Chapter 16 - Selling to the ‘Cool Kids’
To read:
The customer-centric CEO: Becoming customer-centric is an essential part of growth and a fundamental driver of success, argue marketing professors Noel Capon and Christoph Senn.
Selling the Wheel: Marketing is explored as an ancient parable in this Slideshare review of the fascinating story by Howard Stevens and Jeff Cox.
The most important customers: A small percentage of customers represent a very large percentage of company revenue. So treat them accordingly, argues technology executive Nello Franco.
Ego trip: Here’s how to turn ego from a consistent, costly liability into a fixed, appreciating asset. Yes, ego is your most important asset, argue the authors of Egonomics.
Cross the chasm: The concept of “crossing the chasm,” developed into a classic idea by author Geoffrey Moore, is foundational to any understanding of markets and marketing.
Chapter 16
Selling to the ‘Cool Kids’
“Early adopters are literally the bridge to the future. Nurture them and your efforts will be rewarded.”
— Geoffrey Moore, author of Crossing the Chasm
You know who they are. Or you will.
They are the “names'' in your line of work. Those who the journalists call for a reaction when a new factory comes to town, or when one leaves. They’re the ones on the panels when you attend a conference, describing what’s to come next. In social gatherings, they draw listeners like magnets, as everyone seeks a bit of their wisdom. In Silicon Valley, they hang out at Buck’s. In Austin, you’ll spot them at Lola Savannah. In Boston, you’ll bump into them on Newberry Street. They’re the success stories and the trendsetters. The legends. The pioneers. Some are truly visionary.
They serve on the boards and committees of the trade associations. They take time off to serve as guest lecturers, or Entrepreneurs-in-Residence at the business schools. Often, they’re active in philanthropy.
In a phrase, they’re the “Cool Kids.” And when you launch your business, you want to be in their orbit. You want to find a way to bask in their aura. Ideally, you want them to be your earliest customers. Or, you want their customers to be your customers.
To borrow and bend a phrase from George Orwell’s famous novel Animal Farm: “All customers are equal, but some customers are more equal than others.” My point is that while every potential customer deserves the utmost of your attention, the Cool Kids are the protocustomers, the influencers, and the market makers you need to court from Day 1.
Now I want to tell you more about courting this group of potential allies. But before I do, I have to ask you to take a preliminary step and look inward. An essential element of any effort to woo the Cool Kids is the aspiration to be one yourself. And a warning — it’s not about hoodies, black t-shirts, TikToks, or wearing shoes without socks. Here’s the test:
Do you love the industry that you are trying to sell to? Or at least, do you deeply respect it? Are you already geeking out to some degree in its ecosystem of books, newsletters, webinars, podcasts, or even trade shows and conferences? Is this industry or sector your passion? In short, and going back to the principles in Chapter 1 of this book, The Soul of the Entrepreneur, are you ready to step into what President Teddy Roosevelt called “The Arena” of your business stratum?
Of course, if you’ve journeyed with me thus far in this book, you’ve no doubt already answered these questions to some degree. But to put a finer point on it, the key to selling to the all-important Cool Kids is to make sure your interests and passions truly align with theirs. Until you actually begin marinating in the same industry conferences, newsletters, and magazines that the leaders among your sales prospects attend and read, you won’t know if you are passionate about that industry. If you aren’t, then you won’t make it by faking it. In my opinion, life is too short to waste your time doing so and you should move on to something that is worthy of your energy and will fuel your entrepreneurial drive.
But if you can look in the mirror and say to yourself, “I’m going to change the world in biotech,” or, “I’m going to dent the universe in nanotech…” and you are studying this field of choice like there’s no tomorrow, then a beautiful thing is happening. You are ready to be among the Cool Kids that you will grow to know and need. As you spend time in their intellectual spaces and physical places, you will recognize that there are certain people in the industry that are key influencers. They are the ones who stand out and tower above the field.
The Cool Kids stand out for two broad reasons. First, they want to be seen as the key innovators in their industry. Most often, they are. This is good for their ego and, ultimately, their career. They get promoted where they work, or are recruited to their next company much faster than the average person in their industry. By ego, I don’t mean anything bad — all leaders have it and it is a healthy thing. On the Digital Companion, I share a summary of a great book on the subject, Egonomics, that describes this animating characteristic in detail. The second quality of the Cool Kids is that they have reached a point in their careers where their energies are resonating outward — they are the student who has become the teacher. This is validated by the fact that their peers have elected them to boards and committees, that conference organizers seek them out as panelists, or that journalists quote them. And every industry has them.
There is an aphorism, variously attributed to Gautama Buddha or the Taoist philosopher Lao Szu, that counsels, “When the student is ready, the teacher will appear.” This is an insight I’ve experienced in many ways — as both student and teacher — over the years. So I urge you to reflect upon it, understanding that the more avid a student of your chosen sector you become, the sooner the teacher will appear. This is what I mean by joining the Cool Kids.
In this vein, one of the most important entrepreneurial books I've ever read is Crossing the Chasm by Geoffrey Moore. If you haven’t read it yet, please pick it up as soon as you’ve finished reading this volume; I couldn’t recommend it more highly. In the book, Moore describes the key segments of virtually any industry that you will try to win: the innovators, early adopters, early majority, late majority, and laggards. I have lived this book — at Coremetrics, Bazaarvoice and now at data.world. In a sense, this entire book is on what I call the Cool Kids. In his terminology, they are the “innovators” and “early adopters” in the general segments of every marketplace, with the other segments being the early “majority,” “late majority” and the “laggards.” Simply put, the Cool Kids help activate and energize the rest.
The Cool Kids I describe are almost always in the innovator and early adopter segments. Now Moore’s “chasm” concept is a large one, shared by many business sages, and I include a summary of it in the Digital Companion. But two of its key insights are critical here. First is the “chasm” itself, this gap between the two broad groupings of the market segments, down into which many an entrepreneur plummets, never to be heard from again. Moore calls this gap the “point of peril.” The second key concept he elucidates is that of the “whole product,” a notion that is ultimately valid for both B2C and B2B businesses. When I use the term “whole product,” I mean the entirety of a solution a customer must acquire to use the specific product you are selling. To state it simply, if your product is reusable coffee pods that are compatible with Keurig coffee makers, then by definition your customer has to already own or buy a Keurig before you can sell that customer on your reusable pod.
To offer a more complex example, think of it less as selling products than as selling outcomes. Often you are selling empowerment. At Coremetrics, we were selling the ability to use online analytics. At Bazaarvoice, we were selling customers the ability to engage socially with their customers at scale. At data.world, our “whole product” is the transformation of companies to become data-driven. Stop and ponder this for a moment. Almost any product or solution you can imagine exists in this context of the “whole product” and you must keep this in mind. Cool Kids think, live, and work in the realm of “whole products.”
The innovators and early adopters, on one side of the chasm, are often those intrigued with any fundamental advance or innovation. Unlike the majority and late majority, on the other side of the chasm, they are willing to experiment with the new and untried. That said, “there are not many innovators in any market segment,” Moore warns. “But winning them over at the outset of a marketing campaign is essential nonetheless, because their endorsement reassures the other players in the marketplace…”
This second key notion, of “whole product” strategy, comes into play as you cross the chasm into the later market segments that are ultimately the much larger and most profitable slices of your target audience. And here the “whole product” becomes much more of an issue as the buyers become both more pragmatic and conservative, and they will again look to the Cool Kids.
“Despite the overall high-risk nature of the chasm, any company that executes a whole product strategy competently has a high probability of mainstream market success,” Moore writes.
In other words, this is all about “product-market fit.” As one of our largest and most helpful investors at data.world, Pat Ryan, puts it: product-market fit is “the only thing that matters.” He has a video podcast series, named just that, and you can see our discussion of this topic linked on the Digital Companion.
Whether by Moore’s terminology or by that of my friend Pat, the Cool Kids are your guides and mentors. Once you win them — and, most importantly, do a great job of servicing them and making them successful with your solution — they will work hard to help you convince the early majority, late majority, and even laggards to become your clients. It is in their best interests to do so because of the two reasons I cite above about why they want to be known as the Cool Kids in the first place.
As you think about winning your first clients, you need to frame your thinking around these strategic concepts as you ask the question: Who first? Opportunity cost — the hidden loss that is a gain forgone by the choices not made — is very real for any stage company, but it is critical for an early-stage endeavor. The key to success with both Coremetrics and Bazaarvoice was winning over the key industry influencers, the Cool Kids, first. Then we would write case studies about our success with them, do webinars with them, ask them to speak at our client summit, help them speak at industry events such as the National Retailers Federation’s annual “BIG Show” expo, help them win industry awards, and ask them to serve as references. This was especially true when web analytics and online word of mouth were so new they were seen as the next hot things. The Cool Kids helped us cross the chasm, to be sure. But they also were critical to winning the rest of the market, which largely followed their moves.
Among those who have helped me at various times at Coremetrics was John Lazarchic, the head of e-commerce at the pet food retailer PETCO. Another was George Coll, who was the head of strategy for computer retailer CompUSA, and is now the CEO of BWW Media Group. And Matt Corey, then head of marketing at Golfsmith, now Chief Marketing Officer of PGA Tours, was a Cool Kid who helped us greatly. More recently, D.J. Patil, the nation’s first Chief Data Scientist during the Obama Administration is one of the Cool Kids, now helping data.world on our Advisory Board. So is Sam Palmisano of IBM, who is both on our Advisory Board and who is an investor. Kelly Wright, who took sales from data analytics firm Tableau from $10 million to over $1 billion, also serves on our Advisory Board.
Let me pause here and explain my own background a bit because I think it will help make my points more clear. Digital retail spoke to my passion beginning when I was a child. My parents were entrepreneurs from before the time I was born, specifically in retail and direct marketing. I’ve programmed since I was seven years old. Most of my career has been about transforming retail into the digital age. Three of the six companies I’ve started have been in this vein. The first, BodyMatrix, was my online retailer selling sports nutrition products. The second, Coremetrics, was influenced by my experience at BodyMatrix as I brought the same — and ultimately much better — analytics I had developed for my own needs to retailers all over the world. The third, Bazaarvoice, was influenced by the confluence of my experiences at both BodyMatrix and Coremetrics, and brought the power of digital word of mouth to change the face of digital retailing forever. As digital retail was such a passion, I naturally studied it and became somewhat of an expert in it. This eventually earned me the recognition of my peers, resulting in me serving on the Board of Directors of what is now called NRF NXT, the digital-focused arm of the National Retail Federation, the largest trade association of retailers. I was elected by my peers — mostly retailers — to the board for three terms over six years.
In the digital retail industry, the NRF NXT is where the Cool Kids hang out. Sure, there are many other events, including eTail and Internet Retailer. But NRF NXT, — formerly known as Shop.org — is where you go to learn and network. It is a non-profit, unlike eTail or Internet Retailer, and it is where the highest level people in digital retail go as a result. Today, Shoptalk is the biggest eCommerce conference. ShopTalk is a new conference that’s focused on retail tech. And of course, there’s the grandfather of them all, the half-century-old Consumer Electronics Show, or CES, in Las Vegas, that draws nearly 200,000 people. And I’d of course be remiss if I didn’t mention the coolest of them all, Austin’s South by Southwest (SXSW) festival of the mind and senses that merges music, film, media, and technology as SXSW. The point is that in every industry, people are looking to connect with their peers, to learn, and to teach. Ultimately attendees at such gatherings seek to avoid complete bombardment by vendors while they are at their industry’s events. In every industry, there is a Shop.org or NRF NXT of that industry and you need to swim in it. If you are genuinely passionate about it, that will shine through and your glow will immediately differentiate you from the many salespeople that attend these events.
So, enough on who the Cool Kids are, where they hang out and how best to meet them. Let’s get to the ultimate question: Just how do you win them over and sell to them? For starters, you need a team. But again, as I asked of you at the beginning of this chapter, you need to look inward. To answer that question of how, you really need to determine what type of CEO and leader you are, or will be, when it comes to this all-important matter of sales.
There are four principles that can guide you to getting sales right. First is the leader of the sales team and the leader’s immediate supporting cast. Second is the creation of a sale-driven culture, the oxygen generating machine that breathes life into all areas of the company. Third are the story-telling tools, the compelling “demo” that your team will use to explain the product clearly and understandably — and I’m not just talking about a PowerPoint deck. Fourth and lastly, you need a great Board of Advisors that draws from and reflects your industry, which is a point I’ve already alluded to but want to underscore.
Let’s walk through the principles:
First as discussed in the previous chapter, I believe that the CEO must be engaged with the sales strategy and tactics for a host of reasons — led by the fact that sales is the oxygen of commercial metabolism. But not all CEOs are natural-born salespersons. It certainly makes it easier if you are that type of CEO because it is then easier to identify people that can sell like you can. But this is rare. Steve Jobs was certainly one of the best examples. IBM’s Sam Palmisano is another. At the outset of my career, however, I was not, and this is the more common case in the entrepreneurial realm. You really need clarity about your own sales aptitude and temperament to determine both how you will develop your own skills and how you will shape and develop your team. As we’ve already discussed, your engagement with sales is a non-negotiable imperative. But at the same time, you don’t want to be a loose cannon that gets in the way of your salesforce. There’s a great essay from the Harvard Business Review, linked on the Digital Companion, on the various ways CEOs can engage with their sales team that also explores this issue in detail. The essay, When CEOs Make Sales Calls, dubs these kinds of CEOs as “seagulls.” That’s because, as HBR puts it: “They fly in, make a lot of noise, leave a mess, and fly off, maybe or maybe not returning to the same spot.” And that’s not the kind of CEO you want to be.
Better than being a “seagull” is becoming, or better yet hiring, a “Cassius the Closer” with whom you can work and with whom you can build a true sales culture. “Cassius” is a mythical character in another gem of a book I recommend, Selling the Wheel, by Howard Stevens and Jeff Cox. A Slideshare of it is linked on the Digital Companion. It’s an imagined ancient parable about the invention of the wheel and about the inventor/entrepreneur who couldn’t figure out how to sell his creation to the Egyptians. Cassius, as you might suspect, is the lead protagonist. He’s a self-starter and is adept at demonstrating the power and practicality of this new technology called the wheel. He also can impart the vision of the wheel’s potential — in this case selling it to the Egyptians who are trying to figure out how to build pyramids. Cassius, of course, resonates passion for the product and emotional energy. With his devotion to the product, he usually closes sales in just one or two meetings. At the outset, you need a Cassius, and Selling the Wheel also offers insight into the types of salespeople you will need to add to your team as you grow and mature. Salespeople are a very unique breed of people, and I love them for it. They will bring you revenue, and delight your clients. The best sales professionals care about the ultimate value delivered — not just the immediate deal but the “whole product” as I mentioned earlier. Ultimately it’s the sales team that increases the valuation of your company and your ability to create jobs and realize your entrepreneurial dreams. Respecting them deeply is a must.
The second principle is the nurturing of the culture that will shape the mindset that channels energy toward sales. It’s great that you have found a simpatico Cassius with whom you can work, and assembled a professional sales team to support them. This is a critical and very concrete set of tasks. But right behind this comes an equally important challenge for you as leader that is far more abstract. This is the creation of a “sales-driven culture” throughout the enterprise. As we discussed in the last chapter, the sales team is the first violin who sets the melody, but everyone is in the orchestra and everyone needs to keep sales top of mind. We’ll discuss culture more broadly in Chapter 19, The Five Critical Ingredients to Build a Big Company. But here I want to emphasize that the measure of the respect you are showing to your sales team is really in the kind of general sales culture you create.
I emphasize this in part because at Coremetrics, I didn’t get it right. I made the mistake of many founders early in their careers when I projected my own strengths in the wrong way. I built more of an engineering-driven culture. As the founder, that was more of my personality at the time, having grown up as a programmer. The engineer assumes that the product “will sell itself,” and this mindset could not be more wrong. Our main competitor Omniture, by contrast, built a sales-driven culture. Omniture turned into the market leader and blew past Coremetrics. Coremetrics had a good outcome by most entrepreneurial standards when it was acquired for nearly $300 million. But that was certainly eclipsed by the success of Omniture, which was acquired for $1.8 billion by Adobe. There is a huge difference between being No. 1 versus being No. 2 in a new category. I wasn’t about to make that same mistake at Bazaarvoice. I’m proud to say that Michael Osborne, our first VP of Sales whom you met in the last chapter, and I worked hard to create a sales-driven culture. My Co-founder, Brant Barton, also played a major role as did Sam Decker, our founding CMO. It helped that me, Michael, and Brant had all come from Coremetrics and we had learned that lesson — and it helped that Sam Decker was also a natural-born salesperson.
So, how do you create a sales-driven culture? We’ve talked about hiring truly passionate and convincing salespeople. We also examined the role of recruiting, and getting that right, in Chapter 11, The Most Proven Way to Hire Well. And we’ve considered earlier in several opportunities how sales is ultimately everyone’s job. But all of these imperatives really converge on the principle of respect. The respect accorded to the centrality of sales is the key element in nurturing and sustaining a sales-driven culture. Sales is an incredibly difficult job, and sales professionals are constantly facing rejection and are constantly burdened with the ultimate mission of winning the revenue that allows all of the other functions to get funded. Simply put, sales deserves the ultimate respect. But building a sales-driven culture is much more than keeping score on revenue, as important as that is.
In the last chapter, I shared with you the story of Michael Osborne’s green ball. This is a good example of a small thing that snowballed into a tradition. And you need to create traditions where you celebrate new client wins such as an ongoing “gong show” for example. At Bazaarvoice, we celebrated new client wins with our gong, where we would all gather around and discuss the win. This tradition extended to our clients where we sent them mini-gongs and they celebrated the win with us over the phone or sometimes in person. The bond this created between Bazaarvoice and our clients was truly unique. Another way to emphasize the importance of selling is to recognize the heroes — the largest quota winners — at events, such as an annual sales club or a quarterly off-site. When Bazaarvoice was smaller, we had these off-sites every quarter at the Alamo Drafthouse, a combination cinema, and pub in Austin. There, everyone could let down their hair in ways not possible in the stuffiness of a typical corporate venue. When the sales team beat a major stretch goal, they all dressed up as Elvis and stormed into the Alamo Drafthouse, surprising us all, to celebrate their trip to Vegas.
The third principle turns on your storytelling tools. In short, Third, you need a really great demo. When you start your company, you have no credibility other than your background. Some backgrounds are better than others. When I started Bazaarvoice, I had a reputation due to my success with Coremetrics and my stature as a member of the Shop.org Board. I was getting to know the Cool Kids and I was becoming one. But when I started Coremetrics, I was a bit of an outsider, relatively unknown even though I had already started three small companies. This meant that at Coremetrics it was imperative to focus on creating an amazing demo. Coremetrics invented the enterprise-scale web beacon, sometimes called a data tag, a technique used on web pages and emails to unobtrusively check that a user has accessed some content. Prior to Coremetrics, enterprise solutions like Accrue or Net.Genesis served customers with software known as log files or network packet-sniffers to monitor network and internet traffic, but these solutions were far less inaccurate. In addition, our competitors’ solutions required a massive investment of implementation time, often as much as 12 to 18 months. As our approach was one of the first made by a Software as a Service, or SaaS, company back in 1999, I needed to differentiate the Coremetrics approach. To do this, I created a demo of my eCommerce site, BodyMatrix, and I would have someone mimic a customer and click around, looking at different products and putting some in the shopping cart. I was then able to show a client the real-time view of their data and essentially replay the customer actions they had just witnessed. I would then explain how I could collect this data from tens of thousands of individuals — all in real-time — and build a lifetime profile of all of their customers’ interactions. That lifetime profile would allow firms using it to track the behavior of customers across many sessions and ultimately the data could be used to later personalize email campaigns and on-site campaigns, among other things. Revolutionary for the industry at that time, this demo blew people away. I've since worked with several companies that have revolutionary demos like this and you should see their prospects’ reactions to it. Whatever your industry, you need to find a way to build a standardized demo that all on the sales team can use.
As time goes on, and as you move through the market segment across the proverbial chasm, the demo is of less importance as your credibility derives from your relationship with the Cool Kids you have won over in the space as they rave about the impact you are having on their business. But at the beginning, it is all about the demo. Also, the role of the demo is gaining importance in light of the pandemic that moved sales strategies, particularly in software and technology, to Zoom presentations as trade shows shut down or suffered declining participation. Invest in your demo and make it sizzle.
The last and fourth principle is one we’ve examined earlier, but which needs to be amplified here. This is the importance of building a great Board of Advisors of people from that industry. Think of this as your “Board of Cool Kids,” or your action network to win initial clients, cross the chasm, understand and manage the “complete product” ecosystem, and help you enter new market verticals. As I discussed in Chapter 13, How to Leverage Advisors and Investors as Your Extended Team, you can give your advisors anywhere from 0.05 percent to 0.25 percent of equity in your company, depending on who they are and what the connectivity they bring. It is easier to do this than it may sound. The entrepreneurial spirit is very much alive in our country — our founding fathers had it in 1776 — and we are used to helping each other achieve our dreams as we are a country of mostly self-made entrepreneurs. And these advisors will not only help you with introductions to potential clients, but they can also be valuable in helping you shape your solution. With your initial clients and advisors, you need to carefully listen to their recommendations.
Remember the truism that no one succeeds alone. Embrace its corollary, that together with the right people to help and guide, anything is possible. So early in your journey, find the Cool Kids.
“It is not your customer’s job to remember you. It is your obligation and responsibility to make sure they don’t have the chance to forget you.”
— Patricia Fripp