The Ultimate Start-Up Guide: Marketing Lessons, War Stories, and Hard-Won Advice from Leading Venture Capitalists and Angel Investors

211 Pages·2017·2.04 MB·English

by  Tom Hogan

Praise for The Ultimate StartUp Guide
“Any first-time entrepreneur who wants to get the fundamentals of team,
diversity, and leadership right from the very beginning of their startup should
read this book.”
—Fran Hauser, angel investor
“For the many thinking of starting their own companies and others already on
the journey, Tom and Carol’s book is a great read filled with pragmatic,
customer-centric advice and a wealth of tips and techniques. Heartily
recommend!”
—Siva Kumar, serial entrepreneur, founder and CEO, The Find
THE ULTIMATE START-UP
GUIDE
MARKETING LESSONS, WAR STORIES, AND
HARD-WON ADVICE FROM LEADING
VENTURE CAPITALISTS AND ANGEL
INVESTORS
TOM HOGAN AND CAROL BROADBENT
Copyright © 2017 by Tom Hogan and Carol Broadbent All rights reserved under
the Pan-American and International Copyright Conventions. This book may not
be reproduced, in whole or in part, in any form or by any means electronic or
mechanical, including photocopying, recording, or by any information storage
and retrieval system now known or hereafter invented, without written
permission from the publisher, The Career Press.
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Cover design and images by Ty Nowicki
Cover illustration by filo/istock
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A Note of Thanks
ONE OF THE NICE THINGS about writing a book is the opportunity it provides you
to acknowledge and thank the people who helped make it possible.
Silicon Valley and the tech world in general have often been accused of being
extremely self-centered. But when we set out to write this book—and knew it
needed to include the thoughts and stories of our clients and VC partners—we
were surprised to find that virtually everyone we approached to participate said,
“Sure, how can we help?” And then they made time in their schedules and came
back to us later with thoughts that had occurred to them post-interview. We’re
very grateful for their participation and insights.
Special thanks to some of the pals of Crowded Ocean who lent us their
critical eye and extra input. That’s Anne Janzer, Vito Palermo, Steve Baloff,
Jennifer Melwani, Ryan Vong, and Ram Gupta.
One company and one individual that we need to call out in particular are
Sumo Logic and one of its founders, Christian Beedgen. When we envisioned
this book as a collective of sequential chapters around common steps in the start-
up process, we thought it would be of benefit to our readers to take one company
and follow it through this entire process. Sumo was our first choice, and we were
delighted when Christian agreed to participate in the project. He met with us,
shared the Sumo story (its ups and downs), reviewed the copy, and hopefully put
flesh and bones on our different topics with his real-world examples. Thanks,
Christian.
Finally, we would like to acknowledge and thank the people who make our
worlds go round. Carol would like to thank her daughter Hannah Fields and best
pals Donna Schlimm and Jean Dana. And Tom would like to thank the four
women in his life: his mom, Peggy Hogan; his wife, Pamela Pearson; and his
two daughters, Rachel and Maya Hogan.
Thanks to you all.
Contents
Introduction: Who the Hell Do We Think We Are?
1. The Four-Legged Stool: The Crowded Ocean Formula
2. Repeat After Us: “I Am Not Steve Jobs”
3. Failure (Part 1)
4. The Idea
5. Laying the Foundation
6. Building the Team
7. From Blueprint to Construction
8. VCs and Consiglieres
9. The Pitch and the Ask
10. Funding
11. Equity
12. The Website
13. Public Relations
14. Social Media
15. The Launch
16. Avoiding PLD (Post-Launch Depression)
17. Sales 101 (Early Stage)
18. Sales 202 (Later Stage)
19. Demand Generation and Systems
20. Content
21. Failure (Part 2)
22. Boards
23. Endgame
24. Repeat After Us: “I Could Be the Next Steve Jobs”
Index
About the Authors
Introduction
Who the Hell Do We Think We Are?
PEGGY HOGAN (TOM’S MOM)
WHY THE HELL WOULD ANYONE WANT TO READ A BOOK BY
YOU TWO?
CROWDED OCEAN (AFTER SOME THOUGHT)
LET US GET BACK TO YOU ON THAT ONE.
NINE OUT OF 10 STARTUPS FAIL within their first 24 months of operation. We
should know: we were one of them.
Crowded Ocean, like many startups, failed in its first incarnation. We had an
interesting idea (detailed in a later chapter), but opened our doors the same week
that Lehman Bros. collapsed in 2008, bringing the market crashing down with it.
We soldiered on for almost a year with our original idea, but never had a chance.
In fact, we didn’t make a single dollar that first year. Let us repeat that: not one
dollar.
Rather than fold our tents, we regrouped and took a hard look—first at the
market, then at ourselves. We filled our whiteboard with different concepts
targeted at different markets. Then, one evening over beers from our office mini-
fridge, taking a break from the whiteboard exercise, we were reminiscing about
our days as VPs of marketing (Carol at Aspect and Bay Networks, Tom at
VitalSigns and Lucent) and how hard it was to find good agencies.
Remembering conversations with our former peers who were now CMOs, it was
clear that not much had changed during the intervening 10 years. And at that
moment Crowded Ocean 2.0 was born. The concept was simple: we would build
the kind of agency we and our peers had always wished we could have found
when we were heads of marketing.
That idea by itself wasn’t either unique or that compelling—we needed to do
something that ensured that we weren’t pigeon-holed as “just another agency.”
We decided to distinguish ourselves in two ways: structure and target. For the
first one, instead of being another large brick-and-mortar agency filled with
headcount and overhead (for which we would have to bill our clients), we would
headcount and overhead (for which we would have to bill our clients), we would
be a “virtual” or “just-in-time” agency, with no employees. For our target
audience, we would focus exclusively on the most underserved audience in the
market: startups. Our business objective (we hate the term “mission”) was clear:
to build the ultimate marketing agency for startups.
Six years and 42 startups later, we’ve been asked by some of our VC (venture
capital) partners to put down the lessons we’ve learned into something that can
be shared with first-time founders. You’re holding the results in your hands—or
on your screen.
A word about the title: when you title anything beginning with The Ultimate,
either you’re delusional or you better be able to back that claim up with hard
evidence. We hope it’s the latter, but you be the judge.
We want The Ultimate StartUp Guide to be a go-to resource for startup
founders, would-be entrepreneurs, and anyone interested in the startup world in
general—a resource they can go to for insights, examples, and advice about
starting and growing their own company.
So let’s consider those three terms—insights, examples, and advice—in
order, along with some of that “hard evidence” we referenced earlier.
Insights
In our six years of operation, Crowded Ocean has worked with more than 50
companies, 42 of them startups (the rest of them were established companies
looking to “pivot” into new markets).
But so what? Maybe all that number (42) means is that we found an average
of seven CEOs a year dumb enough to hire us. So here are some other numbers:
• Ninety percent of all startups fail within their first two years. More than 90
percent of our clients are still in business after that same period.
• Ten percent of all VC-backed companies go public or are acquired at a
profit; 30 percent of ours have had the same success. And more are in the
pipeline for either acquisition or IPO (initial public offering).
We like those numbers—and so do our clients and VC supporters. We also
think that the insights we’ve learned from working with these companies apply
to multiple markets and can be valuable for anyone entering or participating in
the startup world, tech or not.
But this book is not just based on the insights we’ve gained during the past
six years. Before Crowded Ocean, we were VPs of marketing at our own
startups. And we both got our starts in the early days of some high-tech titans.
startups. And we both got our starts in the early days of some high-tech titans.
Another distinguishing element is that we also don’t think the sun rises and
sets on Silicon Valley or technology. During breaks that we’ve taken from
Silicon Valley, Carol has worked in the non-profit sector, while Tom has worked
in human rights and returned to his earlier profession as a Professor of Holocaust
Studies. So although we love Silicon Valley, we have a slightly different
perspective on things than our more tech-oriented founders and VC pals.
Experience
As already noted, we’ve worked as principals and founders of startups, so we’ve
got a few war stories on that front. More importantly, many of the founders
we’ve worked with in the past have agreed to share their own experiences—both
positive and negative—at each stage of the process. Some of them are now on
their second or third startup since we worked with them—which means they’re
both experienced and jaundiced. Not too many books have so many experts
willing to share their stories and show their scars. In addition, Sumo Logic, one
of our clients, has graciously agreed to share their experiences from concept to
exit, a unique and valuable addition to a book of this sort.
Advice
Venture capitalists (VCs) are the high priests of the startup world. They’re the
ones who, with a single nod of benediction, or the single stroke of a pen, can
turn a dream into a reality for an entrepreneur. Many of them are PR-averse,
preferring to let their business successes speak for them. This is why we are
gratified that virtually every VC investor we’ve worked with in the past (a
number of whom are on the annual Forbes Midas list) agreed to sit down with us
and provide their advice for free (a word rarely associated with VCs) to would-
be founders. This book is shot through with their insights.
So that’s it. As they say in Texas, we may be “farting higher than our ass”
with a title like this. But the generosity of our founders and VC partners make
this, we believe, a book that will be of value to anyone who is interested in the
startup world, either as a participant or an observer.
One More Intro
When we outlined this book and decided to take a sequential approach to how a
startup develops from the development of the idea through to endgame (IPO,