You don’t have to look at the calendar to know that Spring is here… you can feel it in the air.
In Indiana, this can only mean one thing: basketball. Living in Indianapolis for the past decade has taught me that life and basketball are virtually inseparable for Hoosiers.
With March Madness well underway, we’ve witnessed another historic tournament unfold. I love a good Cinderella story, and this year’s Final Four is just that. Even though your office bracket is shot, I know you can appreciate three teams making it to the semifinals who have never been (Gonzaga and South Carolina) or haven’t been for 78 years (Oregon).
Indy was fortunate to serve as a host city for the first and second round games this year. Not only did this give me a chance to brag on Indy as the best host city in the country, it gave me a chance to watch the games in person. Watching the basketball madness in person reminded me of the craziness that I see in the marketing landscape today.
As both a basketball fan and lover of all things marketing, allow me to expand on the analogy of March Madness to the everyday madness in the life of a CMO. If you want a good dose of this, take a look at Scott Brinker’s most recent infographic of the MarTech landscape:
Wow… talk about a mess, right? It’s easy to be mesmerized by the chaos and become overwhelmed. Before you make too many assumptions about the space being overplayed, let me just say that I see incredible things happening in MarTech.
MarTech: The Cinderella Story to Perennial Powerhouse
In the venture capital world, I think MarTech gets a bad rap because it’s hard for investors to sift the gold from the dirt. So, I hear broad generalizations that MarTech is just too crowded now. In my contrarian opinion, the current opportunities are better than ever and we’ll see several billion dollar companies rise up again in the next wave of MarTech companies.
Macro Level Opportunity:
On the macro level, Ajay Agarwal of Bain Capital Ventures spelled out reasons why the marketing opportunity is still phenomenal. I took the liberty of adding a few more below:
- According to Gartner, CMOs will spend more on IT than CIOs this year for the first time
- The International Data Corporation (IDC) has estimated CMOs spending $32.4 billion on marketing technology spending by 2018
- Marketing technology is growing at 12.4% Compound Annual Growth Rate (CAGR)
- Marketing spend budgets have increased for 3 consecutive years, now currently sitting at 12% of company revenue
I wouldn’t say we are in the early innings with marketing technology, but you can expect lots of great action ahead.
Micro Level Opportunity:
As an angel investor in 2012, I invested in several MarTech companies… and I owe some credit to MarTech for what ultimately pulled me in the direction of being a venture capitalist. I wrote early checks to Ahalogy, Bizible, BrightFunnel, and Captora among others.
As a VC with Hyde Park Venture Partners, two of our investments I am most excited about are guess what… yes, MarTech!
- LookBookHQ, based in Toronto, is changing how content is consumed and helping businesses thrive in an attention-deprived economy
- Terminus, based in Atlanta, is leading the charge behind the Account-Based Marketing movement with #FlipMyFunnel conferences across the US and crazy growth
Even though the broader sentiment doesn’t seem to appreciate the mass potential in MarTech, you cannot write off an entire category.
Strategy: The #1 Overall Seed in Navigating MarTech
As someone who sat in the buyer seat at P&G, Coca-Cola, and as a tech CMO, I can appreciate first-hand that buying software can be overwhelming. The noise has only increased since I moved on from my operating role in 2013. G2 Crowd, the leading B2B software review platform, is making it easier to cut through the noise, but I still commiserate with CMOs.
I also learned a few things sitting in the seller seat… one of those lessons is that it all starts with your strategy. Cutting through the noise must begin with strategy.
Sure, I am excited about Terminus and LookBookHQ because their product is great, but if I got excited about every MarTech company with great tech, I would be flat broke.
The reason I am excited about the likes of Terminus and LookBookHQ is because they are solving a problem that speaks to the heart of the CMO’s needs.
Being relevant in a noisy world doesn’t happen by accident. I’ve spent time thinking what matters most, and here are my thoughts on how to succeed in MarTech:
- Speak in terms of solutions not technology. Understand the problem intimately.
- Cut through the clutter with crystal clear messaging.
- Know and segment your audience. One size does not fit all.
- Create partnerships with larger, thriving ecosystems. The reality is you will need to plug into the other platforms of records that have been established. Embrace this.
- Become adept at both driving demand and building brand from the early stages. These two forces compliment one another.
- Obsess over the customer. Do whatever it takes to make them successful. In the end, delivering clear value matters most.
Let’s face it, marketing to marketers is no easy task… to win, you have to stand out. Understanding the needs of the customer is essential, because it is what anchors your strategy.
At the end of the day, the difference between the champions of MarTech and the companies who pack up early is cutting through the clutter to become a “must have” solution rather than a “nice-to-have” widget.
Note: This blog post originally appeared on Tim’s Kopp’s blog, CMO to VC: My Journey from Saas CMO to Venture Capitalist.