This episode of The Grow Fast Podcast features Kevin Dominik Korte, a Board Member and IT Innovation & Growth Strategist with expertise in digital transformation, identity management, and open-source IT infrastructure. With over 50 startup investments—several reaching IPO stages—Kevin shares insights on how investors evaluate go-to-market strategy, sales effectiveness, and scalability. Kevin emphasizes the importance of early sales traction, advising startups to focus on building a niche customer base rather than chasing a broad market. Drawing from his experience in strategy formulation and market expansion, he highlights how industry mastery fosters organic referrals and investor confidence.
He also explores the blending of sales and marketing, noting that personalized outreach—such as cold calling and targeted LinkedIn engagement—often outperforms broad marketing campaigns. Additionally, he stresses the importance of recurring revenue, churn rates, and customer engagement in assessing business viability. Kevin shares lessons from his career, including his success in establishing Univention’s first overseas subsidiary and positioning it as a leader in IT governance and identity management. Currently an Advisory Board Member to Moxey and a mentor to startups at NewChip, he closes with practical advice for founders, recommending public speaking training and Crossing the Chasm to refine their sales approach and scale effectively.
You can find the whole episode of the Grow Fast Podcast with Kevin Dominik here:
Kevin Dominik Korte
www.korte.co
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This is the transcript for this episode:
Mark Shriner [00:00]
Music. Welcome to The Grow Fast Podcast where we talk with leading sales, marketing and personal growth experts about how companies can accelerate sales, optimize marketing, and grow their businesses fast. Let's go. Hey, Kevin, how are you?
Kevin Dominik [00:18]
All good? Thanks for being here.
Mark Shriner [00:20]
Likewise, likewise. I've just noticed the clock behind you. What time zone is that set for? Because I know that you and I are in the same time zone, but that says five o'clock, and it's 1:30.
Kevin Dominik [00:34]
At some point during a meeting my one of my then boss complaints at the clock was so loud, so I took the battery out, and since then, it's five o'clock.
Mark Shriner [00:44]
It's five o'clock and it's right two times a day, as they say, right? Even a broken clock.
Kevin Dominik [00:48]
It's five o'clock somewhere.
Mark Shriner [00:50]
Exactly, right? Well, that's I like that. Hey, you know you're an angel investor. I think you've invested in over 50 different startups, several of them have made it to IPO stages. You're also a board member on several different organizations. And what I'm looking forward to talking to you about today, because it's also very kind of dear to me, is understanding how potential investors or investors or board members, how they evaluate a startups or a company's go to market plan and sales strategy and sales effectiveness, like what, what kind of motions are they looking for, and what are the metrics that they say, hey, you know, this makes sense, this is good, or this doesn't really make sense. So, let's just jump right in, if that's okay with you.
Kevin Dominik [01:44]
Sure.
Mark Shriner [01:45]
Awesome! So, let's talk about it. When you got your investor hat on, and you're looking at potential investments and you say, hey, you know what, the platform looks solid, or the product or service looks solid in terms of what they've developed, but I need to be convinced that they can actually go out and sell it. So, talk a little bit about what are the things that you're looking for.
Kevin Dominik [02:11]
I think the big differentiator is always having sales. That's kind of the point where you go into the pre seed phase, where people don't have sales, versus the seat investments, which kind of get their sales in the in the right direction. That's having sales first big differentiator, but also the kind of sales, and what most founders probably do wrong is we're trying to sell to everyone, like as big as a total addressable market as possible, which gives you the, of course, the great numbers we have the opportunity to sell to 5 billion people or make 100 billion in revenue. And then, of course, the investor questions, how? Mm, hmm, and so often comes down to really, for me, digging in. Okay, what are your sales? And if you want higher valuation, it's on the flip side, great if you're done the sales work and really build a micro target. So, it's much better to see if you have 10 regionally concentrated start customers in one branch in a similar size to talk to each other, compared to 500 companies around the globe which have nothing in common.
Mark Shriner [03:38]
Okay, so what I'm hearing you say is, like, it's probably better to focus on a specific either geography or industry and then demonstrate that you can have some kind of mastery in that area. Because you're going to get one, you're going to understand the industry's needs, you're going to start to talk their talk. But you will also get some sort of like cross pollination, where you know, if you sell to Company A, B and C in this particular vertical, they're probably going to talk to Ed and F and the other ones. And eventually you'll create a kind of awareness in the industry, and that will allow you to kind of maybe, if not own that industry, but at least become a player in that industry. Yeah, the kind of the gold standard is always you have one, at least one customer who was introduced by an existing customer.
Kevin Dominik [04:35]
That's kind of the top level. And it's that's true both if you do sales B2B sales. But even more important, if you sell directly to customers, because it's if you do B2C sales, it's almost impossible to scale till you've reached your whole market, sure, so you need to word of mouth.
Mark Shriner [04:57]
So, you know, talk about some numbers. I will talk about strategies in a second but talk about some numbers. If you're looking at that, you know that seed round. So, we've developed a platform in pre seed now we're going out, and we're starting to sell, and you're selling a B2B solution, because I think you've invested in B2B solutions, you've done some in FinTech. Business, tech, and then also even adult beverages, which, let's put that off to the side, because that sounds potentially more of a B2C play. Ultimately, it will be a consumer play. But what kind of numbers you know for a seed a company that's looking for seed funding in terms of numbers of customers. Well, we'll talk about revenue yet, but let's talk about numbers of customers. At what point does it say, you know what? Because let me back up. You know, every founder can go out and sell to friends and family, people in their network, right? So, let's just say you're going to get your first five to 10 customers from that. But at what point does it become like, you know what? This is meaningful.
Kevin Dominik [06:04]
Really depends on your micro target group. If you have 20 people and in the micro target group and sold to 10 of them, that's a really strong play. If you can't boil it down so far, but have like 5060, then you're 10 become a problem. A word on the family and friends. Friends are generally not a problem. It's at some point Money doesn't grow with friendship. It's just your friends still need, need to make money, and they don't have as much of an incentive to buy from you as your family has. Family customers are a bit of a place. The smaller they are, the more likely we are to say, okay, we are not considering them. On the other hand, if you're even if it's your dad or your mom runs a company of six, 700 people, it's a sale which, which gets considered simply because they're too big to go up or down with you. That's a word on. It really depends on, on who's a family customer. This with an account or not.
Mark Shriner [07:16]
It's funny because we have one customer, and I'll just say it was one of our initial investors who originally didn't feel that they needed to invest that, excuse me, not invest that they needed to buy the platform. They thought, as an investor, they were entitled to it. And I said well, let's talk through this. Because if we sell a lot and grow this business and get the, you know, go to the next round and continue to expand. You benefit as an investor. Now, if you want your company to benefit because this, you know, then, then because you can use the platform and optimize your RFP responses and win more RFP s, that's a whole other conversation. So, you know, we have our costs, and we need to cover our costs and then we had a conversation about, you know, the potential, the benefits, the cost, the cost benefit analysis of using breeze docs. And it's like, if you win one RFP, one additional RFP this year, you've paid for breeze docs for the next five to 10 years. And when you put it in that context, they said, wow, you know what? Okay, we'll write the check. Okay, another check, but this one not for investment, to actually just buy the platform. So, I kind of, you know, group them in there with friends and family, which to me, is kind of a generic term for just people who are close to you and so, you know, they're a legit business. You know, they're, you know, 120, 130 people working around the globe. And so, I as a potential investor, if I was looking at that particular company, I might be tempted to say, oh, that's the invest they bought. They bought it because, but then I could argue that, no, they're actually getting the benefit of the platform.
Kevin Dominik [09:05]
I actually would turn it around. Okay, good. If I was looking at investing in you and saw, okay, one of your existing investors has a legitimate interest in using your product but isn't using it. That's a problem, right? A very strong problem, right? It's, it's also one of the points, if your existing investors don't bring in their network, that can also be a red flag, which you might have to explain. That's really, really in the very early stages. Come back. Okay, how do you make most of the resources you have, which is often one of the questions which gets asked when you evaluate, yeah, it's okay. Do you make use of your network? Did you actually go to your family and friends? And why aren't they buying, especially in in B2C companies? That's it's one of the typical questions, why aren't your friend's family buying this product, which can, of course, be, hey, most of them are older and don't need it. You have a target group which is relatively young. It can be a red flag if you actually don't have customers from your friends, family group, or from your existing investors.
Mark Shriner [10:25]
That's a really good point there and then. And back to my, you know, earlier question regarding, you know, what kind of numbers do you look at? If I'm hearing you right, it's not like a finite number. It's really relative to the target, your initial target market. So, if there are 50 companies in that additional that initial target market, and you've got 10 of them, that's pretty cool, because you're just getting started, and you've already captured, you know, 20% of the market. If you've got one out of 50, maybe not so good, right? So, you want to, you want to see some kind of demonstration of your ability to capture market share in your target area. Do you look at, what else do you look at? Do you look at revenues in, you know, in relation to the investment that is being the next round of investment that's being sought, or in terms of the time that company's been in business. What do you look at?
Kevin Dominik [11:26]
I think revenue is critical in relation to cost. So, it can't cost you more to acquire a customer and to serve a customer than what he brings in. That that only works for some time. You can maybe do it for growth scales, but long term, if someone says, okay, we spend $40 to acquire a customer and $60 to serve them, our product is 1999 a year. Then even once the acquisition cost is worked off, you still have, like, twice the cost. Yeah, you got to keep them for three or four years before you even get your money back. Um, otherwise it's kind of the revenue projection. How much can you really make out of then you get your total addressable market, but also your current market. And really, how fast can you scale to get there? Or do you run out of money before you ever can rate it reasonably so it's really not the finite number, but always in relation to, okay, what does it cost you? How far can you get there?
Mark Shriner [12:35]
What's the lifetime value of that customer and what's your churn rate? Because if the lifetime value of a customer is, excuse me, let's say $50,000 but you're only keeping in every, every you know, every customer. You're keeping them for a year or two, or let's just say, your churn rates 50% so you're losing half your customers. That means you have a go out and get 50% 50 whatever that number is, just to me, just to tread water and then go up above and beyond that with new customers, so that churn rates, I'm assuming, is important. But how you know, when I talk to VCs, lot of times, they'll say, you know, what's your what's your go to market plan? And, you know, tell me what makes sense for you from just from the strategy or tactics point of view versus the numbers that they're actually delivering. Okay? So ultimately, you want to see the numbers, but at some point, you look at their strategy, say, hey, does this make sense? Oh, we're going to do Google AdWords. Well, everybody's doing Google AdWords, right? So, so you know, what do you what do you look for, and what sounds good and what doesn't sound good?
Kevin Dominik [13:38]
I think the, honestly, the best sounding thing is always when a founder says, We'll do our first 50 customers or so via cold calls, because it often shows they have a realistic idea what they can reach with marketing and how much they really have to just pick up the phone. As much as most people don't like picking up the phone anymore. It's still the most effective strategy, cold calling, cold emailing, social media outreach, this kind of and social media outreach in terms of the effective messages we got on LinkedIn, not the one who said, hey, I found your profile. I'm selling B2B contact data we want to buy. It's, um, there's obviously difference of you, yeah, you get those messages like, once a year. Try once a day, or more than that, even more frequent than that. So, you have to also be ready that an investor tells you, hey, call me tomorrow to tell me your product, which can be a challenge for them if you are not really in the industry, but it also shows how well they can do it. And admittedly, it doesn't have to be the CEO if they have a Chief Revenue offer, who is much better than selling having them do this a valid strategy.
Mark Shriner [15:07]
I totally agree with you. I think sometimes it's really easy for people, especially, I kind of feel like the more experienced you are, and then when you step into a startup, you're kind of tempted to go like, well, I don't want to really get my hands dirty and do cold calling and knocking on doors virtually or in real reality, but I want to do these outbound automations and do some AdWords and then, and then, when the leads come in, then I'll respond. And it's sometimes I think everybody has got to roll up their sleeves and go out there and, you know, make stuff happen. You did mention briefly, though, effective outreach on LinkedIn. What have you seen that's effective versus, you know, you described the ineffective. They're like, hey, I'm selling this. Do you want to buy? But what has been an effective outreach?
Kevin Dominik [16:06]
I think the most effective is if they solve a problem or part of a problem up front. So, to give you a personal example, the of one company who does social media optimization, not for individuals, but for companies. So, their LinkedIn platform, their Facebook business accounts, and their outreach is typically okay. Here is whichever platform they contact you're on. And here are three things which are wrong, which hurt you in the algorithm. Then link to wherever to block both of them on how to actually do it better and what the algorithm does right now with you. And kind of giving people part of the problem and part of the solution really touches them, versus same social media optimization. It's one which I love to click away because they're like, hey, we can optimize your social media profile, like most of us think, no, thanks, I'm good enough and spending enough time here as it is now.
Mark Shriner [17:19]
I also like the ones where they've taken some time to look at either our site or our product, or at least understanding what we're trying to do, and then, and then offer some initial feedback. It's kind of like a free audit, a very high-level free audit of something that we're doing with some pointers. And say, hey, if you'd like to learn more, if you think this is valuable, this type of information is valuable. Please, please, get in touch with us.
Kevin Dominik [17:43]
Yeah, the other option, of course, is if you're connected to someone in the industry close to you, think, like, hey, we work with this guy. He has a referral story. Should Is it something you could use as well? Kind of build on the existing relationships you have.
Mark Shriner [18:06]
Like that. Can you give a couple success stories from the companies that you've invested in? I'm sure that, you know, I mean, a number say that, you know, average startup doesn't succeed, but you've had some that have done amazingly well, and some of them probably struggled before they figured out what was the right motion. But maybe you can give an example or two of a success story that they were trying this, and then they switched to this, and things just took off.
Kevin Dominik [18:36]
Well. I think my favorite success story is one where actually marketing worked, because it's such a crazy story. In essence, they're doing antivirus software, but they built, first of all, a new algorithm, and they used encryption technology to send it around. So, when crypto was great, they were a crypto signed company. When cyber security took over, oh, we're great cyber security, and now, because the algorithm uses machine learning, and now an AI company, and every time this change, like bumped their sales up, which is kind of great to say we're the first one, but it's also a story which, it's the exception where it worked because they had a solution which fitted the market, the market ideas of how a tech company should look like. I think the on the flip side, I am invested in a B2C Company who said, who does pedal bought rentals along Florida on the golf course and now in Hawaii, and they completely i. At least initially, failed doing social media and influencer marketing, which you would have thought, okay, that's the way you advertise holiday and holiday experiences. But on the one hand, they were too small, and then wasn't grow really, really, there's a mass to do it. So, they went and did referrals for people who did pedal board yoga and pedal board tours through Florida. And kind of used that as a referral network to get people to rent the paddle boards for the yoga session, or then to rent it afterwards to do their own exercise. And I pivoted to having a referral network with different instructors.
Mark Shriner [20:47]
I like both those examples. That's awesome. And you did mention earlier that, you know, from the from the sales point of view, a lot of it is just initially going out and doing some cold calling, knocking on doors, you know, calling people, reaching that cold outreach. But then, but then we started talking about marketing. Let me ask you, in your opinion, when you're evaluating a potential investment, how you know, is it marketing that's driving sales these days, or is it, or does this, I'm just, actually, what I'm trying to get to is sales and marketing used to be bit more divided. Now they're, to me, they seem almost integrated. Because if you're, especially if you're doing anything online, and I come up from because, you know, we're selling B2B software online, sales. It's really hard to do sales without marketing. And when you talk about, you know, doing a campaign on LinkedIn, that's kind of marketing, that's not, you know, really sales, right? And then if we're doing outbound email sequences, we're using HubSpot or otter, Apollo AI, or whatever these tools are, these, you know, it's that those are traditionally market, you know, activities, marketing activities. So, so where do you draw the line between sales and marketing, and do you need to draw that anymore?
Kevin Dominik [22:14]
I think it's becoming more and more fluid and more and more integrated, because what used to be a great sales tools, when you see a customer, you give them the flyer with reference story which matches them. It's now moving more to more into being a marketing tool which you put onto your website, right? The first thing they find is a customer story. On the other hand, yes, you said the typical email blast of, hey, we are a great company. It's moving more and more into the sales side, because you have also tools like HubSpot, where you can automate sales down to mentioning the industry, mentioning problems that are really industry specific, something which even five years because we didn't have that much, because simply the processing power wasn't there. And yes, some people say you can do even more with AI, but it's already, already just having the data there and doing, like, simple decision choices on there of what industry problems, I can really move it over to being a personalized email and then turning into sales and kind of that's making the really transitionary phase there, where you say, Okay, there's a lot of things in the middle which touch both. And then, of course, you have the typical sales activity, the calls, the follow ups, and the typical marketing, like the big billboard banner ads, where you don't have a one-to-one interaction. I think the line goes more into Okay, the more personalized it gets, the more it gets into sales, into getting the sales interactions, the un personalized marketing part,
Mark Shriner [24:10]
Yeah, makes sense. I am. I'm curious. Have you worked directly with many salespeople? Yes, okay, it's so I as I buy, okay, so, and I've managed teams in Asia, North America and Europe. And there's some common traits. Salespeople are motivated by a couple different things. Typically, most of the time it's either that financial gain so that commission, the potential upside, the bonuses recognition, they want to be recognized for their wins, like, you know, and this way you ring the bell, hey, we got another you know. So, end or autonomy, because, you know, sales. People, typically, they're not judged on how much time they spend the office. They're judged by and rewarded by how they how many deals they deliver, right? And it can be hard, it can be hard, but, but there's some other traits with salespeople, and you know, some of them, I think, to be in sales, you have to be kind of like, overly optimistic. Otherwise, you're, you know, you got to believe that you're going to get that next deal. And I think that Americans are probably the most overly optimistic people that I've worked with, because it's just like, if I work with Europeans, they tend to be a little bit more like, oh, it's going to be difficult with America's like, Oh, we're going to get this, you know, I'm making stereotypes and, you know, generalities here, but, but one of the challenges is, you know, when you're managing or leading a team is getting like, the truth, like, okay, you tell me you have this in the pipeline. Is this real or not? And I have my methods for understanding, you know, are these real deals, or is this really going to happen or not? And my methods may change a little bit depending on, again, if I'm speaking to somebody in Japan versus somebody in the America versus somebody in Switzerland, for example, but you have to have a method, in my opinion, from an investor's point of view, you're going to go in and you're going to talk to either the CEO or the CRO and maybe even to if they've got a team, some of the people on the team, how do you evaluate wishful thinking versus what's really in the pipeline? That was a really long-winded way to come back to a question, but I think it's important.
Kevin Dominik [26:41]
I think the big question is, when did they talk last with someone? And it's always a big, big sign if you get, like, get a sales funnel and there's no follow update in there. And follow up date not just in terms of, Oh, next Thursday, I'm going to send mark an email, but we have an agreed upon, scheduled call to or some other scheduled interaction, but that's we meet at a coffee shop, we meet at a fair, meet at a conference, we talk. We have a link of video chat, real synchronous communications. Has it happened in the past and will it happen in the future? Okay, the only exception is, okay, we think you're in the RFP business. We sent an RFP out, and then there's that kind of, the silence of the government working through it. That's, I think, the only exceptions where I would say, okay, it's out of your hands now, because you should have done all the massaging and getting it nicely done beforehand. But really, when, when's next synchronous communication? When does that last one happen? And that normally gives you an idea whether they have a working pipeline, and was I have a realistic pipeline, and then you have to, if it doesn't fit, you have to see, is it because their pipeline is too big? They just caught up 5 million people, put everyone in there. Now realize my pipeline can't it's a great pipeline, but we have till mid-September, so we have called the last one, and then we have to start at the top again.
Mark Shriner [28:27]
And do you actually go into the CRM and look for that information, or do you just ask them, you know, like, so tell me your top 10 prospects, and then ask them, so when's the follow up? What's going to be the next step, things like that.
Kevin Dominik [28:43]
It really depends on how much they have on the other side of customers ready and how big the sales team is. So, if they have six, seven people already working on it, then it becomes much more the question of, okay, how do your KPI looks like? Do you have it visualized, does everyone work in it and know it? Because it's a bad sign. If you talk them to one of the junior salespeople and they say, oh, we have KPIs. Versus if you have just one Chief Revenue officers or one salesperson, sales manager and the team, then it's much easier to go in there and see, like the 1020 customers he's working with, or 1020 prospects he's working with.
Mark Shriner [29:27]
Do you ever get into the compensation system for salespeople in terms of, you know, how much are they on a base, versus upside, potential, upside depending on the performance. So basically, performance based pay versus, I mean, for example, in Japan and Europe, I keep oftentimes the performance element is minimal, if, even, even if, even if, sometimes nonexistent, in terms of an individual performer versus the team performance, do you get into that at all?
Kevin Dominik [30:01]
Normally not so during due diligence, you look at it and then analyze whether it's there's some outliers there, but it's normally not a criteria whether you want to invest or not. It's just at least here in the US, there's really two schools of thoughts which say, okay, salespeople get a small commission, but a reasonable base salary versus the 100% commissions. You have an even some of the big B2B business software, algos, yeah, if I don't make a sale, I don't get anything. But that the normally the people walk with half a million out of the door. So, yeah, um, the only point where it's like, yeah, is it reasonable for the amount of revenue they make, and does it fit with the personally, or is, does it make the salespeople unhappy? But that's much more a question of HR and HR strategies, and it's of sales, great, okay.
Mark Shriner [31:06]
I mean, so is there anything else you look at when you're evaluating sales? Something I missed?
Kevin Dominik [31:14]
I think the one big thing which we hit a bit churn rate recurring revenue. It's especially in in the software market a big role, but it's even more so if you have returning customers, which have to make a purchase decision again and again. So you mentioned alcohol, it's a B to see market, it's if people buy a second bottle, that's a great story for you, but yeah, with software subscriptions, of course, you have the churn rate and not returning customers, but keeping these up and making sure your customers are Happy. That's also one of the important things, which shouldn't go under, under making new sales, because it's always easier to keep your customers than to make a new one.
Mark Shriner [32:11]
Absolutely and but it's like, like you said, it's not really under new sales, but that customer engagement. What kind of metrics do you look at? Let's, let's imagine this is a B2B platform. What are you looking at like, hours using times logged in? What do you look at to measure engagement?
Kevin Dominik [32:37]
So, time login would what, of course, mean that we have a universal metric of how much you use it, right? But if you say you use HubSpot, how often do you log into HubSpot and how long do you spend time could also be a problem if you say, I'm spending too much time, different time on HubSpot.
Kevin Dominik [32:58]
So, the big is, the big point is, again, the communication part, how often did you re engage your customer? Did you actually ask them for referrals to their friends and network? And one of the great questions, which, if people say yes, it's like, do you actually know what your customers are reading?
Mark Shriner [33:21]
Explain that. Talk about that.
Kevin Dominik [33:25]
We all have our industry blocks or magazines and certain industry journals. But if you're the supplier, you can Google like, okay, who's reading RFP magazines, or which are the leading RFP magazines, you probably find 400 blocks to deal with it. And you can look up, oh, there's three people reading it, versus you can simply ask your customers what they are reading and get kind of the feedback. And then you can see patterns and trends where people, what people are actually reading? An example a couple of years ago, we went at my when I was an executive, we went after agricultural companies in peon in the Pacific Northwest, to sell to them. And what you Yeah, that probably read something about growing cattle or planting stuff, and then talking to them, we actually figured out a lot of them are reading the magazines which focus on flying drones, seeing their seeing their properties, giving the people in the in the office who plan like, Okay, what gets planted? What fields need to be overhauled? Where can we keep cattle? A lot of that deals with getting data in. And that way we figured out, okay, there aren't actually so many of them reading the latest tractor magazines and. They're much more interested in, like the high tech solution would give data input and getting these kind of nuggets out and categorizing them and then handing them over to marketing to do something with it. That's a very strong sign of good customer engagement, especially if it's kind of see specialty types which you say, I wouldn't have expected that. No, that's, I think that's some, some awesome advice.
Mark Shriner [35:31]
Let me ask you, both from the sales and marketing side, because we're talking about startups don't have a lot of resources. Have you seen any successful outsourcing of sales, or, you know, or, you know, some kind of lead generation service. Have you seen anything work that way?
Kevin Dominik [35:54]
Yes and no, I have not seen any of the big ones work, okay? What? What I've seen as success is people hiring, really, people under personal assistant who do like, do personal outreach, and then you have to really ask that's really still a personal assistant, or you're turning them into a salesperson for you. Great, but kind of really personalized lead gen and a lot more on the small side, someone who has the grid to do the lead gen, instead of just someone who clicks three buttons and then it sends 400 spam messages. I think that that's the only way outsourcing lead gen works on a small scale, because let's be honest, you don't have the budget to send 10,000 emails out.
Mark Shriner [36:43]
Yeah, what about from marketing? Have you seen? Because, again, startups can't hire a whole marketing team, so maybe they'll hire one or two people, or typically, I don't know, do they outsource? Is, is marketing as a service? Is that the way to go for a startup?
Kevin Dominik [36:57]
It can work, but it only works if you know what you market to and then going with the boutique marketing companies or individual consultants often more effective than going with the big ones. And it often comes in down to, okay, can we make content which is engaging and which stands out? Can be your reference stories that can be thought leadership adjacent to your product. What it's often not at the Google AdWords just you need too many touch points to get someone via marketing into your pipeline if you do Google AdWords, and especially now that Google likes to put the AI on top and then the advertisement is just too forgetful, because we all scroll like, Okay, let's get the first 50 out of the way before we click on something.
Mark Shriner [37:58]
Yeah, it's the conundrum. Do you do you look at any kind of healthy, you know, resource allocation in terms of platform or product development, X percentage of your funds should go to that versus sales and marketing.
Kevin Dominik [38:07]
It's often the question; do you have funds at sales and marketing. Because, let's be honest, most founders who come in are the people with a bright idea of how product should look like. They're not the salespeople. I think if, if we talk about the seed stage, where you have your first customers and raise money, it's always good to say a quarter to half the money should go to Sales and Marketing, because you have kind of the product which is good enough to sell. Yes, you're still a bit ashamed of the product, but it goes out and it makes customers happy. So now comes a point where you want to get it to as many hands as possible while still improving it. That only works if you have, like, a balance between the two. If we go earlier, yeah, if you have big problems in your product can be more. If you think, like, okay, we have a product which is working now we have to get feedback, then more than half is also a good indicator that you really need to accelerate it. Now, In all case, it's normally a questionable if people allocate 100% to either of them. That's kind of means that either you don't see your problems anymore, which could be that your feedback cycle is broken somewhere, or that you actually don't have a product because you don't know whom to sell it to or who will buy it, and you just have a the worst case, you just have a very expensive toy somewhere or hobby, scary.
Mark Shriner [39:59]
Thought it's crossed my mind before we built this amazing platform. What are we going to do? Fortunately, we're getting customers, and the momentum is growing, but, but it did cross my mind a couple times. It's like, what if you build it? And nobody comes, you know?
Kevin Dominik [40:22]
But I always like to if you tell me you have an amazing platform, you're far too late to getting to market. No, I you know what?
Mark Shriner [40:33]
Yeah, so you sound, you sound very American there. Because I think that there's the temptation to always, oh, we got to get a little bit better, a little bit better, a little bit better, a little bit better before we go to market. And I'm like, man, we got to get it out there, and we got to be proud of it, even though we got to act proud of it, even though deep down inside, we might be thinking about a little bit, but you got to get out there and get that feedback. Because until you get that feedback, both in terms of learning, get exercising, those go to market muscles, but then also getting the feedback in terms of the product. Because we might think that this feature is important, and the market's going to tell us, we don't give a crap about that. We care about this, and so you got to get it out there. Man, you can't, you know, analyze and paralyze forever.
Kevin Dominik [41:15]
Yeah. I mean, in the worst case, you get the perfect product and realize that either someone has already put it in the market while you were perfecting it, yeah, or that it's not invoke anymore, and it's just not what people look for.
Mark Shriner [41:33]
Yeah, we're actually facing an interesting thing, because we're not coming up against the competition. I would say we come up against the you know, we're talking to SMBs, we come against, up against the enterprise guys once in a while. But who we're coming up against, or what we're coming up against more often these days, is just people thinking they can do their own homegrown solution. They're like, oh, man, I'm playing around with large language model, and it can help me respond to RFP. And I was like, So, how is, how is it looking at reference documents? How is it looking at previously approved answers? And they're like, well, it's kind of, let me ask you this, how are you using it to collaborate with 10 different people in your company and get them to, you know? Well, that's kind of a manual work. I was like, So, okay, you know? But it confuses, it clouds the market muddies the waters, because you could have a boss that would say, well, can't you just go on to chat GPT and just do the same thing? And so that what that does is it delays the sales cycles oftentimes. And I've, we've had this happen multiple times where there's one smart guy in the company who says, I think I can do this on, you know, open AI, and so that'll add three months to this, to the sales cycle. And, you know, we're human beings, so we have this cognitive dissonance thing. If I've told you now, I think I can do this myself. It's really hard for me to, like, three months later come back and say, like, I failed. I need your help now, right?
Kevin Dominik [43:02]
So, it's also one of the problems of many companies who don't see their employee cost of doing it. Yeah, it's the opportunity cost of your employee doing something else versus playing around with a new software tool or building a new software tool.
Kevin Dominik [43:21]
It's kind of the problem I'm paying my employees anyways. Why should I now pay for software, and they can just build it? I'm like, Okay, you really want someone who maintains a software product, 24/7, in house, or is there something else your employee can do, which is better for the company, for the company values and the other questions, of course, how long does it take you to be ready with your own employee?
Mark Shriner [43:50]
Exactly and over? And then there's security issues, because which platform they're using to do this, and so on, so forth. Classic example, because I think, you know, I come from the language services industry. So, translation, localization, interpretation, and this has happened a million times. Whereas headquarters will send marketing materials to Korea, Japan, Taiwan, France, or whatever, and they'll say, get these translated into local language. And instead of outsourcing the translation to a translation provider, they'll have their sales team, manager, marketing manager, translate it, and then they're like, why wouldn't you send it out to professionals? Well, our people inside can do it as like, don't you want your salespeople selling? If they're and they're not professional, they don't have the tools to do the interpretation, or, excuse me, the translation, so, and they're going to do it, and they might get it, do it, and, you know, do a really good job, but they might not get the terminology right. They might not get, you know, they're not professional linguists, they're salespeople. So, you know.
Kevin Dominik [44:56]
I would say, if you look at sales and marketing material, yes, there's a good point of having it done in house, because they still have to take it along. And sales marketing varies very much with the culture. I think your example is perfect for documentation and technical documents. Like no, you don't want to have your user documentation translated by someone in house, because it just will take far too long. And then you have someone who's far too invested in it do it, who thinks like, well, this, everything here is obvious. Why don't I cut it? And, yeah, I think that that brings us back knowing your target group, true, not knowing who should do something?
Mark Shriner [45:43]
Well, absolutely. Last question for people who are running startups, and they want to impress you with their sales, but first off, so you've told them what they've got to do. They've got to demonstrate their ability to capture market share in their target market, something that's kind of they have to have a process is somewhat, somewhat repeatable. They have to minimize churn. If they you know, what resources would you advise them to look at? I mean, you know, you gave some advice also in terms of asking their customers what they read and things like that. But in terms of upping their sales game, are there, you know, in terms of running a startup, do you have any favorite blogs, books, you know, speakers,
Kevin Dominik [46:34]
it's really hard to say something typical, because a lot of people are different, I think for for at least for first time, founders joining public speaking groups, doing something like Toastmasters or Dale Carnegie training is it's important just to get over the fear factor of, oh, I have to speak now for a minute to tell someone What we're doing, and then, in the best case, ask them a question of what they are doing or what they're looking for. And getting training and just talking is probably more valuable than any any kind of sales book, at least in the very early stage, if you then get into the point of building your building your sales cycle, building your target groups, and crossing the chasm as a, I think, a great book on learning how to actually boil down your target group and then also say, Okay, once I've done with these 20 here, the next 20 who talk to my originally 20, and kind of learn how to chain these groups up once you exhausted your initial micro target with the next one. And then also how to scale it up to say, Okay, now if three people, I need 320, people, micro target groups. How do I do that? And kind of, yeah, gets a critical mass in east of these without compromising any of them.
Mark Shriner [48:10]
Some more great advice. Well, hey, Kevin, as usual, I learned a lot when I talk with you, and I appreciate your your you know your feedback and your guidance and your your time to come on The Grow Fast Podcast. Wish you a great remainder of this rainy March here in the Pacific Northwest.
Kevin Dominik [48:31]
The dry time is coming. No worries. Thanks for having me and have a great afternoon.
Mark Shriner [48:36]
Awesome. You too. Cheers. Bye.
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