Evaluating the marketing of the emerging players in productivity software.
The Milawukee Bucks’ NBA Championship triumph last week represented the latest and most significant milestone in one of the most impressive personal stories in modern sporting history. Giannis Antetokounmpo, effectively stateless for the first eighteen years of his life, made a living peddling watches and other fake goods on the streets of Athens, before finally gaining Greek citizenship at the age of eighteen in 2013. Fast forward 8 years not only is he an NBA title winner, but was also named the tournament’s Most Valuable Player (MVP). In his own words, or really those of Drake’s, he started from the bottom, now he’s here: the third highest earner in the league. For ambitious founders braving the unfavourable odds of startup success, this story should serve as unique inspiration.
When people talk about the “Greek Freak”, they’re typically referring to his 6ft9in frame and athleticism, but what’s most freaky or abnormal about Giannis has been his ability to ascend so steadfastly to the top of his field.
The parallels are not perfect; sports is a zero sum game - there must be a winner and a loser - while the business world allows for a much greater number of successful outcomes. Nonetheless, almost every founder can relate to the feeling of starting out scrappily, the sense of a journey, and the heroes which energise you. There’s that teasing quote from Steve Jobs which has ignited the entrepreneurial instinct in many:
“Everything around you that you call life was made up by people that were no smarter than you. And you can change it, you can influence it… Once you learn that, you'll never be the same again.”
Even today, many years after his passing, you can feel Jobs’ energy radiating through those words, tempting you to get out there and make an impact. Of course, starting your own business is just one way you can channel that energy - many people make enormous contributions to shaping our world as employees. However, I wager that the people who proportionally make the most outsized impact on our world - both net positive (Yvon Chouinard - Patagonia) and net negative (Mark Zuckerberg - Facebook) - are startup founders who pull a new future into the present, often for billions of people around the world.
It’s easy to get sucked into this vision of startups as world-transformers, and there’s no smoke without fire, but let’s also give some airtime to the less glamorous side of the coin. Late nights, rejection, intense lows and even sweeter highs… it’s all part and parcel of the journey; just ask Giannis. Beyond emotions, there is no hiding from the fact that, at least in the UK, +5 year business survival rates hover around 40%. So yes, it’s true that most businesses fail, but we’re quite confident that’s going to change over the next decade.
Most startups fail because there’s no market need for the product or service they offer. Frankly, that won’t change: some ideas just don’t fly. The second most common reason, however, is that they run out of money, and that burn rate issue is being addressed by a new generation of B2B startups, many designed to forge a wedge with other startups. Pipe is potentially the most transformational: it’s offer of non-dilutive revenue-based capital for subscription businesses revolutionises a founder’s ability to get the money they need to invest in growth, make money and stay in business.
In the same vein, look at what we’re doing here at Passionfruit. A second-time startup founder recently told me that he spent $120k with an agency on his first startup’s branding - a business which is now out of business. We talked it through and worked out that using a Passionfruit specialist, he could have saved $110k of that budget, and got the same quantity and quality of branding for his business. The ability for startups to connect directly with the right people that can market them effectively, without paying that agency surcharge, will keep many more of them surviving and thriving for longer.
The last category of B2B startups which is saving startups from extinction is productivity software. Ask any founder and they will likely tell you that time is the ultimate asset they want more of; it’s the only asset which is finite by definition. So much time gets spent on tasks which feel tedious, and the opportunity cost is time spent on growing the business. Save time, save businesses. It’s that simple (kind of!).
Often SAAS-based, if marketed successfully, these productivity software companies make for beautiful business models. They might seem unsexy to many, but their products become what Giannis might call the “fundamentals” for other businesses: they form the “rails”, or train tracks, upon which other businesses run. For us at Passionfruit, it’s Airtable - the $49 we spend each month on it is among the last money which we would ever sacrifice. While Airtable is one of the biggest names, many others are emerging in different niches, and their marketing will be pivotal to successfully distributing what they’ve built… so let’s look at how the most exciting startups in productivity software are getting on.
Squire offers a barbershop management and point of sale/mobile booking application that connects barbers and clients nationwide.
Funding: $107m (Series C)
Founders: Dave Salvant, Songe LaRon, Yas Tabasam
For a company whose customer base was shut for the early portion of the pandemic, to have reached close to $20m ARR just 10 months later is astounding. And it’s not the only impressive part of what Squire are up to: recently launching their own video series called Brand Masters, they are “exploring what it takes to become a successful entrepreneur in the contemporary landscape of culture”. Coupled with the “Barbershop Blueprint” ebook they released - full of “survival tips & techniques to grow a thriving barbershop business in 2021” - this is a company whose flywheel is starting to turn with content marketing in the engine room. Moving forward they’re hoping to crack Canada, Australia and the UK - this is an exciting challenge as, from a brand perspective, there’s a decidedly different barbershop culture in each of these markets. Adjusting their product marketing and positioning accordingly, while staying true to their American roots, is the name of the game. If recent form is anything to go by, we’ve got no doubt they’ll make it work.
Nory's AI provides restaurant management software that learns the ins and outs of each business then automates key tasks like scheduling, stock taking and ordering, enabling data based execution in seconds instead of hours.
Funding: $2.1m (Seed)
Founder: Conor Sheridan
When a founder has personally experienced the problem they’re solving, and has grown revenues to $6m in 14 months - it’s hard not to pay attention. That’s exactly what Conor Sheridan and the Nory team have achieved, and it’s part of the thesis that enticed Calvary and Playfair to lead the company’s recent seed round. Turning our attention to marketing, they’re hiring for a marketing lead to develop, lead and manage the full spectrum of Nory’s needs. It’s an approach we see often: hire an overall quarterback full time, and then complement them with freelance players for support with specific marketing disciplines.
Good product marketing and positioning are table stakes for success, what is then critical is figuring out your growth engine as fast as you can, so you can over-index your supporting cast in specific areas. With long tail B2B SAAS sales funnels, it’s likely that a complementary combination of content marketing, PR and SEO is the best engine. Not only does it bring leads in at the top of the funnel, it helps to push people through the middle of your funnel towards conversion (as we’ve heard from Habitual and Perchpeek), and then - if the content marketing genuinely informs your customer as to how they can run their business better - turns your funnel into a compounding growth loop through NPS/word-of-mouth. The gold standard move here could be to start a mini-media company with regularly updated written, video and audio content that becomes the go-to destination for restaurant owners to learn how and what they should be doing to manage their business. Particularly at a time when restaurants are struggling, any brand that’s willing and able to add this kind of value will quickly become indispensable.
KodyPay gives retail and hospitality businesses the ability to accept any payment methods in-person – including leading e-wallets, buy-now-pay-laters & open banking – and offers contact-free checkout experiences, such as order at table and self-checkout.
Funding: $6m (Seed)
Founders: Jack Howell, Joshua Roel, Morgan Hammans, Yao-Yun (Yoyo) Chang
Yorkshire isn’t known for its thriving Fintech startup scene, but 21 year old co-founder and CEO Yoyo Chang seems set on changing that. He began the company by self-investing £120,000 of trading profits - accrued through his investment career which he started at age 13 - and now with a recent $3.25m round in funding, he has a warchest to scale KodyPay’s offering across the UK. Deploying that capital effectively will require continued investment in their already successful partnerships strategy - which has seen them link up with Laybuy, Nuapay and the University of York among others - alongside the same type of high-quality customer educational content that has driven the growth of a business like Squire so successfully. Thankfully they are in safe hands with Wendy Blanton, the recently appointed marketing director whose experience appears to cover both content and a wide spectrum of digital marketing. Wendy is joined by Peter De Souza, VP Growth, who previously led Demand Generation at SumUp - and so he knows the space intimately. Slowly but surely this is turning into an all-star team, and one we’re incredibly excited to see develop.
Causal, your new spreadsheet for working with numbers. Build models 10x faster, connect them directly to your data, and share them with interactive dashboards and beautiful visuals.
Funding: $4.2m (Seed)
Founders: Lukas Köbis, Taimur Abdaal
Taking on Microsoft Excel and becoming the “de-facto” way people crunch numbers is no small task, even if it’s a mission supported by the likes of Naval Ravikant and Varadh Jain. Thankfully for the founders of Causal, they’ve built a product which - having spent 30 minutes playing around with their templates - feels light years ahead of what Excel offers. Intuitive, slick, bordering on fun to play with, this is excellent software, no doubt, and its software which is going to be bolstered by a thoughtfully comprehensive product roadmap. The challenge is going to be getting it in the hands of customers. Of course many engineers wished that we lived in a product-meritocracy, where the best software, hardware or solution won out, but the reality is that network effects have entrenched many pre-existing, less excellent products into businesses. Marketing is how we change the status quo: effectively telling people that there’s a better way to live their life, or run their business. In this sense, it’s important that engineers see marketers as their allies: the messengers that can tell the world what has been created and why it's worth their attention.
To distribute their product, Causal are looking for a founding salesperson to sell into (primarily) finance directors at mid-market SMBs. That hire will need product marketing support, and the more Causal can do to use content marketing to create a wall of informative noise around their prospective customer, the better. This is the kind of company we started Passionfruit to support: a product that is 10x better than its closest rival, but one that will only survive if it can affordably leverage quality marketing to distribute that product successfully.