On this episode of the Unlearn podcast, listen in to Bruce Cleveland, a renowned tech industry executive of Oracle, Marketo, and Siebel Systems, as he delves into the ethical implications of AI for HR and why he prefers a hard charging, in-office culture. He also shares his view on future-proof GTM leadership and expounds upon the strategic power of partnership models.
00:00 - Introduction
04:17 - Implications of AI
06:31 - Ethical implications of AI in HR
10:56 - Why a rigorous, in-office culture
14:53 - Impact of a high performing culture over extended periods
20:26 - Change of pace after retirement
23:33 - AI in HR
29:50 - Using a Kanban system to improve employee performance
33:48 - Experience building an award-winning partnership model
37:56 - Insight into the partnership model and the type of partners selected for the
program
45:04 - What does the future GTM leader look like?
50:30 - Community Commerce Marketing
58:08 - Does every company need to create its own product category?
"The issue is that if you don't invest in market engineering, thought leadership, category creation, positioning, messaging, and storytelling—those are the five tenets of what I call market engineering—if you don't do that first, and you create a new category and install yourself as the category queen or king (or whatever you want to call it), and as a recognized thought leader, no one's going to open your email, no one's going to call you."
00:17
To thrive in an era of visual transformation, you have to go up the market differently. Let's find out how.
Everybody, we're back for another session of the Unlearned Podcast. And, today, we have a guest whom you may not all know for partnerships, but you're gonna be surprised to learn about his career in and/or with partnerships. So, Bruce, do you want to just give us a little bit of info about yourself before we dive straight in?
00:47
Yeah, sure. So I've been in the tech industry for about 40-plus years.
Recently retired actually, but I began my career with a small little startup of a few people called Oracle, which was a private company at the time on Sand Hill Road.
And I'll come back to that location in a second because it plays an interesting role. I worked for a guy named Tom Siebel, who became a pretty well-known icon in the technology industry, as his sales engineer. So that means doing the demos and, et cetera.
I did that for about five years and I ended up running the UNIX division of Oracle, which was organized by operating system at the time. It's no longer organized that way, but it was back in the early eighties.
And, from there, I went on to run an engineering division of Apple for five years. And then I rejoined Tom in 1996 when he built a new company called Siebel Systems, which, I think, still holds the record for the fastest-growing company in US history.
We went from when I joined to about $2 million in revenue. Four-and-a-half years later, we were at $2 billion in revenue and created the CRM category, which we then sold off about 10 years later to Oracle and kind of ceded that category to Salesforce.
But Tom and our team were the ones that began enterprise-level CRM. And, from there, I decided to try something different. I tried venture capital for about 15 years. I was the first investor in an idea that became a company called Marketo. I was one of the original investors in Workday, Velocity (which was recently acquired by Salesforce), and all B2B software service companies.
I didn't know much about venture capital, I'm not sure I still do now. But, I thought it'd be interesting to learn. So, I made several B2B investments and did pretty well with them. I ended up leaving Inner West and creating a new venture firm called Wildcat. While I was there, I wrote a book called Traversing The Traction Gap, which I teach at Stanford, Harvard, Columbia, and a few other schools from time to time.
When I'm invited, I did all that. And then, a few years ago, I decided that I was going to end my career and I wanted to figure out how I was going to do that.
I was a personal investor and a professional investor in Tom's new company, called C3 AI. So, I called him up and I said, Look, I'm only going to work a couple more years. The company is not public yet. Is there a role for me? I thought maybe a product guy or something, I don't know what.
And, Tom said, well, why don't you come and be my Chief Marketing Officer? We need that, too, at Siebel Systems, and we need it because we need to take this company public and we need to build a new category called Enterprise AI.
So, I joined, and, a year or so later, we took the company public in December 2020. I agreed I would stay another year. I did, and I found my replacement, and sailed off into the sunset, so to speak, to do some different things. So that's, that's kind of the story of who I am and what I've done; kind of an eclectic set of things.
04:07
Super, and I'm sure we'll come back to the different pieces of your journey, but we always start this podcast with, 'What's top of mind for you?'
Bruce Cleveland
04:17
Well, I think the top of mind for anybody in tech right now is AI, you know, from both its ethical issues and worries to how we're going to completely change over the sales of the entire work organization and be replaced with machine learning algorithms and robotic characters, or you know, exactly how is this going to play out?
And then I think everybody gets worried when new technologies are introduced that have such a dramatic impact on society, etc. So, I think we're in a natural evolution state and I read a lot about what's going on there. I think it's pretty interesting; if I were at the beginning of my career again, it's certainly an area that I would spend a significant amount of time on.
And I also worry about the social issues that are associated with this, given that most of the predictions are based upon a corpus of data that has occurred previously. And that data is, you know, if you think about it, if you're going to use it for HR, that's probably a bad use of AI because it's going to make recommendations on things that have been done in the past, which may not be good.
If you're going to use AI to solve predictive maintenance problems, that's probably a pretty good use of AI. So, I think we're going to go through, just like we've learned with social media, or not learned - you can debate whether we talk with that -
05:40
Learned, but not acted upon.
05:44
So, you can debate whether that's been a good thing or a bad thing. But I think we're going to find that it's going to be a combination of the two, just like we found, with social media.
05:55
Yeah, and when you say with HR you have concerns, what specifically are your concerns compared to the current process? One thing you hear a lot right about candidates who don't come in through a personal network is there's this whole thing of trying to game the ATS or like they have certain keywords; you even have people who charge to say, 'Hey, I'll write your resume in a way that can get past the reader.'
Now, is that an efficient system? Probably not. Is it possible that AI would do a better job of identifying good candidates than what we have now?
06:31
Well, I mean, I think it's a great question. The issue is, HR is a pretty inefficient market when it comes to recruiting and hiring people.
Even despite things like Indeed.com and Glassdoor and a bunch of other technologies that have emerged, as you said, all through these ATSs and others, the problem is that it's the nuances of the candidate; there are things on the paper that look amazing, but when you interview them, you realize it's not going to be a great cultural fit.
It's hard to test for cultural fit; I suppose you could have somebody answer a bunch of questions; they could read it off and you could have a ChatGPT look.
07:14
At it, and say personality.
07:16
Yeah, AI, I just think it's a human thing and we connect with people. You, you maybe I'll be wrong on this, but, you know, I think we connect better human to human. You know, AI knows that a lot of people like to date memes. I think it works better if we meet the person we will supposedly date.
07:40
Most people meet through online dating now, right? I think most marriages come from online dating at this stage, and I agree with you. There's an incredible amount of inefficiency in HR, perhaps in the dating world as well. But you're saying you don't think so; you think that technology is not safe, but actually, more human-to-human interaction would make it more efficient.
08:02
I think that it could, it could help. I think that having something that could go through and maybe screen out the ones that, you know, for sure aren't going to be a good fit. But I think finding the fit still requires human intervention. So, yeah, and then, of course, you've got to screen out bias.
We don't do the world's greatest job today, with that, but we certainly, if we just relied upon decisions that were made historically for hiring, we would then create machine learning that would hire, you know, a white man.
08:44
Yeah, isn't that the problem with cultural fit from human to human, though, too? Right? Like, we people have a human nature to like people who are like themselves. And so, you're doing the interview and you're saying, 'Oh, well, this is a good cultural fit. I just related to this person. I felt that connection.' Isn't that tough for bringing in diverse perspectives or backgrounds?
09:06
When I say 'cultural,' I mean, from the standpoint of a business, I mean, will they fit into the work culture of this company? Not whether I think this is gonna be my beer buddy. Right. So I think that, for the most part, we can do that. I think we are getting better.
By 'we' I mean corporate we're getting a little better. At least, we're acknowledging that the sins of the past were by no means perfect. So I think we have a lot of room to improve, but I think just simply taking a bunch of algorithms and having them go out and do the assessments of whether this person is a great person for our company still requires the human touch. We'll see; maybe I'll be wrong.
09:56
Yeah, I don't think we're there now. Like, I don't think we're at least at a point where I've seen any tooling that would even be able to approximately do that. It's more of a future state. But I think it's an interesting question whether they could do a better job because humans, as we all know, have a bunch of logical fallacies and biases baked into how we think; some of them, which are ultimately for survival modes, can lead to poor decisions in certain cases.
10:24
You know, I've hired--I mean, I had--I've had several thousand people who've worked for me over the years, and I've always done better by hiring pretty diverse teams, whether it was mandated or not. It just turned out to be a very successful strategy for me. So, you know this topic is above my pay grade.
10:48
Though you're retired now, you should feel free to speak; don't worry about being canceled.
10:56
And, we do the Unlearn episodes primarily for our enjoyment, more than anything else, you know. But, as you guys were talking about this thing, right?
Like there's a bunch of debate around the Valley or around in tech: are you going to work in a family culture or a rigorous machine culture? Both models work; it's not like they don't work. Likes would be one example of the Ohana culture, and Amazon would be an example of where frugality and just getting your stuff done matters.
So, and as you guys were talking about this, if you look, if you use the power of AI now to go technically scrape all of the data about people that are publicly available, I'm pretty sure you can actually just come to patterns and say, look, this person's values, based on what they have shown to the world, actually match the company's values. And so, at least there's a value alignment. They may or may not be a personality alignment.
12:03
Yeah, I think that we tend to lie about those things. I think that, well, let's put it this way: We may exaggerate. and we know what we're right about, we know the audience we're writing to. It's just like when I wrote my book; I knew who I was writing to. So, I wrote in those terms using language vernacular that I knew people would understand, and concepts that people would understand.
When I'm writing a resume, I'm writing the same way; I know it's going to be scanned, read by an HR person, and I know the job I'm trying to seek.
I've written different versions of my resume over the years to emphasize one thing over another; in one case, I was emphasizing engineering, in another case, I was emphasizing marketing, etc.
And I know most people are pretty savvy; I mean, I think they do this, so that's why I say it does involve human interaction, a piece of it. And, you know, I've been, for the most part, I think I've been pretty successful hiring people, not in all cases, you know, there've been some things that just didn't work out for several reasons.
Maybe, you know, they didn't like working for me or with me. So that's a reasonable outcome as well. But, for the most part, I think that by speaking with them and having a chance to kind of talk to them about the culture in Oracle, it's a pretty tough culture.
Siebel Systems were tough. C3 AI was tough. It's, you know, there's a lot of, you know, getting work done and work-life balance that's just not, that's not part of the deal; it's not a thing.
So, you know, and I mean, as Tom would say at C3 AI, there was no work-from-home; there is no work-from-home policy. Never has been. I mean, we were back in the office the second it was legally allowed.
And Tom's comment about it was pretty straightforward: Look, we're inventing stuff that's never been invented before. It's really hard to do that over a Zoom call.
We need people who can get on a whiteboard and draw it out and come up with new ideas and do it quickly. You can do some of it, that's for sure, remotely. And we did when we were legally required to do so. But I don't think we could have got, we are, we decided to execute the IPO in August of 2020. And we IPO'd in December.
That work meant seven days a week, 14 hours a day of writing an S1 and doing all the legal work; there's just no way you could have done that from home. So, yeah, that's not a culture for everybody, you know, and we, especially in marketing when I was hiring for marketing people, you know, I said, 'What do you mean we have to be in the office five days a week?'
And I said that's how we work here, and if you definitely should not work here, if that's something that you don't want to do, then that's kind of what I mean, I think.
14:53
Do you think that that culture will have a better output, or do you think it's just a matter of preference and that a more friendly work-life balance over time? If you're talking about one month, that would probably have a higher output. But over time, the argument is that people end up getting burned out; you end up seeing more churn, and people get disgruntled.
Do you think that that culture will have higher output as long as you are good at finding the people who thrive in that culture?
15:25
Well, I can only point to three companies I've been personally involved in: Oracle, Siebel Systems and C3 AI. I would suggest those three companies have been pretty successful. Tom has a point of view on culture and how it works. You know, he wants people to be curious. I think he says, 'Carry a book in your hand; you know, read; be, you know, be intellectually interested in what you're doing.'
And, and like to work with others, like to be together with other people and do it. That's not always the case; that's not everybody. So, I can only point to what I think we did pretty well at Oracle to build a company and an environment: you make your number and you get to stay; you don't make your number, you're gone.
You know, it's not a lot of, I think it's probably still true, with Ellison still there and Safra for sure, it was in Siebel Systems. You know, we had OKRs; they were called MB OS back then. OKRs that we were required to make; if you didn't make your OKRs, you didn't get paid a bonus and you probably lost your job and everybody knew that, but that also attracted people.
The funny part is it didn't attract a lot of people from Stanford, but it did attract a lot of people from Harvard.
So, the East Coast kind of culture, which is a little more, you know, in-your-face kind of culture, used to be that we wore suits--you know, that wasn't a thing at C3 anymore, but we did back then--and that just didn't fit into a lot of people's idea of a great time.
So, but I talked to people still, you know, who had worked for me for many years there, or I had worked with them, and they all look back fondly at it because we won, you know, we could, we, we, we won deals, we met our numbers, you know, I did 50-some 0 52 quarters and every one of them was hard. And you know, and a lot of people helped us to do that, they were along for the ride. So it worked for them.
I had gone to West Point and, so for me, I didn't graduate, I left early to pursue computer science, which at the time wasn't a thing. And, not at the academy anyway and so I hired a lot of West Point, Navy, and other grads who had also gone on to one of the business schools.
The thing that worked for them was they were used to not whining about a lot of things when they were in the military. So the thing I liked about it was I didn't get anybody whining about how many hours we had to work and the tough duty that it was, and you know, it worked out pretty well, but not in every case, but for the most part it did.
So, I would say that the cultural part--you know, different people and different companies have been very successful without that strategy. I mean, yeah, like Salesforce and they get so much. Hm, I think it's, if you're inside the company, I think they would say it's a little tougher than, you know, maybe how it appears on the outside or [it's] kind of a big, you know, fuzzy bear - inside, it's a little different.
18:29
I think there's the marketing of the culture, and then the actions are often two different things.
18:35
Yeah, you know, still they've done phenomenally. Well, Mark's a different guy; you know, he learned a lot from Larry at Oracle. He took on some of those characteristics and rejected some of the others, just like Tom or I did, etc.
I think you know, the culture comes from the top; that you can look to the CEO and decide if it's the culture they've established: accountability or no accountability, or whatever, whether you like it or not.
You know, we can look at Twitter as a prime example of what, you know, recently pretty a company that people are pretty familiar with, because we use it, and it's a B2C company. But we can see what, how Elon Musk has run it versus, you know, the prior set of a CEO. And you could argue, well, is it more or less successful? Well, maybe more in some ways and less in others. I think culture is super important and I think it's up to the CEO to set the tone of what the culture is and then to hold people accountable for enforcing it or living up to it.
And making sure that when they hire people, they hire people who are going to fit in and like working there; you know, and it's them, if they need work-life balance and that's kind of a key thing of the company, and they can achieve that, then that's great. I think if you have happy people, then you can be very productive. They'll tend to work when they're not even required to work.
My career was, you know, 40 years of 24/7, and, you know, working from vacations - working from nice places. But, that's not everyone's cup of tea, and not everyone wants to do that stuff. so, you know, it worked for me; it doesn't necessarily have to work for anyone else.
20:26
So, I just have to ask: if you were working 24/7 when you retired, have you found something else to essentially be working on 24/7? Or have you been able to change your pace?
20:38
Life? So, it's funny that you bring it up. So, over my career, I've learned how to fly, because I like the physical and mental aspects of it. I've also learned how to sail. My wife and I sailed for two years. We took a sabbatical and sailed from Sausalito to the East Coast, living in the Caribbean. So, I learned how to do that and I learned something from those processes: I need to be intellectually stimulated and have something physical with it. So, what I'm doing now is racing cars.
So, I've gone through several different programs, passed them, got my license, several licenses, and I'm participating in two different international racing programs on two different teams. And, it's been a big, big learning curve. It's one of the more difficult sports I've ever done. I think it's kind of like golf.
You know, it looks easy when you see other people do it. But then, when you go out and do it, you never perfect it; the pros are always so much better than you. It's unbelievable. The same thing applies to racing cars. The pro coaches we work with, they're not even driving F1 cars, and yet they easily smoke all of us, amateurs.
so, every time you get a particular turn down or course down, correct, you might do a pretty good lap. Then you blow it the next time. It's a frustratingly technical sport, and AI likes it. You know, I'm learning a lot from it and I knew that I needed to have something like that in my life to replace that other piece.
And then the other part I'll be doing is kind of winding this off a little bit, like, I kind of overindulged in the racing thing this year. It's taken every couple of weeks; I'm in some kind of race.
So, next year though, I hope to take the book that I wrote, The Traversing Traction Gap, which has become pretty popular, more popular than I thought it was going to be. and I'm thinking about turning into an online course, a set of online courses, consulting, and a few other things. A lot of people have reached out to me to do it. I advise a couple of the companies.
That's all I have time for right now, but if I can take it and turn it into a practical course where you can read the book, that's great, but you can augment all of that with specific use cases, co-interviews, etcetera. I think it'll become even more useful to entrepreneurs. So, that's kind of what's on my mind for 2024. We’ll see how I do with the racing thing. I reserve the right to push it out a year.
23:33
I guess we'll start talking about AI and HR because I want to know a little bit more about the future of go-to-market and what you think go-to-market leaders need to do. But the one comment I'll make is that I think one of the fascinating applications of AI around HR is how to know when an employee is getting disengaged or disconnected, so you can help them.
Faster than before. They just go on the other side because we spend so much time recruiting and ramping, and if you and everybody's kind of going through their emotions in their lives as well. Right. But if you just know, then there's a way; I'm assuming there's a way to reach out and help the person, or otherwise, they're just gonna get disconnected and eventually leave.
24:22
Yeah, well, one way that we did it at C3 AI was because Tom and the rest of us were worried about people's productivity and whether they were engaged or not. You can agree or disagree with what we decided to do, but we decided to use Jira as a way to record people's performance. I know that's a way of like quantitatively assessing people, so every day you would fill out: these were we, my team; we built an application out of Jira that would allow you to input, what did you get done that day? What did you get done this week? And then we just basically wrote a report that pulled that information off the cards.
And, and generated saying, 'Here are all the things that they accomplished for the week.' You can say, 'Well, that's micromanaging people.' and in some sense, it is, but in another sense, it wasn't designed to micromanage. It was really around the point of, 'Hey, there's a lot of work that has to get done. Are you getting it done?' So we can recon, we can meet on Monday and go through where we stand on this particular project. And I knew at a glance, I could see what everybody was working on.
Well, it's pretty simple to see when people aren't doing anything or submitting cards. And again, it wasn't meant to be an overly burdensome thing. I tried to make it pretty simple for people to do the tracking. and at the end, you could tell where people would say, 'Look, I'm just not into it, or I don't feel like doing these things, etc.' Well, OK. Well, maybe it's not a good fit, or you're not [happy]—do you want a different work assignment? Do you want to work on something else?
So, that's one way to do it. And that's more of the, you know, that's kind of the time-card approach to management, which I think is OK. You know, it's useful to some extent. But the more important part of that is going back to human interaction, which is, 'Hey, what's going on? Are you OK? It looks like you're not getting a lot of things done that need to be done in the group.'
Is there a reason for that, or is something going on at home? You know, are you, are, you know, everything OK? Now it turns out that my kids have COVID, or whatever; you know, you find out it gives you early warning signals of things that are hard, where we can say, 'OK, fine. Why don't you just take time off? Just go ahead and go.' That's more important.
26:48
Just come back and, I think that's fantastic and that methodology works at scale as well.
26:54
Well, it did; we had, at the time, I know there are probably closer to 1,000 people now there, but you know, there were about 600 there, and it worked well across the entire engineering team because there's all.
27:07
They're already kind of in that two-week, print-more-morality-already-right? And I, I would, I would probably pause that go-to-market team to do the same thing, and the ones that do it and treat their stuff like a product. There are a lot of similarities between the two; the way the two functions work. Yeah.
27:23
Yeah, so we did it across all functions in the organization: legal, sales, marketing, service, and support. And, you know, some people didn't like it, you know, for several reasons.
Kelly Sarabyn
27:35
I mean, I wouldn't like it either. I, would I find it annoying. And I feel, as an employee, like I have to sit down and do it; it feels like a lack of trust. I do think the more regimented or routine your work is, the easier it seems to both do and track. I think it gets harder when you're ramping up entirely new projects. Right? And trying to say what's a reasonable output on a given day.
Asher Mathew
28:04
Just putting it out there.
28:06
I know, I know I wouldn't survive. I was already fired.
28:09
This is my time management system, you know. So, every morning I'd wake up and I would write the 8-10 (whatever) things that I need to get done down on this. All I was doing with the Jira app was to digitize that, so that way I didn't have to keep writing and crossing off, and it's...
28:26
Actually, and I think AI, but AI is a solution for this honestly, because I'm sure you guys have already seen how AI can just summarize any meeting with meeting notes that you've done. I think AI, as long as you're working on a computer now, where it might get tricky is you're having an in-person meeting on a whiteboard that AI may, but then again, we could have cameras in those rooms, right?
And they analyze the live meetings. And AI and I feel like you could tie that system to the system you had essentially where the AI essentially creates those notes at the end of every single day, which, to me as an employee, I wouldn't mind being monitored in that way because, for me, it's not that I don't have any need not to share what I'm doing; it's the fact of having to stop my workflow potentially to go in and, quote, report on what I'm doing that I don't like.
But if AI could do it for me, I think that would be great. And I also think your point about detecting disengagement: I do think AI could detect it before a human being could, because there are probably very subtle things, like this person was previously engaging in this level of messaging, responding to messages within 17 minutes, and now it's nine minutes. I think humans will catch on to it; humans can read other humans. But I think I could potentially flag those even earlier, to then have the human conversation to find out if something is going on.
29:50
We tried to make the burden of recording this information as simple as possible. So, it's a Kanban and the interface we used was a Kanban interface on Jira. So, it's just cards and you'd write in, 'Need to call so-and-so today' or 'Need to get a review of the press release that's coming out', whatever.
I'm meeting with the event team that's going to produce the annual conference, that kind of stuff. And then, I just drag and drop at the end. Did I get it done or not? If I didn't, I drag it into a column that says, you know, 'incomplete', and if it was complete, I drag it into the 'complete' column. That's it. At the end of the week, I didn't have to write.
Report before I had to spend three hours on the weekend taking everybody's Word Doc or PowerPoint or whatever it was, going through it all, assessing: Did they get it done? Not done. Then I had to write it all up and send it to Tom, saying, 'Hey, Tom, here's what we got done as a team.' That was annoying, but once we built the camp, it was like I got my Saturdays back, you know, so it was, you know, and to your point, AI would make it even easier. So I think that's why we, why technology can either make our lives, you know, better or worse. In this case, I think it can make it far better.
31:05
And, I'll just like to wrap up this part of it because I want to move to the 'go to market' topic. But it's like it, it's so Bruce, I'm building a company called Partnership Leaders. It's a community for partnerships, people around the world, right? And we run it the same way that you said, like on Mondays, we just say, 'Hey, what is the most important thing you're working on?' And we don't care, you could be working on 20 things, but we just need to know what you're prioritizing, right?
And then on Wednesdays, we all got together, had a meeting, and celebrated the successes or failures of the last two days. And then on Fridays, we asked, 'Did you manage to finish what you thought you would start?' At first, it felt uneasy, but we eventually made it part of the hiring criteria.
And, now it works like clockwork, and any one of us, because we're all remote, right? Any one of the founders can go in and take a look and see. OK, this person said they were doing this now, I'm seeing that that's not happening. They must be stuck, for sure. And I will say, after the three or six months that we've been doing this, it's actually brought people together and the output has just gone way up. And when we say we're gonna do this, we've gotten to the point that we finish what we set out to do on Mondays by Fridays.
And then Monday starts another sprint. So I would guess that this works. And that's why I was kind of curious, like, Hey, but would it work at scale? Because if you have, like, 10 or 12 people, yes, it's easy to catch on to people. But if you have 1000 or 2000 people, how does that work then?
32:35
Yeah, you need managers, and I think you need a system like he had, versus you just having it in Slack where everybody's responding. But I think you can systemize the same principles, and AI may come along to the rescue to do a lot of the reporting and analysis, right? Like, if they ingest the data of the outcome, they can analyze in terms of where people are falling short and where people are succeeding.
Super hard. I think, in a remote world, it's like super useful, honestly. Like, I think in a [situation] where you weren't remote, but I think this could even be more useful and remote because something that companies struggle with is the lack of visibility and transparency with what their remote workers are doing.
I remember when Yahoo, like decades ago, was originally very remote and it turned out like they had people who were working full-time, getting decent salaries doing no work because they just had not put in place the systems and processes to monitor at scale what people are doing, and you hear right now this whole trend of over-employment, right?
Where a lot of tech people are saying they're getting two full-time jobs and just staggering their schedules. I feel like a system like this provides that visibility where you can catch that.
33:48
Yeah, OK. Let's move to the other topic. So, you had posted a couple of topics on partnerships and stuff. Do you want to give us a little bit of color on your experience in partnerships before we move to what go-to-market deals need to know for the future?
34:05
So, I believe it was 1996, the end of '96, beginning in '97. We began to have a lot of companies start calling us about wanting to work with us and we had no formal way of doing that. I mean, we had a couple of partnerships. We had one with Microsoft, one with Compaq, and one with Anderson Accenture, called Anderson at the time, and those were three partnerships that Tom had put together and they had written business plans. Tom had written a business plan with the company he met with, like, Ed Fries was the CEO of Compaq at the time. And, we would meet jointly and go through, you know, what we were doing with them, what they were doing with us.
And it worked well. And I remember we went to an offsite in Tahoe and Tom said, 'Hey, Cleveland, we need a partnership program; go build one.' I have no idea how to do that. 'What do you mean?'
I've been the victim of partnerships, but I have never built one. 'Why me?' 'Because you're the least busy.' So, OK, great. So I went on, I did a lot of research, you know, I met with people from SAP, Oracle, Microsoft, and a lot of other companies. Every time I looked at how they did it, I went, 'These don't seem very successful. There doesn't seem to be much accountability. I don't want to do that.'
Are there any examples of partnerships out there that I think work? Well, all I needed to do was look in our backyard because ours were working well. So, could AI codify and formalize the principles that we use there? So, AI did, and we put it together in a small team of how we would work with companies writing a business plan and holding.
I told Kelly earlier that we didn't hold our alliance managers responsible for civil revenue; we held them responsible for our partners' revenue in the business plan.
This had an amazing result, as it made them wake up every morning worried about the success of whichever partner they were assigned to. We started with three partnerships, but in a couple of years, we had 760 partnerships and we defined a set of levels about what kind of resources we would provide and what kind they would provide. There was a mandate that they had to create an MDF (market development fund), and at the strategic level, it needed to be a million dollars a year.
So, it was a pretty significant commitment; I didn't mean necessarily in kind, I meant like to spend money. Then I worked with our marketing team. I said I need a bunch of programs that partners can buy. So, you know, you need more money. you don't have any money to demand gen because, at the time, Tom was consuming it all for TV ads. And you know, Brandy, I said, so Pat House was the CMO at the time; I said, Pat.
Tell me what, you know, can you build me a bunch of programs that I can just swap out the icon or the logo of one partner? Put another in and they can buy these programs that you guys can execute at scale. there's a bunch of things, webinars, you know, joint white paper, things, a bunch of stuff. And then we produce that in a catalog, a marketing catalog that then our alliance managers went out and sold. So they went and sold spots at different events. They sold, you know, we can only do so many in a quarter. And then we, the way that I did it, I said we would match you 50-50. So here's how I'm kind of shady: We'll match you 50-50. And we did, I just happened to mark up every program by 100%.
I had an infinite amount of money and Pat was really happy because now she had demanded gen dollars; they just had to be done with partners. So, it was very, very successful. They, what type of...
37:56
What partners did you have in this program at that point? Were they service partners, resellers, tech partners, or all of the above?
38:02
Not resellers so much. I did buy, and I eventually built our program, but that was separate from this. This was mostly joint go-to-market pro partners. So, they were technology partners, services partners, and soft. So, hardware partners, software partners, and services partners.
And there were three levels: there was a base, which is basically you know, you don't have to commit much, and we don't have to commit much, you know, but you can do XY and Z. Well, it was defined and written down, and then there was a premier partnership, which is a little bit more; we assigned somebody, but it was usually one alliance manager to five premier partners at the strategic level.
I mean, we had, with IBM, probably 40 dedicated full-time alliance managers around the world dedicated to that partnership. But we were also driving almost a billion dollars of revenue from that partnership along with Accenture. And when I say that's indirect revenue, it wasn't them reselling our products. It was, they created, they found an opportunity. We decided to partner with them, we modified the CRM system so you could lock the alliance manager, and could lock the partner. So, we didn't allow the sales organization to decide who they would partner with because otherwise it just became, hey, we'll take it to the, you know, the Warriors Lakers game and we'll, you know, and it became a who would scrub, you know.
You know, 'scratch whose back.' And I said, 'No, it's gonna be the people; they have to spend the market development fund; they have to do that and they need to get the leads that come from that particular, that, that program. If the company that we're trying to sell to eventually says, 'Well, I don't want to work with that partner. I wanna work with a different partner for consulting.'
Okay. But the partner had the company had to tell us that until that point we'd demanded and Tom enforced this, that we work with the partner who brought us to the prom. So, that worked well. you know, I see again, we won a bunch of awards; Forbes gave us the most, you know, the most successful program partnering program they'd ever worked with. I have a little, you know, digital logo where it is, you know, that matters.
And, and then, the strategic alliance worked, I worked with them to help. I created a group called the Association of Strategic Alliance Partners (ASAP), went out, and taught them how we did this and why we did it. A lot of people adapted their programs to, you know, somewhat mimic this. But for the most part, most SEO EOs won't do this. They won't invest in this for Tom, though. he's pretty savvy and shrewd and decided we would overinvest in it because it was so beneficial to the company and we sucked up all the oxygen in the ecosystem because if you wanted to work with us, you would sign these agreements and work with us and we would work with you to help generate deal flow for you.
You know, and if you, if you didn't work, if you tried to go work with other companies like that, we would excommunicate you out of the partnership program and you wouldn't be able to come and do any of these things with us. So, it effectively took all the potential competitors out of the market at the time. why? Because Accenture didn't want to lose cable systems, which was generating, for every dollar of license revenue, about $10 of consulting revenue. So, if they did a billion dollars with us in terms of cable revenue, that was almost 10 billion for them in consulting services at the time.
So it just made a lot of sense, right? It made sense to them. We were loyal; we, we, you know, we didn't execute them, but we publicly shamed the people who violated the principles in our organization who didn't follow these rules. And Tom shut them down fast, 'cause the sales group, you know, I mean, they're well-meaning, at least; they want to get deals done. They don't care about your stupid little program inside the company, but they needed to follow the rules because if they didn't, it would create...
Huge ripples, at the executive level, like 'you guys threw us under the bus' - you know, 'we can't trust you', etc. So, Tom just nixed all of that and it was relatively easy for me to enforce.
So, you can read about the program; it's a Harvard Business Case called 'Partnering for Success'. I would say it worked well for us for what we were trying; AI biased it for consulting partners because that's who we needed at the time.
If I was to do Salesforce, I wouldn't have done it that way because you didn't need a bunch of consulting partners, or not nearly as much. And I would have built something different. but that's what we were building it for. And I built a new program for Tom at C3. Not using consulting partners because most of the stuff that C3 can do doesn't require a lot of consulting; it's mostly configuration, and a lot of it works out of the box—80-90%.
So, if you're trying to build an enterprise AI application, which is what See Through AI Technologies and Platform does, we dramatically reduce the number of consulting dollars a company needs to spend to generate that application. That is not in the best interest of Accenture or any of these other companies necessarily, and so it didn't make a lot of sense to have it biased for consulting partners.
so I say all this in the framework itself, the approach, which was, well, what's in it for the partner? And I just bucketed them--you know, software, technology services, whatever--at different levels: what are they gonna get? What are we gonna do? We defined it and adhered to the policies of the program. And once we did that, as I said, we went from roughly three partners in 1997.
And three years later, we had 760 partners, and, I think they worked well for the most part. You know, I can't say that in all cases everybody was happy with us; you know, people, salespeople, would do stupid things, we would miss something, whatever. But, for the most part, I think it worked pretty well. And, what I was commenting on in that LinkedIn article is that most people want to do these paper press releases and that's the end of the partnership.
They don't invest in the people they bring on board. I brought on people who had MBAs from some of the top schools to run the partnerships. So, they were our best and brightest; they weren't our people who couldn't market or sell products. They were people who were quite clever, and I incentivized them; we incentivized them.
Making them responsible for achieving the revenue, margin, and product sales objectives of our partners, as opposed to incentivizing them for stable revenue, makes sense. As Kelly pointed out earlier, if you achieve their revenue objectives, you're going to achieve your revenue objectives, as they are directly correlated.
45:04
Yeah, no, agreed. And, you made a fantastic point about resourcing because, for the longest time, it's changed now, like early, it's changing now. But for the longest time, it was like if the people don't work in any other function to send through partnerships and see if they can work there, right? And that's not what innovative companies are doing anymore. Innovative companies are saying, 'Wait a sec, these whiskey cigars and steak guys are cool, but they were cool for a different purpose.'
And we are now moving into, we've got to innovate fast. And if we can innovate with our partners fast, that means we are finding hidden pockets of opportunity. And that's what the word 'strategic' should mean when people say this is a strategic partnership. But if you leave it to salespeople who were, let's call it, rejected from other functions, you're never going to unlock the hidden opportunities. And so, but again, there was no place for this type of...
People go to hang out or connect with other people in best practice. That was kind of the reason why partner leaders actually, one of the reasons why we started this whole thing. And now there are about 1,400-1,500 people that are moving towards understanding that yes, connections are one piece. But the destination that we need to go to also has to be very clear. And then how do I take that destination to make it personal in this modern world? So it's not just about sourcing leads and stuff like that, it's important, but what are you building towards? Right. And so, it's a super hard and passionate topic for donors to work with leaders and say, 'If you don't resource well, then...'
It's gonna suck anyways, and you're gonna kill it anyway. So, you already know where you're gonna end up with it. And I can tell you that now, so you don't have to waste like 24 months on it. so I guess, as you now are...I mean, you have an immense amount of experience. I feel like we could do 10 podcasts with you and they still may not be enough, right? As you think about the future that we are gonna go into...
And the go-to-market leader has, like, nine, ten, eleven, twelve types of go-to-market motions that are sitting at their table. Everybody wants budget resources and stuff, like, 'What do you see? Like, what does the future go-to-market leader look like?'
47:22
Like? Well, I think several changes and transformations occur. One of the reasons why I also wanted to come back and hold the CMO role, which is what I did in C3, was that a lot of things had changed from the time that I had been a CMO at Sea System. So from 1996 through to 2019, I mean.
I was the first person, as I said earlier, to have a drawing board to create a marketing automation product. That we never got around to it because we sold the company to Oracle before we could do it. But, on the back of my hand, I said I think there are ways we can transform the marketing process.
that would make it a fundamental part of revenue creation, as opposed to just sort of this party planning and expenses and expenses because everybody would just fire marketing. And that was kind of the first knee-jerk reaction to any type of, you know, market downturn. And, so I thought that was a pretty stupid idea. But, but...
You know, well, what would we build to do that? Why did these three people--Phil Fernandez, John Miller, and Dave Morandi--who had an idea, but no company at the time, and no product at the time (well, a company, but they didn't have a product)? They didn't have any customers or revenue, and they couldn't get funded. And the reason they couldn't get funded was because the venture community in general just said, 'Well, marketing is the first thing you get shot at, and they have no budget.'
And, you can't sell on an app per seat. You know, the business model sucks because Salesforce can sell a per seat to everybody. Basically, in the company, or at least the sales organization, which is huge, marketing has nobody in it; it has a few people and they have no budget to buy anyway. So, that was all the reasons why not. So, well, we need to create a new category. We need to redefine. we can call it something different than market automation. But if we do, we need to redefine the characteristics of it. So, I'm gonna get to my point about what happened today, and what would happen. So, I think that those guys did a great job, in category creation or recreation.
Buy, redefining the role: What is market automation and how would it play a role? How could it be quantitatively assessed, and how could we do it? You know that we now have the top of the funnel, middle of the funnel, and bottom, right? We have metrics and we track all this stuff, and we can find, you know, from an MQL to an SQL, etc.
he said, that stuff didn't exist, you know, he said.
49:46
They made people feel proud of their job, like, like I think it was and Market Nation or Marketing Nation, like the whole thing was, I mean, at some points, people would say this is a cult, but people felt proud of the work that they did, the impact they were making, the change that they were going through. I remember I think, this is even as early as, like, seven years ago
There were floors in the market that, if you were not in marketing, you could even access.
50:20
It may sound extreme as I'm saying it, but it actually allowed people to feel proud of what they were doing, so they became confident and could go and fight for this change.
50:30
You know, they did a phenomenal job redefining the role of marketing. But, we've also created a monster at the same time. I have talked about this on LinkedIn a few times, and I will probably do a more in-depth analysis of this to show it to be true.
For the most part, when I asked this in a room, I said, 'How many of you have clicked on a digital ad recently? How many of you have opened an unsolicited cold email that you never asked for? You know, there's all these topics about how you can create a better subject line and get people to [open it], but this is entirely wrong.'
You know, you're starting with demand, but you haven't earned the right to execute demand. You need to be recognized as a thought leader first. And that's a different set of what I would call, in my book Market Engineering. A lot of people can engineer a product. All the tech companies I've ever been involved in, either by teams or ones I've invested in, that built a product, it may have taken longer to build, maybe more capital, but they were successful. It doesn't mean that all the companies were successful.
The issue is that if you don't invest in market engineering, thought leadership, category creation, positioning, messaging, and storytelling—those are the five tenets of what I call market engineering—if you don't do that first, and you create a new category and install yourself as the category queen or king (or whatever you want to call it), and as a recognized thought leader, no one's going to open your email, no one's going to call you.
Once you do though, which is why when Tom asked me to build a new category called Enterprise A I for C Three, I went about thought leadership work with him. A book, different TV shows, different to, you know, I have a great asset. Right? I mean, it's hard when you're not that person, but he wasn't that person at one point, and neither was Marc Benioff, and neither were a lot of other people. When you have smart things to say and people, and you're giving people practical, pragmatic, and actionable advice, they'll listen to you.
So, your job is to get in front of that, and you know, you need to demand that the PR team that you work with, or your own, you need to go to a conference and weasel your way into a keynote. You know, you have to have smart things to say that cause people to think provocatively. And so, we began a strategy to build the Enterprise AI category. We did it digitally, by taking a ton of content and unpacking that content. That was all in PDFs.
And turning it into HTML that could be scanned by Google, so that way we got credit in the form of first-page organic searches. And we began to use the term Enterprise A I over and over and over again; it wasn't used at all when I first checked it. I mean, I think it was like one company that had been using it. There was a digital online newspaper called Enterprise A I, that was about it. I mean, very little now.
Enterprise A is all over there, and as a result, we were getting 3,500 inbounds a month without any outbound email; no SDRS, nothing. We couldn't serve all of the inbounds; that was an issue, and we ended up fixing that. But most startups and most existing companies have this problem: they want to lead with demand because it's an action, right? It's something, it's an action they can take and they can show: 'Look how many emails we send out; look how many phone calls we made.'
And look, now look how much capital you have spent to no avail. This is insane, and you're doing it wrong. You need to invest in thought leadership and a new thing. I'm working with a company to do this. You need to build a new category that we're calling, community commerce marketing. It's not enough for you to brag about your stuff; in fact, you shouldn't.
What you should have is your customers and users of your products bragging about your stuff. You need to find who those people are. Whether it's B2C or B2B is just a committee decision; B2C, it's an individual decision and you need to find those people, identify those people, engage them, activate them on your behalf, and even monetize that through paying them for being an advocate and a raving fan of what you do.
If you follow Jeffrey Demo, Jeffrey Moore was an app partner of mine at Wildcat Crossing. The Chasm. Pretty smart guy. He would say that if you want to cross the chasm, you need references. Well, today we need digital references and we need lots of them, and we need to be able to prove to people. So, I think the transition for marketing for go-to-market is not about screaming via email and outbound cold calls, etc. It's common.
Our people are trying to grab your attention. Instead, we need to work on thought leadership with these market engineering concepts. Invest in that first. The scary part is that it takes 12-18 months to build a new category and build up that credibility. And a lot of the venture community is not tolerant; they want to see immediate results, and they want to know how much revenue has been added. My argument is...
We need to keep the burn rate down significantly in the go-to from the go-to-market side. It doesn't cost a lot to do these things; it takes a lot of internal effort to do them. You need the entire team; it's not on the marketers' shoulders to create a new category. It's the CEO and the rest of the management team; they need to engage and help you build it. The marketer can help you activate it; they can take on duties/tasks to help get it done, but they're just amazing.
As a member of that overall team that's building a new category, it's insane to delegate that objective to a marketer. As we take a look at the evolution of marketing, I think we need to move to this community of commerce marketing, where we have raving fans, and work towards category creation and thought leadership.
And we need to overall recognize that it's not an overnight thing; it takes 12-18 months. And you can see, if you want, if you want a metric to watch, you can use Google tools or you can buy a Seos product if you want - pick your favorite; I won't mention any names. But you can see how many people are organically searching for either the name of your company or those terms. and they need to be interesting new terms; so, for example, 'enterprise' was the one that we came up with, and 'CRM' - customer relationship management. You need to come up with an interesting...
Category name that others can participate in—not you alone, but others can participate in—to help you build it. And then you need to use community commerce marketing to help people advocate on your behalf while you're the best company in that particular new category. So, I think this is the transition. It's not just about a chat GVT and generating content; it's about becoming a thought leader and being recognized in an industry for being provocative and interesting and smart about what the category that you're trying to build is all about.
57:55
OK, this is probably the third podcast we're doing on this, right? We respect people's time, so we have to cut the podcast, but we have to bring Bruce Kelly back. Do you have a question? Do you want to ask something?
58:08
I have one question because I think that approach is 100% spot on. I used to be a partner.
58:14
So, I saw this a lot, but one thing you're saying that I want to ask about is, are you suggesting every company needs to create its product category?
58:26
I don't think product; I don't think they need to create their product category per se. I think they do need to create a category or redefine an existing category. So, if you've come up with a new widget, that's a better widget that fits into a category that has previously been built, I think it's incumbent upon you to be able to redefine the attributes of the category. If you don't, you're gonna get crushed by the category leader in that category.
so, well, why? Well, because they define the rules, right? They're the ones who built it, or they were part of it. I think about Salesforce today. we ceded CRM to Salesforce; Oracle didn't do much with that. You know, random thoughts of CRM, I guess, but not a lot. And, Mark did a phenomenal job, you know, of redefining that, not CRM, but cloud CRM, right? We didn't have any, we had a small...
Cloud thing, but it wasn't really; it wasn't what we were talking about multi-tenant. You know, what we know as cloud computing today, Mark invented cloud computing and then just decided to apply it against CRM and some other areas. He did not go into the enterprise CRM initially that we owned. I think Salesforce is still the largest provider of call center technology; I don't think they've lost that.
So he would have been crushed if he tried to go in and sell Enterprise CRM. Instead, he goes, That's really expensive stuff that is selling. We have a much easier way for you to get your sales team. Aren't you tired of getting dominated? Buy those AI people who have to make all the changes to your CRM. Wouldn't you like to run it yourself? So, they went in and sold a small team.
And small companies. I mean, he's brilliant. I mean, he did a phenomenal job here, and it's very tough for us as enterprise CRM. And all of our revenue was predicated on, you know, one-time, you know, a one-time license deal plus maintenance, right? Marcus is doing that. We're gonna have a whole different business model. So, it is tough for people to compete against that.
So, your answer is no, I don't think you need to. I don't think everybody has to have a new, a new category, but I do think that they need to have something to say about redefining. If they're going to go into an existing one, I think they should redefine it, redefine what it means to be that, and then force the incumbent to have to respond to that new definition.
01:00:47
I'll share one thing with Bruce because he was kind enough to share it with us, community commerce marketing. I think it's super fascinating, as a concept, as you're talking about it. I'll share what I think is also happening is that, as they evolve into community 2.0, they have to start thinking about themselves as a platform for success because the weight they carry or the duty they have to perform is to get people to a destination. And if you think about it, there's a platform for sales called CRM. We talked a bit about it.
We talked a little bit about platform marketing, which is marketing automation. But I think as communities become their second or third version, they start to have to think about all the different things they do for people. So, I'm looking forward to it. If you're OK with that, we'll bring you back on the show. Because I think everything we talked about in this podcast is enough for people to digest too. But again, thank you so much for spending time with us. This has been phenomenal. Thank you.
01:01:52
Oh, you're more than welcome. I enjoyed it and am happy to. I have opinions on lots of things; whether they're right, you can debate all.
01:01:59
About--that's really what the show is all about--so, thank you. Thank you for being very kind with your time.
01:02:06
Thank you for listening to Unlearn. Subscribe wherever you listen, and visit UnlearnedPodcast.com for the transcripts.
.png)
.png)