Thoughts on martech trends in 2017

Having spent the best part of two decades working on the cutting edge of martech, I spend a chunk of time talking (debating!) about what’s next and what’s hyperbole. Given the downturn in adtech last year and the knock-on effect on martech. Is 2017 going to be a good year?

Well it is no surprise the crowd suggests Artificial Intelligence (AI) as their number one tip this year. The commoditisation of natural language systems and machine learning will no doubt accelerate its adoption though I suspect in reality, a large proportion of the companies suggesting they use AI, are really just rebadging decade old technology. This is not too dissimilar to what happened when all the old tech giants claimed they were in cloud computing and will only help the market over time. But what else?

Content Automation: For the last few years, consolidation has been rife amongst the single channel martech companies?—?the most successful of these now exist within the “marketing cloud” platforms of the big 4 (IBM, Salesforce, Adobe and Oracle). All this has meant the focus has been very much on taking advantage of combining datasets and understanding and acting on user behaviour across channels.

Today though, the major cost for companies is in the time taken to put together the various campaigns. These are increasing quickly as the number of channels increases and agile approaches enter modern marketing teams.

Social and email continue to be a challenge here and this year should see startups expand from being focused not just on managing content but also on using AI to make searching for suitable content (both first party and third party) quick and easy.

Account Based Marketing: To some this is decades old and just B2B marketers reinventing themselves. I disagree and think it will be one of the major growth stories of 2017. The approach is certainly decades old but it has been an expensive way to deliver B2B marketing and only the biggest companies have been able to truly deliver on it. This year should see technology being this to a much wider range of companies through great UX and automation delivering on the promise at much lower acquisition costs.

Predictive Analytics should see some real traction this year?—?though it seems to be a bit like the year of mobile before the iPhone?—?its always this year and never is. Maybe 2017 is the year?

Virtual Reality is on the tip of a lot of marketer’s tongues and whilst I believe it will be huge, I think it will be 2018 or even 2019 before this truly takes off?—?though we might see a few companies do things that result in great PR coverage. There just isn’t enough traction yet in my view. Maybe with Apple supposedly doing something or the devices becoming more price competitive in the run up to Christmas we could see things get going in 2018. Maybe.

Assistants a la Alexa, Cortana etc. have seen the level of take-up that virtual reality was hoping for. It wasn’t Apple, Google or Microsoft driving this but Amazon with its Alexa products. They sold 8.2m units over the Christmas period and 2017 should see many many devices also having Alexa built in. Amazon is doing an excellent job with its marketing post sale so 2017 may well see some enterprising jackass finding a way to deliver marketing content and ruin the experience completely. Hopefully not 🙂

Either way?—?2017 is not going to be a year where marketing technology stands still.

Standing out from the crowd: what’s in a name?

Yesterday, whilst drinking a well earned hot chocolate at Shoreditch Grind, I was debating the importance of naming a startup.

One of my old colleagues, Scott Voigt once told me about the bike-shed example, which I now know to be Parkinson’s law of triviality. It basically says that organisations spend a disproportionate amount of time on trivial issues (like figuring out the colour of the shed) because they are easier to grasp than more complex items (like the design of a nuclear power station).

Naming your company is an example of this.

There are however a few things to get right and a few to avoid.

First up?—?you need to be able to get the .com domain. Several people have told me that getting a .io or a .tv etc are all options because they have nicer names available but if you can get the .com it gives the startup a head start?—?it makes the startup feel bigger to the visitor. This is slightly less important if you are a B2B company but still preferable.

Next, it needs to be spelled phonetically?—?i.e. spelled the way it sounds. We seem to be drifting back to the period of Flickr and where we have weirdly spelled company names and this is the easiest way to lose word of mouth traffic. It does not help you.

Clearly you need to make sure the name you choose doesn’t clash with the audience you are targeting. But..

Don’t get too hung up on the name itself?—?if you have a nice backstory as to how you came up with the name then great, if you don’t then don’t waste time inventing one.

Don’t worry about the name being something directly related to what you are creating. Too many founders and advisors get caught out with this one. What is important here, is a name that is memorable, catchy even. Something that has recall value. That way when someone mentions it to someone else, it is easily remembered when they get in front of a keyboard or phone to look it up.

There is nothing worse than a dull name?—?but building on a name around something that fits with the above will eventually lead you to a great name that has brand recognition.

Yo mama, can you spare a dime?

This is the second in the series of posts on early stage investments for technology startups. You can read the first one here.

In the last post I told you to avoid raising money wherever possible. Of course, it isn’t always possible and nor is it always the right approach.

There are a multitude of funding options available today, including friends and family, angels (high net worth individuals), angel networks, crowdfunding websites and of course venture capitalists.

Raising money from friends and family is usually a necessary first step so this post focuses on that. Future posts will look at the other options.

Friends and family are usually the earliest investors in startups, investing typically between $25,000 and $250,000 (Carney, 2013).

Raising money from friends and family is both easier and yet more difficult to do. You are absolutely certain your idea is going to succeed, even though you are probably aware that 90% of startups fail. Clearly, you are in the 10% otherwise why are you doing it!

So why is it both easier and yet more difficult?

  1. You can raise money on just an idea ?
    With the closer relationship (and hopefully understanding of your capability!), it is easier to raise money right at the very beginning of your journey than almost any other (with the possible exception of crowdfunding?—?more on that in another post).
  2. Lower expectations?
    Friends and family can have lower expectations of a “quick” return than other investors due to your prior relationship. This means that companies funded this way are often able to take the slow and steady approach to growth rather than the accelerated approach required by angels and venture capitalists. Whichever route, fast or slow, you decide to take, it is a good idea to be upfront about this with all your investors!
  3. Tax Breaks!
    In the UK, the first £150,000 can be raised under the Seed Enterprise Investment scheme (SEIS). This allows your earliest investors to:
    1. Receive income tax relief of 45% on investments.
    2. After a three year investment period, you can get 50% capital gains tax (CGT) relief on gains, as long as you reinvest the gain in another SEIS investment in the same year.
    3. Of course, most startups do fail?—?and you are risking your friend’s and family’s money. To soften the blow, the government allows them to offset the loss at their highest income tax rate multiplied by the amount invested minus the income tax relief already obtained.
  4. You are the tortoise not the hare.
    Regardless of whether you are building a fast growth startup or a slow and steady one, the majority of investors at this stage do not sell their shares for at least 5 years. So be sure to be clear with your friends and family as to the situation and definitely don’t take money from someone who cannot afford to do so.
  5. Beware the relationship.
    This is not your money. It is coming from someone you likely know very well and will see often. There is a thing about relationships, they are not static and unchanging and are usually filled with sugar and spice 😉 Be sure to weigh up the risks!
  6. Indicators and strength.
    Raising from friends and family, whilst not 100% necessary to achieve funding from angels or venture capitalists, do act as an indicator to external investors that others believe in your idea but more importantly can delay your need to go to these external investors. Assuming you are a growing successfully, the later you approach these investors the stronger your position is.

Finally, today, with the advent of crowdfunding platforms like Seedrs and Syndicate Room, it is often easier to combine your friends and family investors with a crowdfunding platform. More in the next post.