Lenny Rachitsky: observation

Transcript context

…Yeah, generally you've had some kind of qualification happen upstream, and so that qualification could be done in lots of different ways. If you've got some kind of product like growth motion in the beginning, you're looking for signals in that. And if the signals aren't there, then you're not talking to them. And so if you've designed your signals right, then you already know there's intent there. You already know you're a fit. You already know stuff. The way a lot of companies do this is they'll have inside sales do a qualification call before they set up a first call with a sales rep. In that qualification call, you're trying to make sure is this the right person? Do they have a need that we can actually meet? Is this actually a good fit for what we do? And if they're not, they don't even make it to the call. Mm-hmm. Imagine a place where you can find all your potential customers and get your message in front of them in a cost efficient way. If you're a B1B business, that place exists, and it's called LinkedIn. LinkedIn Ads allows you to build the right relationships, drive results, and reach your customers in a respectful environment. Two of my portfolio companies, Webflow and Census, are LinkedIn success stories. Census had a 10x increase in pipeline with the LinkedIn startup team. For Webflow after ramping up on LinkedIn in Q3, they had the highest marketing source revenue quarter to date. With LinkedIn Ads you'll have direct access to and can build relationships with decision makers including 950 million members, 180 million senior execs and over 10 million C-level executives. You'll be able to drive results with targeting and measurement tools built specifically for B2B. In tech LinkedIn generated two to five x higher return on ad spend than any other social media platforms. Audiences on LinkedIn have two times the buying power of the average web audience, and you'll work with a partner who respects the B2B world you operate in. Make B2B marketing everything it can be and get $100 credit on your next campaign. Just go to linkedin.com/podlenny to claim your credit. That's linkedin.com/podlenny. Terms and conditions apply. Another question around this idea of differentiated value and just alternative approaches is there's a certain previous guest who was very big on creating a category being extremely important, and that potentially being the only way to build a legendary business. I know you have a different perspective on that because in theory if you go that direction, there's no alternative. It's like "We're the one." What's your take on that? Well, so here's a few things. So one, obviously creating a category is not the only way to create a legendary business because the vast majority of legendary businesses did not create the categories that they're in. So Google did not create search, Facebook did not create social network. There's so many of them. It's actually more of an exception to the rule that the company is creating a category than the other way around. So I think it's a bit disingenuous to say the only way. It is a way to build a big business, no question about that. But it's absolutely not the only way. In fact, it is not the most common way, but it is a way and it does work. So that's one thing. The second thing is that category creation is interesting. Like most companies, if you look at their arc, even the category creators that are successful, they did not start out as category creators. So they started out as a niche play in an existing category, and that's because that's generally the easiest way to get traction for a company early because what is the job of the market category? The job of a market category is to help answer the question, what is this thing all about? If I'm positioning an existing category, I can say, "Well, I'm CRM for very small businesses." That was Salesforce's initial positioning. I didn't have to explain to you what a CRM was, that already existed. There was already billion dollar company in that space. We know what a CRM is, and I could say "We're CRM for very small businesses. The reason you can use in this very small businesses is we don't have any software. So you don't have to have an IT department to babysit it. It's fantastic." So most companies start there. Now what happens is that if you become the dominant player in that space, which again, category creation folks talk about this like no category creator has ever lost the market. In fact, most category creators wins their market. Like what happened to MySpace? What happened to Ask Jeeves? It didn't work out so good for them. Most category creators actually get overtaken by fast followers. So if we look at the CRM market, Siebel was the big dominant player there and now they're not. So now we've got Salesforce. Once you're the dominant player in that market, a cool move to do is to actually extend the boundaries of the category so that you can continue to grow. And most of the category creation examples we see are companies that when they were 200, 300, 400 million revenue dominating their space, then decided to move the goalposts and say, "Well actually now we're expanding into all these other areas and we're going to call this category something. And that's what it is." And there's loads of examples of that. Like Qualtrics for example, is a company that a lot of people talk about very successful category creation. Well, they were survey software up until there were 300 million revenue just like everybody else in an existing category. So that got them there and that worked just fine.…

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