EP4: Messaging Eats Product for Breakfast

Startups that begin their journey without a primary mission and focus on getting to true market dominance causes many teams to instead lead their new company into conditions that are ripe with extreme uncertainty and essentially abandoning all process. They often jump head-on into the product development cycle in order to execute on their “idea” and get to “market” as quickly as possible…so they can start selling and bringing in revenue. Understandable for sure. But this is not the only option…nor is it even close to the ideal one. Eric Ries’ fantastic work, The Lean Startup, demonstrates that companies CAN create order and reduce chaos by providing tools and processes to test their vision not once, but continuously. That’s the key here…continuously. In this Market Dominance Guys episode, entitled “Messaging Eats Product for Breakfast” Chris and I also discuss when is sales really sales, and when a product pivot should really simply be a messaging pivot.  

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The complete transcript of this episode is below:

We had left off last time with this concept of do something that looks like sales or do you actually do sales. Whereas the goal was to actually do something that looks like sales from our friend VenCat and his concept of trying to get to these pivot points as quickly as possible.

Chris Beall (02:25):

That's a very interesting point. I think it's funny that when you think about it, the looks like sales part actually is sales, but it has this subtlety, this subtle difference, which is that rather than it being an activity that is, I'll say, thrown to the sales department and we measure, "Did you sell something?" We do something that looks exactly like what we would do if the sales department were very mature and well run, which is they handle the top of their funnel with great discipline. That's what great sales departments do is that when you look at the top of their funnel, it looks very smooth. The flow is smooth. And instead of desperately lunging for the deal at the end of the month, the quarter, the whatever in order to quote unquote, make their number, their goaled the same way but the flow is so smooth that they actually make things happen all along the way.

And I mean, that's I think the greatest distinction between a well-run sales organization and sort an average sales organization is a well-run sales organization, even if the deals will tend to close toward the end of the period because that's how their buyers are trained to behave and it's just easier to do that way, their top of the funnel on there and as a result, their pipeline, they call it strong, but it's really smooth. It's just, it flows.

There are opportunities that flow in, they have consistent false positive rates. If you were to investigate them carefully, they'd have very low false negative rates, that is they'd be catching most of the opportunities out there before their competitors do. That's the essence. And what we're really talking about here is market dominance and therefore we're talking about competition.

So, the key isn't just to survive and thrive in the venture capitalist eyes, it's to actually win the market. So, even if you weren't funded at all by external funding, core dynamic is you want to be there before your competition is there.

I think what really happens done right is you build the top of the sales organization, that is the top of the funnel, exactly like you would have it at maturity and you simply do it faster and you run it faster. Down funnel, your activities are very similar but they're subtly different. So, discovery actually a great discovery is real discovery. That is it's not a drive to a deal. Because once the top of your funnel is in good shape and is flowing well, you can afford to do true discovery. That you can afford to have a conversation with somebody in which you discover whether your idea of your offering and their current concept of their problem as it evolves in the conversation that you have together, turns out to be a fit sufficiently to take the next step.

That's all discovery is, is that we're trying to find out, do we have enough reason here from this conversation which might take 15 minutes or 30 minutes or something like that to say, "Let's explore further. Let's go from discovery to intention to solve. To explore a solution to one of the pain point or opportunities that's been discovered."

So, discovery is really the key to this whole thing because what you discover is product market fit. Market because you're talking to enough people. So, it's not product customer fit. The problem with the standard model of, "Let's just go sell." Is you never find a product market fit because you're so busy working on product customer fit.

It feels so good, "Can I get this person to buy something?" And when you go down that path, you morph your message in real time by adapting the message to the customer in order to try to make the sale. And this is the standard problem that shows up in all sales organizations. It's fatal actually, or at least it'll wound you badly when done early in the go-to-market process, is instead of saying, "Hey, here's my offering," in the form of a message, "now I'm going to go through discovery to discover whether anything in my offering resonates with your problem. And then we're also going to explore timing." Instead of doing that, we say to the sales person, "Hey, go get a deal."

So, the offering morphs in the process of the deal to whatever the salesperson and the customer decided should be to take the next step. So, now every conversation takes the offering in a new direction.

Corey Frank (06:44):

Yeah. And the product team is frustrated, "Why don't you just sell what's on the menu for God sakes."

Chris Beall (06:49):

Yeah, exactly. And so now you go all the way back to, and they've invested in the product, the product team has and therefore their confidence in the product. And so you have this drift occurring over here on the sales side, you have this rigidity because you already over-invested in the real product which you can't move very easily because it's built, and those two create this fault line and the Grand Canyon actually that you mentioned shows up in that fault line.

Corey Frank (07:15):

So, the Henry Ford axiom that if I listen, actually listen to what my customers wanted, they'd still be riding on horses.

Chris Beall (07:23):

They'd want a faster horse.

Corey Frank (07:24):

This concept where you can over-invest in the product at a greater pace than you're getting, gaining, culling, harvesting, this market data is the key. So you want to have the product ahead of the market or you want to have the data coming in just where there's a low enough, where the product can continue to be nimble and adjust accordingly.

Chris Beall (07:49):

Yes. Yeah. So, the less built the product is the more valuable feedback from discovery is in terms of informing product evolution. Product is free to evolve when it has less to it.

Corey Frank (08:00):

Product is free to evolve when it has less to it. So, less is more.

Chris Beall (08:05):

Yeah, and it's vastly cheaper to build a message than a product. I personally do messaging work for lots of our customers. The good messaging exercise at the top of the funnel takes about 15 minutes. That's a solid messaging exercise that will turn into results in the form of appointment setting rates within 24 hours.

So, you've got a 24 hour cycle from building a virtual product in the form of a message and getting starting to get the feedback back in the form of appointments that are set. And you have, even in the most agile of development communities, even when the product is pure software, Cloud based, agile is can be, scrumming like crazy, all that good stuff, you're very, very lucky to do meaningful four week sprints with releases.

The difference between four weeks and a day, it's a factor of 20, approximately 18, right? You're 16 times as nimble as the most agile development team if you simply avoid developing things that you don't know you should develop.

Corey Frank (09:07):

Let's talk about that as an example. So, without maybe just broad, broad messaging, obviously not necessarily company names here, but what is an example of where you would go in and you would talk about messaging that they think is static. They think is valid. They think is mature enough and, "Thank you very much, Chris, I just want this tool. Thank you." And then after a while, they'll come back and say, "Hey, the tool, wasm#t what we thought, Chris, thank you very much," and you're like, "Whoa, whoa, whoa. Hang on a minute. Let's talk about your messaging before you just get this faster horse here." Right? And what are some of those examples where folks may think that they are selling the drill versus selling the hole?

Chris Beall (09:55):

Yeah, I wish they were mere examples. I mean, it's the standard. And for a couple of reasons. One is that messaging at the top of the funnel generally is inherited from marketing. Somebody uses some marketing language and says, "Let's say that we are the number one provider of something. Let's say that we have a platform that does X, Y, and Z. Let's say that, our service provides you with and category one, two, and three of wonderful things that it does." So, all those are marketing oriented messages.

In fact, they're the very kinds of messages that inform a [depth 00:10:34] that you've built to influence venture capitalist to perhaps invest in you.

So, in the world of marketing and the world of investment we talk about categories. Always. Because if we're not in a category, we don't know what we're doing. We can't message a market without a category. It doesn't mean anything. It's like to the market we say, "We do this wonderful thing, using words you've never heard before." That doesn't work, right? So, you can't do that in a market because markets are one to many.

Interestingly investors are one to many also because investors look like consumers or companies in the marketplace and that they have to all be investing what each other are investigating, category-wise. Nobody wants to be fool enough to invest in something that no one else is investing in. And that means investing in a category whose name is understood, the idea is understood.

It's really funny, people use disruption all the time as something that, "You're going to invest in my disruptive product." What they really mean is, "I have a variant of something that's hot and that you guys are investing it." Right?

And you can tell, because they'll say, "Well, we're the Uber of something," and then when Uber became unpopular because of their shenanigans, "We're the, whatever," you know, "We're the Snapchat of account-based marketing." And so what does that mean? Well, it's rational to say that to investors. And it's rational to say something a little bit like that to customers in the marketplace when you're using advertising and you're using social media. The problem is when you're trying to assess whether a specific thing that you're thinking of building might solve a specific problem, you have to stay away from the category for two reasons.

One is the category is not the solution to their specific problem. The category is a bag in which a whole bunch of different things that might solve that problem or problems like that are placed. So, you're not really helping them think about it.

Secondly, psychologically, when you say to somebody in a cold call, especially you say something that indicates your product category at all, "I'm calling you because we know we help companies like yours solve the problem of keeping track of their IOT investment." Whatever that is or something like that. It's like well if they're competent, they're already doing it. You're actually asking them, you're saying this, "We provide something that you should have already bought, unless you're an idiot. Unless you're an incompetent fool who's paying no attention to the market. We provide ... Oh, wait, it's already out there. We provide another one."

Corey Frank (13:16):

That messaging that you just say, right, as fictitious as it is, I mean, that is so common to all the different varied sales pitches that you and I receive every day, either in a LinkedIn reach out or in a cold call or in a mass email, it is structured exactly like that.

Chris Beall (13:34):

Right. And so you get one of two answers. Neither one is good. One is, I don't care. That is, that's not a concern of mine right now. Thank you for letting me dismiss you in a relevant sense in a couple of seconds, which is what I was trying to do anyway. But if you're pitching me, my job is to make you go away.

Corey Frank (13:52):

Yes.

Chris Beall (13:52):

I'm not inviting you into my house to sit down. You know, here got another mug, got a pot of coffee, sit down. And Mr. And Mrs. Salesperson and regale me with your wondrous insights, right? That's not what I'm looking to do. I'm looking to make you go away. So, you've given me the perfect way to make you go away as soon as you tell me the category, because I get to say the following either, "Don't need that kind of thing right now," and I get to preserve myself image, "Thank you very much. You have to go away."

And then the other one is, "Oh, you've hit a little too close to home. You've actually talked about a category that's important to me, but you've insulted me by implying that I haven't even bothered to look into this area. So, you're telling me it's really important and I've been incompetent and inattentive and haven't paid any attention to it at all."

Now that doesn't work. So, I just say, "Oh, thanks. That's really nice. I'm glad you're in that business. You know, we're set, we're set." And then neither one of those, consider them as objections, is handle-able. They're fundamentally on handle-able objections. One of them you say, "Hey, this isn't something that's important to us right now." And how do you [crosstalk 00:15:02] argument with somebody, "You know, you're just wrong. You don't know what's important to you. Let me tell you what's important to you. I have insights about you and your problem you have no idea about because I'm a sales person. In fact, I'm a top of funnel, 24 year old sales person. And [crosstalk 00:15:20] you the person with enough money to buy, authority to buy what I sell. And I'm going to give you insights about your business that you just didn't know. I mean, you're just so clueless, dude."

And then on the other one, they say, "I'm set." It's like, what can you do with that? "No, you're not, no, you're not. We're so much better,"

"No, really. I just bought one of those last week."

Corey Frank (15:43):

Isn't saving money important to you? Isn't saving time important to you, right? And then I already lost the pride argument here. Now I'm just wrestling with the slippery pig, but that's the point that most people don't.

Chris Beall (15:53):

You need a message that's in a package that allows you to get all the way through a conversation and intrigue somebody enough to have a meeting or to maybe take a meeting, maybe take an appointment. So, to do that, you have, you've got to put some pieces in the message. So, recalling that, as you pointed out in your intro summary here today, the product is the message at this point, you're selling the message. The close is the beating. They take the meeting. The actual delivery is they come to the meeting. That's delivery. They come to the meeting and you hold the meeting and then you have a full product cycle that you've got an idea of what you want to want to do, you've sold it, you actually have transacted. They came to the meeting and now something will happen next. Whatever's going to happen next will happen next, right?

Corey Frank (16:45):

[crosstalk 00:16:45].

Chris Beall (16:45):

So, we're trying to find out very, very early on, as early as we can, does our product, which is the message actually have validity or legs in the marketplace? Which is my list. So, it's so important to start with a list that the company creates and the company manages because that's the market. Allowing the sales person to make up the list is basically saying, "We have no idea what our market is and what we're really looking for is some faux examples of success so we can take them back and fool ourselves. We want to feel like we're making progress."

You're not making progress if you're going in every direction, you have to be going in one direction. You can't go in every direction at once. That's a bad idea, right? I can't say, "Hey, Corey," say to me, "Well, what'd you do on the 4th of July?" Say, "Well, you know what I decided to do was to go on a little vacation. So, I sent part of me to Seattle and part of me to Phoenix and I went a little, a little chunk I sent over to Columbus, Ohio, because I have some friends there and you know I've always wanted to see Alaska. So, I sent some parts and all those different directions."

"Oh, really? How'd you decide that?"

"Well, I let foot decided where it wanted to go and you know my left hand [crosstalk 00:17:52] had interest in Phoenix ... "

And it's just ridiculous to do that and yet it is common practice. Let the sales person make the list, use a category oriented message and then let the salesperson make up any words that they want to package that [crosstalk 00:18:06].

Corey Frank (18:06):

I had a conversation over the 4th of July with a girlfriend of my brother who just started at a SAS software company selling HR solutions. And she's been there for about six weeks and so of course I say, "Hey, how's it going so far?"

"Well, it's going all right."

"Well, tell me about a typical day, how you start your day and what's your list like, what's your market?"

So long story short, what they believe in is for the first 90 to 120 days is that the sales rep self generates their own leads via LinkedIn, via business journals etc. Find out who's in the news. And so they have a software product that's been around for a few years and their goal is to not support the sales rep by feeding them the list but instead to say, "This is what our product is, this is what it does. Now you go out and you find folks that you think will fit into this type of model."

So, of course there's an incredible amount of frustration. And I would imagine downstream, especially if there's no sales happening, there's an incredible amount of desperation that shows up in the tone. And there is this confrontational nature then because, "I really, as a 24 year old sales person, don't know what I'm doing. I have all this marketing collateral. I have a website that I really don't necessarily quite understand and I'm trying to get to the sale. So, it's going to come through in my tone that, 'What do you mean you don't want X and Y and Z? Because I'm seeing for my website in my collateral that people like you should want X and Y and Z'."

And so the tonality is wrong even if the messaging is kind of right because it's starting from again, I think the back end of the cow here. That kind of yields this, that goes back to the front of the cow where this frustration comes in. Then I realized that the sales manager of this HR software company is probably going to say, "Well, I just need better sales reps at this point. And that's the problem. It was not necessarily my message because I have a mature website and I have a mature messaging and I have sold a couple of widgets before. So, I think I know what I'm doing. I just need to grow at scale.

And so it seems to become a challenge.

Chris Beall (20:19):

It's very interesting that the most common response to executing a process that is guaranteed not to find product market fit is to scale the sales organization.

Corey Frank (20:33):

That's correct.

Chris Beall (20:33):

I mean, it's really interesting when you think about it. It's like saying, "Well, so I have this hose. I'm trying to put out a fire with this hose but the hose sprays the water in every direction so it doesn't seem to do anything to the fire. So, I think I need more hoses just like this one. And I'll point them in every direction and maybe the fire would go out."

Well, for little wimpy fires that could work but dominating a market is not a little wimpy fire to put out. If you just change the hose so the hose directs a high pressure stream at one place, you can choose the part of the fire that you can put out. And from there, cools down a little bit, people would think of this as the opposite analogy, right? It's like, how can going to dominate a market look like putting out a fire.

Well, remember, you have competition. The market is always on fire. You're trying to cool some of it down enough to let you go in. You're new and you need to direct it at one spot. And one spot means it's something about the market that if you get some you're more likely to get more. This is where going all the way back to Geoffrey Moore and Crossing the Chasm is so key.

Markets are self-referencing. The most important thing about a market is that it's self referencing. A correctly defined market is always a list. It's never an idea. It's never a description. It's always a list. So, here you have this problem, "I've got a list and I've got to make that list self referencing with regard to something that I sell, my product. So, if I don't at least make the list, to direct all the effort at the list, I have no chance whatsoever of ever getting self-referencing going on."

And there are exceptions and the exceptions are in the ... This is not about consumers. This is all about B2B. In the B2C world you can actually have products take off almost accidentally. It happens on occasion because the product is so popular for whatever reason something's going on in the world, right? Every once in a while in B2B, like in once in 20 years, something will take off just like that. Often a B2C crossover, like the iPhone. The iPhone became a dominant player in B2B even though the iPhone deliberately tells you in every way, don't use me for business. When you go and put a contact on the iPhone, it says their default phone number is their home phone. Home phone. You don't even have home phones anymore. Even Apple should have known about mobile phones. They were selling you one. But it [crosstalk 00:22:59] difference because utility was so high in the B2C space that the product jumped into the B2B space, like a fire jumping from your neighbor's house. And that's what happened.

But when you're inventing a product or coming out with an innovation in B2B and say, it's not even a product site, it's a service, you've got to get the thought rough reference-ability within a market. That means go small, because it's easier to put out a little fire, a little part of a big fire than a big part of a big fire. Start with the premise, the market is always on fire because your competitors are out there. You've got a problem. There's no safe way to go. You need to cool down part of that market enough for you to safely go into it. And then once you get in there, you're closer, so you can aim your high pressure, very directed, super, your hose with a little bit more water. So, you're not trying to see how much you can get on the flames. You're actually trying to see how concentrated you can get.

And you've got to make sure it's all water. The message is water. If you pour the, if you point that hose at the fire and the fire gets bigger, you got the wrong message. Your product is not acceptable in the marketplace. It doesn't cool the market down enough for you to enter. So, the context that I think folks tend to be missing in this entire discussion is competition. There's a strange assumption that is it works like this, if I'm coming up with something new, I have no competition.

That's ridiculous when you think about it, if you're coming up with something new, you have infinite competition. Your competition set is everything out there that anybody could conceivably use today to solve the problem that you would like to solve. And by the way, the problem is always being solved today because those companies you want to sell to are not all out of business. Your problem's important and it's not currently being solved in some way, then everybody would be out of business. So, your problem is always currently being solved. Always have a competition problem.

Now, the question is, can you cut your way in, or in this analogy cool your way down? I get it that this analogy is weird. It's not going to fit people's mental framework, but it's the true analogy as far as I'm concerned for what go to market is like. Go to market is not an attempt to start a fire, it's an attempt to put one out in a small enough area that you can go there. That it's safe for you to go. Because it's unsafe to go into highly competitive markets with a brand new anything.

Giving it to your salespeople, you're doomed because they're going to make up their own message. They're going to make up their own list. And now I've got, I'm pouring gasoline, I'm spraying gasoline on the fire instead of directing a high pressure stream of water at a part of the fire that's most likely to be put out. That's it.