play by your own rules - how to define and dominate your billion $ saas category

How to define and dominate your billion dollar category

Mark Organ, CEO @ Influitive

@markorgan

@influitive

PLAY BY YOUR OWN RULES

TAKE A NEW ROAD

Company

CategoryCloud-based

Marketing AutomationAdvocate Marketing

Founded Jan 2000 Oct 2010

Exit Nasdaq IPOORCL TBD

Value $871M TBD -- $B

WHAT IS A

CATEGORY?

a transformational experience

+

driven by disruptive forces

MY DEFINITION OF A CATEGORY:

For a distinct segment of the market,

A revolutionary business model

Green-conscious, technophile early adopter car enthusiasts

All-electric drive with equivalent/superior performance to BMW

7-series/Benz S-class

• Custom car ordering online, direct

• Supercharging / battery switching stations

• Continuous deployment of upgrades

• Lithium-ion battery innovation

• Cloud computing

TESLA: Electric high-performance luxury cars

2010-2013

High-growth, cash-strapped B2B companies largely in Bay Area

Acquire and deploy good-enough CRM successfully in days instead of years

• Monthly subscription by user

• Continuous deployment of upgrades centrally for all customers

Cloud / internet delivered software

SALESFORCE.COM: Cloud CRM, 1999-2004

Process and lead-gen oriented (demand gen) B2B marketers

Automatically nurture prospects, guided by their behavior, until sales-ready

• Monthly subscription, scaled by user

• Continuous deployment of upgrades centrally for all customers

• Cloud-delivered software

• Automated filtering of phone and mail

ELOQUA: Cloud marketing automation 2005-

2013

Advocate marketers and the advocates they serve

Advocate-centered, comprehensive and self-service experience

• Monthly subscription, scaled by advocate activity

• Continuous deployment of upgrades centrally for all customers

Pervasive social web

INFLUITIVE: Advocate marketing platform

2010-2???

WHY WOULD YOU WANT TO BUILD A NEW CATEGORY?

Revenue growth (2004-2005)

Note: Relative Market Share is each company’s revenue divided by the market leader; the market leader’s revenue is divided by the 2nd place company’s revenue; Precise revenue not available for Upshot and Salesnet, figures represent approximate revenue and growth estimatesSource: Gartner (http://www.gartner.com/newsroom/id/493005)

-40%

-20%

0%

20%

40%

60%

80%

100%

0 0.5 1 1.5 2

Salesforce.com

Oracle(incl. PeopleSoft)

SAP

Siebel

Amdocs

Upshot

Salesnet

Relative market share

Salesforce.com’s status

as a category creator

enabled rapid growth

several years ago

-10%

0%

10%

20%

30%

40%

50%

60%

70%

0.00 0.20 0.40 0.60 0.80 1.00 1.20

Salesforce.com

Oracle

SAP

Microsoft

IBM

SugarCRM

Revenue growth (2011-2012)

Note: Relative Market Share is each company’s revenue divided by the market leader; the market leader’s revenue is divided by the 2nd place company’s revenue. Source: Gartner (http://www.gartner.com/newsroom/id/2459015)

Relative market share

This led to a dominant

market position today

US unit sales 2013

Source: Business Insider (http://www.businessinsider.com/tesla-is-not-really-outselling-bmw-audi-2013-5)

0

50

100

150

200

250

300

350

Tesla Audi Cadillac Lexus BMW Mercedes-Benz

Tesla currently has tiny share vs. all luxury vehicles – similar

to salesforce.com’s broader CRM broader market in 2002

0

2

4

6

8

10

12

14

16

18

20

PorschePanamera

Audi A8 Lexus LS BMW 7-series

MB S-class Telsa ModelS

BUT Tesla is now dominant in the space closer to its

category of all-electric luxury high-performance sedans

US unit sales 2013

Source: Business Insider (http://www.businessinsider.com/tesla-is-not-really-outselling-bmw-audi-2013-5)

$1,630K

$35K $33K $10K $9K $6K $0K $0K

$200K

$400K

$600K

$800K

$1,000K

$1,200K

$1,400K

$1,600K

$1,800K

Tesla BMWGroup

DaimlerAG

VW Ford GM

* Fisker filed for chapter 11 protection in Nov 2013Source: Yahoo! Finance, Corporate filings, Analyst reports; Market caps are USD & as at Oct 2014

Fisker*

Tesla’s category creator status and rapid growth drive

valuation multiplies far higher than other carmakers

Market capitalization / global 2013 unit sales

$3.40

$5.60

$1.20 $0

$1

$2

$3

$4

$5

$6

Overall (20) Category Creators (10)Non-Category Creators (10)

CNN/Fortune top 20 fastest growing companies (2010)

Category creator premium

Category creators enjoy nearly a 5X valuation premium

on revenue growth!

Incremental market cap per $1 of additional revenue

Source: Cambridge Partners in HBR Blog, 09/2011

WHERE DO

NEW CATEGORIESCOME FROM?

VS

Category creators have missionary zeal about their category vision, not

just their company vision.

MISSIONARY MERCENARY

THE 6 RULESOF CATEGORY CREATOR GO-TO-

MARKET

MARKET THE CATEGORY1

Tesla

Salesforce.com

Software-as-a-Service

Electric car

Source: http://www.google.com/trends/

1

1

Tesla

Salesforce.com

Software-as-a-service

Electric car

Period in which interest in the category

tracks with interest in the category creator

Source: http://www.google.com/trends/

1

Tesla

Salesforce.com

Software-as-a-service

Electric car

Period in which interest in

the category creator far

outstrips interest in the

category

Source: http://www.google.com/trends/

1Do not call yourself the leader in your category.

That is the job for your advocates, not your marketing department.

(NOT INFLUITIVE)

ELEVATE THE UNDER-SERVED MISSIONARY2

Advocate Marketing:

CREATE POWERFUL WORD OF MOUTH3

4Influencer Marketing:

LEVERAGE INFLUENCERS TO RECOGNIZE THE

CATEGORY

Community Marketing:

ENABLE PRACTITIONERS TO CO-OWN THE CATEGORY5

Category Creator Biz Dev:

INTEGRATED PARTNERS TRANSFORMATIONAL

EXPERIENCE6

NEW CATEGORIES ARE BUILT ON TOP OF DISRUPTIVE

TECHNOLOGY

BLOCKCHAIN

How to define and dominate your billion dollar category

Mark Organ, CEO @ Influitive

@markorgan

@influitive

PLAY BY YOUR OWN RULES