to-market mechanics and strategy that delivers that product to the market and helps accelerate its adoption.
Joe: Where were you before you were doing Heinz Marketing?
Matt: I was at a number of places: I was at a couple startups. I was at Microsoft before that, GPR firm before that, and I was writing for the Bremerton Sun before that. You never know where you’re going to go. My degree was in political science and journalism. I don’t have a business degree, I don’t have an MBA. I learned it all as I went. Earlier in my career, I seemed to have an inferiority complex about not having an MBA. I ended up having a lot of conversations with people about whether or not they should go back and get one. If I could go back, I’d probably get one because I’d like to have that foundation. But sitting where I am today, it may close some doors, but if you work hard, put your hard hat on every day, you can make something out of it. When I was at Microsoft, some of the smartest people I’ve ever worked with were zoology majors from random schools. A couple of the dumbest blocks I ever worked with were MBAs from the most well-respected schools. I’ve worked with brilliant people with elite school MBAs, but the story is that you never know. Once you get out of school and you get out of the theoretical and get into the actual, once you actually have to go do something, once you actually have to go sell something and put food on the table for your employees and your investors, you really find out who knows what they’re doing.
Christina: Startup companies range from two guys in their garage to guys who might start an IPO soon. Who do you think benefits the most from working with you?
Matt: We work with all of them. But it needs to be someone who understands that a great product is not enough to drive market traction. That doesn’t mean that you need to go out and spend a lot of money on advertising. Traditional advertising still exists and it still works, but when you’re early stage you are trying to validate a position, especially when you’re selling to early adopters. The early adopters are more likely to mobilize around your idea and around your product if they find real value there. Your means of mobilizing that audience is typically faster, easier, and more organic than having to go out and spend a lot of money on interactive marketing. Sometimes we work with people who have a marketing and sales background. Sometimes we work with people who have an engineering or finance background who have no sales or marketing experience. If they understand the value of sales and marketing as a means of validating and accelerating their results, then we tend to have a pretty good match.
Joe: I work with a lot of companies that are pre-revenue or revenue unencumbered. How early is too early for you?
Matt: If we were an ad agency, if we were someone you go to if you’re going to buy advertising, then most startups are too early. Most startups shouldn’t be spending money on marketing to begin with. Your early adopter audiences are out there, they’re in your communities, they’re on your social channels, and they’re in the associations of the industries you’re going after. If you are starting to have conversations with the influencers in those industries you go after the early adopters, you start posting some good content that attracts people to your site. You will find early organic traction for what you are doing if it is valuable. If you don’t get it, then there may be something wrong. It may be that whatever you are saying isn’t resonating with someone. It may be that what you’re building isn’t going to work. There are a lot of reasons and you can start to isolate some of those variables, but if you’ve built a product or have a vision of something that you think matches and addresses a real unmatched market need, part of what we can do is help you to validate that.
We can help you understand if there is demand for solving the problem. No one is asking for your product or service yet, no one wants to see a demo, but if there is demand or need or pain around solving a particular problem that you think you address, then that can be validation enough. You can then get a prototype and have something that you can start putting in front of people. The real rub then comes not when you put something in front of someone with a bunch of flow charts and say, “what do you think?” It’s when you ask for a credit card. When you ask someone to pay for something, because of lot of people will say yes to something that they wouldn’t pay for.
Christina: How does a startup company figure out whether or not there is even a market for its products?
Matt: That’s a great question. Oftentimes you’ll hear of a founder starting a business because of a personal problem that he or she had. They tried to do something and it was incredibly difficult or they wanted to do it in a particular way and couldn’t. That’s a good founding story, but on its own it may not be enough for a business. It may be one anecdotal example that no one else shares so if you have that premise where you feel like you’re solving a real problem that provides value to a market that is different and independent than what someone else is doing, you probably want to validate that other people have that problem. You can do that through analysts or experts in the industry you’re in. One of the entrepreneurs locally, TA McCann, has been involved with Gist and a number of organizations, including TechStars. I’ve heard him say many times that the first version of your product should be a power point deck to show people what it can do and to make sure that the problem you’re solving resonates with the people you think you’re selling to. Then you may have something.
Joe: Are you familiar with Paul Graham’s startup curve? I’ve seen a lot of people in the “trough of despair.” Founders typically are very motivated and passionate about their idea. They start building, and then when they launch they are greeted with silence and they sometimes fall into the “trough of despair.” What do you suggest to those people? How do you pick them up, dust them off, power them back up? What do you do to help them get going again?
Matt: There is always going to be those rough days. Four years ago it was me and a laptop; now we’re eight people and growing. So I’m a different startup, but I am a startup.
It’s exciting and terrifying on a regular basis. It depends a little bit on how badly you want it, how much you believe in it, how much work you have done upfront to validate that you are really onto something that isn’t just a whim or a problem that only you had. I’ve seen products get built where the premise is good, but the execution is too engineering-driven and there is not enough insight into who the audience is and how they might use it. It becomes too complicated. People don’t get it and it doesn’t go anywhere.
There are many reasons why that trough may exist. Seth Godin actually wrote about this in one of his little books a couple years ago; he called it the “the dip.” He says that you will see success and then you will see the dip and then most people stop because they assume that that the dip is a trough. They assume that it’s the end. Some people get through, some people don’t. For some people it really is the end. There is a little bit of a science and an art to determining if this really is the end or you should keep going. If you look at entrepreneurs in general and you look at the makeup of the people who do well, they don’t give up; they’re stubborn. For whatever reason, right or wrong, with data or without data, they believe in what they are doing. They’re going to push through that dip. It doesn’t mean it’s going to be easy; it doesn’t mean you’re going to sleep well every night. It doesn’t mean that you are going to hit your numbers and your budget is going to work out just the way you want it to. That is another reason why you don’t want to spend a lot of money on your go-to-market work until you actually have validation that it’s going to work.
Jim Collins wrote a book last year called “Great By Choice.” It was a follow-up to “Good To Great” and one of the premises he had that separated the great companies from the mediocre companies was the idea of cannons versus bullets. He said the great companies fire a lot of bullets, they have a lot of ideas and they test a lot of them and so most of the bullets fail. A lot of the things we do fail. The path to innovation is paved with failure. If you fire a bullet and it misses the mark, then you can move on, but if you fire a bullet and it hits, fire a couple more to validate, put down the pistol and pick up the cannon. The mediocre companies built the big cannon, assuming it is going to work, and then some of them didn’t and they’ve wasted all of this time and energy. I had one client actually call it the “crummy test.” He said “we are going to do lots of crummy tests.” What he meant was, we don’t want to do a bunch of work, but we’re going to validate a lot of ideas and see what works. It’s not throwing spaghetti on the wall, its strategic, well-designed, well-executed tests, done quickly. You quickly identify what doesn’t work, and there are going to be a lot of those, but when you find something that works you fire a couple more bullets and then you move into it.
Christina: So as a company, what should I look for in building a marketing strategy and how does your company help me out?
Matt: I don’t say this to be self-serving, but it’s helpful to have someone who is seasoned and can be a quarterback of your go-to-market efforts without having to hire that person up front. One of the mistakes a lot of startups make when it comes to sales is hiring a VP of sales first. That VP of sales often hasn’t done selling in a while and is going to want to build a sales team. There are some amazing VPs of sales in the startup world and in a lot of companies around here, but I believe that when you are a startup you start with someone whose going to carry a bag, someone who is going to go and work the market, who is smart enough and experienced enough to play machete in the jungle and figure out what the sales process is going to look like for this product or service. But it is also going to be the kind of person that can move into a manager role and hire some more tactical sales people underneath him.
I don’t think marketing is that much different for a lot of startups. It’s important to have people that are going to roll up their sleeves and do the work, that are going to do these “crummy tests.” I see a lot of startups that hire the tactical people thinking that the founders, the CEO, or the COO are going to manage them and when their job is pulled in 20 different directions, what you have is a tactical person not executing much strategic work and doing a lot of stuff reactively which isn’t really pushing the needle. It’s valuable to have some insight from the outside, and again, I realize that that sounds self-serving coming from us, but I’ve seen that model work really well, but what I like about it is, we end up working our way out of a job in those cases. They build their team, they hire the head of sales and marketing, and if they do that it hopefully means they’ve gotten to a certain point and we’ve done our job.
Joe: What are your favorite tools for tracking performance?
Matt: If you have the resources depending on, if you are doing B-to-B sales, something like a Salesforce.com is a must. You need something like Salesforce to be able to track your sales process, to be able to attribute what’s working, who is doing what.
Technology is quickly replacing media as one of the more important elements of a marketing strategy, so more important than going out and buying leads is having a marketing automation system like a Marketo, Eloqua, or Hubspot that can help you manage the leads that you have, drip market the leads that you already have that are qualified but not ready to buy, capture more leads off of your website and qualify them and square them to figure out which should go to the sales team and which needs some further nurturing with your content. Those are not inexpensive systems, but they are a fraction of what many companies spend on outbound marketing and deliver a longer term sales yield on overall outreach.
Joe: So you recommend a very systematic approach to the sales funnel, right? Could you quickly explain that?
Matt: It’s important, even in a consumer driven organization and especially in B-to-B, to have a really strong understanding of what your sales funnel looks like. You have to develop it, not in isolation, but in concert with the way your buyers want to buy. You can develop a sales process that maps the way your buyers buy, to match the buyer journey, the way they think about the pain or the problem they have, the outcome and objective they are seeking — eventually identifying a solution that can help them get there. If you can map your sales process through that, you reduce the amount of friction between you and the buyer and you make it easier for them to develop some trust and credibility and report with you early on. It increases your conversion, but what that means then is that you actually end up developing some very explicit stages along the sales process. You know what it means when a prospect exhibits certain actions or activities or make certain requests that indicate to you, based on your knowledge of the customer, that they are now qualified and ready to buy, they are ready to start moving forward. They are someone who might be ready to talk to a sales person now versus a couple months ago when they were in the exploratory phase.
Joe: I have a small client, probably not ready to enter into a monthly engagement with you, but I think they’d benefit from talking to you. Is that too early for you?
Matt: No. I talked a little bit about our growth. All of our growth has been referrals, word of mouth, inbound marketing. We produce a ton of content that is almost all free on our website. We publish on our blog every day about sales and marketing. We produce a number of best practice guides on everything from content marketing, email marketing, inside sales, management. We just produced a massive guide to marketing automation to help people understand what it is and how to use it to their advantage. We generate a lot of inbound leads from that and most of those leads are qualified not ready to buy, but they go into our nurture track. Our business development strategy is to invest time with people that we don’t think are ready. Our account directors and I are more than happy to spend time with people just to talk through their challenges and to start doing the work right away, offering ideas on how to fix it or how to address it right away
Joe: Do you have a minimum engagement size?
Matt: We do. We do everything on a flat monthly fee basis. We do everything from what I guess you would call peer consulting where our senior people and I will come in and work with sales and marketing teams as well as leadership teams on what their go-to-market strategy is. The majority of our business is where we just roll up our sleeves and do the work. One of our account directors actually said this in a blog post last week: “Strategy without execution is hallucination.” Lots of people do pretty power point decks and come up with great strategies and then just sit on them or execute them incredibly poorly. And, that’s not helping either.
Joe: If you were going to give Christina and me advice about what we should do as lawyers, what would you tell us?
Matt: Sell the hole not the drill. A lot of companies get really excited about what they are doing and what problem it solves, but they go right into talking about solving the problem by talking their solution. They are proud of what they built, but most of your prospects aren’t there yet. Even if they are there, they don’t care about what you’ve built, that’s not what they really need. I don’t need the drill, I just need the hole. Let me take that in another direction. How can I get a hole? I could use the drill, I could use a laser, I could punch my fist through the wall, I could find a magic dragon that could blow holes through the wall. These are all ways of getting holes, maybe not that last one, but the rest of them are all ways of getting holes. You have to resonate first with your audience and make sure you understand what they are trying to achieve.