All posts in “Entrepreneurship”

Block to Be Salesforce Co-CEO With Benioff

There are many interpretations of Salesforce’s elevation of Keith Block to serve as co-CEO with Marc Benioff, a decision announced Tuesday.

Block to Be Salesforce Co-CEO With Benioff

Block has been the company’s vice chairman and president for several years, and the elevation simply could be a recognition of the obvious — he’s been doing the job without the title for a while.

However, Salesforce and Benioff are well known for getting added mileage from any move they make, so why should this be different?

Division of Labor

Block and Benioff have worked together since their early career days at Oracle in the 1980s. They know each other and how they operate. If you’re running a big software company, which Salesforce surely is these days, that kind of relationship is essential.

Salesforce’s ambition to hit US$20 billion in revenue early in the next decade, while a doable thing, will require all hands on deck. The relationship, which appears to be a close one, will be essential.

Of course, the division of labor is critical.

“I am going to be focusing on, No. 1, the products, the technology — as well as the culture, and Keith is very much focused on the operations and distribution functions of the company,” Benioff told Fortune. “We feel it’s going to naturally align with both of our strengths.”

That sounds about right. I disagree with the Fortune article, though, when it points out that “the lackluster growth at Salesforce rival Oracle, where Safra Catz and Mark Hurd share top billing, would suggest that arrangement (co-CEO) isn’t ideal.”

Horses for courses I say. Catz and Hurd have been working with a different company in a different part of its lifecycle, and it’s just as easy to say that they’re doing a good job navigating a legacy enterprise software giant to the cloud. So no comparisons there, please.

Political Ambitions?

It’s also useless to begin speculating that Benioff, who is 53, might be angling for retirement or a career change. Many people have commented on his natural political skills and figure he’d be good for a high position. That might take time, though.

Lots of people think that Benioff would be a good U.S. president, but who knows? History shows that some of the best presidents entered office with minimal executive government experience. Those people include both Roosevelts and Ronald Reagan, all of whom served as governors, and Barack Obama, who went from state senate to U.S. Senate to the White House in a very short time. There were others too.

Enough guessing, though. My suspicion is that institutional investors like the Salesforce story, but they are extremely risk-averse. One area of risk is succession in the event of a catastrophe that wipes out senior management. I’m thinking earthquakes, for starters, and then there’s the Millennium Tower leaning 14 inches off center next door to the new Salesforce Tower.

However, let’s not get maudlin. Defining a clear path of succession is just smart business when you’re a $10 billion company heading to $20 billion. So good luck and godspeed. No doubt there will be more news as Dreamforce draws near, and we can expect an enhanced role for Block at the event.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.

Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can’t Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there.
Email Denis.

AI-Driven Marketing Offers High Hopes to B2B Firms

Versium on Tuesday announced a partnership with LiveRamp, an Axiom company, to launch artificial intelligence-powered B2B audience segments,as part of a new business-to-business data management platform.

The partnership will let companies perform online targeting of offline business professional data that often is housed within their own CRM systems.

LiveRamp customers will get access to Versium’s modeling engine to create custom audiences optimized for their likelihood of engagement.

Versium will also offer unique business and consumer audiences built from its extensive LifeData Warehouse, which contains more than 1.5 trillion proprietary consumer and business professional behavioral data attributes, including social-graphic details, real-time event-based data, purchase interests, financial information, activities, skills and demographics.

When those attributes are matched to an enterprise’s internal data and used in Versium’s machine learning models, clients improve customer acquisition, retention and cross-sell and upsell marketing activities, the company said.

The partnership will “extend companies’ reach and ability to target business decision makers digitally leveraging our LifeData Warehouse,” Versium CEO Chris Matty told the E-Commerce Times.

“LiveRamp provides identity resolution so I can associate things like cookies with individuals,” noted Rebecca Wettemann, VP of research at Nucleus Research.

“Versium has the data on all those individuals as well as predictive analytics and modeling,” she told the E-Commerce Times.

Customers of Versium’s AI-powered solutions include Microsoft and T-Mobile.

What Versium Offers

Versium, founded in 2012, offers automated predictive analytics solutions based on its AI-powered analytics platform and exclusive LifeData targeting data warehouse. The solutions are offered via the Software as a Service model.

Versium’s LifeData Predictive Lead Score service, launched in 2016, is a self-service solution that lets marketing professionals, agencies and application providers rapidly build predictive models and visualize a marketing campaign’s projected performance without requiring expertise or experience in data science.

The service has three main features:

  • Predictive Model Builder — an automated self-service Web interface to build predictive models;
  • Real-time lead scoring — Datafinder’s API scores leads in real time; and
  • Prospect list scoring — organizations can upload and score existing prospect lists, so they can market to the most likely candidates for making purchases while slashing marketing costs.

Companies using the service see conversion rates increase by up to 900 percent, according to Versium.

“We use AI predictive modeling to identify the best target prospects most likely to engage in a specific enterprise solution,” Versium’s Matty said.

“Those models are constructed using advanced machine learning algorithms that analyze engagement and the characteristics of those who have engaged with past campaigns,” he explained.

LiveRamp’s Contribution

LiveRamp uses unique numbers called “Deal IDs” to match buyers and sellers of programmatic media. It has partnerships with other companies, including Bing for search marketing, and Google’s Customer Match, for which it initially created IdentityLink.

LiveRamp “brings the marketplace,” Matty said. “That is, they create the centralized data marketplace where Versium audiences can be purchased.”

While LiveRamp’s custom audience-building feature is available for business-to-consumer use, “the ability to reach business professionals has been hampered by low match rates to entity targeting parameters,” Matty pointed out.

“Versium solves that problem,” he said. “Further, most DMP audiences are select-based [rather than] custom generated from deep learning models or AI.”

Teaming up with LiveRamp gives Versium “a great partner in the ad-tech ecosystem that will help bring Versium B2B audiences to market,” Matty said.

“There’s a strong need in the market for better lead generation,” observed Denis Pombriant, principal at Beagle Research Group.

“Rather than relying exclusively on conventional marketing, some vendors are turning to analytics to identify the best potential prospects,” he told the E-Commerce Times. “They then spend time contacting relevant people to convert these into real leads. So this is a top-of-the-funnel activity, and I think it has legs.”

Tackling Buyers’ Avoidance of Salespeople

There’s a general trend among B2B purchasers to go online to research products and place orders instead of interacting with salespeople.

Twenty-three percent of 500 B2B companies recently surveyed by the Miller Heiman Group considered vendor salespeople a preferred problem-solving resource, and 58 percent saw little to differentiate sellers.

Convenience has been driving B2B procurement officers to opt for self-service over live salespeople, suggests an Avionos survey of procurement officers from 160 B2B companies in the U.S.

Increasingly, buyers don’t trust vendor reps. Only 23 percent of more than 650 technology buyers and vendors surveyed by TrustRadius said the vendor was highly influential in their purchasing decision. Only 37 percent of buyers thought vendors were as open about their products’ limitations during the sales process as they claimed to be.

Increasingly, B2B purchasers limit the role of salespeople to answering very specific questions after they’ve conducted online research, Miller Heiman found.

That doesn’t rule out the need for marketing, Versium’s Matty contended. “Buyers still have to learn about the solutions, and companies need to provide this education and awareness via online marketing.”

Further, concerns over customers’ inclination to avoid salespeople may be overblown.

“Don’t worry if customers don’t want to talk to the rep,” Pombriant remarked. “That’s happened throughout history.”

If avoiding interactions with salespeople is a growing trend, that only means sales needs “to engage with customers earlier in the process, almost before the customer is aware of a need,” Pombriant suggested.

Challenges to the Versium-LiveRamp Partnership

“As with any great new solution, it’s important to have an efficient go-to-market plan to accelerate sales,” Matty remarked. “Beyond LiveRamp, Versium’s solution to this challenge is to work closely with marketing agencies that play a key role in guiding companies on where to spend their ad dollars.”

One possible issue with the partnership is that each company might want to highlight its own importance when selling, Pombriant cautioned.

“Putting this in the hands of two similar but different sales teams with different approaches to selling seems to me to be counterproductive,” he said. “What happens when a customer has a problem? Who takes the lead?”

More typically, “we see partnerships going another way, with one of the entities being a ‘vendor’ to the other, which takes a conjoined product to market,” Pombriant noted.

The partnership could be overshadowed by bigger players such as Adobe, Oracle and Salesforce, said Nucleus’ Wettemann. They “already provide much of the capabilities, either organically or through partnerships, with tight links or integration to CRM.”

The challenge “is in operationalizing this data and targeting in a meaningful way without creating yet another CRM or marketing database,” she pointed out. “With most B2B marketers already struggling with multiple solutions and tools, another separate segmentation and modeling environment would have to be really differentiating to be compelling.”

Sales teams invest in 10 sales solutions, on average, but only four of those tools have an adoption rate of more than 50 percent, according to research by the Miller Heiman Group’s CSO Insights division.

Privacy issues also may be raised.

“DMPs have somewhat fallen out of vogue, particularly with GDPR and other privacy concerns,” Wettemann noted. “There’s a fine line between clever and creepy with this stuff, you know.”

Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology.
Email Richard.

Don’t fear the big company ‘kill zones’

Do you worry about the so-called “kill zones” of big tech companies? The Economist thinks you should. The theory basically suggests that if your product or service is anyway threatening or accretive to one of these incumbents,  they will either force-buy your company or clone it and destroy your market.

Any entrepreneur that believes this should probably pack up now before it’s too late —  if it’s not a “kill-shot,” it will be some other perceived death-knell that ruins your company.

Starting a company has never been easier. But growing a sustainable business is still difficult  —  as it should be. If you build something customers will pay for ,  you’re going to attract competition from copycats and incumbents. Consider it another type of validation, like product-market fit: competitors think we’re right.

Welcome to being an entrepreneur  —  you are going to be constantly battling  –  lack of cash, lack of customers, aggressive competition, better-funded competitors, underperforming staff, slow-moving sales cycle, or some other as-yet-unknown. The list of pitfalls is long. But enough willpower and perseverance — “blood, sweat and tears” —  will get you to the other side. Eventually. Remember  –  the product of an overnight success is years of hard work.

If this is sounds too daunting  –  don’t do it!

If you enter a market large enough, with deep pocketed and dominant incumbents, you have your work cut out for you. Maybe a nice UI and faster workflow attracted customers and some early adopters  – but guess what  – they are copyable features. Features alone are rarely enough to win a defensible market position.

Try to ignore advice that says you should focus on building the best product as your differentiator — this does not set you up with the highest chance of success. Instead, focus on finding and serving a targeted segment of customers, with a unique set of needs, and tailor your product and service experience specifically for them.

It’s easy for features to be copied  –  but you can’t be both custom and generic at the same time. Custom is a great approach that new entrants can take to get a toehold in a larger market with larger players that must be generic (i.e. Salesforce is a generic CRM, but there are lots of vertical CRMs that successfully compete  — Wise Agent for realtors, Lead Heroes for health insurance).

Presenting a Total Addressable Market (TAM) is the bane of potentially good startups that have been schooled in “anything less than a billion-dollar opportunity isn’t interesting.” Maybe we should reframe it as Potentially Ownable Market (POM). What are the details you can build in the beginning — where your tailored approach gives you instant leadership?

Project management for chefs

Let’s use project management as an example. Maybe a new entrant starts as an app for restaurants, which helps chefs build new menus. Each task list is a “recipe,” each recipe has “ingredients,” with amounts and timing, kitchen location, suppliers, alternatives and “garnishes and sauces.” The app integrates with the stock system and POS, and helps chefs predict inventory needs and staffing based on recipe times/complexity.

The founder has looked around and this is the only project management app that focuses on chefs, giving him an instant potentially ownable market. The business might be able to thrive in this segment alone and become the dominant player with its own kill zone.

Maybe this is the first step; the company gets profitable early growth and becomes sustainable, which funds development to grow the business into other vertical and complementary areas. Over time the business will grow into a large TAM  —  a far better approach than starting off in a large market with clear winners already.

Avoid the battle entirely by creating your own category.

The Social Utility 2

I have been writing a lot about social media becoming a utility — in my last piece, for example — and one friend summed up his objections very well: “Nicely written and well argued, Denis. However, the question that popped up is, will consumers be willing to pay for social media? Might charging for it cause consumers to flee?”

Here are some possible considerations:

  1. Users may hew to only one account because of the cost. Or they may abandon social media sites altogether unless they have a business or an overriding urge to pay for them. I, for one, wouldn’t bother, frankly — and if my employers wanted me to, they would have to cover the cost.
  2. If social media sites charge for use of their platform, consumers might — and quite rightly too, I must add — demand an end to ads and demand that social media sites be barred from selling their personal information, even in aggregate.

The current argument for being able to sell that information is that it pays for the service. Well, if you charge for the service, you shouldn’t double dip.

The argument against that is if you kill ads and bar reselling of aggregated information, social media sites won’t be able to continue their operations, because subscriptions don’t bring in enough money.

There is no doubt in my mind that Facebook might lose customers by charging, but that could be OK if most of them were people who wouldn’t pay in any case, like teens. Also, it’s possible to offer a junior subset of the service so that advertisers could still harvest some data.

The Dunbar Limit

A lot comes down to fundamental questions: Is Facebook a utility? Who is the customer? Have Facebook and social media in general overshot the mark? Some of my answers follow:

  1. Facebook is already a utility in all but name, and like any other utility it owes its near-monopoly in its market to the good graces of the public. You get a license to broadcast on the public’s airwaves “for the public good,” and social should be no different.
  2. The customer right now is the advertiser, not the consumer of the service. The consumer is the product. We know this — but it’s only true because Facebook hasn’t graduated from the advertising model.

    Other models could be employed that could help shape the dynamic, such that advertisers wouldn’t be using social to force feed their markets. The franchise model might be attractive. McDonald’s long ago gave up selling burgers by the single serve. Although it has a few stores, it is now primarily a real estate management company and a food distributor.

    Every business must change with the times. Franchisees could do a better job than Facebook in vertical markets, for instance. Why not give it a try?

  3. Facebook really has shot through the mark it set for itself when Zuckerberg was a sophomore. That’s because of Dunbar’s number, which says that the mere mortal can cultivate relationships with 150 to 200 other humans at once. That’s all the headspace we have, and social media just makes that easier — it doesn’t really help you with relationship 7,237. You might have the Dalai Lama in your connections, but forget about getting a response.

The End of Hype

What’s really happening, I believe, is that social is nearing the end of its “hypecycle.” If you’re unfamiliar with the term, it was coined by Gartner a while ago to describe the early market for an innovation.

During that early phase, the innovation is seen as everything from a cancer cure to free lunch. Most of the claims prove baseless, but then something curious happens. Users take another look and discover some things that the innovation is a perfect fit for.

As for social, there’s a really good case to be made for technology that helps you keep in touch with your 200 besties and not the thousands who decide to follow you because they thought some snarky remark was fun.

Social should be adopting more of a notifications model that is similar technology but doesn’t cause you to bloviate to the world, just your besties — and if they’re really your besties, you’ll keep the snark in check. What a beautiful world that would be! Notifications is a happening thing. Watch this space for more soon.

Meanwhile, forget the social nonsense of connecting the world and sharing a Pepsi. They couldn’t do it in the 1970s TV ads and we can’t do it now either. Dunbar won’t let us.

The future business model is still like wet concrete, but it has to come — and things like GDPR make that cutover increasingly realistic, Kara Swisher suggested last week, in a New York Times piece, “The Expensive Education of Mark Zuckerberg and Silicon Valley.”

So don’t worry about making social media into a utility. Yes, user numbers are likely to shrink, but we’re in the end stages of the social media hypecycle. On the other side of the cycle there is every reason to believe that once it is over, we’ll find out what social is really good for. And social won’t lose money in the process.

Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can’t Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there.
Email Denis.

5 Practical Tips for Crowdfunding Success

Looking to raise capital, launch a product, and grow your business? Crowdfunding could be the answer.

“Crowdfunding is more than just the money,” remarked Justin Giddings, CEO of The Kickstarter Guy.

“In some ways, it is the perfect laboratory to explore and develop the market viability of your project,” he told the E-Commerce Times.

“If you can launch a new brand and attract thousands of people within a short time frame, it becomes a mile marker of the consumer readiness of the product,” Giddings said. “Plus, it’s just good marketing. If a product is ever going to go viral without an expensive ad campaign, it’s going to be during a crowdfunding campaign — and your target market is paying you for it.”

One of the best things about crowdfunding is that crowdfunding platforms can deliver an audience that’s ready to invest in your company and product, observed Nick Morey, head of Dynamo’s San Francisco operations.

“You are likely to have stronger visibility than if you go it alone when first starting out,” he told the E-Commerce Times. “Also, working with the community, you may have a chance to reiterate and improve your product based on feedback, meaning your product is far more likely to be well received by consumers once it is readily available.”

If you’ve never run a crowdfunding campaign before, however, it can be difficult to know where to start. With that in mind, here are some tips to start crowdfunding like a pro.

1. Prep Well

A successful crowdfunding campaign begins well before it’s launched. Thorough preparation can have more of an impact on the success of your campaign than your actual product.

“Your campaign lives and dies on the strength of the prep work, not on the product,” Giddings maintained.

“Too many business have a truly brilliant idea or product and fall into the myth that the product’s coolness is going to drive traffic. It won’t,” he said. “You’ve got to do all the prep work that goes into finding, connecting and priming your customers. Then you’ve got to drive them to your campaign. If you’ve done your job right, the campaign will take care of itself.”

Researching your particular product, and knowing what to expect when you launch a crowdfunding campaign, can make or break the campaign when it actually launches.

“Know what you are getting into,” cautioned Daniel Zayas, U.S. sales manager for LongPack Games Manufacturing and a tabletop games crowdfunding consultant.

“I want clients to understand what is at risk if they don’t cover a majority of the logistical hurdles of the campaign before they launch,” he told the E-Commerce Times.

“There are examples out there in the world of crowdfunding campaigns where the creators either mismanaged the funds or didn’t ask for enough money, but likely both. I don’t want my clients to end up like that, so we discuss logistics and costs just as much as campaign page layouts and marketing.”

How far in advance you start this prep work depends on your product and business, but think months before your campaign is set to begin — not weeks.

“What most people get wrong with crowdfunding is they don’t take the necessary time to properly prepare their product launch,” noted Mark Pecota, CEO of LaunchBoom.

“I recommend starting at least three months before you launch,” he told the E-Commerce Times. “Your main focuses during this time are 1) testing product positioning within the market; 2) building an email list of people ready to buy your product; and 3) preparing marketing assets for the Kickstarter/Indiegogo campaign.”

2. Pay Attention to Marketing

Crowdfunding is all about marketing, so it’s important to pay particular attention to how you market your campaign.

“Your project is not your plan, so research like a crazy person or hire a professional, but do not hit launch until you and everybody on your team knows exactly what’s going to go down during this campaign,” said Giddings.

One key to effective marketing of a crowdfunding campaign is getting word out about the project in a timely manner.

“Ideally you want to be pitching to press a couple of weeks before the campaign, with coverage timed for when you launch,” said Morey.

“There have been lots of instances where potential companies come to us asking to promote their launch when the campaign has been active for a number of days,” he said. “Given the speed of the news cycle, and the fact that you are often competing for coverage against more well-known entities, press are far less likely to consider covering your product when the news has been out there and is considered old.”

3. Set Appropriate Funding Goals

Setting the right funding goal is another important part of successful crowdfunding, since reaching that goal will be necessary to move your project forward.

Set a funding goal too high, and “people feel it’s a difficult number and they’re less likely to get the product, so they cop out,” said Morey.

Set it too low, “and people will question why you need funding at all. Think about what’s realistic, achievable and attractive, and look to other successful campaigns in your field for reference,” he suggested.

4. Communicate Openly

Crowdfunding is all about creating a sense of community, so it’s vital to keep the lines of communication open between you and your backers — and to make sure not to promise more than you can deliver.

“Make sure you are responding to your backers in a timely fashion, and don’t underestimate your delivery times,” warned Morey.

“You should be considering crowdfunding when your project is closer to completion and you are less than nine months from delivery,” he suggested. “Given the history of crowdfunding, and a lot of projects taking far too long to deliver or failing to deliver at all, a tighter timeline is far more likely to net you trust.”

5. Get Help When You Need It

If launching a crowdfunding campaign is intimidating to you, you’re not alone. There are consultants out there who specialize in planning and managing crowdfunding campaigns. Hiring one of them might make sense for your business.

“A consultant will know what resonates with backers when crafting your page, can advise on your video script and messaging, use their experience to target the right press with the right story, and be able to advise you when things need to change, or if problems occur,” noted Morey.

“Being able to write a concise, relevant and useful press release,” he said, “as well as being able to pitch effectively to the right, thoroughly researched press contacts, goes a long way to ensuring your campaign is a success.”

Vivian Wagner has been an ECT News Network reporter since 2008. Her main areas of focus are technology, business, CRM, e-commerce, privacy, security, arts, culture and diversity. She has extensive experience reporting on business and technology for a variety
of outlets, including The Atlantic, The Establishment and O, The Oprah Magazine. She holds a PhD in English with a specialty in modern American literature and culture. She received a first-place feature reporting award from the Ohio Society of Professional Journalists.
Email Vivian.