Big Awards Sync Up: @Marketo Co-Founder Jon Miller

interview with jon miller from marketoBig Awards Sync with Marketo's Jon Miller.

Jon Miller, co-founder of Marketo. discusses the past and future of Marketo, and provides insight on leadership and his vision for the company.


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Interview Transcript

Russ:              My name is Russ Fordyce, and I’m here today with Jon Miller from Marketo.  Jon is the VP of Marketing for Content and Strategy, and we are going to talk to him today about his experiences in the business world, and building on a SAS platform.  Jon, I appreciate you joining us today.

Jon:                 Thank you.  Glad to be here.

Russ:              You guys started in 2007, when you and Phil Fernandez started the company.  How did you guys first meet?

Jon:                 I’ve been in marketing software for pretty much my entire career.  I originally was an undergraduate in physics, and decided to give a try to the whole business world.  I got into management consulting, which ultimately over a series of jobs led me into software, and I ended up at a company called Epiphany in 1999.  Epiphany was one of the leaders in, originally analytic software, marketing software, and CRN, through kind of the internet bubble.  I was there from ’99 until the company got sold at the end of 2005, and that’s where I met Phil.  He was the President and Chief Operating Officer of Epiphany.

When we sold the company in late 2005, he and I just started talking about the fact that we knew there was an opportunity for marketing software, because we’d been doing it at Epiphany, he’d been doing it at Metaphor, I’d been doing it before that, but that the category had never taken off.  It has always been essentially too expensive for most companies; too hard to buy, too hard to use.  Back in ’05 marketing software was only in the hands of some of the largest organizations in the world.  When we left the company we started saying, “You know what?  There ought to be a company, a solution that provided the marketing software and the power that we were doing at Epiphany, but that was easier to buy, easier to own, and easier to use.”  That’s sort of what ultimately led to Marketo.

Russ:              You guys took on a big gorilla in the market, which was Eloqua at the time.  They were by far the leader in the market.  It was kind of like taking on one of the other big boys like Microsoft today.  Did that intimidate you at all?

Jon:                 I would disagree with that characterization, that they were a big gorilla in the marketplace, especially in 2006.  I’d actually think they were the perfect size of competition to have, because they were big enough; I think at the time maybe they were 15, 20 million of revenue.  They were big enough that they had started to help define the market and to evangelize that there was a need for this kind of technology.  They did a great job of evangelizing it in Silicon Valley high-tech companies, but they weren’t a massive, dominant company, and frankly we could build a better solution because we were able to build something that was easier, more affordable, and delivered a faster time to value.

If I were to speak to anybody about starting a company, I would say that’s almost the perfect market, where there is a competitor big enough to define it, but not so big that they’re hard to beat.

Russ:              That’s a good analogy.  You guys actually use your own platform to generate revenue.  From speeches I’ve heard from you and from Phil, you guys are eating your own dog food.  Tell me what you guys are doing to bring in the leads using the platform, and what’s working and what’s not.

Jon:                 Well I hate the expression, “Eating our own dog food”, because this stuff tastes a lot better than that.  I like to use the expression, “Drink your own champagne”, so that’s what we do.  We are probably the most sophisticated user of Marketo, if not marketing automation, probably on the planet.  I could go into lots of detail about all the different things we do, but I think probably the most interesting and salient point is that we never stop in terms of building, evolving, computer rating, adapting how we use the technology.  In a lot of cases the technology gets better as our friends in engineering develop more and more functionality, but at the same time we are always tweaking that lead-nurturing campaign, adding another track, testing out a new email, trying a different lead-scoring rule -- you name it.

What we have today is the byproduct or the result of six years of evolution, and adaptation, and agile development of our use of marketing automation.  I think that’s just the way to go.  Don’t try to build everything upfront.  Start with some(thing) small, and then evolve, and iterate, and adapt.  Does that make sense?

Russ:              It makes perfect sense.  Are you guys one of the main product developers of the system?  Are you putting those inputs back into the product development shop, and kind of giving them the tips and tricks, and new pieces of technology that you want?

Jon:                 Certainly we as a group, and me personally, are highly involved with the product management team to help kind of specify what the functionality should do.  That’s a real luxury.  Most companies don’t get the luxury of being core users of their products, and having the ability to just go talk to a customer any time, and therefore kind of get that direct input and real-world usage data.  We certainly are the data tester for everything that Marketo does, which helps.

It is important to point out that we are not the only customer, and our needs are not the only sets of needs out there.  We have over 2,000 customers, so the product management team’s job is to certainly listen to what a sophisticated user like us needs and wants, and make sure that we’re delivering on that high-end of the market, but at the same time recognize that there are a lot of other customers that are not as sophisticated as we are, and making sure that we’re delivering their needs as well.

I think a lot of vendors only listening to the sophisticated customer, and that results in building a product that is more, and more, and more complicated over time.  Yes you want to serve that high-end, but you’ve got to recognize the fact that if you don’t keep that laser focus on usability at all times, then your customers just won’t get there.

Russ:              That’s a good comment.  Your platform is really designed so that really any size business can use it.  Where are you guys finding your sweet spot?  Is it small business mid-market enterprise?

Jon:                 I think one of the things that makes Marketo special is the fact that we’re able to serve multiple markets.  If you look at the competition you tend to see competitors that focus only on very small businesses in the low end of the market, or you see other vendors that really try to compete only in the large end of the enterprise.  Marketo has customers that are fewer than ten employees, and I think we are as easy to use and as affordable as anybody as a server of that low end of the market.  That’s what we were founded to be:  a fast, easy, affordable solution.

Then we also have some of the world’s most sophisticated, complex organizations as our customers.  We have many, many multi-billion dollar revenue companies.  We have the power and sophistication to serve their needs.  What great about that, as I sort of alluded to earlier, it means that we can get a small company -- any company -- up and running quickly, but then evolve and adapt as they grow in their usage and maturity.

There is a floor in terms of how small is appropriate for us.  I don’t think that has to do with the technology, I think it has to do with what you put into using the technology.  If you don’t have the resources on the staff to use this stuff, it ends up being like a Ferrari that you never take out of the garage.  It ends up being overblown email.  I would say that the smallest company that would use a technology like ours is a company that has at least one full-time marketer on staff.  Somebody who wakes up and thinks, “My job is marketing for this company.”  That’s not going to be the corner store or the deli or the florist, because they typically are owner-operators and don’t have that kind of full-time marketing person.   Once you get up to a company that has at least a little bit of scale to have a full-time marketer, that’s where we start being appropriate.

Russ:              How do you manage that complexity?  I know over time a lot of systems go from being that simple, kind of easy-to-use platform, and over time they get more complex because you have larger customers with more complex needs.  How are you and the product shop managing those balancing acts between giving that uber functionality and then keeping it simple and pure?  Kind of iPhone and Android.

Jon:                 I think that is one of the core competencies of Marketo.  We like to say, “Making everyday tasks really easy, and making the more complicated tasks possible.”  Probably the most important thing to say is when we started the company the first person we brought in from the outside was a senior user experience architect from Intuit.  Intuit knows about making complicated stuff easy: your taxes, your accounting.  We applied those same ideas and same principles that they’ve learned over the years of doing rigorous user testing, and applied that to our own user experience.  Making sure that we’re always thinking about, “Is this learnable?  Is this discoverable?  Is this easy to use?”

Russ:              For companies that might be watching, your core product is really kind of an email marketing platform.  As companies like yours grow even more popular, and as new entrants come into the market, the kind of proliferation of email is even expanding.  How do you deal with the critics that kind of say you’re just spam; you’re another spambot or enabler of spam?

Jon:                 First of all, I wouldn’t describe us as an email solution.  We are a marketing on a [inaudible 00:11:46] solution, which means that we are at the core, come with a rich marketing database that really knows who all your customers are, integrates with CRN if you have it, but more importantly connects in that behavioral history and marketing history.  You know what campaigns people respond to, what pages they visit, what links they click, what keywords they use, and what kind of content they share socially.  You have all this data to then build this rich view of who they are, and what they want, and where they are in their buying cycle.  As a result I think you actually get from this kind of technology a much more powerful way to create interactions that are actually relevant and engaging with your prospects, much more than you get from traditional email.  It lets you align your marketing to where they are in their buyer’s journey.  If they’re not showing any buying signs, don’t send them promotional contents about your company.  Send them early-stage education.  They’re going to find that more interesting.  Marketing automation lets you do that, and therefore you’ll have a better relationship.

Because you know the content they like and what they download, you can send them more relevant content based on their interests.  You can get the timing more accurate with real-time messages that respond as soon as they do something, as opposed to setting it upon a batch-and-blast based upon where you are in your campaign.  Perhaps at least for B-to-B segments, one of the things that’s best about it is it keeps the salespeople away when they don’t want to get called.  Spam is when a salesperson nails me, saying, “Hey, you don’t know me but I’d like to talk to you about our product”, as opposed to what marketing automation lets you do.  You build that relationship over time, then sales only hooks up when it is ultimately relevant.

Russ:              I think that’s a good differentiation.

Jon:                 Maybe the problem is the word “automation”.  I think it connotes images of factories and machines that are very impersonal, but in reality this is a technology that is about making your marketing more personal and more relevant.  The trick is to do it at scale, right?  Because you’re not building a relationship with one person or ten people, you’re doing it with thousands or millions (depending on your database).  That’s the trick.  That’s why it’s automation and technology; to let you be relevant and personalized to a very large group.

Russ:              Kind of following on with that, you guys started in 2005, 2007 when the web was coming of age.  We’re now seeing this massive shift to mobile platforms, texting, IM, and everything else in the world -- Google hang-outs like this.  How are you guys evolving a platform and evolving a business to bring in those communication channels, and what are you doing on that side of the house?

Jon:                 Again, to us email has always just been a channel.  The way we think about this is that at the core we have a database -- the marketing database I talked about -- so that we know who the customer is and what they’re interested in, we have the workflow engine that lets us architect-out the dialogue, the conversation, the process with the customer.  We have the channels.  Email is a channel.  A social referral campaign is a channel.  SMS is a channel.  A salesperson making a phone call is a channel.  Lastly we have the analytics so that you can measure across all those things: what’s working, what’s driving revenue, and so on.

To answer your question, as marketing evolves, as new channels become popular, as new techniques come online we have to do two things.  The first is we need to make sure we have data and insight from that channel in our marketing database.  For example, we build something so that if you tweet something out that has a relevant keyword that we might be interested in, we can see that, pull that in, and use that maybe to change your lead score, or to adjust what marketing you’re receiving in a nurturing track.  That’s just an example.

Similarly, when social media was becoming popular we said, “Okay, we already have a webinar functionality that’s going to let people run webinars.”  What we added is social referral capabilities.  Now when you sign-up for a webinar you may also get prompted to share that sign-up with your friends.  Or [inaudible 00:17:12] when you sign-up for Google hang-out, you can get prompted to share that with your friends or your social network so you get more people coming in.  That’s just an example.  The follow-up being that core database, that core workflow engine, that core analytic engine just to take into account new techniques, new channels.  But because we’re not an email system, we didn’t build ourselves as an email system, that’s a very natural evolution for us.

Russ:              Yeah, it absolutely does.  You mention there that there is this kind of linkage between the Marketo platform and other channels, one of them obviously being the salesperson picking up the phone and making a call.   You guys initially started with integrating with sales force, and have expanded and made developments with Microsoft CRM and other platforms.  What do those relationships look like over time, and how have they evolved?

Jon:                 We think that it’s an advantage that we’re independent of any of the major CRM players.  At the same time it’s important that we integrate in a deep, deep fashion with all of the CRM players.  We did start with sales force, because they are the largest player in [inaudible 00:18:53] as a service market, which is what we are playing in.  It just makes natural sense to continue to serve more and more potential customers with more and more integrations that are as deep as what we have with sales force.

Russ:              If you go back to those early days and you reminisce, what do you look back on now if you were going to give a tip to somebody starting a company today, what tip would you give them about how you started and what you would do differently?

Jon:                 I think by far the biggest mistake we made was trying to go out and raise venture capital too early in the process.  We spent a lot of time in 2006 going up and down Sand Hill Road pitching the idea because we believed in it so much.  We knew there was value there, so we spent a lot of time and energy going to these [VC meetings] and trying to convince them.  “Hey, there’s a lot of value in this idea.”

At the time marketing automation was not a hot category.  People sort of felt like they’d been burned on investments in the first earlier generation of technologies, and we had a hell of a time getting that first investment off the ground.

First is what would have happened had we gone out and maybe gotten just a little bit of angel funding, and built-out our first [platform] based on that; gotten further along with our proof points.  Because ultimately when it came down later in our cycle it was obvious to investors who wanted to invest in this.  We’d proven just how valuable that product could be once we built it to be easy to buy, easy to own, and easy to use.

The main advice I have to anybody is don’t go for venture money too soon.  Put your own money if you can, get angel money if you have to.  The more you’ve got before you go to Sand Hill Road and the over VCs, the better off you’ll be.

Russ:              You guys have filed for an IPO.  Obviously you’re making that capital move for a reason.  Is capital an inhibitor of your success, or are you raising money to expand the platform?

Jon:                 I really can’t comment on anything related to the IPO.

Russ:              Fair enough.  What does inhibit your success other than capital or money issues?  What in the marketplace is inhibiting you?

Jon:                 I think there’s still a lot of marketers out there who probably don’t know that there’s a better way to do this kind of stuff.  That’s probably the simplest thing to say.  Who still are thinking that the right way to communicate to their customers is with traditional email service providers, and haven’t hear the news, if you will, that they can actually grow revenue faster and build deeper customer relationships with a different kind of approach.  I think technology companies, especially in Silicon Valley and so on, get it.  There’s no CMO in Silicon Valley who is going to start a new job without immediately saying, “What’s my marketing automation platform”, because they get it, they see it.  Meanwhile there’s hundreds and thousands of businesses out there who are probably still thinking about doing it the old way.  The biggest inhibitor is the market needs to keep growing, and people need to keep hearing that this is the way to build revenue in the future.

Russ:              So you’re going out after those guys trying to build the awareness of your brand, and at the same time you’ve got all sorts of new companies sprouting up, and the old guys getting better.  How are you staying one step ahead of those guys?

Jon:                 Which kinds of companies are you referring to?

Russ:              If you look at Eloqua, and Constant Contact, and those kinds of companies, and then you have other platforms that are coming up that are the geniuses of the world in the other platforms.  How do you stay relevant?

Jon:                 At the core Marketo’s always been about innovating and executing.  We started by building a better product, and I think we continue to add functionality that is exciting, that our customers are going to like.  At the same time we have always been a company that has been on the forefront of modern marketing.  We raised content marketing very early.  I think we are very good at how we use social as a way to reach out and connect with people.  We’re transparent and highly communicative.  We keep putting out good, solid leadership and good content.  We keep building the right product, and stay ahead.

Russ:              Earlier you were talking about the minimum size requirement for a company that wanted to use Marketo, and that you have to have a dedicated marketing professional on staff.  Tell us a little bit about your team that you’ve got.  You guys obviously pour out content.  Tell us a little bit about your staff and a little bit about your management style.

Jon:                 That’s probably two questions.  On our staff we do have people who are dedicated to social, people who are dedicated to producing contents; I produce a lot of content myself.  I think part of my job is as the executive editor for Marketo; just like a publisher would have an executive editor.  Working with people, “Hey, we need to write about this idea, we need to [inaudible 00:25:31] content, we need to push the story forward in this direction or that direction.”  I think that is a key aspect of creating a contents engine.  That answers one of your questions.

Your other question was about my management style?

Russ:              Yeah.  How many people do you have in that group, and what’s your style like?

Jon:                 Actually the second part of the question got cut off.  The first part, the number of people in the group, I think about 70% of our marketing department is allocated to essentially content and social.  That is probably more than some companies, but you can potentially see companies that do even more.  The point is we make a pretty heavy investment in it.

Russ:              How are you managing those folks?  Are you breathing down their necks every day?  Are you guys working in teams to develop content?  What’s the strategy for you guys?

Jon:                 Style-wise, personally I’m a pretty detail-oriented person, and I have a very high energy around execution.  My bias is always a drive to get stuff done, check the box, move that project down the field, and making sure that we’re being highly communicative about it.  My style is to let people run with it.  Know that they need to get this stuff done, create this kind of content, but then make sure we’re executing it, and make sure we’re moving them all down the field.  If somebody is getting their deadlines done and checking their boxes, then I’m happy and I stay out of their hair.  Besides the role as executive editor where I will review what we do before it goes out there and make sure that meets our consistent levels of quality.  If something isn’t executing in terms of getting the ball down the field and driving the company forward, then I might get more involved and a little bit more detailed with the project management.

Russ:              I wanted to thank you for joining us today.  I do have one final question for you.  If you could work anywhere other than Marketo -- let’s imagine Marketo doesn’t exist -- where would you want to be right now, and what company are you finding exciting these days?

Jon:                 I’ve had the opportunity now to work at two companies that went from small to big.  I joined Epiphany as the 30th employee, and I was there up to 1500 employees -- down to 400 on the other side of the bubble bursting.  Now at Marketo obviously as a founder, I’ve been here, and now we’re up to close to 350 employees.  Through both those experiences, one of the things that I personally learned is that I have the most fun when the companies are very small and growing; that almost zero to 100 type phase [inaudible 00:29:00] [audio distortion]. That’s not for everybody.  I’m not saying that’s a universal truth, but personally that’s what I like the best.  If I weren’t at Marketo I would be looking at my next business [inaudible 00:29:07].  What’s the next big thing to start?

Russ:              Anything you’re looking at specifically?  I mean, what’s the big trend that you’re wishing you were a part of?  Not that you’re leaving Marketo.

Jon:                 I do think there’s a lot of interesting stuff happening today in terms of how individually addressable the world is becoming.  What I mean by that is email today is individually addressable.  I can send an email to Russ.  The phone is individually addressable.  I can call Russ.  Now with Facebook, with some of their targeting, I can actually put an ad or a message in front of Russ.  I can start doing that more and more accurately with some of the retargeting technologies.  So when you’re reading ESPN.com, I can put my message in front of you specifically.  When you come to my website I can identify who you are, and make sure that you see something relevant and specific to you.  All the way down to more and more -- we’re not there yet -- but TV.  You’re watching a TV show, and why not have the commercial you watch be relevant and specific to who you are?  With digital cable transmission that’s getting close to being possible.  I think there’s some interesting and exciting ideas in terms of taking mass marketing even one step further to being individually addressable.

Russ:              We’ll look for future updates from you on that.  I imagine you’ll be involved somehow.  I appreciate you taking the time with me today.

This has been the Big Awards Sync with Jon Miller from Marketo.  Jon, thanks again, and have a great day.

Jon:                 Thank you.