May 27, 2020

First steps in your marketing campaign prior to starting raising funds by Matt Pru - Managing Partner at Stackmatix.

First steps in your marketing campaign prior to starting raising funds by Matt Pru - Managing Partner at Stackmatix.

In this episode of Fundraising Radio Matt Pru - Managing Partner at Stackmatix, tells about angel investing, the basics of marketing and gives wonderful recommendations on the books to read. If you want to make sure that your marketing is in order before starting raising money - check out this episode. Books recommended:

In this episode of Fundraising Radio Matt Pru - Managing Partner at Stackmatix, tells about angel investing, the basics of marketing and gives wonderful recommendations on the books to read. If you want to make sure that your marketing is in order before starting raising money - check out this episode. Books recommended:

On negotiation: https://www.amazon.com/Getting-More-Negotiate-Succeed-Work/dp/0307716902

Building a startup very lean: BOOK

Zero to One on company building too: https://www.amazon.com/Zero-One-Notes-Startups-Future/dp/0804139296




Transcript

This is Fundraising Radio and today as a guest speaker we have Matt Pru, the co-founder and managing partner at StackMatix and also an angel investor. this episode we're mainly looking at focus of course on angel investing, but we're also going to talk about how to market yourself. men has really serious background in advertising and he will share, he's experiencing that field with us. Matt Leschi coped by you giving us some background on and on stack. Maddix. awesome. Thanks John. Kenya thanks for having me on the podcast. We really appreciate you putting this together. I think it's a great resource for a lot of folks out there. yeah, I started stack Maddix about a year and a half ago after, participating in the growth and exit of two different startups. The first one was TalentBin, which sold to monster.com and then more recently I was the head of sales at mighty high, which sold for $150 million exit to us for capital just a couple of years ago. with that at mighty hive, we sold a marketing technology and services to marketing teams big and small. we started off selling mostly to SMBs, but moved our way gradually up market and eventually work the clients as largest sprint or nationwide. so with that, we learned a lot. I started stack Matics with the colleagues from mighty hive, one of the enterprise account managers there, James Portelli. the idea was to take everything that we had learned through that journey and to work very closely with startups to accelerate their sales and marketing and to help de-risk and scale their businesses. So that sounds pretty interesting. we'll just start with your annual experience. what do you like to invest in? when did you start investing? Actually, yeah, so I started investing about a year ago, and the two companies that I've invested in so far, one of them is called the factual, which is a online news app that tries to find the most credible articles each day and they send those to you at some curation and summarization email and they're trying to solve the challenge of the fact that there's a lot of noise. there's a lot of bias and the U S media and it can be difficult to in a quick and efficient way, get unbiased news, to your inbox. the other business is a consumer services business called remove, which also has a second brand under the business called the local flea. it's effectively a junk removal company, but, the catches that if they're able to resell your largely furniture, but it can be appliances, other home goods, through their warehouse, local fleet, then you get 50% of the resale value on that product. they're trying to create a more efficient business model than the other junk removal companies out there who don't try to get that value back to the consumer. for folks who are interested in donating or simply recycling, they do offer those options. You can get a tax write off for your donations. at both businesses I worked with founders, in an advisory and complicated role, on the marketing side of things. with both businesses, were a to experiment with Google ads and Facebook ads, marketing on Instagram, developing landing pages, optimizing better conversion funnel. both of those businesses saw very promising results with their marketing campaigns and their ability to scale them. that's ultimately what led me to make my investment decision and each company, because in part, the funding is going directly to growing. And extending their businesses. I think that's important thing that that investors look for is, what is this money going to be for? And as much as it's used for expansion and growth and it's clear how that money is going to be used and it's a much less risky proposition investor. Absolutely. Yeah that sounds pretty interesting. I really liked the idea of junk removal company. I would really love to jump into that, but I think we'll have to skip it for now. Maybe we have time at the end, we're going to talk about that. for now I really want to talk about marching parts. I mean every founder at one point has to deal with marketing and the sooner the better. I think you should start advertising yourself. day two as you have day one, as you developed a landing page, whatever landing page you came up with. where do you think founders should start? So a lot of founders are technical or business, but for a few of them are actually with any marketing background. Where do you think they should start their marketing? Yeah, so if you're doing a B2B business, then your marketing is larger than your sales and your sales outreach. Reaching out to people in your network, calling folks, emailing them, getting in touch with folks that you think are a good fit for your product directly and seeing if they'll take a meeting with you. on the business consumer side of things, testing your landing page, testing, Google ads, Facebook ads, email marketing, any of these channels are starting to get an idea for do consumers want this product and what's your funnel metrics look like? How much do you actually need to pay to get somebody to your site? Do they convert? It's a good way to experiment with pricing a messaging. There's a lot of things that you don't know when you start a business, you don't know what the best messaging is. A pricing, positioning and marketing is a way to start testing those things. the B to B side of the customer development provides you very much the same thing. Ultimately you're going to provide the demo or talk to them about the solution that you have to offer. It's really important as much as anything that you go into those early meetings or into those early marketing activities with the full notion that you plan on learning and that you're probably going to be off a lot of different places when you start. you just want to try to be aware of that. I think that the goal is to just constantly optimize, constantly make your sales meetings more successful. Nature emails land more often, make your landing page convert more often. There's different parts that you can optimize and you should be all of them all the time. Tracking your metrics in terms of how things are working and if you keep on that path and then hopefully once you get traction, then it'll only be a matter of improving, the rate at which your business is growing from there. I think that's ultimately what you're trying to do is to find a scalable model. it's really important that are focused initially if your business is to figure out the model and to start plugging in those numbers. Absolutely. I told her to go with you on this one. I think you just have to consistently, continuously refine your model or find whatever you show to the customers. by the way, speaking of metrics I want to mention before I forgot, I used to use a nap, not an app, but a software called lucky orange. it's like a Google tracking thing, but better so you can actually see where your customers are cliquing and literally you can see like a record of this Creek. It looks really, it really makes you understand what's wrong. for me to a couple of days to understand what exactly is wrong and with these thing, it took me a couple customers to understand what's wrong. just to just note so that everyone remembers, I'll leave a link to that thing in the description of the episode for sure. now let's move on to B2B sales. I think that's one of the hardest things in the startup world, especially, for any non sales background founders. I myself was a couple of times forced to do the sales by myself of course. And I was horrible at this. I'm not quite sure why exactly, but I'm pretty sure that many people who have no sales background will do the same thing as I did. what's your advice for those people? What would you think people with no sales background should do when they're have to cold customers? Just cold. Yeah, I mean, so I think in general, if you really feel that uncomfortable and inexperienced, then maybe you're not the best person for the job. I think it's better to have a smaller stake in something that's successful and a successful to the greatest capacity that can be then to waste time trying to fight an uphill battle. I think a lot of people take sales for granted. I think especially at businesses that are doing really well, people think you build the product and then it comes and, salespeople ultimately have to fight for every sale. it's a skill like anything else, it's a skill to be able to message your product, clearly build trust with folks. be able to write compelling emails, generally know how to get in touch with people in a way where they're responsive, to handle yourself professionally in a meeting and to rev send your business as best you can. it's something that honestly takes years of experience. I think it could be worth investing in the right partner or the right VP of sales, in the right capacity to help take over that function for you. Cause ultimately if you're a technical cofounder and you're building a technology driven company, a product driven company, then that's where a lot of your time and energy needs to ultimately be spent the most efficient. it's never really going to be that efficient to try to do sales. if really you're doing yourself a disservice and you're not representing your product in the best way you can. it's, yeah, it's something I'd seriously consider. I think at the end of the day, if you're the CEO of the company, if that's the role that you're looking to fill, over the long term, then it's a skill you need to develop because it's not just a skill that you're going to need for sales. It's going to be a skill that you need to recruit from a, generally, you're going to have to compel a lot of people, to come along on your mission and it's probably something that you definitely want to work on and invest in so that you can be that leader for everybody and handle all those different situations including fundraising. Absolutely. I think that's a great note. that topic actually comes up more and more on my podcast for some reason. I think I'll do one set an educational episode on, she has B to B sales and sales release stuff. for now, let's move on and actually back to advertising. So there are several options. for example, on Facebook you can choose like brand awareness, clethra rate targeting, conversions, et cetera. where do you think you should actually try print awareness? So for me personally, I don't really understand what's the use of brand awareness, but do you think it's reasonable to use it? Yeah, no. no. branding campaigns are, is something that larger companies do once you have a brand. generally that's because some of those companies, like Proctor and gamble for example, people are going into the Isles and, ultimately they need to pick a laundry detergent and a brand matters in the situation. When you're a new pit, this, you're not in that situation where you're in front of consumers and you need to have the best brand image. generally, yeah, brand campaigns and a lot of ways it just means campaigns that maybe you can't measure as well. like ultimately they're still supposed to have an impact. It's just that they're not necessarily focused on sales. either way, everything you do as a startup should be focused on sales. like I wouldn't even worry so much about clicks cause the problem is clicks you pay for. not every click necessarily drives the sale. in terms of where to start with testing, Google and Facebook are always going to be the best two beds for any consumer business. for B2B too, they tend to work pretty well. A lot of people think LinkedIn will work well, but oftentimes it's not actually the best fit. Yeah. I personally had a really awful bias towards LinkedIn. I hate it. absolutely. we'll not get into the dark side. let's talk about the thing that you've mentioned. You said, entrepreneurs should just start with the, Facebook and Instagram, no. Instagram and Google. Yeah. And same thing now. So yeah, exactly. Do you think they should start, what should they look for? Yes. with Google search ads, it can often be a great place to start because the best thing about Google searches that people are raising their hand, indicating that they want to buy a certain product. somebody might look for, podcasts or startups or podcasts or fundraising, and then that could be a good place to promote this one. that's sad for a lot of new businesses. You're often trying to do something new and that can be problematic for search ads because nobody's really searching for what you're building. in that situation, Google's not going to be a great fit. but that's the beauty of Google. It's just in time marketing. As soon as someone's looking for a barbershop or whatever the product or service may be, you can put your ad out there and have a chance to convert on a sale fairly quickly. with Facebook, the idea is more around targeting a specific audience that you're trying to reach and ultimately you still pay just for clicks. if you're showing that to the wrong person and ultimately they're not clicking on the ad and it's not really a big deal. so, in either case it's kind of always worth testing because if you are able to reach your audience, which largely almost everybody's Google searching or on Facebook or Instagram, WhatsApp or messenger. so, in a lot of ways it's just a Testament to your business. It's a Testament to your messaging. Do you fit a product? You have product market fit, like are you actually fulfilling a need? And if you're a campaign that aren't going well, whether it's for B to B, B to C, whether we're talking about ads or emails, it doesn't matter. There's usually something to learn from that. I'm like, there's something about the way your messaging or there's just something things simply wrong with the solution you're trying to offer. Like there's simply not a need. ultimately you need to start seeing traction and people want to buy stuff. ultimately people are looking for stuff that's interesting and useful to them. Things that'll save them time, allows them to make more money. whenever they buy, it's often looked at as an investment. that's ultimately the question you want to answer is why would people want to invest money in your product and what value does it provide them? And in some ways it really is as simple as that. your marketing is just the job of communicating that effectively. if you do that well, then sales come thereafter. Got it. last couple of questions about margin, then we'll go back to fundraising questions. first question that I hear at one to ask you is, do you have any recommendations of books or courses about marketing for beginners? Yeah, I think, there's a marketing for beginners. think there's different ways to go about it. I think, at the end of the day there's, you can learn a lot about marketing. I think in some ways it helps to just think about, like do you have a problem in the first place? Like what is it that you think you need to learn, and then try to find a solution that fits that need. at the end of the day, there's really not too much to it. like you really do have these key channels, Facebook, Google, email marketing you can call folks, and it's really up to you to make the most of those channels and to grow your business most effectively using them. honestly, yeah, like there aren't a ton of great resources out there. we plan on developing a lot of content at stack Mattick to try to help with that. or it's just the case that the content is all over the place. like marketing is a big word. Marketing is branding, marketing is performance advertising. it can include a lot of different things and most of those things aren't going to matter to you as a startup founder. I think the two most important things, I think one is brand, not necessarily brand awareness, but this general idea that how does your business look and feel online. like ultimately that's how you're judged. if you're a startup and you don't have a website, I would make one. If you don't have your own email addresses, I would get those. it's incredibly important the way that you represent yourself and it's going to be incredibly impactful on how your ads or how your marketing actually works. if your marketing is working or not is a reflection on your brand. Do people trust you? And so I think the best place to start is really just to work on that. First and foremost, does your website look great? Do you have online reviews? You have customer testimonials. As much as you can start getting other people, whether that's through press or reviews or whatever it is to start touting, you and your product and your service and that it's great instead of you needing to do it yourself. that provides a lot of assurance to the market, that you're legit, that you are actually helping customers, that it's not a scam. Like as much as you might believe in yourself and your product and service. You send an email to someone and ask them to sign up and put down their credit card. What makes you think that they'll necessarily trust you. that's kind of the game is to build trust. as much as you can build trust through your brand, then sales again will follow. I think anything that you can read or find, to help with that, just how can you, make your brand as compelling as possible. But beyond that, I wouldn't overthink it. It's really about just being buttoned up and then going to market and as much as you're buttoned up, then people will be receptive. Right. I definitely, I really liked those points that you mentioned. Just building a Brent that how you look like, because whenever I get peach or something like that, I first check the email. If it's not customer, I'm not giving it a little kid. He has to come my home or is it to create an email, then I go to Crunchbase. If you're a non credit base, I already have a question. Like why are you not there? Because it's easily a couple of minutes to pull yourself there and so on and so forth. So I think that's really important point. You've touched on two here. I'm here, I want to move back to fundraising questions and talk about your personal investment preferences. you're angel investor and I imagine that you get tons of a cold to outreach through LinkedIn. Do actually re go through it or do just skip all of it? no, I read, I mean every single message you send folks usually gets thread, unless they're really somebody that has an executive assistant actively filtering their email for them. but a lot of folks don't. with that, every LinkedIn message you're sending, every email that goes unanswered, it made it there. the email system wasn't broken like you got their email. Right. I think with that, again, it really comes down to crafting a message, making your brand look strong so that you get responses on those. I think, in some cases, this space is something that I don't feel comfortable with. I'm not particularly invested in investing in life sciences for example, just cause I don't feel I have the technical background and expertise to make investments well in that space. I think that's one thing to consider is that there can be certain disqualifiers that you don't understand about an investor. Certain things that they don't feel comfortable investing in, regardless of how smart you may be or how your idea may be. with that, it maybe helps to try to target folks that you think, would be interested investing you that maybe do have an interest in those types of spaces or have made investments, that fit that profile in the past. other than that, I would say the biggest thing is that if it's a cold message and it implies I don't know you. so, ultimately it's gonna be hard to make a judgment on the team, especially over the map. ultimately the biggest factor is going to be attraction. like trust is something that like and, like not seeing too much risk or are important factors to an investor. the most important thing you can do if you're doing it cold outreach, I think is to speak to your attraction. as much as you're very early stage or you are building a technology product that requires a longer development cycle, then you're really gonna want to focus on trying to find folks that believe in you. if your network is fairly small from the perspective of, being able to quickly network with investors, then I would recommend that, as a founder you work on networking because networking is going to be something that is incredibly value going to be incredibly valuable to your assess over the long term. I think that if you feel, yeah, you don't have the network yet and I would start on that first and foremost because it's going to help with recruiting, it's going to help with your company's personal brand. it's going to help in a lot of different ways. I think most great founders, if not all of them, ultimately develop really strong networks and that helps them to continue to accomplish their goals over time. Right. Yeah. I totally agree with you on that network is a really powerful tool. speaking of network, how do you think those founders should actually build up their networks? Should they go to someone? I know peach events or, for example, in Los Angeles who have, in the back called founders meet founders, which I used to go to. So what's your recommendation to his? Yeah, I would say everything I, when I started off, my early entrepreneurial days, I would go to meet up, I would find online communities. whatever it is. If you, sign up for every online publication that you can find, like every single email newsletter, create a filter to organize them all in one place. you need to tap in and it'll be a way to get notified about more virtual events, in different ways to connect with people. I would basically say do everything until you feel you're over networking or your networks so big that you don't have. I think a key factor in networking, what do you have to offer? part of the beauty of networking is, the concept of trading, things of unequal value that you'll be in a position to give someone something that really benefits that I'm in their career. at some point later, they may do the same for you. to neither of you, it's really a big deal to do the thing to make the introduction or whatever it is, but then the results for the other person is huge. so, ultimately that's what you're looking for. with that, the best thing you can do is start building good karma. whatever it is that you can offer folks, whether that's writing content that's useful, making introductions for them, giving them free advice, consulting them on a project, and then make it clear what your intentions are. like you're happy to help folks, but do let them know what it is that you might need in the future that, you're in the process of fundraising for your company. the person you're networking with or the person you're exchanging with doesn't need to ultimately be the one that does the thing for you. you just need to let them know because someone in their network might be able to help you out. as many feelers as you can put out like that, just letting people know what it is that you have to offer, what it is that you're looking for over time, that'll just start to naturally happen more and people will reach out to you with the things that you need. Right? Yeah. I think you hear, you touched on two really, really important points, which are newsletters. I think that's a really good start. very few people actually think about it. I didn't think about it for a long time too. Now I don't really search anything. I get invitations, through my personal network and through newsletters. I have like two left, but those are really local. Do you think there are any global newsletters of, online events right now that you would recommend? no. Yeah I was gonna a lot of mine are local too. Like I recently moved to Austin and so that's where my mind was with that question. When I moved here, I was wondering what are the events, what are the big groups? And so very quickly I tried to find, a list of the major publications and the major groups here so you could get tapped into the local community. I imagine that there's more sprouting up globally now cause generally it's harder to meet. I would just search the Internet's a very big place. You can maybe even go on Reddit, go on LinkedIn, wherever it is. I'm sure you can start finding different communities. yeah, I think, in general with networking, I mean quality matters, but generally the quantity, there's a lot of research that says there's a lot of power in having a big network. Even if you're not really close with everybody just close enough so they know what you do and what you're interested in and vice versa, that's going to get you further faster. I would just try to network with everyone you can every way that you can and play a numbers game. I would definitely go to go for quantity first and quality something that maybe matter later. Once you're finding that your network can't deliver on certain things, then you might need to search out very specific things thereafter. Yeah I think that's a good question. I think that's it. Essential. Good followup. Just if there are any good online communities popping up in this way. I think there's one website that's pretty interesting called lunch club and you check that one out and it connects you with folks one-on-one for meeting and there's a way, easy way to expand your network. there's another one called common genius where you can talk with folks either free or paid and do a variety of different business consulting engagements. so there are things out there. I would ultimately say try of everything and see what works for you cause everyone's a little different in terms of their preferences. Right. I think you touched them too. Lot of useful stuff in lunch club. I personally try it, go ahead and buy to that thing. Like a year ago, sir. I ignored so many meetings that I was actually out. Personally I didn't have like the best experience in my life with that thing. I think you've touched on to something really that might be really helpful to manufacturers right now and because a lot of my listeners are actually, so I think about 20, 30% of them are European and a lot of them are actually playing to move to the gas or already in the process. I mean, not now of course you're into coronavirus, but eventually they're planning to head here. what do you think as a person who moved to another C, what do you think should be the first three steps of a person who just arrived to a new C? So for example, when they arrived to San Francisco, what first three steps should they take to improve their network? Yeah, I mean I would definitely sign up for all the publications. Like I said, check out, meet up, check out things like general assembly. I would just try to get tapped in as quickly as you can. I think it's, I think it can be hard, but there are always people that are always in exactly the same position as you. it's a very fluid and dynamic world and I think if you put yourself out there, then they're going to be filled out there who are trying to network too, that will reciprocate with that. I think every community is going to be different, but I think all of them have so much to offer as long as you pick a more major hub, whether it's New York or Seattle or San Francisco, Denver, so Cal, their communities and all these different places and there are events going on every single week. it really just as a matter of figuring out what the best options are in that local community, seeing what open events you can come to. yeah, definitely reach out to everybody you already know. Do folks there? Don't be afraid to look on LinkedIn, at your alumni network. when I moved to Austin, that's one thing I did just went to see. Are there other alumni from my school here? And it's different things like the, I like any common touchpoint you might have, is gonna make people more likely to meet with you? and yeah, I think that's something that I would definitely recommend. as much as you don't have those common ties in those groups, I would join them. I would add them to your LinkedIn profile, go search on LinkedIn. Who else is in that group? Try to add members from that group. that's something that I've commonly done. you just say, Hey, I'm in this group too. Like just wanted to reach out, connect to another member, people except every single time and then just reach out to them a month or two later. Like Hey, like wanting to connect, like, learn more about what you're up to. you'll be surprised cause you're already connected and you connected on that mutual ground and you gave it of time. a lot of times they'll take the meeting. I think especially now, unfortunately thrown a virus going on. there's not a lot that you can do in person, but I think it's made people even more apt to say yes to connecting, for meetings virtually. Because if you ask someone if they're free, yes. Like a lot of people have a lot more demands and a lot more going on, but at the same time, everyone is kind of trapped inside more or less. it's kind of hard for them to say like, Oh, sorry, I'm traveling this month. It's unlikely. most people, might be a little stressed and I feel anxious with what's going on, but a lot of people to do have the time. I've been connecting with people more probably since this all started happening as a result of that, just cause a lot of people are more free on average. Right. I think you've touched into so many specific advice that I have. It's just wonderful. Love it. I think that right now, anyone who is listening to this right now, you have a lot of stuff to do, especially if you need to grow your network or if you need to grow your sales. we'll wrap it up here as we came to our 30 minutes, benchmark. thanks a lot of men for coming out, for sharing your experience and for being so specific. I loved it. Yeah, no, thanks for having Konstantin on the three books. I didn't have three marketing books, but I wrote down three books just as a takeaway for negotiation, getting more by Sue diamond. The Wharton professor is very helpful, lean startup by Eric Reis. Everybody's heard of it, but I'll add the caveat. Most people still don't do a great job following the book and practice and then he read it twice and then zero to one by Peter Keogh. Also pretty popular at this point. some of the things he says, I think it's just nobody else said it beforehand or at least put it in that way and gave that perspective. I just thought there were a number of things that were insightful there about what it takes to start a startup and the way to think about it. yeah, I would recommend those books to get some perspective. with negotiation, just bear in mind everything's a negotiation. You're negotiating with your cofounder, like hiring your first employee. I think reading a book on negotiation, the great place to start for any founder. I was actually gonna, I was about to start reading the, something about negotiation and I think, I know we're just starting out. You just made this episode so we're going to write it out. It's too good to be earlier. thanks a lot Matt again for sharing your theories and for sharing those books specifically. Love it. I'll definitely put the links to those books in his description of the episodes and have a great stay. Stay safe. Thanks guys.