Steve,
This email is a story about one of our clients. I can't share their "real name" due to NDA's. I changed the dates and personal details to keep it confidential. Enjoy!
In October 2015, Mike Hucks was hired to run marketing for Japple, a new software company that recently landed contracts with EA Sports, Sony, Facebook, and Google. Japple made it easier for companies like Google to develop, run and host Virtual Reality applications. Virtual Reality was so data-heavy that as one Google executive said, "It felt like it was going to break the internet."
Japple fixed that.
On Mike's first day at Japple, there was an article in the San Francisco Chronicle, they raised $22M in series B funding. They earmarked part of the funding for marketing, thus Mike's role.
Mike or "Huck" as he was known, was tall, athletic and looked every bit a salesman, even though he considered himself more a marketer. Mike was from Boston and Catholic. Unlike his brothers and sisters, who no longer attend church, he went every week, even on vacation.
The CEO of Japple, Bill Rexberger, on the other hand, had a reputation as a tyrant. His subordinates called him "Tyrannosaurus Rex," which he played up. He was a former sales guy from Oracle, that resigned two years prior to starting Japple, or as people inside Oracle said, "He was asked to leave."
Bill could be likable (ish) when he wanted something.
As the Japple Controller said, "Before I was hired Bill was nothing like what people said about him. He was so kind, and patient. Then I began working for him. In our first all-hands meeting, he screamed at an engineer who accidentally turned off the site (for seven minutes). He told him to 'GET THE FUCK OUT." He turned to his assistant to call security and clear out his desk. I was so embarrassed, I considered not going to work the next day."
Bill rarely saw his kids or wife, commenting to one employee, "Anyone can be a good dad, few people have it in them to be billionaires."
Japple had a president, Bill's brother who ran operations. The CTO, who used to work with Bill at Oracle, ran development. Everyone envied the engineers because they worked in the Burlingame office, 15 miles from Bill's outbursts.
The board knew about Bill's reputation but forgave him because he delivered. The sales team was mostly 20 somethings, recruited from HP and Salesforce, with the hope of being on the next rocket-ship. Everyone in San Francisco had a friend who was a former employee #22 at "insert the next hot-startup," and was now buying a ski-in-ski-out condo in Squaw Valley or cashing in stock to fix up a Victorian. VR had potential, and the employees, like the investors, knew it. They openly shared that Japple could be the next 'billion' dollar company.
A former EA Sports engineer, who was recently hired to run QA testing at Japple said, "Why would you want to stare at a screen when you could be on the screen in VR?"
Mike went to NYU undergrad and got his MBA at Columbia. Unlike the rest of his graduating class, Mike didn't go to Wall Street. He didn't particularly like finance or marketing for that matter. He spent most of his career in New York at a series of media and cybersecurity startups. Mike was 47 and had a string of close misses. One startup had a $350 million offer. The CEO and board passed on the deal, holding out for more money. With a 1.4% stake, Mike would have made $4.9 million, more than enough to move to Cape Cod and become a high-school lacrosse and history teacher, his dream. Instead, the company went bankrupt 9-months after the offer.
Every Christmas Mike would get Christmas cards from his Columbia friends with pictures of their families in St Barths, or the Hamptons. Whenever he and his wife visited them in the Hamptons, his wife spent most of the car ride home complaining about all the things Mike wasn't providing. Her mom thought she should have married a banker.
Mike didn't care about the money. He just wanted to win, at least once. He was tired of hearing about twenty-something engineers, fresh out of college making tens of millions.
When he accepted the Japple offer, Bill gave him one directive, develop a marketing plan to triple revenue—by the end of the year. Japple had raised $35 million in VC funding from the "Who's Who" of Sand Hill and Bill along with the board only cared about one thing—growth.
As Mike looked at different marketing channels, he met with the sales team to understand where the leads were coming from. The deals came from Bill's network and board referrals. Both of which dried up. The consensus was if they wanted clients they would be at the upcoming VR trade shows. And if Japple wanted to be the next Snapchat, they needed to move fast.
To round out his plan, Mike added a new website, content strategy and paid search. He also wanted to hire Propeller, a highly regarded PR firm, which Mike knew from New York. He estimated the marketing budget needed to triple revenue was $750,000. He doubled it, just to be sure.
Japple had enterprise-length sales cycles, which would make tripling revenue that year difficult, if not impossible. Their fastest deal took six months to get through legal, and many times their sales team was still working on contracts 18-months later. The trade show schedule was in the spring, which was only weeks away. Fortunately, some of the higher end sponsorships were still available. Mike asked the trade show organizers to come up with a couple of "BIG PACKAGES." Over a series of emails, Mike negotiated the price down from $90,000 to $40,000.
On the day of Mike's presentation about his marketing to the board, he reserved the conference room and walked in 30 minutes early. Bill was already there.
Bill's said, "You're not going to disappoint me are you, Huck? I'm expecting to be impressed." Bill said it without looking up from his iPhone.
As Mike presented, Bill paced the room like a Dad waiting for his daughter to come home from a date.
When Mike finished, Bill said, "If I approve this budget, is it gonna work?"
Mike said, "Yeah, 100%."
"You need to triple revenue next year, are you sure?"
"Yes, my only concern is it's a new product, so I don't have a lot of data to go off of."
"I assume you've taken that into account."
"Um, yeah…I just…"
"Mike you can't fuck this up."
Mike realized at dinner, he forgot to eat all day. "Startups," he thought.
A team of eight salespeople traveled to Boston for their first tradeshow. They paid a sizable chunk to have the new booth shipped overnight. When they got the booth quote, they considered renting a U-Haul and driving it themselves to save money. The first day, they hosted a cocktail hour to kick off the event. The final day Bill gave a keynote during the lunch break.
Everyone who stopped by their booth loved their demo. The show was a huge success.
In the first three months, Mike lived in the airport. He racked up enough Delta points to send his family on vacation to Hawaii. He was living in hotels, working double shifts. Most nights were spent on the phone with the PR team or working on the website redesign. Propeller got Japple articles in the New York Times, Wall Street Journal and TechCrunch, which Mike's wife cut out and put on the fridge so his kids wouldn't forget him.
Japple was burning $1.5 million per month and was far from profitable. They had a strong pipeline, but they were having trouble converting the deals. The trade shows were great for visibility, but they weren't providing enough leads. Mike calculated the cost per lead at $2,000 was a lot higher than he expected. (He kept this to himself).
In the same period, Bill hired ten new salespeople (still no VP of Sales) and the team spent most of their time cold calling. Despite all their efforts cold calling they still didn't have enough leads.
In Q1 of 2016, they missed their number and there were only two remaining trade shows scheduled for the rest of the year. Fortunately for Mike, the board pressured Bill into hiring a VP of Sales, Jeff Minksy, a former Microsoft guy who relocated from Seattle and worked with one of the Board members. Before Microsoft, Jeff worked at an ADP competitor and was known a grinder, an "Eat what you kill" kind of guy. Jeff was supremely confident, some people said overly.
Jeff wanted to build out an SDR team and put sales in charge of outbound. He hired two guys to lead it. Mike was more than happy to give it up, between the travel, PR, and website projects, his plate was full. Mike was looking for any way to get leads. He increased the search spend from $3,000 to $15,000 a month.
They missed their Q2 goal. There wasn't enough search traffic and the SDR team wasn't doing as well as Jeff expected. But Jeff always seemed to have a good reason for it, "they bought the wrong data," "they were changing systems because of deliverability," "they needed better subject lines."
After the Q2 board meeting, Bill sent Mike an email and asked him to come in at 8 A.M., which wasn't unusual but based on Mike's performance (or lack thereof) he made sure to back up his computer the night before.
The next day, Bill said he expected Mike to deliver 150 PQL's (Pre Qualified Leads) by August 30th. Mike's best month was 38 PQL's. And that was after two trade-shows.
Bill went on to tell him he expected 150 PQL's each month and if he couldn't do it, he needed to start looking for a job.
After the meeting, Mike called a couple of the CMO's he knew, from a CMO advisory board he was part of. Because of the immediacy, his only option was outbound. They shared thoughts on how he could improve his in-house SDR team. A couple of the CMO's tried outbound agencies which seemed to help. Mike got a couple of referrals. He started calling around looking at cold calling, and other outsourcing options.
Later that night he hedged his bet. He called back to a couple of recruiters who had "exciting opportunities he would be perfect for." He thought there is no harm in getting a cup of coffee.
In June 2016, I got an inquiry from Mike on our website. In our first meeting, I explained the pros and cons of building it in-house versus outsourcing. Mike found out about us from one of our clients who used our system.
Mike said, "I never respond to people I don't know, but there was something about the email that your clients sent that intrigued me. I couldn't put my finger on it."
I smiled through the phone.
Within a week of meeting, Mike faxed over a signed contract. He bought 120 meetings per month for $22,000/month. He canceled two trade shows for the following year to pay for it, much to the disappointment of the trade show salesman.
As we rolled out Mike's campaign, we interviewed their customers to find key phrases, language and trigger events to use in their campaigns.
Bill hadn't been to any of our meetings and when I presented the copy to them, Bill was concerned the copy didn't look like Japple's other materials.
At the end of the meeting, Bill said, "Listen I didn't hire you, but from what I understand you offer a money back guarantee, so I'm willing to at least give it a shot."
On the car ride home, I told the account manager assigned to Japple, "We might not be working with Japple long."
We built the list of targets for Japple, starting with an account based program targeting CIO's, CEO, and CTO's because "C-Level" decision makers shorten the sales cycle. In the first month, we sent over 60 meetings (PQL's), including several CEOs of companies like the Royal Caribbean and Citrix. Although Mike was happy, he wanted more. We told him he could expect to ramp it up over the next couple of months.
Campaign (After 6 months):
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