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PART THREE: WHERE’S MY DAMN PÂTÉ?

April 13, 2021

By Peter Zaballos

TALES FROM THE EARLY-ISH DAYS OF SILICON VALLEY

As the visibly angry man stormed across the break room holding an empty plastic container, I heard him bellow “where’s my damn pâté? Who the hell ate my pâté?”

It was the summer of 1985. I had arrived at this potential LSI Logic customer, Ardent Computer, minutes earlier and was walking with their head of engineering to a conference room to discuss the custom semiconductors they were interested in building.

What Al Michaels so desperately craved

And that man in search of his pâté? It was none other than Al Michaels: a silicon valley legend who had founded Convergent Technologies, a pioneer of multiprocessor computers. 

And his ego — I realized just then — was as large as his reputation.

The head of engineering and I went to the conference room and he described the basic system architecture of the multiprocessor supercomputer and high performance graphics subsystem they wanted to build. They needed custom semiconductors to build the vector processors needed for the graphics subsystem. And there was a sense of urgency here.

You see, Al and his founders had this idea at almost the same time Bill Poduska decided to build a similar supercomputer in Boston. Bill was also a legend in computing, having founded Prime Computer and Apollo Computer. Al and Bill were effectively racing to market, believing the first one to deliver on their promised performance would get the majority of the huge potential.

But that was pretty much 10am on any random Tuesday back in the mid-to-late 80s in silicon valley. 

The advent of rapidly customizable semiconductors had unleashed a tidal wave of innovation and startups, all rushing to market. With everyone predicting their product would be the big winner and they’d deliver thousands and thousands of products, even millions, to their customers.

As I mentioned in my earlier blog post, all these companies forecasting huge volume were a blessing and a curse for a semiconductor company. There is a finite amount of capacity in a semiconductor fab, and more than one chip company went under by making poor choices about who to allocate that fixed capacity to. Allocate it to a company that failed in the market and your fab would be empty and your company would have no revenue. Allocate it to a company that succeeded and you’d have that fab running 24/7 shipping crates of completed product.

The ’90s would not be kind to Stardent

So while the head of engineering was explaining the nature of the chips they needed built, the sales rep and I had been trained to ask a lot of questions to understand their readiness – where were they on staffing, how complete was the system design, what other dependencies did they have on getting to production, who their investors were.

Our sales reps were bringing multi-million dollar deals to us almost every day. Or rather, “potential” multi-million dollar deals. Part of my job running marketing for Northern California was trying to assess these deals and then sorting out which ones looked the most likely to succeed.

But in reality, it was like I was floating in a fast moving stream and all I was doing was trying not to drown. Too often I would follow the path of a deal rather than affect the path. I was young. I was still finding my voice and experience base. So more often than not I would let momentum dictate the path of a deal

Eventually all deals would flow into a review with all the other marketing managers, the head of sales, the Bill O’Meara (CMO) and at times our Wilf Corrigan (CEO). Frequently my counterpart in sales would make the case for the opportunities in my region – these were their customers, and their literal paychecks on the line.

Ultimately it would fall to Bill and Wilf to make the harder calls. A lot of the less difficult ones my peers and I would work through with Brian Connors and Perry Constantine who headed up sales.

But when I look at my role honestly, I did not do a lot of the advocating, and instead worked furiously to help support the path the deals were already flowing in.

Just as Al Michaels and Bill Poduska were competing to get to market first, I was competing with my colleague, Rick Rasmussen who was responsible for product marketing for the east coast at LSI. Stellar Computer was his potential customer. And we both were likely to need the same allocation of fab capacity. 

One of the many reasons I loved the culture at LSI Logic was that we were fierce competitors – in the market. But inside the company there was none of that fierce competitiveness across departments or within departments. We all knew what we were trying to do, and it was to create a blockbuster category and the company that dominated it. 

So while Rick and I were competing fiercely for this fab capacity, there was zero animosity between us. In fact, Rick and I were good friends, Rick was the guy I worked with at Fairchild who got recruited to LSI Logic, and it was Rick who recommended they bring me over from Fairchild. [Rick and I would work together at C-Cube Microsystems later in the the 1990s]

But make no mistake, we each knew fab capacity would be tight and we wanted our respective customer to be first in line.

Once I had enough information, I put together a proposed set of pricing for the chips Ardent needed. Our proposals had two components

  • The fee to produce the prototypes. This included time in our design center, support from our applications engineers to help with any design issues, the time to run the simulations on our IBM mainframe, the cost of developing the metalization layer mask set for production, and finally, a small wafer set run through production.
  • The per-unit price of the completed chips in volume production. We would ask the prospective customer what their forecasted volume ranges would be – and these typically spanned 2-3 years, and then price the chips accordingly.

We pioneered the category of these custom semiconductors and were acknowledged as the market leader, and we had competitors who were nipping at our heels quite aggressively. I had surmised from my conversations with the folks at Ardent that we were the favored supplier.

But LSI had this weird pricing schizophrenia. We tended to come in with a proposal that presumed that as the pioneer and leader, we could charge a premium. And we would generally submit pricing proposals with a pretty hefty premium. The customer would get the proposal and be shocked at how expensive it was. So they would head straight to our competitors and come back with a set of pricing from them that was 50% of what we had proposed.

And what would we do? We’d drop our prices 50% to take the deal. I was in my mid 20s and I just didn’t know any better to question this. Knowing what I know now, this was a stupid self-inflicted wound and the today “me” would have stopped the process and asked a lot of questions about whether we really thought this was a fair price, did this price represent our brand and values? But 26 year-old me was all wrapped up in the headiness of crafting deals like this and working with everyone to bring them home.. 

I think the origin of our approach to pricing was\ simply hubris. We invented the category. We absolutely knew we were hands-down the best. So I think our corporate ego demanded that we price with a hefty premium. But that same corporate ego was a ruthless competitor and we hated losing business.

It was a stupid move because those customers would react to our suddenly cheaper proposal with a wary eye. “What was that first proposal then? If I had gone with that I would have been paying twice what I am now, and you wouldn’t have told me?”

And that’s what happened at Ardent. My followup meeting with the head of engineering was awkward. He said that Al Michaels was incensed at how we had dropped the price and had no intention of giving us the order. The head of engineering was super frustrated and upset. He and I had gotten to know each other well and spent a lot of time together. He really didn’t want this order to go to our competitor, but our whole pricing process had created a huge mess for him.

And remember, Ardent was competing with Stellar to get to market first. Changing to the competitor chip supplier was going to cost Ardent time. And it was going to make the life of this head of engineering miserable.

He and I both wanted this deal to go to LSI. So I asked if it would help if Bill O’Meara came over and met with Al Michaels. At a minimum this would let Al tell Bill exactly what he thought of our pricing practices. And maybe it would help salvage the deal.

So the meeting got set. I drove over there with Bill and our sales rep along with the rep’s manager. We went into Ardent’s board room and got as settled as we could given the awkwardness of the circumstances. The Ardent team trickled in. About ten minutes after the meeting was supposed to start, Al Michaels came in.

I can’t remember who spoke first, but the head of engineering and I each took turns explaining how hard we all had worked to get this proposal together, how much we respected the other’s time and attention.

Al cut in and said – in the same tone and volume he had expressed astonishment his pâté was missing – “These platitudes are nauseating. We’re here because you’ve wasted our time, which we don’t have a lot of. We worked with you for the past few months on this deal, and you show up with pricing that was so high it was insulting. And then you have the nerve to come back and cut your price in half – only because we got a competitor to give us a reasonable price. How can we possibly trust you? I’ve checked around and we’re not the only company you’ve pulled this on. But the real crime here is our wasted time.”

The room went silent.

Then Bill spoke up. 

A bit about Bill. He was one of the four co-founders of LSI Logic and he was not a silicon valley wunderkind. He got started late in his technology career. Bill was a graduate of West Point. The license plate on his car was USMA59. He had learned to lead, he had learned how to earn the respect of his troops. How to motivate and inspire. He was whip-smart and had an equally sharp sense of humor. If you looked up “inspirational leader” in the dictionary, there would be Bill’s photo.

And as you might expect from someone who had been responsible for other people’s lives, he had a disarming ability to connect with people. When you were speaking with Bill it felt like you were the most important person in the world to him right then. Well, because it was true. He was a phenomenal leader.

And as I shared with my Gucci Luggage experience, he had an unshakable sense of ethics. He took full responsibility for his mistakes, and in this case, the mistakes of someone in his organization – me.

He began with “you are right to be outraged and to question whether you can trust us. It was wrong for us to give you such a high priced first proposal and I take full responsibility for how we got here. We were full of ourselves, overconfident and we clearly have to clean up our act. You have my commitment that whether we win this business back or not, we will do the work we need to in order to not repeat this with you or anyone.”

“But I can tell you one reason we priced the way we did is because we also know that we are the best at building custom semiconductors. We invented this category. We have the most reliable technology and process. And we realize your time is precious. What you can count on with us is that once you commit that design to silicon, it will work. And we can scale your production. You can count on that. I’m sorry we broke your trust, but I can assure you we can get you to market faster than anyone.”

Acknowledging our mistake and owning it created an aperture that enabled another twenty minutes of conversation between Bill and Al. The meeting ended and Al said they would have a decision within the next 24 hours.

I believe this meeting was a turning point for LSI Logic. We did examine our proposal process and amended our pricing – not to meet our competitors – to be more competitive with our first proposal.

What Bill didn’t say? What role I had had in the proposal or the role the sales rep and sales manager had had in the proposal. He took complete responsibility. And I believe he did this for a simple reason. If we won this business the salesperson and I were going to have to show up at Ardent frequently. He preserved our relationships.

The story of Silicon Valley

And while the semiconductor project moved forward, Ardent’s overall product development struggled for reasons not related to our semiconductors. They battled getting the cost of the system down, and as a reset their system design ran into some serious delays.

It turns out so did Stellar’s. In their race to market both companies ran into similar system design challenges. And they were burning cash at a furious rate.

The companies combined forces and changed their name to Stardent (a horribly clunky name, but one that could be logically explained). And they, like so many other promising startups went out of business in the 1990s, a victim of being too expensive for the performance they delivered.

I learned a lot from this experience. I learned about leadership and personal relationships that would eventually show up when I was an executive.

Bill O’Meara’s owning up to when he or the company was wrong, owning when he screwed up made a deep impression on me. In a lot of respects he passed along to me his definition of “ accountability” he learned as an Army commander – something that I would never personally know. And as important he imprinted on me his ability to accept personal responsibility for a mistake someone in his organization might have made. 

More than once as an executive I have had to say “I screwed up” or “I made a mistake” – whether I personally made the mistake or someone in my organization did. As the leader of that organization it doesn’t matter who made the mistake. Ultimately the mistake is mine.

Years and years after hearing “Where’s my damn pâté” the Ardent fiasco informed my behavior when I was CMO of SPS Commerce. One of the super, super talented product managers on my team was about to introduce a fundamental redesign of our core product – a product tied to 80% of our revenue. The stakes were incredibly high. We were a public company and this product launch had to go very smoothly.

The week of the launch, I pulled the product manager aside and told her “This is your product, you’ve put 18 months into leading and orchestrating the redesign and have done a fabulous job. This week as you’re on stage launching this to the company and all our customers, I’m not going be anywhere visible. This is your product and your time in the limelight. But if anything happens, if anything goes wrong for whatever reason, I will be out front and be very visible. So go out there and soak it all in, and do that knowing I have your back the whole time.”

And because she was so damn good at her job, that whole week no one saw me.

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Posted in brand development, Business planning, category creation, fear of not succeeding, Intellectual curiosity, meaningful failure, Self-knowledge, Strategy, Success, Values | 1 Comment »

Work for many companies

March 12, 2020

By Peter Zaballos

One perspective I’ve gained of having worked in lots of different places (the Bay Area, Boston, Seattle, the Midwest) is that you can see the variety of experiences you can take advantage of, and the impact that can have on your skillset and career path.

[And remember, a career path is drawn in hindsight]

Today, I would say that the Bay Area, Seattle and Boston (NYC as well) share a lot in common. Tremendous innovation, extensive ranks of startups — largely founded by experienced, successful entrepreneurs — and available capital. And those high-growth companies tend to share or are adjacent to categories with lots of competitors.

What does this mean to your career path, and most importantly, your personal experience base?

Well, you will have the opportunity to work for a lot of different companies in and around your field, exposing you to new challenges, company cultures, managers, partners and customers. This is going to help you get out of your comfort zone, learn unexpected things, and become more resilient in the face of change and uncertainty.


That last part is super important. Uncertainty and ambiguity are prevalent in high-growth technology companies. As much as we all crave stability and consistency, those conditions will be few and far between when you chart your course in the tech sector. In fact, your ability to learn and grow is diminished in stable, predictable environments.

I just finished reading “Range” by David Epstein, and much of his book is devoted to research-based evidence that the more varied our experiences, the better we become at our jobs. It’s not just about resiliency, but about decision making. In a rather counter-intuitive manner, Epstein shows how knowing a little about a lot of different areas of expertise enables you to make better decisions about any one area.

Seattle has an ecosystem chock full of companies breaking new ground, creating new categories, and changing the directions of computing. No surprise that the Bay Area does too. So when you have reached the limits of what you can learn from one role, you can move to another company (with effort) and expand your experience and fluency with a different set of business problems and technology solutions.

You can also learn what it is like to build a business across different company cultures, CEOs and executive teams, direct managers and co-workers. This matters a lot and is super valuable. The enlightened CEO is a very rare occurrence. Friction-free relationships between Product and Dev teams happen less frequently than you’d imagine. It’s the same with friction between sales and marketing teams. 

So you learn how to manage around or change with these fractured department relationships, or you move on to a more productive next role. Tenure in these three highly competitive geographies can be measured in months. Sometimes years. Rarely a decade.

I would argue the ecosystem dynamic is completely different in the Midwest — this region has a much thinner entrepreneurial ecosystem. There are high-growth tech companies there, but generally only one in a category and little-to-no competitively adjacent companies. This means that to expand your experience base in that geography, you need to change industries or change categories that are far apart within an industry. 

This is really hard to do. 

A recruiter I worked with years ago summed it up this way: “You can change categories or industries keeping the same role, or change roles within the same category, but you can’t do both at once. It’s too risky for the employer.”

What this means in these competitively thin geographies is that employees tend to stay at the companies they were hired into. For a long time. And because there tend to be few adjacent competitors in these regional hubs, if the job you got hired into doesn’t work out, you’re facing a transfer within the company to a different role — further insulating you from broader experience. 

Or you can relocate to another geography to stay within or adjacent to the category you’re already in. Or you can remain where you live, change career paths and start close to the beginning. Both of those options are hard. So you tend to stay put.

Most people are going to stay put. They will tolerate a poor culture, or poor manager. They will tolerate poor relationships across departments. But staying put is the safest of the options. This means the culture of the company you work is the only one you are likely to know. The experiences you bring to your role and threaded through this one company. Tenure matters more than broad experience or innovative thinking. Tenure gets measured in 5/10/15 year increments.

What does this all mean? It all depends on what you want for a career. If you really want to stay at the forefront of your field, it’s clear that getting broad exposure to a variety of roles and company cultures is critical. You’ll be exposed to more unknowns, personalities, and methods, which will help you shape your skillset and experience foundation.

And if you want that broad experience base but are living in a competitively thin geography, this also means you will need to be super international about embracing those new roles, and the sacrifices you may need to make in the short and medium term, to gain that broad experience foundation that could fuel your medium- and long-term ambitions.

It’s that intentionality that is the important part. What do you aspire to do and become? It may be more important to you to push at the forefront of your discipline and be the agent of change in your role and industry. It may be more important that you live in an area you love, and that giving up on career innovation is less important.

But know the landscape. And know yourself.

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Posted in brand development, category creation, Empathy, fear of not succeeding, Networking, Self-knowledge, Strategy, Success, Values | Leave a Comment »

Gracefully forming connections

March 4, 2020

By Peter Zaballos

Gracefully. That one word caused me to pay much closer attention to the “how” of what I do when I introduce people. 

I was made aware of it by Ben Elowitz, when he was CEO of Wetpaint.com, a company we funded at Frazier Technology Ventures (FTV). I was an observer on the Wetpaint board for five years and saw first-hand Ben’s incredible intentionality about pretty much everything he did. The culture he fostered at Wetpaint, and especially the relationships he developed along the way.

At one point I connected Ben to someone I knew. I don’t remember the context or even the person I connected him to. But what I do remember that when Ben replied, he did so promptly, and moved me to the bcc line of the email. And at the bottom of his reply he wrote “Putting Peter on the bcc line so he can fall off the thread gracefully.”

That he was acknowledging the role I had played in this introduction, and the care he showed for how I would be treated as this introduction took its course was classic Ben. And it made a lasting impression on me.

There is art and science here.

That was more than 15 years ago. But it wholly changed how I looked at introductions. Up until that point I think I had viewed them as important but somewhat transactional. Getting one person in touch with another so something beneficial could possibly take place.

But there is so much more to the process of introducing people to each other. It’s about extending the relationship you have with two different people and handing it to each of them.

Purely logistically, I am referring to the “double opt-in” method of making an introduction. That means before the actual introduction is made, I check with each person separately to give them a clear sense of why I would like to make the introduction, who this other person is, and why I think the introduction is a good use of both people’s time.

In this manner, both parties can decide if they would like me to make the introduction. They each opt in.

And more holistically, there needs to be something worthwhile for both people. And to me that is the fun part.

Frequently these introductions originate as one person needing something that I suspect the other person might be able to help with or provide. But the truly rewarding aspect of crafting a productive introduction is understanding how each person could benefit from the introduction.

And one of the most critical benefits of connecting people is not what they can do for each other, but that you’re connecting people who will enjoy speaking with each other. Getting to know each other. 

By way of making the introduction, I can convey just how much I enjoy each of these people, to help set a tone for that first conversation. It could be sharing an anecdote or an unknown common interest. Or just how much I respect and adore each of these people, and why.

So, ever since Ben Elowitz enlightened me to the art of introductions, I’ve been making them this way ever since. 

At FTV we had this ethos that when we met with people we “gave more than we took.” So when I am making a connection, I am generally connecting two people who I have given something to — in some cases significantly, in other cases less so. And the two people I am connecting I believe have something to give the other. Everyone should win here.

I recently made an introduction like this, After checking with both parties — who agreed to the introduction — the resulting email was this:

There is something innately satisfying and rewarding connecting two people together who don’t know each other, and don’t yet know they may find some commonality or even synergy between them. And it wasn’t until way, way after I had been fostering connections between people that I realized just how productive it can be, and how intentionally it depends on forming true, trusted relationships.

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What I’ve Learned Over a Career

September 19, 2019

By Peter Zaballos

Reflections Upon Retiring

I have officially “stopped working,” which is a way of avoiding saying I have retired. I’m still active on two technology company boards. Still very much on a number of near-vertical learning curves.

But leaving my professional role has caused me to look back. And looking back, it’s easy to see and feel what was meaningful — and what wasn’t — in 30+ years of building high-growth technology companies. Let’s start with what wasn’t.

What wasn’t meaningful were the financial and business milestones I had a hand in achieving,  because business metrics are outcomes — of strategy, execution, and culture — but they aren’t the end in themselves. They’re the means to an end. I helped three companies change the very shape of computing, and only one of these companies — LSI Logic — had the winning trifecta of brilliant strategy, incredible execution, and a culture of compassion and performance. C-Cube Microsystems and RealNetworks failed miserably on culture.

And along the way I met some incredible, incredible people. People with staggering intellect and, most importantly, people with huge hearts and abundant generosity. But I also met a lot of people with none of those qualities. And who seemed to become quite successful as well. That was puzzling and frustrating.

And the long hours I put into my different roles? Not a lot of meaning there. As a matter of fact, the further into my career I got, and the higher I rose in the executive ranks, the more jaded I became at the devotion to long hours. 

I wish I could have told this to my younger self, especially when my wife and I were in the thick of raising four children born over a span of five years. A few years ago, when I was at SPS Commerce, I heard a sales rep tell a group of people they had cut their honeymoon short by two days, at the insistence of their manager, to attend a meeting. As I sat there I thought — with the benefit of hindsight — that no meeting would be worth cutting your honeymoon short.

[And it told me about the real culture at that company. Not the one written down. More on this topic further down.]

And on a related note, I also grew weary of the need to always being “hard core” about competing, about winning, almost for winning’s sake, of what in the end were ephemeral competitions.

But when I think back to what was meaningful, it really came down to this: being in a position of power and authority to create the conditions where the people that worked for me could do their best work and discover their best selves. To set the tone, to shape the culture. To be able to actively work to achieve equality in the departments I led. And to be a voice on an exec team pushing for equality across the companies I worked at.

Equality created lasting effects for the people on my teams, and is the polar opposite of a business metric. The people on my teams were able to achieve and exceed business metrics/targets because they could be valued for their contributions. 

The first time I noticed inequity in a specific case was when I was at RealNetworks in 1999 — having joined through their acquisition of Vivo Software — and I inherited a department to run. The first homework I gave myself was to look at compensation across my teams, by role and by gender. I discovered one woman was paid substantially less than her male counterparts. 

It took almost a year of fighting process and bureaucracy to “true-up” this woman’s compensation. And it started me doing a similar analysis in every leadership role I had after that. But that was super tactical, from ground level looking skyward.

I think the first time I realized the impact I could have on equality and culture from the top down was when I wrote my first user manual when I was an exec at SPS Commerce. This simple document simply outlined what I expected of myself, my peers, and the people on my teams. 

Feel free to check out my User Manual

It was the act of writing this document where it dawned on me that not only did I have the ability to set a tone of equality in the orgs I led, but that I had an obligation to my teams and to myself to do so. I was literally kind of giddy over the next few months.

The flip side is that it was sobering to realize how much opportunity I took for granted as a man that women had to work for, fight for, or just resign themselves to never having. And I discovered this because once it became clear for my teams that our values and culture were real, the results were shocking:

  • That the  woman on my team (quote is above, sent to me and her manager) thanked me for making her feel comfortable and empowered to take time off to attend her kindergartner’s graduation.
  • I have had a woman tell me I was the first executive to tell her that taking care of her health in her very stressful role is more important than her job.
  • I have had a male boss ask me, every single time a woman on my team was pregnant, “Do you think she’s going to come back after maternity leave?” He never once asked me that question about any of the men on my team whose wives were pregnant.
  • On the day when we finally (after weeks and months of proposing this) had “equality” on the exec staff agenda, I had our male CEO open the discussion with “Well, I assume if we had an all-female leadership team that would be sexist.”
  • I have seen women on my teams treated like servants by men who were their peers — asked to literally get coffee for the men or rebook their hotels with better rooms when they were traveling as a group.

I have also seen people make amazing contributions and incredible achievements in their roles, when provided the conditions to be their best.

  • I witnessed a shy, unsure of-herself customer service rep make the huge leap into product management and then, over a period of 18 months, turn into a bad-ass, decisive, confident product manager responsible for more than half the company’s revenue.
  • I witnessed a woman who had previously sold cell phones at a Verizon store become a master of marketing and digital demand gen and, as a result, was headhunted to be a marketing executive at another high-growth technology company today.
  • I had the good fortune to hire two phenomenally talented product designers, one in his first role designing software. And by giving these people the freedom to follow their creative instincts, create a culture of design excellence that produced truly delighted users of their products.
  • I witnessed a two-member team apply record-breaking amounts of curiosity to become masters at digital marketing through constant reinvention and data-driven refinement. 
  • I hired a brilliant person from a shoe company into his first full role in marketing. He left a year later to go back to the shoe industry and has so far reinvented two blockbuster, multi-billion dollar international footwear brands.
  • My partners at Frazier Technology Ventures – Len Jordan, Scott Darling, Paul Bialek, and Gary Gigot – discovered that when we stripped away our egos we could have direct, blunt conversations about decisions we were making. This set the standard for me valuing the lack of ego as a chief hiring criteria.

What have I regretted? Well, I mentioned above, working long hours in the end just took time away from my family, and I really can’t point to a meaningful source of business satisfaction that makes up for that. Other regrets:

  • That I did not listen to that little voice inside me when I had to fire people — or ask them to leave — because they were not performing or were not able or willing to live up to the expectations for conduct I had for them. That little voice said to go the extra mile, to fight with HR and in some cases the CEO, to get these people a package that would let them leave gracefully.
  • That I did not listen to that little voice inside me and instead followed the advice of others in letting people go with the bare legal minimum in notice, disclosure, and dialogue. I expect those people left my departments feeling they were not treated with the respect they deserved, and earned, through trying as hard as they could.
  • That I did not put my own job at risk more often pushing for more equality as a company, pushing the CEO and leadership team to take a more difficult but right path. This is where hindsight really stings — when I can see I was right but was afraid or buckled under pressure.

What else I’ve learned along the way:

  • Your brand – personally and as a business – is built on how well you say “no.” You say no 10 time more than you say yes. Doing a good job saying no means you are creating 10 times as many positive word-of-mouth evangelists. It also means you keep your focus on empathy and humility.
  • And since you say no much more than you say yes, you’ll spend time with people who you won’t say yes to. Learn to give more than you take when you do this. Help them some other way. Introduce them to someone else who can help. Offer wisdom and experience.
  • Treating people well on the way out the door is as important as it is rare. Being generous to people you fire, who decide to leave to advance their career, or who are just not a good fit matters. A lot. It is shocking how rarely I have been supported by HR leaders and CEOs on this topic.
  • How a company treats the behavior of their salespeople and developers defines the culture, not the “values” that are written down. I have seen sales people lie (to customers, to me, to other employees) but suffer no consequences because they “deliver.” Same for developers. That corrodes the culture and causes the high-value talent to leave.
  • How a company handles equality defines the culture, again regardless of what “values” are written down. It takes real bravery to foster equality in a culture. It is always easier to let fear cause a company to tolerate harassment. We need more bold, brave leaders. We absolutely need more women leaders. And leaders of color. And leaders from other cultures.

So at the end of this phase of my professional life, I would say that what mattered, what was meaningful, what was important was creating conditions for people to be their best selves. And that how you treat people matters, enormously.

What’s next for me? I’m on the board of two tech companies in Boston and am for sure going to continue stay on steep learning curves there. 

And my wife and I are launching the Diamante Scholars program at Diablo Valley College (the community college I attended)  to help under-performing, high-potential students find their path (more on that in an upcoming blog post). 

I’m attending community college myself to learn Spanish. 

And I am learning to drive race cars. 

But most of all, I am going to keep learning to be better. At everything I do and am. If I learned anything from 30+ years building high-growth tech companies, it’s that you can always be better. You can always learn.

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Posted in brand development, Empathy, equality, Failure, Feminism, Generosity, Intellectual curiosity, meaningful failure, Self-knowledge, Success, Values, Venture capital | 7 Comments »

There is no “career path,” just a network of relationships

March 30, 2018

And how you get from one adventure to the next

A few weeks ago I was asked to give a talk at the University of Wisconsin-Whitewater College of Business and Economics, on the subject of career paths. And the title of my talk was “There Is No Career Path.”

I wasn’t all that that creative. Steve Jobs made this point in his Stanford Commencement speech in 2011, six years before he died. His point was that a career path is only visible in hindsight. The “path” is produced by following your interests and talents. But I want to take that a step further.

My observation is that your career is a product of the relationships you develop along the way in your job along with following your interests and your talents. Notice I didn’t say college alumni networks. One of the points I made to the UWW students was I attended two of the top five universities in the world (Berkeley and MIT), and my alumni networks have produced zero jobs for me.

Networking

But the relationships I developed at LSI Logic, at C-Cube Microsystems, at RealNetworks, and as a venture capitalist at Frazier Technology Ventures have produced six incredible jobs, and have formed the foundation of my career.

When you unpack “relationships” there’s a lot to examine. For me, relationships are formed by establishing trust and credibility with the people you work with and for. And you do that by doing what you said you would do. By speaking your mind. By being honest. By acting with integrity. By being in a culture that aligns with your values.

Your network of relationships is fundamentally about about your personal brand.

That’s right, your personal brand is made up of the people you work with. How well you communicate to them. How well you support others. And that all involves . How you treat them. Those experiences, those memories persist. They’re your personal brand.

Finding the next adventure

And here I am, at another juncture where I am about to move to my next adventure. I left my role as CMO at SPS Commerce in early January, to return to Seattle. Family reasons draw us there, and I really wanted to get back to my roots – building category-creating technology companies.

And it’s this network of relationships that is guiding me. Which made me think of another set of conversations I’ve been having with folks I know – about how instrumental these relationships are to discovering your next adventure.

I’ve been employing the method that has propelled me to where I am now, and which I know will get me to where I want to be next. It involves four activities:

Hone your story – What this means is having clarity about what it is you want to do and what you’ve done to prepare you for this, and it’s being sober and humble about what you’re really good at. And finally, it’s about being compelling about why this next adventure is right for the role and for you – and for whoever it is you will work for.

“Your story” is what you say after you meet someone, you exchange pleasantries, and there’s a pause. You then tell the story. Why you’re there with them, why there is context, and you paint a picture of your future that they might be able to help you with.

Lots of conversations – This is the foundation of the process. This is where you start speaking to lots of people who might be able to help sharpen your focus, sharpen your story (you’ll be telling that to them), and who might know someone else who you might meet. But fundamentally you are asking someone to spend time with you. To help you.

It’s awesome your contact will meet with you, so be considerate of their time. Thank them. And make sure you see if there’s anything you can do to help them. It will make you feel less bashful about asking for feedback, or to be connected to someone else.

Considerate networking – Expect and insist on “double opt-in introductions” – this means the person connecting you someone needs to check with that person to confirm they’re interested BEFORE making the introduction . Only after that person agrees to be introduced, then expect the introduction. This means there’s mutual interest in the conversation.

This also introduces an obligation to responsiveness on your part. That means as soon as you see that email connecting you to the other party, respond promptly – before the other party has to. Your contact is doing you a favor, so demonstrate grace by making it easy for them for them to find a time and place to meet. And while you’re at it, be considerate of the person who made the introduction. In your reply, move that person to the bcc line of the email. That way they will see that the connection has been made, but they are not burdened with seeing the 7+ email exchanges that went into finding a date and place to meet.

Let go of the outcome – This is the hardest part. The only part of this process you can control is your ability to meet with people, tell your story, and explore where this all takes you. What it won’t do is provide a linear path to an awesome next role for you. But enough of these sincere conversations, where you’ve been considerate and forthcoming, will produce a conversation, at some point, that will point to a person or a role, that is exactly what you’re looking for.

It’s that simple. I can tell you every one of the awesome opportunities I am exploring right now have followed these four steps. And it has had nothing to do with where I went to school.

And like with you career – there is no deterministic path you can see stretching forward. Just a network of relationships guiding you down the road.

 

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Posted in brand development, Empathy, equality, Failure, fear of not succeeding, Intellectual curiosity, meaningful failure, Networking, Self-knowledge, Success, Values | 1 Comment »

Why User Activation Is Demand Gen. By Peter Zaballos

March 8, 2018

And why it’s super hard to measure

And it really is an essential component of demand gen. Essential.

Let me digress for just a bit.

Assume you’re zeroed-in on your category, your demand gen is solid and scaled, and now you’re creating a steady, growing stream of prospects to your sales team. And they’re closing them at a brisk pace.

As hard as all that was, now the real work begins. That solution to the problem you promised the prospect? It now needs to be delivered through the product experience. The very first time that new user signs on.

Saved DNA

I wrote about this in my blog post on conversion optimization of demand generation. That new customer found your product because of how it was marketed to them. The very first time a new customer experiences the product, it has to align with the value proposition your promised. So, how do you know if you’re delivering on that promise?

It’s super hard.

And it’s super important, because customer acquisition is pointless without retention. Jamie Quint explains this exceptionally well in a guest post on Andrew Chen’s blog, and goes further to highlight that retention is the core driver of virality. That means retention is a core driver of your…demand gen. Right. Full circle.

First of all, you need to look at each user in the context of a group of users called a “cohort” – usually this starts as the collection of users whose first experience with your product happened during the same timeframe (day or week typically). And you can see how the cohort segments into usage activity patterns – some will be super active, some moderately active, and some not active at all.

This can get you started, but doesn’t really tell you a whole lot. You really need to know two other “hard to define” metrics.

First – what constitutes a meaningful action for that user in their first session? That means you don’t just need to understand the core functionality of your product, but how that first time user is going to interact with that functionality to get something they consider valuable done. This is exactly where your product team and your marketing team should have a happy collision.

Didn’t your marketing start the acquisition process by trying to figure out what the exact words that prospect would use to describe their problem? At the very beginning of the customer journey? Well, now the product team needs to deliver the solution in the form of an experience, in terms that the converted prospect (now customer) will recognize as valuable. To them. Of course it’s not that simple (buyers may not be users, but buyers did buy solutions to problems your marketing team zeroed in on).

Second – how frequently will that customer be expected to use your product? You need to know this to establish the baseline of your entire measurement approach. Is it hourly? Daily? Weekly? You may think you know when you’re developing the product, but product design is focused on personas and assumptions about usage. Now you’ll need to check those assumptions through cohort-based analysis of real world people. Amplitude has a great blog post about figuring out how often people use your product.

And everything I just described is virtually impossible to measure with Google Analytics. That free tool is awesome for measuring website activity, but is architecturally incapable of measuring cohorts (believe me, my teams have tried, hard and GA is miserable at cohort analysis). There are some really exciting companies filling that void who have designed cohort-based tools specifically for behavioral product analysis. Amplitude is one – who offers a free versions that you can use to instrument your product and get plenty of data, and then of course have much more sophisticated capabilities you pay for.

Finally, retention is made up of “activating” a customer – making sure they have not just a successful first experience, but that they have a second successful experience and then ensuring long term customer “adoption.”

This is where Product owes an obligation to Customer Success to ensure that customers activate, and then the success team can drive long term adoption. So the product team should own understanding what value needs to be delivered in the first two uses of the product. This will take intensive focus on data, cohort behavior, and many, many iterations with the product design and dev teams. Customer Success should be a part of this process because they will need to take those two experiences and ensure they become hundreds or thousands, or more.

What’s worked well is to have a weekly meeting with Product, Product Design, Development, and Customer Success, where the product manager leads the analysis of usage, and the resulting product and resource development to ensure successful activation. You can think of this as a smooth handoff of customer accountability:

Screen Shot 2018-03-08 at 11.27.29 AM

In my last role the company had gotten to scale without any focus on product usage or product usage measurement. I was fortunate to have a whip-smart product manager who spent an entire year of these weekly meetings getting grounded in the basics, and bringing that cross functional team to have a clear and compelling understanding of what drove the first two experiences.

And bringing this back to where I started. Product activation is a critical step in your demand gen strategy. It’s why a lot of CMOs have responsibility for both product and marketing, and if not, it’s why CMOs need to have super tight and trusted relationships with their product colleague.

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Posted in brand development, category creation, conversion rate optimization, digital marketing, machine-driven methods, optimization, product management | Leave a Comment »

Product led organizations build categories. By Peter Zaballos

March 6, 2018

Part Four: Product has the obligation to set the tempo of transformation 

Every business needs to have a laser focus on the needs of their customers. Look no further than Amazon, who has a legendary, systemic, DNA around customers. Literally their customer obsession.

A few years ago I had an opportunity to speak with an Amazon exec about the business he was running and the priorities he had in building it. This business was a direct competitor to a business of Apple’s, and I noticed the Amazon exec was using both an iPhone and a MacBook Pro. I asked him, “why are you using products from your competitors, effectively helping fund them?” – his answer was disarmingly reflexive and sincere. He simply stated “why would it serve my customers better for me to use products that made me less effective at doing my job?”

MountEverest

What does this have to do with product led organizations?

Bringing a category to life and Amazon have the same customer focus.

I wrote earlier about when you’re building a category it’s important to not listen to your customers – don’t let them dominate your near term product priorities. You owe your customers the maniacal focus on your bold vision, and bringing that to life over time, not attending to their long list of improvements in their limited field of view.

Which means product will have complicated relationship with sales and customer success. Sales and customer success are faced daily with enormous input and demands about the here and now. And they should focus maniacally on how to win today’s prospect sale and ensure today’s customers get the value they were promised. But the product team needs to be super careful to include only the most critical few of those customer and prospect needs in the roadmap. The category is the high order bit here.

Your category gets built by bringing tomorrow’s promise to life. I’ve seen companies falter and stall when they take their eye off the category defining focus and shift it to the priorities of their sales teams or their customer success teams. Worse, if the next 90 days of your backlog is the only commitment to your roadmap, you’re never going to build a category. You need to have appropriate commitments to what needs to get done three, six, nine, and 12 months from now.

The product leadership needs to behave like the CEO of their product. That means to operate with a strategic purpose and context. Sure, they need to hear the near term need from sales and customer success, but like a CEO, they’re measured on their ability to perform today but also ensure the company realizes its potential. This is so wonderfully captured in Ben Horowitz’ now legendary 20+ year old essay, Good Product Manager, Bad Product Manager. If you haven’t read this. Do so. Now.

Focusing on the bold future can introduce some awkward dynamics to organizations not used to thinking with a category mindset. In a product-led organization, sales and customer success are going to feel pressure to keep up. They’re going to have to become capable and fluent in understanding the trends and priorities that make the bold product vision important. They will need to fully internalize why the category is strategic and important and be able to explain it to their prospects and customers.

In sales or customer success led organizations, the opposite occurs. The product team will need to simplify and reduce the vision and explain the plan using the terms of today. No matter how well you do this, you’ll never build a category. You’ll just hit a forecast. For a while.

I’ve heard some executives at tech companies use the excuse that “we can’t let the salespeople know about the roadmap, because then they won’t sell what we have today.” If that really is true, then that’s the tell-tale sign that the company in question is not a category builder. Because category builders have salespeople who are experienced and savvy enough to sell what you have today, and who can also convey the compelling nature of what is coming. And why buying today’s product puts that customer on a more compelling and secure future.

No one less than Steve Jobs understood this with his typical clarity. Observing that the difference between technology companies that function as sales organizations versus technology companies that function as product companies is that the sales-led organizations will revert to today’s product. They’re not wired to think about or develop big, bold new products.

Companies like Salesforce have mastered “product-led” organizational behavior. Just watch one of Marc Benioff’s keynotes and you’ll see him talking about capabilities that likely won’t be real for years, but speaking to them as if they’re here now. Their salespeople know how to straddle these two realities. They know that you’re going to be better off getting on the platform now and be better off over the years as the promises get delivered.

Product-led organizations build categories, and categories are the product of a bold vision that the marketing organization communicates and aligns the company around, and a product strategy that brings the category vision to life. And that’s good for your customers. Give them something they can’t envision. It’s never been a better time to be a technology company CMO.

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Posted in brand development, Business planning, category creation, digital marketing, Intellectual curiosity, meaningful failure, Strategy | Leave a Comment »

More on why optimization is the foundation of marketing. By Peter Zaballos

March 1, 2018

Finally, data-driven marketing

In my earlier post about conversion rate optimization I realize there’s a lot there to unpack. I thought I’d go into a bit more detail.

And in that earlier post I took a very liberal definition of CRO – which could confuse folks. I’m expanding the topic of optimization (of which CRO plays a huge role) to cover the entirety of the customer journey all the way to satisfied, enthusiastic user of the product. Let’s just refer to this as optimization.

For the marketing team, there’s likely three orgs at work here – an SEO team optimizing organic traffic volume and patterns, a CRO team looking at how to make the most productive use of that traffic, and a product team (product managers and product designers) ensuring the user experience pays off.

Optimize orange

Optimization isn’t just throwing an A/B test up and seeing what happens. It’s about getting super focused on understanding the journey that a visitor is taking and the purpose of the journey. And then using data inform where you focus and improve that journey. This is easy to do for one particular customer’s journey, it’s super hard to do at scale for everyone you are targeting.

While to people deep into marketing this is well known, I’ve lost track of the number of executives, salespeople, and partners who don’t really understand this.

At its simplest, optimization is about examining the path a customer or prospect follows in getting a solution to a problem they have. And then it’s about ensuring that the solution they found really does solve the problem.

The path to the solution follows the “customer journey” model popularized by Hubspot, which I like because it helps you understand what type of engagement is most effective based on where that prospect is in their journey.

At first the prospect is looking for information – to help them understand what kind of problem they have. This means you need to understand the problem AND the words the customer us using to describe their problem. Their words.

On the last marketing team I led, we’d use the prompt of “there’s someone awake at 3am, they can’t sleep because of a problem at work. We need to know the words they’re typing into Google at 3am to describe their problem.”

Your content describing the problem needs to be fully search optimized for those terms. And that piece of content they find needs to also provide a set of terms that visitor is going to remember and use to describe the kinds of solutions to their problem. Because if you do your job well with this first piece of content they will search for more. Ideally follow a link in that first piece of content they found.

This creates the next set of content. And the terms in the first stage of content now align with the terms in this second set and your search optimization needs to be heavily focused on this second set terms. Now you’re providing more specific information about the kinds of solutions to the problem exist. Helping guide the visitor to a solution they can choose (ideally yours).

In this second phase you need to provide a set of specifics about solution capabilities, advantages and drawbacks, and how to select. Again, this content needs to be optimized to get the visitor from the first stage to this content, as well as provide specific terms that will guide the visitor to your solution in this next phase.

There are three types of search terms to optimize for: navigational, transactional, and commercial. Up until now we’ve been dealing with “informational” search terms and strategies. The visitor is not prepared to make a buying decision yet. So “transactional” search terms and strategies would be premature and would send the visitor elsewhere. And data will tell you this. If you’ve got a low conversion rate across phases, that’s where you need to dig in and figure out why.

At this third stage, the visitor wants a specific solution. Yours. Now you show up with a set of search terms that are about transactions. They are about selecting the solution. And the visitor is ready to buy.

You can see how complex this gets. At every juncture connecting these three stages of the journey, there’s a different strategy for optimizing the conversion at each stage.

And we haven’t even talked about how this can change by persona, by type of company and size of company.

But the optimization doesn’t stop there.

Let’s assume the visitor has chosen your solution to evaluate. They fill out your form and submit it. You have literally minutes to contact them. That’s because at the pace we all work today, that prospect will have completely forgotten the form submission and your company by tomorrow. On my last team we got our repose time to under 10 minutes. That’s right, within ten minutes of that potential customer sending in a form asking to be contacted, they were on the phone with a sales development rep (SDR).

And let’s assume that the SDR qualifies that opportunity, and an account rep made a sale. What happens the first time the customer (likely not even the person who purchased) uses the product you sold them?

That too has to align with the terms and expectations set during that journey. Because the cycle doesn’t end with the sale. In a lot of respects the real journey begins with the sale. It causes that customer to want more of the product they bought, and be interested in learning about the other products they might not have considered originally. A happy, satisfied customer is what also causes more prospects to learn about you by sharing their experiences. And one of those people they tell will head to a browser, and type in a phrase that should bring them to you, and the process starts all over again.

For CMOs today, this whole landscape is pure gold. optimization is measurable, it connects words to actions and connects prospects to products. It’s everything you’re responsible for, and it now is informed and driven by data. What could be better?

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Why conversion rate optimization is the most important role in marketing. By Peter Zaballos

February 26, 2018

And it’s as important as your product

Why? because conversion rate optimization is the function that reveals the truth of your brand, your product, your business. Holistically.

It’s where you have to think deeply about the problem your customer or prospect has, and the information path they will follow to find a solution. But it doesn’t stop there.

Many marketing orgs look at “conversion” as the final step. But it’s really the beginning of the customer journey. It’s when all that carefully crafted terminology has to be aligned to what the customer experiences with the product you just sold them. The customer journey is about delivering value. And having a happy customer come back. And bring their friends and colleagues.

analytics-ss-1920

I was having a conversation with a senior exec at a successful cloud application provider last month, and they mentioned that they were having a hard time converting free trial users to paid subscribers. They were asking my opinion about what communications strategies I’d used in the past to boost these.

My first thought was, “you may be too late to do a whole lot about it.” If the content path that caused someone to find your solution – all those carefully crafted conversion junctures – did not line up with the first experience of the product, then you’re stuck.

No amount of in-app or email or chat communications will fix that. You might make the bad situation a bit better, but you really need to see this as a continuum of your brand promise. It’s what creates the words that draw a prospect in, and the experience they have with your product.

Like with almost everything today you get one shot at establishing trust and a relationship. Whether you’re a marketer or a product manager. And as a marketer you’re ultimately marketing a product experience. So there’s got to be tremendous coherence and alignment between what you market and what happens the very first time that former prospect becomes the user of your product.

Activation is different from retention. Retention looks past that first experience and presumes activation. Activation is converting the promise of a solution into…an actual solution to a problem. Retention is ensuring that the solution is durable, compelling, and lasting.

So if I were to pick one discipline that a marketing org should master it’s conversion rate optimization. Above any other. It’s the moment of truth for your business. It’s measurable. It quantifies your ability to deliver value to your customers.

And this is why it’s awesome to be a CMO and to be responsible for Product and Marketing. Because you are accountable to the business for ensuring the brand promise gets delivered. Everywhere. Every time.

CRO

 

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Posted in brand development, category creation, conversion rate optimization, digital marketing, fear of not succeeding, machine-driven methods | 2 Comments »

Category creation – Why a messaging pivot is frequently essential. By Peter Zaballos

February 19, 2018

Part Three: The fallacy of “Everything is working, we just need to tell the story better”

So your CEO has articulated a bold vision of what is possible for your customers. Fundamentally different from what they have today. A change so dramatic they can’t imagine it. But you can.

This all got written down. And these words matter. A lot. They didn’t come easily or quickly. At the beginning they were directional, not precise. Intensive scrutiny and many iterations produced the exact set of words that describe the change you envision, and the category you’re creating.

Now you shift your focus to putting those words into action. And those words will inform and bring to life the go-to-market orchestration that will position you as the leader, the creator of this new category. They will inform the demand generation, the events, the company communications and training, and most important, the experiences customers have when they use your product. Let’s call this your category story.

The category story is the collection of words and visualizations that tell the market, your customers and prospects, and critically your employees about your role in bringing the bold future to reality. It’s the core creative idea that fuels any of the forms of the media you will deploy.

A SpaceX Falcon Heavy rocket lifts off from the Kennedy Space Center in Cape Canaveral

The story can and should live in lots of people’s hands. It’s what gets amplified through marketing. Evangelized through events and workshops. It fuel’s the virtuous circle of adoption. It informs every step of the buyer’s journey. It creates the triggering events that makes someone open to switching from what they’re using now, to the future you inspire them to join.

The reality is that a lot of companies formalize their category vision after they’ve shipped their product. After they’ve sold it. After they’ve figured out how to create demand.

When I was a venture capitalist, I lost track of the number of Series B and Series C financings I was pitched where the CEO would sheepishly admit that they’d “shipped their demo.” It worked well enough to get traction and funding. And that part of the next financing was to finish and fix what had gotten them started.

So a lot of companies need to make this pivot to build their category while running their existing business. With demand gen working. Salespeople selling. Customers using the product. Going back to what I wrote in Part One, category creation is for the bold and means you’ll need to make some pretty scary choices to leave the familiar past behind to realize the category’s potential.

It’s crucial that you amplify the category value proposition. Not the tactical value prop that got you here. The chief warning sign that’s you’re falling into that trap is believing…

“Everything is working we just need to tell the story better.” 

But that’s the wrong story. The old story is made up of well thought through campaigns and tactics, but without the purpose of creating your category dominance. The old story may produce near term success, but it sure won’t build your category.

This is the “make or break” juncture for the business. You can certainly amplify the tactics that got you to where you are today. Increase the paid search budget targeting potential buyers of today’s tactics. Scrape for more organic visitors by tuning the search performance of your pages to the value prop of today. Train your salesforce to sell what got you to where you are today.

You’ll just dig the hole you’re in a lot deeper. You’ll acquire customers and partners who aren’t aligned to your category vision. Who won’t evangelize it’s potential for you. Whose product and service feedback will be a distraction from your category progress.

So when I’m asked by executives and CEOs about how to scale their growing business and how build awareness of the role their solution plays in the market, I always go back to “what is your category and how is that aligned with your growth campaigns?”

This is where the CMO’s marketing organization needs to carry the responsibility to transform words into bold actions. If you start from anything else, you’re applying bandaids to a wound that won’t heal, and will instead get worse. And more bandaids won’t fix that.

With category alignment you can build kickass marketing campaigns. Your events will bring your ecosystem together and send them off evangelizing your value. Your paid search and your organic search will be aligned and fill your demand gen funnel.  The C-suite at your prospects will see the value in standardizing on your solution.

That’s the kind of foundation durable leadership can be built. Category leadership.

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Posted in brand development, Business planning, category creation, fear of not succeeding, Intellectual curiosity, Venture capital | 1 Comment »

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