Category Archives: Business

A Few Mega Platforms Are Quietly Killing Free Traffic. Here Is What it Means For Marketers

I recently published an article on LinkedIn and sent out this press release on the mega platforms. As it says, a small number of websites are gaining control over larger portions of internet traffic. This means that sites like Google, Facebook, Twitter, YouTube and a handful of others are growing their own traffic faster than internet traffic itself is growing.

Systematically these sites are focusing on better monetizing that traffic which is good for their financial performance (in most cases) but it means a major shakeup for marketers.

Look at the major changes at each of the big players. YouTube is under criticism for how it structures its agreements with content providers and its content strategy is highly controversial among big YouTube promoters. Google’s changes have been to reduce the effectiveness of SEO overall while shifting more content to being delivered right in search results. Facebook and Twitter have really gotten serious about advertising. These and many other changes have the effect of promoting paid traffic solutions in place of previously ‘free’ organic ones. Even Amazon’s marketplace and online store strategy shifts eCommerce traffic from several sources (including organic search) to paid Amazon services. All this has big ramifications for marketers

thank you for reading

Mike Zammuto

Michael Zammuto on Neil Hughes TechBlog Podcast

Neil Hughes was a gracious host on his Technology Blog Podcast. Neil and I talked about Completed.com why we delivered a platform where you can review anyone on business and get recognition and constructive feedback for professional development

 
Follow the link below to hear Michael Zammuto speak about Completed.com with Neil
 

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A New Breed Of Chief Growth Officer Takes On B2B In The Age Of The Big Internet Platform

Chief Growth Officers Take B2B To The Mega Platform

Synopsis

Michael Zammuto Internet Executive

Michael Zammuto Is An Expert In B2B Sales & Marketing Growth For SaaS and Internet Companies

The rise of online “mega-platforms”, a small number of sites controlling huge amounts of the internet, is obsoleting traditional B2B Sales and Digital Marketing leadership roles to make way for a new Chief Growth Officer. CGOs drive huge sales growth by combining sales, marketing, operational, entrepreneurial and data expertise and they see traditional marketing and sales tactics not as integrated programs but parts of a whole they construct from the ground up in what we are calling Sales Architecture.

Growth In A World of Giants

Today, any scalable, successful sales and marketing program must start with your strategy for working with the mega platforms that control the internet. The main effect of this is that traditional B2B sales and marketing programs must give way for a single, enterprise Sales Architecture that aligns the entire experience from your target audience’s phone and laptop screen to the successful booking at the bottom of your sales pipeline.

SimilarWeb Listing of Top Sites.

SimilarWeb Listing of Top Sites.

Traffic is power and the power has shifted to the huge and mighty. Every gatekeeper, influencer, recommender and decision maker that you need to reach is on some combination of Twitter, Facebook, Amazon, Google, Yahoo, LinkedIn, eBay, Instagram or a handful of other sites but social marketing won’t let you reach or influence them.

The number of internet users continues to grow but that growth is dwarfed by the surge in the number of websites. In 1993 there were 108 thousand people on the internet for every website. Ten years later it was 19 people per site and today less than 4. So, your website is lost in an endless digital jungle.

Internet Users Per Website. Website growth has outpaced internet user growth

Internet Users Per Website. Website growth has outpaced internet user growth

The monsters are getting an ever-growing share of all that traffic too. In 2012, ChaCha built the largest PPC social traffic platform in the world on Twitter. We harnessed a deluge of data to align topics and keywords of large influencer tweets to keywords in articles to optimize advertising revenue per session. As a result, ChaCha.com shot up to become the 35th busiest website in the world in just a few months. Today, if a site had that same traffic it would nearly make the top 10 because the mega platforms are consuming more and more of the traffic.

At Brand.com we built a platform to connect over 100 major news sources to marketers and could (for a while) use content marketing and SEO to strongly influence search traffic. But Google decimated traditional SEO tactics so the ‘above the fold page 1’ spots are increasingly dominated by mega-platforms and sites with authority you cannot practically build. As planned, this helps shift traffic to Google’s paid search offerings meaning you pay for what used to be free. Increasingly, sites like Google are integrating information into their search results effectively hoarding traffic from sites in their own search results. Today content marketing is a powerful tool but without paid traffic sources you will rarely get volumes for large scale marketing programs.

This consolidation means the giants are squeezing everyone else. Publishers are getting killed by the downward trend in advertising rates while marketers are having to pay more and more for access to eyeballs. This means that traditional online marketing, especially so called ‘brand building’ is getting killed with out of control costs per leads (CPL) and campaigns that drive clicks for the behemoths but few sales for you.

 Sales Architecture: One Internet – One Pipeline – A Billion Cohorts

Clicks don’t equal sales. Clicks equal cost. Because the mega platforms were built themselves around network effect, at their core they are B2C engines. Every step in the process needs to be built around how these mega platforms can be tamed to profitably increases B2B sales. This means the correct message must reach each person in the sales process at the right stage. Online marketing and your inside and outside sales have to work together as a single unit. Small errors in one tactic can be harder to find but cost you dearly in missed growth. Guerrilla marketing and the company website or blog and niche sites such as those around verticals have their place but are decreasing elements of the sales architecture. For starters, no activity can be done without clear cohort analysis that connects every marketing and sales decision with the outcome and few organizations have true end-to-end management of their spend.

 Extinction Level Event: The Demise of Sales & Marketing

At great firms the traditional border between sales and marketing campaigns has collapsed. These companies are seeing massively scalable success by moving to a Chief Growth Officer who owns the company’s Sales Architecture and views every marketing and sales activity as part of a continuum. I always house sales and marketing together and measured and reward every step from beginning to end. Getting complete cohort analysis and testing of every critical decision and visibility and KPIs at every step is a massively difficult process that many traditional sales and marketing experts cannot tackle.

Traditional sales and marketing roles historically attracted very different types of people and they may approach the internet from their silo. Most have failed to keep up with the lighting-fast pace of change. Surprisingly few have any deep knowledge about the internet. Many talk a good game but probe and ask your sales manager the CPL for their leads. Ask them how to social proof during the proposal phase in a world where every company is Googled. Ask them to show you the cohort of close rates for outside sales on leads from content marketing vs. advertising. Or ask them how they connect the dots between the positioning value prop in social marketing with the final pitch. Too often you will find a disconnected process. Many sales people view online marketing purely in terms of market awareness and lead generation. As leads reach the bottom of their sales funnel the tactics and messaging increasingly looks like the same approach as 5 or 10 years ago. Chief Growth Officers, on the other hand, ensure that every step of the process supports the sales team converting the booking by ensuring cohesive prospect experience throughout.

Marketers are even worse off. Many corporate marketers feel totally disconnected from the sales process. So, they strongly naturally resist any integrated pipeline metrics. Few are taught direct response marketing and fewer still know how those responses support the later stages of the sales process. Too often, traditional marketing leaders want the same tall wall between their online efforts and close rate and want to be judged on engagement metrics that make direct marketers roll their eyes.

The Chief Growth Officer owns the Sales Architecture and is comfortable at the entire continuum of the marketing and sales process. They align the sales and marketing resources in new ways that allow them to leverage the mega platforms to drive massive growth. Armed with essential operational and technical skills, this new breed of growth leaders build organizations that use data like never before.

About The Author

Michael ZammutoView Michael Zammuto's profile on LinkedIn

  • Transformation Executive Who Repeatedly Accelerates Growth to
    Mike Zammuto and Philadelphia Mayor Michael Nutter meet and discuss the Philly Tech and Startup Community

    Michael Zammuto welcoming Philadelphia Mayor Michael Nutter at an event in Philadelphia

    >100%

  • Deep Expertise Selling and Marketing High Growth SaaS CRM, PoS, ERP & Revenue Lifecycle from $1k to $5M Price Points
  • Top Digital Marketing Expert Who Built The 35 Busiest Website, The World’s Largest Social PPC Network, Content Marketing Network of 100 News Organizations, Massive Global Email Marketing, Hugely Profitable Webinar Programs and Keyword Hyper-Optimized Display Advertising Programs
  • Inside & Outside Sales Program Expert Who Has Created Multiple-massively scaling programs tranforming their organizations into growth engines
  • Operator – Entrepreneur Hybrid Who Builds Optimized, Data-Addicted Sales Operations That Win
  • Case Studies at Stanford Business School & Microsoft Dynamics CRM
Michael Zammuto with former Pennsylvania Governor Ed Rendell

Here is Michael Zammuto meeting with former governor Ed Rendell. Governor Rendell is a big supporter of the Philadelphia tech and business communities. Mike Zammuto recruited Mr. Rendell to be an advisor to Brand.com

Sources

https://www.quantcast.com/top-sites Traffic at the mega-sites

http://www.internetlivestats.com/total-number-of-websites/ Users Per Website

 

 

 

Cloud Commerce Consulting Mission – Sharing Some Hard Fought Lessons In 90 Days

The most valuable lessons are the most hard fought ones. I learned a lot working for great startups and growth companies. I had the honor of joining some turn around teams and learned a lot and worked with amazing people. Being a startup exec is an amazing and energizing field but even the best need help sometimes and Cloud Commerce Consulting is here to help them with it. What works at one stage of a startup rarely continues to work at later ones. Taking a company from first revenue to $20M or $100M is no less challenging than launching the startup and takes all new approaches.

Our newest offering is a 90-day startup transformation package we will be announcing shortly. It builds on the incredible lessons I learned working with the amazing Dr. Behnam Tabrizi and his 90 Day Rapid Transformation process. Behnam helped with the massive transformation of Ontario Systems and I learned so much that can benefit others.

Very excited to get this one to market. Read More soon on CloudCommerceConsulting.com

-Mike

US Ranked 32 In Youth Employment & Opportunity

With a kid adult entering college next year and two others not far behind I worry about the opportunities they have. So when the US is ranked 32nd globally in employment opportunities for the young it raises a question. Do I suggest my kids start their career in the United States or look globally for the best place to make a life? The Commonwealth Secretariat published a report that analyzes a number of economic, political, health and welfare factors into a Youth Development Index. Whatever you think of the US’ 23rd overall ranking it is worth looking at the 32 place ranking we got in Employment & Opportunity.

To see the full ranking criteria and scoring download the full report here and look at page 119 for rankings or read a summary on the Miami Herald’s Site

Commonwealth Youth Development Index Ranking Lists US at 23 for 2016

Commonwealth Youth Development Index Ranking Lists US at 32 for Employment and Opportunity in 2016

Rethinking poverty – from aid to economic miracle

 

Last Year’s documentary, “Poverty, Inc.” asks if the global approach to addressing severe poverty has unintended consequences and asserts we could be inadvertently damaging the ability of people in those countries to better themselves through internal economic development.

 

The framework for addressing human suffering from disasters (natural like earthquakes and unnatural like wars and many famines) has been the same my whole life. Driven by heart wrenching media reports and championed by celebrities and public figures from all walks, well intentioned people give money through tax receipts, charitable donations, and feet on the ground to addressing suffering and to longer term developmental programs. We do this through transfers to governments and NGOs who are supported by armies of consultants and volunteers of all stripes. More conservative elements argue with the adage “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime”. But there are critics to both mindsets, arguing that giveaways and the ‘teach them to fish” approach are not the best mindsets for supporting developing countries becoming developed countries.

Global Poverty

There are many entities from governments, NGOs, charities and even celebrities involved in the global effort to reduce suffering

There are many entities from governments, NGOs, charities and even celebrities involved in the global effort to reduce suffering

We want to believe this is helping, and of course it does, but it comes with a not-so hidden cost that perhaps substitutes treatment for cure. This is the focus of “Poverty, Inc.” the most thought-provoking documentary I have seen all year. Please consider watching it. You can stream it on Netflix or rent it from YouTube, Amazon. It argues that everyone from celebrities and our governments to NGOs and charities to the peoples of both the developing and developed worlds have bought into a system that only now we are realizing does massive, sustained harm even as it does good.

 

The 2010 Haitian Earthquake Case Study

On January 12th 2010 a 7.0 magnitude quake hit just outside Port-au-Prince affecting 3 million people and destroying or severely damaging almost the entirety of Haitian infrastructure including emergency and medical services, air sea and land transportation, communications and supply chains. Corpses rotted in the rubble and the government resorted to mass graves. Over the next few years there was a massive Cholera epidemic affecting 6% of all Hattians. Although the numbers are highly contested, between 100,000 and 160,000 probably died.

 

The global community reacted almost in unison and at massive scale to the devastation, sparking talk about a new, global approach to disaster recovery. Money, donated goods and people flooded into Haiti Clearly a lot of good was done and Haiti has a lot of ongoing needs. The government estimates 10,000 NGOs are operating in Haiti, many continuing programs started as earthquake responses. Temporarily supplementing private enterprises that have been devastated is one thing but consider how long that goes on before you are denying these local businesses the markets they need to prosper, grow, provide jobs and so forth. Subsidies are designed to create market distortions. But distortions of giving on a large, sustained scale have consequences. When humanitarian aid becomes a way of life with programs and giveaways sustained over years it displaces or even prevents the internal development of the country.

 

Case in point is rice. For decades, the US government has subsidized American rice farming. During Bill Clinton’s presidency the US began a new, sustained hunger program of delivering highly subsidized American rice. US farmers have received $ 13B in rice subsidies and very low import tariffs when selling to Haiti. Haitian farmers have received no subsidies. This was intended to address hunger and also designed to supplant inefficient and environmentally damaging local agriculture techniques. Plus, it promoted US agriculture and the President, Congress and many others celebrated a great program. What has happened is that the Hattian consumer now consumes rice offer at 3 meals a day, destroying domestic rice production and the businesses and jobs that supported them. The documentary shares a clip of Bill Clinton himself explaining how he and others was wrong about this program and he sees now the damage it did. American rice growers have benefited from the expensive taxpayer subsidies but this sort of sustained corporate welfare causes its own distortions in the resources and techniques applied to food production as also demonstrated by corn subsidies from Ethanol fuels.

 

Even well intentioned social programs. At least 80% of Haitian orphans have at least one living parent. Most are arguably ‘poverty orphans’ whose parents gave them up thinking that the institutions would raise them better. Doing so costs them their parental rights and effectively dismantles any hope of the child being raised or reunited with its parents. Well intentioned, prospective adoptive parents often don’t know they are adopting a child who has a parent who actually wishes they were raising them. In essence, the program actually CREATES some orphans.

 

African Cheetahs

After the Rwandan genocide a church in Atlanta organized an effort to deliver free eggs to suffering villagers. They flooded the market with free eggs. This drove local egg producers out of business. They shared the story of a chicken farmer who was focused on egg sales. Since nobody would buy his eggs the farmer sold his hens only to then see the church stop the program and move on to new causes. Now the community has to import eggs

 

One argument for programs like these is that if you free up local economies from subsistence farming they can focus development on higher value-added industries and develop their economies faster. Herman Chinery-Hesse is a software entrepreneur called “the Bill Gates of Ghana.” He tells of a time that he and other local techies bid on a government software contract. They bid against a European country. The home government for that European country gave Ghana a loan for the project and their software company won, telling Herman that nothing beats free money. The Ghana firm ended up subcontracting to the European firm doing as he says “the hardest and least profitable parts.”

 

Even respected and cool social entrepreneurs like Tom’s Shoes gets some treatment in the documentary. It raises the issues of what happens when free shoes (for example) enter a market on a large scale but often unpredictable schedule.

 

The documentary references a George Ayittey TED Talk on Africa’s Cheetah and Hippo generations whose criticism of “Swiss Bank Socialism” by their society’s slow moving, ‘hippos’ in the government and entrenched business interests at the expense of their at the younger, more entrepreneurial generation of ‘cheetahs’ I recommend watching this. Ayittey is unflinching in his criticism of African governments and leaders and argues that aid subsidizes these rulers and disincentives them from creating an environment that promotes local economic growth.

 

If you have ever traveled to a developing country with extreme poverty one thing you notice is that they are not universally poor. Some development exists in all places at varying levels and with varying support. All people have the ability and right to improve their lot and the question is what role can the international community and the people and institutions of the wealthiest countries play in supporting and encouraging that.

 

“Poverty Inc.” effectively argues that there are unintended consequences from the aid-centric approach to global poverty and argues that these have developed into a “Social Fact” that reinforces continuing with a given approach.

Our approaches to global poverty have become entrenched and habits and vested interests reduce review of the overall effectiveness of the approach.

Our approaches to global poverty have become entrenched and habits and vested interests reduce review of the overall effectiveness of the approach.

Instead it argues we should shift to promoting development of the local economies by pressuring governments where needed and supporting efforts to improve rule of law, land property rights, right to start a business, links to exchange ideas and trade which are lacking in many places.

 

The best outcome for is for local countries to create the circumstances for a sustained ‘economic miracle’, the rapid economic growth in an area. After World War II much or Europe including and especially Germany along with Japan, aided by the Marshal plan began long, transformative processes that took them from shattered, starving states to economic powerhouses. In many different forms this later occurred in Taiwan, Hong Kong, Singapore, South Korea, China Brazil, India and many others. All of these examples include aid and plenty of examples of richer countries “teaching them to fish” (perhaps best illustrated by W. Edwards Deming’s efforts in japan). But the critical ingredient that may separate these from Haiti and the poorest states in of Asia, Africa or the Americas is that the conditions for growth were developed. Step one may be repositioning recipient nations not as ‘victims’ of disasters, natural and unnatural, but as partners who have the right and ability to create their own miracles.

Get ready to hear this election will good for newspapers.

Here is why it won’t be.

100 newspapers have disappeared since 2004. Get ready to start hearing how this election will be good for newspapers.

 

Now, I two years ago I didn’t actually say “News Is Dead.” But ‘misquoted me’ may have been more correct than the real me was at the time. In 2013 and 2014 I was quoted pretty publicly that I felt that traditional editorial and entertainment media were simply not going to transition their existing model to digital revenues and something much more serious was needed. Like many, I was critical that sponsored content had been something developed by the publisher’s sales department and then was published to mimic editorial content. This was by placid agreement by sales & editorial which have decades of avoiding each other in the company lunch room. So what is the update?

Pew Research Newspaper Revenue Trends

Newspaper revenues are shrinking and digital ad revenues are growing much slower than the drop in print advertising and subscriptions as seen in this Pew Research Chart from 2003 to 2014.

Newspapers are designed to be ‘inefficient’ producers of content. By that I mean they produce some of the costliest original content possible. Produced in medium-to-short-form but with a lots of research, interviews and fact checking, the news business has always depended on subscriptions plus healthy advertising rates to survive.

 

Election cycles have historically been fantastic for local media. Newspapers will see a blip in an otherwise downward collection of trends. This will lead the PR folks in the print news industry to try to use it to argue that the long term trends are actually neither. Unfortunately for them it isn’t true. Digital is taking a larger portion of a rapidly shrinking pie.  The Pew Research Center’s annual report tells the tale. In 2015 their circulation fell by the greatest amount so far this decade. Advertising revenue dropped even faster than overall circulation diving 8% last year.

 

Young people are ignoring newspapers in droves but the bleeding is occurring much faster than aging. The Pew Research report says that only half of the elderly read papers now.  We are probably past the point of no return. Let’s hope the news industry can pivot better before misquoted me turns out to be right.

 

eCommerce Strategies — How eStartups Should Plan to Thrive, Survive, and Fail in Emerging Markets

eCommerce is a critical marketing battlefield between brands, and though it is true that pioneers and early venture capitalists will enjoy the low bearing fruits, newcomers have the advantage of hindsight — they can rely on the mistakes of early adopters and learn from them.

 

At Cloud Commerce we preach that it is good practice to establish some ground rules before embarking on any venture like eStartups for instance. Let’s get started.

 

At first we’ll talk about failure, specifically; how you can fail as an eCommerce startup.

 

HOW TO FAIL IN NEW and EMERGING MARKETS

 

Once an e-Startup has established the countries that are ripe for growth, and the ones that they want to target, their next step is to develop the strategy for entering new markets. Let me introduce the five ways that can assure you a failed attempt at expanding or even entering in the overseas market.

 

Replicate Your Business Model

 

The most well-tested business models are simply experiments with high repeatability, under specific circumstances. The slightest change in market conditions, demographics, and buying choices can force the startups to review their model, scale it, and make amends to remain market competitive.

 

These tested and proven models will fail in emerging countries.

 

Why?

 

Primarily because the whole market landscape has changed. A lot of companies, founders, CEOs, and executives believe that their U.S based business models (or based in any developing country for that matter) can easily be tweaked, and their processes scaled or morphed according to the local laws and business practices.

 

I’ll be severely blunt here: read modern history and learn from it. You cannot simply try to colonize another landscape (the market in this case) and impose your values or model one way or the other, and believe that it will work. It will only generate anomalies; ones that we’re still trying (and failing) to control.

 

The marketplace is no different.

 

Your existing business model is targeting a specific consumer group existing in a specific market niche that has grown out from realizing the needs or wants of the consumers in the market as a whole. You can profile them and understand them while assuming certain similar/overlapping values, behavioral traits, and certain marketed and propagated perceptions about needs, wants, and consumption.

 

Your current business model isn’t good enough, and there are a lot of hard facts to be researched ahead before you can start thinking about the new business model. You’ll need to understand the new culture and their ingrained values, the marketplace and how their culture affects them, and then re-profile your target audience.

 

Testing the new model that emerges from this endeavor is a thought on the horizon.

 

Assume Recognition and Entitlement

 

Your product may be a household item in every home of your target audience, and your brand awareness campaigns and stellar service may have changed your brand name into a verb or an adjective even, but you cannot (must not) assume that your brand is known in the new markets.

 

It’s just another local brand with a local product in a country on the globe.

 

So, it’s back to the drawing board for your marketing strategy and campaigns.

 

Set Unrealistic Expectations

 

This is a corollary of the previous point. Remember your initial days of marketing campaigns where you had to spend every waking hour thinking up creative ways to get it right. Remind yourself that it will take time to establish yourself (leave growing for the moment) in the new market within a new country. Avoid creating KPIs that compare the progress of your established business with the new one.

 

Choose the Wrong Local Partners

 

Maybe you’ve pulled together a great team at home, one that has conducted exhaustive research on the new market. You may even believe that you know the market more than the locals do, that you have better insights into its working, and now you have created a business strategy to take the market by storm.

 

Many will miss the end point-of-effort in this whole picture. It will be the local partners in that market that will play an integral role in properly executing your business strategy.

 

Have you found the right local partners to take your business through the tough times? Unless your feet are firmly planted on the market floor, and you actually have built a local team in the emerging market of choice, you cannot hope to accomplish much.

 

Avoid Investing in a New, Country-Specific Website

 

Google translate is a good tool for translating foreign websites, but just for the fun of it. Translating saps the message of the actual, local, and culturally entrenched language, metaphors, and expressions. There is no marketing, just plain communication of a non-engaging message.

 

A lot of companies are simply investing in creating a website and simply translating their original message into the foreign language. What is actually needed is original content for your marketing campaign, in the voice that the local people understand, can relate to, and engage. Hence, having a simple “.in”, “.cn”, “.br” as a domain suffix will not make your business become part of the market environment. eStartups vying for local masses’ attention need to add more original content (created locally and targeting the local populace) to their content strategy.

 

Let’s get into the surviving and thriving mode for your eCommerce startup.

A TALE OF TWO STRATEGIES

I’ll start with the two blunt, battle-tested rules of thumb. Call them strategies to avoid failure if you may. They are:

 

#1 — Put Working Systems at the Core of Your eCommerce Model

 

Build your eCommerce model around business functions, rather than people.

 

Yes, when it comes to developing your eCommerce strategy, your focus should be on defining your business functions and developing long-term systems for your eCommerce venture. Your focus should be on building a structured system organized around these business functions so that your startup departments can work at optimal levels. For example, prime departments could include tech, HR, marketing, finance, etc. As a result, you’ll have a business model where systems run the business while people run the systems.

 

While defining these systems, their workability should address their sensibleness (and hence ease of use) by employees and potential investors. This is where developing integrated CRM, POS software, and relevant APIs for integrating other business systems into a holistic unit come into play. Furthermore, it facilitates your startup launch by increasing viability and dramatically cutting time to market.

 

Though it may sound a bit mechanical and representative of the caricature idealization of business centered execs, but Michael Gerber did hammer the point just right:

 

“Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant.”

 

It’s harsh, but true.

 

No other tech startup’s success is more enslaved to technology and robust business systems than eStartups. You need to have a great team, but you also need sound, well structured, and lasting systems representing well defined business functions. You need seamless automation and transparency across all systems to boost your data collection for your Big Data bank and hence increase the power of your analytics.

 

 

Building an Executive Team from Scratch in a Growing Startup

Your company cannot begin to grow unless you have built a team.

 

It doesn’t matter how strong an idea you have, how committed you are, or how many hours you are putting in. It really doesn’t:

 

Because a startup cannot grow over the founder’s shoulders alone.

 

Because eventually, the fate of every startup (hoping to turn into a growth company) rests on the shoulders of the team you have built.

 

Build a team of people who have the required skill set, who can deliver what you are looking for, and who are more experienced than you who can empower you. As a founder you must forget the idea of wading your way through the growth landscape on your own and learning along the way.

 

Generational Gap and the Myth of Team Learning

 

Startups often fall into the trap of empowered learning i.e. believing that they (the founders or the original team) can outgrow themselves at every stage of the growth phase. As a consequence, they hire people who they believe will learn and be trained to do a great job tomorrow. Hence, they waste energy and effort into creating a resource.

 

Empowered learning is a trap, primarily because the task of a growth company is to aggressively overtake market opportunities, and in the process scale its management and systems, restructure its organizational model, and re-establish a new company culture.

 

Plus, all that you are hoping to learn on your own (mostly hoping to avoid delegating responsibilities and/or leadership to a better person), is already available in the form of hard-learned wisdom of experienced people, and mentors. In the world of growth companies, you do not get a generational gap when it comes to mentoring and leading startups into the growth phase.

 

Hence, my first advice: Avoid wasting your time, efforts, and finances, on your amazing idea — on your own, or with the aid of a lousy team.

 

Build a team of executives, from scratch. By doing this, you can dramatically reduce your time to arrival at your expected destination.

 

This post is about aiding you build from scratch a team of executives capable of handling the complex territory into which your growth company is moving into, or you want to move into. Here’s a 5-tier plan for putting together your executive team:

  1. Figure out roles
  2. Recruit
  3. Measure performance / quality of team
  4. Identify gaps
  5. Debate the right structure

 

Let’s get started shall we?

Figuring Out Roles and Positions

 

When it comes time to hire an executive team, there are certain roles that you have to find the right people. Here are three prime roles you should be scouting:

 

Chief Executive Officer (CEO) — The two facts of the matter are: that the CEO is the boss of everyone and is responsible for everything, and that Founders cannot always be the CEO as the startup moves into the growth phase.

 

If you’re mired in the day-to-day details of the business and can’t yourself out, then you know you need a professional CEO. A CEO thinks about where the organization is going, where it has to go, and hence the people and processes that are needed to get it there while wading through the current market.

 

 

Chief Financial Officer (CFO) — CFO is the guy that handles the money. She/he creates your budgets and develops financing strategies so you can stop moping about not getting the latest upgrade on your servers. The CFO is that bad guy busy figuring out the most profitable products, business lines, and target audience to get that server upgrade next year. Avoid wasting your money, try moping, and hire the right CFO.

 

Chief Marketing Officer (CMO) — If you haven’t noticed yet, many startup battles are battle of marketing. As a result, many startup strategies are hinging on their marketing strategies. Hence, if your business’s success depends primarily on marketing, then you need to hire a CMO — the guy who owns the marketing strategy (and at times the sales strategy), and overlooks its implementation.

 

Mike Zammuto Meeting

CEO Michael Zammuto leading an internal meeting at Reputation Changer in West Chester, PA in 2013

The Required Skill-sets

 

One of the biggest mistakes startup founders make is that they assume that a title comes with self-explanatory job descriptions. You might think that it would be pretty self-explanatory that a Chief Marketing Officer should be a person would be someone with strong marketing skills. The job description varies from industry to industry and business to business e.g. B2C vs. B2B, marketing vehicles, etc.

 

It is your job to make sure that you are hiring someone who has (first and foremost) experience in successfully scaling up a business in your category (budget, tactics, etc.), and secondly has a deep knowledge of your specific industry.

 

Past Startup Experience

Know your budget, and hire accordingly. An experienced CMO who has had experience in scaling/leading a company with a $2 billion budget is highly unlikely to be able to lead a start-up with a budget $10 million.

 

A person involved with building big brands may not see organic and guerilla tactics (take viral as an example), and various low-budget engagement marketing opportunities (e.g. SEO, social media, responsiveness) in as bright a light as the SME niche might be seeing. She/he is also highly unlikely to make them as a major part of their marketing strategy.

 

You should be looking for someone who has demonstrated past success in leading early-stage businesses, operated a budget “on fumes”, and lead it from an “acorn into an oak”.

 

A Shared Vision

 

You are hiring someone to aid your startup achieve its goals founded on a vision for your business. You may be grateful to them for expanding that vision, but not changing it or creating frictions as your startup starts to scale. The growth phase is known to be tumultuous and the last thing you want on your plate are executives bent on leading the company in a completely different direction.

 

Hence, an equally important trait you should be looking for is that each member of your team shares a consistent vision on exactly what you are building. This ranges from the target market, and target audience, to the market dynamics you are hoping to engender through your startup.

Personality Fit With Team

 

Accept it, deny it, hide it, or try to make it as politically correct as we may, the truth of the matter is that startups are a 24/7 job.

 

So, you are going to be spending a lot of time with the team you have hired. This makes it critical that you find a candidate who has a good personality fit between the team. You seriously don’t want someone who gets on your nerves late into the night, or worse someone with whom nobody wants to work with.

You’re trying to win a startup race. You seriously don’t have time to work around this issue.

 

Surround Yourself with Mentors

 

Surround yourself with individuals who are much more experienced than yourself. It is important that you hire people who would empower you and the company to dramatically grow and succeed.

 

Here’s the deal: identify the people which you believe have (and can give you) what you need. Reach out to them, or gain an introduction and invite them to coffee or a lunch. On the occasion, briefly explain to them what you are doing, and ask them relevant questions. Once the conversation is over, ask them for a another follow-up meeting after 2-3 months.

 

Follow up, and you will automatically fall in the select few who have ever done that, and as a result would have shown them that you are interested in the matter.

 

Conclusion — The Importance Of Quickly Letting People Go

 

I’ve already discussed the importance of employing topgrading as an essential hiring device for the executives http://michaelzammuto.com/?p=101, but once again, nothing is more detrimental to the cohesion and optimal working go your team if people aren’t working at top performance.

 

Hence, it is important for you to keep the strategic vision of the company in check by continuously grading them with feedback, frequent job performance appraisals and immediate and proactive response in case someone is not working up to par with the performance needed of them — in a phrase let them go.

 

In the end, while you are building this team, remember that to be empowered, you yourself have to acquire a practical and growth oriented attitude — a defining character allowing you to make the decisions required of you. (Here is a good starting point for this: HBR’s article on Building Personal Character.)

 

I wish you all the best!