I don’t think the inbound style of content marketing is relevant to most SaaS companies. I think the idea of inbound marketing has done a lot of damage to good marketing, if I can say that. The reason is it’s sort of propagated this idea that, oh, if you build it they will come. Let the SEO gods determine what your future as a SaaS company is. Good luck if that’s your approach. That’s not going to work for the vast majority of SaaS companies.
This episode was sponsored by Nickelled, simple SaaS Customer Success software
Nadim Hossain is Co-founder and CEO of BrightFunnel, a B2B Marketing Attribution and Forecasting platform. Nadim has 15 years experience in selling and marketing SaaS applications having worked his way up at McaFee, Salesforce and Bazaarvoice amongst other notables.
Given his experience, I asked Nadim to join me on The SaaS Revolution show to discuss ‘Lesson’s in Marketing for SaaS Startups’.
Alex Theuma: It’s great to have you on the show, Nadim.
What I want to discuss with you is really a lesson in marketing for SaaS startups. Does that sound like something that you’ll be happy to talk about?
Nadim Hossain: Absolutely.
AT: Before we get into that, I always like to give the guest opportunity to give a bit of background to yourself and your company as well. First question is who is Nadim Hossain?
NH: Good question. Professionally, I’m a former VP of Marketing and a former product marketer and product manager. Came up through Salesforce and, as you mentioned, had some success in a later stage SaaS startup.
On a personal side, fun fact, I’ve lived in 5 countries before I turned 17 and it was when I moved to the U.S. Bangladeshi by nationality and my father’s occupation had us moving around, which was a real blessing and something I’m really thankful for.
And to bring it to BrightFunnel, I think what we do, we’re a marketing analytics company, SaaS company focused on the B2B market. And the way I think about marketing, modern marketing is really about synthesizing quant and qualitative. It’s less of that pure analysis but more synthesis and insight. That’s really something I think I became good at because I was exposed to so many cultures.
That’s a little bit about me and also about the company.
Our purpose, I think it’s helpful to know, our category is marketing analytics. What we are trying to accomplish is to connect marketing to revenue. I really believe we’ve entered a new era of marketing. I call it the data-driven era. Our goal is to be a catalyst for that sea change which we think is going to unlock the connection between marketing and revenue.
It’s very exciting trends that are happening. We’re obviously surfing on that trend. We also think we’re accelerating that trend.
AT: Leading from that, connecting marketing to revenue, it’s a nice segue into the question: Is marketing eating sales? If so, explain why.
NH: Yeah, I think it is. I think that phrase might be a little controversial but it is intentionally provocative. You probably saw the blog post I wrote with that title, Why Marketing Is Eating Sales. The reason it’s eating sales is that if you look at the B2B buying cycle, more and more of it is being owned by marketing. There’s different metrics out there but anywhere estimates are somewhere around 70-80% of the buyer’s journey is owned by marketing, and you can pick your favourite analyst who’s coming up with that.
If you were to unpack that, maybe looking at it as marketing eating sales might feel a little bit sort of combative or fixed pie which is not my intention. The way I think about it is really automation is eating human-powered processes.
And I love metaphors and I want to use one. Think of the modern salesperson as being like a navy SEAL. And think of the previous type of generation of salesperson as being more 19th Century infantry men, say, in the U.S. Civil War, for example. Very, very different soldiers. What the navy SEAL has is that they’ve got the power. There’s a lot fewer of them but they have the power of satellites in the sky. They can call in drones and air strikes. They’ve got all this technology behind them, air cover.
So the rule of marketing is to be that air cover. In the old days, salespeople didn’t have that quality of air cover. Now, it’s a lot more precise, a lot more targeted, a lot more effective. So as a result, you have this world where the salesperson might get involved in a much smaller percentage of the process of the timeline but they have a much greater impact. So the need for salespeople has never been greater. It’s not diminished. It’s just the amount of time or the amount of the process they own is a much smaller percentage.
That’s what I think of as automation is eating the human-powered process and I think marketing is eating sales. What’s behind that, it’s not just me making this up. These are trends that we’re all experiencing just from the idea of internet and mobile.
I moved here in the Valley in 2000, the first generation of the internet. But really this current generation of what’s happening is much more interesting where data is exploding like never before. The amount of channels has exploded. Marketers certainly feel that. Consumers benefit from that and their consumer behaviour is changing. Whether you’re buying a pair of sneakers or you’re buying enterprise software, your behaviour has changed in a way to reflect those new channels and new preferences. Certainly all those things lead to the fact that marketing and automation are more and more important.
Let’s talk about the theme, the lesson in marketing for SaaS startups. I want to pick your brains here so that those that are listening in can learn from somebody that’s got 15 years of marketing experience and is running their own marketing analytics SaaS company.
The first question I want to ask is what stage should a SaaS startup, and when I say SaaS startup probably an early-stage SaaS startup, make its first marketing hire? And what, in your opinion, would that marketing hire role be?
NH: It’s a great question. It is a tough one. I think the first hire has to be someone who’s a multi-hat hire. I’ll explain that in a second. But I think the timing of that I think you hire them as soon as you can. I’d say as soon as you have an MVP or as soon as you feel you can afford them, but certainly one of the first 10 people, probably one of the first 5.
As far as what I mean by multi-hat, if you think of the minimum viable marketing team for a typical 4 or 5-figure SaaS product, you need some product marketing which shall include sales enablement, messaging and positioning. Anything branding-related I’d put into product marketing in the early stage.
You need that demand gen skill sets, so everything from email, content, copy, ops, all of that I’d say is a second skill set. It’s pretty different than the product marketing skill set.
Then the third type of skill set would be then around creative. Basic design, website, etc. So even if you have three very, very skilled people, you’re looking at a minimum team of three realistically. Obviously, startups are about doing the impossible. So you’ve got to do those three jobs in one person.
Now, you’ve got two paths. You can go raise a $10 million Series A, go hire all three people. If you can do that, definitely do it. More likely you don’t have that luxury so you can really hire one person at best and you’ve got to find a way to get those three jobs done. Now, it’s not as impossible as it sounds. You can get one person that can maybe do two of those jobs and then find a contractor for the third.
That’s my very tactical advice. It will vary by the type of SaaS company it is. Most of what I say will apply if you’re ACV is in the $10,000-100,000 range, and probably above that. But if you’re really selling something that’s $100 a month, the priorities will shift a bit more towards automating things and things get done more through, I guess, more growth-hacking mindset than really needing an experienced marketer.
AT: I see myself that the generalists, well, I say generalists but somebody who’s wearing many hats, will be needed in the very early days and then you then move to the specialist is the common path trodden.
NH: I’ll give you one more very actionable piece of advice. I gave this piece of advice to a fellow founder in one of my investor portfolios. I’m blanking on the company’s name right now, but he put it to work and he was really thankful for it.
He came to me and said, “Hey, look, we’re 5 people. We don’t have a marketer.” “We can’t hire a marketer,” is what he said. “What should we do if we can’t hire a marketer,” which is probably a position a lot of you guys are in. So my advice was whatever business you’re in, you, the founder, are our domain expert. If you’ve got a product, by now you’re a domain expert. You pick whatever product category.
And I said just write down what you know, your point of view on this world. Like why do you guys exist? We’re a software to automate legal back office, let’s just say. Just write down a page or two worth of your point of view and your knowledge. And then go to oDesk or Upwork or whatever they call it these days, find a writer to go research this and write an ebook on this one topic. Just a single asset. Don’t go crazy. One topic that you’re proud of that represents your company, your point of view that’s well done, that you’re not going to be embarrassed if your friends read it, and just create that asset.
I think that’s the first thing you do even before hiring a marketer. You don’t need to hire a marketer for that. You can do it yourself. You might need to hire a marketer but the next thing you do is take that one piece of content, put it on your website, gate it. It’s fashionable to have content marketing and everything being open and free but if you’re a SaaS startup, have some way to capture leads. Have this meaningful, valuable piece of content that is reasonable to ask for some other information and then promote that. Just create the content and find channels to promote it.
You can do it through LinkedIn. That’s one example. If you do one thing, you’re selling to businesses, take that one asset, write some LinkedIn campaigns. Just do that. See how that goes for a while. That you can do yourself as a founder tomorrow.
AT: What about demand generation? What demand generation techniques do you personally like to employ, perhaps that you’ve used at BrightFunnel?
NH: The good news for startups whether you’re at our stage or even much earlier is that you don’t need that many things to work well. You just need a couple of things.
For example, our customers are people that are bigger companies, so public companies or maybe about to go public. So very large companies and they have a different set of challenges. It’s really becoming very, very deal-driven and optimising their spend is really a critical need. At our stage, reality is you need to have good enough data. You can’t be good at one or two things.
To your question, what techniques do you need to be good at, it just depends. For us, it is a bit more of an enterprise sale, requires a bit more education as far as changing your mindset from believing in a world of single-touch marketing analytics to multi-touch, for example, is becoming much more accepted but that does require some wrapping your brain around it.
We found that trade shows are very effective in our first year. I was there myself. That required some interaction so that was very, very effective. We found that outbound prospecting was very effective. Referrals were the way we got a lot of our business in the beginning asking for intros into companies. That’s what worked for us. During the early days we did a lot of formal demand gen.
Then later on, so say the stage when we were about 10 people, we started doing email nurturing, we built targeted lists, started doing some basic, later on some content syndication through various channels, etc.
AT: Depending on the SaaS company, who you’re selling to, in your case, selling to large companies and enterprises, then there’s going to be different techniques for everybody. Not a one-size-fits-all. But good to get the insights into things like what worked for you in the early days like trade shows and referrals.
What about content marketing? Where do you rank content marketing in the priority of all the different marketing channels that you can activate? And is content marketing something that you should be doing from Day 1?
NH: Let me add something to my last question if that’s okay
That the problem that I had and you all have is that in the early days you just need customers. You can’t take your eye off that problem where, in a way, if you have a more transactional SaaS business you’re lucky because you’re going to get data very quickly. If you’ve got $100-a-month product, you should be able to quickly get hundreds and thousands of customers. Or that might be a sign that you don’t have a market if your product is more the $1,000 or $5,000 a month.
In the beginning, you’re sort of more mid-market enterprise, you’re not going to have that many data points. So the challenge with optimising marketing in the beginning is that you haven’t optimised your business yet. You have no idea what you do for a living and who you do it for even if you have product/market fit. That’s when you’re barely figuring it out.
I would say whatever you could do to get people, customers to get their hands on your product to show some meaningful commitment to your product and make them successful is the most important thing. The first hire might even be someone who’s got marketing and customer success skill sets or product and customer success focus. Really, really figuring out why is this person using our product, what are they doing with it. That will really help you strengthen your product/market fit.
And well, I’m stating the obvious but the reason that’s important to remember is you can’t think too much about scaling your marketing or scaling your go-to market until you’ve really figured out what the heck you do.
Moving into your question about content marketing, so how important is it? The idea of content marketing I think dovetails nicely to what we’re observing in the market which is that there’s more channels that consumers want to interact with. Folks are buying things in a more scalable manner. They don’t always want to talk to a human. Content marketing can solve that problem in the sense that you can do it asynchronously. You can give them knowledge, educate them early in the buyer’s journey and then as you go through the buyer’s journey you can give them other information. I think content marketing is very, very important.
To sort of boil it down, once you know who it is you’re targeting and that might change. Once you have a good enough idea then think of how they want to actually interact with you, how they want to buy the product. That’s sort of the buyer’s journey. And think of what are the pieces of information they might want and how they might get those pieces of information.
So obviously there’s early. They’re top of the funnel. They haven’t met you, they haven’t heard of you. That’s one part of the marketing funnel we all talk about. But a lot of it is once they’ve already heard about you, you already have their name, you know what the company is, how do you nurture them, how do you get them through that journey of understanding what you do and what you might bring to the table. That’s kind of the role that content marketing plays. I think it’s very important.
That said, I don’t think the inbound style of content marketing is relevant to most SaaS companies. I think the idea of inbound marketing I think has done a lot of damage to good marketing, if I can say that. The reason is it’s sort of propagated this idea that, oh, if you build it they will come. Let the SEO gods determine what your future as a SaaS company is. Good luck if that’s your approach. That’s not going to work for the vast majority of SaaS companies.
AT: Actually most people, or a lot of people that we’ve spoken to, they heavily rely on content marketing and to the inbound marketing channel in the very early days. It’s interesting to hear an alternate view.
Content marketing for BrightFunnel, what have you guys been doing? Do you have a blog? What percentage of focus within your marketing channel is given to content marketing?
NH: When I say content marketing, I’m a big fan of content marketing. That’s the idea of creating content that’s going to answer questions, that’s going to educate the customer, etc.
The idea of inbound marketing is what I take issue with. This is a movement that the last 5, 10 years really popularised by HubSpot, which is a great company. If you’re HubSpot, you can pull off inbound marketing really relying on SEO as your primary channel. No one is building a new HubSpot. No one is going to succeed with that model going forward. I think that would be very foolish to try to become a HubSpot.
What I’m suggesting as an alternative is of course you need to have good content. You need to have a point of view. But really think about promoting it. Actually there’s content and there’s channels through which you promote something. If you’re HubSpot, you can get away. Over the years you’ve built up all this search engine credibility. That’s great. You can get away with that and you have to get away with that because their price points early on were very low. They’ve done a phenomenal job of growing the price points since then.
But for the majority of SaaS companies, you create that one asset that tells your point of view. Of course it’s on your website so if you get organic traffic, someone will come across it, that’s a no-brainer. But what I’m suggesting is spend some money also promoting that content. There are channels through which you can spend money to promote your content and get leads and that might be a very good idea to do it early on.
In fact, I think Marc Andreessen talked about this. If you do that early on then you’re actually proving you have a scalable business. If you don’t spend any money on marketing early on, all you’ve proven is that you don’t know how to scale the business going forward. That’s kind of my point. As far as like us personally, we don’t think of it in terms of are we spending X amount on content or not. Really what we’re looking at is the overall budget and the metric I look at is how much money am I spending and how much pipeline am I getting for it, and how much revenue am I getting for it.
We are also using BrightFunnel so we’re looking at things like primarily on sort of Dollars-In, Dollars-Out. We’re looking at things like velocity. How are things flowing stage by stage? And then as we’re planning, what is the predicted result from a certain investment? I would say definitely looking at the revenue and pipeline from a marketing investment is a critical thing to be looking at across the board.
AT: Understood and good to see although I’d expect nothing less that you guys are dogfooding or drinking your own champagne, of course.
I read a lot about customer advocacy and evangelism as a marketing channel. What’s your thoughts and advice around that? And let’s bring it back to BrightFunnel, what are you guys doing, if anything, around that?
NH: I think customer advocacy is huge. The idea of automation eating human processes, this idea of marketing eating sales broadly speaks to increasing transparency. In a more transparent world, in a more data-driven world, you’re not relying on your IBM account executive from the 1970’s to give you information. You can get the information yourself. There’s review sites that are out there. You can quickly find what other companies are using, a particular product you’re considering and go ask them directly. A lot more of the control is in the hands of the B2B buyer, and the same is true for B2C as well.
And given that control that’s powered by this transparency, what that means for advocacy is that it makes advocacy much, much more important. This idea of in the first couple of years, I think a third of our sourced revenue is coming from referrals. And we saw that in BrightFunnel. It was a surprise. We wouldn’t have seen that if we weren’t analysing it using BrightFunnel. That was a little bit surprising but it was also really heart warming in the sense that you have happy customers. That’s the most important thing. If you don’t, if the opposite is happening, they’re out there detracting you, which is also scary, it’s really reason to have really good customer success.
Customer advocacy is hugely important. How do you get there, though, is to have a good product and to have good product/market fit. Have a good product and have it in the hands of the right people. Unfortunately, I don’t think it’s super actionable in the very, very early days other than building a good product. As you get later and later, of course you can formalise things. The best thing you can do is to make sure you have someone with a product mindset in CS early on. I think the role of the CSM is to be an evangelist, is to be an advocate, is to be a domain expert. If your product has any kind of complexity, you’re going to want that out of a CSM early on.
AT: What are your views on growth hacking? And can and should SaaS startups be growth-hacking their way to success, say early success?
NH: I’m not going to shy from a controversial answer to this. I hate the term growth hacking. I’ll just be very transparent about that. I think the term sucks. That said, I’ve gotten over my hate for it. I think I hate it because I’ve been a product manager, product marketer, marketer for a long time and a lot of the concepts of growth hacking are just marketing. What are you really hacking?
I think if you’re writing lines of code then you can call yourself a growth hacker. If you’re writing in the English alphabet, you’re not a hacker and you should shut up about it. That’s kind of my feedback to people that think they’re growth hackers.
As far as should you do growth hacking, absolutely. Let’s define what sort of techniques that might be growth hacky. If you can find ways to build your product or website, the process in ways that are really going to enable you to get more customers whether it’s virality, which obviously can help some businesses, not all, absolutely you should do it. I think the idea of growth hacking fundamentally is to build a product with growth in mind and that is table stakes. You should be doing that.
It is less important the higher your price points are. It is absolutely critical if you’re a lower price point SaaS product, it is very nice to have if you’re higher end. And you can make an argument that future enterprise companies are actually going to be the ones that are going to combine some of the great growth hacking techniques and mindsets with higher price points and more solution selling. That is one of the things we’re trying to accomplish here is sure, we don’t have to have really amazing customer experience and onboarding and very scalable marketing and all that. But if we do and we have a more enterprise solution oriented mindset that can be an amazing result.
What tool should every SaaS startup have in their marketing stack? What tools did you guys have in your marketing stack like in the early days? And what are the tools that everyone should have as table stakes?
NH: I think it’s getting harder and harder for people to figure out what technologies to use because the marketing stack is exploding, and data is exploding. I do empathise with people trying to figure out that problem.
One maybe unexpected answer to that might be pick a person, or this could even be a contractor or agency, and have them sort it out. I think if you were the founder thinking through the tech stack, you’re going to be wasting a lot of time. So that’s kind of one thing to think about is just maybe you don’t worry about it. You have your marketer think about it.
If you are the marketer and you’re trying to solve that problem, I think it varies widely by company. You asked me what did we have early on? We were very, very basic. In the very early days, the first tool we had was a marketing automation platform so we can do some basic nurturing. We started with just a cheap email product and then we moved to a still not-so-expensive marketing automation product. I think for B2B that’s critical to have something like that. It’s not that expensive. Obviously, you need someone to be thinking about the content and some basic list building is very, very important.
I would answer the question a little differently. I think for a SaaS startup the most important thing is to figure out what companies you’re selling to. And then put those companies in your database, put names against those companies. There’s lots of tools out there for sales development, there’s tools out there for getting company profiles and names. But I would say the sooner you do that work, the better. I think that’s very, very important. So targeting.
Now, account-based marketing is a popular term but it’s really been the way a lot of people have done marketing in the enterprise world for a long time. I think figure out those accounts, figure out those people, and then start finding ways to market to them.
AT: What one piece of advice would you give for SaaS startups looking for growth?
NH: That’s a great question so I’ll couch my expertise. I was VP of Marketing at a later stage, Series B company and then I’ve been a CEO founder from founding days to now sort of a Series A company. I do have a gap in my knowledge. I haven’t worked at a company in that sort of high single-digit millions of revenues yet. If you’re at that stage, ignore what I’m saying. But if you’re really early-stage and if you’re later stage, I think my advice might apply.
Once you pass $10 million, you’re not really a startup in my view. But what advice if you’re looking for growth. I would go back to that one piece of advice I had early on which is start with a point of view. Why do you exist? Don’t be afraid to write down a positioning statement.
I would Google positioning statement and you’re going to find a couple of good ones. But it’s basically a statement that says, for example, “BrightFunnel is a marketing analytics platform for data-driven B2B marketers that want to connect marketing to revenue and unlike other platforms,” etc., etc. For us, those differentiators will be really about simplicity, power, completeness, etc.
But what is that for your company? Write down that statement and come back to it and really understand that you’re living up to it. Have a point of view, have a market position, and that will change over time, and then find ways to propagate your voice out there in the market. That’s hard, obviously. Maybe asking if you can write blog posts so we can try to get your name out there, but I think that’s kind of where you find some channels to then reach your audience.
In the first year, you might find that you’re talking into an echo chamber. You’re not even hearing anyone. You’re just hearing your own voice coming back. But over a couple of years, it really does compound this idea of people hearing your name, knowing what you stand for. That’s why pivots are expensive, obviously because you’re changing what you stand for. But I’d say figure out who you are and let people know that.
AT: You’ve been a great guest today, Nadim, so really appreciate you giving those insights and the lessons in marketing for SaaS startups. Thanks very much for being on the show today.
NH: Yeah, absolutely. Feel free to, if you want to follow me on Twitter, it’s @NadimHossain. The company is @BrightFunnel. Those are great ways to get in touch. I can’t promise I’ll answer but you can try to email me firstname.lastname@example.org. Salesforce is my old boss. And I do check my emails. Sometimes when I’ve got time to kill, I answer questions. Definitely you can reach out if they have a burning question.
AT: Marc Benioff might be getting some emails now about this particular podcast.
NH: Yeah. He’s my inspiration for that. He always would say, because it’s harder. You remember, “How do you spell Marc? With a “C” or a “K”?” Same with my first name.
Really that’s a nice growth hack I guess right there is just to have a simple CEO email and give it out to people. You have the choice of ignoring the email but it’s great to get those signals coming in from the market saying here’s what I care about. Even if your audience might not be your target market today, I do want to know what startups are thinking about and what they’re struggling with in marketing because it might indicate where the market is going in the future.