0:00:05 - Alex
Welcome to a very special episode of Experience Focus Leaders. I am delighted to introduce you to Mark Orgen. Mark founded the Marketing Automation Movement as we know it as the founding CEO of Eloqua, then created a Customer Marketing Movement as a Founding and Founder and CEO of InfluenTIV, and now it's helping folks to learn who want to build new categories that matter as a CEO, coach and a B2B leader, coach and category not small, Mark. Welcome to the bottom, Thank you.
I'm thrilled to be here and I have to say that, while we haven't met, until this, I've been a secret fanboy of your products, as a marketer and success factor. I discovered this thing called Eloqua that you built and it helped us be much more intelligent at the time and leading the market at the time and how we were creating our category around employee performance management solutions, and then we changed that category a few times. So let's hear from you the origins of the idea behind, obviously, eloqua and, broadly, how do you see this evolve into the buying experience space which you at the time really made it simpler compared to the alternatives that were present?
0:01:42 - Mark
Thanks. Yeah, it's a great story and it's so interesting that I'm here for experienced focus leaders because really, from the beginning, that was really my insight was that both the buying experience and the selling experience was that great, and that was so. At the time, myself and one of my co-founders, Steve Woods, CTO, founding CTO at Eloqua we both had some insights around this myself more around the selling side, where the experience of sellers was really pretty, pretty poor. They were often talking to prospects that weren't interested in buying, and so that was annoying for buyers and also pretty dejecting for the sellers, Right? So you basically the early version of cold-colling.
0:02:41 - Alex
You know that interrupts the buyer actually non-buyer more often than not because they were not even interested in the solution and it's seen as an annoyance and then destroys the willingness to live for an average sales development wrap because they're just kind of getting rejected more often than they have to be. Is that kind of a good way?
0:03:04 - Mark
Yeah, I think that's exactly right. So that experience for both the buyer and sellers is not great. At the same time, like Steve gave himself a challenge around buying all his Christmas presents online this is back in 1999 and he found that he couldn't really do it. He couldn't do it because he needed the advice and the service of, you know, of a salesperson. So we kind of came together with these insights and said you know, there's got to be a way to have a better experience for both seller and buyer, and the internet's probably a key way to do that. And that's part of the.
I guess some of the research that I did when I was at Bain was that the internet was emerging. Both the web and email were emerging as a place for buyers to go when they were interested in buying something. So those are our foundational insights. But the product that we created first didn't look anything like the marketing automation software that you may recognize. It actually was like a chat product, a proactive chat product, a lot like what you might find with Intercom today, or a live person there's a number of a number of providers out there that do it.
That was actually the original product, and the idea was to connect a buyer that was really interested because they looked at lots of different things online, they lingered on the right places and so on. To connect that person with a salesperson live on the website was the idea, so literally an embodiment of the foundational insights of the company was was the idea. As it turns out, that experience was not necessarily great for sellers or, you know, or buyers, and so we thought, well, maybe we just need to turn up the volume and get more prospects so that the experience may be better for sellers. Our first customer was what's now Cushman and Wakefield, so the number one commercial real estate company. So it was. It was B2B right from the beginning, and so you know those sellers are making a lot of money and they don't want to talk to random people on the internet. But when we put the email engine on top of it, what we got then was a list of people that were interested in a certain property and we could rank it based on how much interest that they had. So that became really interesting. So now the sellers could actually call the first three or four folks in order.
That actually became the minimal viable product of the company. So it was kind of lucky that the because we were focused on B2B and and it was a proactive chat product, we needed all this pretty sophisticated analytics to understand what you know, what territory a prospect was in, what they were interested in, so we could connect them with the right person, and, as a result, we built a product that was completely different from everything else at the time, like different from every other marketing automation tool, different from other chat tools, different from other email marketing tools, because of the target market that we had and the problem that we were trying to solve ended up being really different. Now, what was interesting, though, was that nobody else thought this was interesting at all, so all the analysts thought we were crazy and that we were in all these different categories. It didn't make any sense. No VC would fund us, so Ellico was a bootstrapped company. We raised $166,000 and we got profitable. That's it.
We got profitable on that we did have to go to the well and get another quarter million dollars of debt, which was a very, very, very dilutive debt that we had to do to stay alive. But a lot of the VCs, like we didn't make any sense to them because they're, like are you a web analytics company? Like, no, we're not. But you have web analytics technology. That's true, but that's not what we're interested in at all. Are you an email marketing company? No, what we are is we're. You know, we are a prospect Development and identification company, right, and we're doing activation. You were doing activation at that time, right? Like, or is that? Did that emerge over?
0:07:14 - Alex
time? Were you just like really identifying first who is what interested in what? Or did you start nurturing you know in the early stages of the yeah, but I wish I could say how brilliant we were and how we discovered this category.
0:07:33 - Mark
The bottom line, the truth is that we had no idea what we were doing at all.
Right, like most you know early stage companies where the oldest person in the company was 20 years old, and we had a lot of people that were in the company's where the oldest person in the company was 25. You know, we were honestly just trying to survive another quarter. We were a bootstrapped company. We were barely surviving. We almost went bankrupt four times, and so you know, and I could definitely tell the story of sort of how we got profitable, but it actually wasn't until we by accident discovered who we were, and it's because we won a really interesting customer called J Boss, and J Boss was one of the leaders in open source software at the time.
So their peers not competitors, but peers would be companies like Red Hat, as an example, or MySQL is another one. Right, these are open source application companies, and so we won J Boss. And open source software companies are different from your typical software companies in that they don't really have to generate more leads. They need to prioritize which leads are most valuable, because they've got zillions of leads. They've got all these people using their product for free, their business models, to sell them services. And so what happened at J Boss is we inflected the sales like this because, before their SDRs were calling on prospects at random or
whatever like oh, this company looks big and interesting, let's call an M, and all of a sudden they went from that to calling the right people in order about the things that they were interested in, and so we actually won.
Almost every open source software company there is and there's a funny story around this one, because Eloqua had no open source in it at all. We were a Microsoft shop from top to bottom, and the funniest thing was when I went to North Carolina at a red hat, which is like the Cathedral of Open Source, or maybe in Mecca, it's Mecca of Open Source, which is a better analogy, because I came in with a bacon sandwich, which is what it was, because they were built on Internet Explorer. They had to actually buy computers that were not Linux just to run our products. So that's a good definition of product market fit If a company has to buy their arch enemy in order to use your product. But they needed us, like they need us, because they needed to do what. You know what JBoss did and MySQL did and a number of the other open source software companies.
0:10:27 - Alex
And for Ariads that doesn't know, this Oracle ended up buying Eloquo eventually. For what about a bit just under a billion.
0:10:35 - Mark
Just under a billion dollars.
0:10:36 - Alex
Yeah, and which at the time was a very, very big deal. You know, I think right now it's sort of is a different universe in terms of exits, but that's double doubly impressive. You know that you had such a compelling technology built out.
0:10:57 - Mark
Yeah Well, there's an interesting story about that that actually parallels this red hat story and I think for the entrepreneurs listening, you know, I think this is why it's so important to be constantly developing hypotheses as to who your target market really is Like. What's the real center of the bullseye? It turns out it was different than we thought it was. You know what is the real offering that you have, what's the ideal pricing and packaging and messaging? Because if you're really listening and developing hypotheses a lot and testing them, then the answer becomes clear and once you get that answer, boom, right.
At that point we knew exactly who we were, how to message. We changed our pricing, we changed our packaging, we changed our messaging and we started to grow faster, even before we raised money. We were growing faster on a bigger base because we figured out again completely by accident, like the same way that, you know, post-it notes were an accident, right, but there was a smart scientist who said hang on a second, this adhesive that's not actually a very good adhesive, may actually be useful for something else, and I think a good entrepreneur is thinking about that too. But with respect to Oracle the reason why they bought the company, you mentioned that you were in HR or employees software right, so you're probably familiar with success factors.
0:12:19 - Alex
Well, that's where I was, yeah.
0:12:20 - Mark
OK, so here's a funny story about success factors in Oracle and I guess I can say this now. I've probably for a while. You probably couldn't say this in public, but, as Oracle likes to do, they bought that acquisition of success factors big time because they actually turned off their revenue engine, which was Salesforce and Eloqua and some other tools, and they said we should use our own fusion tools and they really destroyed over a billion dollars of value. Because you know, sap for cats said hey, what is going on Like success factors was doing this and now it's doing this. What happened?
0:13:03 - Alex
You mean people soft, you mean Mark, you mean people soft. Just to clarify, right, I think.
0:13:08 - Mark
Sorry, I thought it was success factors. The Oracle buy success factors.
0:13:15 - Alex
It was. They bought people soft and they say people success factors.
0:13:19 - Mark
But I think you're what you mean is people soft?
0:13:22 - Alex
because this makes perfect sense.
0:13:24 - Mark
I meant people soft, Excuse me, yeah, but you know what happened. And then the revenue leader said well, you turned off our revenue.
0:13:32 - Alex
He turned off the engine, yeah.
0:13:33 - Mark
Yeah. And so what's in that engine? They're like well, we're not going to buy a Salesforce. Oh, what's this Eloqua thing? And as it turns out, you know, eloqua did have a partnership with Oracle and it said, well, let's just go buy that. So it's. I didn't know that.
0:13:48 - Alex
That is actually pretty legendary. That makes a ton of sense. Yeah, yeah Again. This is why we do.
And why people should listen to your podcast is they can find secrets that are not available to them. First ever known history of like what happened. And it is fascinating as well as well because from an outsider perspective, right Like so that when people think marketing automation they think Eloqua, mercado and then like Hopspot and the sort of SMB world and eventually they kind of market and moved up market. And you know Hopspot is moving up market but guide us a little bit, because people say marketing automation and they kind of immediately blur out these companies. But it does sound like you had a very different focus and Mercado had a different focus. And I didn't negotiate these areas where you compete or where you just really go in the different directions. Like like what's for an outsider? What was it like to be in your shoes and thinking about competition in this market?
0:14:51 - Mark
Yeah, that's interesting. Well, you know, eloqua was founded seven-ish years before Mercado and Hopspot and had quite a quite a lead on them. I think Phil Fernandez and John Miller were very much aware of Eloqua and I know that because somebody actually showed me their pitch deck, which kind of had Eloqua and a bullseye, and they did a great job, like they did a good job of attacking Eloqua at its weak spot, which was user experience. You know, god bless the amazing technical team that I had at Eloqua Lots of fabulous architects. They built an incredibly scalable still the most scalable marketing automation platform in the world. It still creams Mercado at that particular thing, but the user experience wasn't great. It was a while before we invested in product management or design.
We were a heavy heavy engineering focused shop and based in Toronto, you know, whereas Hopspot in Boston and then Mercado in Silicon Valley have a long legacy of investing in things like product management and design and created more elegant, I think, more elegant products, and ultimately, I think that's what the market, the meat of the market, really needed. I think the high end of the market, where you have, you know, where you had people who wanted to create 150 different nurture platforms this is like Megan Eisenberg and she's kind of become legendary in our space there's that DocuSign, and then MongoDB and whatever 150, 200 different nurture streams for every little part of the market. Really, eloqua is the only product that works for that and that really was a big part of my strategy Was that I believe that the high end of the market was where the profits were, and actually I think I was right. You know, the problem is that everyone else knows that too, right? So of course, the high end of the market is where you want to be. Of course there's a lot of profit there.
You know the problem and this was really the CEO who succeeded me, who both did a great job but also missed the boat on a couple of things depending on what you think the goal is. You know he helped take the company public, which is great, but seated overall leadership to Marketo at the end. And that is like when you run away further up market it creates a vacuum that the lower and we see this in time after time right Like Rolls Royce, you know, keeps running away up market and now their market segment is really tiny. Of course that they may be very strong in that segment, you know, competing with Bugatti, but that's a very, very tiny segment of the market versus, like Toyota that has a much bigger part of the market. So I think the strategy that came after me. I wanted to fight down below.
0:17:56 - Alex
For the mid market. You wanted to be in money.
0:18:00 - Mark
Not necessarily to win it, because you can't win everything. I wanted to create what's called a fighting brand, right? So you create a fighting brand so that companies like Marketo and HubSpot have a difficult time getting too much oxygen. But I think what happened, you know, after I left 2007, was that hey, and at the time there was a recession, so I get it 2008,. There's a recession. Let's focus on the most profitable segments, which is the high end of the market. That did leave a vacuum. So in the end, everyone actually did succeed, like Eloqua did go public, so the shareholders of the company got, I think, what it is that they wanted. Marketo also won. They actually end up with a bigger market cap and then going public later. Ultimately, I think they ended up being the category King. But a lot of that is is is because of of timing, and maybe, if I executed my strategy of creating a fighting brand, that might have also diluted the focus of the company and maybe we might have lost Control over the high end of the market. Who knows, right?
0:19:11 - Alex
Well, congratulations. One way or another, you've basically shaped the category. People copied you and you've had a great Exit. And I think one of the things that really intrigues me is your next, next company in fluid of what took some of the lessons of what does it take to bootstrap an enterprise Company right, which is you have to work off of the word of mouth of successful customers and have them be your champions? This is something that's near and dear to our heart and, and I think a lot of our audience is Kind of realizing now, especially in this market environment, that you know the the best sales people are not the sales people, they are your customers, right, whether they're, like in our case, they're creating with us, and that may just speak for itself, or if they say some nice, something nice, that's way more credible.
We love Godard and g2, which has created a platform for customers to kind of say their Publicly share what they say, and you've created a fluid of. So tell us a little bit about what are some of the Reasons that drove you to do that. And you know, go go at it again which you know. As we know, entrepreneur journey is not for the faint of heart. Yeah.
0:20:28 - Mark
Yeah, and this one is. You know, now I had some experience behind me. I also had some some time to really think about the lessons that I learned at Eloqua, because while I was at Eloqua, for the most part I was just trying to survive another quarter, as I said, and it really wasn't until I left that I realized some, you know, really important things. For example, I did learn it's not really related, but the importance of a great employee experience. I only really learned after I left and speaking with people how, how much I really could have done a better job there, and I think that is one area where I did do a better job when I was at it.
But the the insight for influence did come from my experience at Eloqua, where we noticed something interesting, and that is that the best quality Customers came through a customer channel. So in other words, when we got a referral and you probably have seen this at Relate, relate, oh it, probably every listener in this podcast has seen this in their own business and that is when they get a referral, a high-end referral, those are really good prospects. They close faster, they close for a higher amount, they adopt the solution faster and actually they're more likely to become a customer advocate themselves. It's like customer advocacy is like kind of a beneficial virus that way.
0:21:53 - Alex
Yeah, yeah.
0:21:54 - Mark
And you know, not just referrals. You know If you want to close deals faster, if you get a reference call, one-to-one reference call in there, they close faster. If you've got the right case studies on your website, if you've got now, you've got G2 and trust radius and and gardener peer insights type of things going on, when, when prospects are seeing those and it resonates with them, they're much more likely to become not just a customer but a successful customer. So this is something that we realized, like many other Companies, the many other leaders do, and so the question is well, how do we get more of this? How do we get more?
And it turns out it's not an easy problem and you may have noticed that in your own business that you want to get like, oh, let's double the number of referrals that we get. Oh, that's hard. It's not easy to get more referrals. It's not easy to get customer advocates assigned up to be a reference call. It's not easy to get truly great case studies that convert prospects into customers. And it wasn't a tools kind of an accident that we had. You know I had a user conference. You know the markies is what it was back then Not named, not named after me, but named after marketing. And what we noticed was, when we provided this amazing experience for customers, where you gave them a glass of champagne and a fancy order and you and you celebrated them with trophies and videos and all this kind of stuff, they came. Their reaction was to advocate a lot more.
0:23:27 - Alex
Okay, and again.
0:23:27 - Mark
This is why it's important like we got to be paying attention to these things right. That was really interesting. It was unexpected.
That wasn't our goal. Our goal wasn't to generate advocacy. Our goal was to celebrate our customers, make them feel good. But what ended up happening was a huge outpouring of advocacy from those people. And that's when a light bulb went off for me that if you make the customer advocacy experience great, you will get more customer advocacy. Yeah, rocket science, right, brilliant, you know. That's why we're both in the experience business because providing great experience works and the customer advocacy.
Advocacy experience is not the same as the customer experience. Okay, the customer experience means that the product really works. It's got surprise and delight in it. It. You know the service experience is great. You know that when people use your product, it does what you expected to do with and a little more. Right, that's the customer experience. The customer advocacy experience is different. You can even get a customer who's not absolutely delighted your product, so they're not a 10 out of 10. They're like a 7. They will still advocate a lot. You can get a customer who's a 10 out of 10, who's thrilled with your product, and not advocate much at all.
So there's something else that's going on and the the things that I learned about it is what caused me to build another company, because what I learned was that the advocacy experience is really different from the customer experience, and I knew that this was going to be a new company. But I wasn't ready to run a new company. I was running the old company. But then, when it was time for me to move on, I really wanted to work on this problem, and the problem was how do you get happy customers to advocate way more than the ordinarily would? How do you get someone to do a referral a week instead of a referral a quarter? How do you do that? Right? And so I interviewed over 800 people. These are 800 people that I would call them like super advocates.
They're people who just enjoy helping companies that they like, and I found out what it was a drove me to do it, and there's three basic things we found out. One was they wanted to be part of the team, so they didn't want to have a big demarcation between employee and and customer. They want to be part of the team. Part of their identity was Infused with this company they care about. It's almost like Superman, like Clark Kent Superman.
So in regular life, a customer advocate may be, you know, an accounts payable clerk no deep into bowels of some big company, right, or they might be whatever it is. They may be a. You know that there are sales leader, marketing leader. They're a teacher Okay, they're their Clark Kent, but when they are advocating for a software that is transformational for them and their career, they turn into Superman or superwoman at that point, and so their identity is is tied up in the company. So we want to make them feel that even more right. We really want to make them feel like they're a VIP, that they're part of the team, that they're, you know, not that different from an employee, actually. So that's one of the things we learned. The second is that people wanted to Understand the impact they're making on the company.
0:26:56 - Alex
They wanted to make an impact.
0:26:57 - Mark
It's one of the reasons why startups get so much more advocacy then the oracles and the SAPs and the sales force comms of the world, because if you advocate For sales force comms a today, you're really not going to make much of an impact, but in the early days of sales first on the division was huge, huge thing, right, huge thing. And they did a great job. The sales first did a great job. Customer advocacy. So you want to show people the impact that they're making so you're.
0:27:24 - Alex
You are one of our early customers, you matter, you believe in us, we value that. And then, on top of it, you have a new persona of yourself, as this sort of super Superwoman or Superman. Superman, that's right, you may. What's the third one?
0:27:40 - Mark
Yeah, and you even made me recall me sales. I mean, mark Badyoff has got such a great instinct on this. You may recall the billboards around San Francisco that literally had their customers of superheroes right on top of billboards. So, yeah, that's, that's really so. So they need to show people the impact that they make.
And the third thing is that their life should be improved and a career should be improved if they advocate more. So this was a big, this was a big insight. Some companies were really good at this that you know when people advocated for their company that they prospered. So, for example, if you want your career to go in the right place, you may want to write some content that is going to be seen by your next employer or or your existing employer, so you get promoted, you know. You may want to get more public speaking experience and get on stage and show how insightful you are as a leader. To use Relato, you know that sort of thing. So you know, if you want to get more advocacy, help your Customer advocates prosper in their life and career.
0:28:50 - Alex
Those are the three things, and it's really interesting because they're not transact like the last one is a little bit more your, your. You know you could be perceived like it's transactional but in reality it's not, because it's a pleasure, like I'll tell you right now. Yeah, like there's nothing more pleasing to see of a founder of a company, then to have your users get promoted. It's like it's such a joy Like I don't, like I don't have to bet you don't even have to promote me.
You know, like you don't have to promote Relato like zero benefit. It is a joy to see. Hey, this person believed in me, in us. When we're early they took a risk and look at them there like they were director and now they're CMO or they're. They kind of had low quarter Numbers and then they want the big deal and they used our data to make. That. It's just, I think, and our team loves it.
0:29:47 - Mark
I'm so, I'm so motivated, I'm so happy to hear that because, I mean, not only is that a great joy, it's probably one of the best metrics of success that we have. Because, look, b2b is, yes, you're between businesses, but these are still people selling to people, and so you've got a buyer near the side and especially if you're selling a new piece of technology from a startup organization Is maybe a new category you've got a buyer on the other side that is taking a major risk on you and your vision and your product working. And why are they taking that risk? You know, is it to make their company successful? Yes, in part. And and probably the smaller the company is, the more likely that the buyers career aspirations is completely lined up and aligned with the company.
But when you're getting into, you know, a fortune 500 company or or a government division or something like that, you know there can be a divergence there between the interest of the buyer and the Organization. What the buyer is looking for is to prosper and, again, hopefully that's aligned with the company. But they want to get promoted. They want so that they can get their job of their dreams by going elsewhere and saying, look at what I've done in my last company, look at the value I've created. So yeah, I mean we always had a celebration whenever our customers were promoted. We have parts great.
That's great.
0:31:24 - Alex
Yeah, that's actually we haven't done that formally. That's a great idea. I wish everybody could kind of Write that down. Yeah, we have a celebration. We'd have the person promoted record audio or video.
0:31:36 - Mark
We would play that in front of the whole company. We would invite them to our to our all hands meetings. And nothing got people fired, especially engineers. You know, all engineers are kind of jaded cynical view of the world. They've heard all this before. They're kind of allergic to sales because they're not.
They've heard all this before. They're kind of allergic to sales peak. Let me tell you, when you have someone saying I got promoted because of your amazing technology and everything around it and the whole service and sales experience and I got promoted, I mean, the engineers just light up and now they have such a strong sense of purpose. They're not just slinging code, they are making careers happen right. They are driving huge amounts of value and if you want to succeed as an entrepreneur, you really want your best engineers to be fired up all the time and not taking calls from recruiters.
0:32:36 - Alex
Yeah, and I think you know we're very privileged and I think many people are maybe that, like their product can itself generate meaning.
So we're, you know, kind of in the in that extension of the buyer experience journey that you said, like where we can take the you know content that would, like you know, normally you know, suck the, suck the light out of you, like reading like 200 page PDF on a phone or something like that. Or you know it's really painful to create and you don't feel proud of if you're as a creator, we make that come to life and so we're delighted that it's like we're reinventing the book and so sometimes we can tend to have it, can forget that, like we get so excited about our mission that you know, hey, it's separate from that, as exciting as that mission is, whether it's for us or for our customers, there's these people for whom, like this, this moves the needle of their career as well, and I think if you can combine it too, it just feels like it's magical right, because you have a purpose. Your customers feel the purpose. It's bigger than the career.
0:33:44 - Mark
It's a calling.
0:33:45 - Alex
But if you can combine it with career like we live in reality, right, and we want people to succeed and progress.
0:33:51 - Mark
Yeah.
0:33:52 - Alex
No.
0:33:52 - Mark
I think you nailed it there. I think that's great, and you know my insight around this, around these special people, right, that have taken this huge risk on us, on our companies and our categories. To me, these are actually the foundation of where the category actually comes from, so I have a theory of how categories are developed.
0:34:17 - Alex
Let's hear it Because you've been studying this and, by the way, like Mark is a brilliant guy, like he's bain, like most people that go to Bain and get degrees in neuroscience, they don't go, you know, thinking about categories at an unheralded, unheralded level. So this is a privilege here. Let's hear it. Thank you, I appreciate it.
0:34:38 - Mark
Well, yeah, I mean, this is everything we've talked about about again, like these special people and these champions, whatever I mean, this is really where my theory of the category kind of came from, and that is, the category is actually built around a special class of people who think about solving problem differently from everyone else. And so at Eloqua, these were people that were called demand generation. Now, everyone knows that phrase. That was a very weird phrase in 2001, 2002. And so what I noticed when I was going to visit my sort of target prospects so the people interested in us is that they were different from everyone else in marketing. A lot of them came out of engineering as a discipline. Some of them came out of sales, sort of very technical sales.
Well, a lot of them came out of engineering, and what was going on was that you had the CEOs, some visionary CEOs, of companies that realized in the early 2000s that the internet was gonna change everything and go to market, and they looked at their marketing organizations and say we don't have the people here who get it.
And so they would take someone brilliant from another organization and they would say you gotta figure out how we use the internet to drive demand because, again at the same time, the rise of the internet as a platform, but also a brutal recession 2001, 2002, 2003,. There's no budget. Marketing budgets were cut by 80, 90%, in some cases cut to nothing. So all of a sudden we went from a demand-rich environment in 1998, 1999 to a demand-poor environment in 2001, 2002, 2003. And so the CEOs said, hey, use the internet, figure out how to drive more demand proactively. And so we'd go to these people's offices and they would have whiteboards with funnels on it and they would have flow charts and they would have the formulas Like they wouldn't have, like Pantone, colors and slogans.
0:37:04 - Alex
So this is like change in marketing from brand like maybe product focus, to this engineering flow mentality. Exactly Okay, got it.
0:37:18 - Mark
Yeah, exactly, and they didn't even say well, yeah, we're in the marketing department, that's not what we do, right? What we do is we generate demand for a living. So our first category was called demand-gen automation. It's kind of clumsy demand-generation automation. It's demand-gen automation. That was the original category and it was focused on a very small segment of the market, maybe 5%. I mean, it was really tiny. Then we noticed something else that was really key to our growth was that a number of our best early prospects. They were subscribers to a tiny little analyst firm based in Connecticut and a rented storefront over a drug store called Serious Decisions. We were the and literally I drove, I flew to Hartford, I drove to these guys to see who these guys were. Because a number of our prospects. They read everything that Tony Jaros wrote over there from Serious.
Decisions. At the time it was like four people and a dog. It was just tiny. Eloqua was the first vendor to ever partner with Serious Decisions, so Serious Decisions was focused really just on buyers and focused on sales and marketing automation.
We became the first to partner with them. We bought an annual thing for $17,000, which was a lot of money for us at the time. That same thing would be 250K today. But as a result, it was a symbiotic relationship where Serious Decisions was talking about our ideas, we were talking about Serious Decisions, ideas, and essentially all we did from that point on is serve these people. That's it. So these people at the man Gen, we said we're gonna bet on these people. We think that one day, most of marketing is gonna look like this.
It's gonna be more technical, it's more process oriented, it's gonna have like repeatability, auditability, all these things. We're gonna get away from mushy marketing and towards something that's much more measurable, turns out, that was true, and then all we did was say okay, we're not just gonna give these people a product, we're gonna give them analyst support as a mention, serious Decisions. We're gonna give them a community that became top liners. We're gonna give them a award ceremony that was Marquis. We're gonna give them an ecosystem and that was App Cloud and basically just give them everything, these people, everything they needed to accelerate their career.
0:39:55 - Alex
Right, so what you're saying is there's a persona that's emerging and you're feeling it around the particular trend, that sort of a mega trend, and then you're wrapping. You're then just enabling a combination of the that persona succeeding and kind of capturing that trend. You didn't invent the trend. The trend was there, exactly it didn't invent the trend. You didn't invent the persona. The persona was there. You're just there to serve them in their journey.
0:40:25 - Mark
And hopefully you've done a good job and you've picked something with legs. The great thing about this model of category development is, even if you're wrong, you still end up doing okay by dominating a category. And I've seen it with this buddy of mine that he was a top sales guy at LinkedIn and then he went to go and help his wife who was a permanent makeup artist. These are people. So women, instead of applying makeup, they can tattoo makeup on their face. So that's what she did. He's like I'm burned out from selling. I'm gonna help my wife out in her little business. And at the time we met, I talked about my ideas around category development. He's like that's great, I'm gonna do the same thing around these people. So all he did and his wife did, is serve these permanent makeup artists and give them everything they needed. So not just product, but services, education, certification, an award ceremony all the platform all the same components that I did at Aliqua.
Today it's something like a $16 million business has never raised any venture capital at all. He and his wife own 100% of it. They could sell it to private equity today for $60 million. It's a massive outcome, and the reason why it's interesting is that there still are not a lot of permanent makeup artists in the world. I mean, that category has grown.
0:41:50 - Alex
So it's a niche, so it's a niche that you could turn.
0:41:53 - Mark
It's a niche, they just own 80% of that niche, right. And so when you own 80% of something, even if that something isn't that big, it's still pretty interesting. But it's also interesting if you own 30 or 40% of something that's huge.
0:42:10 - Alex
Well, let's talk about something that's big and I wanna quote you from your book which we didn't talk about. Mark is the author of a book called the Messenger is the Message how to mobilize customers and then leash the power of advocate marketing. But one of the quotes in there is near and dear to our audience which is relates to kind of overwhelmed attention spans.
You know that you know we can say some marketing automation systems are leading to that a little bit these days. You know, every technology can go a little bit sideways every now and again. But let me quote you and let's connect the dots, for what do you see going on Particularly around, like the content to serve? So this is the quote. In the same way, modern businesses have stripped, mind, extracted and troll the most valuable resource we have people's times and attention. Once a seemingly endless resource, the attention of a customer is now scarce. Their time fragmented by hundreds of digital distractions. A minute daily onslaught of sales messaging that all foreflows their inboxes overwhelms their spirit. I love that. Companies must spend exponentially more money than they used to in order to grab that little attention that's left. This investment generates yields that are very profitable completely un-economic and, worse, dwindling.
This is a very sad state of affairs. I would say that, like, what you're describing was one of the founding ideas behind us that relate to, or we're like, look, you know, doesn't matter, you're gonna see me have great content. Let's not assume it's some AI generated spam. Let's assume this is substance. Right, you know people are still overwhelmed. So how do you make it digestible and interesting? Community, like trusted, because maybe it comes from you know, a case study or other things.
So we were like really deeply interested and I think one of the your contributions that you make this be real, from real customers, real people, these sort of champions that are passionate because they feel like they're on a mission as well. But tell us more. Like if you were to extrapolate this right, like you meet tons of startups they're all trying or larger companies they're all trying to build categories. And for those of you that don't know, like you were describing, my experience is you don't just build one category. You build one category, then the slightly other, then another. If you expand and you get lucky, you own a mega category, a collection of categories and so on, or at least definition. So it's an ongoing process, but you're. You know, attention to scars, right, and the new category. I think in some ways it's even tougher, right, because there is, maybe it's new, but people don't think of themselves yet in that category, maybe, right? So talk to us about the challenges and maybe what role can content play in that.
0:45:14 - Mark
Yeah, well, thanks for that. And yeah, I mean, at one level it is sad. I mean one other quote that I have in the book, which is marketers will ruin every party they're invited to. And it's like, once marketers sort of figure out something that works, they just, like, you know, stomp on the gas pedal and they, you know, flood, they flood the zone, right, you know, it doesn't have to be sad if you're on the right side of that trend. You just have to accept that this is what's gonna happen.
And, of course, it's just gonna get worse, and it has now with AI driven content. Wow, even like, the last constraints around content proliferation is now gone. You can create unlimited amount of content for almost nothing now. So it just means, more than ever, content needs to be highly relevant, and that's why customer driven content is the best content, right? So I think there's a big interaction between community, which is what Influited was all about. Influited was about creating a community of your best customers and mobilizing them, right and so, and one of the things you mobilize them to do is to get involved with content. So, first thing is, what should we even write about? Right, a lot of marketers, content marketers, guess. They're like.
I think we should write about X today, you know, they get together in a room and they have a brainstorming and let's go write about this. Here's a better idea. Why don't we go out to our best customers and ask them what we should write? What's in their life? Let's go and find out. Let's go and write about things that our customers really care about. And then why don't we have, instead of, ai writing things, why don't we actually have customers writing things in their own voice? Cause, you know what, if we want our prospective customers to get influenced by our content, wouldn't it be better to have other customers who really know them write that content? And then, in terms of dissemination of that content, who are you more likely to accept content from A random person or a marketer or one of your peers, right? So I think content is absolutely critical to creating a category, and that's been true in every category, even going back to biblical times.
Right, there's a content called the Bible, which was really important for Christianity and Judaism, and every religion has its content. Every country the United States has founding documents the Constitution, the Bill of Rights and even things before then. Right, these were critical pieces of content that galvanized the early Americans right, to create that community and fight a war against the largest power in the world at the time right. So content is critical to creating a movement, a movement critical to creating a new category. The United States is an entirely new category of country, probably one of the most successful that's ever lived right. You've never had a republic like the United States before. It's a completely new category and it was created by people who were galvanized by content.
0:48:29 - Alex
Who cared about content, who cared about it and who made sure that I guess it was distributed, right, like I guess like there was an engagement around rituals, around the content, right, so it's actually not just creating it. It becomes part of your identity.
0:48:49 - Mark
That's fascinating, yeah yeah, so I think there's actually a big parallel between religions and revolutions right.
And what we're trying to do with new categories. I think there's a lot of things that are actually, you know, run in parallel, you know, around it and but yeah, I say, if you want to create a great category, I would first start with this special group of people who think differently about a problem than other people, right? So, whereas you know, most people think about, I mean, we create something. I just discovered an interesting category in gyms. I'm a gym goer, right, and most people who build gyms do it a certain way and have a business model. It's actually not a good business model. You know where they make money by people paying them and not showing up to the gym. Then some people said what if we did it differently? What if people paid less by going to the gym more, and that we were oriented around health, and the healthier people were, the less that they paid, right? So that is a whole different way of thinking. And that there's a group of buyers of gym goers who also think differently, right. So what if we serve those people? What if we serve those people who think differently and give them everything that they need for success? That is, to me, what great categories are built around, and less around the disruptive technology.
So I think what a lot of entrepreneurs do is say what's hot today. Artificial intelligence is hot, drones are hot, 3d printing is hot. I'm gonna create a drone company because drones are hot, right? So my approach is a little bit different. It's just like okay, drones are going to get exponentially better, faster, cheaper, right. One day, we can imagine a company that is gonna be able to field millions of drones. Who is going to prosper as a result of that? And so I can imagine, for example, enterprise drone manager someone who's responsible for like thousands or millions of drones, for example.
So you need to do the same thing with AI. Who's gonna prosper as a result of AI, right? So, for example, the prompt engineers. Someone should build a company around prompt engineers and just serve those people and give them everything they need in order to be successful, which is not just product, it's service, it's community, it's a platform, it's award ceremonies, it's career help, it's all of those things. And someone is gonna build a multi-billion dollar category around prompt engineers I'm sure there probably are a couple that are being founded right now out there as opposed to saying I'm gonna build the next big AI company that's gonna be successful. So that's where I think my approach has been.
0:51:36 - Alex
This is really interesting, like one of our guests and kind of friends of relate to CEO of Altarix, dean Stoker, when he was describing how they were shaping their category of kind of I would say analytic automation. Eventually that's became the kind of the category they were describing that they were going for the sort of super powerful VLOOKUP Excel power user Right, that is sort of not quite ready to use the complex business intelligent tools, but like, basically, was maximizing what you could do was Excel and then you could create superpowers for them, and so they were able to serve that audience. They still set some power users, like the VI types, but that was the definition. And when he saw what we were doing he's like, yeah, you guys are doing the same thing. You're democratizing the sort of super web-like interactive experiences for the advanced PowerPoint users or advanced in-design users that are sort of taking those platforms, like whether they're graphic designer or presentation designer, taking it to the limit.
But they're stuck right, like, and they don't do they want to start learning to code? Probably not, you know, will it serve their problems? Probably not, but you creating this opportunity for them to feel much prouder about what they've done, to take their skill sets to the new level to become a no-code citizen designer versus just a PowerPoint person who could get sent the PowerPoint slides you know, at the last moment, right, and that was really interesting, aha and I like. Well, we kind of thought about it, but it wasn't very clear and it sounds like, if I'm connecting the dots, this is exactly where you're kind of advocating. Find these sort of power users potentially that are underserved, that are motivated because they've taken their time to learn what's the max that they can do with PowerPoint or in design, whatever other tool in our little universe.
0:53:37 - Mark
Yeah, I agree. Actually, I think no-code is creating a whole bunch of exciting categories, and the reason why it is it is a disruptive innovation, right? Because now you're giving non-technical people the ability to build really amazing, powerful solutions, right. So this is, for me, textbook. Right Now you've got people that are experts in process that meet experts in understanding the customer.
That's their expertise, and now we're empowering them with disruptive technology to do 10 times more value than they used to be able to generate. In that, you can build a category around that. Okay, you can. In fact, I've helped a couple of companies build categories around process engineers for lack of a better term, right and these are people who use no-code technologies in order to create a step function, improvement and productivity in our companies and because of that step function, that allows them to get paid a lot more. I mean, we talked about promotions, right.
One of the things I'm really proud of both for in both categories that I'll create the marketing automation was originally around demand gen. Those are people who are paying, paying 50 grand a year. Today, they're paying, paying a quarter million Today. More often than not, a new CMO today in B2B tech likely has a background demand gen. It's pretty amazing, and that may be supplanted by the next category I created, which was built around the customer marketer. So customer marketing in 2010 was not a big deal at all. This is not a place to do marketing.
These are the people that wrote the case studies. These are people that did connected for reference calls, that did referral campaigns but there were some they were respected in places like Salesforce right but not as mainstream in the rest of the market.
0:55:40 - Alex
Is that a fair statement?
0:55:41 - Mark
Definitely not mainstream, but there were some companies where they really got it. You mentioned Salesforce and then my first customer at Influitive was Zora and team. So the CEO was really a right hand man to Mark Benny off for a while, learned a lot from him and references were critical to close a sale at Zora and that's why it became our first customer. And actually they took customer marketing very seriously because without the right reference call in a timely fashion they would not close the deal. So there were some visionaries like team and some of our other early customers where they took customer marketing really seriously and they had one of their best people on the job not their sort of also RANS and again I could see because of trends that were happening. So the trends were exponential. Increase in content was a big trend. Right. The trend towards dominance of social media. Right Back in 2010,. Social media wasn't huge yet. Right, facebook was only what four years old. Linkedin was five years old. I mean, this was not a bit, but you could see where it was going to be.
0:57:05 - Alex
You're connecting the dots you could start. You're connecting the dots of what's going to create this persona to be more successful, of the customer market.
0:57:13 - Mark
Exactly and more successful and more essential right. So I had a theory that customer marketing was going to be huge and it was going to go from being a backwater in marketing organizations to becoming the main event. And you really are seeing that more and more. You're seeing where it's becoming a main event, and it has to, because how else are you going to create content that cuts through the clutter? How are you going to make demand gen where people actually respond to emails? How are you going to create product marketing that's effective?
I mean, the only way to do this well is you need to get your customers involved in every aspect of the way you do business, and that's why customer marketing is becoming such an important role. And so, yeah, these categories really built around these people and their needs, and I would suggest to any entrepreneurs that are here listening if you want to build a company, as opposed to falling in love with a product idea, which is what usually happens fall in love with a subcategory or class of users that are really special, that really think differently and, because of disruptive technology and other trends, their star is going to rise. Bet on these people, just give them everything they need and you can build a really great company. I mean, it takes a little longer, so it takes. In my experience, this is a decade-like which for a long time. But the great thing is, honestly, it's one foot in front of the other. All you need to do is serve these people and as they grow, you grow along with them. So I think it's a great way to build a company.
0:58:51 - Alex
Well, this is a fantastic masterclass in going from the origins of, particularly with your focus over time on the marketing field, of how different categories emerge Now, mark. One last piece of advice. Now is a tough time for many marketing organizations. So obviously customer marketing, as you pointed out, or advocate marketing, could be more cost-effective in many ways. But still, like, the environment is hard, new initiatives are hard. What's your take on and how do you prioritize in this environment where you're the CEO or you're the CMO in the B2B universe and you want to be building a category where, at the same time, you've got to take the low-hanging fruit in your go-to market?
0:59:52 - Mark
Yeah, yeah, I mean, and it's a very exciting time. I mean, both companies that I founded were actually in recessions Eloqua, deeper one in 2002, 2003, but 2010 and 11 weren't weren't great years either, but I think that's actually an exciting time. This is an exciting time. It's it's do or die time. You know, a lot of companies are not going to make it through what's happening, especially in marketing tech. It's really rough out there. Marketing budgets are really being cut and I don't think we've seen the end of it, because I'm not seeing a lot of bankruptcy. So which we saw in 2008, which we saw in 2001, 2002 so I think it's gonna get worse for it gets better, but that's an exciting opportunity because if we can just survive, that means that we're gonna get to the other side of this and have a chance to build a big company, and so I still think that marketing the category first is a great idea if you you know People still want to buy things that are disruptive, that are going to have the opportunity for a 10x improvement. What I'd say is really critical in this environment is that you need to make your category also about cost reduction and risk reduction, and you need the CFO to be a partner with you Because right now the CFO is very powerful. They are cutting a lot of spend on technology. In many cases, they have to approve any new technology purchase, so we need to partner with those guys.
And so, you know, at Eloqua we survived in a number of ways. One was to identify budgets that were still active, and you see today. So Marketing budgets were cut, literally many cases to zero. In 2002, sales budgets were not cut, in some cases even grew, because companies said we're gonna invest in our sales people, we're gonna train them well. And so you know, I made a pitch around how you know we really want to help your sales guys. Why don't we get them better leads? Okay, that's a great way to help you Sales guys out. And in many cases we were able to get budget From the sales organization because our category at Eloqua was about marketing and sales coming together. Right, right, leads are where marketing and sale come together sales comes together, and so I like I have one slight corrections.
1:02:23 - Alex
I think educated leads, right Like since you brought up education that's the cream of the crop. Right Like because I think those are the leads that you want. That's where the marketing has done. Maybe some of the job of the sales and that's our marketing and sales come together is to talk about what great lead is in many cases.
1:02:38 - Mark
At Eloqua, so many times we heard marketing sales.
You say you know, this is the first time we've been together in a year to talk about this, so we were where marketing sales came together and that allowed us to draw from the the sales budget. We could also make a claim and say you know, if you use our technology, you don't need as many people in marketing, you can allocate them elsewhere. And so we could. You know, oh, you have a direct mail budget. That used to be a thing. Right, you can cut your direct mail budget big time. Yeah, so show immediate cost Benefits.
The same thing at an affluent have and said you know how about this? You do 20 trade shows a year. How about you do 18? Instead of 20, and make every single trade show that you do 50% more effective because you got your customers involved in every aspect of your trade show. We actually Won a lot of deals through the trade show budget During a kind of mini recession in like 2010, 2011. We, we won a lot that way. So you want to be able to show immediate cost reduction, no increase in budget and and you know, you know what make your category about that right part of part of you know Customer marketing excellence. Customer marketing means that everything you do in marketing is that much more effective. It means you don't need to do as many things. We could do less things and be doing less things. It means we're spending less money and we make each of the things we do more effective.
So I'd say for anyone listening in on this call we want to do the same thing with. I don't think you want to be doing that. I don't think you want to abandon category marketing. I still think for many of us listening in this call, we're still selling to visionaries. We just need to help those visionaries get deals done, and the way to do that is to show immediately immediate cost and risk reduction right off the bat. This thing should pay for itself in three months and then everything after that is gravy. If you've got that pitch, you're going to do well in this environment.
1:04:42 - Alex
This is brilliant and, you know, I'm like applying some of these things in my own head and one of the things we've been thinking about but didn't really articulate yet Is like, what's the risk for the career risk, for example, for somebody doing Marketing, was, you know, downloadable PDFs and things like that, the way they were done you know, 20 years ago or 15 years ago in this noisy, different environment? Right, and that's that's. There's a. There's also a risk of wasted resources. You know paying ads, you know to lend people into, you know a lending page that doesn't convert because you, you know the, the, there's nothing enticing at the end of that, at the end of that conversion form and so on and so.
But there's a risk To a career of being stagnant. There's a risk, uh, to a company, obviously, of being ignored. Uh, and wasting. You know ad spend, and so this is a, you know very real and I think you know two years ago People would speak about it, but it wasn't. It was all grow, grow, grow. You know it was. It was more like let's jump on this bandwagon.
It's new, it's innovative and especially, as you know, marketers sometimes like to try new things, but I think there's a risk of sticking to old habits and you know last kind of thing that we didn't touch on but you have this background in neuroscience, you know, and, and I'm just curious to see how how do you see the, see the effect in communications or a community building? You know, like, as like, there's a lot of work in social psychology, your science that we're trying to apply, you know, is this giving you this extra laser? Look at everything that you're doing? Um, and what kind of tips do you have from that kind of that expertise that you can share with Marketers and go to market leaders?
1:06:32 - Mark
Sure, yeah, and I could definitely tell a great story around this, but you know my work and neuroscience was focused on rats and they're learning memory motion, although there may be some interesting things to apply from it.
But but yeah, I mean. The reason why I got interested in neuroscience in the first place was I was interested in motivation, right, what is it that? But you know, once you go in, and when I started my phd, all of a sudden it's like Well, this is your tiny little area of the world that you're going to become experts in, and and and. So I was a physiologist, I worked with rats, but but still, that interest and motivation, I think is Is interesting, because, as marketers and salespeople, ultimately our job is to persuade People into our way of thinking so that they make a decision To invest more in our ideas. It doesn't mean to buy our product, right, all we're trying to do. For example, if I, if I Right now, what am I doing here on this podcast? What I'm hoping I'm doing is that people who are listening to this Are going to find my ideas intriguing and are going to want to invest in them, and that might mean reading a piece of my content. It might mean going to a form on my website.
1:07:51 - Alex
I mean Um actually speaking of that. Let's for those that are listening, paying attention, and how can people reach you?
1:07:59 - Mark
or before we do that, yeah, well, I have a website at category knotscom, so my email address is mark at category knots. You can reach me on like, then you can reach me on twitter at, uh, at mark oregon on twitter. Lots of ways to go and and reach me, um, but but, yeah, that's, you know what? Uh, what I'm here to do is to persuade people, and the way to do that is to understand their mental models and be able to work with those, either to change their mental model of of of how they think, uh, which I've done, hopefully a little bit of that today. I hope that I've shifted people's thinking on how categories are developed, yeah, um, the focus more on these special people who think differently and work with them. That's really part of my message today, and you know so.
But there's principles of neuroscience, of motivational psychology, of social psychology, um, that are at play, and there's some famous books. Now, you know so a lot of people have read influence by Robert Sheldini, one of the best business books of all time. I think it's something that literally everybody should read, not just for their business success, but if you want a better marriage, if you want to have more successful kids, um, and lots of other things. You should really know how to influence people to your way of thinking. And that's what the book talks about, talks about social psychology principles that if you apply them for example, the famous foot in a door technique if you get somebody to give you a little bit of compliance, then you can end up getting a lot of compliance later. So good marketers and salespeople use that principle. They, they get a little bit of compliance. You know, um, uh, real real estate salespeople will give out a magnet with their face on it. People accept that magnet. Oh, okay, now you've done that, maybe it's time for the next thing.
Um, you know, with content marketing, for example, one of the innovations that, uh, I had at my company Was, uh, around. This idea was to get people to provide a little bit of information, right, so, for example, just your favorite color and your first name, that's it. We're not going to get you to fill out a big form and then all you do is you make the ebook that color, now the ebooks purple, and now we address you by name alex. So, um, you know, what we've done is you've, you've got a little bit of compliance by filling out this little form. Then later what you might get be able to do is get a lot more compliance to get people to fill out a much longer form. So just one example of leveraging a principle of social psychology in order to improve performance.
1:10:47 - Alex
Um, so I've quite a bit of insights that come out of this and endless, like well, of insights, mark, this has been such a treat. I I'm sorry for making this go way over any budget at high, but I'm so glad we could share, like, one of the joys of being an entrepreneur is having, you know, conversations was smart, you know super Experience, entrepreneurs, thought leaders like yourself, and you know it's a privilege to share. That was our audience. Thank you so much. I hope you reach out to mark um, whether you want to change the world or change a category, create one and, at a minimum as as to to uh, uh, to mark kind of key, inspirational points to really delight a group of people that are, you know, sharing your, your mission and vision for how the world should be. Thank you, mark, so much.
1:11:40 - Mark
Thank you, alex, the pleasure.