Traversing the Traction Gap
Page 24
According to a recent article posted in The Atlantic, “Liberal-arts majors are two to three times more likely to be underemployed than those with engineering or nursing majors.” The article goes on to states: “The gap between humanities and STEM students is striking. Underemployment afflicts more than 50 percent of majors in the performing arts, anthropology, art history, history, communications, political science, sociology, philosophy, psychology, and international affairs.”
Yet the US is envied the world over for its creativity, individualism, and innovation. These are precisely what the liberal arts foster. Until now, there have been few programs focused on liberal arts majors—or anyone who is creative and articulate—to make them “job-ready.” GreenFig’s microeducation program has been designed to address this problem.
GreenFig is focused on people who possess critical thinking skills with a desire to learn and who want to become business scientists. A business scientist possesses “digital literacy” and understands how to capture, analyze, and utilize customer, financial, market, and product data. People who have gone through a liberal arts program are ideally suited to become business scientists and fill the positions of the 21st century.
Reskilling the world for the digital economy was a topic among everyone at the World Economic Forum in Davos in 2016. Helping veterans transition back to civilian life, helping women return to the workforce after child-rearing, helping liberal arts students get great jobs: we have created something that is really impactful.
GreenFig’s unique focus on job-readiness—in less than 200 hours—and reskilling the workforce to operate the “soft machinery”—business application software—has been tried and tested, and has delivered proven results over the past 2 years.
Key Words
The following are key words and terms that we need to use to reinforce GreenFig’s thought leadership and differentiation:
Soft Machinery—business application software to “power” the digital economy, which relies upon systems of intelligence and significant sources of data. Contrasted against the “hard machinery” (factories, physical machines) that powered the industrial economy that relied upon significant sources of capital.
Business Science—the “scientific method” uses observation, facts, metrics, and experimentation. “Business science” uses the scientific method to analyze and respond to business transactions and results across all business functions, including but not limited to: customer success, marketing, products, sales, sales operations, service, and support.
Key Words
(cont.)
Business Scientists—people who are skilled in business science and fill key roles in companies of all sizes. Business scientists understand how to capture, analyze, and utilize customer, financial, market, and product data.
Applied Business Science—The act of developing and applying business strategy and tactics using the tools of business science—business application software.
Microeducation—A new education category defined by:
Job-ready talent with microdegrees in applied business science in less than 200 hours
Accelerated experiential learning from a hybrid training delivery model—using live, interactive online and offline team-based learning
Hands-on, real-time business application software instruction from industry experts
Work experience gained through real-world projects mentored by industry experts
High-demand certifications from industry-leading business application software providers
Selective application process biased toward people who are motivated to learn
Intimate collaboration and networking among students, instructors, and industry experts
Microeducation—A new education entity that participates in the “microeducation” category.
Microdegree—A student achieves a microdegree when the student successfully masters the material presented in a microeducation course. More importantly, GreenFig’s microdegrees prepare students to take an exam leading to a certificate of proficiency by industry-leading business application software providers such as Marketo and Salesforce. This is what employers are looking for: there are tens of thousands of open jobs for people with these skills on jobsites such as Glassdoor.com or Indeed.com.
Job-Readiness—GreenFig is laser-focused on making its graduates “job-ready” by providing a combination of strategy/concept training, skills training (industry-leading business application software), real work experience on real projects, and proficiency certification through “micro certificates” that are endorsed by industry-leading business application software providers.
ENDNOTES
CHAPTER 1
1. (For Figure 2:) Cartoon, “Then a Miracle Occurs…” Used with the permission of ScienceCartoonsPlus.com.
2. (For Figure 3:) Danielle Morrill, “Founder Competition for Series A Deals Is Fierce, Due to Record Number of Seed-Funded Startups in the Funnel,” September 8, 2015, https://mattermark.com/founder-competition-for-series-a-deals-is-fierce-due-to-record-number-of-seed-funded-startups-in-the-funnel/.
3. Wildcat Venture Partners.
4. Andreessen, “Product/Market Fit,” posted June 25, 2007, https://web.stanford.edu/class/ee204/ProductMarketFit.html.
CHAPTER 2
1. Kurt Schroeder, “Why So Many New Products Fail (and It’s Not the Product),” posted March 14, 2017, The Business Journals, https://www.bizjournals.com/bizjournals/how-to/marketing/2017/03/why-so-many-new-products-fail-and-it-s-not-the.html.
2. Geoffrey Moore, “A Quantum Theory of Venture Capital Valuations,” posted February 7, 2017, https://www.linkedin.com/pulse/quantum-theory-venture-capital-valuations-geoffrey-moore/.
3. (For Figure 10:) Crunchbase, https://www.crunchbase.com/organization/vlocity#section-investors.
CHAPTER 3
1. Interview with Monte Zweben conducted by Velocity Group on behalf of Wildcat Venture Partners, 2017.
2. James Nunns, “He Said What? 5 Things Larry Ellison Actually Said about Cloud,” Computer Business Review (April 27, 2015), https://www.cbronline.com/cloud/he-said-what-5-things-larry-ellison-actually-said-about-cloud-4563323/.
CHAPTER 4
1. CB Insights, “269 Starup Failure Post-Mortems,” August 13, 2018, https://www.cbinsights.com/research/startup-failure-post-mortem/.
2. (For Figure 14:) CB Insights, “The Top 20 Reasons Startups Fail,” February 2, 2018, https://www.cbinsights.com/rsearch/startup-failure-reasons-top/.
3. All content from Patrick Campbell’s blog (including Figure 15 and Figure 16) sourced from Patrick Campbell, “Customer Research Benchmarks,” ProfitWell (May 29, 2018), https://www.profitwell.com/blog/customer-research-benchmarks.
4. Quotes in this and the following paragraphs come from, Mat Honan, “Remembering the Apple Newton’s Prophetic Failure and Lasting Impact,” Wired (August 5, 2013), https://www.wired.com/2013/08/remembering-the-apple-newtons-prophetic-failure-and-lasting-ideals/.
5. EMC Digital Universe, “The Digital Universe of Opportunities: Rich Data and the Increasing Value of the Internet of Things,” April 2014, https://www.emc.com/leadership/digital-universe/2014iview/executive-summary.htm.
6. All quotes of Sean Ellis are taken from his interview with the Wildcat Venture Partners team.
7. Suite Seven, “The Ultimate Guide to Discovery Interviews,” http://suiteseven.com/wp-content/uploads/2014/10/DiscoveryInterviews_SuiteSeven.pdf.
CHAPTER 5
1. Holley Malia, “The Components of Becoming a Category King,” posted June 24, 2017, Brey Matter Marketing, https://www.greymattermarketing.com/blog/the-components-of-becoming-a-category-king.
CHAPTER 6
1. Source: Amplero. Used by permission.
CHAPTER 7
1. (For Figure 28:) Neeraj Agrawal, General Partner at Battery Ventures, “The SaaS Adventure,” TechCrunch, https://techcrunch.com/2015/02/01/the-saas-travel-ad
venture/.
2. (For Figure 29:) OpenView Venture Partners https://cdn2.hubspot.net/hubfs/366266/Expansion%20SaaS%20Benchmarking%20Study%20-%20Full%20Report.pdf.
3. Kaiser Mulla-Feroze, The Missing SaaS Metric: Customer Retention Cost Report, Totango, https://drive.google.com/file/d/1x4koxaW12aIM-lxeZ0uxk6cMNqaFBxb0/view.
4. Gregory Ciotti, “7 Things You Must Understand When Leveraging Social Proof in Your Marketing Efforts,” https://neilpatel.com/blog/social-proof-factors-2.
5. Mike Maples, quoted in “The Secret to Making Board Meetings Suck Less,” First Round Capital Management Magazine (2013), https://firstround.com/review/The-Secret-to-Making-Board-Meetings-Suck-Less/.
6. (For Figure 31:) First Round Capital, http://firstround.com/review/The-Secret-to-Making-Board-Meetings-Suck-Less/.
ACKNOWLEDGMENTS
Writing this book required about a year from start to finish, primarily because I had to do it evenings and weekends. The reality, though, is it took more than thirty years, as a member of the technology community of Silicon Valley, for me to accumulate the knowledge and experience I needed to write it. And none of this would have been possible had I not interacted and worked with some incredibly talented people, many of whom have transformed the world we live and work in.
■
WILDCAT VENTURE PARTNERS
I owe a deep debt of gratitude to the current and former members of the Wildcat Venture Partners team who provided input and content, performed entrepreneur interviews, offered feedback, and the like. Specifically, thank you: Katherine Barr, Liz Burstein, Bill Ericson, Laura Evans, Abhas Gupta, Nathaniel Krasnoff, Amanda Maestri, Geoffrey Moore, Bryan Stolle, Brett Teele, Jennifer Trzepacz, and Phyllis Whiteley. And, additional thanks to Jennifer for her wonderful project-management skills, Amanda for her graphics skills, and Laura for her interview skills—each of you put in a significant amount of extra effort to help bring this book to life.
When I first introduced the Wildcat team to a very nascent Traction Gap Framework, they immediately saw its value and helped to further develop the key concepts and introduce them to the startup community. Without the Wildcat team’s encouragement and support, it would not have been possible to produce this book. Thank you all! You are a great team and I’m proud to be a member of it.
Tom Siebel, former founder, Chairman, and CEO, Siebel Systems; and current founder, Chairman, and CEO, C3
It is difficult to put into words how much I have gained through my professional relationship with Tom Siebel. It began when Tom hired me into Oracle when it was a small private company, and then brought me into Siebel when it too was a small startup. Over the course of ten years, I served as a member of Tom’s executive team as the head of marketing, head of alliances, and ultimately head of products. Many of the concepts I share in this book are lessons I learned working for Tom.
Pat House, cofounder and former Vice Chairman, Siebel Systems, and current Vice Chairman and cofounder, C3
Pat is one of the finest marketers and technology executives to come out of Silicon Valley. Few people understand that a lot of what enabled Siebel to grow to a $2B revenue company and $50B in valuation in only five years from startup is due to the contributions of Pat. Before Sheryl Sandberg or any of the other notable women in tech today, there was Pat House. Thanks for teaching me how to be a marketer, Pat. Someday I might be half as good as you.
Flip Gianos, GP, InterWest Partners
Flip convinced me that I should try out venture capital and taught me a lot about how to be a venture capitalist. One of the key principles Flip taught me was: “Do good deals.” I haven’t always succeeded, but I’ve done my best to follow that advice, Flip.
Doug Pepper, GP, Shasta Ventures
Doug and I made the investment in Marketo together, and we both served on its board for many years. Along the way, we became more than business colleagues: we became friends. Doug, in fact, is the one who gave me the idea for the Traction Gap. I might have twisted the meaning and taken it a bit further than he might have imagined, but Doug deserves the credit for inspiring me.
Phil Fernandez, Jon Miller, and Dave Morandi, founding Marketo Team
Marketo was one of my very first investments as a venture capitalist. Thanks, Phil, Jon, and Dave, for letting me be a part of your amazing journey. You accomplished exactly what you set out to do: you permanently transformed the role of marketing and the role of the CMO. What an extraordinary feat. Some of the lessons I learned from that experience have found their way into the Traction Gap principles.
Christopher Lochhead, coauthor of Play Bigger and former Silicon Valley Tech Executive
Chris, thanks for helping the Obo team and me come up with the concept and definitions—the Fro/Tos—of what it means to be “market-first,” one of the key Traction Gap principles. The “Play Bigger” process we went through when you hosted us at your awesome home was just outstanding. Here’s to dinosaurs roaming the earth, my friend.
Geoffrey Moore, author and venture partner, Wildcat Venture Partners
Geoff, thank you for encouraging me to write this book. I can only hope it has a tenth of the positive influence you have had over the entrepreneurial community.
Michael Eckhardt and Paul Wiefels, The Chasm Group
I want to thank you two for helping me to brainstorm the ideas around the Traction Gap Framework and its principles. Your feedback was instrumental in my thinking. Michael, you coined the term “Minimum Viable Traction” when I was standing at the whiteboard and couldn’t immediately come up with a suitable name for the last Traction Gap value inflection point. It sounds so obvious now. Thank you!
Michael Malone, author
Mike, you took my ramblings and turned them into entertaining prose. I really appreciate all the help and advice you provided me—and the prodding—to complete this project. I definitely couldn’t have done it without you.
■
CEOS/FOUNDERS/ADVISERS
A big “Thank You!” to the following people who provided their input, thoughts, and advice to me and the Wildcat team: Tom Chavez, Andrew Chen, Tim Eades, Sean Ellis, Ben Faw, Ed Fields, Harley Finkelstein, Russell Glass, Fred Goff, Athani Krishna, Blaire Krochak, Nathan Latka, Chris Lien, Jamie Miller, Tom Mohr, Megan Niedenthal, Aidan O’Brien, Mark Organ, Kathryn Petralia, Bill Portelli, Amy Pressman, Rajesh Ram, Dale Sakai, Andrew Salzman, Vivek Sharma, Gurjeet Singh, Hari Subramanian, Tom Tunguz, Randall Ussery, Matt Wallach, Bob Wiederhold, David Yarnold, Dave Zabrowski, and Monte Zweben.
Again, thank you all for investing your valuable time by providing feedback on the manuscript, or sitting through the interviews and providing answers to questions about facts long forgotten.
■
ROBIN CLEVELAND
I want to thank Robin, my wife, mother to Blaire and Megan and “Nonna” to Georgia, Aubrey, AJ, Nat, and Alex. Thank you for putting up with me for all these years, and especially over this past year while this book was coming together. Your willingness to listen and provide constructive feedback along with offering creative insights during our hour-long walks several times each week was indispensable.
■
JERRY AND ANN CLEVELAND—DAD AND MOM
You provided me with a happy home and strong values growing up. These values continue to serve as my life compass. I can’t say that I’ve always followed the right path initially, but I have always found my way back accordingly. I miss you both very much.
■
FRIENDS AND BUSINESS COLLEAGUES
And, finally, I want to thank my friends and business colleagues who have had such a positive influence on my life. I am, at the core of it, the sum of those collective interactions. Thank you for being a part of my life and helping to shape it.
INDEX
a
A/B testing, 100, 131–133, 156
Adobe, 152, 204, 217
Agrawal, Neeraj, 217–218
Aingel, 178
AirPR, 1
41
Allen, Robert G., 154
Allied Signal Corporation, 177
Amazon, 97, 120
Amplero, 31–32
Andreesen, Marc, 20
Annual Contract Value (ACV), 43–44, 212–213
Annual Recurring Revenue (ARR), 43–45, 219fig29, 222
Apple, 4, 77, 80, 104–108, 144, 152
Apple Newton, 105–108, 105fig17
Applied Business Science, 78–79, 164–166
Architecture Pillars
and capital, 46
and Ideation, 53fig8
and IPR, 124fig21
and MVC, 85fig13
and MVP, 161fig23
and MVR, 202fig26
and MVT, 229fig30
overview, 22–30, 22fig5
and Revenue Architecture, 187
and Team Architecture, 174
and Traction Gap, 246–248
B
B2C startups, 24–25, 189–191
Bain & Company, 150
Baird, John, 230
Barr, Katherine, 265
Battery Ventures, 217
Benioff, Marc, 67–70, 163–164, 205
beryl.cc, 115
Bessemer Ventures, 220
Blake, Adam, 94
Blank, Steve, 5, 17–18, 90, 117, 192
Blue Martini, 69–70
Board pack, 233fig31
Bossidy, Larry, 177
Bottom of the Funnel (BOTF), 25, 25fig6
Box, 81, 204
Branson, Richard, 246
BRAVE, 115
Brooke, Emily, 115
Burstein, Liz, 265
Business-to-Business (B2B), 24–25, 25fig6, 203–205
Business-to-Consumer (B2C), 189–191
C
C3, 4, 97, 266
Caan, James, 115
Campbell, Patrick, 94
Capital expenditures, 49–50