The following interview is a conversation we had with Chris Golec, CEO and Co-Founder of Channel99, on our podcast Category Visionaries. You can view the full episode here: $5 Million Raised to Power the Future of B2B Marketing
Chris Golec
Thank you for inviting me.
Brett
Yeah, no problem. So to kick things off, could we just start with a quick summary of who you are and a bit more about your background?
Chris Golec
Sure, no problem. Grew up in Michigan, and I was a chemical engineer in Detroit, which is a recipe for a really boring career. But I found my way out to the east coast. I worked for Dupont and GE. And then 1996, I started my first software company called Supply Base with two other guys from GE, and that was a supply chain software business kind of serving B2B. And back then, in 1996, people didn’t even know what B2B was. You had to define it. And anyways, we sold the business in 2000, and I was frustrated as a B2B person that there was no marketing technologies out there. And so I started a company called Demandbase, which is really focused on helping B2B marketers generate the right accounts in their platforms. And the account based marketing category was born, and it took years to really get off the ground.
Chris Golec
But today there’s multiple companies now serving that category, and it’s growing successfully. And I left Demand Base as an employee just a couple of years ago to start my new company, Channel99, which is really focused on helping B2B marketers measure what’s working, what’s not, and looking at business outcomes and do a much better job at measuring a dollar efficiency of their spend. So really excited to be here and get that company off the ground. Actually, it was the original vision of Demand based, believe it or not, in 2007. It was just way too early. The market wasn’t ready for it.
Brett
And I know this is a hotly contested term, but who coined the term account based marketing? I had Mark Organ on, and I think he said that he was very involved in that. Next week we’re speaking with I’ll probably get his last name wrong, but sangram bitch, do you know what I’m talking about? From.
Chris Golec
Mark, I would say ABM has been around a long time in practice. When I was at GE, I was kind of the account based guy for Apple Computer. So the reality is it doesn’t matter who coined the term, but I would say that we definitely pioneered the ABM technology category, and were batting around different ideas from Target Account Marketing or ABM, and we really locked into ABM, and it took off finally. It was surprising how long it took, to be frank.
Brett
Interesting. Now, let’s talk a bit about Supply Base. That was the company that you launched in 96, you sold in 2002. What was it like building technology companies back then in the boom and then, I guess, the bust?
Chris Golec
Yeah, well, interesting story. B2B wasn’t sexy. Everything was about B2C. It was all Yahoo and Amazon and obviously very successful businesses. B2B became sexy in 2000, and so did supply chain software. Everybody knows what supply chain is today, of course, but it wasn’t that popular. When it became popular, we ended up selling the business. And I’m proud to say we sold the business the day the market peaked on March 13, 2000. Lucky timing. But we had the foresight to know that it was better for Supply Base to be part of a larger solution than to try and go it on our own, even though a lot of the venture guys on the board were like, we’re leaving billions of dollars on the table. Thankfully, we did not try and stick it out because I think it would have been a rough road.
Brett
Yeah, makes sense. And that’s smart. And talk to you about leaving Demand Base. So obviously, very big company, very successful, very influential, and I see you were there, what was it, 13 years before you stepped down from that role? Was that hard to leave that role behind and go into something new?
Chris Golec
Yeah, of course. It was kind of my baby. It was such a great company, great culture. We had so many great accolades with best places to work and innovated. So many new things, from B2B advertising to personalization. We were the first at a lot of things, but as we built the company, we got to that 1st 100 million. Our CRO, Gabe, who just did an amazing job, kind of building out the sales team, the efficiency, incredibly good in operations. He was ready to do the CEO gig, and I was kind of getting a little squirmy around, wanting to innovate faster and things. And so we just kind of made this decision to let Gabe step into the CEO role and I’ll stick around and help out, which I did, and then COVID hit. And so that made it extra less fun. I remain on the board of the company, so I’m still definitely invested there.
Chris Golec
And I started this business, and I spent some of my time revalidating that. The market is ready for what we’re doing today in China. And so it’s been a nice transition. And Gabe’s done a wonderful job in acquiring some other businesses to really accelerate our roadmap of the things we wanted to accomplish with data and integrations and things like that.
Brett
I had a founder on a few weeks ago who was in a very similar position where they spent I think they were like, 20 years of their lives building a company, super successful. And then they ended up stepping down and going and doing a new startup. And how he was describing it is empire building is a lot of fun. Empire managing is not a lot of fun. And now that he had launched into this new company, he was finding joy in all of these little tasks and these little things that would typically have been handled by his big, massive team before, but he was enjoying doing small things that he kind of wasn’t able to do, running this big company. Is it a similar experience for you?
Chris Golec
Oh, for sure. It’s such a sense of accomplishment every day because you get so much done. Right. We’re a team of ten people right now, and, yeah, we’re obviously growing, but it’s very intimate. We can build the culture we want to. I will say that the thing that’s hard to build a company. It’s really hard to build a great company, virtually, and kind of build that culture. And so I’m hoping that in the near future, we’re able to be in an office together, not necessarily five days a week, but certainly a lot more than we are now. And we’re trying to get around that by getting together periodically every two, three weeks. But people are kind of spread out, and it’s kind of the new norm in tech. But I think companies are finding it’s really hard to do well without being in the office at least some of the time.
Brett
And are you personally based in SF?
Chris Golec
I am. I live just north of the city in Marin.
Brett
Oh, nice. Marin’s so beautiful. I’m jealous. I was thinking about moving there, and instead we moved to a financial district, but my fiance and I were heavily debating Salsalito, and it’s just such a nice place out there.
Chris Golec
Yeah. I love the city, though. I love coming back and really excited. Hopefully it turns the corner and companies start coming back into the city. Such a great you know, it looks.
Brett
Like it’s coming back to life. When I go walk my dog some days, I’m like, all right, this is looking better than it was six months ago. And every month seems to be getting more lively, and there’s business going on, there’s activity, there’s humans. So that’s good. My question on San Francisco, obviously you’ve read the media articles. I’m sure you’ve seen the buzz that SF is dead, silicon Valley is dying or decaying, and that whole kind of narrative that’s out there, do you think that’s true? Do you think we’re actually seeing a major decline in Silicon Valley and SF and the influence that this region has on tech? What’s your take there?
Chris Golec
I think it’s partly true. Maybe, yes, there are companies that have moved and people are more open to hiring people outside of the Bay Area, but there’s just such an ecosystem of innovation. I’ll start with the venture capital, the majorities in the area, and a lot of the talent and just the kind of the startup mojo is just rooted in Silicon Valley. And so I think that would take a long time to go away. But I do think it is getting more diversified. But I think the Bay Area is still home to so many of the startups and so much of the funding.
Brett
Let’s say if you were 23 years old again and you could choose anywhere to go start a company, would it be Silicon Valley in the Bay Area?
Chris Golec
Maybe. I love this area. I’m also looking at as far as where we put our headquarters eventually potentially looking at Utah and other places where the cost of resources is less. And maybe instead of having one big HQ, you have distributed offices where you might have an engineering team here, an SDR team in a different location. I think it’s hard to get it all right with everybody at home, especially things like SDR and selling functions because those organizations learn so much from each other. And I often find that SDR teams that are really distributed, they’re also missing out one of the best times of their professional career. Like, think about it, you said you’re 23, so many of your best friends and your best times are going to come from the people you work with. Right? And so I do feel like some of those functions, people are missing out in their professional and personal lives by not being in the office.
Chris Golec
May not be a popular opinion, but that’s how I feel.
Brett
I agree with you 100% there, and I think more and more people are coming around to that idea. I get it that maybe I’m 33 years old now. I feel like maybe my time of wanting to be in the office 40, 50 hours a week, that’s probably gone down. But I spent a lot of time in offices when I was 20 to 30 and I loved that time. Obviously it would have been nice, I think, to work from home, but the relationships I built in that period and just the chance to really learn from the people that I was working so closely with, it just would never have happened on Slack. It’s not really possible, at least from my perspective. So that definitely resonates a lot.
Chris Golec
No, that’s great. I agree.
Brett
Now a couple of questions that we like to ask really just to better understand what makes you tick as a founder. So first one is what founder or CEO do you admire the most, and what do you admire about know, I.
Chris Golec
Could give you the easy one like Steve Jobs, because obviously he’s passed. But he’s pioneered such different industries and been wildly successful at doing it, whether it’s digital animation or music or, you know, I guess more current. I really know Benioff for what he’s done, not just in building CRM, but the whole community and how he’s taken a very human approach to it, invested back into the city and the children’s hospitals and he does what he says he’s going to do. I don’t know him personally, but I’ve always admired kind of his approach in building that company and community that we all know very well today.
Brett
Nice. Yeah, that’s one of my all time favorite books, behind the Cloud, and really just his view and perspective on declaring war, having an enemy, and how he really positioned salesforce and depositioned others. I think he’s a brilliant leader.
Chris Golec
Yeah, I agree.
Brett
What about podcast? Other than category visionaries, is there a go to podcast that’s your favorite?
Chris Golec
Yeah, there’s a guy I hired as our chief Product Officer. His name is Abhanish Sahai and he ran AppExchange for Salesforce and he has this newer podcast that’s called The Platform Journey and he just has really insightful guests and things I enjoy that I also really like. I don’t know if it’s a podcast, but Nick Meta, who you may know, does a really good blog and he’s also just very human about what’s working, what’s not. And I think his balanced point of view on most topics that he gets asked are just really insightful because he looks at what didn’t work and what worked better and he’s just very transparent. And I lived a lot of the things that he talks about, so I really enjoy reading that because it’s very relatable to me personally. Nice.
Brett
Yeah, I follow him as well and he’s great and really fun and very engaging and have learned a lot. Now let’s switch gears and let’s talk about the company. So we call this the pitch. So it’s the problem you solve, who you serve and really what that product does. So can you just give us a high level overview?
Chris Golec
Yeah, I’ll start kind of from the very top. And people are talking about efficiency in marketing. And the reality is, B2B, marketing is inherently inefficient, meaning most companies only sell to two or 3% of the companies out there because they’re targeting a certain industry, a certain size company, and they’re selling into tens of thousands of companies, not millions. And so most of their web traffic and the things that they’re doing, only 15 20% of the companies on their website have a potential of buying anything. And the visibility into that is just very limited. And so what we’re trying to do is really understand what’s more efficient, where are there inefficiencies how to improve, but also layer in, I guess the dollar and what you’re investing into that so that you can understand on a very level playing field what’s working and what’s not and what is the rest of the industry doing?
Chris Golec
Am I average? Am I above average? Am I best in class? And you may be in certain areas, but you’re probably not across all different channels and vendors. And so we’re trying to bring the real source of truth to B2B marketing. Much like Adobe has done in the B2C world. But in B2B there is not a single platform for managing and measuring all your vendors and channels. So it is kind of like a supply chain meets Martech Play. And the reception from customers has been fantastic because they’re always trying to do bake offs and comparison and where should I spend more or less? And especially now, if they’re trying to reduce dollars, where do they cut spend and have the least impact on pipeline? And so it’s all those types of answers that we’re solving for. And I’d say the other piece that I’m really excited about is this ability to kind of solve this dark funnel question.
Chris Golec
And I’ll just kind of define that a little bit in that most of the traffic that comes to a B2B website is from sources or channels that are unknown. Meaning it falls into this bucket just called Direct where people kind of just typed in the URL. Now, the reality is the people that are coming through that channel probably saw an ad, probably heard a podcast, probably read an ebook, probably saw a video or did one of these other things where you have all this content across the web, but you have no way to measure it. And so we’re going to be introducing a technology that solves for that in the not too distant future. And I think it is the thing that people will just really gravitate to because it’s such a huge signal that has been largely ignored up until today in the B2B world.
Brett
And is that similar to dark social? I follow Chris from Refine Labs and he’s banging the drum on that and making a lot of noise and educating the market on dark social. Is that the same concept or similar.
Chris Golec
Concept in concept, but I would elevate it to all channels, whether it’s digital ads, whether it’s social, video, content syndication, all those things. And I remember back at Demand Base, so we built this B2B advertising platform and to show how it was working, we came up with all these KPIs around what was called Lift. And so let’s say you wanted to advertise to the Fortune 1000. We would have to baseline all your traffic for a month and then we’d run the campaign to the Fortune 1000 and we would look at the lift in traffic from all those accounts while the campaign was running. And it turned out to be really successful, but incredibly unscientific, right? But it is the thing that drove that business through major growth. And it’s amazing how widely adopted that has become across a lot of big enterprises. And the reality is marketers don’t want a different measurement for demand base versus LinkedIn versus everywhere else.
Chris Golec
They’re spending their money. They want a consistent way to do that. And so I think we’re going to be in a position to really do that at scale, much more scientifically than other companies. And so I’m super jazzed about that. And I do think companies like Demand Based Success, Terminus, LinkedIn that are really designed for B2B and a lot more efficient, are going to stand to benefit because we’re going to really give credit where credits do to those organizations.
Brett
This show is brought to you by Front Lines Media, a podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you’re a founder, you may be thinking, I don’t have time to host a podcast. I’ve got a company to build. Well, that’s exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io podcast. Now back today’s episode. And what do you think about market categories here for Channel99? Is that still going to be part of ABM or is this going to be a totally new category that you create?
Chris Golec
I think it’s broader because it goes across all B2B. And I don’t know that it’s a new category. Bread it’s really painful and hard to create a new category. It takes a lot of time and a lot of patience and a lot of investment. And I think if you had to really simplify it’s B2B performance marketing, and you could put it in a lot of different buckets. So maybe it’s kind of transforming some, but there’s not a new acronym coming. I just don’t know that it’s needed. And I can tell you from at least my early customer interactions, everybody gets what we’re doing. They know the problems we’re solving. Like ABM was a lot more a little bit more of a head scratcher for people when we first rolled it out. And so I guess it would be more transformative of the existing categories than its own unique thing.
Brett
I’m glad you say that, because I think it’s very important for founders to hear that right now all across LinkedIn, the sexy thing to do is to go out and create a new category. And what I’ve seen and some of the founders I’ve talked to on the show, when they talk about it, they’re not really creating a new category. They just have some features and some cool capabilities that are a little bit different, maybe a little bit better from what’s already on the market. But that doesn’t justify trying to go out and create a new category. And I think that I hope that more founders start to really buy into that idea that they don’t have to chase category creation. There’s nothing wrong with looking at an existing category and saying, this is broken, this is flawed, let’s redefine it. And that’s a massive market opportunity.
Brett
And then just pursuing that, which sounds like that’s exactly what you’re doing right with B2B, performance marketing. You’re just going in saying, hey, this is established, but it needs to change and we’re going to redefine it.
Chris Golec
Exactly.
Brett
Makes a lot of sense. Now, talking about your first paying customers, obviously securing those first deals is always difficult. How’d you acquire them, what was going on there? And what did you learn from that experience?
Chris Golec
So we’re just in that motion actually right now. And so the first product we rolled out last December was actually a free product. And that free product is really helping people understand kind of what’s working, what’s not, and providing them benchmark data and how they’re compared to the rest of the industry. And so basically, people can come to our website, they can sign up for a service where they set up their total addressable market. So they select the industries they sell to and the size of companies and the regions. We give them a tag, they can place it into their website, google tag manager or whatever they use. And within the next day they can start seeing their traffic, where it’s coming from and the quality of that traffic by channel and then how it compares to industry average. So it’s very insightful, it’s an easy way to get people adopted and that’s kind of step one.
Chris Golec
And that free service will continue. The product that we’re rolling out, it’s not commercialized yet, but will be next month is where we then start consuming. What are you spending to generate that traffic and what are the business outcomes as it relates to building pipeline. And when you tie all those three things together, digital signal, vendor, spend, business outcomes, now you have something way more powerful and can quickly see that gosh. The percentage of budget that I spend on this channel or vendor versus the impact or the pipeline influence is totally mismatched. It’ll make decision making a lot more scientific and really start bringing finance into the mix with metrics like what am I spending to generate a new pipeline opportunity? Sounds pretty simple. Some companies do it, but the majority are still stuck in this world of MQLs and SQLs, which finance people and salespeople don’t care about those.
Chris Golec
They want predictability on pipeline, they want efficiency in when the dollars are spent and they want to eliminate waste. And that’s what we help do.
Brett
Is the MQL dead? I keep seeing that a lot on LinkedIn as well.
Chris Golec
It’s always a red flag for me when somebody talks about it.
Brett
And can you talk to us? What’s broken about MQLs and just expand on that a little bit? I think that could be helpful for.
Chris Golec
The audience listening in. Yeah. So a marketing qualified lead, I’ll define what it is because some people say marketing questionable lead. It has a different meaning at every company. And what’s even worse is that within a company, it often changes. So it’s hard to look at results over time. And people build spreadsheets. If I generate 10,000 MQLs and 25% turn into SQLs and another 10% turn into opportunities, people start getting measured on MQLs and volume and cost. And the reality is, if you look at customer acquisition cost, it’s hard to draw the relationship to MQLs, especially if it’s a change in definition. What people should be looking at is what do I spend to generate a pipeline opportunity and what’s my close rate? And then you can quickly figure out the variable marketing expense that goes into CAC. And in most companies, 50% of your customer acquisition cost goes into this variable marketing spend and it’s not controlled.
Chris Golec
And so I think that’s a huge opportunity for companies to get a lot more efficient in kind of where they’re spending dollars. So anyways, that was a long winded answer to your MQL question. I think it’s important. But you should never measure your organization around it and pay people on MQL. You should pay them on pipeline and the things that sales and finance and the CEO cares about makes a lot of sense.
Brett
Now let’s talk about go to market. So if you reflect on the journey so far, what would you say is the biggest challenge you face and what are you doing to overcome that challenge?
Chris Golec
I love the model where we’re adopting free customers, the path from our free product to the premium product. The journey has been a little bit too long. I wish it was a few months, not a six month difference. So that’s created a little bit of a hiccup in our whole kind of go to market motion. But these things happen, as you know, with startups. And I’m also really encouraged around these kind of PLG models where the customer can expand usage and not necessarily have to interact with sales, maybe their CSM if they want to expand usage or they can just kind of buy more within the product. And so I think that’s a really interesting model for us. And we have a plan around that with some new functionality that I mentioned earlier that will be coming out in Q three. And so I think it may change the way the go to market strategies of B2B companies, but the traditional two to one SDRs and huge sales and marketing overhead, it just feels really bloated and I think it can be a lot more efficient.
Chris Golec
I would also say, though, it’s hard as a small, innovated, kind of unknown or unbranded company to get there. So there’s going to be a lot to learn along the way.
Brett
And based on your journey, building channel 99 so far and demand base previously, what would you say is the top piece of advice you’d have for an early stage founder just starting their company today?
Chris Golec
It’s always people, from my standpoint, really solid. People in a big market will find the money and find the success and the team that you bring on kind of that one to 10 million is probably different than that 10 million to 100 million. Different passions, different skill sets. And it’s important to recognize that early. Some people absolutely scale from one kind of phase to the next, but a lot don’t and a lot prefer to be in that early stage. And so you just got to be on the lookout for that and be prepared to make changes when you need to. And it’s hard when you’re early because it’s family like, right. People are your friends, but you just got to be transparent and be open with conversations about that.
Brett
Makes a lot of sense. Love that last question here. Let’s zoom out into the future. So three to five years from today, what is that big picture vision that you’re building?
Chris Golec
Yeah, I want our company to be the must have platform in the marketing staff so that you can measure what’s working, what’s not, and you can compare different vendors or channels. And I’d love to be kind of the Adobe for B2B when it comes to measurement and analytics.
Brett
I love it. Chris, we are up on time, so we’re going to have to wrap here before we do. If people want to follow along with your journey as you continue to build, where should they go?
Chris Golec
Yeah, just go to Channel99. Com. I also have a blog right off the website that you can follow and certainly follow me on LinkedIn.
Brett
Awesome. Chris, thank you so much for taking the time to chat, talk about what you’re building and share lessons from your journey. Really appreciate it. This has been a lot of fun and wish you the best of luck in executing on this vision.
Chris Golec
Thanks so much, Brett. I enjoyed it.
Brett
All right, keep in touch.
Chris Golec
All right, bye.
Brett
This episode of Category Visionaries is brought to you by Front Lines Media, silicon Valley’s leading podcast production studio. If you’re a B2B founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening and we’ll catch you on the next episode.
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