The ugly, unspoken truth of being VC funded
Season 6, Issue 1, a reality slap in the face
Hi Mehketeer, and WELCOME TO SEASON 6!
When I was a wee baby Mehdeeka, I was really taken in by the idea of being early to a startup, setting up marketing, growing a big team, and then being CMO. This has happened for a bunch of companies/marketers! And great for them. Didn’t happen to me, though.
I had a much more “regular” experience of working in a venture capital (VC) funded company that was openly saying “we don’t want to spend more on marketing, we don’t want to hire more in marketing”, which to me sounded like a bubble bursting and my dreams being dashed before my eyes.
At first, I really didn’t get it. Our numbers were good, the more money we spent, the more leads we got, the more sales we converted. Why wouldn’t you want to ramp that up and throw more money at what was working?
Well, there’s a bunch of valid reasons marketers are probably familiar with by now:
Higher marketing and sales efficiency is good, maximising the return for every $1 spent
Demand generation, where the customers serve themselves up on a platter for you
Ramping up strategic outbound sales teams, focused on high average contract value (ACV) deals and ideal customers
Introducing self serve, product-led motions
But there’s another, less spoken about reason. VC money.
Those dot points above are more like symptoms rather than root causes for not wanting to grow a marketing team. The root cause is that startups and VCs are looking at pure numbers, and where they can lower an input (marketing spend) and increase an output (revenue), they will always chase that.
I got a bit jaded when this was happening to me, but I’ve come to agree with it over my years of working in funded startups. Marketing teams need to reduce wastage (time spent on half baked campaigns, lack of strategic work, waiting too long to turn off ads that don’t work) and focus on high quality, impactful, measureable work.
Marketing is often seen as a cost centre
Two things here:
As marketers, we know we contribute to revenue. We could be better about making that more well known internally.
Marketing has a generally negative reputation (see: marketers who say their efforts can’t be measured, bloated traditional teams, and agencies taking business owners/founders for a ride)
And how to solve these:
Go to your related teams (sales, customer success, product) and ask what problems they’re tackling, then take this back to your team and brainstorm “how can marketing assist on this”.
Sometimes the answer is “we can’t” and sometimes the answer is helping out with content, adding FAQs to the website, organising a webinar, or something else. Look for a one to many approach, where you’re focusing on a pattern, not an individual prospect or customer’s problem.Shout about your contributions, and make sure you always tie them back to either revenue or how this will impact (in a positve way) another team. Don’t do this in a presentation that people have to attend, because then it’ll be like “marketing taking up time” - do it asynchronously.
Make sure you always set context before saying what you’ve done, and follow up with what you expect the results to be in a very tangible way.
An internal newsletter is a good place to start, but you can also try and claim a slide in the investor update deck each month or quarter, or just be more active in any Slack/Teams channels that are dedicated to celebrating wins - even if that means sneakily hiding the promotion inside another message, e.g. big thanks to [teammate] for helping me on [project], it’s finished now and available to check out [link]. Couldn’t have done it without you!Work on relationships. You want to get to the point where other teams are saying “let’s get marketing in here.”
Some “shout about your contributions” examples in this back issue:
Start thinking like a VC
Be ruthless about how you’re evaluating what you’re spending your time on. If you cannot tangibly link it back to revenue, deprioritise it. Try to avoid getting attached to your own ideas, even when you think they’re really good.
Think about what metrics would go into a VC pitch deck or monthly investor update. This will obviously be different depending on your company, but it’s not rocket science.
Headcount vs revenue to get rev per employee, you can do return on marketing spend (RoMS) against how many people in your team/marketing.
If you have shorter sales cycles, are you making your marketing spend back within the same month you’re spending it? And then how much extra revenue is coming from that lead gen cohort over the following months? This one is really interesting to look at, and can justify more marketing spend if you want to grow your budgets. (I’ve got a tracking template for this in the Mehdeeka spreadsheet, second tab)
Month on month (MoM) and year on year (YoY) growth. This is also one of the reasons I’m such a huge advocate for solid documentation, because it makes doing a retro so much easier.
Old trusty customer acquisition cost (CAC), I feel like this doesn’t need expansion from me, you can Google it if you’re not familiar.
In general, when working in startups I think employees should be watching non-marketing numbers like MRR and net dollar retention (NDR), churn, burn rate, and how much and when the last raise was.
When you’ve got access to sales numbers + marketing budgets, you can figure out a company’s finances pretty easily (salary is a black hole of mystery though).
Use this to know when to push and when to pull in marketing - do you need quick sales turnarounds or is now a good time to work on larger strategic pieces?
If you’ve calculated your company’s runway, around 9 months before it’s due to run out, take a good look at all the company numbers to see where marketing can make the most impact. If you’re in a good spot, prep your argument as for why marketing should grow, whether that’s new channels to explore, a new contractor/agency, or even learning and development for yourself!
If you’re still aspiring to grow a bigger team, start building a case for contractors or agencies to fill in those gaps, and focus on growing your stakeholder management and strategic planning skills. Step away from executing, and coordinate others to execute. This will allow you to work on “more” while still being a small team, just be aware that it could be cut off at any time.
If you know that your time isn’t infinite at your company, start thinking about what skills you want to learn. When you are a solo marketer, you do get to steer the ship a little, so steer it into waters where you want to learn and grow. Try a little of everything, see what you do and don’t like, and generally try to have a good time. Once you have done the rounds, ask yourself “what could I see myself being dedicated to?” and use that to plan your next career move. It could be specialising and going deep, learning people/process/project management, or continuing with what you’re already doing.
Startups can be wild, but if you think like a VC and stick up for yourself, you can get a lot out of them (other than $).
Less pessimism, more optimism!
Have some fun:
Browse branded content ad libraries on Facebook! I love what data transparency has done for seeing what ads your competitiors are running, and now this has been extended to branded content, aka sponsored influencer posts
A hint for next week’s topic, artist Berta Vallo designed this wine label for Wine52 and I love the summery vibes (we’re finally getting out of winter, thank you)
The NFL’s advertising is crazy good, and they did a “table read” of the next season. Check out the video here.
This “game” comes with a huge side dish of “I hate this game” - make a secure password.
And that’s the Season 6 opener! If you liked it, spread it around 🥰
See you next week,
Kayla
Very interesting insights eyes