Mar 26

Marketing Through Perpetual Volatility

Everyone wants to create a company that becomes a blockbuster brand in the proverbial hot minute. You know the ones. They fly over the chasm with zeal, straight into the coveted leadership quadrant in a seemingly linear path. These newly established leaders do the impossible, surviving hypergrowth and the toils of scale. Now these companies, which exist as lasting brands and are too big to buy, are busy defending their position and customer base from competitors coming at them from all sides.

Depending on what sources you read, roughly a thousand tech unicorns are standing worldwide each year. These companies boast an average valuation of $3 to $4 billion with eager investors salivating for that coveted acquisition or a $10 billion IPO. If the past is any indicator, only a handful will ever make it there.

And then there’s everyone else, living in perpetual volatility in the Valley of Transactions.

We must market to thrive in perpetual volatility in the Valley of Transactions

The Valley of Transactions is where deals are inevitable, as it’s often more appealing for investors to sell than to go public, because of either the timing of payout or the actual percentage of return. For others, the path is much more unpredictable, and for the companies that linger, growth and scale are the right ideas, but the path can be, let’s say, elaborate and full of surprises. Some companies go on an acquisition spree of their own, go public, go private, and then get bought themselves.

For some companies, such a saga can be an exciting linear adventure. For others, it can be full of unexpected plot twists and impose a plethora of human emotions. Goals can get intricate, and focus can go asunder as shares trade hands or as various executives take the helm in search of new ways to achieve progress, deliver on customer commitments, and drive value for investors. As if that wasn’t hard enough, things get gnarly when economics shift since the technology industry is highly sensitive to downturns due to pressures on discretionary spending and dependencies on a dynamic global economy.

The Valley of Transactions was born exclusively on the premise of exploring innovation, and it evolved over decades mostly on the backs of willpower, optimism, quick decisions, and luck. By luck, I mean that in some of the segments, companies could make money simply by being open for business, which created an industry full of loose habits and shiny objects. So, while innovation and good timing lead to rapid growth and excitement for many, as an industry we didn’t get to fully practice being sustainable, profitable, adaptable, and resilient.

Instead, we became highly comfortable with volatility and therefore competent at being impulsive, reactive, and hopeful. To the point that 'growth' became the default strategy that is void of anything helpful to base day-to-day decisions on - since it's a desired outcome, not a strategy.

In this business, there can be a lot of mania for many reasons that might include binging on opportunities in every direction, trying to rebound competitive moves, endless firefighting within the customer base, and making fast deals or executing creative financing to make the numbers all work out. It can be easy for strategic lethargy to set in, and long-term planning can fall overboard without anyone ever missing it. Unfortunately, this can become the default operating rhythm, and the company can get lulled into believing they are playing the long game when they are simply trying to survive the next quarter or fiscal year. With all eyes on the quarter or the close of the year, tough choices can be kicked down the road that may otherwise create a meaningful competitive advantage when the world gets wonky.

In good times growth can happen without a business strategy, and problems can be solved by throwing people at them. The fixation on the short term may work for a while, but it stops working when times get tight and can turn into a rash effort to spread cuts and layoffs across the company to protect EBITDA. This can inadvertently trigger a series of events that cause a contraction that now needs a rescue and recovery mission.

The good news is that while the technology industry is sensitive to downturns, it can also play a vital role in driving economic recovery if vendors take advantage of opportunities presented in those times. Modernization initiatives in these cycles often become catalysts for growth, as many businesses seek deeper efficiencies and unity. Yet, it is ironic that many B2B software or tech-enabled companies remain strategically clumsy and operationally shortsighted while evangelizing how their technology supports long-term customer success by creating efficiencies, alignment, and productivity—since that’s the fundamental nature of what software does!

Having a thoughtfully curated business strategy helps you focus on what matters most, grow quickly when times are good, and prosper in downturns when others struggle. It allows you to position yourself to surge out of a downturn to your intended destination, not simply react to a bad storm.

We have seen this play out historically. Those who pursue intergalactic world domination in earnest make a deliberate decision to do so over time and have a prevailing strategy for how to get there. I’m referring to those tech founder-CEOs that everyone either wants to emulate or loves to hate. However, they share common attributes that include having a bold vision, an unwavering passion, an extreme commitment, and a maniacal focus that also meant they burned a lot of boats that would otherwise have been used to fling them off course. But just as a reminder, they represent the 1 or 2 percent of companies that ever make it to this scale and are typically led by some of the most bold, ambitious, and sometimes stubborn founder-CEOs of our time.

This industry is more unpredictable than ever with more start-ups, more advanced innovation, and more complex global dynamics, so we should expect much more volatility on the horizon. A solid strategy can withstand gale-force winds and anticipates the probability of a transaction, which happens much more often than it doesn’t. In times of unpredictability, organizations with solid business strategies will have a better chance of delivering earnest value creation, perhaps in addition to, but not exclusive to, investor returns.

What does this have to do with marketing?

Well, you can’t use marketing strategically if you don’t have a business strategy that suits your situation and the conditions ahead of you. You can’t have phenomenal marketing if you are just doing tactics and activities that are random, reactive, and one-off – you won’t get the multiplier effect with any meaningful impact. If you want to use marketing to instigate more dramatic value creation, you must be willing to use it as a strategic function, which first requires you to have a business strategy it can anchor on.

You will never get great marketing if you don’t first have a business strategy. Period. It's the fundamental truth that many software services companies overlook. You must have a sound strategy that is appropriate for your stage of maturity, the condition of your customer base, and where you are with your product/market fit. It keeps you from thrashing in the waves of change that are inevitable. It keeps you focused and aligned as an organization so you can execute quickly and it can often help you outrun a storm.

Learn how to get the marketing you deserve for your B2B SaaS or tech-enabled services business by starting with a sound strategy, today.