By Matt Heinz, President of Heinz Marketing
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This week’s episode is entitled “How Your Board and Investors Think About Marketing” and our guest is Robert Pease Managing Director at the Cascade Seed Fund.
I ask Robert, as a board member, as an investor, how do you not just think about marketing, but when the company comes back and describes their marketing plan, describes how marketing is doing and how they’re reporting on it, what do you as an investor want to see? What are you looking for?
You’ll love his message around audience message and offer. I also ask him, thinking about the life he’s lived, the career he’s had, the mistakes he’s made….What’s a piece of advice, or a lesson, or an experience you would share with others that hopefully they can learn from as well? Listen and/or read the full interview below.
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Paul: Hey, welcome back. Time to grab your board and swim out into that big sea of ideas that’s washing up on the shore right now. See if you can catch a wave like the man who always catches the latest wave. He’s ahead of all of us here, Matt Heinz.
Matt: Paul, is that a West Virginia mountaineer type of deal you’re heading now?
Paul: Yes. Yes it is because we do a show on West Virginia University’s School of Data, Marketing, and Communications. Data, marketing, and communications. They have an online school. We do a program with them, and they were kind enough to send me a cap. I’m trying to hope that maybe Matt Heinz will send me a cap here.
Matt: We could probably figure out a way to do that. I was impressed. I’ve never been to West Virginia. I have never to been to West Virginia University. I did read an article about a year ago about, it was series about the tailgate cultures around college football. Apparently West Virginia is well known. You get the tailgates, it’s about two things. Literally, it’s about pepperoni rolls and moonshine. It was an article about the ordinance. I had a call with a prospect a couple of months ago, and she was from West Virginia. I happen to say, I just asked her, I said, “I have to ask. Is this a thing?” She said, “Weird. How did you find that out?” It’s apparently a real deal.
Matt: We’ll have to ask our guest today. West Virginia might be a little more Yankee, and little more north than he tends to play. He’s a Tennessee native who’s a Georgia alum who is, I’m sure, going to be watching very closely.
Paul: You know what else he is. He’s not just an alum of that school. He’s an alum of the Matt Heinz school of propelling people onto bigger and better careers here.
Matt: I don’t know. I think it’s the other way around. Anyway, before we get to our guests today, we just want to welcome everyone again to Sales Pipeline Radio. Thanks for joining us. This is our first episode of 2020. Thank you very much for joining us. If you’re joining us live on the funnel media radio network, thanks so much as always for joining us and making us a part of your workday. If you’re catching us on the podcast feed, thanks so much for listening. We’ve been doing this for, I think, four years now. Our listenership last year exceeded our listenership from the first three years combined which is amazing.
Paul: Wow. Amazing.
Matt: Thank you so much everyone who is listening and subscribing to Sales Pipeline Radio and every episode of those past years. You can find past, present, and future on salespipelineradio.com. Every week we’re featuring some of the best and brightest minds in sales and marketing. Today is absolutely no different. Robert Pease I met I don’t know how many years ago. He was a client. He’s been the CMO at a number of organizations. He’s a marketing leader. He’s a thought leader. He’s the former cohost of the Marketing Cranks podcast. The way back machine, Mr. Pease. Thank you for joining us today.
Robert Pease: Matt Heinz, Happy New Year. A lot of pressure on this the first show of 2020 especially with an audience and all of those things. You and Paul are doing a great job of making me sound really good, so maybe I should just let you two talk and not say so much. It’s interesting. I went to University of Georgia some years ago, but the tailgating there was all about Jim Beam, and Coke, and fried chicken, the type of stuff you started consuming at 9:00 in the morning.
Matt: Have you been to West Virginia, and/or have you had a West Virginia pepperoni roll?
Robert Pease: I have been in the state of West Virginia. I have not been to West Virginia University, so I don’t even know what that is. I’ve got be honest with you, other than what it sounds like that you just roll pepperoni and eat it.
Matt: That would be funny is that is literally what it is. It’s just pepperonis rolled around your fingers. From what I understand it basically is, it’s like a pizza, but instead of having a slice of pizza, you’ve got pepperoni on dough that somehow is cooked and then rolled up. Apparently, the origin is this was lunch for the miners. This was food that they could take with them down into the mine. It was fine. It was tasty. That’s what they did. I don’t know if they took moonshine into the mine. I would hope not.
Robert Pease: It sounds tasty.
Matt: Maybe we might have to try it. I’ll have to find a recipe, and we’ll give that a shot. I was excited to have you on. Robert, we go back a ways. You were a client, I think, when I first met you. You’ve done work with a lot of companies in a marketing leadership capacity. You are now living out of Bend, Oregon, and you are on the investment side. Talk a little bit about what you’re doing now, and how you’re helping young companies start to grow and be successful.
Robert Pease: Yeah, no, thanks. We do go way back. We’ve done everything from drink beer together, to run, to everything in between. It’s been good to know. Currently, I’m manager director of Cascade Seed Fund, which is an early stage investment fund. You have to be based out of Bend, Oregon to do that. We invest in Oregon and the broader Pacific Northwest into technology and consumer products companies, mostly directed consumer product companies and the first institutional money they’re going to raise. You start a company, begin to get some traction, get some users, get some customers. They’re looking for a little bit of outside capital. Pretty early on, my background, as you said, Matt, is on the operating side. Then I was fortunate to work with you a little bit as a fractional CMO/CRO for a variety of companies, but always very focused on funnel and growth.
Consistently, normally what happens is that a company will start, and it will build a product, and it will get some early customers, and then the question is always let’s grow, and how can we grow faster, and why are we not growing fast enough, and sales cycle, and all those other things. There is no, as we talked about, no magic pixie dust. I guess better, there’s no silver bullet other than Coors Light in the world, so there’s lots of method in process to do to try to grow a company’s revenue. On this side of it, whether I’m a good investor or bad I guess we’ll see because a feedback loop on where we invest is very long. If you’re running a company you know within a week or a quarter how you’re doing. With the stage we invest at it’s 5-6 years before you fail or realize if you’re good at doing this.
I think I’m still in the zone of not knowing if I’m any good at this, but I get the privilege of working with a lot of great entrepreneurs fortunate enough to partner with some and actually own a little bit of their companies.
Matt: It’s fascinating where you are now and the stage of companies you’re working with. Right? These aren’t the later stage companies. They’re like, “We clearly have momentum. We just need to make the scale.” Oftentimes you’re working with companies that are still at the, “We have an idea. We’ve vetted it. We think it’s got something. We still have to go prove there’s a market here.” When you’re at that earlier stage of growth, how do think about the chicken or egg game of, “We have to build the product. It is what the market needs,” versus going out and actually creating a sales and marketing infrastructure to scale it.
Robert Pease: What you’ll see a lot is (1) you’ve got to find a problem to solve. This is paraphrased from somewhere. I don’t have any original thoughts. I just take other peoples, but I don’t cite them correctly. As a startup, if you’re going to do business, especially in B2B space, right, if you’re going to do business with an enterprise, they have to be desperate to do business with you because you’re new, and you’re young, and you’re unproven. You’re not IBM, right, or you’re not Microsoft, and you’re not SAP. Brewing it on those problems, and just that mindset is an important one, right, which is, “Why would want to do business with me? We have such a big problem to solve that no one else can do it.”
What happens then is you get a hold of those things. When you get a bead on those that’s great. A lot of times the founder of the company, or the founding team right there, they’re the visionary sales people. Right? They’re the ones that are doing it. I think there’s a real maturing step that has to happen in a company where it’s beyond just founder-base selling. You’re trying to get to this plane of an average salesperson selling an average deal. There’s so much within that, right, which is that you’ve got some level of repeatability. You know who you’re ideal customer is. You’ve got good qualification on your leads and on your sales opportunities.
Then there’s a playbook on those, right, that you can go out, and you can hire a competent salesperson that they can execute. It doesn’t mean the founder stops selling. Marc Benioff is still a sales force, right, still is involved in closing deals. I think that always happens, but a lot of the core process around sales and customer acquisition to really move beyond the first handful of customers, or the first, even, million bucks of revenue if you’re trying to get to three, to five, to ten, you’ve got to get to where you let go of the reins a little bit as the founder, and you’re getting to this world, but you’re trying to find the average salesperson and average deal.
It can be complex, right, so it can take a long time. That’s back to the repeatability because if you start throwing money at customer acquisition without having the bead on who you’re trying to sell to, right, or what the process is, you can waste a lot of money. Cash is a very precious resource at the early stage of a company, so you’ve got some discipline around it.
Matt: You just brought up a really good part of this, the evolution of the birth of a company. You may say that we’re not going to build out a sales and marketing structure and scale until we have some proof of concepts of the CEO or the founders are going to be the initial sales team. They’re going to vet it out and be scrappy up front. I think the one thing you mentioned that is critical is knowing who you’re selling to and why. Right? There’s a component of defining that ideal customer profile, defining the buying committee and the buying journey, and understanding the needs behind the product you’re solving that provides a foundation not only for why you’re building the product and what features you’re triaging, but also how you build a foundation for that sales and marketing process without infrastructure that’s still the right message to the right person at the right time.
Robert Pease: Yeah, for sure. It’s building on that, where we invest so we’re not a confident stage investor, right, or a pre-revenue generally investor. We can lean pretty early on, but shell companies, I try to be very clear about this, a lot of this is just personal and professional vendetta I have to try to identify funding raising because as an entrepreneur I sucked at it and failed. I think I still sucked at it and did it. It was always very complicated to me. I try to be very clear with the folks. We look for three things, right, three boxes to check, which is one, can you build the thing you think you can build, which means you’ve moved it out of PowerPoint, right, and there’s a thing. Again, this is back to costs being bent down. It doesn’t take a tremendous amount of capital to build a initial version of a product.
The second box that we want to have checked is does anybody care, or do people care? Think about like that. What this is that you’ve moved beyond your friends and your family, the people that don’t want to hurt your feelings. You’ve gotten out in the wild with it, right, trials, or pilots, or proofs of concepts, something like that. The third box that we want to have checked is does anybody care enough to pay. It’s not that we’re not aware of the stage we invest in, it’s that the maturing that happens in a company when it goes through its commercial motion of actually securing a customer is significant. In a direct selling model, direct revenue model, which is knock on the door, and tell you my thing, and you buy my thing from me, right. There’s discipline in that.
If you have a more complicated model that has to do with transaction volume, or commission, or some indirect revenue stream, you’ve got to go through that for your own good before you begin to go and try to access capital for two reasons. One, it will be harder to make the case that you are needing capital because you’ve got a lot of risk in business you haven’t sorted out yet. As an entrepreneur you’ve actually increased the value of your business, so you’re selling less of it to someone like me when you’ve gone through those three cycles. Embedded within that is knowing who you’re selling to. You won’t all the time know that, right. I mean, the assumption lasts until you leave the four walls of your office, but you’ve got to get outside and say, “Well, I think people are going to find this value and do this thing with it.”
A lot of times it’s right through the process, people say, “Well I don’t have that problem. I have this problem. I think that will solve this.” It’s that flexibility to understand it, the things you think that you’ve got figured out early on may not be the actual things. You get this virtuous feedback cycle. It can sometimes be a little rough and tumble as you’re trying to get a product out in the market.
Matt: That’s for sure. We’re talking today on Sales Pipeline Radio with Robert Pease. You’re role at Cascade Seed Fund as well as just separately, you’re serving on the boards in a leadership capacity for a lot of companies. I want to talk a little bit about as a board member, as an investor, how do you not just think about marketing, but when the company comes back and describes their marketing plan, describes how marketing is doing and how they’re reporting on it, what do you as an investor want to see. What are you looking for?
Robert Pease: Yeah. A lot in that. I have the benefit, or the curse, right, of having sat at the table and in board meetings as a VP of marketing, as a CEO, and talking to investors about it. I think a lot of it is as capital is brought into a business, right, or funds are available and funds are invested that they are going to have, in 2020 we’re spend $500,000 on marketing, the place that you’re getting to the nirvana state, right, is that you drop a dollar in on one side and three dollars fall off of the other. You’ve got that kind of machine. You’re on this constant journey because I’m not sure it’s quite a destination, you’re on this journey to try to get to that repeatability and predictability early in a company’s life cycle. You don’t know.
This is what I emphasize. You have to have this experimentation mindset and experimentation budget. Don’t spend all $500,000 on one Super Bowl ad, which I don’t think you buy it for that. The point is, right, that’s a binary outcome. It’s like, “Wow, we’re going to try this. We’re going to try this. We think our audience spends time here.” Every fundamental marketing campaign is essentially audience, message, and offer to me. We’re trying to reach electricians, and we think they have this problem, and our offer is blah. That’s the playbook. Having an agility to do that in experimentation mindset. There’s a lot of things around which you’ll drum from agile software development, right. If you think about marketing on a sprint, which is, “Don’t spend six months choreographing a campaign when you don’t really know who your market is or you customer is.”
It’s okay for it not to be perfect and polished, right. Do a rough cut. Stick it out in front of people and see if they engage. Those are important things. Then, the instrumentation, I think, is also super important, which is all the dynamics of the business. As the head of marketing, you’re going to have silo in what you’re doing. Matt, you and I have talked about this for years, which is your marketing value is visible through the sales pipeline. You ought to be proud of that at marketing which is to say, “Let’s do a …” You and VP of sales walk hand in hand and talk about what’s in the funnel. Here’s the qualified opportunity. Here’s those that have a 70 percent or greater probability of close. Here’s the close ones. Here’s where they came from. Here’s some that we don’t know why they came to us.
What you’re trying to do is if you’ve now got some rhythm and momentum, right. Okay, we’re gaining customers at a higher velocity than we have in the past. Your job is to do that, and crank it up, and make that repeatable. Where did they come from? What journey essentially did they go through to get to that state, and then go find more of those. I think the pipeline, right, is the place that you’ve got to get comfortable around because your board is going to supportive of anything that’s related to PR, and events, and whatever, but the output is what is generating potential revenue opportunities. If you start there then the rest of the things are active.
Matt: I agree. I love your message around audience message and offer. I think that’s a really nice three word, consolidation of the things you have to have in mind. We are late taking a break. We’ve got to take a quick break. Pay some bills. We’ll be back with more with Robert Peez on Sales Pipeline Radio
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Paul: All right. Let’s head back to Matt and his guest. I want to make sure before we end in the last five minutes where you both have my address for a Matt Heinz cap, and a cap for the Seed Capital Company here.
Matt: We’ll get you a cap. We’ll figure out a way to do that. I have start with what we have which are pens and notebooks. We’ll get you some swag Paul. Mainly, Paul just wants to feel loved.
Paul: That’s it. Right. Then I wear it on all these shows and everybody’s comments on it. Think of the value of that here.
Matt: I think, Robert, hopefully you still have some of your Heinz marketing swags from the time that we were able to work together here as well. Back probably three or four years ago, you and another colleague, Brian Hansford, did a few episodes of a podcast called the marketing cranks. You’re both super smart marketers, and not just taking contrary views, but just get cranky about some of the worst practices and things we see out in the market. I’m curious, even though you haven’t done an episode of the marketing cranks in a while, what are some things you still see in sales and marketing today that make you cranky?
Robert Pease: Man. Okay.
Matt: We’ve only got eight minutes left in the show.
Robert Pease: Yeah, I was going to say, I could go a lot of different places with this. I think there’s a pragmatism to this, right, which is there’s no shortage of stuff in your stack that you can do that’s going to give you this report or that report. You can almost over instrument. One of the companies we worked with jointly, right, I was like, “Try this.” They tried it. Two days later it didn’t work so they turned it off. I’m like, “You got two days of data. That’s just not going to do it.” Almost beholden to much data. Maybe up to still 20 some odd years of go to market experience down to three things with audience message and offer. That’s the playbook. The notion of agility, especially from marketing teams, right, which is your output is to the pipeline. You should do everything you possibly can to do that.
I realize there’s a lot of traditional marketing aspects that are important, but they take so fricking long to execute for minimum value. Not that I don’t believe that marketing and markets and that kind of thing isn’t important, I think there’s just this notion, especially in the early stages of the company, you’ve got to roll your sleeves up and get at it. Not necessarily wrap yourself in all the reports, and all the data that can come out of all these tools now because at the end of the day, right, what matters is who does business with you? How many customers do you acquire? Right? It doesn’t matter how optimized your page is and make click throughs you get if that doesn’t necessarily lead to some revenue outcome for the company.
I may be a little cranky, but I think there certainly has been a little bit of clarity in all the marketing technology that’s out there and all the large promises that happen. I ran a company that was a marketing tech company. It did all this stuff. I’m not sure that it necessarily moved the ball too much. Right? I think let’s get back to basics and focus on that, and agility, and not get confused by the fact that you can hide behind your numbers that aren’t really relevant to what the company really should be focused on, right, which is net new customers, growth in existing accounts. Then that trickles into the true company, which means you’re going to continue to have a job, and the company is going to be successful and attract capital if you need to.
Matt: Just a couple of minutes here with Robert Pease. He is the Managing Director of the Cascade Seed Fund. Before I get to my last business question for you, we have a good news/bad news situation with the University of Georgia right now. We’ve got Jake Fromm, who your quarterback is going to be leaving for the NFL draft this fall. We won’t get a senior season from him, but it seems, from everything I’m reading, it sounds like Georgia’s recruiting continues to get better. With one person leaving there might be a lot more coming down the pike. This is a team that just barely missed the playoffs this college football season as a alum and an avid fan. What do you think? What’s 2020 look like for the Bulldogs?
Robert Pease: You know, I don’t know. I was so surprised. Right? I thought Fromm would come back. I was reminded of Peyton Manning came back for his senior year at the University of Tennessee because of the privilege of being the college football quarterback in the top tier team. A lot of things are in economics these days. Kids get hurt and whatever, so I totally understand it. It will be interesting to see. I think Kirby’s done a great job of recruiting. He clearly has a lot of resources available to him. There’s another dynamic now where at the college level it’s almost like kids can transfer. It’s possible you can get a transfer in of a quarterback. Right? Take advantage of all the resources that are there. I think it’s great. I was glad to see Jacob Eason have a great year at Washington. He’s ultimately a super talented guy. Clearly got more talent than during his time at Georgia. Yeah, I think college football is a lot of fun, a lot of fun to watch, and a lot of fun to pay attention to.
Matt: Yeah, it is. The transfer portal has made things very interesting. Right? You mentioned we lost our quarterback at the University of Washington for this next year. I really hoped he was going to stay another year, but you look at the graduate transfers that are available that could immediately have an impact. It get really, really interesting.
Robert Pease: Is the transfer portal public?
Matt: I don’t think it is. That’s actually a really good question.
Robert Pease: It would be fun if it was public. It would be fun if they had a comment section. I still have all my eligibility left. I don’t know about you. Right?
Matt: I’d have to go look it up. I’m pretty sure it’s all still there. Last question for you Robert, a question that I’m affectionately titling the longer I live and the more mistakes I make. The point is for everyone that we have on the show, it’s not that everyone is old, but you’ve had at bats. You’ve been in the business world. You’ve been in life for a period of time. This doesn’t have to be your one biggest, greatest lesson for people. Thinking about the life you’ve lived, the career you’ve had, the mistakes that you’ve made. What’s a piece of advice, or a lesson, or an experience that you would share with others that hopefully they can learn from as well?
Robert Pease: Wow. That’s a heavy question. I better make it count. I’m going to give you a quote my dad gave me. I’m a pretty passionate and focused person as you’ve seen over the years. Maybe I still need to aspire to live to this. His whole point, people will be losing their minds because something had happened, or he’d lose a customer, or something stupid happens at work, this isn’t anything that hasn’t happened before. The details may be different, but an error in an email campaign that goes out to 600,000 people. That sucks to have happen. It makes you look, but it’s the type of thing that’s happened before. I think that looking at those things in context, I think, are super, super important. It doesn’t correct something that has gone bad, but I think it level sets, it should calm both yourself as a leader goes around you. I think that’s super important.
The other is that there’s no quantitative proof to this, but I always have a lead in the two percent rule. The two percent rule is that no matter what you’re doing talking about a marketing campaign or whatever, that there’s going to be an error. Right? There’s going to be something wrong. You can argue this as an end thing that you’re trying to do, an event, whatever. The goal was to minimize what that two percent is. Right? As I tell my children, there is no perfect. All you can do is seek to the best you can to get something where it needs to be. Somewhere in there is wisdom. I don’t know.
Matt: I think those work. I’m getting the wind up here from Paul. I know they’ve got another show coming up. I think he might have to get on plane and go audition to be the next prince of the royal family. I want to thank our guest today, Robert Pease, for joining us. If you like this episode you could find it and others at salespipelineradio.com because I know we’re about out of time. We’ve going to wrap it up. On behalf of my great producer and the future prince, Paul, this is Matt Heinz on Sales Pipeline Radio.
Sales Pipeline Radio is sponsored and produced by Heinz Marketing on the Funnel Radio Channel. I interview the best and brightest minds in sales and Marketing. If you would like to be a guest on Sales Pipeline Radio send an email to Sheena.