Hey everybody, welcome to the second growth podcast. I'm Tori Kinlick, VP of Demand Generation at Refined Labs, and your host today. On this episode, I sat down with Matt Wilbanks and John Fennungher, two directors of Demand Gen here at Refined Labs, and we covered how to talk to VCs, investors, and boards of directors about demand generation. It was a great episode filled with tips on how to navigate these conversations around funding, conversations around quarterly business reviews, and we wrapped up the episode with each of our top recommendations on how to prepare for these conversations.
So I hope you enjoy the episode as much as we enjoy filming it. Welcome to the show. Two of my buddies, my colleagues, Matt and Jonathan. Matt, Jonathan, you want to just go a quick intro?
Go ahead, Jonathan, you want to go first? Yeah, sure, I'll start out. Hey everybody, I'm Jonathan Unger. I'm the director of Demand Gen here at Refined Labs.
Been here since the beginning of 2022. Prior to joining, I was at a company called SigmaVIA. It was about an 80 person startup. When I joined, we were acquired in 2021 by SAP.
So I've seen kind of the entire lifecycle for startups and been around when the funding grounds came in, seen the impact on how that changes marketing team. So I have some perspective there, and I'm now working with a lot of clients who are in similar stages. So hearing what kind of questions they're getting from VCs and helping us assist them with messaging back. Awesome.
My name is Matt Wilbanks. I'm also a director of Demand Gen here at Refined Labs. I've come from the tech startup space. I started a SaaS company back in 2014 and ran that as CEO for six years.
We went through six different rounds of venture capital. We spun that into the next early stage startup, where I served as CMO, and we raised three rounds there. And I'm fresh off of that one. And here at Refined Labs, having fun?
Awesome. Thank you both. And so for those of you that are listening today, you might kind of catch a little bit of a similar thread there in those intros in that talking about startups, talking about funding investors. And so that's actually really the topic of the conversation today, and it's how to talk to VCs or investors or boards of directors about demand generation.
So this can be a very nerve-racking, a very daunting experience for folks that haven't been through it before. And I think in my experience, I have presented to a couple of different boards of directors, a couple of different investor groups in my career. And I can say that I have always overprepared for those conversations. And certainly better to be overprepared than underprepared without a doubt.
I think the main issue that I ran into is that overpreparation often kind of led itself into the deck that I had prepared for those conversations, thinking that everything was just going to go very smoothly, everything was going to go according to plan, and that couldn't be further than the truth. And so the thought here with today's episode is that a few folks that have been through this before, we're going to give you all a couple of different ideas, a couple of different topics, a couple of different perspectives to think about so that when you're faced with this situation, and maybe it's something you're preparing for right now, you've got a couple of different ideas and takeaways that you'll be able to leave this podcast with and hopefully put to use pretty quickly here. So I think the best place to start is really what the most expected or most predictable challenges are going to be when you're getting in front of these groups, these leadership teams, these investors. And so Matt, I want to start by kind of tossing that question your way.
What do you think is the biggest challenge that you really need to prepare for? Well, so first I think it's understanding the mindset of the investor that's on your board that you're talking to. If you're approaching the conversation from the perspective of a marketer who is wanting to run demand-gen strategy and tactics, you have to understand that from their perspective for the last decade plus, they've been investing in companies, and they've been on the boards of companies that have been running lead-gen strategies. They have been operating on financial models that have been built around the MQL.
They can talk front to back about how much money is allocated towards a lead coming in at the top, and how much it should cost, and the conversion rates all the way down to where it turns into revenue. And it works out really nicely on a spreadsheet. And that is the mindset that they have used with every startup that they've been invested in, for some of them for as long as they've been an investor. So that's the mindset you're walking into.
If you're wanting to run demand-gen strategy, then you have to be able to talk about why that mindset needs to start changing. And the way to do that is to approach it much like you would approach the problem of even selling your own product. You talk about this is the way things were, 10 years ago, there was no Zoom Info or Cognizome or these types of companies that collect contact information for you. We were collecting leads as salespeople, we were collecting them manually.
We're going to trade shows, we're exchanging business cards. And so back then, if marketing could put together a piece of content and get somebody to hand over an email address and exchange for it, that became a much easier way and a much faster way of building a list of contacts. And so over the last decade plus, that has been marketing's job is to become really efficient at building leads of lists for sales to outbound to. That's no longer needed anymore.
You can go to one of these contact info collection companies and you can get those exact contacts that you want directly from them immediately. And for cheaper, then it costs for marketing to go out and run their campaigns just to get the lead that probably isn't going to call you back anyway. So talk about the way things were. Talk about the way things are, how things have changed, Zoom Info, Cognizome, those types of companies exist now, it's cheaper.
And then talk about what they're about to do is, which is, y'oh, give you money for it's running the program. And so from their perspective, if they're wanting to invest their money in the most effective way to build value in your company as fast as possible, well, that's definitely not going to be running lead gen campaigns on downloadable content. It's going to be taking a fraction of that and going to a Zoom info company, getting those leads immediately, getting your sales people started there and then investing in the demand gen tactics that ultimately are going to build those inbound leads that you'll be able to scale the company on and grow margins on. Yeah, it sounds like what you're saying is that the best place to start is like Square One, that there needs to be almost a re-education that happens here with a lot of these leadership groups, these investor groups, because putting it in context, so many of the people that are controlling the money that are controlling the cash did come from an era where that predictable waterfall model, that lead gen model that you're talking about, it was effective once upon a time.
And I think that period of time is what everyone is reflecting back on and thinking that it's still the current state when the reality is times have changed and times have changed pretty rapidly over the last several years. And so many of these folks have been tied up with a lot of us have, with a number of different things over the past few years. But with COVID, with the pandemic, with everything that happened, it brought about change pretty abruptly. And now we're at a point where the marketplace is different, the buyers are, they've been in control, they're even more in control than they ever have before.
And so helping to educate these, the board of directors, the investors, the VC funds on the current state of the marketplace, and this new and better way to do marketing, that seems to be like, it needs to be the starting point of the conversation. And you can't necessarily just jump right into it and say, all right, here's the volume of leads that we're gonna drive or that we drove last quarter, because frankly, I'm surprised that anyone actually did care about a metric like leads when you're going into a conversation like that. But again, they care about kind of two main things, right? It's the predictability of what's gonna happen and how they're going to hit the growth targets, those growth trajectories that they had set forth for the company.
And so Jonathan, on your end, I kind of want to go back to the starting point here, right? That same question, what do you see in your experience as kind of the biggest challenge that folks need to prepare for when getting ready for a conversation or a presentation like this? So you guys had on two things in your initial answers that I wanted to try to tie together. So one is the perspective that the funder is coming in with.
So if you're handing someone a big lot of cash, you're going to want to know exactly how it's being spent and want to know exactly what kind of return you get. That's only natural, right? So that does create an over-lines on some of these demand capture channels, things like paid search, review sites, the typical ones that we often talk through. But that also is leading to subpar results.
So that creates a perception that marketing is a cost center, that it's not a strategic arm of the company. So there's, you know, this want to see this direct return, but then it creates poor results, which causes this kind of vicious cycle where maybe a marketing team is not trusted to do demand generation like they want to. So I think the way to overcome that is the education point that you made to where you said it's about teaching them new ways to measure things. It's about introducing metrics that are tied to business value, which really should be what they care about in the end.
If you can tie what you're doing in marketing to things like pipeline, things like revenue and all the different ways that you can slice and slice those two core metrics, then you're going to have a lot more success and you're going to elevate the status of marketing from we're generating all these contacts to we're generating actual dollar value for you and that those take time and a certain amount of education. And that's something that can happen, you know, right from the beginning of a relationship with your funding partner, but it's something that probably needs to continue throughout the entire partnership. Yeah, no doubt. And I think but pretty interesting there, right?
That understanding that the audience here, right? That you're presenting to, they want to know what the return is going to be on the cash that they're about to potentially hand over to you. And yeah, that's natural. That's something I would certainly be interested in as well.
And so that kind of ties back to Matt's point, right? This whole predictable lead waterfall model, that was something that was a little bit of an easier model to say dollars in dollars out. You give me this much money, I can drive this many leads and we're going to get this much pipeline and revenue. When the fact is like that linear bypass just does not exist anymore, I don't know that it actually ever did, but it certainly doesn't today.
So Jonathan, what are the right metrics to be focusing on, right? So I think that's what we said revenue, but in terms of like how we're going to predict these things, how we're going to model them out, how are you supposed to kind of look back and say, all right, this is what we've achieved, great. But now that you're giving me this additional funding, what's it going to get us? And so where are we now with the ability to kind of predict these things?
Yeah, so a lot to hit on there. I think number one, first and first, you have to understand your CRM data and have your data quality and architecture, everything set up before you're even talking to folks about this, right? So you need to be able to trust the data that you're going off of. In terms of what you should be looking at, one thing that I've found interesting to talk through is pipeline velocity.
So that's basically a combination of your win rates, your ACV, the qualified opportunities that you're driving. So a bit of a volume metric, as well as your sales cycle. So those four metrics are incredibly important. And what we can do is look at them quarter over quarter historically, think about how your demand generation program could impact each one of them and in which ways.
So do we think that we can increase win rates? How are we going to do that? We're going to look at our sales cycle, at which stage are things falling off? What kind of tactics can we do as both a marketing and a sales team really has a go-to market unit to improve that?
If it's ACV, are we introducing new features and functionality that'll help us move up market, qualified opportunities that ties back to the overall demand-gen program? So taking a look at each one of those elements or metrics within the overall pipeline velocity and asking how can we impact that? And what sort of tactics would we need to put into market in order to do so? And I found that that is a useful way to think about it.
Where you could go moving forward and it also gives you a really great historical lens. I like the pipeline velocity. Metric talking about that. It relates really well to the concept of a flywheel, getting a flywheel moving, a lot of investors.
And this is really common language in the startup world. Early stage, we're trying to get the flywheel slowly turning. And then eventually we get to a place where it's got enough momentum that it's kind of turning on its own. And at that point, we're just feeding it energy.
If you're using pipeline velocity to help them understand that with a demand-gen model, you can get that flywheel turning much faster a lot sooner. And you can use some metrics to look at that in terms of just the quality of your inbound demo request. Look at the conversion rates. If all of these demos that you're having are coming from e-book downloads and it's that type of lead gen, you're going to see a very, very small percentage of those that are converting to qualified pipeline and eventually revenue.
And so that's really slowly getting that flywheel turning. But if you're approaching this from a demand-gen strategy, you're creating demand, you're helping buyers to self-educate, self-qualify themselves. When they come in and ask for a demo, they're not raising their hand and saying, your product sounds interesting. Tell me how it works.
They're saying, I already know what your product does. Show me how I can implement it in my company. The quality of that is so much higher. And you have much larger percentages of those meetings turning into qualified pipeline.
So your flywheel ends up turning much, much faster way, way sooner. Yeah, it's all about getting into the state of mind of your audience. So chances are, everyone on that board that you're about to present to, they've read Jim Collins' book. They know the good, a great journey.
They understand the flywheel concept. And so I think that one other way to really help them see things from this new perspective, this other view, is maybe you give them a little bit of an anecdotal example, but just throw it out there. Like, hey, when's the last time that you downloaded an e-book and then went on to purchase something? Oh, never?
OK, so why do you think that this is a good idea for us to be doing it then? Do you think that our buyers are that much different than you all who are now sitting here at the helm of this company? The reality is they're very much open to a new way of thinking. These are obviously intelligent people.
Or they wouldn't be sitting in these seats. They wouldn't be on the other side of this conversation, holding the reins, holding the cash, and being the ones that decide where it's going to go and who it's going to go to. And so I think that the other thing that pivoting just slightly here that I want to think about is that these conversations are not always about securing that next funding round or trying to get this new cash infusion. A lot of these conversations are often more of like a quarterly business review.
And so again, in my experience here, the two biggest questions that you need to be able to answer going into, let's say, more of a QBR style conversation with these folks is going to be what's working and what's not working. And so unpacking that a little bit further, right? Like, what's working? OK, why is it working?
And how do we do more of it? And then conversely, what's not working? And why? And what's our gap remediation plan?
To get these numbers back on track? If you're thinking about things the right way, if you do have that foresight to understand that something's not working or that potentially the trends are suggesting it might not be working in the near future, and you've got a way to pivot, this is something that you want to be bringing to the leadership team, because number one, it puts you in a positive light. But number two, it also is going to demonstrate that the marketing team is not just this reactive team. We are proactive.
We are strategic thinkers. We belong. We need to see at the table. And this is a great way to do it, is by putting these things on display.
And there's nothing wrong with being a little bit vulnerable and explaining that something's not working and trying to help them understand the rationale as to why that might be. So yeah, Jonathan, Matt, any thoughts there on how to weigh in on some of these conversations that are a little bit more of a business review? Yeah, I was just going to add, you said quarterly business review, and that's a review that happens in a specific amount of time. But one thing that you can do is be proactive, like you were talking about, and drip some of those wins out to the team and to leadership as much as you can while they're happening.
So don't wait for the quarterly business review to show that marketing is, in fact, driving stronger tools. It's similar to how you give feedback to an employee who you're managing, right? You don't want to wait until you're employee review, and then tell them all the things that they're doing right and doing wrong. The more consistently you can provide that feedback of the chain of command, the more they're going to be educated as you head into an official review, and the less pushback you're going to get.
Yeah, that's a great point. Dripping it out so that when you're coming to the meeting, there's no surprises. Everybody knows everything. Go to bed, and you're having a discussion about what to do about it now.
Investors hate surprises. So tell them as soon as you know something, go to bed. In telling the story, when you're going to just a regular board meeting or a quarterly review or something like that, try not to get to in the weeds with the tactical level data that they are probably not going to understand anyway. Maybe there's a few of them that might have a background before in marketing, but the chances are very low that if you start talking about click through rates or impression or reach or frequency or all of these marketing metrics that we like to geek out on, you're going to lose your audience.
You got to tell your story in the business level data that they understand. But do have that in the weeds technical data in your slide deck that you can back it up with. So if they start challenging you on it and giving you a pushback on it, then you can pull up that slide and start getting technical and eventually they'll say, OK, OK, OK, we're getting you. No, we're talking about it.
The appendix is definitely your friend. And that kind of really granular data and getting into the weeds is a big part of how you're going to be able to actually build your story out. It's kind of difficult to do without having that foundation. And you might be tempted to build a slide out because you spent all this time looking at that data, even just for your own interests.
So it's great to have it there. Like you said, as a resource if you get pushback, but don't lead with click through rates. Yeah. And you know what else?
Like, hey, you go and build out those slides, even if they don't make their way into the presentation with the board of directors. If you just spend enough time putting something together that you were comfortable enough to put it in front of the board or the investor group, chances are that's something that can still be socialized around the rest of your team. And there's probably going to be other people that might find it a little bit more relevant. That might be a little bit, let's say, closer to some of the data and want to kind of geek out on some of these things with you.
But yeah, so not a total loss call as if you end up building out a number of different slides or talk tracks that don't end up getting utilized. So that actually kind of brings me to one of the, I guess we can call it kind of our key tips and a section that maybe we can use to kind of start to wrap up and summarize our thoughts on here. But so I'll put the question out there first, and then I'm going to answer it and let you both have a moment to kind of marinate on it a bit as I'm giving my answer. But if you had one tip for the audience to take away, to think about as they're preparing for a conversation with the board of directors or VC firm or their investor group or any C level folks that they're about to present to or provide an update on or make a request from, what would that be?
And so for me, I was reminded of, when I sort of think about this was reminded of a quote by one of my favorite boxes of all time, Mike Tyson. And it's something along the lines of everybody's got to play on until they get punched in the face. Now, I don't expect that you're going to go into a board of directors meeting and get punched in the face. I mean, I've been a part of a lot of these meetings, but I've been a part of enough of them to suggest that this is not something you need to prepare for, but I feel like the metaphor is still relevant, right?
And so what I mean by that kind of tying back in the comments that we were just making is like, obviously, you want to come prepared, you want to have a deck. But when you build your deck out, let's say you build out five or 10 slides, take it and then distill it down 90%. Figure out how you can really just have the key talking points because if there's one thing that I have learned, it's that it's just totally unpredictable. You're going to have a plan.
You're going to think that you've got your talk track nailed down. You're going to get five minutes into that presentation and things are going to go sideways. And you're going to spend a majority of time kind of on some parking lot topic that you had not really intended for. That might be the one most predictable thing that you can expect.
And so the kind of second bullet to that, right, is that you also want to prepare an agenda. And so your deck should be really as concise as possible, but your agenda should probably be as broad as possible. And that goes back to the point that you were both just making, right? And it's being armed with the data, even if it's not something that you're planning on presenting, you never know which turn the conversation is going to take.
And so having those data points, those slides available, even if they're not part of your original talk track, that will come in handy, even if it's not immediately with the board and it's something that you go to utilize later on, that information is still good to have with you, kind of keep it in the holster so to speak and make sure that you've got it and can speak to it if the conversation does go that way. So I'll toss it over to whoever wants to crack at this one first. But what would your key tip for the audience for you? I'll go ahead, Matt.
All right. So I'll say this is very much related to what we were just talking about. But I'll say know your numbers. You want to be able to tell a story and make a good case for whatever it is you're pitching or whatever it is you're updating on.
But you need to know your numbers really well. Because if you get into explaining whatever it is that you're talking about and they start pushing back and you can't come up with the numbers to support yourself or they start asking for things and you have no idea what the answer is, then you're losing credibility really fast. So know your numbers. Love that.
Jonathan, how are you? For sure. So I think this goes back to the point about being proactive. And we talked about a lot of different things.
So speaking about QBR, speaking about when VCs are coming in and potentially funding you. But I think like getting a big round of funding is a lot like winning lottery, right? And you hear a lot of horror stories about people who win lottery and then their life goes completely in the tubes, right? Because they weren't ready for this kind of money and they didn't have a plan for it.
So I think what people should do if they're in high growth startup is always have kind of a dream list of items that if you had the cash, what would you use it on? Why would you use it? And what would you expect to get out of it? So like as an example, a lot of companies don't have video capabilities in-house.
But they know that they would love to do it. They love to be on YouTube. They know how video can be repurposed across various social channels. So build that plan out.
Think about like what kind of headcount what you need for it. How much would you have to spend on production versus hiring versus media spend? And be ready for that so that when that money does come in, you're comfortable speaking to it. And you can action it quickly.
Because I think it's very easy to get caught on a wares and then be like scrambling and not seem like you have a strategy so that then might turn into more of like a legion based program that these sees are more comfortable with. So I'd say people with the dream items be like aspirational and know what you'll do when you get that windfall. Yeah. And don't say run content syndication programs with it.
No, I just got back. That's a red flag. Cool guys. Well, this is great.
I think that that wraps up our conversation for today. So thank you both for joining and for everyone out there listening. Thanks for listening.