00:00hi everyone welcome to day 6 and Z
00:02podcast I'm sonal today we're talking
00:04all about category creation which a lot
00:06of new startup selling new innovations
00:08especially to big companies have to do
00:10joining us to have this conversation we
00:12have general partner Martine casado who
00:14helped create the category of Software
00:16Defined Networking do nice Sarah and
00:18then at VMware and also recently wrote a
00:20post on going to market when no market
00:22exists we also have michelle Feaster CEO
00:24and co-founder of user mind which
00:27provides integration software to help
00:28companies connect their internal systems
00:30together so that customer experience is
00:32seamless and before user mind michelle
00:34was VP of products at app tia where
00:36she'd define the category and the
00:38discipline of technology business
00:39management so our discussion today
00:41covers everything from pricing to
00:43positioning to other product marketing
00:45and what category creation means for
00:47entrepreneurs to broader trends in how
00:49ite is changing but we begin by defining
00:51what we mean by category creation and
00:55category creation is about creating a
00:58net new problem and a net new solution
01:01to that problem and the reason it's
01:02important is that if I go and I build a
01:04better monitoring tool the price point
01:06of monitoring tools is already set
01:07whereas if I create a category I can set
01:09the contract value in the price point I
01:11can set my own market size and I can
01:14literally move money from one pot of
01:16gold to the other that is so crazy
01:18counterintuitive to me because I would
01:20never think that the whole point of
01:21creating a market is actually set the
01:22price point I mean I think most people
01:24don't have a high enough aspirations
01:25like category creation means you created
01:27a new thing people can buy why do you
01:29want to do it wanna set the price point
01:30right point two percent right and why is
01:33price point important because basically
01:35there's no other single number that like
01:37ties to the valuation the price point
01:39basically that's ACV yes and if I am in
01:42an existing market the ACV is already
01:44set already set period nobody else's
01:46game there's the purpose of calibration
01:48I've got this kind of super high level
01:49way of thinking about this thing which
01:51is at least in the enterprise of you're
01:53an entrepreneur you kind of have two
01:54objectives and they're actually pretty
01:56simple they're just hard to do so the
01:57first one if this is category creation
01:59the first one you have to create a
01:59concept in people's brain like whoever
02:01your constituency is whatever they wake
02:02up in the morning and they think about
02:04millions of things but they probably
02:05don't think about your thing now if they
02:07think about your thing you're probably
02:07not doing category creation because
02:09somebody else has already planted that
02:10idea in their head and they already have
02:11concepts about it but if that concept
02:13it's your job to plant it so let's say
02:15you've come up with a new thing so your
02:17first job is get someone to think about
02:19that so now they wake up in the morning
02:20they think about it and then the second
02:22thing that you have to do is to set the
02:25value on top of that thing to Michelle's
02:27point in category creation the playing
02:29field doesn't exist so you first have to
02:31create the playing field but then you
02:32get to set the rules and once you do
02:33that that's what drives your business
02:35and like basically the industry I mean
02:37that's profound in a certain level but I
02:38feel like it's also very obvious like of
02:40course price point drives your business
02:41what do you actually mean why does that
02:42specifically matter in the enterprise or
02:44is it unique to the enterprise I don't
02:46think it's unique I mean if you look at
02:47it right who would start a kleenex
02:49company like we call Kleenex Kleenex and
02:51the price of Kleenex is set and so to me
02:54the point of view is how do I get you to
02:55see the world differently so you see a
02:57problem I want you to focus on how do I
02:58make that problem really important to
03:00you how do I make it compelling that
03:02you're gonna solve that and it's really
03:03hard to do that in a defined like where
03:05Kleenex exists so this to me is
03:07marketing and branding just like in any
03:09other business just like CPG we don't
03:11think about enterprise software like any
03:14other marketing and branding exercise so
03:15to me that's where the narrative starts
03:16narrative starts with framing a problem
03:19that may already be latent or they don't
03:21even think about and making it top of
03:23mind and when you make people see a
03:25problem differently you arbitrarily get
03:27to reset the value associated with
03:29solving that problem because you're
03:30describing the arc and the narrative so
03:32Michelle I actually have a lot of things
03:33in common but one thing is we both had
03:35been Horwitz on our board yeah and
03:40here's the one that actually really
03:42impressed us upon me was he told me once
03:44in a meeting he said you know there's
03:45nothing that will impact the value of
03:46your company or the valuation of your
03:48company more than pricing and I never
03:50understood how profound that was until
03:52actually having gone through it yeah why
03:54tell me more so indirect Enterprise
03:56sales when you've got a salesperson
03:57there's only so many deals that they can
03:58close in a year let's say it's five
04:00let's say it's ten whatever it is like
04:02there's a natural law and how many they
04:03can close so the pricing is going to
04:06directly impact how much they bring in
04:08that year right now there's a market
04:10value for how much you pay a sales
04:11person so your margin is basically how
04:14much they're able to bring in - how much
04:16you pay them that's by far in your
04:18balance you see at the overriding thing
04:19basically Enterprise Products don't sell
04:22themselves you have to have that's right
04:23and there's a market price for how much
04:26you have to pay a seller
04:27right and therefore they have to be able
04:29to clear a certain hurdle so they have
04:30to get $200,000 a deal or $300,000 a
04:33deal in order to get the margins that
04:35you want and so like that margin is
04:37directly impacted by price and so to
04:38Michelle's point if somebody else
04:40created the category and it's mature the
04:42price points probably already set and
04:43you don't have a lot of flexibility it
04:45becomes like tissue because it's come
04:46already subject to commoditization and
04:48other pricing pressure not breaking
04:50tissue everything that's mature it's
04:52being set but if you're doing something
04:53new you get to define the narrative of
04:55that value and show that value yourself
04:56but there's an inherent catch-22 here
04:58which is when you are in a market
04:59creation category creation or market not
05:02ready situation kind of we're conflating
05:04all three but let's for all until the
05:06purposes they're the same thing in this
05:07context you are asking people to bet on
05:10something new and how can you get around
05:13this when the value might be huge but
05:17you don't have product market yeah so
05:20how the do you expect mad at me
05:23when I cuss but oh well
05:24like how the heck do you expect people
05:26to then invest at a high price when you
05:29haven't proven anything yet yeah and
05:31you're creating it so it's like this
05:32weird chicken egg tell me how you guys
05:33are both like gone around that yeah I
05:35mean you're a Seavey doesn't start out
05:37as high as you want it so in the first
05:38couple years number one your early
05:40buyers are visionaries that's who you're
05:42selling to you're not selling to the
05:43broad market an enterprise you're
05:44selling to like the the chin 5% of
05:46visionaries who basically embrace a
05:48vision and love working with you because
05:51they're betting their company on early
05:52adoption of technology and so when you
05:54really look at it you're not selling
05:56them they get the narrative they embrace
05:58the category but an enterprise there's
06:00some magic that happens somewhere
06:01between 20 and 50 enterprise customers
06:03you've got you know the top five in a
06:06couple verticals and now all of a sudden
06:08you're really defensible now all of a
06:09sudden you can go into that deal and
06:10your dearest in a massive way and at
06:12that point you see a gigantic inflection
06:14and the ACV that you can actually pull
06:16out of that account and ideally you grow
06:17that over time and you grow that into
06:19multi ordeals but to me that's the
06:21recipe of an early company and I think
06:23that you can actually turn this into
06:24pretty concrete steps that an
06:25entrepreneur can take in an early market
06:27this is what I always tell my companies
06:29which is don't discuss pricing until
06:32after you've got them to technical close
06:33and what I mean by that is these people
06:35didn't even know the problem existed a
06:36month ago and now that they know it
06:38exists right but they haven't actually
06:40they don't actually know how to value
06:42the risk so the risk could be to them
06:44millions of dollars of risk so unbounded
06:46that's right so any discussions up front
06:49are gonna be very difficult for you
06:50dukes you haven't demonstrated value
06:52then they don't know how to value the
06:53risk so what i always recommend deeply
06:55engage the customer get to the point
06:56where you had your SES do parks and
06:59pilots and system engineers yes part of
07:02the pre-sales after the technical
07:03pre-selling so they're like technically
07:04this solves our problem technically this
07:06is valuable and then you can start
07:07talking pricing and a common mistake for
07:09people that come from mature markets is
07:11they're like oh you know i've got a list
07:13price and they put it on the website
07:14before they've even talked to the
07:15I mean you've basically given yourself a
07:17haircut before you've even started this
07:19guy's down to the advice that market men
07:21always give to everybody I feel like
07:22it's like they're two-word motto which
07:23is raise prices raise prices I'm not
07:26gonna like meditate on that but that's
07:27like their big message okay so then back
07:30to this notion of early customers as
07:32being visionaries they might be the only
07:34one so then how do you deal with that
07:36because you might have one internal
07:37champion to hell you can even have ten
07:39but how do they then get like everyone
07:42else on board especially with enterprise
07:43software where there's integrations
07:45involved and multiple stakeholders tell
07:46me how you convert those other people or
07:48arm them to make the case for you well
07:50that's where product marketing is just
07:51like the lifeblood of an enterprise
07:53what is the box you're drawing for the
07:55customer to buy how do you define the
07:57box what's in the box what's outside the
07:58box that's product marketing in doing
08:00that you define your entire competitive
08:02landscape and like deconstructing your
08:03secret sauce how do you teach 110 100
08:06salespeople how to sell what's unique
08:09about you that's the sales enablement
08:10side of product marketing so you know
08:13we're a little early at user mind for
08:14this but at aptio we took our first 20
08:16customers we got them into a customer
08:18advisory council and we brought
08:20prospects into those meetings and we had
08:22them all talk about what they were doing
08:23and there's nothing more credible than
08:25big enterprise is talking about in
08:26detail their use cases their value
08:28because now it's not you selling them
08:30it's it's the customer selling them so
08:32to me you know whether it's building a
08:34community or it's case studies the arm
08:35the field with or its reference calls or
08:37its you know business ROI calculators
08:40your job is to basically take all that
08:42proof that comes out of your first 20
08:44customers and turn it into materials and
08:47tools that you can teach the other sales
08:48reps how to use like you're not going to
08:50be able to scale your early success or
08:52scale how to sell or scale
08:54which persona did target without that
08:56capability I totally agree that product
08:58marketing is one of the most critical
09:00functions of going to market an early
09:02enterprise ok so don't let's talk about
09:03what the product marketing function is
09:05and why it's so critical if I was
09:07boiling it down it's positioning and
09:08sales enablement and ultimately its
09:10synthesis what do I mean by positioning
09:12by positioning I mean your job is to
09:14basically frame the problem the value
09:17and the technical solution for the
09:18customer and ultimately what you're
09:19trying to do is set the buying
09:22requirements such that your
09:24differentiation is the thing that the
09:26customer will value most and so it's a
09:29mini narrative right that's a product
09:30marketing is in a sales cycle first
09:32you're convincing them of the problem
09:33that's the POV how to think about
09:35something in your company differently
09:36but ultimately what you have to do is
09:38argue that how you solve it is unique
09:41better and different and that unique
09:43better and different needs to be
09:44defensible against the other vendors are
09:46going to be competing with product
09:47marketing are the people who decompose
09:49that and quite often an enterprise those
09:51differentiations are very technical well
09:52you have to be able to translate
09:54differentiation into things that you can
09:57then scale into the field so that's the
09:58other half of product marketing to me a
10:00sales enablement all these tools so that
10:02you can train sales and pre-sales to
10:04replicate and basically go sell the same
10:07way you want you want to execute like a
10:09machine to the same people so you're
10:11nailing your message you're nailing your
10:12differentiation and if you get really
10:13good at it you're also laying landmines
10:15for your competitors right you're
10:16setting up the entire criteria so that
10:19look you want the buyer to organically
10:21come to the conclusion that you're the
10:22only solution that they can choose to
10:23solve this problem and there's
10:24compelling reasons why it's you that's
10:26product part I'd say 70 percent of early
10:28companies had enterprise they're trying
10:29to figure out how to do sales and the
10:30first thing I look for is like do you
10:32have a product marketing function yes or
10:33no because like there really is no
10:36single point in the company that better
10:39encompasses the ability to sale
10:41something in a repeated fashion than a
10:43product marketing right and so it's
10:44interesting because I find the
10:45inclination is you're criticizing sales
10:47when often in like the salespeople doing
10:49the best that they can they just haven't
10:50gotten the tools by the way and that
10:51brings up a third function of product
10:53marketing which is what I call playbook
10:54development so early product marketing
10:56is positioning in sales enablement as
10:58you get mature and you start to see
11:00enough numbers of your deals to where
11:02it's really clear that there's a set of
11:03repeatable plays every company I've been
11:06part of you find a couple motion
11:08you're not just gonna sell a single
11:09motion you're gonna sell multiple plays
11:11so at aptio that example would have been
11:13we had a sales play called you know Bill
11:15of Materials and so you're trying to
11:18find a new CIO whose businesses are
11:21frustrated with IT lack of transparency
11:22and so what you want to sell them is
11:25essentially a bill of materials from a
11:27supply chain that they can deliver to
11:28their buyers to say here's the cost
11:30quality and value by team or at user
11:32mind you know a play is we dovetail
11:34under new chief digital officer x' we're
11:36looking for business transformation
11:37initiatives and if you have journeys
11:39mapped now you're ready for us so it's
11:41basically the set of indicators whether
11:44it's the initiative or the problem the
11:45customer has the person you're gonna go
11:47talk to the set of messaging you're
11:49going to give them that it turns into a
11:51product sale at the end but it's how to
11:53find the ops right and that's a sales
11:55play that's like the full prospecting
11:58selling motion that ends in technology
12:00motion that's what I mean but you just
12:02don't see that until you get a little
12:03more scale I have to have fun this is so
12:05beautiful yeah a lot of people they view
12:07sales says I'm gonna give you know one
12:09slide deck you know to a salesperson
12:12they'll take that slide deck and then
12:15they'll be successful in selling and
12:16know like actually you're developing an
12:19algorithm that they need to follow it
12:22has lots of if else statements and
12:24things like that right which is a play
12:25what you're saying but it's like so for
12:26example like you're looking for certain
12:28actors depending on situations and use
12:30cases you'll change what you say like
12:32I'm used to selling too high an
12:33enterprise and telcos man we're talking
12:35three years sales cycle you know four
12:37people in the account you know
12:38navigating organizations and several
12:40organizations from like the decision
12:41maker all the way up to the c-suite like
12:43just real complex there is no like
12:45single battle car that'll do that these
12:46are these very complicated things and I
12:48do think that product marketing is
12:49responsible for generating that
12:51algorithm before you guys get too
12:53excited about this playbook and the
12:54place you're in a pedigree creation
12:57market readiness situation you're also
13:00in a position where you don't
13:01necessarily know you have product market
13:03fit yet so what happens if you have so
13:05much of a playbook that you're missing
13:07out on opportunities that are emergent
13:09like oh this is a use case we're hearing
13:11about that we actually could steer our
13:13product to more focus on because you
13:15might build that play off the core use
13:17case that you think but your hypothesis
13:19might be wrong you don't know what you
13:22one of the primary functions of an
13:24entrepreneur is to actually get access
13:26to real market signal and it's hard
13:28because all of our capacity for delusion
13:31is so high and we really want it to be
13:33working and we really want that product
13:34market fit and the reality is listen if
13:36you have a sufficiently charismatic
13:38founder they can sell anything to
13:40anybody right and that's not necessarily
13:42signal like that's not necessarily and
13:45you've got product market right you
13:46could always find something you know say
13:47the right thing and they wanted to
13:48engage you can't cash out on charisma
13:50well but unfortunately you'd go for a
13:52long ways but you can't scale it and so
13:54it's important in the early days to have
13:56that emotion but you have to be very
13:57self aware you have to realize that
13:59you're starting brushfires but they're
14:00just brushfires and they may go out but
14:02at some point in time just because
14:04you're getting dollars and just because
14:05they're taking meetings doesn't mean
14:07that this is a signal I mean even the
14:08customers capacity for education is
14:10enormous they're quite happy to pay for
14:12you to educate them so this is a real
14:14real important thing for enterprise
14:16entrepreneurs to try and figure out what
14:17to do is like what is real actually here
14:18Michelle's view on what the real signal
14:21is yeah I know I fully agree it's funny
14:22when we do deal analysis a user mind we
14:25actually called these deals relationship
14:26deals and I and I we call it out that
14:29interesting so you know to me look the
14:32the the signal comes when you get enough
14:34data to see patterns patterns that
14:36validate your ideas so if I look at like
14:39the first two years a user mind where
14:40I'm talking to you know 10 or 15
14:42customers there's just not enough there
14:43to actually start to see patterns and
14:45particularly because a lot of that was
14:47relationship driven so to be honest I
14:48never over weighted my conclusion that
14:50much you know once you start to get the
14:52sales motion working we're likely jen is
14:54not from a CEO discussion where lead gen
14:56is actually starting to happen and you
14:58start to see a customer's kind of get
15:00far enough into the pipeline and either
15:02close or become successful I'm a big fan
15:04of like actual deal analysis and really
15:07looking at who's the title and what's
15:09the initiative and why did they buy you
15:12know in loss analysis so it's not just
15:13the post mortem but you're actually
15:14really figuring out what worked exactly
15:16in fact we just went through it and
15:18prepping for our kickoff and we found a
15:19couple really interesting common
15:21patterns that customers had that if
15:23you'd asked me I would have had no idea
15:25that those were really true get that
15:27data back yeah and so I think just being
15:28really rigorous this is kind of very
15:30fascinating or if you look on a consumer
15:32side product management is very very
15:34data-driven and it's become
15:35that's what a big shift and the kind of
15:37product management function but product
15:39marketing should be equally data-driven
15:41you're looking for patterns in who's the
15:43what's the initiative what's changing in
15:45the organization like you're trying to
15:46find out what's common about the things
15:49that you're doing because that's the
15:51stuff that you can scale yeah and maybe
15:52to make it like even one step more
15:54concrete here like key indicators this
15:56is not an exact science that I look for
15:58that I'm like okay maybe there's
15:59something there so the first one is if
16:01you actually have a production
16:02deployment there could be something
16:03there I mean like it's quite possible to
16:06get a ton of engagement and a ton of
16:07money into parks and pilots and
16:08everything else that's actually really
16:09good still it's not actually moving you
16:12get license revenue and it still remains
16:14shelfware but if someone puts it in
16:15production they want to use it second
16:18one is like across multiple deployments
16:19like there's a simulator in the use case
16:21that you've solved totally to your point
16:22of patterns right like listen if one
16:24bought it to solve one problem other
16:25than another problem other one another
16:26problem you may have just built
16:28something very general like a compiler
16:29and you're just kind of form fitting it
16:31into whatever they need and then the
16:32last one and this is kind of the more
16:34touchy-feely but once you actually start
16:37to see a repeatable sale from a
16:38non-expert then I think you now have
16:40good signal so for example anybody that
16:42can push the deal through without
16:44actually having the original founder I
16:46think then you're kind of getting close
16:47to perfect market fit but it's
16:49unbelievable the capacity for the
16:51customer to pay to learn and it's
16:54unbelievable the ability for strong
16:56founders to make money and sell without
16:59they're actually being a good product
17:00market fit so something I think
17:01everybody in this situation needs to be
17:03very aware of ok all right so let's now
17:06talk about navigating the enterprise
17:07because one of the best lines I think
17:09I've ever heard is that navigating
17:10enterprises like navigating government
17:11it might be like navigating a city like
17:13there's lots of different players lots
17:15of different agendas and it's not
17:16necessarily unified view and one of the
17:18beautiful things about software is its
17:20malleability and ability to cut across
17:22however you got to get in the door so
17:24how do you guys navigate organizations
17:26with software as sort of the vector in
17:29like how do you break down silos well
17:30you know it's interesting so I always
17:31have a pet theory that if you can create
17:33a new role in a company it's the
17:35ultimate act of category creation you
17:37know at a bo the ultimate expression of
17:39TV technology business management is
17:41that there now are TBM people in the
17:43company we created a new function within
17:45finance an IT and a new set of roles and
17:47responsibilities to the point where
17:48title of that person changed their job
17:50responsibilities changed that's the
17:52ultimate expression of category Gration
17:53the old expression on category ssin is
17:55software change the work in the
17:56organization therefore the org looks
17:59different that's my favorite thing about
18:00suffering yeah I love it so and you know
18:02when I when I founded user mind one of
18:04my central premises was the line between
18:07IT and the business is blurring if you
18:08look at the future majority of software
18:11applications that are gonna be built are
18:12gonna be consumed by non IT they're
18:14gonna be bought as SAS and so you end up
18:16with actually now HR sales finance our
18:19gigantic IT organizations and they don't
18:21even realize it so one of the questions
18:22I asked myself is like how is the
18:25organization going to change new teams
18:26are gonna get formed in order to manage
18:28this technology people are gonna realize
18:30that you don't want to manage marketing
18:31software and sales software what you
18:32want to deliver is services so my theory
18:35is that customer experience this idea of
18:37customer journey is the same idea that
18:39transformed IT and reorganized IT and so
18:41if you play out this idea you know ten
18:44years from now my belief is you're gonna
18:45end up with a business technology team
18:47whether it dots into IT or it stays in
18:49the business it will own all of the
18:50technology end to end and it will be
18:52responsible for and and customer
18:54journeys end-to-end customer experiences
18:55so the ultimate outcome is that there's
18:57a new role a new function a new team new
19:01job titles that get created but that
19:03takes a long time but that's what we're
19:04all trying to do when we talk about you
19:06know it's a dent in the universe you're
19:07changing the way companies work you're
19:09changing what people do on a daily basis
19:11so that's what I believe categories end
19:14up doing listen if you're entering
19:16somebody else's playing field like
19:17you're selling you know tissue or
19:19something else like that you're playing
19:20by somebody else's rules so a lot of the
19:22time they're walking in the existing
19:24work structure which is built around an
19:25existing procurement process you know
19:27there's existing roles that are used to
19:29have relationship to the existing
19:30vendors and budgets that are being
19:32allocated to certain things existing
19:33criteria baked into the organization for
19:35what they value and think that's
19:36important that's exactly right and so
19:38you know it's almost like things happen
19:40in two phases totally your point so the
19:41first one is your reverse engineering
19:43all of the context around those things
19:46how does this person think how is this
19:47budget allocated like we did this with
19:49network virtualization it didn't exist
19:50it wasn't a budget item and the first
19:52question we ask is like are we doing
19:53networking budget or are we doing
19:55security budget we're doing
19:56virtualization budget and then we said
19:57who are we selling to the networking
19:58person the virtualization person we
19:59found out it was a new person and
20:01totally to your point
20:02after we were done there was someone
20:04that was responsible for the virtual
20:05networking layer that's phase two right
20:07early on you're you're absolutely right
20:08there's important key aspects you've got
20:10to navigate and understand and then
20:11hopefully if you're doing category
20:13creation right you create your own and
20:14then and then you actually control the
20:16definition of the context around them
20:17and then others have to navigate in your
20:19wake and by the way the customers are
20:20looking to you for Thought leadership
20:21yeah and ultimately I always say that in
20:24a category company product strategy also
20:26has multiple chapters so to me you know
20:27chapter one is platform yeah I mean
20:29you're leading the customer with your
20:30vision but good category companies
20:32creators product ties content into the
20:34platform so you prioritize your customer
20:36advantage by the time somebody else
20:37pivots into your space ideally you've
20:39created more differentiation that's not
20:42just platform based based when I post my
20:44feedback I want to go back to this idea
20:45you guys keep touching on which is
20:47thought leadership and narrative and it
20:49comes in different forms but one of the
20:51challenges I'm marking in your case you
20:53guys had the narrative baked before you
20:55even started selling you had all those
20:57papers and all these beautiful things
20:59like you guys knew the value proposition
21:01you wrote a paper that actually Software
21:02Defined Networking the enterprise you
21:03already built that you had your content
21:05frankly literally yeah so why was it so
21:07freaking hard to get started then
21:09narrative was there the level of naivety
21:12I've had over the past decade in general
21:15right has just been enormous and this is
21:16one example of that which is I came from
21:19you know an academic environment where
21:21you know we kind of argued and
21:23understood all of the properties but if
21:25you're living in kind of that bubble you
21:27forget that other people may not even
21:29recognize the problem that you're
21:32solving and so you're kind of coming
21:33with a solution without even having to
21:36find the problem right and it's like
21:37this is such a cliche but it's like the
21:39Henry Ford quote which is like if I ask
21:40them they would have asked me for a
21:42faster horse right like which by the way
21:44that's the folklore but he actually
21:45didn't say that but that's still true
21:47which is like but if he did I think is
21:50actually true yeah I'm very useful yeah
21:53yeah so I mean there's one of these
21:54things where like we're probably 10
21:56steps ahead of them and I think so much
21:58of building an early enterprise company
22:01and changing the way the world works is
22:03understanding how people view the
22:05environment mapping yourself to that and
22:07then incrementally changing it to
22:08understand the value of your solution
22:09which is a multi-step process yeah yeah
22:11I always tell people you know I think
22:13this is why you know when you
22:16when you found a company I think there's
22:18a lot of pressure to basically build a
22:20better existing thing it makes more
22:22it's easier to monetize it's competitive
22:25by the way it's really clear who you
22:26should be selling to I think very few
22:28investors and founders have the patience
22:30for the level of uncertainty that it
22:32takes to build a new category and I
22:35think that's because like you're
22:36literally debugging every piece of the
22:38supply chain you you don't exactly know
22:40who's ultimately gonna be your buyer you
22:42don't exactly know if even though you
22:44frame the problem you don't know exactly
22:46what initiatives what are the repeatable
22:48signal that you can have your sales team
22:50listen for that says this person is
22:51likely to value my framing you haven't
22:53convinced the analysts or anybody in the
22:55world that like your ideas super
22:57provocative and really right they've one
22:59small piece of what you're talking about
23:00like if you're doing category creation
23:02you would think like well either you're
23:04competing with some existing set or
23:05you're competing with nothing at all and
23:07it actually tends to be like not either
23:09right so often in categorization you're
23:11actually competing with the status quo
23:12that's a very nuanced message to get
23:15across without calling the baby ugly
23:17right you're kind of people inside that
23:18company have a lot more skin in the game
23:20basically saying the way that you're
23:22doing it is wrong I mean it's not like
23:23there's no competition that you're
23:24competing against an existing process or
23:26maybe a band-aid solution there's some
23:27ownership of that and then if you start
23:29to have a little bit of success then
23:31every company in the world starts to
23:33position against you right and then all
23:35of a sudden it's like pivots from like
23:36the incumbents every other startup says
23:38they do what you're doing even though
23:40they don't and then now it's like almost
23:41like shadow boxing you're positioning
23:43against like you know people have taken
23:45your tagline and so forth and so even
23:47just from like that one narrow view of
23:49competitive positioning cut aberration
23:51is a very nuanced but what if you're so
23:52you talked about that sometimes the
23:54competition is a status quo and that's a
23:55really key message here especially in a
23:57market creation got a great creation
23:58situation how do you navigate the build
24:01versus buy thing and the whole not
24:03invented here syndrome I used to see
24:04this all the time so first of all if
24:06people are thinking they're gonna spend
24:08money to build your thing that means the
24:11problem is acute enough or if they're
24:13willing to put money there so from my
24:15point of view that's signal that says
24:17your idea is probably right so don't be
24:19depressed by it no no that's a great
24:21validation I just want to say we
24:22actually look for that in diligence
24:23how interesting so like when we're
24:25diligent company if we find band-aided
24:27like crummy solutions that are already
24:30so to me that's good and by the way then
24:33the other thing is an entrepreneur is if
24:35what you do is really right there is
24:37probably a segment of the market that is
24:38gonna build it it's so core they have to
24:40build it but as I mean your market isn't
24:41gigantic like from my point of view you
24:44know majority of companies do not have
24:46the amount of money the commitment
24:48attack the good enough developers to
24:50really actually go deploy it so first
24:53that validates the idea then the second
24:54thing is how do I sell against bull
24:56versus buy right and look now I'm making
24:58a business case I'm trying to argue the
25:00ROI of not only not tying up opportunity
25:03cost right of your existing developers
25:05to build this thing but the ongoing cost
25:07of maintenance and the benefit of like
25:09I'm gonna do this for a thousand other
25:10customers so you're not just gonna get
25:12the thing you rolled you're gonna get
25:13the benefit of every other customer and
25:15every other feature and every other
25:16thing it's like the whole premise of SAS
25:17and cloud anything in that sense you're
25:19literally sharing R&D and insights yeah
25:22to me this is the next phase it's like
25:23you get past bill versus buy and then
25:25there's some vendor who's like mom you
25:27know 70% of what user mind has at 20% of
25:29the price and now you have not now
25:31you're in war yeah I like that phase to
25:32like that's my favorite phase good but
25:35just the other bookend on the
25:36competition is basically an incumbent
25:38selling on futures oh yeah what do you
25:40mean by that so a fast follower builds
25:43like some crummy version what you do and
25:44they basically give it away
25:45that's one book and the other book in is
25:47like big incumbent ex says we're gonna
25:50do exactly what say user mind does we're
25:52gonna do it it's on our roadmap okay you
25:54know but because they have the account
25:55control and because they have dollar
25:57leverage and because they can like play
25:58around with discounting and stuff like
26:00sometimes the the companies but then how
26:04do you as a founder actually address
26:06those two cases of a competitor who's
26:09essentially trying to position in the
26:11same space or an incumbent selling on
26:13futures that's why product marketing
26:15matters so product marketing's job is to
26:17articulate how whatever it is
26:19architectural II they suck or
26:20feature-wise they suck drawing the box
26:22right so like the things that only you
26:25why is that a must-have for this
26:26customer you know there's one-way doors
26:28in two-way doors I'm really big into
26:30painting the other vendor as a one-way
26:31door most enterprises that I sell to
26:33have an adoption curve they want to
26:35think about a four year implementation
26:36cycle of a product a cheap competitor
26:38they'll get you 20% of the way we're
26:41gonna get you a hundred percent of the
26:43you haven't even thought about the
26:44problem deeply enough to understand that
26:46yeah this year you may want some simple
26:48rules but eventually you know what
26:49you're gonna want you're gonna want all
26:50machine learning driven customer
26:52journeys and we're the only platform
26:53that can scale from simple rules to ml
26:55driven journeys so it's again back to
26:57the narrative arc but that's product
26:58marketing you have to be great at
27:00product marketing ok a couple of quick
27:03things I wanted to ask you know Michelle
27:05any things that's fascinating to me is
27:06that you guys you know you talk about
27:08this customer first journey and this is
27:10something that every enterprise wants
27:11every company forget it cares about the
27:13customer and especially in this age of
27:14Amazon which is pretty much nailed the
27:16whole customer part of it what happens
27:19when you have non tech users though as
27:21your customer like what are some of the
27:22nuances of navigate could you money on
27:24your software gives them superpowers
27:25which is incredible to be like an Amazon
27:27on the other hand there might be
27:29differences and how they deal with
27:31software like what are your lessons
27:33there well one I think the future of
27:35coding is in non-technical people I mean
27:37you know user mind is fundamentally a
27:39rules engine for non-technical people so
27:40like when you think about the future of
27:42innovation its democratizing development
27:44the future of innovation is not having
27:46more developers code the future of
27:47innovation is getting non-technical
27:49people to be coding you know look I
27:50think our belief is that the answer is
27:52you actually need both the technology
27:54for the business users you want to
27:56empower them free them but unique
27:57controls both security data promotion
28:00permissioning for IT and so the winning
28:03technologies to me are ones that
28:05straddle both the really technical
28:06people and empower the business but put
28:09controls in place so they can't just
28:10break production by doing too many
28:12deployments just one quick thing and
28:14it's more of an underscore which is if
28:16you're have an enterprise product that's
28:18going to market today to a non-technical
28:21user say marketing for example like what
28:23we're seeing is that the organization
28:26hasn't fully shifted and so most of the
28:28products we see in the space have to
28:30position both to IT and to the line of
28:33business and it used to be just core IT
28:34or you could imagine just the line of
28:37business now you know one company I'm on
28:40the board I'm like literally there's two
28:41pitches like if the IT guys in the room
28:42you do this and if it's you know the
28:44line of business that now that may
28:45change in the future but now realize
28:47that there are two very different
28:49stakeholders that have very different
28:51ways of speaking that you have to appeal
28:53to this is another thing that's
28:54completely come up in this podcast
28:55multiple times is this two-phase thing
28:57are in this market creation situation
28:59you have people now where their head is
29:00that and where they're going and then
29:02you have this like double phase on a lot
29:04of the things you do basically yeah
29:05actually this is been a learning I like
29:06a big learning in might in the last two
29:07years it's like we all talk about the
29:09line of business being empowered but we
29:11talk about less is that it's a
29:13transition that isn't complete yet
29:15right and so like it really is about
29:17navigating both sides in a sales process
29:19today the technology in business is so
29:22complex now that you actually need IT
29:24engaged because you're like building an
29:26SOA system I'll give you an even a
29:28simple SAS company and you ask them you
29:30know how many tools do you have it's
29:31like 50 how do you connect them together
29:32well that's a really calling you know
29:34that's really really complicated by the
29:36way you change Sora and it breaks
29:38Marketo like how often do we hear that
29:40so when I look at that I actually think
29:41now running the business is a very
29:43complicated technology problem in the
29:44front office there was a narrative for
29:46some time that like I t's dead I think I
29:48t's changing I think I t's gonna become
29:50an integration and configuration
29:52organization and it's gonna become
29:53horizontal for real modern enterprise
29:56platforms you sell the value to the
29:59and you sell the technology challenges
30:00to IT and you need that's a complex sale
30:03and by the way if you if you know how to
30:05do that well you win but as you said
30:06earlier you have to be the kind of
30:08entrepreneur who can handle this
30:09uncertainty and play this long game to
30:12so what's your parting takeaway or
30:14mindset or advice for others trying to
30:17do this investing product marketing your
30:20product function yeah I mean look the
30:21beauty of enterprise is that enterprise
30:23can be figured out over a number of
30:25years so the reason why a founder out
30:27there is listening to us should be super
30:28excited about enterprise is that in the
30:30enterprise relationships are forgiving
30:32and people want to help you succeed
30:34these enterprises you don't have people
30:35in their office every day wanting to
30:37change their life and when they find
30:38people who they believe really want to
30:40do that they want to work with you to
30:42help you be successful and that those
30:44relationships the customers if you pick
30:46the right first 20 and you know how to
30:48realize which piece of what they're
30:50saying is really right they will
30:52actually help you figure all this stuff
30:53out and I think it's Martines earlier
30:55point you just need to be really squinty
30:57eyed like you as a founder have to be on
30:59some level super delusional and
31:00convicted that there's this big market
31:02yeah but you have to be really open on
31:03the details maybe your personas wrong
31:05maybe your features wrong maybe your
31:07positioning is wrong and and and like
31:09you're gonna iterate and be patient
31:11yourself be patient because in the
31:12enterprise like what I thought in your
31:14one of the company what I thought in
31:16your two of the company and what I think
31:17now and your three of the company
31:18they're all related there's a very clear
31:21arc to that but they're not the same
31:24and that's that's success that's not
31:26failure that's rose thank you for
31:28joining the a6 and Z podcast my pleasure
![How To Succeed As A NEW & YOUNG Realtor [Deals Every Month + Luxury Listings]](/_next/image?url=https%3A%2F%2Fi.ytimg.com%2Fvi%2FrtrRghgTayc%2Fhqdefault.jpg&w=3840&q=75)
