Today's Guest

Wall Street Journal Best Selling Author Steve Mark Kahan has helped grow seven startup companies from early-stage development to going public or being sold, resulting in a total value of more than $5 billion. He is best known for his ability to plan and execute marketing strategies so that companies can accelerate revenue, grow market share, and consistently deliver superior returns for shareholders. Steve currently provides marketing advisory services to startups, including several Insight Partners portfolio companies. 

Resources Shared

• Be a Startup Superstar by Steve Kahan
• High-Velocity Digital Marketing by Steve Kahan
• Insight Partners
• Thryv
  

Episode Transcript

(Please excuse grammatical errors due to transcription)

Gordon Henry:             Hey, this is Gordon Henry at Winning on Main Street, and this week we're fortunate to meet Steven Mark Kahan. Welcome to the show, Steven.

Steve Kahan:                Thank you for having me, Gordon.

Gordon Henry:             Great to have you. So Steve is a marketing strategist, TEDx speaker, startup guru, and author of the Amazon bestseller, Be a Startup Superstar in which he extols the virtues of working in a tech startup environment versus a large traditional corporation. And his newest book is called High Velocity Digital Marketing. The new book is an easy to implement guide to getting found online, providing the most critical information and getting buyers to purchase fast. Steve has successfully helped grow seven startup companies from early stage development to going public or being sold, resulting in more than five billion dollars of shareholder value. He helps companies increase their revenue in competitive markets online.

                                   What should listeners get out of this episode? Well listen to an expert who can give you the strategies about your career, about launching or joining a new business, and finally about marketing strategies and tactics that can take your business to the next level.

                                   So starting off, Steve, I'd love if you could tell us the story about what your parents told you when you were young and how you pursued the path they recommended and where it led you?

Steve Kahan:                Yeah, so I found early on that taking the traditional path to climbing the corporate ladder could not only be high risk for my career, it very much could almost feel like a death trap. And I remember my father telling me so many times, he'd say, Steve, get your degree. Work your tail off. Go to work for a large corporation. You work hard, they'll take care of you. You'll have a great career. And so that was a path I took.

                                   And I remember about a year and a half in, I opened up my bank statement and then I was staring at this pile of claims I was supposed to process that day and I was down to $500 in my bank account, and the student loans would grab a hold of my checks before they ever even got cashed. And I was wondering how on earth would I ever get ahead? And it was just a couple of days later that I asked myself a very important question, which was, how could I earn a great living doing what I love? And I made the jump to the startup world and have never looked back.

Gordon Henry:             Were you always an entrepreneur? Were you, as a kid tinkering like things in your garage or selling things door to door?

Steve Kahan:                Yeah, I would say that being a little bit of a entrepreneur was always part of my DNA. It wasn't so much that I viewed myself as someone who necessarily had a great business idea that was going to drive growth, but I very much wanted the opportunity to do everything. I couldn't imagine myself being pigeonholed in a large bureaucratic organization where the move up the corporate ladder would be slow, very deliberate, that I really wanted my hard work and talent get the opportunity to rise to the top and to do so quickly. And so I guess from that perspective, I've always considered myself very entrepreneurial and not afraid to take some risks.

Gordon Henry:             Right. So would you recommend, as you think about it, should all kids pursue startups or technology? Does it depend on what kind of person you are? Do you need a Meyers-Briggs test that says you're well suited for a startup career?

Steve Kahan:                Yeah, I think that really anyone could take that path. And so if you think of the larger corporations, I mean, some of them are great, but they tend to be big bureaucratic battleships. And I like those speedboats where you could work with like-minded entrepreneurs and selecting the right startup. And so a lot of times people are also concerned that if they go to a startup, they'll lose work-life balance. But there's ways, certainly I've found, to manage that. But what it comes down to is choosing a startup that not only has a good story, but one that also has a really good chance at success. And I've learned a little bit about that over the years for sure.

Gordon Henry:             Right. So let's talk a little bit more about that. Of course, there's many, many startups up out there, many, many tech startups out there, especially the past few years when venture capital has been flooding the market. And so there was probably some bad ideas funded as well as good ideas and maybe bad entrepreneurs even. How do you separate a good startup versus a bad startup? Is there a series of questions you should go through in your head?

Steve Kahan:                Yeah, absolutely. And so I guess it starts for me with finding quality people who share your values. So startups, they tend to be small and so people reflect the company's culture. So when you're meeting that team, if you don't think you can respect, trust and admire some of the other entrepreneurs involved, then move on. And what you're looking for is a solid team of leaders that rock your world. And you could learn this by asking questions, by looking at what those people are posting online, you could look into their background and do some research.

                                   Second, I look for a concept that fills a big market need. At the end of the day, buyers oftentimes won't spend money on nice to solve solutions. They'll spend money on must solve solutions. And so I do my research, I do my homework, read the reports to see that there's a big market need. And I'm not worried if I see lots of competition. I'm more worried if I see too little competition.

                                   I look for a great product that I believe in. I think this is really important. Does the company's product, is it something that you feel proud about representing? Do you feel that you would purchase it yourself or recommend it? You want to choose a startup where you could go to work every day with a passion for what the company creates and your role in creating it.

                                   And then finally, I look for if the startup is well funded. So you want to choose a startup that has a long enough runway to get off the ground and ask. So you want to make sure that they're properly capitalized so you have the best chance for growth and stability. Those are some of the core items that I'll look at and evaluate when I'm choosing a startup.

Gordon Henry:             I'm wondering about other kinds of startups besides those that are just technology. And I'm asking you partly because our listenership is many of the entrepreneurs and would be entrepreneurs are in the service trades doing home remodeling or roofing or installing garage doors, service businesses. And I'm wondering how you view startups that are not tech necessarily, but rather service-based. Do you view those with the same passion and recommend those as tech startups or do you view those as somehow not as exciting?

Steve Kahan:                Well, in the services business, there are great opportunities. In fact, I'm working and advising a services company right now. It's a PR company, so it's totally services based. But what I am doing in the advisory work that I offer is really trying to get them to think differently. To think about how they would take a very different, almost like an anti-PR, if you will, approach to solving the visibility puzzle so that they're able to truly communicate the value of their differentiation and grow and even look to productizing some of their services.

                                   So for example, PR reporting oftentimes, is horrible. And so it's not done well. And a lot of times entrepreneurs or businesses that employ PR companies, they really can't tell, "Hey, am I really getting anything out of this really?" And so automating the reporting, that should be something, as just, if you look at the various services and you lay it all out there and you're saying, all right, what can be automated? What could be done more efficiently? How can we differentiate our company the way some of the best technology, Silicon Valley companies do?

                                   I think that there are great opportunities, but I also think in the services business, lots of companies sound pretty much exactly the same, even though people working there might say, "No, no, no. We're different." But then you read their website and gee, it sounds a lot like everybody else at the end of the day. So, I try to get a lot of those entrepreneurs and those that work within the services industry to think differently about their business such that they can accelerate growth and differentiation.

Gordon Henry:             You talk about make sure there's demand, but there sure is strong demand for many of the services that these small businesses provide.

Steve Kahan:                Absolutely. And so let me just underscore your point. Take the restaurant industry. So during Covid, a lot of restaurants struggle, but some that succeeded in spite of Covid were restaurants that had great digital online presence, where their takeout business grew like a weed. And now because they thought about their business differently and they thought about how they could go build that end of it, that they're no longer limited by the number of seats and tables that they have. And so their revenues, actually for those that did a great job from a digital marketing perspective, are far higher than they ever would've been had they had not made those investments. So I think that the services point that you made is even underscored in businesses like restaurants for sure.

Gordon Henry:             Yeah. 100 percent. I'm just curious, we're going to move to your new book and I want to talk to you about marketing, but one more question about this sort of people issue. I've heard some of your previous podcasts. You've often talked about how hard it is to find good people. I wonder if anything in your view is going to change now with the new environment where funding is scarce and layoffs are commonplace.

                                   We've read just in the past weeks about Amazon laying off and Salesforce laying off and many tech companies have been laying off. Was the hiring shortage a factor of loose money? And is that all about to change?

Steve Kahan:                I'll tell you what I think is not going to change, and that is that in my view, nothing matters more to winning than A-plus talent. And one of the things that I always tried to do and that I've seen some of the best entrepreneurs do, is they surround themselves with A-plus talent. And so not necessarily the biggest teams. And so when I was hands-on, for example, running marketing and organizations, I never had the largest organization, never wanted one, never wanted to deal with the management stuff that goes along with that, if I could limit that. And so I think that what's not going to change that, the key to winning remains surrounding yourself with A-plus players as well as complimenting them with the right consultants who can bring value and experience in ways to accelerate growth.

Gordon Henry:             That makes sense. We're going to just take a quick 30 second break and we're going to hear, come back and hear it from Steve on his new book, High Velocity Marketing and his thoughts on how you can do a better job marketing your company.

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Gordon Henry:             And we're back with Steve Kahan and we're going to talk about his book High Velocity Marketing. And Steve has really had a distinguished career running marketing as you heard many successful startups that ended up doing IPOs or other successful exits. So, lots to learn here. The new book is High Velocity Marketing. Why did you write this book?

Steve Kahan:                I wrote a study done by McKinsey where they said that 83% of CEOs expect marketing to drive most of their growth, yet they're dissatisfied with the return on their marketing investments. And that has caused a lot of sales and marketing leaders to feel overwhelmed by revenue expectations they can't meet and it's companies of all sizes. And fundamentally, when I was looking at that McKinsey report, what I knew was that the way people buy has totally changed and that buyers rely on digital content to make purchase decisions.

                                   In fact, there was a study done by Gartner Group that said that buyers, particularly B2B, spent only 17% of their buyer's journey in meetings with sales reps. And so this all got me to thinking about the need to create a how-to oriented book that wasn't loaded with a bunch of theory, but rather loaded with what people can do to becoming great online marketers.

Gordon Henry:             So the audience for your book are CMOs and marketing people who either work for tech companies or want to be working for tech companies?

Steve Kahan:                Really marketing peoples or CEOs, business leaders of every kind of business. Because think about it, if you want to consistently grow revenue, you've got to be great online. And let me just give you an example. If you're going to go buy a car, what are you going to do? Are you going to go to 10 different dealers and talk with 10 different sales reps? No. What you're going to do is you're going to go to Google, you're going to Google the car. You might look at some competitive cars. If it's a new car, you might build that car at the manufacturer's site. You're going to look and see how much that car should cost you, right? You're going to know more about that car probably than the sales rep does before you ever walk in. And that's how people are buying today. And so you got to be great online and that's what my book, High Velocity Digital Marketing, is all about.

Gordon Henry:             Now, you contrast high velocity marketing with traditional marketing, the four Ps that many of us heard about years ago. What is different about high velocity marketing?

Steve Kahan:                So to me, I think the four Ps, that's some of that theory, it's what do you do with that? So to me, the concept behind high velocity digital marketing is profoundly simple. The quicker you convert digital content-based leads into paying customers, whether it's service or product, the more successful your business. That time is money and the single metric that reveals the most about time and money is velocity. Yet, velocity is commonly overlooked. It's rarely managed. So high velocity digital marketing focuses on how fast you're bringing in money.

Gordon Henry:             Makes sense. Your first chapter is about being laser focused on your target audience, which makes tons of sense. Why did that come first? Do most companies get that wrong? Don't know who their customer is?

Steve Kahan:                Absolutely. And so let me give you a perfect case in point. So when I started at the last company I was with, Thycotic, and again, we were five million when I started. And I met with the founder and a couple of the folks on the management team and I said, "Tell me who your customer ideal target customer is?" And they said, "Steve, come on. You're an experienced CMO. You should know. We're targeting the chief information security officer, the VP of IT security." I'm like, "Yep, got it, thank you." Shook my head.

                                   And then I actually started to do what most companies don't do enough of, and that's talk to customers. Because when I'm meeting with companies, I find that their definition of their ideal target customer is too vague or too broad. And so when I met with customers, what I found was, is that VP of IT security wasn't the customer. It actually was the IT admin. This is the techie in the trenches. These are the people responsible for the systems that they are administering, downtime was unacceptable. A big cause of that was security. They wanted fast, easy, but where they hung out online was totally different than where the IT security execs were. And they were never going to read an analyst report, but they would read about what their peers had to say.

                                   So imagine from day one, if I would've put together a digital marketing approach that would've targeted the wrong customer. And it wasn't like this VP of IT security wasn't involved, they were, but they relied on the techie to figure out what they should buy. And so I quickly understood that. We target our value proposition to them, and I asked those customers the right questions, which a lot of organizations don't, and it gave us that start that we needed to, which was targeting the right customer.

Gordon Henry:             Now, your second chapter, after establishing the target audience or ideal client profile, your second chapter is about building content that buyers need now. Do most companies get that wrong? And I'm curious about this content area so much because while everybody understands implicitly, yeah, buyers are looking for content online, everybody expects that to turn into these great SEO numbers where you get tons of traffic coming to your website. And actually for a lot of companies I think that's really hard. You can build it, but they don't come so easily. You don't automatically... What should companies expect?

Steve Kahan:                So first of all, if you understand the full context of the buyer's world, even things like about the status quo, because a lot of times you don't lose business to a competitor, you lose it to the status quo when you hear things like, "Gee, what I got is good enough, we're not interested." And so once you understand the full context of the buyer's world, what you've got to be able to do is to then create content across the full spectrum of the buyer's journey. So buyers might do some education, and this could happen quickly. They might then consider different options. They might then evaluate certain solutions and then they'll buy. So simple buyer's journey and nothing zaps the velocity out of a high velocity model than a gap in content in any of those phases. Plus, let me give you an example of content, because the way I think about content is very different than the way most people do.

                                   So in the consideration phase, we came up with an idea, we called it a privilege password risk assessment. And here, someone could come to our website, take about 10 minutes, answer some questions, and then they would get immediate feedback, which is what they wanted, which was a grade like A through F, how are they doing? And then they'd get this beautiful report immediately of where they were doing well, where they weren't, and what they would need to do to improve whether or not they bought our products.

                                   But then we took it to the next level. Because we collected information when they were filling out that about their industry, the size of company and geography. Now, the next day we were, and by the way, that first, the risk assessment flew off the shelves. People really wanted to get that grade, but then the next day we then would send an email which gave them this beautiful report of how they compared to their industry peers, which everybody wants to know. How do I compare? Which then got them in the habit of clicking and acting on our emails because they got real value. And then think about it, not only were we able to generate a ton of leads, but I had all this proprietary information that would load up our webinars, our podcasts, our social media, traditional media. So I was able to generate a ton of leads, great visibility.

                                   And then I took it a step further, which was I trained our sales force and our partners up on every piece of content and how to follow up. So for example, they were trained and they were young, pushy reps. We want them to be, right? But they were trained to follow up in the following way, so tell me what grade did you get? Where did you do well? Where didn't you do well? Would you be interested in learning about how we can help you improve? And that totally changed the dynamic of the relationship. They weren't viewed as pushy reps, but as consultative helpers.

                                   So it's when you think about great content and some of this content that we created, the company that ultimately bought us, I was looking at their webpage the other day, and on their homepage over five years, six and a half years later, some of that same content is on their homepage. So if you have great content, you've got to keep it fresh, but it's got a long shelf life.

                                   And so that's just an example. And think about how that might relate to your business. And there were even things where we knew that if you asked our buyers, how many of these privileged passwords do you have, that they had to manage and secure? They had no idea. And we would charge them a part in our paid for tool for a discovery function. And I said, you know what? We're going to give that away for free. And so now people got this great report, hey, here's the passwords that they didn't even know about and what that means and what they should do. So it's thinking about content across the buyer's journey, but differently, and then utilizing that not only to contribute to revenue, but to visibility as well.

Gordon Henry:             Okay. And how about from a budgeting perspective? It just seems that over the past few years, most of the ad budgets, most of the marketing budgets, money online flowed to two companies, Google and Facebook. That Google and Facebook were the big winners. Pretty much everybody else was not the big winner. And of course, they've had tremendous runs, both of those companies. Is that still true? Has anything changed in the way the dollars are deployed?

Steve Kahan:                Yeah, well, you got to be great on Google, which for sure, from an SEO perspective, I could give some thoughts on that in a moment. But also because I was constantly in contact with our customers, I knew where they hung out online. So for example, we had techy buyers and they would hang out in Reddit. And so we had people that would be monitoring them, not following up on a salesy way, but following up in a techy way.

                                   Here's another example. One of our security experts wanted to launch a podcast, and the last thing I wanted was a podcast that nobody listens to. And so what we did was we knew that these IT admins got trained by an organization called Cybrary. They had hundreds of thousands of these IT admins, and they did some podcasts, but they had no cybersecurity podcast. We pitched to them the idea they had all these buyers already and they were thrilled to do it. We gave them the experts, and literally in two months we had one of the largest, most listened to podcasts in all of cybersecurity. So yes, Google's important, but if you know where your buyers hang out online, you could get really creative and think about that partnership with Cybrary cost me nothing. It was just time. And so there, there's a method to the madness and it doesn't have to be just spending more.

Gordon Henry:             Great stuff. Well, in the few minutes we have left, I did want to ask you a couple of questions more personal to you. First of all, you mentioned that topic about mentors. I find that very interesting. Who were some of your mentors?

Steve Kahan:                So one of the CEOs that I work for who now runs a venture capital company, absolutely was a key mentor of mine. And what he taught me was not just the value of hard work, but the value that the people that you're working with in many ways, treating them like extended family. And he really did. And probably the best testament of that is that company successfully exited probably 15 years ago. We still have annual reunion parties where much of the 275 employees still go to. That's when you know are onto something special. But creating that culture where please and thank you are part of how you communicate, and that family atmosphere was just wonderful. And he's a mentor that I'll never forget and helped me immensely.

Gordon Henry:             What was that company? What was the name?

Steve Kahan:                The company was called PentaSafe. And that person's name is Doug Irwin.

Gordon Henry:             Doug Irwin. Great. You've had a bunch of successful startups and exits. You must live a great lifestyle. What do you do for leisure?

Steve Kahan:                Well, lots of things. I ride a motorcycle, do a lot of boating, paddle boarding, but I just completed actually yesterday a murder mystery. So I've written book three with two of James Patterson's co-authors and so we collaborated on that, the three of us, and it was a blast.

Gordon Henry:             That's fascinating. Is that also about to be released?

Steve Kahan:                Well, it's completed and we're looking for the right publisher, but again, it was just completed not even 24 hours ago.

Gordon Henry:             You're a busy guy. That's super impressive. I had no idea you were also a novelist in your spare time.

Steve Kahan:                Yeah, for sure. Between that and enjoying my grandkids, it's all good.

Gordon Henry:             That's great. Well, Steve, I want to thank you for coming on our show. It's been great to have you here.

Steve Kahan:                Thank you so much for having me. It's been a lot of fun, Gordon.

Gordon Henry:             And I want to thank our producer, Tim Alleman and our coordinators Diette Barnett and Daniel Huddleston. And if you enjoyed this podcast, please tell your colleagues, friends and family to subscribe and please leave us a five star review. We'd really appreciate it. It helps us in the rankings. Until next time, make it a great week.

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