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What kind of marketing leader does your company need?
The Goldilocks conundrum applies... too big, too little, juussst right
As an advisor to B2B startup, scale-up, and public-company C-Suites, I get this question ALL THE TIME. Companies in hypergrowth move quickly through many phases of being and need different things from their marketing leader at different points. Hiring a big-time CMO too early can be a recipe for disaster - they may not have the budget or buy-in they need to be successful at a too small company. They may not remember how to roll up their sleeves and do hands-on work themselves. Conversely, outgrowing a great executional marketing leader can be hard too. They get their work done (mostly), but they aren’t pushing the strategy forward, unifying the message, elevating the team, and pushing the company to the next level. It’s a tricky yin and yang for founders.
Trading Off Important Qualities
In selecting a marketing leader, there are three aspects of their knowledge that are under consideration. In your dream world, you could get the best of the best in all three, but generally, you are trading off some aspects of each against the others:
Within “Marketing Skill” itself, there are three orientations. Some marketers have cross-trained between these areas of expertise, but many work their way up in one and have weaknesses in the others.
There is a small fourth category — some marketers have come from Sales backgrounds - incredibly helpful for marketing and sales alignment and revenue-focus.
How you make decisions on these skills and expertise varies widely by the size of your company.
At each stage of a company’s journey, it can be hard to hire “out of your league.” A CMO that has been successful on a run from $200M - 500M, for instance, might be hesitant to take a CMO role for a $50-$75M company. There is a lot of risk, and opportunity cost vs taking another $200M CMO role and doing the larger-company ride again. But as you pass through each stage of growth, you have access to the “next level” candidates that weren’t available to you before. But first, let’s look level-by-level.
Early Stage Startups Should Hire Generalists
Most first-time tech founders aren’t experts in marketing. But early-stage founders do a ton of marketing on their own - they identify the ideal customer (or at least start testing possibilities), they work on messaging and positioning (or at least write something on their website), they build a brand (or at least select a logo and a first color scheme)… Often, a ton of initial marketing takes place inside a startup before experienced marketers join.
But as the product gets built out, gets some early traction, and the company is looking to expand awareness, leads, and sales, they frequently look for their first professional marketer. Most early-stage companies, constrained by costs, hire a single marketer who is a generalist. They often are more product-marketing-y, helping the company define the message and materials, or they are more growth / demand generation-y and start working on building the organic and paid lead infrastructure. At this stage, many startups hire a Sr. Manager or Director-type role — they need someone senior enough to build the right structure, but junior enough to do a lot of hands-on work themselves. The person gradually starts adding additional generalists to fill more aspects of the marketing skillset. It’s all hands on deck across all aspects of marketing.
Next You Hire a VP of Marketing
The first marketing team will be very flat - a generalist leader with a few generalist/experts on their team. These people flex a lot to do what needs to be done. As the team grows above 8-10, the leader will need to start nesting employees. The CEO may have started upgrading his/her leadership team and bringing in more senior leaders. Sometimes first-hire marketers make the leap to the VP, but often a VP of Marketing who has already seen the next stage of revenue at a growth rate that is similar to yours. This leader is brought in to formalize the team and build out new functions. This often happens directly after a fundraise, when the company has proven product-market fit, has new money wants to invest in scaling up. Sometimes companies are tempted to hire a CMO at this stage. It can work, but it can also be too much. They will demand a bigger salary for starters. They will want a budget to hire great people and fill out a team. They will build out a leadership team that also might be expensive (did you want a VP layer?). If they are coming from a much bigger company, they may have forgotten how scrappy and thrify your startup still needs to be.
Crossing over to a CMO
But there comes a time, when the VP seems “fine” at their job, but doesn’t have the confidence of the CEO or board to take the company “to the next level.” Top issues:
Not generating enough pipeline or revenue (Maybe someone more experienced will be better?)
Isn’t a thought leader for the company, creating compelling, unified campaigns, driving new initiatives, bringing strong business strategies to the table
Hasn’t built a leadership team of their own that’s trusted to scale. The leader and org might feel more junior than peer groups that have been upgraded as the company has scaled
Your VP of Marketing should be a marketing expert. A Chief Marketing Officer is an officer of the company - a business person expected to drive business strategy with the leadership team. They are a step up. Some VPs grow into or flex to that level, but many are replaced by someone who has already been there, done that, and knows how to do it well. How to do it well includes:
Building a category or at least a well-differentiated place in a category
Having a firm grasp of the company's growth levers and step-change ideas on how to affect them
The ability to synthesize problems and opportunities to discuss and solve them with the board, the C-Suite, and the company
Is a thought partner and business partner to the rest of the C-Suite
Scale CMOs: Taking the company public and beyond
Often as companies look ahead to IPO and beyond, they start to reshape their board, their executive team, and their company to look more like a tried-and-true public company vs. a scrappy startup. In the past, many larger-company CMOs were willing to take a CMO job with a late-stage startup for the near-term promise of an IPO and expected financial up-side. While IPOs aren’t in the cards for the next several quarters, it still holds true that as a company scales, they tend to keep upgrading to bigger and better CMOs that have already seen the NEXT stages of growth. The trade-offs remain of domain expertise, marketing skill, leadership skills, and marketing specialties. For many large companies, the trade-offs get even harder because the pool of potential candidates keeps shrinking — fewer CMOs have taken the next ride because fewer companies are on that ride. Interestingly, Spencer Stewart found that 54% of Fortune 500 CMOs were promoted internally. In this case, the weaknesses of candidates you know (not having been a CMO before) might be outweighed by the fact that they have deep context across the business in what works, and that have a track-record you have seen directly.
Hiring THE RIGHT Leaders is the CEO’s most important job
Leadership roles are HARD to fill. Many C-Suite searches take 6-9 months, even with a recruiter in place. But hiring an executive leadership team is critical to a company’s success. If it’s done right, the product will flourish, sales will flourish, marketing will flourish, and customers will be delighted. If you make the wrong choice, it might take you 18 months to swap out the leader and get their new team high functioning. So like Goldilocks, check out the different options to find the one that’s juussst right.
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