If it were not so serious a question — I would appear daft. As it is, ventures are regularly required to jump through incredibly high hoops — be disruptive, have IP that can withstand competitive challenges, be a socially conscious venture ready to change the world all the while creating value that can exit with a ”B” somewhere in there.
Whew — and against those milestones — my question sounds even more absurd. Yet the question pressed itself upon my mind because of my recent experiences with and outreaches to VCs about our venture, engageSimply.
In true startup form, we bootstrapped our way and raised nearly $500k. We were able to develop and launch Eden; a marketing platform that powers our own topic-based network to drive curated commerce. Within weeks of launch, we closed a few deals including a major brand and our sales funnel would be the envy of any company.
So while we are enjoying great traction from customers, we need an infusion to take advantage of the opportunities before us so we started knocking on investors’ doors. The reception from the investor world is a quite different story.
The meetings start off great — all positive, appropriately imbued with “passion” speak. “Ah”, they say, “We love your passion.” However, at some point in the meeting, sometimes early on, sometimes later — I see the main “E” objection forming in their minds which, when spoken, is expressed as: “Why don’t you just focus on either the platform or the network but certainly not both!” or the deadly; “Sounds like you have too many things going on.”
In short they were telling me; nice idea but we don’t think it can be executed. Marketing as a segment is scary. A marketing venture with such a broad vision that is hugely dependent on execution is terrifying. So, investors seek cover under the umbrella of proprietary technology thinking the right tech bet limits their risk (not as true as they would like).
To try and overcome this issue, I point to my four year publishing record in Ad Age, Digiday, Social Media Today and HuffPo where I correctly, it turned out, agonized over the practical execution of digital copyright practices, content monetization, the new corporate branding model and the overwhelming proliferation of platforms.
I tried to drive home the point that our “broad” platform + network strategy mimics the great direct response companies of the 1990’s that thrived by creating holistic offerings with platforms (like email servers) and the networks or lists to send out the message. Those businesses were built on the back of “execution” and profited handsomely!
Futilely (so far), I tried to realign VC expectation of what can be executed if there’s a seasoned marketer at the helm. After 30 years in the business, my executional chops are second to none.
Yet the “execution” wall I am running into again and again is high; built up brick by failed venture brick where brilliant tech or content-based CEOs failed because of their limited experience in “execution”. All the passion in the world can’t fix that.
So in the cold light of day, as a venture of “execution innovation” we seem unrecognizable to tech investors; an outlier that wandered too far out on the outlier limb.
Investors could see the need we were addressing, but couldn’t see the inherent advantage of a venture formed by marketers — not technology or content folks. They recognized the revenue potential but didn’t understand why we created the business model first and the tech second (heresy — I know!).
But more than anything, they didn’t believe that an experienced team can achieve the needed executional feats that, to the unschooled eye, seem impossible.
No wonder we are an “off the chart” risk even if they believe that our domain expertise gives us a better shot than most. It was a depressing conclusion because it left a gap in my heart and mind (not to mention our bank account).
But even beyond our funding needs, more than anything, I long to have thoughtful conversations with investors about an industry I love that they are reshaping (naively?) via the investment choices they make. I wonder why no investor worries out loud about the lack of a business model for agencies in marketing tech; an issue which I believe majorly throttles the speed of tech adoption. It doesn’t seem to bother investors that there are a lot of practical issues around a marketing tech landscape that is saturated with platforms, algorithms and big data (with good and bad big data) that too often confuse behavior with intent.
So I’m taking this chance to take a stand against the low “execution” expectations investors have in the hope that I can make the way easier for follow-on ventures attempting to solve these industry execution issues. Someone’s got to start clearing a path in the overgrown and entangled marketing tech forest. So with my digital machete in hand to clear through the tangling underbrush, I declare:
1. Long-term marketing wars will never be ever won by cool tech alone. The current tech lurch toward the semantic web (e.g. Hummingbird), hyper targeting and algorithmically-based RTB media nirvana seems oblivious to the fact that marketing tech muscle can break the delicate marketing trust needed to drive efficient sales conversion. Executional integration will ultimately determine which technologies make it and which don’t.
2. I believe it is a mistake for investors to measure every venture’s execution capabilities against the yardstick of current startup CEOs. It sells us outlier ventures short and does not allow new designs in the business to emerge.
3. I submit that the next wave of marketing startups will be the “execution startup wave” where value will be placed on the execution capabilities of people to master marketing technology. In this wave, “the how” will be cooler than the “the what.” It will become clear that marketing can’t function well if it is driven primarily by binary, algorithmic formulas that can’t create the marketing trust the industry rests so heavily on.
It seems possible I may have to wait a long time before some VC is convinced that our plan is eminently executable. It’s also quite likely that I may have to prove it can be executed before I get serious investor interest (the chicken/ egg conundrum here is not lost on me).
I must therefore hunker down, muster every ounce of courage I can and take a page from my favorite book The Little Engine that Could. I need to be resourceful in turning; “I think we can…I think we can…” into; “I knew we could… I knew we could.”
Judy Shapiro; www.hereineden.com
Author’s note: This tirade — er — post only pertains to my observations within the marketing investor realm. This perspective may in no way be representative of investors in other industries or sectors.