Kraken's Mayur Gupta on Creating Value When Product Isn’t Enough

0:00Propel Fitness Water with Gatorade electrolytes, zero sugar, and vitamins. Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade electrolytes. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast.

0:37That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. Chronic migraine. 15 or more headache days a month, each lasting four hours or more, can make me feel like a spectator in my own life. Botox, onabotulinum toxin A, prevents headaches in adults with chronic migraine. It's not for those with 14 or fewer headache days a month. It's the number one prescribed branded chronic migraine preventive treatment. Prescription Botox is injected by your doctor. Effects of Botox may spread hours to weeks after injection causing serious symptoms.

1:09Allerge your doctor right away as difficulty swallowing, speaking, breathing, eye problems, or muscle weakness can be signs of a life-threatening condition. Patients with these conditions before injection are at highest risk. Side effects may include allergic reactions, neck and injection site pain, fatigue, and headache. Allergic reactions can include rash, welts, asthma symptoms, and dizziness. Don't receive Botox if there's a skin infection. Tell your doctor your medical history, muscle or nerve conditions, including ALS Lou Gehrig's disease, myasthenia gravis or Lambert-Eaton syndrome, and medications, including botulinum toxins, as these may increase the risk of serious side effects.

1:39Why wait? Ask your doctor, visit BotoxChronicMigraine.com, or call 1-800-44-BOTOX to learn more. To be very candid, as an engineer, I coded for eight years. I, look, outcome was not even on my map. I didn't care. I was just so focused on this one tiny little thing. I didn't understand for the longest time what was I really solving and for whom. That perspective came so late to me. But I see that a lot of times why teams struggle is because their definition of success is so micro. They have no context on how it ladders up to the macro.

2:18This week I want to talk about a version of growth and value creation that happens without what many would consider marketing. The product so good and so needed that the customer becomes an evangelist and the company scales before anyone who's got marketing in their title joins it. And then growth flattens, competition catches up, the product alone stops being enough, and the enterprise is forced to answer a question it's never had to before. What are we doing and what aren't we that's either creating or destroying value for the people we serve? Mayor Gupta spent 26 years at this exact inflection point, the one where product-led companies realized that every decision they make, not just the product ones, shapes whether customers come, stay, or go.

3:00Mayor is an engineer by training, becoming a marketer by necessity. He's helped lead growth at Spotify, Freshly, Gannett, Kimberly Clark, and now at Kraken Digital Asset Exchange, one of the world's largest cryptocurrency exchanges where he's chief growth and marketing officer because he knows they've never been separate to begin with. All right, let's set this conversation up, Mayor, which is kind of the way I get into this first question with everyone. Like beauty, of course, value is in the eye of the beholder, right? customers see it different than the capital markets, the private equity markets, the enterprise may define it differently than any of those people do.

3:43And so with this and as a way to just get into it, I'm wondering if you can share how you think about how you define value creation and destruction and what. Well, let me stop there and then I'll build. Yeah, it's a great, great point, Seth, because I think in our in our daily hustle, is very easy to get absorbed with the inputs and the hustle and very easily overshadow the outcome. And I think that has been one of the challenges I feel over the last 26 years within marketing growth overall, or even if you're a product guy or girl. We get so obsessed with vanity. We get so obsessed with what we are doing and we lose sight of that context on the business outcome.

4:26And ultimately, when I think about the outcome, there are only two entities for whom the outcomes matter in their context. One is the end user. And if you care about them, then the outcome for the business is inseparable. Everything else, in many ways, are the inputs. Those are the mechanics. That's right. And so that's how we think about value creation. As long as whatever we do in whichever form and shape, whichever technologies and how-tos, now, of course, we will talk a lot about native AI and whatever, but 20 years back, we were talking about digital, we were talking about data, mobile. All those are how-tos.

5:01But ultimately, everything we do, as long as we can figure out a way, what impact is it driving to the end user? What behaviors is it driving? And what emotions is it creating? Those are outcomes. And the more you do that in the right direction, the more impact and outcome it drives for your business in a positive way. Agreeing with you completely, that strikes me as so freaking odd that more people don't understand, which is you cannot accrue value to the enterprise if you do not provide value to the end user. Like it's just A plus B equals value. A plus B equals V. Might make that a t-shirt.

5:37What do you think? All right. So having articulated that, what are some of the two or three forces within an enterprise that you think can contribute to value creation or value destruction? Yeah. See, first, fundamentally, the reason why we missed that very simple common sense, in fact, all marketing and growth is common sense, right? That's how as an engineer, I was able to have the courage to go into marketing because you realize, well, everything that works in marketing is what my parents try to teach me. Hey, don't lie. Show up when you said you'll show up. Be consistent and all that stuff.

6:16Be authentic. Be honest. I'm teaching my kids as they start adulting. Exactly that. It's manage expectations. Yes, and that's just great marketing. So I feel the first fallacy I see in most organizations, which drives this obsession with vanity inputs and not outcome is how you define success for your teams. See, when you define success for your teams, every single member of the team in context with that input, that's how and what they are trained to optimize. They're not thinking about the outcome. And to be very candid, as an engineer, I coded for eight years. The outcome was not even on my map.

6:52I didn't care. I was just so focused on this one tiny little thing. I didn't understand for the longest time, what was I really solving and for whom? That perspective came so late to me. But I see that a lot of times why teams struggle is because their definition of success is so micro. They have no context on how it ladders up to the macro. I'm sorry to interrupt, but it's just, again, you said something that just stuns me, which is this myopic point of view where organization cultural incentives reward somebody for things or penalize them for things that are unattached to value creation, unattached to delivering against the needs of the enterprise and the needs of the end user, which takes me actually to something that you've written about, right?

7:43So tell me if I'm getting this right. I've got that you wrote that scaled growth is orchestrated and not owned by any single function in an organization. Is that right? That is right. And I have written about the same thing about a brand. It is not owned by any single team. It's not the brand marketing team. It is everybody from the call center to product marketing to performance to product to every single human because brand is that outcome. is that emotion where every input contributes to in either creating it or disrupting it. So let me ask you a question because yet again, I'm in violent agreement.

8:22On my old show, my CEO's Guide to Marketing show, Frank Cooper and I had a conversation that really touched on this. And I articulated something that Regis McKenna, who was a professor at HBS back in the 90s said, which is marketing is everything and everything is marketing. I asked Frank what he thought about that and he paused and I thought he had a really good point. He's like, well, if marketing is everything and everything is marketing, who owns it? Right. Like who within the organization owns it and how does the organization organize to optimize for it? Right. Because I'll share that the subtitle of this show, which is Reimagining Marketing, its premise is that marketing has to be a mindset, not just a function, a mindset across the enterprise.

9:11But does that, is Frank right? And does that create a, like, you know, who's on first and Alice in Wonderland, all roads lead their thing? Look, at one level, sure. And I would say the same thing about product. Every person in an organization have to think like a product person. accountability, ownership, at the end, the user you're talking to. I always tell my team, I've always believed every marketer has to think like a product person. In fact, more so now than ever before in the history of marketing or building products with AI. And we'll talk about that in a second. But this point on everything is marketing and so on.

9:47Look, philosophically, yes, of course. As a product person, as an engineer, as a CEO, we're all telling stories. It depends on who we are telling to. Even this narrative, everything is marketing, depends on who we are talking to. On your show, because you've been such a strong voice and platform for the craft in the past and now connecting that to business, this is great. But if you're talking to a CEO who is still questioning the incrementality or still trying to figure out what is the incrementality of all the spend within marketing, if you're talking to them and saying this, then you're like, dude, what the hell are you talking about?

10:20You know, so if we apply the first principles of what we are trying to do and what and how we are doing it, then it totally changes because I honestly feel for so many years, marketing and somewhat growth has been drifting away from the core mainland, from the core business where everybody else lives. And I know this is what you're focusing on. How do you bring it on the mainland? Don't go away. Don't expect the rest of the city to talk, behave, and understand your language. Operate and talk in a language that everybody else gets, which is the language of the business and the language of the user.

11:10Get back to your best self. What propels you? Propel with Gatorade Electrolytes. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs.

11:46Chronic migraine. 15 or more headache days a month, each lasting four hours or more, can make me feel like a spectator in my own life. Botox, onabotulinum toxin A, prevents headaches in adults with chronic migraine. It's not for those with 14 or fewer headache days a month. It's the number one prescribed branded chronic migraine preventive treatment. Prescription Botox is injected by your doctor. Effects of Botox may spread hours to weeks after injection causing serious symptoms. Allerge your doctor right away as difficulty swallowing, speaking, breathing, eye problems, or muscle weakness can be signs of a life-threatening condition.

12:16Patients with these conditions before injection are at highest risk. Side effects may include allergic reactions, neck and injection site pain, fatigue, and headache. Allergic reactions can include rash, welts, asthma symptoms, and dizziness. Don't receive Botox if there's a skin infection. Tell your doctor your medical history, muscle or nerve conditions, including ALS Lou Gehrig's disease, myasthenia gravis or Lambert-Eaton syndrome, and medications, including botulinum toxins, as these may increase the risk of serious side effects. Why wait? Ask your doctor, visit BotoxChronicMigraine.com, or call 1-800-44-BOTOX to learn more.

12:51It's absolutely right, right? If we recognize that, as you said in the very beginning, marketing, along with everything else, is the means to the end to value creation, right? Marketing is a business function. Ergo, speak the fucking language of the business and speak the language of business. But I want to ask you, I want to go back to what you said about first principles. What are some of the assumptions you think need to be challenged? One is that, first of all, marketing owns the brand. Absolute fallacy. Everybody owns his marketing as the orchestrator, but also in a product-led organization, I have to caveat that everything I'm saying has a subtle difference based on the nature of the organization.

13:38Right. And won't go through all the categories, but very simply, if you are a CPG, which is building physical products, where the network affects the core growth doesn't come from the core product itself. It comes through marketing, which means marketing is your only lever. Certain things shift. And there are less and less of those organizations now. Right. If you're a product-led organization, which is natively online, natively digital, we never use those words anymore, but you get my point, then it's a very different role that marketing plays. And in that context, which is most of the organizations today who are born in the last 20 years are natively inherently digital.

14:16The ones who are getting born now are natively inherently AI. So for those organizations, marketing, the biggest fallacy is that you can own the brand, you can build the brand until you have absolutely understood the core product. until you have immersed yourself and you become a champion of the product. So first fallacy, I feel, is in those organizations, don't think about your role as being a champion of the brand. You first have to be a champion of the product, then be a champion of the data, which reflects the end user. Are you a champion of the data or are you using the data? So, yes, I'm using the word championing in the sense that what I always imagine is if I'm working in a physical environment, like everybody together, I'm walking down in the typical water cooler chat, data is oozing out of my pockets.

15:04In an organization, as long as a marketing and growth org are owning the data and with accuracy and efficiency and they become the advocate for the end user, but in a way that is data inspired and informed, that's how you command the respect and you get a seat at the table every single day. And in this function, we have to fight to be on that table every single day. Why is that, right? Why is what should be the principal engine of growth in a company, which is the principal engine of growth in every company, whether or not the company realizes it, fighting for its seat at the table? Is it because people are speaking the language of engagement, making it up, random word, which means abso-fucking-lutely nothing necessarily and not speaking the language of business?

15:57Is it, you know, I don't know if you've ever seen the movie Cool Hand Luke. It's, you know, probably 40 years old, Paul Newman. Paul Newman's in prison and there's a racist as fuck warden but with a great line who says, what we have here is a failure to communicate. And is that why marketing is fighting? for its seat rightful place at the table? Yes. I'm very passionate about this topic. There are two or three foundational reasons why is this still questioned? And first and foremost, I feel those are valid questions and the ball is in our court to address it, not in anybody else's. So I will never point the finger at the CEO, the CFO because their job to question it.

16:50But here's why. First of all, almost 30 years of marketing's existence up until the mid-2000s of 2010, there was a lack of attribution to that skill set. It was just hard to attribute to the level that we talk about today. It just didn't exist up until 07, 08, mobile, etc., etc. So that was one. So some of the older players who come, their perception is still based on that. Now, many have evolved and changed. So that's one part. Second is, how good are you in two things? One is understanding and measuring attribution to incrementality within your business. Because, hey, how much growth would have happened anyways?

17:31Yeah, actually, just for our audience, both the marketers in the audience and the other executives across the C-suite, spend a second on what you just said. Because I think it's such an important point. Alex Schultz at Meta talks about it constantly. But you're one of few others, I think, who really do, which is you got it. What would have happened without X? Talk about incrementality and help our audience understand what you mean. Yeah, yeah. It's like my Spotify days and obviously learned a lot through that. But businesses like Spotify, Kraken, Google, YouTube, these are product-led companies where their path to a billion dollar in revenue happens almost every time without marketing, without physical functional marketing.

18:19It happens through product inertia, which means it goes back to your first point, Seth. It doesn't mean that they want marketing, but the marketing was done inherently through building a great product. That is what builds the brand. I mean, years ago, sorry to interrupt you yet again, but years ago, I think it was, I'll put it in the show notes if I'm wrong, but I think it was Crispin Porter Bogusky or maybe it was just Alex Bogusky wrote a book talking about things being baked in. Right. And, you know, implicit in what you're saying, not disagreeing, but implicit in what you're saying is this, again, 20, 30 year change where product and marketing has have been bifurcated.

19:01Yes. Oh, such an important point. This actually goes back to the point you made earlier. Everything is marketing. Product is marketing in a product led world. product is your strongest marketing channel and the marketers who don't get it will always miss it because they ignore the strongest leverage point they have which is the core product or your user base. So I think I was talking about, yes, in the first zero to one growth and let's define one in this case roughly ballpark of billion dollars revenue for all these companies happen in the absence of a physical marketing org. You know, it's because either virality, network effects or a category creation, You know, it just happens.

19:41Then they realized that we now need to scale marketing. We need now forced growth engine because that natural adoption has kind of saturated. Competition has come in. Now we need to amplify the brand. Now we need to create demand, more demand, either in new geographies or launching new products, which are adjacent. So we need to expand the TAM. I need to build this function. So then the function gets created. That's how I came here. That's how I came and joined the team at Spotify and many, many organizations. When that happens, emotionally, the organization is in need. Wow, we need more marketing work.

20:17But inherently, they also know, well, we've grown this far without it. So on day one, you are on the back foot. You have to prove now you're suddenly spending$200 ,000,$300 ,000 ,000 in marketing or$10 ,000 ,000. It doesn't matter. Now people are saying, yeah, but we were growing. And then the markets shift. So you go through this pendulum. So by default, the moment you come in, in this type of an organization, product-led, on day one, your job is, we are spending in a function that we never had to spend before. The company's used to growing without it. Now there's incremental spend. I have to prove not just the fact that the company's still growing, but that this growth sits on top of the growth that would have happened anyways.

20:56That's incrementality. And we've come a long way as an industry. And by the way, great marketing can never be proven and measured absolutely terms. If it does, then it's not great. If there is no serendipity and irrationality, then it's not great marketing. It's all pure lower funnel. Well, that's because you cannot measure accurately how people feel and think about something. This is the behavioral economics iceberg, right? You got last click at the top. You got some behavior you can measure. you know, right below the water are values, emotions, feelings, thoughts, you know, peer-to-peer influences that actually are driving the one or two things you can kind of measure.

21:48But even attribution, as you know better than I do, is oftentimes a false flag, a false metric, and certainly doesn't accrue benefit to all the places it might belong. Yes. I do want to share a lesson learned I've had, Seth. Yeah, please, give us an example. Incrementality bandwagon and MMMs and MTAs and all kinds of models. To be honest, since 2008, when I got into building these products, that's how I got into marketing. So I've been at it. I'll kid you not, no one's really solved it, even with all the AI and MMM. And I've come to realize that, actually, you don't have to solve it the way we are thinking about it, which is too mechanical, too dry.

22:29but the way we solve it now at Kraken where Arjun who's our co-CEO and he's been one of the best growth thinkers in the last 25 years and he's written a lot about it through his VC firm Tribe where what we obsess over now actually is relatively less about where did this growth come from? Where did that come from? What is the impact of brand? What is the lower firm? What we say is if you're spending$100 in marketing my job as a growth leader in the company is to prove how long does it take for me to bring the 100 back, period. Payback, whichever way I distribute the 100, my first job is to how quick, and we are very, very aggressive with that.

23:09We apply our LTV margins. We add additional things to cost, like our operating costs, et cetera. So we're very aggressive in terms of how we calculate it. But it's very simple - How you calculate what needs to be paid back. What needs to be paid back, absolutely. Because it's not just a marketing cat. Well, what about the people? You know, what about the operating costs? What about the cost of products you're building? So we, and then what about gross margin? You know, so because all the revenue that a user is creating is not actually going to the bottom line. So we do a math and we say, okay, this is the benchmark.

23:39And then we say, as long as it comes back in X months, there is no amount of money that we can spend. Because why would you not spend? If I can prove that every$100 spent, I bring back, I'm making it up in let's say, you know, six months. why would any business say stop spending that's how we operate now so so it's like 2004 i'm i'm at creative artist agency big client was the coca-cola company i'm at the coca-cola company in atlanta and i'm talking to the guy who was was cmo at the time and we were talking about attribution problems such as they were in 2004 um and and he says you know we know that every time we spend a dollar on TV, we're getting a dollar plus X back.

24:28And I said to him, I was like, so why aren't you spending more money on TV? Yeah. Yeah. And he didn't have a particularly good answer to that, but I, it's like, it didn't make any fucking sense to me. If you know, you're get, if you know, your ROI is bet, unless it's better somewhere else. Yes. Like, why aren't you spending more money? Um, which brings me to a question I want to ask you every decision a company makes, not just the marketing ones and not just the ones made by you as the CMO, contribute to either value creation or destruction, right? Charlie Munger says, every decision eliminates another decision, another option, right?

25:05And so I'm wondering if you buy the premise, and given how we've spent the first 20 minutes, I'm reasonably confident you do and why and why you do or don't. And then I'll follow up. Yeah. Everything you're asking, Seth, has so many connotations that I love. Like your point that every decision we make either creates or disrupts. To me, I'm a Buddhist. The fundamental principle of Buddhism is cause and effect. Karma. Every action you take has an effect. The caveat is there is no main, there's no AI engine that sits that's tracking every single decision we're making and the reflectivity. As far as we know.

25:51As of now, right? So do I believe in it? Absolutely, yes. Do I worry about that? No, because I feel successful teams and organizations are the ones who are not as much worried about this decision I'm making. Is it going to work or not? But they are actually focused more on, do I have the agility? Do I have the velocity to make rapid decisions, experiment them, and pivot if I see the outcomes not going in that direction? So I feel, and this is something that I've learned having worked in Fortune 100 and then having worked in fast-paced growth organizations like Spotify and Kraken, where we worry less about knowing the end outcome of that decision, or we focus more on how do we generate the velocity of decision-making so that we don't paralyze and have the engine that can show early indicators to where you are going.

26:43There's some companies in particular, you know, some at the top of the Fortune 500 ladder putting aside category, just they've got so much to risk. Yeah. They become wildly risk averse. Right. The status quo serves them because they think it protects them. if we're on the scale of we need absolute certainty to like we have no fucking idea what's going to happen do you guys need to be to feel confident and how do you what are the inputs for your confidence and then you know that allows you to say all right let's let's spend a dollar and see see what happens if there are still those organizations which we and i both know there are who feel that there are, and people in those organizations who feel that their job is to protect the organization.