Hello Kaveh, could you provide some insights into your professional journey within the marketing realm that eventually led to your position as Founder and President of RiseOpp?
When I was studying for my bachelor’s degree in electrical engineering, my friends and I founded a tech company. I became the head of marketing in that company that eventually had different SBUs (strategic business units) in digital electronics, telecommunications, software, and education. I had to devise marketing plans for each SBU and figure out how to make them successful. Fast forward an MBA degree, 20 years of experience, and an startup exit, I have worked in many different sectors including but not limited to healthcare, gaming, food, and of course deep tech, and while my main focus and expertise has remained as marketing, I have also shipped tech products, led full operations, and dealt with all aspects of business.
At RiseOpp, I have leveraged that expertise and experience from 2014 to help companies take the right course in marketing, prioritize proper strategic marketing channels, and grow radically by hiring proper experts, and recently by hiring a Fractional CMO. Cozymeal, is a notable example that I served as the founding CMO and grew the company from its humble beginnings and no product-market fit to the largest cooking classes marketplace in the US and a leading company worldwide.
When scoping a fractional CMO for startups, what are the key considerations and factors that need to be taken into account?
When a startup approaches RiseOpp as a source for Fractional CMO hire, as the first step, we want to understand the current status of the startup. It involves interviewing the startup leaders to get answers to the following questions:
- How is the company funded, Is it bootstrapped, relying on external funding, or has revenues, how much of runway the startup has
- What’s the size of the startup, how many employees it has, how much in annual revenues
- What’s the current structure of their marketing, what marketing campaigns and channels they have utilized in the past and which ones have been successful
- What is their target audience, customer persona, and the ICP (Ideal Customer Profile)
- Who do they consider as their main competitors
- What is the average order size, lifetime, and LTV (lifetime value) of a customer
- Finally, if they have a target monthly marketing spend (including and excluding ad spend) and for how long they can sustain it
In planning long-term budgets around fractional marketing efforts, what strategies or approaches do you suggest to ensure efficiency and effectiveness?
We usually want to strike a balance between channels that have the potential for generating quick results, such as Google Ads and paid social, and channels that offer more defensibility, competitive advantage, and better ROI long-term, such as organic traffic through SEO.
Whether it’s a startup or an established company with sizable revenues, you shouldn’t focus on all marketing channels all at once, there are more than 18 online marketing channels alone, and you need to prioritize. Identifying the right channels, proper prioritization, and a plan to test those, is an important part of a Fractional CMO’s job, and accordingly one of the first steps we take at RiseOpp.
What specialties do fractional CMOs bring to startups that may not be readily available with a full-time hire?
Setting aside the high cost of hiring a full-time CMO and higher affordability of hiring a Fractional CMO instead, hiring a Fractional CMO has a few benefits:
-
- A Fractional CMO is working with a few companies at any given time. This reduces the bias and groupthink, broadens the perspective of the Fractional expert, and allows for more out-of-the-box ideas.
- Working with multiple entities also provides more insights about trending marketing channels or special challenges. For example, at RiseOpp, we have access to Google Search Consoles of many companies in different industries. When Google pushes a new update, we have a first-hand understanding of the changes based on analysis of the data. This then translates to insights to communicate to our Fractional CMOs and their clients about the SEO best practices based on the most recent updates.
- My thesis is that each marketing channel has become so specialized that you need the best experts for each channel, the kind of expert that works on one specific channel alone, day and night. So you need a Fractional CMO as the team leader and strategist, as well as a team of experts, each best at one channel. Fractional CMOs have access to best experts which may not be as available to full-time CMOs. As an example, I have hired and worked with 500+ experts. I have hired many Google Ads experts and have seen how they have performed, reported, and brought success to different clients. Then, if we recommend Google Ads as a suitable channel to a client, I have some go-to experts. These experts are also Fractional experts and are not hired by one company, so they are available to us for different projects. Going back to the example of Google Ads, my preferred expert has run Google Ads for 250+ different companies and brings such a wealth of expertise when we hire him for a new project. Generally speaking, you can’t hire this kind of talent full-time in a company.
- Hiring Fractional CMOs is easier and brings more flexibility to the company. While from the company’s standpoint, a Fractional CMO essentially is the CMO, and takes care of the same duties, there are more possibilities and less resources needed for hiring a Fractional CMO. In other words, it’s more likely for a Fractional CMO to have room for one more client to start with right now and expand as needed, but for a CMO working with another company, this is a bigger commitment and larger switching cost, and accordingly more necessity for headhunting and more effort in hiring.
How do fractional CMOs impact the ‘optics’ during fundraising, particularly in the eyes of investors who prioritize a well-rounded C-Suite in the companies they consider investing in?
When you are fundraising as a startup, it’s desirable to have the leaders of each division, such as a CTO, a CMO, and a CFO. This is important because it not only shows investors a balanced approach, but also it decreases the risk of the startup and improves its survival chance. Investors are eventually looking at the upside and the risk, the more of the checkmarks you have covered, you are more fundable as a startup. A Fractional CMO is essentially as presentable as a CMO to investors and given its advantages, sometimes even more presentable, with also lower burn rate, and eventually a better balance.
From your experience, what are some common challenges or misconceptions that startups have about engaging with fractional CMOs, and how do you address them?
The startup may not have the right mindset about marketing to begin with or may not have accounted for it in the budget setting. A lot of great startups are started by technical founders. While these founders might have great ideas in technological innovations, I have seen quite often that they become overconfident about every aspect of their business including marketing. So they underestimate the importance of marketing and the budget that they need for GTM (go-to-market). The founders that are well-balanced and realize the lack of expertise in this field, have a better chance of addressing it and getting help from the Fractional marketing experts.
On a similar line of thought, a lot of times, startups spend too much of their funding on development and think about marketing too late. They burn through their pre-seed or seed round of funding and then for the follow-on seed round or series A, they have to not-only show proven product-market fit but also scalable and sizable traction. Then, they expect a Fractional CMO to solve this problem for them when they have burned through 95% of their initial funding and also want to keep investing in their development team. So, unrealistic expectations could become an issue.
Could you provide insights into your personal strategy when working with startups as a fractional CMO? What methodologies or principles guide your approach?
At RiseOpp, we don’t accept each startup as a client. We believe there should be some level of matching between the startup’s vision and mindset and the startup funding level with what we perceive to be the DNA for success.
For example, if the founder doesn’t believe in marketing as a fundamental aspect of business-success and sees it as a nice-to-have option, we might not see enough long-term commitment needed for us to be instrumental to the startup’s growth.
As another example, if all a startup founder is thinking about is finding the lowest-cost talent, we won’t work with that startup. While the Fractional CMO approach is a cost-efficient approach for startups and much more effective in generating the results with higher ROI, it is important to work with the best experts not the least expensive experts. Each marketing channel, if utilized properly, has the potential to generate millions of dollars of revenues, and many companies become the leaders in their space by being the best in one marketing channel. This means you need to hire the best experts for each channel. This is not something you can do if your main focus is on costs rather than results.
Based on your expertise, what advice would you offer to startup founders or entrepreneurs considering engaging with fractional CMOs for their marketing needs?
If you are a technical founder and you have a co-founder with marketing expertise, it’s great, but if your founding team doesn’t have the marketing expertise, hiring a Fractional CMO is a great alternative.
Start having conversations with Fractional CMOs as early as possible. Don’t leave them for the last minute and when you are desperate. Marketing is one of the most important pillars of a business’s success, and you should start thinking about it early on, from the time you think about creating your product.
Pay attention to the specifics of Fractional CMO’s experience and what they have accomplished in other startups. While having resumes with big-company names is a good signal, it’s not enough to hire a Fractional CMO for your startup. The dynamics, structure, and the speed of business operations is very different between an enterprise and a startup. The strategies that may make an enterprise successful, may kill a startup. You need to find a Fractional CMO proper for your stage and with the past experience of working with startups at your stage.
Looking ahead, how do you predict the fractional marketing space will continue to evolve in the future? Are there any emerging trends or shifts that you foresee impacting the industry?
The Fractional CMO and broader Fractional marketing space have grown significantly in the past few years, as is evident by looking at Google searches people do for relative keywords. This was boosted by a hot talent and labor market as well as the shift toward remote and hybrid workforce facilitated by the COVID era. I believe that the Fractional movement will keep growing because it has fundamental advantages compared to the full-time model.
Finally, what are your final thoughts or key takeaways for our audience regarding the role and significance of fractional CMOs in the startup ecosystem?
A Fractional CMO could be your missing link for success, so don’t underestimate it. A Fractional CMO should be able to conduct market research and help you with identifying and establishing product-market fit, ideally understands all major marketing channels and can lead you to prioritize and use the proper ones, which is critical given the limited resources of a startup, and eventually a proper GTM strategy could be all there is between your success and failure. Start conversing with the experts early and take advantage of these professionals to take your business to the next level.
For more such updates, follow us on Google News Martech News
Kaveh Vahdat, Marketing Expert, Founder and President of RiseOpp
Kaveh is a serial entrepreneur and marketing thought leader with startup exits during his 20 years of business experience. RiseOpp is a leading Fractional CMO Agency assisting both B2B and B2C companies across different industries and various marketing channels. LinkedIn.