The document summarizes a VC's views on marketing tech businesses. Some key points include: focus on retention and contribution over acquisition costs; rely on white hat SEO practices; use blended customer acquisition costs that consider both paid and unpaid channels; track the most important metrics rather than too many numbers; address major drop off points in the sales funnel; and have personality, be creative, and be bold in marketing approaches. Testing is important but shouldn't be the only approach used.

1. Marketing tech businesses:
a VC’s view
Rob Moffat
Pirate Summit 2014

2. Invest $0.1M - $15M
into tech companies
with $B potential
Invest across Europe,
help businesses go
international
Have invested in
>120 companies over
last 13 years
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3. Some of our team
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4. Me
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2000
2007
2009

5. Me
5

6. VC view on marketing
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7. VC view on marketing
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VC view on marketing

8. VC view on marketing
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9. VC view on marketing
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Retention
Contribution
Margin > CPA
or
Spend €€€€
before
working out:

10. VC view on marketing
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11. Rely only on SEM

12. VC view on marketing
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13. Do ‘black hat’ or ‘grey hat’ SEO
Stick to white hat:
• Well structured site*
• Quality, relevant content
• Quality, relevant links
*As defined by Google

14. VC view on marketing
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15. Total
customers
2,000 customers
€17 CPA
Use blended CPAs
€25 LTV business

16. Use blended CPAs
New
customers
Repeat
customers
Paid
channels
Free
channels
800
€5 CPA
Paid
channels
Free
channels
1600
€20 CPA
Total
customers
400
€5 CPA
2,000 customers
€17 CPA
800
€35 CPA
100
€35 CPA
300
€4 CPA
€25 LTV business

17. VC view on marketing
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18. Ignore your brand
Not just name: what do you stand for?

19. Basic marketing value statement
<Your brand>
is the
<what you do>
that will
<benefit to your user>
due to
<proof points>

20. VC view on marketing
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21. Do offline ads too early / without experience

22. VC view on marketing
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23. Put your faith in K-factor (referrals)
K = # of invites sent by each user
x % conversion of each invite

24. Put your faith in K-factor (referrals)
K = # of invites sent by each user
x % conversion of each invite
Occasionally >1 for:
• Games
• Consumer apps
• Developer tools
Usually 0.1 or less for: everything else

25. VC view on marketing
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26. Spend time/effort getting into tech press
Helps for:
• Hiring
• Tech early adopters (sometimes)
Doesn’t help for:
• Anything else

27. VC view on marketing
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28. Track hundreds of numbers before you know
which are the 3-5 which really matter for you

29. VC view on marketing
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30. Lose people in the funnel
(where this is in your control)

31. Lose people in the funnel
(where this is in your control)
Which to focus on:
20% drop out while choosing product
30% drop out when asked for credit card

32. VC view on marketing
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33. Depend only on A-B testing

34. VC view on marketing
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35. Use third party tools
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36. VC view on marketing
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37. Have personality
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38. VC view on marketing
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39. VC view on marketing
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Be creative

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41. VC view on marketing
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Be bold

42. Questions?
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@robmoff
rmoffat@balderton.com
www.robmoff.com