Can we find new growth levers by looking at the most fundamental ways products grow and marketing’s role?

The Short Version

Acquiring customers is really hard right now and the levers we have been relying on the past few years aren’t as reliable as they used to be. Compounding the problem is org roles and responsibilities and conflicting “motions”: product-led growth, marketing-led growth, sales-led, growth design, growth marketing, etc. AI is about to break open amazing new solutions. The companies who find this out fastest will grow like gangbusters — because it will be efficient and customers will be in awe by the experience those companies create in their products and marketing. How do you become one of those companies? I don’t know yet. But I threw out a potential way to organize around it in the context of AI: Network Value (product-leading growth) and Virality (marketing-leading growth).

The Long Version

What I Am Seeing

I am seeing so many marketers “send more” and “optimize” using Chat-GPT based on the existing growth playbooks. Not to be dramatic, but marketers trying to acquire customers sending “more” “faster” against a 0.X% response rate is a race to the extinction of a channel. Chat-GPT is the just the first AI tool for marketers. There will be many…

Consumers are going to revolt if this is the way we use them. Just like automation created a short-term win for direct mail, it then killed it with volume. And MarTech blew out display ads, and then consumers got blockers. Content Marketing, Email and Text are rapidly entering this curve. These channels were maturing even before Chat-GPT and AI marketing tools. They haven’t been as reliable as they used to be. Chat-GPT didn’t start the challenges, but I think it is exacerbating them.

When content is so commoditized and pummeling us, we will look for curation, quality, or just stop reading. I think we may be accelerating the death of our core channels.

So What Do We Do?

I don’t want a better buggy whip. I want a car. My obsession is on what is being unlocked by AI (consumer and marketer sides). I have been grokking this because people keep asking me and I haven’t known what to say yet. But here is my strong instinct. We will find it in the two most fundamental ways products grow meaningfully for users and marketers:

1) Products that create more value for the users when more people use them (network effects)

2) Scaling meaningful connections between products and people (virality)

The biggest growth success story so far this year does both: ChatGPT. Now how will product + marketers build on that to market their products? I don’t know yet, but I am happy to share where I am looking.

Back to Basics: How Products Grow

What does a marketing team fundamentally do? Marketing conveys meaningful value and makes scalable connections for products that don’t naturally do it themselves.

Products that market themselves 1) have value that increases with more users and 2) create connections better than paid marketing.

If a product doesn’t market itself (or generally does market itself, but is at a juncture when it needs help (eg launch, marketplace imbalance, adding fee based services)), you need marketing.

For free products, networks, and marketplaces, marketers: launch them to get the word out, compete when they are mature, or rebalance the marketplace (think AirBnB).

For paid products, marketing has a big role from pricing to positioning and more (think iPhone). It’s hard to compete with free.

Confusion comes from: 1) Marketers tools (media, data, product, content and channels) dramatically changing and mashing up with Product’s. 2) The word “marketing” too narrowly used as a synonym for paid media and, therefore, the myth that the best products don’t need marketing.

Network effects (value of the product or platform increases with more users) and virality (users getting more users and bringing them back to the product or platform) are well documented. The best founders and CEOs understand this intuitively and many investors look upfront for business models with network effects and virality built in. Product-Led Growth is a recent iteration: bringing consumer network effects (eg community templates) and viral loops to B2B SaaS.

While both marketing and product agree the product is the most important thing — growth orgs, ownership, and tools are at an impasse.

We need to look at who is focused on 1) creating network value (Product leads, Marketing supports) and 2) who is focused on scaleable connections (Marketing leads, Product supports). It won’t work for every company, but it might for a lot? Most importantly ensuring this doesn’t fall through the cracks.

The “Type” of Product is Really Important

Beyond the customer, everyone agrees the product is most important. How you grow it starts with the product. Simply: does the product provide “inherent” or “network” value to a customer? Note: I am using the word product universally for product or service. Here’s a break-down of marketing three types of products: Inherent value, Networks, and Marketplaces.

Marketing Inherent Value Products

Inherent value means the value for the user is the same with 1 user or a million users. These products do not “market themselves”. Drinking a can of Liquid Death does not naturally connect me to another person who then drinks a can of it. There is no natural incentive, meaning the value doesn’t increase my can of water, if someone else across the world is drinking it, too. This is the same for my standing desk or Mac or in many cases B2B SaaS.

Inherent value products tend to have fee-based business models, that allow companies to charge for them and likewise invest more in the value of the product or service and marketing to get the word out, distribute the product, and serve customers. Customers pay for these products.

Since these product do not intrinsically have connections or incentives to make them, marketers create them. Doing that meaningfully and cost-effectively is a skill (especially doing it beyond discounting). This is the vital role of marketing.

Marketers of inherent value products can pay to make the connections, but to do it efficiently, they often piggyback off of viral (network effect) platforms like TikTok and Instagram. Liquid Death (canned water) or the very original Old Spice first viral campaign on YouTube, have some of the most successful digital campaigns of all time. But it is due to creative, storytelling, and the platform wrapped around a complete commodity (water). Pretty cool when you think about it. Ironically, that’s why some of the best creative marketers who create remarkable campaigns work on the least technical products.

Product Marketers (aka Product Managers) use marketing levers to sell these products: value proposition, pricing, placement (aka distribution), promotion, partners, and people (aka service) (5Ps) and deeply understand customers, competitors, channels, and cost (4Cs).

Semi-exceptions are inherent value products that are unbelievably remarkable (eg ChatGPT) and/or scarce (Air Jordan collabs). But somewhere, somehow people have to be made aware of it in the first place. That usually why the marketers of those crazy good products start with PR and influencers. Elon Musk tweeting to 100M+ followers about ChatGPT. Press interviews on ChatGPT. etc. The first “marketing hires” for amazing technology products tend to be Communications (PR and / or community leaning).

Marketing Networks

For networks, interactivity with other people make the product more valuable and a better experience. I am incented to recruit more users. Slack. TikTok. Instagram. Airtable. Figma. etc.

Many of these business models are free to the end-user (entirely or a freemium model). If they are completely free, companies can’t afford to spend money on marketing to acquire new users (eg TikTok). The free-ness fuels the virality. The barriers to sign up are so low.

The irony is that while these products “do not use marketing”, they almost all rely on it to make money. They use advertising business models to make money and invest it in the product that is free to their users. They charge advertisers, while monetizing their free audience. There is often a symbiosis between network products and inherent value ones.

Marketers have other roles in network products. They do sales enablement for the B2B side of networks. Marketers also come into play in mature direct network effect categories with lots of competitors. This transition can be messy: introducing paid marketers into a culture that got all of their historical growth without it. They may be introducing a premium tier or firewall (and working to introduce an “inherent value” product). But many of the first and most successful additions of marketing are often through partners. For example, making your app default on an iPhone.

Some of the network products charge fees. They also get better with more users. B2B SaaS collaboration tools (eg Slack, Miro, Figma) or MMORPGs (Massively Multiplayer Online Role-Playing Games) like World of Warcraft where special gameplay unlocks with more players. Unlocking network value and charging fees is a pretty incredible business model. This was the secret sauce of a lot of tech success stories the past few years.

Marketing Marketplaces

You need scale on one side to create value for the other and vice versa. It is a chicken or egg challenge. The network effect kicks in when you hit critical mass and there is demand / pull marketing from one side to the other (eg AirBnb)

These products tend to be fee-based (eg a percentage of the transaction), which allows marketers to invest in hitting that network effect moment. For quite some time after that, the network can market itself.

However, the supply and demand can get out of whack. Too many men, not enough women on the dating app. Too many patients, not enough doctors on the scheduling platform. You may need marketers to get the network back into balance. But they need to do it in a way that also doesn’t (ironically) decrease the value for that side of the network. Simply, more sellers on Etsy is worse, not better, for other sellers. More women on the dating app means more “competition”. It is the anti-network effect or anti-virality: they are disincented to recruit more peers.

This is where marketing and product can work together. Ideas include: 1) Offering something of inherent value (eg new feature of benefit). For example: “Fulfilled by Amazon”, Free Shipping. Those are not network effects, but can play a role in a network. 2) Create a viral or remarkable campaign. 3) Partnership marketing, etc.

The Holy Grail of Marketplaces

Create a way that one side of the marketplace get more value when more of their peers participate. Flip the narrative.

For consumer examples: reviews, group buying discounts or donations, co-creation, movement.

For sellers / businesses: lobbying (eg AirBnB), benchmarks (eg Google analytics), developer forums (eg Stripe), efficiencies of scale (eg Amazon Web Services).

Quite simply, are you always thinking about how to create more group value for your product to motivate your customers to recruit others? Especially if it doesn’t happen naturally (or even the reverse, they are disincented to do it for competition). This is how to align product and marketing and makes roles much clearer. This is where AI can be more than an “optimizer”. It is a value creator for growth.

Org Structure is About to Get Really Important

There is a lot of confusion right now on who leads growth: Product, Marketing, Growth, Sales, Brand/Communications (often the voice of the CEO), and CEOs/ Founders having to referee it. “Growth is everyone’s responsibility”. Yeah, but how do you then create clear roles and responsibilities and accountable goals? How do you give amazing teammates “room to lead and space to work”? (A quote I learned from a great product leader Carolyn Dempsey). And how do you make sure companies who are figuring out AI faster don’t eclipse your growth relying on email, affiliates, SEO, etc.?

I have a working hypothesis we need to explicitly add “network value” for product teams and “network connections” for marketing ones — to ensure that we are solving for the right questions. This feels brave and really different than how priorities are set today? Who is doing this that I don’t know? I’d love to learn from them.

Here is a potential way to frame it:

Who owns creating network value in the product? Product.

Who owns creating connections for products that don’t do it themselves and “selling” fee-based products? Marketing.

Sometimes you lead (eg launching a network value feature). Other times you support (eg marketing getting the word out about it). And vice versa.

Creating a goal or dedicated marketing / product team to “explore AI for our product” is not the end. It’s the means to a goal for marketers: growing in a meaningfully way for customers and shareholders.

The Wrap Up

I haven’t been this excited to be in marketing for awhile. Existing digital channels are mature (customers and marketers feel it). These are amazing times we live in. I’ll keep learning and sharing.

About the Author

Pat Shores is the founder of worktwenty— a new model providing two services: 1) Marketing advising and consulting projects (worktwenty) and 2) Marketing Matchmaker and Agency Finder for great help to match company budgets and B2B or DTC needs (ask worktwenty). Her passion is how great marketing gets done and better marketing models to meet the moment.

I have shared my ideas about Matchmaking Marketers to Company Stage and Strategy for founders and marketers. To further this idea to help match marketers and roles, I am introducing “context skills”. This is a work in progress, but my initial thinking is that a marketing leaders’ skills fall into three buckets: 1) Marketing, 2) Management, and a new area I’m calling out 3) Context.

One: Marketing Skills

This is the through-thread. These skills are what define a “marketer”, and they are absolutely transferrable between different stages and strategies. Certain companies may require dialing up different ones. But like great athletes, marketers can play multiple sports really well: growth driver; product marketer; brand storyteller and voice of customer; digital transformer; and marketing operations. The biggest differences tend to be B2B vs. DTC; free (ad supported) vs. paid; and existing customer base (cold start vs. cross-sell). There are others, but you get the point.

At our heart, we are all customer-obsessed (be it analytics or intuition) and use messages, touch points, and creative that we make based on those insights to inspire, inform, or incent someone to take action.

Two: Management Skills

These are also pretty clear, but vary significantly based on the size of the company. Why? Literally the number of employees. Managers need people to manage. Seed stage startup hire an Individual Contributor first. I do a ton of work with seed and Series A companies, but they do not need a full-time CMO. That’s a later stage hire for function (re)creation (tech stack, processes, and people) and hiring and working through people. Great marketers in big companies can be masters of this. Process without bureaucracy, clear decision-making, communication, developing people… In many high-performing large companies, managers are goaled on this alongside financial metrics since it is so vital to how work gets done and why great employees join companies and stay.

The messiness can be in Series D, run up to IPO, and fast growing companies where managers are “brought in”. The transition can be tough on everyone. There is work to be done here!

Three: Context Skills

This is the murkiest and I’m helping surface this as so important. It’s basically operations: how work gets done. But for marketing, I think we have the most to learn and develop here as we move between company stage and strategy. Bias to action vs. strategy. 90 Day Plan in a startup vs. big tech. When to be hands on vs. delegate. Socialize vs. skunkworks. Get permission vs. ask for forgiveness. Getting to a decision with a founder vs. Exec Team. Leading to clarity in ambiguity vs. optimizing processes. Founders and CEOs (and increaslingly Product Leaders) have tomes on this. But VPs and CMOs across stages do not. Maybe we could just say it’s about “company size”, but a more actionable way to look at it is context. This isn’t as simple as their nature. Can we nurture the skills?

My gut is that “context skills” are the third leg plus marketing chops and management skills that will determine how effective marketers are. We are about to see a lot more surface about this. I hope so. PS Culture is critical, but not a skill. So I am not explicitly including it.

Closing Thoughts

Marketers will be moving between large and small companies with the tech layoffs plus the surge of new startups right now from emerging technologies. Marketing Operations continue to get more complex. Stakes are high in this funding environment. The median tenure of a CMO is 30 months. For all of these reasons, I think we are going to have to get better at intention and development around “context skills”. Let’s do it.

(With the volume of incredible marketers changing company stage and strategy right now, we have to build “context skills” faster vs. learning everything the hard way. It’s why I am so focused here and learning from the best operators to support founders and marketers.

Some senior marketers strongly disagree with this idea that context matters. On the other hand, founders often nod their heads, especially if they are on their second or third marketer. But if we can’t identify the problem and own it openly, we can’t solve it together. And hopefully, if we solve it we can help prevent spinning out great marketers so fast — as bodies reject the organs of even the most amazing marketing leaders in the wrong context. Why are high growth startup founders surprised when they hire the most amazing marketer from Apple or AirBnB, and it doesn’t work out? And what is the difference for the ones who thrive? Matching marketing, management, and context skills to company stage and strategy — and going in with open eyes to highlight the strengths and getting ahead of the gaps with support. It is worth it!

Here’s some inspiration: Climate startups are hiring thousands of roles. If 50,000 tech employees laid off in 2023 spent even one hour on climate work, that’s the equivalent of 20+ years of one full-time person. The speed-to-impact of this moment could be monumental for people getting jobs and the planet).

About the Author

Pat Shores is the founder of worktwenty — a new model providing marketing strategy and staffing. We provide strategy, messaging, go-to-market plans, and org design. Then we support execution through recruiting and referrals to a vetted network of growth, product, and brand marketers and agencies. And if needed, we roll up our sleeves to get momentum in the meantime.

Two years into founding worktwenty, I’m seeing — and helping founders and execs understand —changes in CMO hiring and building marketing teams for cost-effective growth.

What I’m Seeing

Pressure for companies to rethink growth strategies and therefore orgs. But they are stuck with the chicken or egg dilemma: hire or growth strategy first?

History shows people hire a new senior marketing lead first. I believe this will change. This sounds crazy, even to me at first.

A Perspective

Marketing’s role is defined by growth strategy and stage. Not vice versa. I provided tools to map this in a prior post.

No one marketing leader can do all of it anymore. It’s too big of a risk. The stakes are too high and the runway is too precious.

You can lower risk and speed-to-learnings faster with growth strategy “pre-work” to inform your focus, CMO job description, and goals for the lead.

The Problem

Hiring first is rolling the dice with high stakes of budget, time, and major culture / credibility hits if it doesn’t work out (many times it doesn’t). It goes like this:
1) Spend forever filling the role since interviewers are debating strategy through the job description;
2) Give the incoming leader a mandate to turnover and hire the whole team;
3) Hope you picked a leader who’s strength is what you need to grow;
4) If not, lose patience, exit the exec, rinse and repeat.

A Potential Solve

Pre-work on growth strategy and then develop the leadership profile, goals, and high level org structure and action plan to get learnings faster and move on the vital roles / ops. This won’t work for every company, but for many it will brilliantly, right? There are growth strategists and fractional CMOs actively working to prove it out including and beyond me.

BUT PAT, DON’T WE TEST AND LEARN INTO GROWTH STRATEGY?
Yes and no.

Yes…What you know WILL inform the growth strategy, not just gut.

No…But relying on incremental test and learn tactics for a major company pivot will take too long and give false signals. By your own design, new audiences, products, etc. will underperform what you have been optimizing to so far. It will very likely keep you on the same path, armed with data showing what doesn’t work, not insights on what to change.

SERIOUSLY, PAT? LET’S WAIT FOR THE EXEC.
In the past, 100%. But now, they will thank you. They will be set up for success. They won’t have to re-org the whole team the minute they get there. They won’t be scrambling focused on filling the critical role(s) from day one. You will be in it together, not putting it all on them with incredible expectations and a stopwatch.

Happy to have this (crazy) talk with you. Recruiters fill full-time roles. I focus on achieving goals through org design tied to growth strategy. I’m tapping into a network of incredible people with even stronger experience across stages, business models, and specialties than me to help us all get smarter on this. The work continues…

About the Author

Pat Shores is the founder of worktwenty — a new model providing marketing strategy and staffing. We provide strategy, messaging, go-to-market plans, and org design. Then we support execution through recruiting and referrals to a vetted network of growth, product, and brand marketers and agencies. And if needed, we roll up our sleeves to get momentum in the meantime.

The median tenure of a CMO is 30 months and I suspect for earlier stage companies, it is even shorter. There’s a ton written as to why, but I believe at the heart of it is mismatching marketing’s role with the company’s needs. This mismatch isn’t just for CMOs, but for the overall function.

TL;DR marketing’s role is driven by company stage and strategy and changes over time.

It is one of the top questions I am asked to solve, so I thought this might help. To help right fit marketers to companies, I created some basic guides.

For Founders, CEOs and HR, my hope is that these guides can be used as directional tools to help map your company to what marketing capabilities you need.

For marketers, maybe they can help you create your own path.

Tool #1: Matching Marketing to Stage and Strategy

I picked the live or die North Star goal by company stage and worked backwards from there. I defined marketing’s role in crushing that goal, then backed into what capabilities are required. I broke capabilities into marketing skills and management skills. Finally, I included common org structures by stage as a point of reference.

Between the stages, there are strategic inflection points.

That’s usually when the organization starts questioning the marketing team or marketing lead and asking “what does marketing do?” A lot of the advising work I do is helping companies through these transitions, which is how I started to piece together this chart.

The irony is that if a marketing leader or team does its job really well and get to the next level, they likely design themselves out. My gut is that the median tenure of a CMO correlates to the length of a stage or change in strategy. I personally don’t think any one person or the same team of people can deliver across multiple stages over time.

This dynamic creates opportunity for new models, such as: fractional leaders, fully embedded growth teams “on loan”, and specialized freelance collectives across the marketing stack. I think of it like Mary Poppins Marketing. Fly in. Get sh*t done. Have some fun. And then fly on to the next one. (It’s a more recent vision for the Reid Hoffman, Chris Yeh, and Ben Casnocha concept of Tours of Duty)

Tool #2: Marketer Roles

Creators Colin and Samir said the term creator is like the word athlete. So is the word marketer. I think of our “sports” in 5 big buckets:

Note: There’s a ton written on marketing roles and levels, especially for Fortune 500s from Spencer Stuart, Deloitte, and more. I did not invent this concept!

Like a great athlete, you can play lots of sports. But you probably shine and love one or two of them. No one is amazing in all of these marketing roles. If you are early in your career, these roles can be North Star(s). If you are more senior, this guide might help you better understand how to position yourself: your major and minors.

Considerations: Customers, Product, and Lead Go-to-Market Channels

Here are other considerations when thinking about different marketing roles and capabilities. Even great marketers and recruiters sometimes underestimate these differences. (I have, too). I tried to call out the differences and heavier marketing skills required for each.

Who are the Customers?

Enterprise B2B (requires more product marketing, brand, and sales enablement with longer sales cycles)

SMB (remixes enterprise high-touch tactics with scaled consumer ones)

DTC (requires full-funnel marketing at scale with shorter sales cycles)

B2B2C (requires marketing with indirect control through other companies)

What is the role of the product in marketing?

Product-led growth and network effects (“markets itself”)

Paid product (requires pricing and promotional smarts)

Commodity (requires branding, ingenious channel / partner strategies, and creativity to differentiate)

Highly differentiated product (requires awareness and then pricing, product marketing, and distribution skill sets)

Where is the Distribution Focus?

Online, Offline, or Omni-channel

Tool #3: Getting Jobs, Skills, and Connections

Specialized marketing communities are skyrocketing. Nothing beats learning marketing capabilities on the job, so these communities bring marketers together for practical skill building cohorts (upskilling), sharing job openings (hiring), always on networks to ask questions (peer advice), and networking (business development) whether you have a job or are in between them.

MBAs and L&D Programs (eg Life Labs) were created for management capabilities. These emerging communities fill the gap for marketing ones. And they often bring the power of the connections and introductions, unlike pure online courses.

Links:

Reforge | Right Side Up | Pavilion | Bravado | Email Geeks | Online Geniuses | Lenny Rachitsky | Marketing Profs | Product Marketing Alliance | Superpath | Mixing Board | Kellogg Online Courses | Publicist | Julian Cole’s Strategy Finishing School | Miami Ad School | David Spink’s Collective| Chief | Accenture Academy | Change Management Models and Sources | Marketing Ops

About the Author

Pat Shores is the founder of worktwenty — a new model providing marketing strategy and staffing. We provide strategy, messaging, go-to-market plans, and org design. Then we support execution through recruiting and referrals to a vetted network of growth, product, and brand marketers and agencies. And if needed, we roll up our sleeves to get momentum in the meantime.