Building a great management team

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Oscar Wilde said, “With age comes wisdom.” After working as a CFO for more than 30 years with nearly 100 companies, mostly startups, I’ve begun to identify some of the key early attributes of a topnotch management team. A great management team doesn’t necessarily guarantee success, but without one, you’re almost guaranteed to fail.

Of course, the second part of Wilde’s quote is, “But sometimes age comes alone.” So what are the hallmarks that distinguish a tier-1 management team from others?

The Chief: It starts with the CEO. Experience certainly helps, but there are plenty of outstanding, young CEOs. Successful CEOs rely on their strengths and leverage the strengths of the team around them. In a fundraising pitch, for example, I’ve seen CEOs do nothing more than open and close the meeting. In between, the heads of sales, marketing, product and finance all have a chance to shine and highlights the team.

Hire Great People: I often say that I’ve made a career out of hiring people smarter than I and managing them well. Successful companies and their managers are not afraid to hire A players and they never settle for B players.

Recognition: Great companies highlight and celebrate their successes as a team. “Catch people doing something good”. This might be cash compensation, a call-out at the all-hands company meeting or it could be something with intrinsic value only. At one company, we used a baton to celebrate success. The baton would sit on the recipient’s desk and became a coveted symbol of achievement.

Accountability: Of course, with recognition must come accountability. People need help and coaching if they are not meeting expectations and you can be sure that the rest of the team notices when a teammate is lagging. Holding people accountable for their goals fosters an environment of high achievement and success.

Decision Making: Seek input from a variety of sources but move efficiently to make decisions. Once made, communicate those decisions
clearly and succinctly. Most people are afraid to make decisions, but a leader embraces the challenge and is not afraid to be wrong.

Culture: Perhaps the most important, but the hardest to manage. Culture requires buy-in and starts with the senior management team. Culture is a continuous process that needs to be nurtured. While the management team can help guide the process of building and maintaining a strong culture, they do not have to implement specific programs. There are personality types in every company that help establish company culture. Ask for their advice and allow them to make proposals (e.g. The Fun Committee).

Great management teams operate in an environment of high expectations and welcome candid discussions and feedback. How does your team stack up?

Learn more about Chris Thomajan, TechCXO’s Managing Partner – Boston

CISO-As-a-Service

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CISO as a Service

A Fractional CISO as a Service, sometimes called vCISO (virtual Chief Information Security Officer), is an alternative security program leadership strategy that leverages a flexible resourcing model to achieve your program goals. TechCXO has been providing this independent and well-planned Fractional CISO service for years, we are experts in this area.

Most organizations find it challenging to justify the investment of a Fractional CISO but their business requires a high level of security to maintain operations. Use a fractional, Fractional CISO-As-A-Service model that is affordable and integrated into your operations.

Five Areas to Benefit from CISO-as-a-Service

Information Security in modern business has been elevated to the C-suite due to a number of high profile breaches in corporate America and the government. TechCXO has created a CISO-As-a-Service solution for companies of all sizes to meet needs and provide benefits in the following five areas:

Regulatory

Payment Card Industry (PCI), HIPAA, GLBA (banking), CFPB (finance and insurance), SEC and FINRA (Financial services / registered investment advisors).

Supply Chain Framework & Compliance

Contractual requests: to our clients coming from their clients and business partners; NIST (National Institute Standards and Technology) 800-XX series.

Information Security Audits

Internal and External.

New Market and New Business Opportunities

Driven by clients and consumers. As a marketing differentiator for those firms selling an information security posture as competitive advantage.

Risk Management

Driven by CEOs, CFOs, Executive Teams, Investors and/or Board of Directors.

TechCXO’s CISO Team

Your business is unique. We’ll work with you to accommodate your specific needs, from short-term projects to ongoing support, either remotely or in-person.

After completing the form, a TechCXO advisor will reach out to learn more about your project or team needs and match you to the perfect product and technology talent.

CISO-as-a-Service Guide

Most organizations find it difficult to justify the investment in a Chief Information Security Officer (CISO), but their business requires a high level of security to maintain operations. TechCXO provides a fractional, CISO-As-A-Service model that is affordable and integrated into your operations. Includes 5 Key Security Areas CISO-As-A-Service covers.

CEOs Are Like Fine Wine

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During my 30+ years as a CFO, I’ve worked directly with roughly one hundred CEOs. They are a unique and fascinating breed and over the years, I’ve started to discern some patterns and have tried to segment them into categories. Using the analogy of fine wines, below is a short and wholly unscientific compendium of the personalities you are likely to find in the corner office.

Beaujolais Nouveau – aka the first-time CEO

These CEOs are relatively light in terms of experience but make up for it with their can-do attitudes. They are often the founders of their companies and may have been thrust into the role by default. As with the producers of the young wine, they may race to get their products and services out to the market, sometimes before they are ready (sacré bleu!). Beaujolais nouveau is a wine that celebrates the harvest, and these (often young) CEOs are avid cheerleaders and find ways to celebrate wins with their teams. Best paired with a strong C-Suite or Executive Board member to mentor and lend credibility.

Rosé – aka the sales-oriented CEO

These CEOs range from the light and frivolous to the structured and complex. They’ve had success in the sales function and bring a competitive, goal-oriented approach to their jobs. With notes of hubris and aromas of exaggeration, these CEOs can be highly successful leaders. Much like the wine that can be drunk at any time of day or night (please don’t judge my day drinking tendencies) the Rosé CEO is a hard charger and ready for all challenges. Best paired with a strong CFO/COO who can apply some discipline and realism to the company’s business plan.

Chardonnay – aka the engineering or scientific CEO

Deep sector experts and often polymaths, these CEOs come in a broad range of skills and talents. They are well balanced and sometimes too smart for their own good (think too much oak or buttery taste). The Chardonnay CEOs are confident, well respected and have been aged on the frontlines of their industries. They do not have long shelf lives because the very attributes that make them successful (deep knowledge of the science or technology) also mean they will struggle to delegate and take a broader view of the business. They are meant to be drunk early. Best paired with outward-focused executives such as business development or sales.

Cabernet Sauvignon – aka the mature, serial CEO

These CEOs are respected for their laser focus and seasoning. Though sometimes acidic, they exude confidence, both with their gravitas and experience. They can be expensive, but the right CEO, like the right wine, is priceless.

These CEOs come in with a plan, an established network, including investors, and command respect. Heavyweights in their industries, the Cabernet Sauvignon CEOs have experienced success over their careers and made a lot of people a lot of money. Best paired with an executive team that will execute on the plan and sweat the details.

Port – aka the dictator

The port wine CEO is highly complex with notes of authoritarianism and control. They often build a cult of personality and demand total loyalty. Key to this phenotype is the use of fear as a management tool to drive results. The port CEOs can be successful but have a short shelf life because of their inevitable negative impact on employee turnover. As with the traditional method of stomping grapes, these CEOs run roughshod over their teams.

Though sometimes successful, companies with a Port CEO usually end up with sour grapes. Best paired with a board that can curtail the worst of their excesses.

Learn more about Chris Thomajan, TechCXO’s Managing Partner – Boston

Calling Your Content ‘Thought Leadership’ Doesn’t Make It So

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Content marketing became a powerful marketing approach over a decade ago, with the maturation of the internet, the commensurate explosion of online content, and the evolution of digital and social media marketing. This has given rise to an evolved customer journey, with customers doing most of their research online and relying on various forms of content to keep them up-to-date and aid in decision-making.

However, lately, there’s been a dramatic rise in the term “thought leadership,” which marketers have used interchangeably with content marketing. The problem is – just because you’re creating and sharing content on relevant topics doesn’t mean you’re engaged in “thought leadership.”

While content marketing and thought leadership are involved with developing content to ultimately drive inbound interest, thought leadership goes beyond its ability to provide a greater sense of authority, expertise, and trust. Simply stated, content marketing isn’t bad; it’s just that thought leadership is more powerful.

So, what are some key elements that differentiate thought leadership from basic content marketing?

It’s audience-focused not company-focused. As I’ve written before, it’s more important to write content about what your customer cares about than what you do. Rather than using content to promote one’s products and services, thought leadership is consumed with answering its audience’s fundamental questions. It demonstrates an understanding of the worlds, challenges, and needs of its customers and uses the language of the industry and its practitioners. Because of this, its primary goal is to be helpful – which is why customers view it as more valuable.

It’s novel and original. There’s a fairly common playbook for most content marketers, consisting of similar types of summaries, e-books, and product comparisons.

Thought leadership aims to be more original, with next-level insights, unique takeaways, and creative twists on the standard fare. This is what provides the leadership part of thought leadership. In addition, thought leadership has a distinctive “voice” that gives it personality and attitude, which helps it stand out as worthy of attention. 

It demonstrates relevant experience and expertise. This may be the most important aspect of thought leadership: it showcases the writer’s (and, hence, the brand’s) pointed relevance for solving its users’ problems. It demonstrates an applicable set of experience and learning that sets the brand’s offering apart from its competition. This level of experience projects overarching expertise — which leads to trust. And trust is the one thing most desired in the buying process.

It’s two-way, not just one-way. While content marketing tends to aim to push out its one-way story, true thought leadership invites input and even sparks debate. This can add a layer of authoritativeness to the writing by demonstrating an openness for dialogue and opposing views that evince confidence and substance.

So next time you or your marketing colleagues discuss moving forward with a thought leadership effort on behalf of your brand, recognize that you’re speaking about something beyond content marketing — thus requiring an effort beyond it as well. But the impact and results you’ll achieve will be beyond it, too.

Email Michael | LinkedIn | Download Michael’s CV (PDF)

TechCXO Expands Its Nashville Presence with New Partners

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Executives On Demand Firm is Now a Nashville Top 10 Management Consultant. Interim and Fractional CFOs, COOs, CMOs Support Region’s Fast-Growth Companies.

TechCXO®, a pioneer and leading provider of industry-relevant, part-time, fractional and interim executives and teams, today announced that it has expanded its Nashville presence with the addition of three new partners. TechCXO now ranks as a Top 10 Management Consulting Firm, according to Nashville Business Journal and is led by veteran finance executive and TechCXO Managing Partner for Nashville Viraj Parikh (bio).

Nationally, TechCXO reported an increase of 47% in annual service fees in 2021 over 2020 to more than $41 million. TechCXO has increased revenue every year since its inception in 2003. The firm was also on the Inc. 5000 list of the nation’s fastest-growing private companies for 13 straight years.

Read Full Press Release Here

New Partners in Nashville

In addition to Viraj Parikh, COO Healthcare Partner Stephanie Rose Belcher (bio) and CFO Partner Gerry Hayden (bio), TechCXO has added the following partners in Nashville:

  • Amanda Donnelly (bio) – Partner – Revenue Growth: Amanda Donnelly is a full-stack marketing leader who elevates brands, engages customers, and increases market share for organizations. She uses her deep understanding of digital marketing to assist high-growth stage businesses looking to expand their marketing operations to meet demand. Amanda is a Partner in the Revenue Growth group and is is most frequently called on by Boards, investors and senior management teams to assist clients as an interim and fractional CMO.
  • Dan Benetz (bio) – Partner – Finance & Operations: Dan Benetz assists start-ups and fast-growth companies as an operationally-focused CFO. He primarily focuses on firms in the Technology, Manufacturing, Life Science/Biotech and AI spaces, as well as SaaS businesses in Digital Healthcare, Digital Transformation and Education Technology. Dan spends his time in both Nashville and California.
  • Peter Clifton (bio), Partner – Executive Operations: Peter Clifton is a senior strategic and operational technology executive with extensive business building experience across industries including Healthcare, SaaS, Technology, B2B, Information Services, Media, Publishing & Education. Peter is a collaborative partner with a successful track record working with startup and mature company management teams, boards, venture, public and private owners to drive growth and create shareholder value as a fractional COO and/or CTO.

“Nashville is a dynamic, high-growth market whose entrepreneurial energy is exceptional. We are so pleased to this city home,” said Viraj Parikh. “We’ve had the honor to assist some of the region’s fastest-growing and most successful startups. With this expanded team, we can meet the region’s operational and strategic needs, including marketing, sales, finance and operations.”

“There are so many built-in advantages for Nashville as a business hub. There is a robust Incubator, Angel, Venture Capital, and Private Equity Investor network. Then, there’s a world-class education infrastructure of colleges and universities. Young, creative people who come to school here are staying here for the lifestyle and opportunities,” said Parikh. “Couple all that with a culture of hard-work, hustle and grit and you have something special here.”

Building Brand is Paramount for a Sustainable Marketplace

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Building a marketplace brand is no easy feat.

Marketplace executives may be tempted to consider whether they or their sellers “own” the relationship with the customer. In truth, neither the company nor the seller does. The customer determines the terms of engagement. Both the company and the sellers serve the customer, albeit in different capacities. The company’s brand and the seller’s brand must coexist in this environment.

Many early-stage marketplaces focus on driving buyers to their website or app. While this is a critical step in validating product-market fit, building a brand is as important for the longer-term viability of the marketplace. Without a strong brand, the marketplace has no chance of remaining top-of-mind and will be relegated to a perpetual cycle of spending heavily to acquire customers.

Take these steps to begin to strengthen the brand and break the cycle.

Implement a Seller Vetting Process

One role the company plays is that of a scout. Potential buyers often come to a marketplace because they will be presented with several options to choose from. Like sports scouts, marketplace leaders have to go to the game, see how the player plays and how they interact with others. Essentially, they watch how the seller performs outside the marketplace before they are invited to join the team. If the seller meets expectations, they’re in.

This vetting process is important because the individual activity of each seller reflects on the company’s brand. It is important for the marketplace to define and screen for seller criteria that align with the brand they wish to embody.

Expand the Supplier Base

In addition to having vetted sellers, marketplaces must curate a sufficient number of suppliers. A wide supplier base not only gives buyers more options but also reduces the company’s reliance on individual suppliers.

A more substantial supplier base can reduce the need for the buyer to look elsewhere. It can also mitigate damage to the company brand if a rogue supplier does not meet customer care expectations. Essentially, having more suppliers reduces the impact of any single supplier’s untoward actions on the platform.

Mitigate Communication Barriers

It is practical for marketplaces to want to limit communication between buyers and sellers before any transaction has taken place. Doing so keeps opportunities for disintermediation in check. However, it also can breed distrust. Blatantly blocking communication between buyer and seller will be brand damaging.

Marketplaces should mitigate communication barriers so that their brand can be seen as one that is trustworthy. So, share critical information between buyer and seller in a timely fashion. If it is prudent to do so, transmit contact information after the purchase transaction. The product should enable communication to commence immediately after payment is made. Marketplace leaders can also prioritize product features that enable communication through a secure (perhaps monitored) channel.

Satisfy Buyers to Retain Sellers

Remember that building a strong brand with suppliers is as important as building a brand with buyers. For some platforms, it is more important.

Suppliers will remain active on the platform if a steady flow of buyers is available to them. Encourage loyalty in the buyer community. Invest in data systems that allow for dynamic learning of buyer behavior. Use this knowledge to make personal recommendations that add value to the buyer’s experience.

Introduce options in products, devices, and payments that allow buyers to interact on their terms. A concierge-level of service for frequent buyers can further strengthen loyalty. In fact, preferred tools should be made available to both volume buyers and volume sellers.

Key takeaways for marketplace leaders:

  • The brand voice of the marketplace becomes more significant as the supplier base grows. The larger supplier base reduces the ascendancy of any individual supplier brand.
  • The supplier’s delivery of service is a reflection of the marketplace brand. Therefore, the marketplace must select sellers who align with its brand values.
  • Communication between buyer and seller before the purchase can be perceived as an opportunity to remove the marketplace from the transaction. However, it is a critical part of building trust within the community and one that the marketplace must astutely navigate to build a viable brand.

Email Katherine  | LinkedIn | 626-344-8730 | Download Katherine’s CV (PDF) | Twitter

Define Your Ideal Customer or Be Magnetic To No One

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It’s obvious that knowing your target customer is a critical part of operating and growing any business. Defining your ideal prospect drives all aspects of sales and marketing but also provides direction for the entire enterprise, from developing products and services, creating positioning, developing sales enablement programming, and building the organization, from people to tech stack to processes.

Unfortunately, in too many companies, a target is viewed as “anyone willing to pay money.” In that case, being deliberate and targeting specific customers feels like missing out on opportunities. I’ve literally seen food brands targeting anyone with a mouth.

However, if your business is for everybody, then it’s likely to have a very generic offering that isn’t really the perfect fit for anybody.

Pointedly defining your ideal customer also helps a company discover where to spend its resources. Because your company’s resources are finite, giving attention to one type of customer means giving shorter shrift to others — including those who are empirically more valuable.

So how do you identify your ideal customer? To begin with, leverage all accessible data to better understand your current customers and why they chose you over your competition – e.g., CRM data, sales intel, customer satisfaction surveys, interviews with customers and non-customers, and beyond. Dig into what you know about them, what their goals and challenges are, and how they make their decisions/what their path to purchase is.

Having this information, here are some steps to improve your ideal customer definition, from good to better to best. Good

Define your current BEST customer

You may have various of types of customers, but focus on those driving the greatest value for you. Perhaps they are repeat users, are most appreciative of your product/services, or provide recommendations.

If you are a B2B business, identify your customers’ category and size, how long they’ve been in business, if they’re growing or have stalled, etc. All this will be helpful for your marketing and sales efforts. For example, imagine the difference it might make to realize that you tend to help turnarounds vs. early-stage startups and scale-ups. Better (add this to the above)

What types of people hire you/use your product/services?

Remember that, even for B2B organizations, it is people who make decisions. What are your customers’ goals and fears? What are their values? What is important to them?

Consider the difference it makes in your sales pitches and storytelling to determine whether your customer is the kind of person who seeks bold, innovative solutions that drive big change or are more risk-averse and want to maintain control and the status quo. Best (add this to the above)

When do you and your team do your best work? 

This is a critical determination, especially for service-based companies. Think about when your company is performing at its best and when the teams are most energized – is there a type of client, a type of engagement, a type of solution that brings out the best in them? This is the type of information that helps you truly define your company’s differentiation.

As you can see, these types of definitions and attributes can make a big difference in your company’s offering — and are most likely to drive resonance with and create magnetism for your ideal customers.

Email Michael | LinkedIn | Download Michael’s CV (PDF)

Finding Hustle in the Quiet Quitting Era

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High-energy, can-do attitudes and effort can still be found if you know where to look

Is hustle dead? Finding workers with energetic, can-do attitudes is getting harder. Gallup says more than half of U.S. workers are “Quiet Quitting,” meaning they’ve taken on an attitude of no extra effort or weekend crunch sessions to deliver a project. 

Millions are watching TikTok videos in which younger workers defend their decisions to do the minimum requirements at work and no more under the banner of quiet quitting. Supporting comments cascade down and include: 

‘Above and Beyond’ is wage theft

I didn’t write the contract defining hours and responsibilities, they did.

I call it, The Great Relaxation

Coasting at work is nothing new, and experts say younger workers will get generally more ambitious as they work longer and want to achieve more, just as past generations have.  However, broader attitudes are changing in ways that researchers say is surprising.  People are feeling less connected to their organizations for one.  Also, work is just less important to many workers post pandemic.

Manager Work Engagement Declines

Perhaps most ominous is that managers, the people who are relied on as the primary motivators within organizations, are also disconnecting. Gallup said only a third of  managers describe themselves as emotionally or psychologically engaged at work.  This reflects one of the largest drops among all classes of employees. It’s also believed that managers who check out have a deleterious cascading effect on their direct reports.

Where to Find the Hustlers

Employers understand burnout is prevalent and there is increased emphasis on work-life balance. They say hustle isn’t defined by long hours but more of an attitude that includes positivity, resourcefulness, persistence and action.

During the interview process, recruiters and hiring managers say they are listening intently for tell-tale signs of hustle such as those who helped put themselves through college by working or have self-taught themselves several skills. Questions about struggles are no longer throw aways like, “Tell me about a time you overcame a challenge?” Attitudes about challenges and finding if potential employees truly have grit are central to interviews.

Contracting with Hustlers

Many companies, particularly growth-stage companies and startups, would rather simply contract with hustlers.  TechCXO, which has been providing on-demand executives and teams as interim and fractional support since 2003, says it has helped thousands of companies due as much to the experience of its partners and associates as their attitudes.  The qualities of hustle TechCXO says is inherent in its people include:

1. Enjoyment of Work – TechCXO partners are required to have demonstrated expertise within companies as C-level executives. This means they have a track record of success and are in demand from multiple organizations.  Many have been part of significant liquidity events and typically have resources. They choose to consult and lead projects because they enjoy the work and interaction with companies.

2. Entrepreneur’s Bias for Action – TechCXO partners have been CEOs, COOs, CFOs, CTOs, CMOs, and CHROs at companies of many sizes, including large enterprises. The firm’s client base tends to skew toward smaller companies in growth mode. The entrepreneurial energy of lean, fast-moving companies plays to partners’ own entrepreneurism and a bias toward action and tangible results.

3. Thicker Skin – Because TechCXO partners are generally older due to their C-level experience, the small slights, conflicts and grievances that may derail younger workers are quickly overcome and brushed aside by more experienced executives and managers who feel these things “come with the territory.”

4. Time to Value – The nature of interim, contract and fractional work requires tangible results to be generated quickly. Many of TechCXO’s clients are operating with venture or private equity capital so an emphasis on small learning curves and producing value in a condensed period of time is essential. 

Beat the Heat with Machine Learning to Optimize your Pricing

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It is hot everywhere these days. In fact, record breaking temperatures throughout the US and Europe.  So, what impact does this have on the supply and more importantly… the price of air conditioners. 

In contrast, there is the recent flooding which is creating havoc with supply chains and humanitarian assistance with food, medical supplies, and housing. Setting the right price for a good or service in times of crisis is an old problem in economic theory. With supply challenges and demand through the roof, the time for price optimization synced with supply chain planning is helping companies deal with pricing these days. 

Manufacturers and distributors are taking advantage of the tremendous power of Machine Learning technology to build effective pricing solutions to address the crisis. There is a multitude of pricing strategies that depend on the company’s overall objective. While one company looks to maximize profitability on units sold, another company needs to access a new market. Different scenarios coexist in the same company for different goods or customer segments is a reality.

These are some of the crucial questions that companies face:

  • What price should we set if we want to make the sale in less than a week?
  • What is the fair price of this product, given the current state of the market, the period of the year, the competition, or the fact that it is a rare product?

Given that these days it is easy for a customer to compare prices thanks to online catalogs, specialized search tools or collaborative platforms, companies must pay close attention to several variables when setting prices. Attributes such as competition, market positioning, supply chain production and distribution costs, play a key role for companies to make the right move. 

Price Optimization and Demand Forecasting with Machine Learning During a Crisis

During a crisis, the market does not behave normally, historical insights typically will be of limited value in predicting future sales. Therefore, companies need to increase the importance of shorter-term information such as daily sales to predict the future. 

Additionally, demand forecasting requires incorporating more near-term real-time market data than before. This means frequent updates on sales data, customer churn, sales intent, and competitors’ prices. On a broader scope, data on consumer spending, unemployment, GDP and even cities/regions may be considered for modeling future demand. Machine Learning as part of pricing optimization is being greatly leveraged to build accurate demand forecasts and optimize pricing strategies these days by accounting for nearer-term lags vs. historical data in the models. 

Bottom line is that Machine Learning in pricing optimization has an enormous impact. Its strength is tied to the developed algorithms that detect and learn patterns from the data. Machine Learning models continuously integrate new information and detect emerging trends or new demands that tie back to supply planning optimization. Instead of using aggressive markdowns or promotions, companies benefit from predictive models that allow them to determine the best price for each product or service in balancing supply with demand.

What Machine Learning Does for Price Optimization

With more targeted data into the model, a price automation solution with Machine Learning will automatically price items the way they would be priced by a human expert. Machine Learning is a tremendous tool for insights:

  • In what way is the sale of air conditioners impacted when fans’ prices are drastically cut?
  • When efforts are made to sell more car batteries, are the related products, such as battery cables, recharger units, automotive tools impacted?
  • Are customers who buy certain pet foods more or less likely to buy new eating bowls the following month?
  • Are clients inactive in the last year sensitive to a promotion campaign?

Machine Learning models consider a huge number of products and optimize prices globally. The number and nature of parameters and their multiple sources and channels allow them to make decisions using fine criteria. This is an overwhelming activity if companies attempt to do it manually, or even use Excel spreadsheets.

By analyzing a large amount of past and current data, Machine Learning can anticipate trends early enough. This key value allows companies to make appropriate decisions to adjust prices. Finally, in the case of a competitive pricing strategy, Machine Learning solutions benefit from systems that continuously crawl the web and social media to gather valuable information about prices of competitors for the same or similar products, what customers say about products and competitors, and a competitor’s deals for certain products, their price history over the last number of days or weeks.

It seems natural to apply Machine Learning in the case omni-channel companies that take advantage from this technology. Though price changes are less performed in brick-and-mortar companies there is plenty of room to improve and adjust to current demand. Digital price tags now are enabling brick-and-mortar retailers to do as many price changes as e-commerce sites to match the current demand and maximize profit.

Companies using Machine Learning for Price Optimization

Price optimization has been used, with significant success, in industries such as hospitality, airline, car rental, and e-commerce retail. The hotel industry continues to employ dynamic pricing strategies, based entirely on Machine Learning. The current computational power allows prices to change practically in real time. 

Airbnb proposes a dynamic price tool that recommends prices to its hosts, considering parameters such as seasonality, the day of the week or special events, and more sophisticated factors such as photos of the property to be rented or the prices applied in the neighborhood. Other companies such as eBay and Uber have adopted similar approaches. Changing prices in such a dynamic way is informally known as the Amazon effect. 

Companies like Ralph Lauren and Michael Kors use Machine Learning to offer fewer markdowns and optimize their inventory in an integrated manner to increase profit margins, even at the risk of losing a little revenue. Another use case is Zara, which uses Machine Learning to minimize promotions and adapt quickly to the changing trends in demand and supply. There are many other success stories, such as Morrisons which is taking advantage of the power of Machine Learning to increase their revenues and improve operations.

Final Cooling Thoughts

Nowadays companies are changing prices more often and using state-of-the-art data driven pricing strategies to do it. Top performers across industries are nearly twice as likely to price dynamically. Whether it’s a manufacturer, distributor, or retail company, all are embracing the benefits of dynamic pricing and price optimization.

Price optimization helps understand how customers will react to different price strategies for products and services and set the best prices. Machine Learning models take key pricing variables into account to find the best prices to achieve the end goal.

The question is no longer whether to apply optimized pricing or not. But the question is how to do so to remain profitable. 

Remote Knowledge Workers Digital Theater

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Remote Knowledge Workers Increasingly Engage in ‘Pretend Work’ Performances

Hours Wasted Daily on Elaborate Electronic Theater to Satiate Guilt Pangs, Traditional Bosses and Clock Watchers

Return to Work Effort May Make “Digital Clown Shows” Worse

For decades movies, tv and comics portrayed the elaborate masquerades created by office cubicle dwellers pretending to look busy in case the boss walked by.  Many were funny and some iconic because of how much truth they held. In one Dilbert comic, the Pointy-Haired Boss declares, “We need a sense of urgency.” Wally, in a moment of honesty, replies: “I spend most of energy pretending to work, but I can add a layer of fake urgency if you really need it.”

Pretending to work is not new.  However, elaborate presentations in what’s being called ‘productivity theater’ among the 20-30 million US-based remote knowledge workers is becoming an all-new art form in the digital world.  The purpose of these online work plays is to give the appearance of constant and conspicuously visible busyness. 

Favorited tactics of digital presenteeism include:

  • intentionally sending emails in the early morning and late evening 
  • remaining logged on Slack at all hours, 
  • blocking out big swaths of time on fake meetings in Google calendar and 
  • joining irrelevant Zoom meetings with the mic muted and the camera off while doing just about anything else outside the call.

Among those who have continued to work significantly or exclusively via remote, its estimated that an average of 67 minutes per day are spent on these performance antics, according to a new report by software companies Catalog and GitLab. 

Post Labor Day 2022, companies like Apple, Comcast, Prudential Financial and Peloton are nudging employees to return to work, if not completely than at least a couple of days per week. The Wall Street Journal called Labor Day a “line in the corporate sand” which is “the best chance to finally lean on workers to return to the office this year.”

“Pretend to Work Somewhere Else”

 Some companies are shoving rather than nudging. Recently, Elon Musk told employees in a memo they are expected to return to work or “pretend to work somewhere else.” His memo subject was “Remote work is no longer acceptable,”and he wrote, “anyone who wishes to do remote work must be in the office for a minimum (and I mean *minimum*) of 40 hours per week or depart Tesla. This is less than we ask of factory workers.”

Is Work from Home More Productive?

Mr. Musk may have been operating from the old school perspective that working remotely from home is a way to loaf without being seen.

However, a study published in Nature looked at data from 60,000 Microsoft employees and found remote workers were actually more productive for short-term projects. The study did point out those same employees did not perform as well for longer-term projects. A potential cause for that dynamic may be the lack of team interaction and collaboration. 

Also, over time, distractions from family members to pets and errands may become more prevalent for those not accustomed to remote work.

Factory Mentality and Guilt Pangs

For their part, workers say they do feel pangs of guilt if they deviate from a 9-5 routine or take breaks from work with a walk, attending to personal business or just daydreaming.   To compensate for the insecurity that comes with working from home in casual dress, elaborate performances of appearing constantly busy ensue.

These feelings of insecurity or guilt stem from a factory mentality prevalent in the 1980s, according to Cal Newport, who wrote the best-seller Deep Work. The factory mentality attempts to achieve high production by constantly applying effort to a mechanical system, like an assembly line. A plurality of workers say they believe management and company leadership prefer a traditional in-office culture with lots of activity buzzing about.

Many knowledge workers are pushing back. They have come to enjoy benefits of work-at-home, including more work-life balance and quality time with family, and less commuting stress and wasted time.  Apple has again asked employees to return three days per week.  Some of the company’s employees have gone so far to form Slack channels of advocacy groups. Among the largest at Apple with as many as 2,800 members called “Apple Together”  are pushing back against return-to-office plans.

Solutions based in Remote Work Veterans

TechCXO, which provides on-demand executives and teams to companies of all sizes, has been leveraging remote and hybrid work models since its founding in 2003. Their interim and fractional executives  include CFOs, CTOs, CMOs, Heads of Sales, COOs and HR Executives.  These executives on demand are expert and building hybrid teams and delivery models that work for organizations who want flexibility for employees but also want projects and initiatives driven to completion. 

Project Management experts at the firm are frequently incorporated into complex product and IT deliveries that efficiently combine in-person and remote task deliveries and thus eliminating the need for pretend remote performances.  

Source: Microsoft

9 Growth Pathways for Two-sided Marketplaces

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Every two-sided marketplace starts with a chicken-or-egg question: Do you bring suppliers or buyers to the platform first? The right answer is nearly always to find suppliers first. Suppliers are the merchants. They are the ones with something to sell. Once you build an inaugural assembly of suppliers, the next quest is to find a sustainable and scalable user acquisition strategy. There are multiple ways for a marketplace to drive growth.

Find Additional Suppliers

It is likely that an initial marketplace acquisition strategy involved going deep in one or a few geographic regions. One obvious way to grow is to expand your geographic pool of available suppliers. This happens through increasing suppliers in existing geos or increasing the density of available suppliers (and buyers) in targeted markets. Geographic density has the advantage of minimizing advertising expenses. Many acquisition strategies, include paid search, outdoor and social media advertising, can come with a lower price tag when efforts are geographically focused.

Expand Search for Buyers

The geographic expansion for buyers will mimic that of the suppliers, with the supplier growth preceding buyer growth. Identify buyer personas and their physical and online gathering places. Partnering with organizations who reach the same buyers can yield mutually beneficial results.

Add New Offerings (and Cross-sell Them)

When contemplating new offerings, consider the needs of the buyers that are seeking out your suppliers’ services. Airbnb’s hosts offer house-sharing from budget to luxury in everything from large metropolitan areas to remote locations. The company recognizes that travelers needed meals and help navigating once arriving at their destination.

Eight years after their initial launch, the company added Experiences to their service offerings. Today, they offer chefs, tour guides and even entertainment services, like escape rooms. They have onboarded new suppliers who want to share their talents and interests with guests in their communities. What tangential services would enhance your buyers’ experience?

Reward Buyer and Supplier Loyalty

Build product features that make it easy for buyers who make multiple purchases to do so. A discount may be appropriate for a buyer who is purchasing again from a supplier they have purchased from through your platform in the past. In fact, such an offering might reduce revenue leakage that results from disintermediation. Packaged services, such as those offered by travel services who bundle airline, hotels and car rentals, can be attractive to buyers who purchase multiple services. They also increase the average spend per user.

Loyalty can also be rewarded through product features. Mine your data to identify opportunities when a customer who buys X is also likely to buy Y. This information can help determine what emails to send to past customers, how to use effectively remarketing or what information is displayed when a customer visits your site or app.

On the supplier side, those suppliers who list and sell multiple products or services or your platform are likely your most valuable. They can be rewarded with a priority position in the product display queue. A tiered fee structure might help you attract more of these suppliers, who offer higher average revenue than those with fewer products in your marketplace.

Developing a formal advisory board of your best suppliers is another way to reward loyalty. Not only will it allow you to recognize your highest performing suppliers, but it will also allow you to establish a formal feedback process to keep the supplier community engaged.

Focus on Frequent Buyers

It is important to analyze consider customer data to identify characteristics of buyers who spend more on your platform. For instance, during the pandemic, Airbnb noticed that the work-from-home trend resulted in longer term stays than traditional vacation travel did. Undoubtedly, they are now displaying properties with desirable WFH amenities in key markets.

Once you have identified your most frequent buyer segments, be sure that your customer acquisition strategies appropriately target these key buyers. Consider that the higher average revenue garnered from this population may justify higher acquisition costs for the same.

Invest in Product Enhancements

In early 2021, Airbnb also introduced their “I’m Flexible” search functionality. This feature was designed to allow those living nomadically during the pandemic to discover properties. It also gave Airbnb an opportunity to display their most frequently booked and most profitable properties first.

Product enhancements that simplify the supplier onboarding experience will allow you to get more sellers on board faster. Once you have captured supplier contact information, communicate what is required to move a profile from pending to active. If you are unable to convert suppliers in the pipeline form pending to active, consider capturing more information upfront.

Tools that give the supplier market information that they do not otherwise have access to, like pricing recommendations, can be useful for converting and keeping suppliers on your app.

Take Advantage of Market Trends

As noted previously, as the WFH trend took hold during the pandemic, Airbnb took a WFAH (work-from-any-home) approach to its product. The company recognized that staycations and local travel had become a larger part of its business. They discovered that guests wanted to be closer to family and domestic travel rebounded faster than international travel. Stay abreast of market trends so that your platform stays current and relevant for today’s users.

Improve Brand Awareness

With so much discussion on performance marketing, it is easy to lose sight of the value of a strong brand. Google has become synonymous with search and Uber with ridesharing by investing in brand. When you are top-of-mind in your market, it become easier to garner more share of market. In the long run, investing in brand awareness can also reduce reliance on paid media.

Increase Prices

There are at least two ways for a marketplace to increase revenue through price increases. One is to increase service fees. Another is to get suppliers to increase their prices. The latter is often the less contentious.

One drawback to marketplaces is that they can inherently put suppliers in direct competition with one another. This competition can lead to pricing cutting and lower average revenue for suppliers and the overall marketplace. To mitigate this risk, help suppliers price their products by supplying market-based data. Use a broad range of product characteristics to categorize supplier offerings in order to introduce more differentiation in the marketplace.

When increasing service fees for suppliers, consider market conditions including competitor fees. The ideal time to increase fees is when there is a corresponding change in your product that increases the value for suppliers.

Key takeaways for marketplace leaders:

  • Focus growth of marketplace suppliers and buyers on those who sell or purchase multiple offerings. Rewarding both will improve average revenue per user.
  • Prioritize product enhancements that meet supplier needs. Remember that suppliers are your most active users on the platform.
  • While performance marketing will drive early growth, long term growth is contingent upon building strong brand awareness.

Email Katherine  | LinkedIn | 626-344-8730 | Download Katherine’s CV (PDF) | Twitter

Uber Is Not in the Transportation Business: Lessons for Marketplace Leaders

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Uber is Not a Transportation Company: Lessons for Marketplace Leaders

Uber is a technology platform that powers “movement from point A to point B.” Even though it was founded as Ubercab, it is a technology company first. Through its app, the company connects riders to drivers and eaters to couriers. Independent contractors provide the transportation. These contractors provide rides in various types of vehicles, including rickshaws and taxis. The passenger determines what type of vehicle to call and the driver determines what type of vehicle to drive. 

Uber provides the platform. It derives revenue from the use of its tech. More use and more users of the app generates more revenue for the company, regardless of how they move about. 

Uber-sized User Growth 

Uber users benefit from network effects as a result of its technology. The company, drivers, passengers, eaters, couriers and restaurants benefit from the network. 

For simplicity, let’s focus on drivers and passengers. Let’s say there is a single city with one driver and two passengers. That single driver picks up either passenger at an appointed time. When a second driver is added to the network, the passengers have more options for pick up times and locations. Now, because there are two drivers in the market, more passengers join because there is more availability. More passengers produce the need for additional drivers and the cycle continues. The drivers benefit from having more passengers to pick up. The passengers benefit by having more options in their immediate area. The network is effectuated by the technology.

One risk with this network growth is disintermediation. This occurs when a driver defects, bypasses Uber’s app and has a few or several passengers pay them directly. There are inherent reasons why disintermediation happens less frequently with ridesharing than in other online marketplaces. But Uber’s focus on technology and app features (like the display of wait times and upfront pricing) help to mitigate this opportunity.

Risks in Reclassification

Uber does not want to be in the business of transportation. Management recognizes its gig economy workers as independent contractors. They argue that drivers and couriers get to decide whether, when and where they work. Employees do not have the option of punching out of work by turning off an app. Drivers also provide their own vehicles and work with competitors. (Roughly one in four ridesharing drivers drive for both Uber and Lyft in the U.S.) 

Many jurisdictions, including Uber’s home office state of California, have challenged the classification of drivers as independent contractors. However, with much support from ridesharing lobbyists, Californians passed Proposition 22 in 2020, which essentially allowed Uber, Lyft and other ridesharing drivers to remain independent contractors. That said, Uber understands that it may not be able defend drivers’ independent status in all jurisdictions it operates in and that operating as a “transportation company” increases that risk. 

Autonomous Vehicles Are Coming

Perhaps one of the biggest threats to ridesharing companies is the development of autonomous vehicles. While widespread adoption is not on the immediate horizon, it is anticipated that there will be 65 million self-driving cars globally by 2030. Autonomous vehicles have the potential to materially disrupt Uber’s current business model. The companies developing such could create a new network for driverless vehicles and passengers.

It would not be surprising to see a technology company, like Uber, increase its investment in this space. While the strategy could cannibalize its existing business model, Uber can use the technologically advanced vehicles to defend against new market entrants. 

Key takeaways for marketplace leaders:

  • Look for opportunities to remove your company from the transactions in your business. This will help you understand how suppliers may engage in disintermediation. Use your product, processes and people to mitigate these opportunities.
  • If your business engages gig economy workers, consider how and why regulators might want to reclassify them. Stay ahead and abreast of regulatory threats in your industry.
  • Determine technological advances that might disrupt your business. This exercise will help you identify new product features, key partners and/or acquisition targets in the years ahead.

Email Katherine  | LinkedIn | 626-344-8730 | Download Katherine’s CV (PDF) | Twitter

TechCXO Unveils New Brand Identity

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TechCXO Unveils New Brand Identity Reflecting Company’s Leadership in Providing Growing Companies with Executives On Demand 

Refreshed Logo and Tagline Capture Broad Corporate Acceptance of Interim / Fractional Executives and Adoption of Firm’s Approach to Serving Clients

ATLANTA, AUG 16, 2022 – TechCXO, a pioneer in providing industry-relevant interim and part-time executives and teams to companies in the U.S. and U.K., announced that it is refreshing its brand identity, including a new logo and tagline, to reflect broad acceptance and adoption of the firm’s unique approach to serving its clients.

“We believe our refreshed logo and tagline is an exciting continuation of our clear, and simple value proposition: in TechCXO you get expert, strategic implementers who deliver value and quantifiable results quickly and efficiently,” said TechCXO Managing Partner Kent Elmer.

Reasons and Timing for Brand Refresh

“The time is right for an updated articulation of who TechCXO is and the many ways we support our clients. Internally, we have expanded our services to include new, fast-growing disciplines like IT and HR while refining our market presence. Externally, we are seeing broad acceptance and adoption of executive services that are delivered both in-person and remotely. We call it ‘executives on demand,’” said TechCXO Co-Founder and Managing Partner – Finance Mike Casey.

In 2021, TechCXO reported an increase of 47% in annual service fees in 2021 over 2020 to more than $41 million.  TechCXO has increased revenue every year since its inception in 2003. 

TechCXO was founded in 2003 on the premise that companies can benefit from having the best executive talent available and serving as their CFOs, CTOs, CSOs, CMOs, CROs, COOs, CHROs, and other executives on a part-time or interim basis. Companies might not otherwise be able to access the talent and experience level of a TechCXO partner and or teams due to cost or availability. 

Companies can also outsource their entire Finance, Sales & Marketing, IT, HR, and Operations functions to TechCXO for 50-75% less than it costs to staff full-time, loaded salaries.  All TechCXO partners and staff are U.S. and U.K.-based.

TechCXO Creative Treatment

TechCXO sought a refreshed new look that was bold but minimalist and classic to communicate the firm’s legacy of service. It preferred a lower-case main font and to continue to treat the “x” icon in TechCXO, which has always been a distinctive artistic element in the company’s branding.

In addition, the firm wanted to extend and expand its use of blue and gray colors, along with its accented green. The firm’s use of gold in its color palette has been retired. The firm’s logo will also be used as a single color, black and inverted (white on black background). 

TechCXO had been using a logo both with and without its former “experience acceleration” tagline.  The new tagline, “executives on demand” communicates succinctly both what the firm does and the inherent experience and time value it provides. 

Please see the attached TechCXO Brand Guidelines for proper use.

About TechCXO

TechCXO is a pioneer in providing high potential companies with industry-relevant interim and part-time executives on-demand. More than 5,000 companies, from startups to the Global 1000, have entrusted TechCXO to help with their critical functions by calling on TechCXO executives and teams as their CFOs, COOs, CSO, CTOs, CMOs, CHROs and other executive roles. TechCXO has appeared on the Inc. 500/5000 Fastest Growing Private list every year since 2008. For more information about the firm, please visit techcxo.com.

TechCXO Brand Use Quick Reference Guide (PDF)

TechCXO Color Logo (.PNG file)

TechCXO Logo Black/White  (.PNG file) and White Logo (.PNG)

TechCXO Icon Green “X” (.PNG file), Black “X” (.PNG file)

Annual Planning Process

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Mastering the Annual Planning Process

Revenue Teams Need a Clear Roadmap for the Coming Year

Ah, summertime.  At most B2B companies, that means more staff vacation days, (slightly) fewer e-mails and meetings, and slower client activities as those companies experience the same phenomena.

But be warned:  Winter is coming.  Or at least Fall is coming.  And for most businesses, that means the start of a process that is both frantic and necessary.  It’s the Annual Planning Process for next year.  In the roughly 16 weeks between Labor Day and Christmas, it’s imperative that your revenue teams and those that support them come together to craft a clear and articulate roadmap for the coming year.  

While 16 weeks might sound like sufficient time, think about the other things going on.  For most B2B companies, Q4 is the busiest sales and renewal quarter of the year.  Client interaction is also highest since the same planning and year-end activities are going on with them as well.  And don’t forget that the Corporate Finance team needs to know the goals you have for next year so that they can set the budget.  Suddenly, those 16 weeks can seem more like 5 or 6.

In the roughly 16 weeks between Labor Day and Christmas, it’s imperative that your revenue teams and those that support them come together to craft a clear and articulate roadmap for the coming year.

Now that your blood pressure and heart rate are elevated, be comforted by the fact that we still have weeks to go before the planning process really gears up.  There are steps you can – and should – take now that will make the annual planning process easier to manage AND more likely to result in a plan that will meaningfully improve revenue growth next year.  Here are 4 ideas:

Plan for Planning

Now is the time to gather the data and insights you will need to point your annual plan towards the best opportunities for growth.  A great way to do that is to perform a “Revenue Operations Health Check.”  Identify the areas across all your revenue functions that are performing well and those that are struggling.  Your plan for next year can then focus on optimizing the former and improving the latter.

Keep the Band Together

Attrition in your critical revenue functions can be the difference between revenue growth and revenue decline.  Statistically, Q4 is the slowest month for attrition in sales and marketing, but Q1 is the most active.  Assess your team’s level of engagement now to what is frustrating them.  You can then incorporate elements in your plan that will get them excited for the coming year and keep them off the phone with recruiters.

Take Back Your Stack

The average B2B technology company uses over20 different tools and applications across its primary revenue functions.  After the cost of personnel, it’s often the 2nd leading element in your cost of sales.  In addition, few (if any) of these tools are fully leveraged by the people they are meant to help.  Now is the time to audit these tools for usage and usefulness in growing revenue.  

The Best SKO Ever

This may seem tactical, but Sales Kickoff events have been known to make or break a company’s sales year.  Done well, your revenue-generating teams start the year motivated and equipped to succeed.  Done haphazardly (or not at all), and the new year is just another year where they start at zero and have a huge mountain to climb.  SKO is where the plan you build comes to life, but you can’t wait until Thanksgiving to start planning it.  Pull a team together now, and coordinate their activities with the annual planning process.

At TechCXO, our Revenue Growth team has led or participated in HUNDREDS of annual revenue planning processes.  We have the expertise and tools to help you get ready for the most successful – and least stressful – annual planning season ever.

Email Bert  | LinkedIN | 626-344-8730 | Download Bert’s CV (PDF) 

Argument for Revenue Operations

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A very successful Chief Revenue Officer said this to me about his job:

“There are three things that I have to pay attention to:  How to generate more leads, how to lead my sales team, and everything else.  I HATE the ‘everything else’.”

I have made the case for expanding the term Sales Enablement into something called “Revenue Operations”.  The comment from my CRO friend gave me another insight.  Revenue Operations is really the “everything else” that he was talking about.

If you think about the responsibilities of today’s CRO, it encompasses everything that happens at a company that leads to revenue – from generating interest in the market to securing new clients to ensuring that clients stick around.  And making sure that all those elements work together to ensure that revenue is flowing is what revenue operations does.

revenue-operations-graphic

Most CROs and CSOs have a natural affinity for one of these four. Leaders who rose through the marketing function may gravitate towards making sure the lead generation engine is humming. Leaders who started out as sales hunters will likely spend most of their focus on managing their team of new logo sellers. And leaders with a background in customer success will naturally lean into back-to-base selling and the renewal process.

But who focuses on the “everything else” of Revenue Operations? Given the rate of change that all companies and industries are seeing today, having your revenue operations running smoothly can be the difference between success and failure for the overall revenue function. In general, there are 6 major areas to focus on to ensure your revenue operations are working properly.

Six Areas of Focus for Revenue Operations

Metrics that Matter:  Do you have the right metrics and dashboards to provide you with a clear-eyed analysis of how each revenue function is performing?  Do you get that data regularly?  Is it both accurate AND actionable?

Revenue Tech Stack: What technology is being leveraged by your marketing, sales and customer success teams?  Do they integrate with one another? Are your teams leveraging these tools to the fullest?

Messaging Alignment: You communicate with your clients and prospects in far more ways than a sales pitch or a face-to-face meeting.  Do all of your customer-facing touchpoints, from your on-line presence to your sales collateral to your client newsletter, give a consistent message?

Process and Methodologies: Regardless of the size of your company, you have processes and methodologies that are used by your team in the generation of bookings and revenue.  Are yours efficient?  Do they ensure a positive experience for your clients and prospects?

Hiring and Onboarding:  Failure to have a coordinated hiring and onboarding program can create massive discrepancies in the quality of the interaction between the revenue functions, and it can create a very unhealthy customer experience. How effective are you at hiring great people to speak to your clients?  And how fast are you getting them up to speed and effective?

Revenue Improvement Initiatives:  This is the area that many revenue generating organizations neglect.  What is the process by which your company examines the overall health and effectiveness of your revenue generation functions?  More importantly, what is your process for improving them?

At TechCXO, we have deep expertise in all aspects of Revenue Generation and Revenue Growth.  We work with companies of all sizes – from start ups to publicly traded multi-nationals – to assess and improve their revenue operations function.