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Dave Gerhardt (Founder of Exit Five, former CMO) and guests help you grow your career in B2B marketing. Episodes include conversations with CMOs, marketing leaders, and subject matter experts across all aspects of modern B2B marketing: planning, strategy, operations, ABM, demand gen., product marketing, brand, content, social media, and more. Join 5,000+ members in our private community at exitfive.com.
Dave Gerhardt [00:00:08]:
Exit, exit. Want to know what always works in B2B marketing? It's not sexy, but it always works. The fundamentals, the story, the strategy, your icp, who you sell to, that is what will always outweigh the growth hacks, I promise. And my guests on this episode took me back to those fundamentals. w Davies is CMO at Paddle. Paddle provides the complete payments infrastructure for 4,000 software companies. And w runs a team of 30 marketers powering their mission of being the most helpful brand in the space. I think that is the best B2B marketing strategy to help your customers win.
Dave Gerhardt [00:00:50]:
And I love w and the team's mission of being the most helpful brand in the space. We talk about that, how they do it, how they're executing on it, and just what the life of a high performing CMO looks like. Here's my conversation with Paddle CMO Andrew Davies. All right, I'm excited to have my guests on today. w, good to see you, man. How are you?
Andrew Davies [00:01:11]:
I'm very good as well. Thank you for having me on.
Dave Gerhardt [00:01:15]:
And where are you right now?
Andrew Davies [00:01:17]:
I'm currently at home, which is in the middle of Nowhere in Ottery St. Mary, a tiny village in southwest England. So, yeah, we're out in farmland. It's beautiful down here.
Dave Gerhardt [00:01:27]:
Farmland that's like me. We have a, we have a connection. Right now I'm in Vermont in the States and it is definitely the country land. Also, I like the. I can tell where you're at. I can tell by the beam and the stove back there. It's very lovely.
Andrew Davies [00:01:40]:
It's about a 300 year old farmhouse and so lots of maintenance, but beautiful place to live.
Dave Gerhardt [00:01:46]:
Oh, that's amazing. We've been living here in the country for about two weeks now and every single day something has happened. Like three days ago I put gas. I put gasoline in the diesel tractor and ruined the engine because we, we bought the tractor off of the people who sold this house and it ran out of gas and there was a tank in the barn and I figured it was for that and I put it in. And then this didn't start after that, so. So there's that. It's like every time I touch something, something breaks. And then two nights ago we had the big drama in my house was my kids were sitting on the couch and my cat, one of our.
Dave Gerhardt [00:02:24]:
We have two cats. And one of the cats came walking down the stairs with a bat in its mouth.
Andrew Davies [00:02:29]:
Yeah, lovely.
Dave Gerhardt [00:02:32]:
So, all right, you. I'll let you say it, but you're CMO at Paddle, what is Paddle and then what is your role? How do you define, like everybody knows cmo, we're talking a bunch of marketers. But how do you define what, what your role is at this company? What are you responsible for?
Andrew Davies [00:02:45]:
Yeah, of course. So if we talk about PADDLE first, we're a business that takes care of the complete payments infrastructure for about 4,000 globally operating self serve software businesses. So if you're trying to sell your software via a checkout on your site, you probably sell it to everywhere in the world almost accidentally. You're born global, you're competing with everyone in the world. And the problem with that is there's loads of local regulations, local sales tax, you've got to deal with local currencies and those are big company problems that you've got to face in the very earliest stage of your company history. And so we take away all of that liability and all that complexity for you. Prices about $1.2 billion a year for those customers all over the world, but particularly in small local economies who are scaling everywhere else. So that's what we do.
Andrew Davies [00:03:27]:
And we also have a couple of other pieces of our business as well. But that's the dominant part of our business. And yeah, I served the business as CMO and previously I was a founder who then got acquired and then ended up running global marketing and Optimizely which was the kind of group that was formed out of the people we sold the business to and walked into Paddle into a business that had grown exceptionally fast pre Covid and through Covid and now needed to put in place some muscle and some foundations to go to the next layer and go to the next level. And so yeah, marketing at Paddle, it covers all the normal things you'd expect. Product marketing, content, it covers demand generation, we have some inbound BDRs and it also includes our self serve revenue portion. So yeah, that's a bit of the business.
Dave Gerhardt [00:04:09]:
I said how did you land at Paddle? What was the path from and how long were you at Optimizely post acquisition?
Andrew Davies [00:04:16]:
So we were about a 60 person business. When we sold, we went into an Insight Venture Partners backed asset which was called Episerver, which was about 400 people and then we grew to 1600 people in 18 months or 24 months by acquisition. So aggressive M and A to build up that business. That business is now, you know, I think probably 400 billion plus in revenue and profitable, going really well. And after doing a couple of years there, I wanted to go back early stage. I told My wife. I'm either going to start a new business or I'm going to stay with optimize little ipo. And then two weeks later I was doing some advisory work with different clients, different earlier stage customers.
Andrew Davies [00:04:51]:
And one of those was Paddle and my series A investor was Paddle Series A Investor. So I knew some of the board and Jimmy the CEO, now the CEO here at paddle, pulled me in to do a demand gen audit and I worked for about four or five months behind the scenes just trying to help out and then they, they dragged me kicking and screaming into a full time role. No, no, I'm having, I'm having loads of fun.
Dave Gerhardt [00:05:12]:
Yeah, that's right. Show me the money and I'll go now.
Andrew Davies [00:05:16]:
I love being part of a team. I love being part of a team and that's the big thing. Like the advisory stuff is all good fun, but if you're a fractional, you're never part of that team. That makes an impact and that means a lot to me.
Dave Gerhardt [00:05:26]:
Yeah, man, I feel that deeply. I think I was doing the solopreneur thing like running Exit 5 as my solo business after my stint as a CMO. And I was like, this is for about a year. I was like, this is great. I work for no one. It's just me. And I didn't realize until now having a team of five, like working on things together, collaborating on things together. Like we had this idea, we got the landing page out, we got 60 people that bought tickets.
Dave Gerhardt [00:05:49]:
We're doing this thing like you know, right now during these podcasts I keep notes in a Slack channel so we can like take them out. Like it makes it easier. And I'm not talking to no one. Danielle on my team chimes in, just said, andrew, tell him I said hi. You know, it's like it's fun to be doing things with people. So I want to talk about the main chunk of this interview. I want to talk about like what the marketing org looks like at Paddle, what you're doing. But a couple of things in there that I want to follow up on.
Dave Gerhardt [00:06:14]:
First of all, what was it like for you going from being founder and a CMO of a, of a startup, selling it to a company and then becoming like head of marketing again. What was that experience like?
Andrew Davies [00:06:26]:
It was great. I mean I was an accidental marketer at the beginning. I picked up marketing because that was the job that needed doing at the business we founded. And you know, I did a business degree, did a bit of marketing in that, but everything was just taught on the job, right? It was just trying to work out what had to be done and then going and doing it. And for our existence as a startup, the business was called Ideo. It was a personalization platform, content personalization, and Ash was our biggest problem. Trying to eke out that next bit of growth, trying to make sure we were a business that was going to have a future with a cash balance that constantly needed topping up was our biggest problem. And then when I stepped into optimizely, suddenly you see the other end of the spectrum where complexity is the biggest issue.
Andrew Davies [00:07:05]:
And I think often in the early days you yearn for some complexity and stability because you just got no cash. And in the later days you yearn for some simplicity because you've got too much complexity. And so it was really interesting to see the earlier side, the later side, and paddle's kind of right in that middle. You know, we don't have any cash concerns, we're fully funded, we can run all the way we need to at default, alive. But also complexity is rearing its ugly head as we keep scaling. And so it's fun to be in that mode now between the two. But no, I love variety and so I love the early stage, I love the later stage, but I definitely biased towards a mode where there is a very close connection between action and impact, which is what I really yearn for.
Dave Gerhardt [00:07:42]:
It feels good to hear you say that, actually the complexity piece, because it's like, it's almost like this grass is always greener mindset. You might not have the cash, but you'd kill to have the product market fit that optimizely had, right? And then when things get more complex, you just want things to be simple again. You're like, man, I wish I had just had a team of five and there was no meetings and no BS and we can just go do things. Is that, is that just the ebb and flow of business? Like, do you think there's some value in there? Like, is there value in if you want to be a leader, whether you're, you know, executive, a CEO, a founder, marketing leader, there seems to be value in seeing both sides. Unless you're only going to be early stage person ever. Like, even though that's uncomfortable, it seems to be from people like you and others that I've talked to, even some of my own personal experiences. It seems like when you get out the other side of that, you look at it and you're like, you know what? That kind of sucks. But I learned a lot from going through that Today, Yeah.
Andrew Davies [00:08:37]:
And I think we learn the most from those hard experiences, right? Those difficult experiences, those new experiences. But I think the most important thing here is that you've got to find comfort and peace and value where you are. And if you can't find that, then yeah, you're going to find a different environment. And so just yearning for the grass is always greener. A different type of company environment. I don't think it's healthy for anyone. You've got to resolve that in yourself to find the value of the moment you're in. And I certainly did that the whole experience.
Andrew Davies [00:09:02]:
Through Optimizely I learned a huge amount. Multi product, multi geo, multi language. The challenge of all these different ICPs as lots of companies got shunted together the two years in a row, three to one, Marketo and Salesforce merges that, you know, burnt my eyeballs the amount of rows of data we were looking at. But great fun to work it all through.
Dave Gerhardt [00:09:21]:
Do you know Tom Wentworth at all?
Andrew Davies [00:09:23]:
I don't think I do.
Dave Gerhardt [00:09:24]:
Okay, so he's a CMO from where I'm from, like the Boston area. He was CMO at recorded future multiple hundreds of millions of dollars of ARR and then they eventually sold to MasterCard. Anyway, he's a CMO friend of mine. He always talks about there's like HubSpot, like the best kind of top of the funnel plays ever. One of them is like HubSpot's website grader, right. They built a free tool, you go in, you plug your website in, they tell you everything that's wrong with it and then they happen to have a product to solve that problem. The other one he always would mention to me is Optimizely, like how you could actually go put your URL in, run a no code test, see what Optimizely would look like on your site without having to do anything. And so whenever I hear about optimizely that makes me think it brings me back to that example of great tools.
Dave Gerhardt [00:10:08]:
And he always, it's still to this day he'll be in airport and he'll send me a picture of an optimizely ad. Do you think being a founder and entrepreneur, like have you embraced that as your in your role as a marketing leader? Does that help you in any way versus being the like you're not the traditional cmo. You didn't. I think my guess is paddle is in the hundreds of millions of dollars in ARR. You didn't spend 15 years at Salesforce and now you're the CMO of this company, you've kind of taken the more entrepreneurial path. Obviously we're going to be biased because we believe it's true. But tell me about how you think that's helped you in your career as a cmo.
Andrew Davies [00:10:43]:
Yeah, I think there's three things that helps me right now. The first thing is that you have to understand the value chain of your business, your market, the fundamental unit economics of your business if you're on that founding team. And one of the things I often find marketers don't do if they're professional marketers who've never been in a P and L ownership role before, is not understanding enough about the market, the value chain they sit in, and the unit economics of that business. So that's the first thing I think is really important. The second thing that I think is really important is that the joy I have right now is that I'm serving my own Persona. Like we are selling to software founders and I've never been in that situation before. I've always been a founder or CMO trying to sell to other people who didn't look like who I was. So it's a real joy to serve our own Persona.
Andrew Davies [00:11:25]:
And the third thing is PADDLE is in that beautiful scale up phase where we've got the ability to place some bets on the marketing side. And therefore you often are functioning as a bit of an entrepreneur because you're wanting to experiment. It's not just churning out another ebook and trying to get a few more MQLs. This is, you know, we've got a lot of opportunity to try and market make and so bringing an entrepreneurial kind of view to that I think is really key.
Dave Gerhardt [00:11:48]:
Yeah, it's like you care more about, you have, you're rooted in like the marketing is just the thing that we're doing, but the overall goal is driving success for the company. I'll do whatever inside Sal, outside enterprise value.
Andrew Davies [00:12:00]:
Absolutely.
Dave Gerhardt [00:12:01]:
Okay, we're going to get to talking about the marketing team at paddle, I promise. But you mentioned that. So the CEO at Paddle, you came in as an advisor and you did the demand gen audit. What does that look like? What did you do? And obviously the company. That was only two years ago. Ish. Right. So the company already had some level of success and scale.
Dave Gerhardt [00:12:21]:
What did you come in and do? Take me through that audit.
Andrew Davies [00:12:24]:
Yeah. So I think at that point it was three years ago, so we were probably 160, 170 people. We're probably nearing 300 now. And I learn by doing and by talking to people, I'm not going to download loads of spreadsheets and analyze it for weeks on end and then come up with a magic opinion. I'm just not smart enough for that. So it was jumping in and chatting to the existing marketing team, the existing sales team, the product leadership, trying to understand where the gaps were, where they saw the gaps were, then stepping back and thinking about what this could look like if we really applied some thought and some outside in perspective. So for me there were a few things there. There was an awesome team and there's some leaders in our marketing function who pre existed me, who have stayed with me on that journey.
Andrew Davies [00:13:03]:
And it's great to see them have real ownership of parts of our function now. But they were operating on much less resource and they were operating in a very sequenced we're going to do this and then we're all going to do this and then we're all going to do this fashion. So the first thing I really felt was there was a need to build parallel activity I love in the marketing function. Building brand and attention and building demand by constant, constant lightning strike updates things that a surprising volume of things that are going on that match what the customer needs. And so I felt this really to increase the volume of activity. Secondly, there was lots of good understanding about our customer, but our ICP was changing as the company scaled. So it was a real need to step back and think about that ICP because we were generating quite a lot of demand. But it wasn't.
Andrew Davies [00:13:49]:
So it actually wasn't a demand, kind of a pipeline problem in terms of overall dollar value. It was the quality of that pipeline wasn't the right quality of pipeline that the sales team could go and close and that would turn into revenue fast. And so that was the challenge we needed to go and solve. And then thirdly, there was already the notion of a brand refresh. I wasn't kind of the classic faux pas of a CMO coming in and saying, let's change the palette on our website. We've got to do everything differently. They already knew that there was a big refresh to come through because they were in the technical blues and cartoony kind of early stage where it's cute for a bit, but you've suddenly got to realize you're managing billions of dollars of people's money and you've got to work out how you build this brand and perception that actually lives up to the level of credibility you hold and stats you hold in the market. And so there was a need really to up the game on that front too.
Andrew Davies [00:14:36]:
So those were a few things that we were picking out, but a lot of it was really about just doing more. Just having the trust to go into the exec room and say we need to do more, we need more budget, we need more headcount. And that's going to enable us to go.
Dave Gerhardt [00:14:47]:
Do you have any overall like guardrails or guidelines for your own business or somebody else's business? It's like sometimes I get lost in the weeds too much. And for me it always is. Like it ends up being like, let's work backwards. Like, look at the last three months of new customers. What do the best customers look like? Where did they come from? And you can find a lot from there. Do you have any kind of just like first principles thinking that you rely on for something like that?
Andrew Davies [00:15:13]:
Yeah, I mean, I agree with what you just said there and then. Also, everybody wants to talk tactics and channels. They want to talk about what's working or what's not working. And for me, the first principles approach here is do we have a tightly defined market that we deeply understand? And I'd much rather have a difficult conversation with the board that the market size is too small, but we deeply understand them than a difficult conversation with anyone that the market size is a multi billion dollar one, but we don't really know who they are or how to reach them. So firstly, shrinking down to, as you say, those perfect fit customers who are going to be insanely successful by using us and we've got proof in previous customer acquisitions that makes sense. Do we know everything about them? How often are we meeting them? How are we learning from them? And then the second piece is, do we have a message that matters? Horovitz says the company's story is the company strategy. And often in the demand infrastructure, I often find that the message, the narrative is the least optimized piece of what's going on there. And I've yet to see a marketing function that doesn't have a tightly defined market, that has a tightly defined market and has a message that matters.
Andrew Davies [00:16:13]:
Where the tactics and channels don't just look after themselves. You've got to focus on those two main things because if you've got those two things right, anything works. Steak dinners work, running an event in Vermont works, you know, sending people gifts work, running webinars work, A boring ebook works. But if you don't have those two right, then nothing works.
Dave Gerhardt [00:16:30]:
Oh man, I love that. It's so true, but it's so easy to be like, well, everybody knows about the story and positioning, it's got to be something else. It's got to be like the targeting on our ABM campaign. And it's like, no, the, the clearer we can get defined on this, on the story, on the niche, on the who we're selling to. And I'm lately I've been talking to a lot of startup founders and marketers who work at less established companies. And I think, especially with the rise of AI, you know what the number one challenge right now I think in marketing is it's differentiation. It is we all kind of sound the same, we're doing the same things. And I think that really comes from lack of storytelling positioning.
Dave Gerhardt [00:17:11]:
And I think understanding that positioning is not just a marketing, it's not a marketing exercise, it's not a what messages on the website marketing exercise. It's a fundamental like company strategy conversation that needs to happen.
Andrew Davies [00:17:25]:
So on positioning, that was super interesting. As I've walked into paddle, it was one of the jobs to be done because they'd just done a piece of work with quite an expensive external consultant and they'd rebranded or remessaged as the revenue delivery platform and they had a whole story that sat behind it. And I didn't understand it because for me, revenue delivery sounds like sales tech, sales intelligence. It doesn't sound like core payments infrastructure, which is what we do. So I listened to gong calls and I would hear sales reps say things like, the marketing team has decided to rebrand as. So let me explain what that means. Or as a company, we call ourselves a revenue delivery platform. So let me tell you what difference this makes in your life.
Andrew Davies [00:18:04]:
So instantly I was hearing feedback, data driven feedback, that the message was wrong. And when we did the panel testing, we use Winter, when we did the panel testing, the question that people asked when we talked about what we did was what is it? Rubbish positioning. So we changed to something pretty boring quite quickly. Just the complete payments infrastructure for software. And suddenly the question that was coming back was how do you compare to Stripe? So suddenly, now there's a strong position in the market and I'm super happy all day long having conversations about how we compare with Stripe. Fantastically well run company. They're a supplier of ours, we also compete with them in the marketplace. Now if the question is how do you compete with Stripe, we're in the right conversation.
Andrew Davies [00:18:39]:
The position is correct.
Dave Gerhardt [00:18:40]:
Yeah, it's like now that's the only thing we have to answer. You shrink the universe of objections and you just can focus on answering that one, that's tough because I always struggle with that. I feel like everyone always wants to know how you're different than X. Like they always going to compare you to a frame, you know, to something else and. But I think in your point, like if you can shrink it down that that's better. All right, I'll shut up. Well, take me into paddle. What is the company size today? How many employees at the company today and then how many people are on the marketing team? Let's start there.
Andrew Davies [00:19:09]:
Yep. So I think we're about 280 right now. In the overall company, product and engineering are the dominant function of all of the different teams. And in the marketing function we have about 25, 26 people I think. And outbound BDRs, outbound SDRs sit with sales. And so 25 is the central marketing function, including a few inbound BDRs, demand product marketing, content, brand creative, events and the rest. And that team is based all over the world. We have a hub and hub strategy where we've got hubs in London and Dublin and Lisbon and Atlanta and Austin and we try and hire within two hours of those.
Andrew Davies [00:19:45]:
We've got a good span across mostly Europe and the U.S. yeah. So that's the size and shape.
Dave Gerhardt [00:19:51]:
Got it. Did I hear you that you have hubs? Are there offices there or. Everybody's remote.
Andrew Davies [00:19:56]:
So London has an office. Some of the others have WeWorks and so yeah, some of them are emergent. We're just putting an office there now and just trying to hire around the area with the main thought that people can work remote. We're remote first but we can bring people into a cross functional hub for an off site or as part of our comms if we need to.
Dave Gerhardt [00:20:13]:
Got it. Okay. So that's a fun size. 25 people on the marketing team, 280 people in the company. You still probably can know everybody at that stage. There's nothing, 15 layers of VPs, you can still get stuff done. That's fine.
Andrew Davies [00:20:28]:
Yeah.
Dave Gerhardt [00:20:29]:
So how do you have the team? People really like to hear like, okay, you got a team of 25. You kind of brush through the roles quickly. But people like to hear like how do you have the team split up and then who reports to you?
Andrew Davies [00:20:40]:
Yeah, totally. So we've got Jess, who's my VP of marketing, VP of integrated marketing. She runs our brand team which includes communications and our PMM team, product marketing which includes content and our creative team that all rolls up under her. And then we've got ahead of demand gen PAOLA who leads kind of the channel ownership, the different email and ads, etc. HubSpot as well as the inbound marketing team. And then I have a solo chap on the side called Tarshan who is my experimenter, who's an IC that reports to me directly with no team ownership. And together we run problems that are cross functional, have business impact, but have not been done before. And so yeah, those are my three direct reports.
Dave Gerhardt [00:21:22]:
Ah, three. That seems nice. That's the way to do it right there.
Andrew Davies [00:21:27]:
I had a much broader span when I came in and you know, part of this is working out what you as an individual can contribute to the organization. And if we think about my time, about 50% of my time is outward focused. It's customer meetings, it's prospect meetings, it's speaking at conferences. And so I need to have really strong leaders internally to run the marketing function, the business as usual. Otherwise I just wouldn't be able to do that for the business.
Dave Gerhardt [00:21:50]:
Yeah, this is the hardest thing for me coming up as a first time marketing leader. And I think I'm saying this because I think a lot of people struggle with this. It's like the job changes from being individual contributor in marketing to now with a team of 25. Like, you can't, it's this balance of like, you can't be in the weeds doing all the things, but you have to kind of know what's going on and play more of a strategy level role. I remember I had a team of maybe like 10 people at the time. It was the first time I was VP of marketing and my colleague who's a VP of product who is much more experienced than I am, he pulled me aside one day and he's like, hey, can I give you some advice? And I'm like, no. I mean, yes, obviously you can, but my internal ego is like, no. He's like, hey.
Dave Gerhardt [00:22:33]:
He's like, the key to being an effective leader is like, you got to stop trying to do everything yourself, man. Like, I see you trying to like be you're going to kill yourself. And you hired people like you need to let your team go and you need to get out of their way. And I've also had another boss who was like two hands off. And so I think finding the balance is really important. But that was like a, that was an important lesson for me to realize like, oh yeah, the team is the, and the people are the way. And I think oftentimes in business the cliche of like, oh, the people is everything, hire is everything. It's very easy to roll your eyes on that, but it really is the only way to do this successfully at scale.
Dave Gerhardt [00:23:10]:
Right?
Andrew Davies [00:23:10]:
Yeah. And the way I think about it is I'm not smart enough to be that or kind of autocratic top down leader who's micromanaging and knowing everything about everything. The way I think about it is that I love to try and teach the rules of the game so everyone else can play the game for themselves. And so in a business like ours, the rules of the game are how much budget do we have, what are the targets we're going after, what's a detailed definition of the customer and you know, the overarching goals we're going for and if we can set those well. And then it's about giving feedback and it's helping people and coaching them on their route to playing the game themselves. So that's really my preference of how to try.
Dave Gerhardt [00:23:43]:
And I love stuff like that. I think I want to like yell through the microphone because I think it's so easy to roll your eyes and be like, oh, that's too simple. But like it always comes back to the simple stuff. It always comes back to the fundamentals, like what's our goal, who's our target, what is the budget? Otherwise like, why are we doing this? Maybe you're going to have experiments and you're going to run them as some smaller percentage of the overall mix. But like why are we doing this? And I've always liked the activity of like stop having the team like every once a quarter be like, let's talk about, let's do stop, start, continue. What are the things we should stop doing, what are the things we should continue doing and what are the things we should start doing? Because so often you just get in this rhythm of just like everyone's doing marketing stuff and like team is burnt out and everyone's busy but we're not making progress towards our goals. And that's like the worst combination.
Andrew Davies [00:24:31]:
Yeah, 100%. And I'm the biggest failure on that front. I'm the person who says yes to absolutely everything and I've got five new ideas to run at and so I load up the team with too much. And then you do have to have those kind of moments of catharsis where you say, okay, people are looking in too many directions, we're doing too many things that are a mile wide and an inch deep. Let's stop and let's think about what we can remove. Stop, start, continue as you say. Because really, although I love volume of activity. I think one of the challenges as you start doing that on a limited resource is you start doing.
Andrew Davies [00:25:02]:
Putting too much effort into the creation of the thing and not enough effort into the distribution of the thing, and you end up doing lots of really creative campaigns, executions, dinners, events, whatever it might be, and none of them have the impact they could have because you haven't allowed the time to breathe and let them evolve and iterate a few cycles. So, yeah, wholeheartedly. Agreed. And I'm the worst of that.
Dave Gerhardt [00:25:23]:
I wouldn't. I wouldn't know anything about that. Just having. Being like, I'm the same guy that will be like, no more. No more new stuff. We need to focus. We're only going to do these three things. And like, two hours later, I'm like, have you seen this? We need to be doing this.
Andrew Davies [00:25:38]:
Yeah, my team will be laughing right now.
Dave Gerhardt [00:25:41]:
I can't help it, but I think that's where, like, having a strong team really matters. And I think now I've. I've worked with a couple folks long enough where, like, you have to be able to push back on each other. Right. Just because you're the boss, you're the cmo. Like, don't you love it when your team is like, hey, man, this is a great idea, but, like, if we do this, we're not going to be able to do this and this. And you're like, oh, yeah, actually. Right.
Dave Gerhardt [00:26:01]:
But I also think you need to be able to. I've gotten frustrated in the past with the team where they're like, you're. You're changing directions too much. You're giving us too many ideas. I'm like, that's my job. Like, your job is to be able to filter and figure out, like, what's important or not. Because I'm doing this, by the way, with the CEO. The CEO is sending me a thousand things we should be doing, and I'm trying to, like, you know, filter with her and being like, no, we can't do that.
Dave Gerhardt [00:26:24]:
We can't do that. And so I think if you want to. This is. I'm saying this on the podcast because I think if you're not the marketing leader, if you're another member of the team and you want to grow your career, you got to be able to push back. And there's a difference between just. There's a difference between pushing back and being, like, getting defensive and saying, no, no, w, I'm not doing that. Versus, like, hey, let's talk about that. That's interesting idea.
Dave Gerhardt [00:26:45]:
But does that take place from this? How are we going to rob from that? Like, you gotta have those conversations. You're not a dictator. You gotta have like back and forth discussion on the team. And that's the only way you can make things work.
Andrew Davies [00:26:57]:
And I think having those conversations not just as pushback, we can't do this, but how could we make this happen? Is a great framing. You know, what additional resource do we need to have in order to make this happen? Or what else needs to pause or stop in order for us to make this happen? Or what will the cost be in our team? Maybe from a overwork, burnout or morale perspective if we let this happen? And is that possible, is that acceptable within the short term? Having those conversations, I think are great. And there's a few things I love. I love people coming up with customer insight that I've never seen or heard that they brought because they've been speaking to customers directly. I love people who are pushing back in a way that says, not no, we can't, but no, we can't on given constraints, how can we change those constraints? And I love people coming or me finding out about things that I never had my fingerprints on at all and have been executed somewhere in the function. And I just learn about them after they've been in market for a few weeks. And, you know, that's my favorite thing is just turning up and finding stuff that's happening that's cool that I never thought of, never initiated and never ran with.
Dave Gerhardt [00:27:56]:
Let's get tactical for a minute. If you had to think of one or two of the most effective marketing campaigns that you have run, the team has created at paddle. Give me one of them.
Andrew Davies [00:28:06]:
So one thing that's really interesting about PADDLE is the complexity of our customer size difference. So we have customers who are first dollar rep revenue, right? And we've got customers who are processing hundreds of millions of dollars of revenue. And we take roughly five, five and a half percent of each of those ARRs. So it can range from literally pennies, cents all the way through to tens of millions of dollars a year. And so we can talk about experiments and things that have worked at both sides, but they look so different, and we've got to make sure they always look different because the same tactics do not work for the same. So down the bottom, one of the experiments we ran a year ago was we thought, okay, why can't we just find more ways of helping customers go live? And we built what we call the AI Launchpad. So it's an accelerator program, we threw in some marketing budget as a cash prize. I think the first one was $25,000 as a cash prize.
Andrew Davies [00:28:56]:
We invited AI founders from around the world to apply. We got discounts from AWS and Google Cloud and a whole bunch of other vendors. It was a really compelling package. We took no equity, we charged no fee. And I think the first Cohort we had 50 founders on. The second one we had 170 founders on. We found that was too big. So this current cohort is back to 70 founders.
Andrew Davies [00:29:15]:
And it's a vibrant slack channel and zoom calls multiple times a week. And they're all helping each other. And every, every cohort, we have a whole bunch of them that actually choose to use PADDLE as their fundamental mor, the payment processor. But we also see them get funded, get onto new accelerator programs, win customers. We see their revenue grow. And so that was, that was an example of something that really cost very little but worked exceptionally well and is still working right down at that bottom end.
Dave Gerhardt [00:29:41]:
I bet you doing something like that also creates like a halo effect where like even people not directly tied to that campaign, like overall traffic and awareness is going to grow for paddle, right? Yeah.
Andrew Davies [00:29:51]:
Because now everybody who is on that cohort, they want to share with their friends. And they're not sharing paddle's value prop with their friends, they're sharing the cohort they're part of and how we've helped them. And one of our core brand principles is we want to be the most helpful brand in the market. And that means often things that are outside of our product value proposition. It means community, it means our execs leaning in and providing coaching and expertise into the market. It means bringing data into a conversation when we're giving a keynote or when we're producing content. And so, yeah, this is one way we can be super helpful at the bottom end, at the low end of the market. And we really see that payback in spades in terms of how people appreciate and share.
Dave Gerhardt [00:30:29]:
I love that line. I just wrote it down. Be the most helpful brand in the market. Not that the line is so great, but more just like having that line. I think something that is missing in a lot of oftentimes in marketing strategy. That line actually tells me a lot about your marketing strategy. Right. It's like you need to have, you need to have principles on, like, not just the tactics.
Dave Gerhardt [00:30:49]:
I think it's very easy to be like, here are the goals, here are the tactics, we're going to go do them. I think you need like statements like that, okay, but how are we going to do marketing? Right? We're going to be 100% field driven, hardcore events, dinners, sales, led. Okay, great. That's different, right? You having this statement saying like, okay, we have our goals, we have our tactics, but how, how are we going to do that? We're going to do it by being the most helpful brand in the space that then dictates how you're going to go do the things in the marketing bucket, right?
Andrew Davies [00:31:20]:
Yeah. And we have three questions. So firstly, is it helpful? The second one is we say firstly, is it helpful? Secondly, we say, is it, is it impacting? So is it being distributed? Is it actually hitting? And the third one is we talk about whether the processes and the campaigns and the activities that we're doing, whether they are actually personal. So helpful, personal and impactful. And those are three kind of gates that we try and run everything we're doing through. And that personal one is also really important because you can be helpful but without being personal. And we find the best way of collecting understanding about the customer is in high fidelity conversations. It's around the dinner table.
Andrew Davies [00:31:57]:
It's having conversations like this. We find that the best way that we can, you know, talk about our story is for our customers to do it themselves and for them to preach our gospel. So it's personal. So I think those three words are really important to us.
Dave Gerhardt [00:32:10]:
All right, what about anything, anything that your marketing team is not doing that is considered like an obvious thing or a best practice for every other company? Making up an example like this is something that I want to hear. Like actually we killed all of our Google AdWords spend. We don't do any of that. We do X instead. Is there anything that you're intentionally not not doing that is typically seen as like an obvious best practice?
Andrew Davies [00:32:35]:
So we don't really churn out ebooks and gated content assets. We don't do much of that at all. We do some longer research papers. But you know, that kind of motion is not something we've invested in. We do less and less big trade shows. I much prefer a dinner with 10 founders or next year we'll be investing in retreats where we bring those founders away for a day or two rather than going to big trade shows where we're just having to sift through the lead scans to work out who is a great fit customer and who can benefit from us most. So those are two examples. And you know, there are a few things that we are not doing enough of yet.
Andrew Davies [00:33:09]:
But I want to do More of which certainly include how can we build apps that are lead generators and lead gates rather than just thinking about campaigns, things that have recurrence and repeatability to them. How we're using influencers, we're pretty early on that game right now and so we need to make sure we're building out relationships across the market who can again tell our story to their audiences. There's a bunch more we want to do as well.
Dave Gerhardt [00:33:32]:
And do you think you're doing something like, are you doing something in place of ebooks or have you, is this, is that just not a part of the funnel? Because I found that like the reason people do ebooks is because they want some level of like hand raisers. Even if they're not ready to buy the product, they want some level of like intent. Like, okay, these 200 people work in ops and could buy our product. Have you substituted that with something else? Are you like, instead we just want everyone to come to our website and we know if we get them to our website they're going to sign up for free and get into our product or chat or is like on your site you have get started now is that like free? Can you get started for free?
Andrew Davies [00:34:08]:
Yeah. So you know, our contracts generally have no teeth. You can just get started or through sales or via, via our self serve. And until you're actually deploying us and processing, we're not going to see any revenue. So yeah, absolutely, you can go in and get started. We've got a good developer experience and we see revenue flow from that every single week from people who just come across it, click through Gone Live and then we see the volume.
Dave Gerhardt [00:34:30]:
Right. So I think it's like in your model it makes sense to just drive more people to like let's get people to the site because they can either get started for free or they're higher end talk to sales.
Andrew Davies [00:34:38]:
Exactly. And fundamentally a lot of our people talk about category creation. Fundamentally. If all software founders out there in the market know that there's two options for how you build out your billing. There is a, you know, get a PSP like stripe and then add on all of these other tools as you scale, or there's user service like Paddle, which is technically called a merchant of record, where we bundle all of these things for companies just like you and you only have one provider. If people knew there were those two choices, then there'll be no issue about our growth for the next 10 years. And so a lot of what, what we need to do is to make people problem aware and solution aware and that often the best tactic isn't ebooks for that, it's talks and it's going to conferences and it's meeting people face to face and it's working with those in the industry who influence and it's.
Dave Gerhardt [00:35:23]:
Yeah, I think we also like the ebook stuff because it's, it's easier to measure in some ways like you know, going on a bunch of podcasts, going doing a bunch of talks. The tail of that is a little bit, takes a little bit longer and it's harder to measure but it seems to definitely seems to work better. What's your opinion on AI for B2B marketers?
Andrew Davies [00:35:42]:
I think it's at the same time killing us and helping us survive. I'm sure we're all totally overwhelmed by the amount of outbound of various quality coming into our inboxes and our LinkedIn email. So I'm struggling with the overwhelming amount of that just like anyone else's. The bits where I find real value and we find real value are number one, helping non technical marketers be technical marketers. I find that really interesting. And number two, it's where we have quite a large amount of data on our current customers, but also on our prospect universe. We have a free metrics product which we bought off ProfitWell, which has about 19,000 active companies on it and we see a bunch of data that flows through that. So with the assets and knowledge we have on the content side and with data we see out in the marketplace, we're very interested in how we can use AI to build growth guides and advice for people based on what we're seeing and how they could grow better.
Andrew Davies [00:36:33]:
So those are two areas that I'm really interested in.
Dave Gerhardt [00:36:35]:
Do you think it is overhyped, sufficiently hyped, underhyped? And I'll give you my answer and maybe you can either disagree or I think that it's the biggest wave to ride in marketing since the creation of social media. And I think it's easy to be like oh like it's overhyped AI copywriting sucks and like we're not just going to crank out blog posts, but I think there's something that people are missing which is like I see it as I've kind of always been like a full stack marketer, right? Like I can write the copy, I can make the landing page, I can mess around in canva, whatever. Like I can do the thing end to end. What's possible for somebody like that is like we're talking about, you can make videos you can make images, you can do audio, you can do demos. Like, I think that if you're a full stack marketer, this AI stuff is going to be the number one thing in your toolkit to enable you to do more without having to wait for a developer. Instead of me having to be like, oh, should I, you know, or a designer, should I go take 16 months, 18 months and go learn Photoshop? No, I can, I can customize. And not all this stuff is possible today. Like, the AI images aren't great, but I can see where things are going.
Dave Gerhardt [00:37:47]:
And it's like imagine a world where you can write a video script for a product demo and you can write the script, edit the script, make the video, make the content, like, all on your own. That's the stuff that is super exciting to me as a. As a marketer. Right?
Andrew Davies [00:38:01]:
Yeah. And I do think that the biggest challenge is for marketers who are mediocre. Like, the problem is that everyone can be a mediocre marketer already. You know, with the existing tools, we have our fingertips and the challenge is, I think, a couple of folders. Number one, how close can we get to the customer to understand what they really feel and need? And how can we make sure we're using or these tools at our finger, at our fingertips to really punch much harder? Because I think if we can think bigger, if we can be more bold in what we're trying to do, then actually there's some rare space up there. But I do think that there's going to be a huge amount of competition in the mediocrity.
Dave Gerhardt [00:38:35]:
Well said. All right, w, thanks for hanging out with me on this episode of the Exit 5 podcast. Great to chat with you, learn more about you and what you're doing at Paddle. Everybody. If you got something out of this interview, which I know you did, for me was the focus on first principles, going back to first principles in B2B marketing. I could do an episode a week on just that. And just that's the narrative. That's all that matters.
Dave Gerhardt [00:38:55]:
But go find w on LinkedIn. He's w Davies on LinkedIn. He's a CMO at paddle. He's a great guy. Maybe I'll see him at a dinner soon in the future, next time we rendezvous here in the US or maybe I'll make a trip over there. w, good to see you, my friend. Thanks for coming on the podcast.
Andrew Davies [00:39:10]:
You too. And you'd always be welcome on this side of the pod.
Dave Gerhardt [00:39:12]:
Oh, I'd love it. All right, let's do it. There's. There's some. I could make an excuse. There's some good golf over there, depending on the time of year, so.
Andrew Davies [00:39:20]:
Okay.