Speakers Corner

Hell Revisited

- A View on Sales and Marketing & 'The Road to CEO Hell'

By Brian Bennett

I very much enjoyed reading the "Road to CEO Hell" article that appeared in The Chilli. The 'food for thought' at the end of the article has prompted this response based on my personal experience from three technology start-ups, for two reasons:

i. One must not underestimate the role of the investor in making life hell for the ceo, and

ii. One must have a clear understanding of the roles that sales and marketing have in the process of establishing customer 'traction' and making sales happen.

In each of the three start-up companies referred to above, the primary investor became dissatisfied with the performance of the company within 12 months. Why such dissatisfaction so soon? We can only guess at the 'hoops' each ceo had to jump through in order to secure their respective funding but the result appears to have been unrealistic expectations on the part of the investor. Such unrealistic expectations would have been things like a full 'sales funnel', a number of customer design-ins, signed contracts, purchase orders and glowing testimonials. Nothing wrong with any of these, you might say, but is it reasonable to expect any of these within 12 months of starting up? What if the ceo had committed to such things within 24 months, or 36 months - would funding still have been secured? I doubt it.

Thus, so often, starts the ceo's road to hell.

Don't get me wrong. It is perfectly reasonable for an investor to seek a return on any investment, but undue pressure on the ceo can often put return on investment (ROI) in jeopardy, especially if the ceo's reaction is to appoint "an account manager with a Rolodex and a field applications engineer"; this should NEVER be the ceo's first priority!

The simple mention of marketing (the 'M' word!) is enough to turn a lot of 'high tech' entrepreneurs off. They will tell you they need sales, not marketing, as if such functions were optional. Some cover their deficiency in marketing by saying they have a vp/director of sales & marketing; this is code for a vp/director of sales! Sales and marketing are mutually exclusive functions, both have their place in commercial enterprises but they are each very different, so much so that I seriously doubt the ability of any one individual to do both.

Technology start-ups are usually founded by a team of very bright, technical people, often with a great idea which they believe will set the world on fire. Early funding rounds are usually to do with developing the idea further and establishing the technology. Once the technology is considered viable, further investment is usually sought to build customer traction and develop the business.

William Davidow (ex-Intel) once wrote: "Good devices are invented in the laboratory but great products are invented in the marketing department." While not all 'good devices' become 'great products', the point is clear. There is a lot more to product definition than a long list of device features.

I had the privilege of working at Texas Instruments' ASIC/SoC headquarters in Dallas, Texas during the early nineties. It was a good training ground in learning how to 'manage the white space'. If William Davidow's 'device' could be represented as a dot, then his 'product' would be a large circle around it, with the dot at its centre. The area around the dot, inside the circle, is the 'white space'. Everything that is required to convert the device to a product is then placed within the white space, often like spokes on a wheel. These spokes might include evaluation systems, technical documentation, applications support, white papers, etc. Such items give the customer a sense that they are looking at a well-defined, whole product. It's good to ask yourself "do you have a whole product, or a hole in your product?"

Another thing, people buy benefits, not features! Founders of technology start-ups tend to promote features, usually in the context of a competitive advantage they have over established/incumbent players. Unless they are able to articulate benefits, the guy with his Rolodex is going to be much less effective than the ceo and/or the investors would like. Many highly experienced and extremely talented sales executives end up harming a start-up's prospects in the marketplace through their inability to articulate and promote benefits.

A common mistake is to assume that a prospective customer will be able to 'see' benefits for him/herself. Why take the chance? If people buy benefits, sales people have to promote and sell benefits. If they don't, their competitors will!

It's a sad reflection of our times that an otherwise respectable, hard-working and trustworthy ceo has to sometimes propagate unrealistic business expectations in order to secure funding. Having done so, customer traction needs to occur quickly, if the ceo is to keep his investor/s happy.

In order to generate traction, the CEO must invest in developing whole products and in articulating customer benefits BEFORE promoting the same to target customers. This is what PRODUCT marketing is all about.

Bottom line, there is no substitute for 'doing things right'. Cutting corners will delay, reduce or eliminate the opportunity for sustained market success.

Brian Bennett is founder and principal of Nova Consultants. He previously held senior marketing positions with TI, Synopsys, VLSI Technology and Philips Semiconductors.

Any feedback? Contact Brian Bennett via editor@theChilli.com

© Chilli Publishing Ltd 2003

7MAY2003