When I introduced my new blog, Start-Up! The Musical, a couple of weeks ago I spoke about how similar start-ups and musicals really are.
They’re both a “hits” driven business with ego-charged characters whose very stage makes them think they are larger than life. You have to pick winners from a pitch, fund a dream and practice child psychology aboard a rollercoaster of unknowns.
This is true in many more ways than you might expect, starting with the role of the angel.
Back in the day when new technology meant “the wireless” (radio), the angel audition was already a Broadway institution. A high net worth individual with a penchant for show biz (and, often, for chorus girls) would invite the writer and composer of a new show to perform the tunes for the new show on a piano in his apartment. If the investor liked the tunes, and if there were enough opportunities for scantily clad chorus numbers, he’d back the show. Fast forward a century or so, and not much has changed.
Act 1, Scene 1 of
Start-Up! The Musical
Highlights from my PebblePost venture pitch.
VC: (insincere tone) Sorry I’m late.
Me: (token gesture) No problem, great to see you!
I have a seven-syllable pitch for a billion-dollar opportunity.
VC: (momentary focus, doing math) Impressive, over $140 million per syllable. Lay it on me.
Me: Programmatic Direct Mail. We transform real-time online activity into personalized, dynamically rendered direct mail into postal hub in less than 24 hours. With real-time response path activity analytics and next day optimization. Every day, continuously.
VC: (Feeling like the visionary) Isn’t direct mail dead?
Me: (hide eye roll, educate) Direct Mail is large and growing. It’s the largest ad spend after television, has the highest response rate after telemarketing, and the highest average order value of any marketing channel, period. Yet, there has been no new product or major innovation in about 25 years, not since the advent of Zip+4 and digital printing. No technology revolution. Until now.
VC: (needing to chase a fad, can’t be direct mail) Who knew? Ok, so how exactly are you doing this?
Me: There are four key components to our Programmatic Direct Mail platform: Segmentation, Workflow Management, Analytics and Optimization. These components work seamlessly together to create a fully integrated loop. Our first product is Retargeting with Direct Mail, and we’ve started with ecommerce companies seeking to grow revenue and customer lifetime value. We’ve invented the industry’s first ad server and campaign management system, the first real-time analytics, and the first optimization of next day’s mail based on every day’s response and conversion data.
VC: (reaching for an analogy to show understanding) So, if I’m getting this, you just invented DoubleClick, MailChimp, Google Analytics and with next day optimization every day, but for Direct Mail, which is bigger than display or search?
Me: (hates the analogy game) Great analogy, yes! And we offer unlimited segmentation. Think any URL or activity within a page on an eCommerce site. We offer frequency capping, name suppression, and geo-targeting, to name a few. And we…
VC: (interrupting) How is the marketing performance?
Me: (provide Schoolhouse Rock math only) We combine the efficiency of digital with the effectiveness of direct mail, in our world 1 + 1 = 11. We are seeing response and conversion rates that are orders of magnitudes higher, with much higher average order values.
VC: (putting his phone down) And customers? Are you selling to brands or agencies?
Me: (answer the question he should have asked) PebblePost’s business model includes both. We set this up as a SaaS model: Software, production, printing, postage and delivery to postal hub, all-inclusive on a per piece price based on monthly volume. No term, minimums, or set up fee. It’s producing a 5x-plus return on ad spend for small brands with inexpensive products!
VC: (trying to look relevant) What about fraud and ad blockers and such?
Me: (am I playing t-ball?) We are intrinsically 100% fraud free – it always gets delivered to a real person with a real postal address. Bots don’t have mailboxes. Programmatic Direct Mail is 100% transparent – anonymous cookie, known user, opt-in by brand, and postal address linked to the segmented activity and piece of collateral. There’s no ad interference with the user experience, and our Programmatic Direct Mail is immune to ad blockers.
VC: (thinking he is so clever) There’s always “return to sender”!
ME: (smiles nervously, acts impressed with the attempt at humor)
VC: (insert obligatory years old question here) So how do you cut through the clutter of all the other ad tech companies?
ME: (he’s a pocket knife in a gunfight) There are more than 2,500 ad tech companies. There are more than 3,850 direct marketing companies. But with our programmatic digital-to-direct mail technology, 99% of them don’t exist in our world for the marketer. One platform.
VC: (recalling associate’s homework) OK, there’s about $50 billion dollars in digital marketing, $50 billion in direct mail, $50 billion or so in marketing data services. What percentage of the market do you think you can get, in just direct mail?
ME: (every founder should just say this) You have that question backwards. The question is how much are we going to leave for the incumbents. We are creating a market; they become incremental.
VC: (fawning for audacity) You’re pretty confident… ME: Dude, we’re going after Moby Dick, on a paddleboard and with a hibachi. You want a fish taco?
Did the pitch work? Yes, with a
. The first scene of Act 1 is a success, and we are on our way. ——-
Start-Up! The Musical
will publish (roughly) every two weeks. Next installment: “
Please, Sir. I’d like some more.”