The following represents the transcript from a recent Podcast I was a guest on. I have not modified the text.
The Challenges B2B SaaS CMO’s Face in Europe
In this episode, we're speaking to Alan Gleeson, experienced fractional CMO of B2B SaaS startups, on the challenges facing CMOs in the European startup landscape, how they can survive and thrive, and what lessons CMOs outside of that region can learn
Many people are aware of how the US startup scene works both through cultural osmosis and the fact that it gets so much coverage in the press. But working in the European startup scene offers unique challenges and rewards, which we discussed with Alan.
Key talking points include:
The main challenges facing CMOs in the European B2B SaaS startup scene.
What skills you need to survive and thrive in that environment?
What benefits do CMOs get from excelling in this landscape?
Today I'm speaking to Alan Gleeson, fractional CMO for B2B SaaS startup companies and founder of Work with Agility, on the big differences between being a startup CMO in Europe and the States, and what skills CMOs need to survive and thrive in that environment.
Will: Hi, Alan, welcome to CMO Convos. How are you doing today?
Alan?: I'm great. Thank you. I'm in West London here the sun is shining, so it puts me in a good mood.
Will: Ah, yeah, it's a good time for the sun to be shining in London with the lockdown easing and stuff, I bet? I've certainly been enjoying things up in Liverpool.
AG: Yeah, no, it's great. I mean, there's a lot more normality being restored, which is long overdue. So looking forward to an extended spring and summer now.
WW: Definitely. To the topic at hand, which is your work as a CMO, maybe you can tell us a bit about yourself and your background, how you got into the CMO role, and maybe your most recent CMO role? Because you're a fractional CMO so it's quite a diverse array of stuff, isn't it?
AG: Yeah, fractional CMO is almost an interesting term, it's kind of back to the fact that increasingly you can be a freelancer or a b2b marketing consultant or a part-time CMO and it's quite an effective model particularly in the UK. How I got into it's an interesting journey. I guess if I go all the way back to the early days in university, my primary degree was economics and marketing.
Then I did an MSc in Strategic Management and Marketing. So I guess my marketing hat was always there. I'm from Ireland, originally, as you'll have picked up in the accent, but I moved to the UK straight out of the university undergraduate program, so actually, my initial years in the UK were working with Barclays. I was on the graduate scheme there. I stayed in Barclays for seven or eight years in sort of strategic roles. I guess finance didn't appeal to me as much as strategy and marketing. I ended up around the time of the internet emerging almost, and I'm giving my age away there a little bit, but I had a client in Barclays that was a software company in America. IIt kind of got me interested in tech and software. When I left banking, I started running a small subsidiary for an American software company. That was primarily a marketing role, lead gen, market creation. I've been in it ever since. So in more recent years, I guess I've been Head of Marketing, CMO of a couple of mostly VC backed companies, mostly B2B SaaS, Software as a Service, that's very much my sweet spot.
Probably for the last four or five years, I've operated as a fractional CMO, essentially. That's a senior marketing person that's not full time and I guess it's filling the C-suite for these companies that are probably pre-Series B, they can't afford to fill out the C-suite so therefore they can bring in senior leadership that can support the marketing function without having to have a full-time person in situ.
WW: Being in that kind of role, are you able to approach these roles with a set philosophy to being a CMO? Or is it something you have to adapt to the situation? Do you go into these companies with a standard playbook, an idea behind how you're going to be a CMO? Or is it more of an adaptive thing?
AG: It's a great question and I think it's a very important question. And I'll tell you why is you can't really have a playbook. The reason and I think which is kind of provocative in some respects because we all write content, we read content, we want to look for playbooks, we want to look for recipes, we want to look for blueprints, that's the way the world operates.But the reality is that and this is why it makes it so fascinating and tricky is that there are such unique characteristics to different businesses that you can't really deploy the same playbook. I'll give you some examples. And again, the lens that I'm talking through here is very much B2B software.
Resourcing is a huge issue so some places, there's big teams, some places, there are only one or two teams, some places they're still in their kind of pre-series A stage of trying to find out whether there's demand for the offering, others are in categories that are exploding and there's suddenly lots of competition to worry about. So there are different stages of the cycle, there's fundraising, some are very resource-constrained, they're more at the bootstrapped end of the spectrum. Others have a little bit more cash.
I think there's a huge mix of elements that come into play, I guess which is why I think there's a lot of value in the sorts of roles that people and I can bring because I guess, it's not as if there's a huge amount of years of experience in the UK for B2B software, it's a fairly new category.
Often there's a cap on salaries, which means the talent pool is a certain threshold or a certain level and sure, you can learn and grow from it. But actually part of the challenge, I think, is it's not easy to follow playbooks. You can, but you have to adapt them for your own circumstances.
WW: I think one of the dangers with the idea of playbooks, particularly with the European or UK startup landscape is a lot of the playbooks and a lot of the marketing insights that we get are all US-focused.People seem to be quite familiar with the US startup landscape sort of way; osmosis, pop culture, you get an idea of how the startup system works there. But then I think people get a bit surprised when they try and set up startups here. What are the big differences between... you mentioned resources and caps on salaries and stuff, but what are the big differences between the European and the UK startup scene and the American one? For people who might not be familiar, particularly our American audience who might not be familiar with how things work over here?
AG: Yeah, it's a great question. I think one of the key things is undoubtedly resourcing. If you look at the typical raises in the US at seed and Series A rounds, they're often five or 10x greater in the US than they are in the UK, Ireland, or Europe. And that creates a very, very different dynamic, because a 2 million seed round, as you'll see often here in an enterprise, B2B sort of software context, doesn't go very far if you're trying to aggressively generate extra leads, and paid acquisition is increasingly an important part. So that resource gap is a huge issue, that means we're a lot leaner and more bootstrapped here, but it means there's also a lot more demand on time and then it gets quite frustrating.
So it's very easy for a CEO to come and say, "Hey, we need this amount of growth, or you need to be doing X, Y, and Z because someone in the US is doing it." And the reality is, it's not apples to apples, there's no like for like comparison in that, again, it's not just the cash piece, it's the number of people in a marketing function. It's the tech stack. And I'm more familiar with, in the UK, working with teams of 2, 3, 4, 5, small numbers, particularly in the pre-Series B range. And it's very hard to kind of... the playbooks are coming from the US and it sounds great, you should be doing this, you should be doing this, you should be doing this, you should be doing this, you should be doing... and it's like an ever-growing list and, of course, the other thing then is that forces knock-on effects that aren't all too readily understood. One example might be, if there's a smaller raise, and you're more resource-constrained, the marketing function is going to have to be very focused on demand gen and lead gen. US companies can have a bit more of a broader mix so the marketing function can get involved in branding, if needed, which is, again, an important element that gets eliminated in Europe, because you can't really afford to do it in these early days.
Or product marketing or another one that's often missed is that the raise comes in, and you see them looking for things like growth hackers, which is madness because, in the early days, you really need someone that's less on the lead gen, but more on the market research, product-market piece, where they're really out talking to the customer, validating that the assumptions behind the startup are true and fair, and then using that to craft marketing plans.
Where often that just gets eliminated, because there's this rush to, "We've only raised x, we're going to be out of cash in another 18 months, therefore, we got to accelerate this lead gen process". So then they go into it and messaging could be off or they may have the wrong target personas, and they may not have talked to enough people. Then I guess the other pieces to throw into the mix are, in the US, you've got 300 million on your doorstep plus Canada, plus you pick up UK, Ireland, and Europe. Europe is a lot more fragmented. The main market is always the UK. But look at it through an English lens, the only main English-speaking countries are UK and Ireland and then you've got different currencies between countries, after Brexit, you've got people in a different political jurisdiction. So it's definitely a more challenging environment in some ways. That's not me being despondent or me being down on it. There's still a very viable ecosystem here in Europe, but it's just got very different characteristics. And often American companies may not be aware of some of these factors.
WW: I imagine talent has got to be quite tricky as well, you go to San Francisco or Palo Alto, you chuck a rock and you hit someone who's got startup experience, whereas in the UK because as you said, the B2B SaaS startup landscape is quite fresh, it must be quite tricky to find the people who have the experience to help build those companies. Everyone's gonna have to be operating by the seat of the pants kind of thing to work out and develop the skills they need.
AG: Yeah, it's a great point because there are a few elements that play into it. Obviously, Software as a Service relies on a fast broadband connection, I can remember 56k dial-ups where you heard the pinging in the background, and you were hoping to get a connection. You clearly couldn't run a software as a service business back in those days. So it's time-bound by being relatively recent in that sense. The other key point built into it is the timescales, it takes time to build these businesses, and I'm thinking, of course, there are outliers, but for the most part, these are 10, and 15, and 20 year plays. So when you start looking at it through the lens of, we had 56k dialup not so long ago, and then there just hasn't been huge exits. Again, if you look at it through that cycle, there's definitely a lack of people that have gone through an exit, and there's just not huge amounts in Europe at the moment. Same on the scaleup piece, so there's often a disproportionate focus on startups, when actually, I know there's certainly people lobbying in the UK on this whole scaleup piece, and they're arguing we should be putting a lot more focus on scale-ups. I think there's a lot of merit in that argument. So scaleups, just for clarity will be those that may have two to 5 million revenue. They're through the startup phase, they're very much on a growth trajectory and the tech press tends to kind of favour X raised to series A, or Y raised a seed, so I think there's definitely an opportunity to accelerate the scale-up section. But yeah, the lack of talent is a challenge. I guess, going back to the very early start of this call, there are more interesting options that are, of course, in place. Clearly, there are models, like the one that I operate, whereby you have people with experience that can contribute on a part-time or consultancy basis. They're not wedded to one particular company, they have a portfolio. That kind of option can help spread the experience load for want of a better sense.
Then you are seeing things like, obviously, with remote working people plugging into talent more broadly, and I have seen recently, for example, a number of European companies hiring heads off or chief marketing officers and they've been domiciled, some of them have been in the states actually, whereby they've realized actually, our main growth market is in the US and therefore, it's best to have the lead being familiar with that market. And by the way, there's a sort of a slightly broader talent pool there. The flipside is, then you do need to have a more chunky cheque book, because of classic demand and supply, these people are expensive.
WW: You mentioned having US-based CMOs for European companies, does that mean they would have to develop certain skills to adapt to the European landscape? Even if their main focus is the States, they still have to understand how the European B2B SaaS landscape works. What are the skills that you'd need to be a successful B2B SaaS CMO in Europe and the UK?
AG: To be successful in Europe I think you've got to be a voracious reader. I mean, it's fast-moving, and it's not for those that think my learning stops at 25. You do have to have an appetite for keeping abreast of things. It's so fast-moving. Another thing is being strong on data and analytics because there's an awful lot of data created by technology companies and software companies. Again, this goes back to my earlier resourcing question or point, there's almost so much data, it can be very hard to derive insights where you need actionable insights. You can have people spinning up things like Data Studio but data is nuanced so for example, take Google Analytics, which runs in most software websites. You need to apply lots of filters to the data coming out there and there's an inherent flaw with people that don't apply filters. So filters could be you might make assumptions about the traffic on your website. But actually, when you filter out, you find that there was a spam bot that hit us in February and that accounted for a huge chunk of traffic in February. We have a log-in button on our website so there's a lot of people coming to our website to log in. So if they are skewing the data, because they're not being filtered out, or we've got 150 people in the office that are going on to the website every day so there's internal traffic. You got to be very strong and data, but it's got to be very focused on what we call actionable insights. It's easy as I said, to just throw up Data Studio, but not take action on the back of it. So that's important. And then some softer skills that are really important like time management. Because there's just always way too much to do so you've got to be really focused on what I call unit economics and making sure that your time is being aligned with the outcomes. Things like prioritization, again, sound like a very simple idea. But the main thing you're juggling as a CMO is what you've got to prioritize and how do you ensure that you're optimizing when it's one of those functions where there's a lot of external noise and a lot of external interference. You will get people lobbing grenades over the fence around, why aren't we doing this? Or why aren't we doing that?
Because everyone wants to have an opinion on it and so there can be a lot of external noise, again, prioritization needs to be key. They're some of the qualities I think that you definitely need and skills. Then I guess, the other interesting one is, how much do you need to get into the weeds?
Because if you think about it, you'll be operating in a domain. So the domain could be market research software, our accountant software, or whatever the domain is, you need to know the domain. You need to understand who my buyers are, what are the buyer personas? What are the stakeholders in the purchase decisions? You then need to know the software unit economics and the tech and some of the stuff we've talked about. But then how deep do you go on the various elements like analytics or PPC? Do you really need to get into the weeds? And I'd argue, probably not. You want to be able to delegate effectively there.
WW: These skills that you've got to develop to have, how do you go about learning these skills? Are they something you can learn on the job? Or is it something you can pick up from other sources before you reach the CMO role? Is it a trial by fire for a CMO? Or is it something you can learn on your way up to that position?
AG: Again, there's a real mix, I'd argue. I guess I'm not your typical CMO either, background in economics and marketing from a primary degree. I've also done an MBA so again I've got... and that helps with foundations around more macro stuff, and strategic stuff, and unit economics. I guess my skill set is a bit unusual, I think it's fair to say. I go back to some of the points I made earlier on having a voracious appetite for reading. Of course, I think part of the trick is almost trying to know what to read because, of course, we're overwhelmed with content, we're overwhelmed with video content. So it's trying to be I guess, a couple of things. Recognizing that in life, there are hard skills which you need to know to do certain jobs, and then there are soft skills because you need to be able to relate to people, you need empathy, you need emotional intelligence, they're almost just good interpersonal skills that you're going to get through your journey through life.
For me, I've got a couple of external writers or commentators that straddle everything from psychology to economics to data to analytics, that overtime I've recognized, these are really the ones that I never get a bad article from. The slight drawback with that is something you kind of touched on earlier is that yeah, they're all American, they're predominantly male, so I do recognize the inherent bias with that.
What I would say is I'm aware of it and I'm consciously trying to follow more of a more diverse background, including more female writers. I think there's definitely a need for more thought leadership out of European B2B SaaS people, and I think it's coming. There are some great initiatives going on pretty much like this one, increasingly bringing people together. People like Alex Theuma at SaaStock, creating a SaaS network and looking to really create that ecosystem. So not the most straightforward answer, I think I'm arguing a mix really. Going back to the point, there's no essential playbook, people will have different routes to where they get to the senior role. But it does mean a mix of hard and soft skills.
WW: Tailing back to the interpersonal stuff, and the idea about understanding other people, I think that's got to be very important for a European CMO, as you said, Europe's a lot more fractional, than it is compared to America.
We like to pretend that business doesn't have borders but in Europe, there can be a lot of different business environments, the way business is practiced, the way businesses are set up can vary from country to country. How do you go about getting to understand the different business cultures and how you market to them? Is there a one-size-fits-all for SaaS in Europe or do CMOs have to adapt their strategies between different countries in a lot bigger way than a US-focused startup would have to do?
AG: I guess one of the benefits of SaaS is that you almost start with a global audience. That's almost taken for granted. If you look at the big markets for most software applications, the US is the big gorilla in the room, and the UK will often be second. Then if you bring the English-speaking countries together, and you include Ireland, South Africa, Australia, New Zealand, that as a cohort. And what you'll find is the consumption of many of these software applications in Europe is actually weaker than most of the other countries. The early days are very heavily skewed to English software applications. Germany is probably the other big market. Now, what you do find is that if your solution is B2B for professionals, that many of these countries in Europe will be English-speaking at the professional level. So that kind of covers that. It's less of an issue, I'd argue, I think there's just this assumption that brings it for UK companies, we create an English language version, we're going out on the world, and different applications will have different pools of demand.
So your solution will be in the domestic market, and the UK will often be the frontrunner. Where it starts getting interesting, I guess, is those companies that get founded in places like Belgium. What you'll often find there, and again, I've experienced working in continental Europe is, it's a lot trickier. They're trying to cater for the domestic market, so they're looking at, domestically, do we do Dutch? Do we do French? Do we do German? And often what they miss with all of that is that there's a very high cost to that decision. By that, I mean, you almost have to run four sets of websites. And every time you add one, it means that there's a huge extra cost. So if there's a new blog produced, we have to translate it into these different languages. Then you get into challenges around which currency do we anchor in? You're stuck straight away if you find that in Europe, the biggest player is the UK so that's Sterling, the rest is in Euro and then you've got American dollars. So you can have currency fluctuations if you're trying to almost arbitrage between the three of them. It's a lot more complex. Most of my experience is, even though I have worked in continental Europe, with the UK and Irish companies, and their default out the gate is, this is a global solution, we're writing predominantly in English, we're catering predominantly for US, UK, and Irish markets initially. And then if the data suggests otherwise, you can start looking at alternatives. And when I say the data, I mean, again, Google Analytics can tell you where people are coming from. And if you see particular hotspots, you can then look at localization.
But I guess the point I'm making is it comes at quite a cost. So it's really a decision, I think, for those that are probably at the Series-B level because if you try and introduce some of this in too early, again, it's just layering on extra cost making it too onerous for the marketing function. Then it's adding even more stuff to the list of to-dos when they're already swamped as it is.
WW: Why make more work for yourself at the end of the day?
AG: Right but you do have to watch things like pricing pages, right, whereby if you put fixed exchange rates, and there's a big skew in pricing because of an FX movement you could go from being very competitive to be completely uncompetitive. So you could find that your market demand in certain markets could collapse. So I know there are solutions out there that can give you more dynamic pricing.
Then the other thing to watch is site speed, it sounds like a tiny point but if your growth market is the US and you don't have a server there, you could think you've got a very fast website, because you're in the office, the websites cached, looks really fast. But for someone in the US, it's taken seven seconds to load, which is going to be too long. So again, you need to keep an eye on those things as well.
WW: And if you don't have a base there, you can't go and test that, there's no way that you know that's a problem until-
AG: You can, so there's Pingdom, there are a few tools, Google has a tool you can use but Pingdom is the main one, it's free, you can literally designate the city that you want it to be tested from that gives you the evidence then.
WW: Ah perfect, that's a great tip.
AG: The other thing actually is in Google Analytics, you can probably filter based on site speed by geography. So that could help as well. Most people are okay on this, but it could be something to just keep an eye on.
WW: But it's still stuff that European CMOs will have to adapt to and perhaps keep in mind that maybe US CMOs might not have to have to factor in.
AG: Exactly. And it goes back to this experience piece because there's not a whole lot of blogs or articles telling you these kinds of things, you almost learn. And I probably learned once by recognizing that, going back to the data point earlier, that we seemed to be struggling with our US clients. I was thinking why has it tapered off? And the two areas I isolated were the price dynamic and FX and site speed checks, and when you go through the process and see both of those are an issue then you never forget. That's why it's front of mind. But if you're a junior marketer that's never been exposed to this issue then you're not going to be aware of it. That's the inherent complexity with this, that's where the experience thing comes in. Similar, another example would be blogging, you get a junior marketing person, they write content, but if they don't know things like when your content is written, you need to index it in Google Search Console, or you got to make sure that you got optimised meta titles and meta descriptions, or you got to make sure that you've got backlinks from other blogs to this new blog.
Or you have to have an amplification plan in place when you write something. Again, stuff that experienced CMOs will be aware of, but those that are more junior won't be and they've just got to learn I guess on the job on those things.
WW: So forgive me if I'm wrong, but it sounds like European CMOs have to be scrappier, is that a better term, than US CMOs? Do you think this trial by fire they have to go through to learn on the job because they don't have the learning resources available, does that give successful European CMOS an advantage over US CMOS? They're not getting stuff handed to them on a plate in the same way?
AG: I like the word scrappy, I think resourceful and resilient are also terms. Does it make them better? It certainly makes them different because I think there's a deficiency to the model, too. Clearly, there's a lot of value from any US CMOs to have a full stack team and a full tech stack that’s optimized early on that can probably enable you to do a lot more sophisticated stuff than you can probably do in Europe. So I think they're quite different. I think from a European point of view, we're definitely probably more resourceful because we've got to get more done with less. So we're probably more reliant on using contacts or Upwork for freelance people or using our network more activity to backfill stuff. So I think they are quite different if I'm honest. Which is better? I don't know, in some ways, I prefer working in a more resource-rich environment. I think maybe that's just a challenge for me personally, maybe I need to start moving up the food chain a little bit into these companies that are in scale-up and that have the resources, and then you can almost add a lot more value because you're at the more strategic level.
WW: Talking about the US landscape in comparison to the European landscape again, is the US landscape always going to be like this? Are they always going to be the resource-rich ones and Europe's going to be resource-poor? Or do you think you could see the playing field balancing a little bit? People have been talking about the tech bubble bursting for a long time and it hasn't yet, could that happen? And could there be a situation where CMOs in America suddenly have to start behaving like European CMOs, being scrappy and more resourceful?
AG: And I mean, I think there will always be a gap, there's definitely more... it's not just the 300 million people on your doorstep and the more cash brought in at the early stage, I think there's a richer ecosystem. So it's catching up, there's no doubt about it. And again, actually, one of the tricky things is, it's probably not all the US, it’s probably pocketed around particularly Silicon Valley, and the West Coast, right. So there are large swathes of the US that probably are more on par with Europe. I guess there are just natural advantages to having such a huge domestic market, that does help. And I'm familiar with startups in Ireland, startups in Finland, which are brilliant startups but they lack a natural advantage. At least the UK has got a good population, but let's say, Ireland and Finland, both have some fantastic companies coming out of there. But some of them need to move early to the US, Stripe being an example out of Ireland. So I think there will always be that natural advantage, doesn't mean I'm despondent or downbeat about it, no, because I think there's some interesting dynamics playing out. So there was a philosophy for a while that these markets are all winner takes all. But actually, what's evolving is that there's no doubt these markets are pretty big and growing and most categories can contain a number of players. Sure there can be a US lead that maybe takes all the enterprise into the market, but there can be plenty of room for local European companies to be exceptionally profitable, and exceptionally well run. They may not be the unicorn outliers that are going to give VCs the 100x exits that they desire, but I think you'll have a recalibration almost of this VC based almost, all the chips are on black, and there's just this one unicorn we need to deliver. I think there'll be a lot more recognition that you can build very viable growing companies that, not saying they lack ambition, or they will be growing but they may not need to be "Guys, it's all in we need to be the winner takes all and therefore we need to dominate the market", I think with software, what we're recognising increasingly is positioning is very, very important. Because most markets will have entrance to competition increasing because barriers to entry are declining. Therefore, when I look at most of my clients there are very, very busy markets. So I think that's how it will play out. Sure, the US has natural advantages, but similarly, they're probably not as strong when it comes to Europe for a lot of the stuff we talked about earlier. So actually, many of them will look at acquisition in Europe, because they might view it as a complicated market, we don't fully understand that, do we do boots on the ground and do an organic play? Or do we do an acquisition and take someone out? So I think, again, I'm not despondent, I think they've got very different characteristics, and I'm very bullish and optimistic about European software. I just think there might be a slight reframing of the historic approach, which was, as I said, very VC dominated on these unicorn outcomes when I think you can be a perfectly strong business, 20-50 million, strong in numbers employed, grow nicely, and what's not to like about that, right?
WW: What is not to like about that, that sounds great. I think that sounds a nice optimistic note to end it there, Alan, thank you very much. Just before we go, do you have a final piece of advice to people who are fresh new CMOs into the B2B SaaS landscape in Europe, what's your main piece of advice? What should they do first, to set themselves up for success?
AG: Yeah, I think there's a couple of things Will. I think there's being data-driven, that helps, so getting into what I call unit economics early on, I think, is important. Prioritization is key, use Trello, use Teamwork, use Asana, whatever you need to prioritize. Toggle for time tracking so you can use whatever is at your disposal. Go read, pick out there are some fantastic resources, and go network. If you look at the CMO Alliance and SaaStock and other bodies. I would formerly be on a platform called Growth Mentor, where I used to mentor aspiring CMOs. So I'm giving you a long-winded answer Will but I guess the one piece of advice was actually just to reach out to people. People will help, don't try and do it all yourself. I'm a mentor on Enterprise Ireland, they've got a scale-up program, where again, Enterprise Ireland is probably the biggest early stage VC in Europe. So they're with Irish B2B software companies, and that's a great means to get access to senior people. So, yeah, I would use your network, don't try and do it all on your own, look for people to chat to, bounce ideas off, don't do it in isolation.
WW: To pull out a cliche, it takes a village, doesn't it at the end of the day?
AG: Absolutely. It certainly does. So I think that's a fair strategy for a point.
WW: Thank you very much for your time, Alan. Really appreciate it. And thank you for listening. We'll be back soon with more CMO Convos.