Reid Genauer is the CEO of Magisto. Magisto uses artificial intelligence to transform ordinary photos and videos into professional movies. Currently they make about 10 million movies/month.
It’s fun to use ->> Go check it out
The topic of this interview won’t be on Magisto though, we will focus on partner marketing. Partner marketing has played a big role in the growth of Magisto.
Listen to this interview so you can understand what to expect with from a partnership and learn how to choose the right partners as you start or grow your business.
Listen now and you’ll hear Reid and I talk about:
- (01:00) Introductions
- (05:30) How did you get started with partner marketing?
- (07:00) What was one of first mistakes you made and what did you learn?
- (11:30) What can go wrong with a doing a “value exchange” deal?
- (13:17) How do you initiate a conversation the right people?
- (17:30) How do consultants play a role in getting in the door?
- (20:50) How do you move from conversation to action?
- (25:23) How do you like to be contacted?
- (27:55) How do you figure out how to structure the financial aspect?
More About This Episode
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
Hey there bright idea hunters welcome back to episode 167 of the Bright Ideas podcast. I am your host, Trent Dyrsmid, and this is the podcast where we help marketers to discover ways to use digital marketing and marketing automation to dramatically increase the growth of their business. So if you’re a marketer and you are looking for proven tactics as opposed to theories and untested strategies then this is the podcast for you to listen to.
How do I make good on that promise? Well I bring a proven expert on to the show, each and every episode to share with you the exact tactics and strategies that they used to achieve some pretty extraordinary results. In this episode that is exactly what I plan to deliver.
My guest in this episode is a fellow by the name of Reid Genauer. He is the Chief Marketing Officer of a very fast growing company called Magisto. The company has grown from 3 million users just eighteen months ago to a whopping 40 million users now. What the app does is it helps you to make a really cool little movie in less than 60 seconds. It is crazy, download it onto your phone, give it a shot.
I did, it was a lot of fun and it was real easy to use and of course you can upload those movies on to Facebook or any number of other social networks. So what are we going to talk about in this particular episode? Well we are going to talk about partner marketing best practices; something that is probably near and dear to the leadership team of every start-up on the planet because as I am sure you are all well aware, partner marketing can really have a dramatic impact on your growth rate.
Some of the things that we are going to talk about in this episode is how to get started with partner marketing; some of the mistakes that people most commonly make; what you should do to initiate a conversation with the right people and then how consultants have actually played a role in helping Reid to get in the door on a number of occasions. And then what you should do to move from a conversation to actual action, things actually happening.
That is a huge stumbling block for a lot of people. Get your pen and paper ready. Get ready to take some good notes because we are going to have a wonderful discussion here in just a moment. Before we do that I wanted to draw your attention to a free resource for you. If you head over to GrooveDigitalMarketing.com/resources you will find an ever expanding library of inbound marketing resources including ebooks and webinars and so forth.
I would encourage that if this is a topic that is of interest to you to go ahead and check that out. With that said, please join me in welcoming Read to the show.
Hey Reid, welcome to the show.
Thanks, great to be here.
Yeah, it is a pleasure to have you. For the folks in the audience who don’t yet know who you are, and I want them to have context for this discussion that we are going to have all about best practices for partner marketing, let’s start off with just giving you an opportunity to introduce yourself with who you are and what do you do.
Sure, so I am the Chief Marketing Officer for Magisto, and if you don’t know Magisto, we use artificial intelligence to transform ordinary raw photos and videos from your mobile device into produced professional looking personal movies. We make about 10 million movies a month on 80 million pieces of content, so this gives you a sense of a scale.
I touch everything; I guess I am responsible for some things and touch many; but responsible for the typical things you can think of in a CMO role at a start-up, from acquisition and data driven marketing, to partner marketing to PR to social media, and to customer service etc.
Okay, folks if you have never downloaded Magisto, it is the coolest little app you’ve ever seen. I’ve made some really cool movies about my little daughter with that cool – put it on your phone, you’ll see in five seconds how to use it; and maybe a minute or a minute and a half after that you’ll have a neat little movie you can put up on Facebook or wherever you want to share it.
It really is cool.
It is, alright, and if I remember correctly I think it was free too, wasn’t it?
Yeah, okay, so we’re not going to talk really much about Magisto or the app or any of that kind of stuff unless it pertains to the conversation. So partner marketing – let’s start to set the stage for the conversation. Partner marketing has played a pretty big – if I remember correctly from our pre interview; which full disclosure, was done maybe a month and a half or two months ago because we scheduled this a couple of times; has played and I think continues to play, if memory serves me correctly, a pretty big role in the growth of Magisto. Is that correct?
So let’s start at the beginning, you decided that partner marketing was going to be a good way to go but you had to start somewhere. Where did you start?
I guess where we started is to think about targets, right? It is like, “Where would we be best served?” You start from the “What is in it for me” angle. Typically in the start-up land you think about technology partners, software partners, like a Google or a Yahoo or a Facebook. You can think about OEMs like Samsung and Apple and LG and Dell.
You can think about carriers. You can think about lifestyle brands, you can think about media brands.
And so depending on what your product is and who you are, I think the trick is to try and focus on a couple of verticals. The reason for that is just that, focus, right? You might have to do some trial and error to figure out where the fit is. In our case the most obvious place to start was the app stores.
Then we’ve expanded from there but truly we’ve suffered a little bit from lack of focus and as we understood what the value we bring to a partnership is and understanding what we are looking for frankly, we have been able to focus who and how we approach people.
That is where we started.
Before you go on, tell us about – because I think some of the greatest lessons come from mistakes – tell us about an early mistake that you guys made and what you learned from it.
Sure, I guess the one point that I want to make is I don’t think that; to me it is not a linear process, it is an iterative one. There is a term called customer development; which is starting with a hypothesis in terms of who your partner is, who your customer is basically in a partner, and how they might derive value from you and then testing that hypothesis by bringing it to the market and seeing how people react in terms of pricing, in terms of features, whatever and then iterating as you go.
That is something I feel like we can always do more of but we have been fairly good at doing. Before I talk about our errors I wanted to sneak that in there. Two come to mind for me and I have made this mistake over and over again. Sometimes it is just hard to avoid it but there are bright shiny objects out there in partners.
What I see a lot of start-ups doing is taking on the majority of the risk in the partnership because it is company X, right? You can name any company basically that is well known and as a start-up you want to do business with them because they are well known and they give you credibility.
I think the perception is they will give you business, right? What we found is we tend to overestimate the amount of business we’ll get from partnerships. So whether it is a carrier who agrees to put you on a mobile device and you hear, “On a million devices”, right? That sound amazing, a million devices but the two other factors are if you are on the device, where are you on the device? Are you presented? What do you think your take rate or conversion rate will be? And what kind of development work do you need to do to get that placement?
A lot of times you wind up having to do a disproportionate amount of work and if you were to look at the cost of that development as the equivalent marketing spend, does it make sense because it is spending your resources? I think there is easily half a dozen deals that we’ve done where we probably put more development in than was merited.
I think that is okay as long as you are honest with yourself about what you are getting out of it and what you hope to get out of it.
So if it is PR value, if it is legitimacy, if it is learning, that customer development feedback loop; those are all things that I think are reasonable to expect from some of these early partnerships. And again, where I think businesses / start-ups tend to overestimate is the lift it is going to give your actual KPIs or sales or whatever you define as acquiring a customer.
That is one example. I can think of another example is where with a lot of times with start-ups the guy on the other end will say, “Well why don’t we do a value exchange, right? So we are not going to pay you but we are going to give you X in exchange for Y.” Particularly for technology companies you get a lot of those offers.
In that case do the math that I just said, what are you hoping to get out of it and if it really is exposure and distribution, be realistic about what that means, so similar but slightly nuance difference.
We have done deals with organizations who have 8 million, 10 million, 15 million Facebook followers and you figure, “Wow, it is a tremendous number”, right? And who offer you a bunch of ad impression but again when you do the math on Facebook, if you figure, 10% actually see the post, right? So you quickly go from 10 million to 1 million.
Of the people who see the post, whatever, at best 1% click through, of those who click through 1% or 2% take action, and so that 10 or 20 million Facebook page goes to virtually nothing, a couple of hundred very quickly. It is more or less the same lesson told in a different suit.
Alright, so once you have identified, and when I say you I mean the start-up entrepreneur, the audience that is listening to this. Once they have identified who their most probable partners are, and then as you mentioned it is going to be an iterative process; you got to get these people’s attention and we are in a world where getting people’s attention has never been more difficult to do.
What are some of the things that worked well for you guys to get conversations started with the right people?
Right, I can answer that in a number of ways. I think I’ll go back to focus, which is like you probably have a pretty clear sense of the top six that you want to do business with. It is almost like looking for a job or dating.
You can do this direct marketing approach which is just throw a lot of lines out there and hope that you catch a fish or you can do more of the spear fishing approach which is to say, “There’s the six fish I want to catch and I am going to knock on that door a zillion different ways until I get in.”
With the ones that are really game changers for you, to the extent that there are. So for us again, the apps stores are very important and there are a couple of other key players and we were very focused on developing and managing those relationships.
So much so that we have a pretty senior individual whose sole job is really to manage a small amount of accounts that are very important to us. So that is one.
Two is we have sort of like a hierarchy of needs; like a pyramid. And I think that is at the top of the pyramid. The next one that I think is money well spent is on consultants; who ideally you pay a flat fee plus some fair incentive on to make introductions, ideally that they have.
I think it is worth spending on a senior person because it sounds wrote but it is true that relationships go a lot further than a cold call. Even if that individual is making a cold call with LinkedIn today the individual can look at their LinkedIn profile and see that it is a more senior person and they have respectable contacts and it is not just some lackey out there dialing for dollars, right?
And so if there is some weight behind the outreach, whether it is a consultant or frankly the executive at the company. The challenge I have is I got a bunch of different responsibilities and it is just hard for me to do enough of it. So what I found is I started by just doing it myself and I realized that I was being inconsistent with my follow-up. I spent a lot of energy in making the introductions and then I wound up sort of swatting at the relationships when I had the time with one hand rather than methodically pushing them through a business funnel day in and day out.
I made the decision that I was not – given the responsibility that I had – I was not doing the job well and looked two hire one and then a second consultant to help me do it. I think being methodical and process oriented – it seems almost like “duh” but what you quickly realize as the number of contacts builds up is it is more unmanageable than you even realize.
If you attempt to do it in an organized way through a CRM tool like Close.io or SalesForce or even through just a spreadsheet you realize how much work it really easy. The endpoint of my monologue here is that to be effective in that outreach you have to be thorough. And if you think that one or two pings is going to get you in the door you are probably going to be disappointed with the results.
Well let’s hang out on the consultant idea for a minute because there’s probably some other start-up CEOs that are going to listen to this and they are going to think, “Oh gosh, maybe I need to find a consultant.” So where do you find them and how much do you pay them and what do you expect in return?
Right, where to find them I don’t really have a great answer. I found them in you know – I have a little treasure throve of guys that I have worked with in the past. There is most definitely a sector of consultants, you might use LinkedIn, you might network with you friends, I don’t have a great answer for that. But what I will say is that the other mistake that I have made and that I see start-ups making is you’re obviously cash poor. And so a lot of times they will say, “Well, we’ll give you a piece of backend.”
And while that is attractive, mostly these consultants have several clients, if not many clients. And in terms of being prioritized they wind up spending their time on the clients they have a retainer with because those are the guys that are paying them.
It is kind of penny wise and pound foolish not to have a retainer of some sort. I am not saying it has to be tens of thousands of dollars but some skin in the game because then you are entitled to this individual’s time, otherwise you’re remnant inventory if they happen to have an extra hour in the day. That would be my advice and then structure a deal in the back side on top of that that gives them real incentive to want to work besides the obligation they have to want to work.
What kind of range in terms of a retainer? Low end, top end, what that look like do you think?
It depends on the industry and on the discipline but I think it could be anywhere from $1000 a month to depending on the consultant, $40,000 a month. I am thinking of a PR firm in that case but typically I think it is more like $2500 to $10,000, something like that.
Okay, totally unrelated question, there is some noise happening there on your end, that noise right there [shuffling noise].
Somebody just actually opened the door while we were talking, so it should be better.
Sometimes it is whiskers on the foam of the microphone that can cause it as well.
Okay, yeah I am unshaven.
That is probably what it is so if you’ll just back away from your mic a tiny bit we will solve that problem.
Okay, so once you get the conversation started, these conversations can probably go on for a very long period of time. At some point obviously you need to get some action happening, are there any best practices or stories or advice that you can share on how you have been able to move conversations through to a deal?
Yeah and I am a little conflicted on this point but I think that there are a few pieces of advice that I’d give. Number one it that you should qualify the lead before you make a face to face visit. And this is the point I am conflicted on, I think most sales guys would tell you, “Go and shake hands with somebody.” And I agree that is worth doing that but the mistake that I have made before is your time is a resource.
Is running around shaking hands with anybody who would shake hands with me as opposed to really being thoughtful about whether or not – or at least honest with myself about whether or not there is a deal there; and I think you get a read when you talk to somebody on the phone if there’s real interest or not.
So that is one and the second piece to that is opposite of what you asked which is – I think – you need to apply realism to your tier funnel and actually throw people out of the funnel. Because you can spend a lot of cycles wasting time on people that are just never going to be a partner and so whenever that is; I am not saying don’t be tenacious but you do it enough times and you can just tell when it is not going to go anywhere.
And so park it for the time being. And then I think it is really beneficial to get in front of somebody because there’s just a sense of connection to people when you see them face to face.
So typically what I like to do or what I’ve seen done well is if you get initial interest, offer to do a proposal, a custom proposal that you will present in person or at least on a second call. The other broad advice that I would give is find reasons to touch base whether it is specifically about the deal that you are talking about or interesting, cool, relevant updates about other deals or products or features that you’ve launched that keep the individual engaged.
I know I am on the receiving end of these pitches a lot of times and the truth is many times I am interested, I take the first call, not sure if I need it. Then I get sucked into my other stuff and the person disappears and the opportunity is lost. Then flip side though is the personalization that is why I say going and forming a relationship and taking the time to send a customized note because the flip side is I know when I am getting a cut and paste email from somebody and then it is spam and I basically filter it out.
It is a fine balance between finding legitimate reasons to reach out and doing it in a personalized way against scale. You trade a certain amount of scale for that quality outreach.
Let’s talk about that for a minute because I actually attended a conference recently where there was four CEOs up on the panel and the topic of discussion was how to get their attention and it was a very interesting discussion. I want to hang on that for a bit because I am sure there is going to be people listening to this who are needing to get the attention of people like you.
So talking about email and the phone as methods of communication, when you don’t know who they are and they are making that first outreach attempt to you, which medium do you prefer, email or phone?
I guess there is prefer and effective right and the most effective is when there is a warm introduction and or a face to face at an event. It is funny, I have asked the same question of decision makers on the other end and the response I got was, “Really hard to get my attention during the day because I am over programmed, I am not really reading through my emails and if I do I am skimming them to find the ones that are important.”
I am trying to answer your question directly which I am not really doing but I think number one is going to those types of events that you just described is probably one of the; it is a lot of investment but it is one way to get somebody’s attention because you’re –
You get to talk to them.
Yeah and they’re in a place where they are open and offline at some level, right? So that is one. Two is again this notion of personalization, for me with LinkedIn, I think of a few, the ways that I get “suckered” [laughing] is when there is a warm introduction from somebody that I know and respect, right? I will always take that call. Two, when the individual finds a point of commonality, either we went to school together or they’ve made some observation about my business that doesn’t feel trait.
Like, “Hey I saw you guys at TechCrunch and I spoke with so and so.” Something that makes me feel like they are actually considering me and I am not just fodder for their target machine.
Yep, those answers were fairly similar to the ones of the folks on the panel at the event that I was at. Alright, so when you get the conversation and action follows the conversation and parties are interested and heads are nodding up and down like, “Hey we should do a deal”, what advice would you give on how to structure the financial aspect of the deal because obviously everybody has got their own agenda, their own needs.
But there must be some kind of a framework for conversation for figuring that out.
Yeah, again I think that is an iterative process and it is a little bit of trial and error for sure. I think the first thing is coming to the table and saying what value do I bring to this partnership, right? And in some ways it is sort of like PR and I think it is almost easier to describe the failings in PR but it is the same process because PR is more or less sales as opposed to marketing where so often businesses go to editors or journalists and say, “I want you to write about me” more or less.
Instead of going to the journalist or thinking about the journalist or editor; learning what their beat is, reading what they have written before and coming to them with your story bundled as news that they would find value in sharing and their readers would find value in reading, right?
I am not saying that is easy to do but that is the way that you get articles written and that is the way that you close deals which is to not just think about – start, sure start by targeting businesses that would have value for you but then entering the deal thinking about what has value for them, right?
And then that is how you can sort of back into numbers, right, and what the deal components are. I think a lot of partner marketing is less about financial transactions and more about how can I use my owned and earned resources and how you can use yours to make it bigger than the sum of the parts. I am not saying there shouldn’t be financial exchange; in fact, I think deals are much more successful if some money have exchanged hands even if it is a nominal fee, because there is some sense of obligation on both sides.
In terms of how to structure the fee it in part it has to be determined by the value of the exchange; being realistic about who is giving what. And then in part it’s got to be about managing the perception, the value of your product. I wish there was an easy answer to that, I think you start probably by giving deals away more or less for free and then you look at what your competition is charging and then you start trying some different pricing models and see how people react to it.
Reid is there anything; before we wrap up is there anything that I haven’t asked you about that you think would make the interview better?
I think, I don’t claim to be the expert at it but I think having good collateral is a real challenge and a real art because defining what good is, is somewhat arbitrary but I would say clear blunt messaging, it is a challenge right, because basically you got three / five seconds to get somebody’s attention, if you get their attention you got three or five minutes and what I find is pitches are often too light or too heavy. “Like what are you selling?” “Or I don’t have two hours to understand what you are selling.” So I think that finding that balance is really important.
It is interesting that you bring that up, I spent last week at Dream Force which is SalesForce’s annual conference. There was one company there which I guess is about to get a free shout out, Pitcher.com. And then there is another company that meet at the show and gosh, I don’t remember their name off the top of my head so I wish I could so I can mention them.
But their business is really – the value prop for them is, “Hey you worked really hard to get these three to fifteen minutes in front of a potential customer for the very first time and we’re going to give you (they call it sales enablement) a way to make sure that you really maximize the impact of your presence for those very first few minutes.
And both of them have really incredible dynamic stuff that goes onto an iPad so that when you show up you can really “knock their socks off” as opposed to just whipping up your laptop and showing a PowerPoint presentation which might otherwise just put people to sleep.
Anyway, so I just bring it up because I think it is a very real problem. You put all this time and effort into getting that first meeting and so the last thing you want to do is blow it.
Alright Reid for anyone that wants to get a hold of you what is one easy way for them to do that?
One easy way is just my email, email@example.com.
Alright, I want to thank you very much for making some time to come and chat with me here on the show about best practices for partner marketing.
Yeah man, it is my pleasure, thanks for having me.
Alright, to get to the shownotes for today’s episode go to BrightIdeas.co/167 and if you enjoyed this episode and would like to help spread the word, please just head over to BrightIdeas.co/love where there will be a tweet awaiting the click of your mouse.
So that is it for this episode, I am your host Trent Dyrsmid, thank you so much for tuning in. If you would like some help with inbound marketing. I welcome a discussion with you and you can learn more about our agency over at GrooveDigitalMarketing.com. That is it for now, take care and have a great day. Bye-bye.
About Reid Genauer
Reid Genauer, Chief Marketing Officer of Magisto, has always always been fueled by building things. He first discovered this love of entrepreneurship as the lead singer of an independent rock band called Strangefolk, based out of Vermont. They toured the country and made nearly a dozen albums on the back of bootstrapped hard work and DIY sheer will. That passion for working with a small team to build something special has led Reid to the intersection of media and disruptive technology – a location at the heart of the Magisto story.