According to Scott Brinker, there are currently 29 "unicorns" in the marketing technology, or "MarTech," space. That is to say that there are 29 companies valued at more than $1 billion and under 25 years of age. That's a lot of power in a pretty crowded space. Names like HubSpot and Marketo are familiar to inbound marketers, of course, but there are plenty of other SaaS tools used regularly by marketers and growing like weeds in your backyard. There's a lot of debate about how these mostly privately funded players will do in the next 2-3 years. Will they do an IPO like Marketo and HubSpot did, or will they continue to grow with private equity until a bigger fish comes along? More interesting to me, how will they grow revenues and EBITDA rapidly enough to satisfy investors and attract potential suitors?
According to VentureBeat, "Investment in the space reached $3 billion in just the first quarter of this year — the lion’s share of which went into analytics startups as companies are doing their best to wrestle with the massive amount of data that marketing tech is generating." Marketers are getting much better at reaching us with compelling content that stimulates our interest and familiarizes us with their brand. Engagement on a personal level requires technology and data, and that's what MarTech software provides.
Marketers are getting smarter about using marketing software, and marketing software is getting smarter about delivering content and measuring engagement. This trend isn't slowing down; it's accelerating. More businesses now realize that failure to upgrade their marketing strategies is a competitive disadvantage in their industry or niche. The good news for marketers is that competition is also driving innovation, as well as affordability, in the crowded MarTech space. How do the unicorns stay ahead of the competition? Let's take a look at a few examples from the still privately funded category.
Founded in San Francisco in 2006, EventBrite is a global marketplace for scheduling events and posting them online. It's a focused app with a tight niche, event marketing available across mobile and web. That's what makes the online experience clean and easy to use. It's dead simple to use and free for event organizers that don't charge for tickets. For paid events, there are low-cost service and processing fees. The website shows upcoming events sorted by date and by category. There's one call to action—to sign up. Twitter and Facebook pages offer helpful hints for promoting your event and customer support Q & A. EventBrite also follows growth hacking best practices by including a referral program, help center, community and an app for managing sales at live events. I love the focus of EventBrite and the attention to detail for event organizers.
Founded in 2010, Domo is a business intelligence SaaS product that helps marketers (and other business roles) collect, analyze and make sense out of data in a fraction of the time it used to take using diverse software and IT solutions. While not strictly designed for Marketing, the package is finding a home with companies like Sage North America that offers business management solutions for SMBs.
On Domo's website, scrolling banners explain the company's value proposition succinctly. In the fat drop-down main menu, you can find solutions by industry and role, which is helpful because Domo has many potential business applications. The main call to action is to request a demo, which is smart because this application is complex compared to EventBrite. Founder Josh James knows a thing or two about building a company, having built and sold Omniture to Adobe for $1.8 billion. Now with $450 million in private equity, Josh has a war chest with which to build Domo. It's a complex sale, so he focuses on sales.
"I’ve heard Josh say from the pulpit that 'sales solve everything' (paraphrased). And to some extent, he’s right. It’s hard for an entrepreneur to be creative and disruptive if they don’t have revenues coming in the door. By focusing on sales, a company is able to weather the ups and downs of the market without having to rely on venture funding or debt." - Tech.co
One of the younger unicorns, Slack was launched in August 2013 and has since become a celebrity in the software development and support industry. In fact, Slack is the fastest growing SaaS company in history (so far).
"At launch, in February of 2014, Slack had around 15,000 daily users. [2] By August of 2014, Slack’s daily active users had grown to 171,000, and that number had swelled to 285,000 by November. [1] By February of 2015, the app boasted over 500,000 daily active users, with 'tens of thousands' of new users added week over week, representing a thirty-threefold growth in just a year. Not only that, but Slack users are collectively sending 300 million messages every month, and users are actively engaged with the app for more than two hours every day." - Growthhackers
Again, not strictly a marketing application, Slack is popular among web and app developers offeringpersistent chat rooms that integrate with GitHub and other tech resources. Why the rapid rise in user base and brand loyalty?
According to Co-Founder Stewart Butterfield, "We’re selling a reduction in information overload, relief from stress, and a new ability to extract the enormous value of hitherto useless corporate archives. We’re selling better organizations, better teams. That’s a good thing for people to buy and it is a much better thing for us to sell in the long run. We will be successful to the extent that we create better teams."
Slack's website is simple. It's a one-page scrolling website. There's only one call to action, to sign up for a "freemium" account. It remains free for small teams and limited searches. After that, pricing scales with the size of your organization. Simple value proposition, communicate with your team, and simple marketing strategy, leverage the natural sharing by the developer community, make for an amazing unicorn in Slack.
There are plenty of other MarTech unicorns like Shopify, SurveyMonkey, Sprinklr and HootSuite, each with its own unique value proposition and go-to-market strategy. How will they stack up next to the mega-unicorns like Uber and AirBnB? Will they survive the inevitable tech bubble bursting as predicted by Mark Cuban? I think they will do well because the marketing technology space, while crowded, is in high demand as more and more companies realize that digital marketing, done right, is essential to their survival. I think there will be more IPOs and more acquisitions as the marketplace finds its own way, but implosion doesn't seem likely. Eventually, the leaders in MarTech will become profitable because they inherently understand marketing and sales, which gives them a leg up on other unicorns and startups.
