Speaker 1Hey, everybody. It's Sam Jacobs. Welcome to Topline Spotlight. Topline Spotlight's a short segment where we talk to operators, investors, CEOs, and founders, people that are on the front lines of B2B technology right now. And we dive deep into their business, and we also ask them a question about challenges they faced, challenges they faced over the last couple of years running their business and what they learned from them, so that we can walk away from 20 to 30 minutes of time with our guest and get something actionable and practical and tactical. And today we've got on the show John Short. And John is the founder of Compound Growth Marketing, which he started eight years ago after a decade-plus of working in-house for companies like Workable, Monster.com, and LogMeIn. Building out performance teams focused on media and organic. And when looking at massive growth in software and the need for performance marketing, John felt there was a gap in the amount of talent in the market and the amount of demand, and felt starting an agency would help fill that gap in B2B performance marketing. So, John, welcome to Topline Spotlight. Sam, thanks so much for having me on today. We're excited to have you. So, first thing we want to do is give you an opportunity to tell us more about your business. So, I just read a little bit of your bio, but talk to us a little bit about your business. The history of the business, you know, why you started it, and why you feel like now is the time for what you guys are working on.
Speaker 2Yeah. So, like you mentioned, I started the business about eight years ago after some time working in-house. And I think late-stage software investment had gone from something like $4 billion in 2013 up to its kind of peak in 2021 of like $120 billion. And late-stage funding. So, we had seen this massive amount of growth in capital that was looking to get deployed. And there weren't a lot of people who were growing up and saying like, oh, when I grow up, I want to be a B2B marketer, right? There weren't a ton of people who were, you know, kind of overnight, it felt like there was the launch of freemium and PLG and folks looking to drive interest through digital marketing online. And so, our feeling was, like, there's an opportunity for an agency to kind of learn the best practices, kind of collect data, sit in the middle, understand what's working, and help deploy that capital efficiently for the businesses that we work with. So, today, we work with high-growth venture-backed, private equity-backed, and publicly traded companies, typically in fields like cybersecurity, DevOps. HR technology, software, and other industries like that in order to help them drive predictable growth for their businesses.
Speaker 1Tell me about the benefit of specialization and verticalization. You know, what are the compounding advantages that you have as an agency when you've worked with a bunch of cyber companies? Is it knowledge of the channels? Is it knowledge of positioning? I'm just curious on the vertical emphasis, which is interesting.
Speaker 2Yeah, the vertical emphasis was important to us because, you know, for us, when we were starting, it was a little differentiated to be a B2B agency. And so over time, we've gotten even more focused on the verticals we go into. With like cybersecurity, for instance, we work with a lot of these businesses, and we really understand the buying committees for those companies that are selling into mid-sized and enterprise, selling cyber. We understand how big that team is, who the typical decision makers are. And so that helps us inform what channels we should be using in order to go after these companies, where we've seen the most efficiency in deploying dollars for those businesses, and allows us also to kind of, you know, aggregate the data we have and make smarter decisions for all the companies that we're working with as well.
Speaker 1So talk to me about a little bit about that. What channels are, and here, I'll make a statement, and you can react to it. But here's what I've been hearing. I think there's been an over-reliance in B2B on LinkedIn as a channel. And I hear that even companies that are pretty hardcore B2B, like cyber, that they are expanding into new channels that previously were perceived to be exclusively like B2C or consumer. So more and more, I think, there's been an over-reliance in B2B as a channel. More on Instagram, more on YouTube, maybe more on Reddit, but, you know, sort of broadly defined meta advertising. Because it's sort of harder to figure out how to differentiate yourself on LinkedIn. And then talk to me also about the role that AEO plays in all of this.
Speaker 2Yeah. Yeah. So I think that's a great point. I think there's a little bit of an asterisk next to LinkedIn because there are a lot of businesses that will put money into it. They'll solely focus on low funnel campaigns, like trying to drive demos, and they won't build out the full infrastructure of what those campaigns should be, should look like. But in general, I agree. If we look over the last 20 years, these companies have raised funding from private equity or VC. Those portfolio operations teams have pushed them to invest those dollars into Google ads and LinkedIn. So we've seen incredible inflation in prices on Google, CPCs. And we're also, you know, starting to see that over the last couple of years on LinkedIn. And so the opportunities have arisen on meta, Reddit, TikTok, some of those channels that you were discussing before. We've also seen that companies are a little bit hesitant and taking a little bit too long to do other type of like what we call high recall events. So we've seen a lot of success with CTV. CTV is interesting. CTV is a company that's been doing a lot of interesting, right? Because the amount of inventory is expanding pretty rapidly. What is CTV? Is that just cable TV? Or tell me what you mean by that? CTV would be like a Hulu or Paramount Plus or, you know, streaming services. And so there are more streaming services out there. Amazon, Netflix, they've all launched ad inventory recently. So the amount of inventory has expanded, but there's still a moat for companies that get in there where you need to create high quality video assets. And so that has helped to suppress the amount of demand. And so we've seen prices actually stay pretty steady in that space. And even within LinkedIn, we ran a test last year where for a cybersecurity business targeting enterprise, where we're able to run CTV ads, we're able to have a control audience to see who was engaging or viewing these ads. And control audience who wasn't, we're able to see, you know, much better conversion rates down funnel. When we did a full funnel targeting of those customers starting on CTV, we saw they were much more likely to convert. So CTV is an incredibly high recall because you have an engaged audience. But even like sponsored webinars and content syndication gets a bad, bad name. But like, you know, some of the sponsored webinars, some of the industry publications that you can go to, we've seen a lot of fruit from those types of opportunities. And not every portfolio operations team is pushing their companies to do that. And so prices have kind of, you know, maintained a pretty good level. So you can acquire customers efficiently there.
Speaker 1That's really cool. That's great. Because to the point, you know, one of the themes that we hear about in the world is more companies than ever before. The cost of building software is cheaper than it ever has been, which creates more competition. All of that finds its way into increasing customer acquisition costs, higher CAC. So I would assume that if the prices are stable in certain channels, then that is almost an arbitrage opportunity to just exploit those opportunities and to your point, find efficiency.
Speaker 2Right. Yeah. And I think there's incredible opportunities there. And I think customer acquisition is incredibly important these days because the moat for software, now, is not, you know, building on top of a database. It's building software that can take advantage of network effects that is ultimately going to help be the differentiator or the moat for the business moving forward.
Speaker 1Well, I, yeah, I mean, you're certainly working in an incredibly exciting area, but the topic for Topline Spotlight is what you, lessons learned as an operator, particularly after having run compound growth marketing for the last couple of years. So talk about, you know, what you wished you'd known when you started working on this business a couple of years ago.
Speaker 2Yeah. So my, like, the job that I had before I started compound growth marketing was VP of demand generation. Then I had a very short stint as a VP of marketing before moving out and starting my own firm. Initially, my goal, I always say, kind of like accidentally started a business. It started out as freelance. There was an incredible amount of demand in the market for, for performance. marketing in B2B SaaS. I ran into, you know, my second client in a Whole Foods. I ran into my first client at brunch in downtown Boston. And like, you know, both times pretty immediately was telling them what I was doing. And boom, was able to, they were people I knew, of course, but was able to kind of get enough interest to start driving customers into the business. That's great. A
Speaker 1random lunch meeting is always a nice way to generate some pipeline. Yeah, yeah. Because you have to eat anyway.
Speaker 2Yeah, right. But so I kind of fell into this a little bit. And, you know, I think my strength is not in like organizational structure or design. And so, you know, over the past couple of years, what I've needed to learn is not everybody is as kind of where I didn't like to be, put inside a box inside a company. That was probably a signal that maybe I should be starting my own business versus sitting inside a larger corporation. But what I didn't realize was not everybody was going to want to kind of build out their own job description and have complete autonomy. And so over the last couple of years, the lesson that I've learned that I think is really applicable for a lot of businesses is, you know, this idea of we're trying to build repeatable processes. And so I think that's a really good idea. And I think that's a really good idea. We're trying to build frameworks that help everybody on our team be better because they're on our team. And the we and I'd always kind of relied on an org chart to help me design how my company should be working. But what we've started leaning on over the past three years is more of a roles and responsibilities chart, which lends itself a little bit better to a growing business because rather than, you know, saying one of the things that I'm going to do is I'm going to do one person is responsible for one job and their job description is this. It's really mapping out everything in the business that needs to get done in a roles and responsibilities chart and then mapping the people who are going to help get that role or responsibility done in the organization to each of those responsibilities.
Speaker 1How is it what for you when you think about there's a lot of work that needs to be done. What's the, what's the difference? Is it the starting point? Because you could imagine looking at a bunch of boxes on an org chart and saying, these are all the people or these are the boxes. I'll be set before you put the people in there. And these are what they this is what they're supposed to do.
Speaker 2Is it? Do you find that the org chart is too limiting? Like it? Yeah, I find that the org chart a lot of times is built around the people you have, or the people who you're looking to hire, versus starting with more first principles thinking of build around the structure that we need, and then put the people in places in order to help that. And the other key differentiation is, is that with the roles and responsibilities chart, and you know, this is something that entrepreneurs operating system has used for years and other business frameworks like that. But you can have one person sitting in multiple seats, or multiple roles across the organization. So compound growth marketing, we're 25% person firm, we're not big enough to hire full time HR yet, but we can bring on someone who has responsibilities in the operation side of the organization that they need to do, and responsibilities in the HR organization that they need to do.
Speaker 1Yeah, did you did you implement EOS? Was that part of your journey of hire? Or did you just read traction and you feel, you know,
Speaker 2benefit to? Yeah, so we have not done EOS, we have done kind of a modified version of it called the growth system built by a company we work with called cruise and co. Okay, who has helped us with with kind of the implementation of some of these tools that we use in our business for it.
Speaker 1So talk about the before and after what, what was what, what didn't work that now works? Because you sort of reimagined how you think about defining, you know, and maybe Clay Christensen would call it jobs to be done, but responsibilities and you know, versus like, what was breaking or didn't work? Was it that you felt trapped by the existing people? You just couldn't get beyond like looking at a name in a box and figuring out what they should do?
Speaker 2Yes. Yeah, I think that's it. It's and by the way, I absolutely love Clayton Christensen. I could watch YouTube videos of him all day.
Speaker 1And did you see the not to interrupt, but did you see the 98 versus 100% video? No, no, I'm gonna have to watch that. It is a great one.
Speaker 2Fair. Yeah. And I but to be frank, I haven't studied the jobs to be done quite like I've quite as well as I've studied some of the tools that we've implemented in our business. But on the face of it, I really love the the kind of the jobs to be done framework, right? So I might botch some of it. But, you know, in this case, and and for the marketing organization, like a big problem that we see, when we're like, I talked to a lot of companies, right, either prospecting or just getting to know my business, getting to know the industry that I sit in. You know, I talked to leads that come in, and I'll talk to a manager, and they're not able to say how their goals ladder up to the company's goals. Or they don't know how what the expectation is for growth for that business, whether it be, you know, typically, we see companies that are looking to grow 20%, and like the larger private equity firms, 50% for some of the smaller kind of growth equity type businesses, 100%, 300%, or even 400% for some of the VC backed businesses that you work today, work with today, the the the companies that we've seen grow the quickest, the abnormal securities of the world, the drifts of the world, the app dynamics that we've worked with, you know, there's always been pretty clear understanding of what someone's role or responsibility is inside the organization, what the KPI that they're moving towards, and how that ladders up into the larger vision of the overall business. And so when we start with roles and responsibilities, you know, I think this gives a lot of marketers a pretty clear framework for how to how they should be structuring their organization. It's also helped us understand how we should be structuring our organization. So everybody feels bought in, of what the metrics they're looking to move and what their roles are inside the larger, larger inside of compound growth marketing.
Speaker 1And, you know, it's
Speaker 2something I missed out on
Speaker 1early on, did you face any pushback from the team, rolling some of these ideas out where maybe they're used to doing things a certain way? Or did you feel like maybe
Speaker 2this is busy work? Like, did you have to evangelize the idea to have it resonate? Yeah, I mean, I think for a lot of the folks that I work with, what I found is people have very different views on how they work than I do. And so they have really liked, you know, understanding what is the criteria for me to be successful in the organization. And so we've kind of mapped this out across AEO, performance marketing, our account management function, org, and HR. But, you know, for I think a lot of your listeners are in are in sales or in are in marketing, right? They are. I mean, it's the pavilion community. So it's a go to market community. And then kind of thrust into this kind of executive role. And I think, you know, that's why you see some folks get into the director and VP roles and struggle a little bit because, you know, they're missing out on certain parts of the marketing function. But, you know, I would encourage people to think about like roles and responsibilities in a marketing function. Think about the marketing funnel. Think about the KPIs that are tied to that and develop those. Develop the roles and responsibilities to make sure you have visibility and you have key performance indicators at every step of that marketing funnel that somebody is paying attention to, that somebody has clear ideas of what their performance would be tied to, because it's I would say it's the number one indicator to us of a client of of a prospect who we think, you know, they have potential to grow versus, okay, this company needs to put a little bit more of a focus on. Yeah, I agree with that.
Speaker 1That's great advice. advice. John, we're almost at the end of our time together. One of the things we like to do is pay it forward. So that means influences. You know, it could be books, could be podcasts, could be a mentor. Ideas that have influenced you that you think we should know about. What comes to mind when I frame it that way?
Speaker 2Yeah, I mean, I still remember the Miami weekend that I spent with my wife where I read The Hard Thing About Hard Things. I was a VP of marketing at the time that I read that book. I go back to it often. And, you know, it helped me understand some of what the founder who I was working with was going with and how to kind of manage up into that position. But also helped me think about, you know, my role as a CEO within my little, you know, function inside of the business. That I was working with. So that's one that I often go back to.
Speaker 1A big one and a favorite for a lot of folks. A great book, obviously, by Ben Horowitz, if anybody doesn't know. If folks are listening and they want help with their marketing, and I know compound growth marketing can help them, what's the best way to reach out? What's the best way to connect? How should they reach you?
Speaker 2Yeah, you can find me on LinkedIn, John Short. I write posts every once in a while, but I'm pretty good at keeping up with my DMs. Or you can go to compoundgrowthmarketing.com.
Speaker 1Awesome. John, thanks so much for being our guest on Topline Spotlight. Sorry for the intrusion of my little girl. I loved it. Yeah. She's still here. And she's playing with my watch right now.
Speaker 2How old is she? She's 20 months old. Oh, wow. Yeah, that's great. That is starting to become a bigger influence at that point. So that was a really fun time for me.
Speaker 1How many kids do you have? I have two. I have a six and nine-year-old. Oh, awesome. Well, listen, thank you again for being our guest. Thanks for being a supporter of Pavilion. We really appreciate it. And folks, check out compoundgrowthmarketing at compoundgrowthmarketing.com if you want help driving performance and demand generation for your B2B business. All right. Sounds good. Thank you. Okay.
Speaker 3And against all odds, you're still here. Thanks for joining us today. We'll see you next time. Have a delightful day, everybody. Thanks for watching!
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