• The Angle
  • Posts
  • Marketing has Become too Specialized

Marketing has Become too Specialized

The Angle Issue #237

Marketing has become too specialized
David Peterson

I was speaking with a founder the other day about who they should target as their first marketing hire. The “first marketer” is a tough role to fill, in my experience, because most marketers are too specialized. You may know a great paid marketer or content marketer, but it doesn’t make sense to hire any of them until you’re sure that those tactics are worth investing in. Brand marketing is valuable down the road, but not at the start. You might think that hiring a product marketer would be the answer, but most of them are just glorified sales enablement managers or user researchers.

What you really need is someone who has a broad-based understanding of what marketing is all about, and is willing to own the growth of the business. I’d like to think those sorts of marketers used to exist, but I’m not sure where to find them anymore.

My favorite description of marketing comes from the book Marketing High Technology by William Davidow. Davidow was a general partner at Mohr Davidow Ventures and, prior to that, a marketing manager and then SVP of sales & marketing at Intel. The book, in which Davidow lays out the approach he took to make Intel’s 8080 and 8086 microprocessors so successful, is one of those incredibly useful tomes that seems lost to time. I’ve never heard anybody mention it, but it is, pound for pound, the most useful book about building, launching and distributing products that I’ve ever come across.

Davidow begins by making a distinction between “devices” (in his case, microprocessors) and products. A device is a technical invention. A product, on the other hand, is the “totality of what the customer buys.”

To land the point, Davidow makes the following analogy: when you go grocery shopping, you’re buying food (the device). But you decide where to shop based on the food quality as well as the retail environment, the food display, the cleanliness of the store, and the ease of parking. It is those features combined which define the product.

And while a great deal of effort goes into developing new devices, “far too little energy is expended on inventing complete products.” The latter is the realm of marketing.

Engineers invent devices. Marketers invent products.

That’s not where the job of marketing ends, however. A product is nothing without a market. And market segmentation is not nearly as easy as it sounds. Customer requirements are wide-ranging and often mind-numbingly specific. And it is the job of marketing to identify the dominant characteristics in a customer group, define the product relative to those requirements, and build a defensible market position. Defensibility may come from technical features (the device), but more often, defensibility will come from other aspects of the product - better distribution, superior onboarding, excellent post-sales support, stronger brand awareness among the target customer segment, strategic partnerships, and so on.

The job of marketing still isn’t done, though, because market segments aren’t static. Customer needs, wants, desires are all constantly changing, as is the technical landscape. Each shift in customer preference creates an opportunity for exploitation by the competition. It is the job of marketing to track those shifting tides and maintain a defensible market position despite all of that.

That is what marketing means to me. Paid marketing, content marketing, brand marketing…those are all levers that an excellent marketer can pull to maintain the defensibility of a product and drive growth. But they are tools to be used as part of executing on a larger strategy. Marketers seem to have forgotten that they need to own defining the larger strategy as well.

Diagnosing why marketers have forgotten their role is a task for another day. I think it has something to do with the evolution of the role of the product manager (see Ben Horowitz’s fantastic post about what it means to be a good PM). And the problematic, but nonetheless widespread, belief that the PM is the “CEO of the product.” But, regardless, we’re now all suffering the consequences of a marketing function that has atrophied.

To paraphrase Davidow, great devices may be invented in the laboratory, but great products are invented in the marketing department. Or they used to be, at least. And perhaps one day they will be again.

David

FROM THE BLOG

No Sleepwalk to Success
Engineering success in a technical startup.

Revenue Durability in the LLM World
Everything about LLMs seems to make revenue durability more challenging than ever.

A Digital Fabric for Maritime Trade
Why we invested in Portchain.

WORTH READING

ENTERPRISE/TECH NEWS

AI scientist. Tokyo-based Sakana AI releasedThe AI Scientist”. This AI can perform end-to-end scientific research autonomously, without human intervention, and at a fraction of the cost of typical research – less than $15 per research paper according to Sakana AI. The AI Scientist generates hypotheses, conducts experiments, and analyzes results. This could potentially mark a new era in scientific research. “The implications of such a system are profound and multifaceted. On one hand, it could dramatically accelerate the pace of scientific discovery by allowing continuous, round-the-clock research without human limitations. This could lead to rapid advancements in fields like drug discovery, materials science, and climate change mitigation. However, the automation of scientific research raises critical questions about the future role of human scientists. While AI may excel at processing vast amounts of data and identifying patterns, human intuition, creativity, and ethical judgment remain crucial in steering scientific inquiry towards meaningful and beneficial outcomes. The challenge will be in finding the right balance between AI-driven efficiency and human-guided purpose in scientific research.”

SearchGPT review. As reported last month, OpenAI announced SearchGPT, its new AI search engine and competitor to Google’s core search business. It was only released to a limited set of users as a prototype. However, The Neuron was able to get access and write up a review of SearchGPT, comparing it to Google and Perplexity. Ultimately, they found SearchGPT to be the most comprehensive of the three – building out tutorials, embedded videos and providing screenshots, rather than just providing a short text summary. “SearchGPT feels like a mashup of Perplexity and a souped-up Google One-Box, offering thorough initial answers for quick, comprehensive responses. While it excels at providing instant insights, it lacks Google's depth when you want to do deeper research. Use SearchGPT when you need a rapid overview, but turn to Google when you want to explore a topic more extensively. As one tester put it, "It's like having the ability to search through the first three pages of Google, compile all the information, and write a summary."”

Israeli defense tech. Spurred by the ongoing war in the region and the needs of the Israeli military, global venture funds are increasingly investing in Israeli defense tech. These startups, often founded by military veterans with recent battlefield experience, are attracting significant investments from top VCs. “In the past few weeks, several quiet investment rounds have closed, bringing some of the biggest names in global venture capital to Israel. These companies, founded after October 7, are not led by the typical Unit 8200 graduates but rather by combat unit veterans who have firsthand experience”.

HOW TO STARTUP

The hidden cash crunch. Pitchbook reported how the current “AI gold rush” is obscuring a broad financial crunch for many startups. “If you strip away the AI deal-making frenzy, a harsh reality of today’s fundraising landscape comes into full view: More startups are pushing the limits of how long they can go before replenishing their cash reserves.” Crunchbase data showcases that for US companies that raised a Series A and went on to raise a Series B, there was on average 31 months between the two rounds, “by far the longest span since 2012”. The clock is ticking for many of the boom-era startups that have yet to raise a subsequent round. “In a previous analysis on the concept of the “fundraising cliff,” we found that it’s rare for the time lapse between rounds to extend more than three-and-a-half or four years. That’s concerning considering that venture capital funding peaked about three years ago, leaving a large pipeline of startups that last raised a round in 2021.”

Sales DNA. Two great pieces on what to look for when hiring sales talent. First, in this fantastic evergreen piece, Boldstart’s Ed Sim looks at what sales candidate characteristic fundamentally drives success: hunger. “If you are a sales rep at an early stage company with no name, no brand, and an unproven product, you better be hungry, make your calls, schedule your meetings and not take no for an answer. What this boils down for me is the difference between "order takers" and "order makers". His closing advice for founders hiring sales reps: ”Make sure they have the qualifications but more importantly make sure that they have the hunger and desire to win.” The second piece is a Twitter post by Ben Braverman, the former CRO of Flexport. “Founders building your sales org at seed-series B, your focus should be 100% on rising stars vs. proven talent. This is obvious if you think about the adverse selection at play: The best mature sellers are overpaid at their current roles. They’ve spent years building their book, expanding their territories, and the real ones (aka the ones you want) have too high of an opportunity cost to take a chance on your startup.”

HOW TO VENTURE

A sliver of good news. 2023 Q4 was the best quarterly performance for VC fund returns since 2021, according to Pitchbook data. “Venture fund performance finished the fourth quarter of 2023 in the black for the first time since 2021, according to fresh PitchBook data. The showing comes in tandem with a lift for alternatives broadly, with buyout funds, PE growth, secondaries and infrastructure all recording solid performance. VC funds eked out a 0.4% return in Q4 2023, leaving the asset class with a 13% 10-year horizon IRR.”

PORTFOLIO NEWS

CruxOCM announced the closing of a $17M Series A funding round led by M12, Microsoft’s venture fund.

Aquant’s CEO Shahar Chen joined the IMD | Industrial Machinery Digest podcast to discuss how AI is transforming the service sector across manufacturers and how a personalized AI Co-Pilot platform helps manufacturers provide better service to their customers and improve equipment uptime.

Vault Platform CEO Neta Meidav co-authored a Chicago Tribune piece on why companies that silence worker voices via nondisclosure agreements are actually delaying a hit to their bottom line.

FalkorDB shared a sneak peek of what they’re working on in this video.

PORTFOLIO JOBS

Reply

or to participate.