YouSaid · the spoken record

Mik Kersten

lines on the record: 63
first: 2018-02-24
most recent: 2018-02-24
sittings or episodes: 1
sources: podcast

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“Yes, part of the pre-sales effort, the technical pre-sale. So they're like, technically, this solves our problem. Technically, this is valuable. And then you can start talking pricing. And a common mistake for people that come from mature markets is they're like, oh, you know, I've got a list price and they put it on the website before they've even talked to the customer. I mean, you've basically given yourself a haircut before you've even started.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. So any discussions up front are going to be very difficult for you to do because you haven't demonstrated value. They don't know how to value the risk. So what I always recommend is deeply engage the customer. Get to the point where you've had your SEs do pox and pilots.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think that you can actually turn this into pretty concrete steps that an entrepreneur can take in an early market. This is what I always tell my companies, which is don't discuss pricing until after you've got them to technical clothes. And what I mean by that is these people didn't even know the problem existed a month ago. And now that they know it exists, right? But they haven't actually seen it happen, they don't actually know how value the risk. So the risk could be to them millions of dollars of risk.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“And you're creating it. So it's like this weird chicken egg. Tell me how you guys have both gone around that. Yeah. I mean, your ACV doesn't start out as high as you want it. So in the first couple years, number one, your early buyers are visionaries. That's who you're selling to. You're not selling to the broad market and enterprise. You're selling to 5% of visionaries who basically embrace a vision and love working with you because they're betting their company on early adoption of technology. And so when you really look at it, you're not selling them. They get the narrative. They embrace the category. But in enterprise, there's some magic that happens somewhere between 20 and 50 enterprise customers. You've got the top five in a couple verticals. And now all of a sudden you're really defensible. Now all of a sudden you can go into that deal and you're de-risked in a massive way. And at that point, you see a gigantic inflection in the ACV that you can actually pull out of that account. And ideally, you grow that over time and you grow that into multi-year deals. But to me, that's the recipe of an early company.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“Product market bit yet. How the fuck do you expect Weish by not cussed? I always kept people mad at me when I cussed, but oh well, like, how the fuck do you expect people to then invest at a high price when you haven't proven anything yet?”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“But there's an inherent cash 22 here, which is when you are in a market creation category creation or market not ready situation, kind of we're conflating all three, but for all intents and purposes, they're the same thing in this context, you are asking people to bet on something new, and how can you get around this when the value might be huge, but it's not proven yet.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. And there's a market price for how much you have to pay a seller, right? And therefore, they have to be able to clear a certain hurdle. So they have to get $200,000 a deal or $300,000 a deal in order to get the margins that you want. And so margin is directly impacted by price. And so to Michelle's point, if somebody else created the category and it's mature, the price point's probably already set and you don't have a lot of flexibility.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in direct enterprise sales, when you've got a salesperson, there's only so many deals that they can close in a year. Let's say it's five, let's say it's 10, whatever it is. Like there's a natural law in how many they can close. So the pricing is going to directly impact how much they bring in that year, right? Now, there's a market value for how much you pay a salesperson. So your margin is basically how much they're able to bring in minus how much you pay them. That's by far your balance sheet, the overvariing thing. So if your price is...”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“Because you're describing the arc and the narrative. So, Michelle, I actually have a lot of things in common, but one thing is we both have been horrit on our board. Yep. Good old man. Yeah, and here's the one that actually really impressed us upon me, which is he told me once in a meeting, he said, you know, there's nothing that will impact the value of your company or the valuation of your company more than pricing. And I never understood how profound that was until actually having gone through and started.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, that's profound in a certain level, but I feel like it's also very obvious, of course, price point drives your business. What do you actually mean? Why does that specifically matter in the enterprise? Or is it unique to the enterprise? Well, I don't think it's unique. I mean, if you look at it, right, who would start a Kleenex company? Like we call Kleenex Kleenex. And the price of Kleenex is set. And so to me, the point of view is how do I get you to see the world differently so you see a problem I want you to focus on? How do I make that problem really important to you? How do I make it compelling that you're going to solve that? And it's really hard to do that in a defined, like where Kleenex exists. So this to me is marketing and branding, just like in any other business, just like CPG, we don't think about enterprise software like any other marketing and branding exercise. So to me, that's where the narrative starts. The narrative starts with framing a problem that may already be latent or they don't even think about and making it top of mind. And when you make people see a problem differently, you arbitrarily get to reset the value associated with solving that problem.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“They're actually pretty simple, they're just hard to do. So the first one, if this is category creation, the first one is you have to create a concept in people's brain. Like, whoever your constituency is, whatever. They wake up in the morning and they think about millions of things, but they probably don't think about your thing. Now, if they think about your thing, you're probably not doing category creation because somebody else has already planted that idea in their head and they already have concepts about it. But if that concept doesn't exist, it's your job to plant it. So let's say you've come up with a new thing. So your first job is get someone to think about that. So now they wake up in the morning, they think about it. And then the second thing that you have to do is to set the value on top of that thing to Michelle's point. In category creation, the playing field doesn't exist. So you first have to create the playing field, but then you get to set the rules. And once you do that, that's what drives your business and like basically the industry.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“Gold to the other. That is so crazy, counterintuitive to me because I would never think that the whole point of creating a market is actually set the price point. I mean, I think most people don't have high enough aspirations. Like category creation means you created a new thing people can buy. Why do you want to do it? You want to set the price point.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source
“Hi everyone, welcome to the A six and Z podcast. I'm Sonol. Today we're talking all about category creation, which a lot of new startups selling new innovations, especially to big companies, have to do. Joining us to have this conversation, we have General Partner Martine Casado, who helped create the category of software-defined networking through Nicera and then at VMware and also recently wrote a post on going to market when no market exists. We also have Michelle Feister, CEO and co-founder of UserMind, which provides integration software to help companies connect their internal systems together so that customer experience is seamless. And before UserMind, Michelle was VP of products at Aptio where she defined the category and the discipline of technology business management. So our discussion today covers everything from pricing to positioning to other product marketing and what category creation means for entrepreneurs to broader trends in how IT is changing. But we begin by defining what we mean by category creation and why it matters.”
2018-02-24 · a16z Podcast · a16z Podcast: Creating a Category, from Pricing to Positioning · IDENTIFIED FROM THE TRANSCRIPT · source