One of the things I tried at CCAW was performance marketing. Think Google Search ads, Facebook ads, Instagram ads, etc. I never had true success with it. I went as far as hiring five or so MBA and undergraduate interns from Emory to help me figure it out. The result after their project and our own internal testing was the same: It was too expensive. The amount we had to pay Google, Meta, etc. for a click was so high that it wiped out all our profits. We weren’t selling subscription products, so we had to be first-order profitable, which wasn’t possible (in a scalable way) using those platforms.

I’m helping a friend with his new start-up, and it’s becoming increasingly clear that performance marketing will need to be part of the marketing strategy. From my preliminary research, I’ve found that the performance-marketing landscape has changed drastically in the last two or three years. Several factors are involved, but I think one of the biggest is that the algorithms these platforms use to decide which ad to show to which user have made the ads much more effective. The introduction of new ad platforms is also a game changer for performance marketing.

It’s still early, but I’m intrigued by what I’ve seen so far and want to learn more about the new reality of the performance-marketing world.

As I’ve shared over the last few weeks, I’m helping a friend work through logistics and operational challenges at his scaling start-up. The company sells physical products, so my experience running a company that sold physical products has been useful. And I’m getting something I hadn’t planned on: a front-row view of the launching of a new brand via marketing. Marketing is my weakest area, and I want to understand it better. Working with my friend, I’m seeing how he’s using various marketing strategies to launch his latest product. It’s been cool to see the step-by-step, day-by-day actions and thoughts that led to results that have exceeded all our expectations.

I’ve learned a lot about new-age marketing so far and am looking forward to learning more.

I know several Atlanta entrepreneurs who made fortunes selling marketing technology companies. Think email marketing workflow, automation, etc. They nailed the timing because two major trends were happening at the same time. Software as a service (SaaS) was gaining traction thanks to cloud computing pioneer Amazon Web Services. And after the global financial crisis when companies were looking for inexpensive ways to market to customers, email was a perfect option.

The more I talk with people on the marketing front lines, the more I see that marketing is undergoing a huge shift again. I’ve been introduced to several factors, and  I’m trying to get up to speed on them. But even with my current shallow understanding, I can tell that the combination of these factors is upending how companies market to customers. It seems that a convergence of factors is creating white space. There isn’t any technology that helps marketers create, execute, and measure the latest marketing strategies. It’s all very manual, piecemeal, and painful.

Marketing is a requirement for all businesses because customers have to know about you. That means the shifting marketing landscape must be causing pain for a ton of people. Translation: a huge market opportunity.

I suspect we’ll see a new crop of marketing technology–focused entrepreneurs capitalize on the changing landscape. They’ll come up with new solutions that create, execute, and measure efforts in this new marketing landscape, and they’ll build massive companies in the process.

This week, an entrepreneur said something that stuck with me. He believes that marketing is an accelerant, meaning that whatever was going to happen anyway still happens, but faster. His caveat: it cuts both ways. If a company’s product or service is great, marketing pulls forward the number of people who buy and enjoy it. It accelerates building a positive reputation and a loyal customer base. If a company’s product or service isn’t great, it pulls forward the number of people who dislike it. It accelerates how fast the company builds a negative reputation and the number of people who don’t want to buy what the company is selling.

His point was that marketing can do a lot, but it can’t save you from a bad product or service. He suggests that before beginning to market heavily, you should make sure that what you’re marketing is something of quality. If you market a subpar product or service heavily, you could be accelerating the demise of your company.

This week, I had a conversation with a good friend about the power of community. He’s an entrepreneur in a traditional industry and is looking for ways to increase awareness of his brand and the products he sells. He’s got good marketing ideas that follow what others in his industry have done successfully.

I introduced the idea of building a community around his product: First, create an audience of people who love the product for a deeply personal reason (i.e., it helps them solve a problem they care deeply about). Then, hopefully, convert some percentage of that audience into a community of people who will engage with each other (with some guidelines and light moderation).

I like this idea because it leans into a key market concept: word of mouth is the best form of marketing. People in a community love talking to one another and will invite other like-minded people into the community. They share what they’re doing in the community and how the community has helped them. This all helps knowledge of the brand and product spread via word of mouth.

I also like the idea of community because it creates a moat, or competitive advantage. When you have a community of people who’ve bought into a brand or product, they don’t want to leave the tribe they’re a part of, so it’s less likely they’ll leave or switch brands or products. Community makes customers stickier and creates a moat that’s hard for competitors to replicate.

Lastly, I really like community because it’s a great way to keep a finger on the pulse of what your target customer thinks of your existing products, learn about ideas for new products, and spot early trends you can capitalize on. It’s a great feedback mechanism and a way to stay connected to customers in an organic way, which leads to product improvements and new products that keep your customers loyal.

All in all, I’m a fan of companies leaning into creating communities, especially when they’re in slow-moving or antiquated industries.

This week I had lunch with a group of entrepreneurs. One of them, a CEO, had a pressing issue he wanted input on. He had a few million in revenue and was having trouble finding a firm to handle his company’s marketing. They all pitch the same strategy, which doesn’t resonate with him. He’s frustrated and wanted to know what other founders have done to get their marketing efforts off the ground.

When clarifying questions were answered, we learned that the CEO’s focus has been solely on outsourcing the marketing function to an agency. He wants to achieve a specific output or goal and wants an agency to figure out how to do that.

The feedback from founders centered on two points:

• You can’t outsource marketing entirely. It’s hard for an external company to develop a strategy when they don’t have a great understanding of your customer or the problem(s) you solve for your customers. Some founders have had success hiring a full-time marketing leader, who developed the marketing strategy and outsourced some tactical work to agencies. The function and strategy were owned internally by a full-time company employee.
• Deep understanding of the customer, their problem, and their journey lives with the CEO. It’s the CEO’s job to get others in the company to understand those things too and, in the case of marketing, to create appropriate strategies. The CEO can hand his or her understanding off to marketing, but it’s not realistic to expect marketers to develop that understanding and the messaging around it.

I’m no marketing savant, but I’m actively learning to understand it better. Based on my past mistakes and what I’ve read from marketing thought leaders, I agree with these points.

The feedback was useful to the founder with the problem, who walked away thinking differently about marketing. Instead of outsourcing, he’s now considering finding someone to lead his marketing strategy. He’s also thinking about how to convey his deep understanding of the customer’s journey on day one to his new marketing lead so he can set them up for success.  

A friend sent me a link to an OpenAI press release (see here). This past week, OpenAI held its developer conference, where it shared new products and technical capabilities. The press release announced the launch of apps in ChatGPT. Developers can now use a new apps software development kit (SDK) to allow users to access external apps from within ChatGPT. What does that mean exactly? Zillow is one of the launch partners. If you’re using ChatGPT to ask residential real estate–related questions, ChatGPT can access the Zillow app and use data from Zillow to enhance your ChatGPT session. In short, you’ll soon be able to access your favorite apps from ChatGPT.

Why This Matters

ChatGPT has 800 million active weekly users, according to Sam Altman (see here). Getting exposure to that number of potential customers is a huge opportunity for companies.

ChatGPT users can ask for third-party apps by name (e.g., “pull in Zillow data”). But ChatGPT will also recommend apps based on a user’s questions, which are a signal of intent. High intent increases the probability that someone will use and get value from a third-party app (say, Zillow) when it solves a pressing problem or answers a pressing question. Intent-based discovery is a big opportunity for other companies to find new potential customers via ChatGPT.

This all just happened this week, but if ChatGPT executes this well, it could create an app ecosystem that helps tons of third-party app companies acquire new customers when the customers most need what the companies have to offer.

This week, I had a conversation with an entrepreneur who’s considering closing his business. The business breaks even or runs at a slight loss most months. When someone is considering closing a business, I wonder why, so I asked.

This entrepreneur has had his business for about a decade. He’s no longer excited by it and hates the thought of going back to being involved in its day-to-day operations. He’d rather spend his time on new entrepreneurial pursuits, which he’s already doing. This makes sense to me. Around the decade mark with my company, I began to lose enthusiasm and remove myself from certain aspects of the operations. I’ve heard other entrepreneurs share similar experiences.

Next, I wanted to understand the issue with the business. Why wasn’t it generating a profit? Operationally, it’s running smoothly with a small team. The work gets done as expected and customers are happy. But they’re not getting enough customers through the door to generate the revenue needed to turn a profit. I asked how they acquire customers and let customers know they exist. It turned out that the entrepreneur hasn’t done any marketing in a few years. He did big marketing pushes years ago, which were successful, and he’s been coasting on word of mouth ever since. But word of mouth is dwindling, and the result is fewer customers.

Marketing is just like other business functions, with one important difference. When you stop operations, you notice immediately because the work isn’t getting done and customers are mad. When you stop marketing, you often don’t see the impact right away. Awareness of your business gradually declines. Revenue gradually declines. One day, you realize you don’t have enough business.

I told this entrepreneur that it seems like he’s got a marketing issue. If he can dedicate himself to a few months of restarting his marketing function and incorporating metrics that quantify his return on marketing spend, he’ll likely see a profit again in a few months. Instead of closing the business, he’ll have a good shot at getting marketing running smoothly without him—just like the rest of the business—and then selling the business. Instead of getting nothing and walking away, he may be able to sell it, get a nice chunk of change, and pursue his new entrepreneurial ideas with a clear mind and capital to fund them.

A few months ago I met with an early-stage founder about his growth strategy and his messaging. He hasn’t found messaging that attracts his ideal target customer profile, so he isn’t growing at the rate he’d like. We discussed some ideas and his current sales pipeline. He told me about a new outbound sales strategy that wasn’t part of his original plan, but it’s working. He’s working with a company that specializes in providing sales development representative (SDR) services to clients who don’t have dedicated SDRs or sales teams. It finds prospective customers, does cold outreach to them, and sets up demos on behalf of its client companies. It gets paid only when it books demos with prospective customers that it sourced. Said differently, it eats what it kills.  

This founder is having early success with this firm. I wondered how this SDR firm is finding the right type of prospective customers. What messaging is it using? Turns out, the founder had given it high-level information about the problem he’s solving and the solution he built. He instructed it to come up with fresh messaging that it believed would be effective in landing demos. The firm created new messaging based on what the founder provided.

Creating messaging is hard. Founders and their teams who’ve been in the weeds working on a product for months or years may struggle to come up with great messaging because they’re too close. It may be challenging for them to view things from the perspective of someone unfamiliar with their company or solution.

Working with an outside firm whose incentives are aligned with yours but that brings a fresh perspective is an interesting hack to get better messaging. You both want the same thing—more sales—but it’s able to see your solution from a perspective you can’t, which enables it to create on-target messaging easier than you or your team.

It sounds counterintuitive, but the more I think about it, the more sense it makes. An outside sales firm will take what you’ve built and explained to it and come up with simple messaging that’s more effective because it understands the outsider’s perspective (that is, the customer’s perspective!) better than you or your employees do.

This early-stage founder may have found an interesting way to solve his messaging problem in a cost-effective way. He pays only when good messaging created by an outside firm leads to demos with prospective clients. He doesn’t have to pay one firm to create the messaging and another to book the demos. He’s getting a two-for-one deal.

This week, I chatted with a CEO who has a software solution that’s been on the market for a few years. The product is both powerful and complex. It does a lot of things, which is both a gift and a curse. Earlier this year, he was struggling to get traction. This week, though, he shared that things are trending up rapidly; they’ve landed over 10 new customers, each paying roughly $25k a year.

So, what changed? Two things:

• The messaging changed from describing what the product does to describing the problems it solves.
• The company identified several problems that their core customers face and that their solution addresses. Instead of cramming them all on one site, they created a stand-alone site for each problem. Prospective customers with a particular problem can learn more about how this software solves that problem, and they can sign up and try it for free.

All this happened in a two- or three-month period. They didn’t build more stuff; they just focused on the customer’s problems and made it crystal clear, via better messaging, how they solve each of them. Perspective customers now have an oh, that’s for me moment when they visit the site and are converting to paying customers.

Having a great product that solves a problem is critical, but so is the messaging you use to tell the world about what you’ve built.