Crossing the chasm as a tech scaleup in 2024 - Paul Wiefels

Hello and welcome to Tech Marketing Trends, the podcast where we delve into the strategies, experiences and insights that shape the dynamic of sales and marketing in the tech sector. I'm your host, Jacob Lawram, CEO of Brightvation. In today's episode, we will be talking about crossing the Casem as a tech scale-up in 2024, and we have a really interesting expert with us today, Paul Riefels, whose managing director of the Casem Group, a managed-med consulting and advisory practice devoted to helping technology-based enterprises increase their revenue. He started his career in the heydays of Apple Computer and started working with the Casem Group early 90s and worked together with hundreds of tech companies from one of the 30 years. So we couldn't find a better expert in this topic than Paul to help us here today talk about this. So without further ado, let's welcome Paul Riefels to Tech Marketing Trends. Great to have you with us today, Paul. Thanks, Jacob. Great. Good to be with you. Awesome. And that was a very short introduction. So maybe we can get a little bit more meat on the bone here because you have done so much great things and have, you know, worked with such a long time with this interesting industry as well. So can you give us a little bit of background to who you are and what you've been up to so far and what you've been doing now? Sure. Well, when I got out of graduate business school, I started in the consumer marketing industry, notably with a couple of big advertising agencies. And so I was a classically trained, you could say kind of proctoring gamble style marketer. And one of the agencies that I worked for won a piece of business associated with Bank of America capital markets, so where they do trading and things like that. And I had two introductions to Tech in my agency life. First of all, was the winning of an account that was known for games, but out of computer, it was called the chart. So my boss and I won that piece of business for our agency, Los Angeles. And when I left that agency and joined the agency in the Bay Area, we won this piece of business for Bank of America. And they had what they called a Treasurer's workstation. And this was a basically a very simple, a bit computer built around, you know, CPN, I think, was the operating system on it. And they were impressed that I was the only person really in the bank or the agency who knew something about this and knew what to do with it and kind of wasn't scared about it and what have you. So long story short, I was recruited by Apple back in the very early 80s. And I was still, you know, quite young at the time, but that's how Apple rolled. The company was a very young company. And I was recruited into the company as one of their advertising managers. So I spent seven years at Apple in a variety of different marketing positions both domestically as well as with Apple International, then at the time was based in Paris. So I had a very, very good best job of my life really with Apple in the fledgling years, the personal computer. I left them and became a head of product marketing for a software company. And during that time, I met a guy called Jeffrey Moore because I'd hired him to help me do some stuff with the software company in Israel. And Jeff and I, you know, took a liking to each other. And when we sold the software company, I went back into kind of a division of advertising for a division of Young and Robocamp. And Jeff called me one day and he said, Hey, what do you do? And I said, Well, I'm kind of missing the tech industry. He says, well, I just wrote this book and the manuscript that I've given you previously, he says, it's changed around. So I want you to take a look at it again. And I think we can actually do something if you're interested. I said, Sure, why not? So that's how we started Casem. So I'm managing director, but I'm also co-founded. So Jeffrey and I decided that we would do this until we had to go get real jobs again. And so in 1993, we dubbed the company the Casem group and we went from there. A little fantastic story. And just a personal sign up for that. When I was in business school in late 90s, I got an assignment from my brother who ran a small tech startup in Sweden at that point. And I was helping him with a marketing plan for the as a summer job. And you know, the cocktail model and the four P. S and all that. I just realized that this won't cut it. And by coincidence, I found the crossing the Casem book on Amazon, who wasn't that old. It was probably 97. And you know, that took a career defining path for me as well. So that was a fantastic book. And awesome, interesting work you have done so far. We built the practice around. We kept getting clients who would call us and say, "Gosh, you're describing. You described in that book. Jeffrey described in that book exactly what's happening to us. What do we do about it?" And so that's really how we put together a practice that was first built around these models within by that time there was multiple books. So 97 inside the tornado was also out. And we were working on IP that you know, would be codified later in the early 2000s. So we built a lot of model stuff, but we also started to do mostly around what my past experiences were a lot more bespoke consulting. But still with a view towards we're going to specialize in technology, we understand the industry. We've got a lot of now a ridiculous amount of what we call pattern recognition. So we could understand what companies were going through and we could explain it to them in ways that were actionable to them rather than kind of the traditional management consulting of you know, boiling the ocean to get data and then dithering over that data as to what it means and what we should do about it. Yeah. And it's so interesting because I've met a lot of companies over my career as well who have applied your models and so forth. So yeah, really really helpful. And let's dive into today's topic you know, 2034. It's over 30 years since the book came out and you have published a lot of books and models after that of course as well. But if we dive into a little bit of today, then if I were to run the marketing assays area of a scale up a tech scale up a B-tech scale of which is primarily your target market and would like to start working with market developing strategy and so forth and understanding the market dynamics. What are the most important things to focus on now in 2024 for a B2B tech company to accelerate their growth according to you? Well, I think the the the underlying principles of strategy still remain. So if I rolled back the clock 30 years ago and then I advanced it 30 years to the present, I would argue that pretty much the basics of market development strategy, understanding who your target customer is, understanding why they would spend money with you, understanding what it is that they're looking to accomplish, understanding what their alternatives might be, understanding how you're going to you know, position and talk about what you do. I think those are still basically the same Jake. What's changed is the mechanics of actually operationalizing a strategy. So now we've got you know, martyx marketing technology, you know, dozens of applications that mechanically do a variety of different things. Obviously you've got a business built around, you know, aspects of those particular things, notably demand gen. So that has changed the way that we reach an audience has changed the way that we that we can engage their own changes. But what we keep coming back to is that's only as good as the strategy underneath it is. And if the strategy underneath it isn't solid or if it's based on people's opinions rather than had the facts of the case or if it's based on wishful thinking or if it's based in what I call looking at a mirror and thinking you're looking through a window, you're still going to have problems. And the other thing that we have found Jake at this that this increasingly is a time-based competition. So companies notably scalars that are able to scale themselves in a very, very smart way, minimizing the number of mistakes that they make, realizing that they're going to make mistakes, that the ability to compete quickly is really that that has become a there's a premium on being able to do that rather than dithering over decisions, rather than, you know, taking too long to get product out rather than taking too long to understand who the ideal customer profile is. You know, I had a client the other day asked me, well, you know, we need a template for an ideal customer profile. And I said, well, Google one, there's lots of them, you know, I mean, they're all generic, they're all vanilla. Well, don't you have, one, I said, well, are you bespoke? Well, why is that? Well, they're bespoke because the industry is bespoke. So an ideal customer profile might look so something totally different. for a semiconductor company, then it would for a biotech company. So while you can kind of follow the same tenets of what you need to know, that's about as far as it goes. And I think there's a tendency to want to sort of genera science, everything, and go faster, but you got to be careful about what you're doing now. Another problem where we, I mean, what we see today is a lot of companies coming to market. I know we have written a little bit about it, but you know, I think it's so interesting with crossing the Kassam and everything you have developed around that model. You know, but going from a early stage market where we have an MVP or, you know, a small product within interesting technology to actually build a whole product and so forth. What are the common pitfalls that companies face during this transition trying to build out their solution and things like that? And how do you typically work with companies in this stage? To share those problems? Well, a lot of that, a lot of that is related to the fundamentals that crossing the Kassam. So a minimum viable product is a product that ostensibly is attractive to and that you're trying to prove it, attractive to an early adopter, but a minimum viable product is not what, traditionally, a mainstream or conservative buyers want. In other words, the great bulk of that curve, as you've seen it, you know, what we call the technology adoption life cycle, whatever rushes call the diffusion of innovation. The fundamentals there are essentially you're trying to in effect, restart and resize your market growth and what that ramp is going to look like. And the ability to do that is to kind of come back from a minimum viable product for a lot of people to a whole offer for a small group of people in that whole offer as opposed to the minimum viable product, the whole offer solves the whole problem. And that's very counterintuitive to companies who have been used to serving, oh no, we can do it for those guys, those guys, this company over here, this segment over here, this segment, getting them to come back to saying, yeah, but you can't, now you have to do it 100%, not 80% because once again, it's the time-based competition. The company that can do it for 100% stands a much bigger chance of getting the next what we call pragmatist customer. And that's, you know, they're just as we say, there can't be any holes in the boat when you go out deep in the ocean. So, you know, it's, it's fine if you spring the leak and you're kind of close to shore. But once you kind of set sail for much longer distance, you better have a boat that's solid. And that is the difference in this crucial transition. There's a variety of other things that we haven't got time to discuss today. But, but there's, you know, you start looking at things that we might call a minimum viable traction and minimum viable, you know, minimum revenue, repeatability and things like that. But I'm lowering you that those are all the function of how well can we target a group of people who really need what we have and the weakest all the problem for. That's interesting to hear. And using a big problem that many scale ups or younger companies have is that they target the wrong beachhead segment or is it more like a whole product definition that they are struggling to get together? Yes. And yes. And the beachhead segment is a tricky thing to and I will go so far as to say that nowadays and Jeffrey would probably take argument with me that I know we would because we've had this ordinance or no sales force is actually ever going to go after one second. I mean, just point. So you're going to look at segments that are we hold at Jason to each other. I'm cool with that. That's okay. That's practical. Right. The challenge is to really have the discipline to be able to do that. Number one, and then have the discipline to really say we're going to have to let some other people go. Yeah. Many other customer opportunities go to focus our limited sources on being able to solve for this one. And so we have we have a number of techniques that we use kind of a scoring system is to, you know, what segment would be better? And we ask our clients to do that. So it's something that we get our clients to do because they're the ones you're going to have to live with it. In other words, we can bring in all kinds of data that will show, you know, well, the total available market for this is this total available market, this opportunity and over here. But at the end of the day, the company has to be adept at actually talking, engaging and closing those people. So the company has to have all of our clients enough to have a real sense of alignment and ownership around going for that group of people. And that's that's a process that we run with clients. And if you move into a little bit on positioning and measuring, how do you approach the challenge of creating unique positioning and persuasive messaging as sectors where products are? Quite technical or even highly technical and also often in quite crowded markets. Well, let me just kind of step back a second. Positioning, first of all, position is a very misunderstood phrase, technique, art. It's a combination of all of those things. But at its core position is about deliberately choosing how you're going to be different. Notice that I didn't say better. I said different. Yeah. That's right. And I'll come back to how better fits into that in a bit. And so positioning really is about what tradeoffs are we prepared to make in order for us to as me and a lot of other people who do this. And I kind of specializing this kind of stuff to own, you know, that the cliche to own a corner of the room, right? You know, if you looked at that company, you said those guys are noted for that, right? That means all of these things that, right? You know, I mean, I honestly have a bit biased, but what of Apple's big advantages is that Apple owned the position. Its competitors never did in the in the personal computer market. They never. We did. We were distinct. We were different. People knew if it was for them and knew if it wasn't for them. You can't say that about any other product at the time. So the idea that position is the first thing that sets the context for how people are going to assemble what a rational step of opportunities or options that they might have to choose something or not. So the position is not really about explaining things. It's about trying to inspire people to see that the way that me, the vendor and you, the customer might have a match. And we can express that through messaging and, you know, all kinds of communication engagement. But the notion, first of all, of positioning as context setting, I think is oftentimes missed because people immediately want to lead to or jump to superiority. And of course, the first thing that we as human beings decide whether something is inferior or superior is what is the context of that in my life? In other words, how is that relevant to me? So as someone who does a lot of positioning, I want to be first and foremost, the most relevant to the customer that I'm trying to serve. And I'm prepared to give up customers where I would be less relevant to. And the reason why I am is because I also accept the fact that there are other alternatives out there that people could go to that they might be better serve. So another thing that we look at is one of the alternatives that people would go to. First of all, if I didn't exist and second of all, if I did exist, but maybe I'm not exactly what those people are looking for. Now you start to see, okay, how do we go and sort of A, B this back and forth and back and forth? So, you know, this ultimately, you know, the process and again, it's we don't have time to explain at all, but the goal is not superiority in position. The goal is maximum relevance for a given target group. If I'm relevant, if I'm maximally relevant, it's very easy as a student of consumer behavior. It's very easy to understand that people say, well, they're the most relevant. They're fool. They're the best for me. Not they're the best according to gardener. And that's what we're really trying to get at. Positioning is part of a business strategy. It's not a panacea as some people would have you to believe. It doesn't cure everything. It's not simply a marketing exercise either, done by the marketing communications people. It's not a one and done, but it's not a, well, we got to change our positioning. Well, we just changed it last month. I know, but people aren't getting it. Positioning is part of business strategy, right? A fundamental core part of business strategy. It has vast implications across what you're going to build. You're going to talk to how you're going to operate, how you're going to brand yourself, how you're going to comport yourself. It's not simply, well, you know, we're for this person, unlike that. Right. It's not a statement or anything like that anymore. That's interesting. And that's quite different from branding. And, you know, are we on our, on our Apple or? Yeah, I mean, brand branding. I a good friend of mine who I've known for years and years and years, who also is a great author, good marketer as well, talks about branding as the emotional sibling of the more emotive sibling of position. Yeah, and that's kind of always the way I've thought about as well. So I don't know what to brand. If I don't know kind of what I'm positioned, there's a lot of, a lot of ways to do that. And again, it's different Jacob. And B to C, right? Positioning is a different kind of exercise. It's related, but it's a different kind of exercise. Exactly. Because the messaging in B to C is so much different than the messaging in B to B, the way you go about it. So interesting. So hard to get right also. And as we see today, there's so many companies competing for the space and the eyeballs, you know, having all these campaigns going on in every cell of these days. So what do you say to scale up today? How different must they be to be different? Because there is a lot of companies claiming to be best at the same stuff and so forth. So, yeah, give an example of a unique differentiation or something like that for a scale up today. Yeah. So the difference has to be, again, going back to that notion of position. When you are looking at a relatively large pond, you know, with a lot of fish in it. How do you discern them? Well, the first thing you might want to say is, I wonder if there's smaller ponds where we can be a bigger fish. So I wonder if we can serve markets that are underserved or not served or, and again, this is kind of, this goes back to business strategy, not simply communication strategy. So I want to go through the litany of things or the rubric, I should say, of what really are my alternatives to serve customer bases that are poorly served. And there's a little, you know, can I build something that other people can't build? Can I, do I have patent protection that other people don't have? So there's kind of those sorts of things. Can I reach people in a way that is cost advantageous to me and cost disadvantages to my competitors? So the actual way I go. And then can I talk about myself in ways that are not simply just in a tech industry, the traditional feeds and speeds? But in terms of what are the human outcomes for what I do? In other words, can I really speak to a customer both in human terms as well as in technical terms? Now, to be fair, I'm not sure, and I've worked in just about every category known to be a design that I think in the tech industry. And there's obviously some I prefer and some that I don't. But that's a little more difficult to do when you're selling semi-conductors to a design engineer. So the design engineers I've met are not really looking for human-term discussions about that necessarily, but maybe they are. So the idea is that kind of the running semantic and what I believe in is what is it that you really do well? And who are the people that really appreciate the fact that you do that really well? That's always the place that I want to get to. I do not want to try to wind over the 8 billion people in the world because I can't do that. So I've got to try to win over the people who are going to be the base of my franchise and then expand from there. And we can talk about some companies, oh gosh. Well, now 9, 10 years ago, I first started working with a company and I'll name them because they're now owned by somebody else. The company was AppDynamics. And AppDynamics was a mind-blower because they were in a category that was dominated with what they did, obviously, was manage applications. And what AppDynamics could do that their competitive brethren could not do is their secret sauce was their ability to show on a dashboard live time when an application was going to break or where it was broken. And they had a revenue for AppDynamics at the time said, I can show my customers a green light, an orange light, or a red light. The other aspect of that was that in certain cases, the AppDynamics app could fix the application, not dramatically, not in any significant way, but enough that would create a worker in. Now, the computer visions of the world, the MC and everybody, well, we can do that. It's like, yeah, but you can't do it in real time. You're going to have to do job tickets and people like that and things like that. Okay, well, that's a really cool thing to do. Now, who do you think would really value them? People in e-commerce. People like Expedia. We have no idea where our applications. They may be through five different hops, right? So I've got an application that's looking into the Western hotels that's looking into United Airlines, that's looking into SAS, that's looking into, you know, Scania hotels. I don't know where the thing is. I don't, I mean, I need that insight. I'll give you another example. I talked to the CIO of Union Pacific, the great big North American railroad, right? He says, how do you think we run trains? We run them on software. You know, engine your bill is in the, is in the, is in the front engine, but it's mostly just a kind of pull the, pull the horn, right? If we get, if the software goes wrong and we have two trains coming in and, you know, put it this way, bad things can happen. Yeah. We need this, a whole host of companies needs this. We had another client, again, acquired Clankle, Tonga, Tonga was the number one application on Salesforce's app side. They made sale as they said, we make Salesforce better. And by the way, we only do it for Salesforce. We live on planet Salesforce. And then, by the way, we have an NPS core that is three times that of the average software. You will not fail when you use us. You will not fail. We have 365 day global support if something goes wrong, which it won't, by the way, but if it does, and we don't care if it's Christmas Eve, you're going to get closed. So interesting. But a big question that sometimes comes up is that some marketers say that you should try to define your own categories. You can be the winner in that category, for example, Christoph Lockhead, which we had here last year. And then I had a discussion with somebody else who said, no, don't do it. It's dangerous, you know, it's costing a truckload of money and you might just fail, you know? Yeah. So what's your take on creating a category? It's the popular panacea of the day strategy designed to sell books, designed to sell workshops. And I know all those guys. And yes, it can be done. But I'm kind of somewhere in the middle. You better, first of all, know what you're doing. Number two, this takes a hell of a lot more time than you think it's going to. And it takes a hell of a lot more money than you think it's going to take. And another thing that I've seen with these exercises is, so what kind of competitive moat do you really build around yourself if you're in a market that has some massive competitors in it? In other words, if you're in the cyber security, you're going to have a lot of money. industry and you're going to create your own category. Why can't Palo Alto and CrowdStrike just come right in and say, "Thanks, we'll take it." Right? So I mean, I think there's an awful lot of what I'll call kind of wishful thinking in that, in that exercise. Now again, I didn't say it's rubbish. I said, "It can be done, but it's done. You have to do it, and there's a whole lot of moving parts to it that I think are not really adequately discussed in the whole conversation around it. And it is typically born out of what we see a lot of it. It's typically born, this idea of creating a category is typically born out of a category that's consolidated. Well, do you really need to create a new one? Or do you just need to create a new segment of an existing one? Because again, when you create a new one, you have lost your positioning context. Well, what is that? We don't have a line on our budget for that. I don't know how to explain that to management. I don't know how to explain what this category is to the board as to why we should acquire it. I don't know how to explain to the analyst. Well, Ashley, I do, but I wonder if they'll say, "No, it's not a category." The analyst community can be, as you know, fairly influential about that. So I think it's a simple, attractive, and flawed strategy. It can be done. You better know what you're doing. Again, you run the risk, just as a closing on it. If I'm going to do that, and I've constructed all of this, and somebody looks at me and says, "That guy Paul, he's outstanding in this field." Or, "That guy Paul, he's outstanding in the field. Nobody around him." That's wonderful. So that's very interesting and super important questions for scale-ups. How to find your space. We could go on for the whole day. I can feel it. It's so interesting. But as a final advice to be to be tech revenue leaders in scale-ups for the next 12 months, what do you think they should focus on? Where do they have the most leverage on their time and resources from your perspective? The way. Yeah. Well, first of all, let me just get my tactical announcement out of the way. Yeah. Don't AI-wash. Okay. Yeah. That's not what everybody does. I think this pen is now SAI, or it was designed with AI, or if I push it in a certain way, it's got AI. Oh, my God. Are we going to get tired of hearing that? So are you going to talk about, you have it, or are you going to talk about what it does? And if you talk about what it does, it better be doing something fairly important and fairly immediate to the problem at home. That's my tactical advice. More strategically, and I think that I know I mentioned this notion about time-based competitions. So the scarce resources that we have nowadays in business, I would argue are time, talent, management, attention. The plentiful resources we have in this environment are muddy. I didn't say unlimited, but plentiful. There's lots of money. There's lots of software, and there's lots of service providers around. And what I have seen, and what we advocate, is that use your scarce resources, you accompany, on things that truly move the needle for you, that add value for you. Right? That could be the building of product. It could be the building of, of either strategy. It could be recruiting better people. You know, competitive advantage is not created by technology. It's really created by people. So recruit the best people that you can get. Use your plentiful resources to do what we would call the hygiene of your business, with one exception. So the hygiene of the business is things like, you know, can we automate everything that we need to automate without removing the human associated with their automation? And this is where I have a problem with marketing automation, marketing technology specifically. Automation does not make up for a bad idea. It just makes it go, it just makes it fail faster. Right? And we can experience that every day by the amount of spam that we get. We're not a software development house. And yet I get software developers, we can help you with your development. We don't develop. So you've missed right there. So, you know, use money and software to build out and to ally with people that can take some of this hygiene. And where the service provider thing comes back in back and forth is there's two kinds of service providers. There's professional service providers like you and I who can actually help our clients make better strategies and execute better strategies. Because we do it for a living, right? And we live and die on how good we are at. There's also people that why do I need a great big in house law firm if I can get an outside law firm to do all of that stuff for me? Why do I need to have business people roaming around the gas and group to do our accounting, to do our, you know, our billing, to do all of the things I don't, which is why we outsource it, right? Because then I don't have to spend any management attention on that. I'm still the administrative partner. So that's what I think, you know, people, it sounds fairly obvious, Jacob. But I think people miss that because again, it's like, you know, the next big thing comes in. Oh, here comes AI. Well, you know, there we go. I mean, your dishwasher detergent will have AI in it. That makes sense. Yeah. That makes total sense. Don't AI wash. Yeah. Don't AI wash and, you know, use your resources, your scarce resources on things that really move the needle and let other people help you on the things that may move the needle, but at least keep all the floors clean, the roof, not leaking, you know, the boat with no holes in it. Love that. Thank you so much. This was so interesting. I mean, you offered so many insights, so I'm so thankful for this interview. But people who haven't read your books or haven't come across the cast and group where you pull, where can we send them so they can read up more about you and your content? Sure. Sure. Well, our website, chasmgroup.com. So that's easy to find. I'm on LinkedIn. So I'm easy to find both of my LinkedIn site as well as on our website. You'll find articles that I've written and one of my partners who's also rather prolific in terms of liking to write. You'll find a number of articles, some of the things that we talked about today. And you know, we're, I would offer those as two obvious places to go. With that, Paul, thank you so much for a time. Thank you so much for all the insights. I wish you all the best with chasmgroup and I sure hope to see you soon again. My pleasure, Cam, wait to come back this week.