Episode #18: Eloqua's Founder Talks Category Creation - Mark Organ
What does it take to create a multi-billion dollar category?
“Why build something completely new?” Mark Organ muses rhetorically. “And I think the answer is just 'cause that's how I'm wired. It's just what I'm excited about doing.”
After chatting with Mark for an hour, I understood what he meant.
Relatively few people are wired for the risk-taking, emotional swings, and personal sacrifices that entrepreneurship demands.
But even fewer succeed in creating entirely new categories.
It requires a particular way of looking at the world - a sense of imagination coupled with a willingness for scientific trial and error.
In Mark’s case, it meant founding Eloqua, the first successful marketing automation platform (a category today valued at over $5 billion1). Mark was also founding CEO of Influitive, a company in the nascent customer advocacy category.
In our discussion, Mark takes us back to a time when marketing automation was far from obvious and describes the pivots and experiments required to achieve product-market fit. We also discuss category creation generally - when to do it, how to do it, and how category-creating businesses come in all shapes and sizes.
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About Today's Guest
Mark Organ is the founding CEO of Eloqua and Influitive. His greatest professional passions include creating new billion dollar categories in technology and developing new leaders. Today he helps CEOs achieve their full potential in their businesses and their lives as the CEO of Categorynauts.
Take-Aways
Category innovation often requires an enabling technology:
Mark points out that the automobile was available for some years without catching on, because the process of hand-cranking an engine was cumbersome. Key ignition was the enabling technology that enabled cars to take off.
Similarly, other categories can become unlocked when the surrounding technological context reaches appropriate maturity. In the case of Eloqua, the big enabler was the cloud.
Mark points to AI as being an obvious enabler for new categories going forward.
Pivot your how:
When creating a category, your first idea isn’t always the right idea.
Eloqua was founded on a vision of connecting buyers and sellers via the internet. But it started with a chat product that never took off.
It moved into email by accident, and continued to pivot until finding excellent PMF as a tool that could surface qualified leads and enable complex marketing journeys.
Finding PMF is a process of scientific experimentation:
Mark spent nearly 8 years doing scientific research and put those skills to work in business.
As CEO, you need to be constantly asking “what if?” questions and trying to understand the reasons behind why things worked or didn’t work.
Mark advises to be clear on what data you’ll see if things are going well and then to experiment until those indicators appear.
You can’t scale in every dimension:
Founders need to make tough calls on where their product should scale and where limitations are acceptable.
For example, Eloqua could not scale infinitely for volume of sales users or volume of web traffic. But they wanted to enable the most complex and sophisticated campaigns possible.
Ask yourself, what do you want to be the best in the world at?
Not every category needs to be worth billions:
We tend to think of category creation as building massive markets.
However, it is perfectly viable to create a smaller category that you own a huge piece of.
You can build great businesses that dominate smaller categories.
Key Topics
[00:00] - Introduction
[01:05] - Founding Eloqua and the marketing automation category
[07:47] - Origin of the lead generation playbook
[10:39] - Getting to product-market fit
[16:03] - Genesis of lead scoring
[19:08] - Toolkit software vs. opinionated software
[24:25] - Pivots and brushes with death are the norm in entrepreneurship
[27:09] - When is it right to build a category?
[30:14] - Building a category around an under-served hero
[33:51] - Creating a category for the second time
[36:42] - Challenges with churn at Influitive
[41:05] - Alternatives to VC funding in SaaS
Resources
Categorynauts - Categorynauts is the leading global community of category creating leaders, helping CEOs looking to discover, develop and dominate their category.
https://www.statista.com/topics/10768/marketing-automation/