SPOTLIGHT: Why Good Marketing Teams Still Fail with John Short | with John Short, CEO @ Compound Growth Marketing

0:12Hey everybody, it's Sam Jacobs. Welcome to Topline Spotlight. Topline Spotlight's a short segment where we talk to operators, investors, CEOs and founders, people that are on the front lines of B2B technology right now. And we dive deep into their business and we also ask them a question about challenges they faced, challenges they faced over the last couple of years running their business and what they learned from them so that we can walk away from 20 to 30 minutes of time with our guest and get something actionable and practical and tactical. And today we've got on the show, John Short. And John is the founder of Compound Growth Marketing, which he started eight years ago after a decade plus of working in-house for companies like Workable, Monster.com, and Log Me In, building out performance teams focused on media and organic.

1:02And when looking at massive growth in software and the need for performance marketing, John felt there was a gap in the amount of talent in the market and the amount of demand and felt starting an agency would help fill that gap in B2B performance marketing. So John, welcome to Topline Spotlight. Sam, thanks so much for having me on today. We're excited to have you. So first thing we want to do is give you an opportunity to tell us more about your business. So I just read a little bit of your bio, but talk Talk to us a little bit about the history of the business, you know, why you started it and why you feel like now is the time for what you guys are working on.

1:35Yeah. So like you mentioned, I started the business about eight years ago after some time working in-house. And I think late stage software investment had gone from something like$4 billion in 2013 up to its kind of peak in 2021 of like$120 billion in late stage funding. So we had seen this massive amount of growth in capital that was looking to get deployed. And there weren't a lot of people who were growing up and saying like, oh, when I grow up, I want to be a B2B marketer, right? There weren't a ton of people who were, you know, kind of overnight, it felt like there was the launch of Freemium and PLG and folks looking to drive interest through digital marketing online.

2:28And so our feeling was like there's an opportunity for an agency to kind of learn the best practices, kind of collect data, sit in the middle, understand what's working and help deploy that capital efficiently for the businesses that we work with. So today we work with high growth, venture backed, private equity backed and publicly traded companies, typically in fields like cybersecurity, DevOps, HR technology software and other industries like that in order to help them drive predictable growth for their businesses. Tell me about the benefit of specialization and verticalization. What are the compounding advantages that you have as an agency when you've worked with a bunch of cyber companies?

3:19Is it knowledge of the channels? Is it knowledge of positioning? I'm just curious on the vertical emphasis, which is interesting. Yeah, the vertical emphasis was important to us because, you know, for us when we were starting, it was a little differentiated to be a B2B agency. And so over time, we've gotten even more focused on the verticals we go into. With like cybersecurity, for instance, we work with a lot of these businesses, and we really understand the buying committees for those companies that are selling into mid-sized and enterprise, selling cyber products into mid-sized and enterprise companies.

3:59We understand how big that team is, who the typical decision makers are. And so that helps us inform like what channels we should be using in order to go after these companies, where we've seen the most efficiency in deploying dollars for those businesses and and allows us also to kind of, you know, aggregate the data we have and make smarter decisions for all the companies that we're working with as well. So talk to me a little bit about that. What channels are, and here, I'll make a statement and you can react to it, but here's what I've been hearing. I think there's been an over-reliance in B2B on LinkedIn as a channel.

4:42And I hear that even companies that are pretty hardcore B2B, like cyber, that they are expanding into new channels that previously were perceived to be exclusively like B2C or consumer. So more on Instagram, more on YouTube, maybe more on Reddit, but, you know, sort of broadly defined meta advertising. Yeah. Because it's sort of harder to figure out how to differentiate yourself on LinkedIn. And then talk to me also about the role that AEO plays in all of this. Yeah. Yeah. So I think that's a great point. I think there's a little bit of an asterisk next to LinkedIn because there are a lot of businesses that will put money into it.

5:21They'll solely focus on low funnel campaigns, like trying to drive demos, and they won't build out the full infrastructure of what those campaigns should look like. But in general, I agree. If we look over the last 20 years, these companies have raised funding from private equity or VC. Those portfolio operations teams have pushed them to invest those dollars into Google Ads and LinkedIn. So we've seen incredible inflation in prices on Google CPCs. And we're also starting to see that over the last couple of years on LinkedIn. And so the opportunities have arisen on Meta, Reddit, TikTok, some of those channels that you were discussing before.

6:08we've also seen that companies are a little bit hesitant and taking a little bit too long to do other type of like what we call high recall events so we've seen a lot of success with ctv ctv is interesting right because the amount of inventory is expanding pretty rapidly what is ctv is that just cable tv or tell me what you mean by that ctv would be like a hulu or paramount plus or streaming services. And so there are more streaming services out there. Amazon, Netflix, they've all launched ad inventory recently. So the amount of inventory has expanded, but there's still a moat for companies to get in there where you need to create high quality video assets.

6:57And so that has helped to suppress the amount of demand. And so we've seen prices actually stay pretty steady in that space. And even within LinkedIn, we ran a test last year where for a cybersecurity business targeting enterprise, where we're able to run CTV ads. We're able to have a control audience to see who was engaging or viewing these ads and control audience who wasn't. We were able to see, you know, much better conversion rates down funnel. When we did a full funnel targeting of those customers starting on CTV, we saw they were much more likely to convert. So CTV is incredibly high recall because you have an engaged audience.

7:44But even like sponsored webinars and content syndication gets a bad, bad name. But like, you know, some of the sponsored webinars, some of the industry publications that you can go to, we've seen a lot of fruit from those types of opportunities. And not every portfolio operations team is pushing their companies to do that. And so prices have kind of, you know, maintained a pretty good level so you can acquire customers efficiently there. That's really cool. That's great. Because to the point, you know, one of the themes that we hear about in the world is more companies than ever before. The cost of building software is cheaper than it ever has been, which creates more competition.

8:27All of that finds its way into increasing customer acquisition costs, higher CAC. So I would assume that if the prices are stable in certain channels, then that is almost an arbitrage opportunity to just exploit those opportunities and to your point, find efficiency. Right. Yeah. And I think there's incredible opportunities there. And I think customer acquisition is incredibly important these days because the moat for software now is not, you know, building on top of a database. It's building software that can take advantage of network effects that is ultimately going to help be the differentiator or the moat for the business moving forward.

9:05Well, I, yeah, I mean, you're certainly working in an incredibly exciting area, but the topic for Topline Spotlight is what you lessons learned as an operator, particularly after having run compound growth marketing for the last couple of years. So talk about, you know, what you wished you'd known when you started working on this business a couple of years ago. Yeah, so the job that I had before I started Compound Growth Marketing was VP of Demand Generation. Then I had a very short stint as a VP of Marketing before moving out and starting my own firm. initially uh my goal i i i always say kind of like accidentally started a business it started out as freelance there was an incredible amount of demand uh in the market for um for performance marketing in in b2b sass i ran into you know my second client in a whole foods i ran into my first client at brunch in downtown Boston.

10:11And like, you know, both times pretty immediately was telling them what I was doing and, and boom, was able to, they were people I knew, of course, but was able to kind of get enough interest to start driving customers into the business. That's great. A random lunch meeting is always a nice way to generate some pipeline. Yeah, yeah. Because you have to anyway. Yeah, right. But so I kind of fell into this a little bit. And, you know, I think my strength is not in like organizational structure or design. And so, you know, over the past couple of years, what I've needed to learn is not everybody is kind of where I didn't like to be put inside a box inside a company.

10:57That was probably a signal that maybe I should be starting my own business versus sitting inside a larger corporation. But what I didn't realize was not everybody was going to want to kind of build out their own job description and have complete autonomy. And so over the last couple of years, the lesson that I've learned that I think is really applicable for a lot of businesses is, you know, this idea of we're trying to build repeatable process. We're trying to build frameworks that help everybody on our team be better because they're on our team. And I'd always kind of relied on an org chart to help me design how my company should be working.

11:40But what we've started leaning on over the past three years is more of a roles and responsibilities chart, which lends itself a little bit better to a growing business. Because rather than, you know, saying one person is responsible for one job and their job description is this, it's really mapping out everything in the business that needs to get done in a roles and responsibilities chart. And then mapping the people who are going to help get that role or responsibility done in the organization to each of those responsibilities. How is it, what for you, when you think about there's a difference between that and an org chart, what is the, what's the difference?

12:26Is it the starting point? Because you could imagine looking at a bunch of boxes on an org chart and saying, these are all the people, or these are the boxes. I'll be sorry, before you put the people in there. And these are what they, this is what they're supposed to do. Is it, do you find that the org chart is too limiting? like it doesn't convey. Yeah, I find that the org chart a lot of times is built around the people you have or the people who you're looking to hire versus starting with more first principles thinking of build around the structure that we need and then put the people in places in order to help that.

13:02And the other key differentiation is, is that with the roles and responsibilities chart, and this is something that Entrepreneur's operating system is used for years and other business frameworks like that. But you can have one person sitting in multiple seats or multiple roles across the organization. So Compound Growth Marketing, we're a 25-person firm. We're not big enough to hire full-time HR yet, but we can bring on someone who has responsibilities in the operations side of the organization that they need to do and responsibilities in the HR organization that they need to do. Yeah. Did you implement EOS?

13:43Was that part of your journey of hire or did you just read traction and you feel, you know, either answer is obviously okay. Candidly, I'm interested for my own benefit too. Yeah. So we have not done EOS. We have done kind of a modified version of it called the growth system built by a company we work with called Cruise & Co. Okay. Who has helped us with kind of the implementation of some of these tools that we use in our business for it. So talk about the before and after.

14:22What didn't work that now works because you sort of reimagined how you think about defining, you know, and maybe Clay Christensen would call it jobs to be done, but roles responsibilities and, you know, versus like what was breaking or didn't work? Was it that you felt trapped by the existing people? You just couldn't get beyond like looking at a name in a box and figuring out what they should do? Yes. Yeah, I think that's it. It's, and by the way, I absolutely love Clayton Christensen. I could watch YouTube videos of him all day. Me too. Did you see the, not to interrupt, but did you see the 98 versus 100 % video?

15:02No, no, I'm going to have to watch that. It is a great one. Yeah. And I, but to be frank, I haven't studied the jobs to be done quite like I've quite as well as I've, I've studied some of the tools that we've implemented in our business. But on the face of it, I really love the, the kind of the jobs to be done framework. Right. So I might botch some of it, but, you know, in this case and, and for the marketing organization, like a big problem that we see. when we're like, I talked to a lot of companies, right? Either prospecting or just getting to know my business, getting to know the industry that I sit in.

15:44You know, I talked to leads that come in and I'll talk to a manager and they're not able to say how their goals ladder up to the company's goals or they don't know what the expectation is for growth for that business. Whether it be, you know, typically we see companies that are looking to grow 20 % in like the larger private equity firms, 50 % for some of the smaller kind of growth equity type businesses, 100%, 300%, or even 400 % for some of the VC-backed businesses that you work with today. The companies that we've seen grow the quickest, the abnormal securities of the world, the drifts of the world, the app dynamics that we've worked with, You know, there's always been pretty clear understanding of what someone's role or responsibility is inside the organization, what the KPI that they're moving towards, and how that ladders up into the larger vision of the overall business.

16:46And so when we start with roles and responsibilities, you know, I think this gives a lot of marketers a pretty clear framework for how they should be structuring their organization. It's also helped us understand how we should be structuring our organization so everybody feels bought in of what the metrics they're looking to move and what their roles are inside the larger, larger, inside of compound growth marketing. And, you know, it's something I missed out on early on. Did you face any pushback from the team rolling some of these ideas out where maybe they're used to doing things a certain way or they feel like maybe this is busy work?

17:26Like, did you have to evangelize the idea to have it resonate? Yeah. I mean, I think anytime there's a structural change in the organization, we're always going to face some challenges from some percentage of the folks. But in large part, you know, I think this is something that me as an employee would have struggled with more inside of an organization of being put inside a box. But for a lot of the folks that I work with, what I found is people have very different views on how they work than I do. And so they have really liked, you know, understanding what is the criteria for me to be successful in the organization.

18:09And so we've kind of mapped this out across AEO, performance marketing, our account management function, org, and HR. But, you know, for, I think a lot of your listeners are in sales or in marketing, right? Yeah, they are. I mean, it's the pavilion community, so it's a go-to-market community. And I think, you know, sales has always had the advantage of, like, the KPIs are pretty clear. The organizational structure, the way that that's built is pretty clear how you ladder up and move from, you know, individual contributor to manager to more management positions. It is clear, but marketing, a lot of times you're going from individual contributor to manager with some responsibility and then kind of thrust into this kind of executive role.

18:58And I think, you know, that's why you see some folks get into the director and VP roles and struggle a little bit because, you know, they're missing out on certain parts of the marketing function. But, you know, I would encourage people to think about like roles and responsibilities in a marketing function. Think about the marketing funnel. Think about the KPIs that are tied to that and develop the roles and responsibilities to make sure you have visibility and you have key performance indicators at every step of that marketing funnel that somebody is paying attention to, that somebody has clear ideas of what their performance would be tied to.

19:42because I would say it's the number one indicator to us of a prospect who we think, you know, they have potential to grow versus, okay, this company needs to put a little bit more of a foundation in before they start working with us. Yeah, I agree with that. That's great advice. John, we're almost at the end of our time together. One of the things we like to do is pay it forward. So that means influences. You know, it could be books, could be podcasts, could be a mentor. or ideas that have influenced you that you think we should know about. What comes to mind when I frame it that way? Yeah, I mean, I still remember the Miami weekend that I spent with my wife where I read The Hard Thing About Hard Things.

20:26I was a VP of marketing at the time that I read that book. I go back to it often. And, you know, it helped me understand some of what the founder who I was working with was going with. and how to kind of manage up into that position, but also help me think about my role as a CEO within my little function inside of the business that I was working with. So that's one that I often go back to. A big one and a favorite for a lot of folks, a great book. Obviously by Ben Horowitz, if anybody doesn't know. If folks are listening and they want help with their marketing, and I know Compound Growth Marketing can help them.

21:11What's the best way to reach out? What's the best way to connect? How should they reach you? Yeah, you can find me on LinkedIn, John Short. I write posts every once in a while, but I'm pretty good at keeping up with my DMs or you can go to compoundgrowthmarketing.com. Awesome. John, thanks so much for being our guest on Top Line Spotlight. Sorry for the intrusion of my little girl at different points. Yeah.

21:36John Short: She's still here and she's playing with my watch right now. How old is she? She's 20 months old. Oh, wow. Yeah, that's great. Dad is starting to become a bigger influence at that point. So that was a really fun time for me. How many kids do you have? I have two. I have a six and nine-year-old. Oh, awesome. Listen, thank you again for being our guest. Thanks for being a supporter of Pavilion. We really appreciate it. And folks, check out Compound Growth Marketing at compoundgrowthmarketing.com if you want help driving performance and demand generation for your B2B business. All right. Sounds good.

22:13Thank you.

22:20John Short: Okay. And against all odds, you're still here. Look, if you want more Topline, check out the Topline newsletter at topline.beehive.com. Beehive is spelled weird. It is B-E-E-H-I-I-V.com, topline.beehive.com. Or if you're a video person, because video is great, check us out on YouTube. Topline-media is what you want. Have a delightful day, everybody.