How to Structure Your B2C / SMB Growth Team
Many early-stage founders think of growth as a one-dimensional operation, either performance marketing-centric for B2C growth, or account-based marketing-centric for SMB growth. While many blogs and podcasts have covered how to do performance marketing right, not enough has been articulated about how to build the growth team from a human capital perspective. Therefore, we’re making our recommendations public to help first-time CEOs plan their budget and the formation of the growth team over time.
Generally speaking, your Marketing Stack, or Revenue Growth Stack, has four pillars:
>> 1. Brand Marketing
This pillar includes articles, bylines, media coverage, conferences, press releases, logo, design language, and organic social because it's very much about content. Anything to do with content and distribution of that content across media publications, Facebook groups, Quora answers, etc. is under Brand Marketing.
Do you need a “Head of Brand Marketing”? Not necessarily, particularly for B2C startups. It may make sense to outsource this capacity at the early stages. We recommend adding an in-house function once you have a predictable stream of new users and a “baked-enough” value proposition. Some startups confuse this pillar by grasping it as the main pillar out of the four, making it the case for a VP Marketing or a CMO coming from the traditional marketing space. We recommend considering your specific needs and prioritizing performance marketing and partnerships for your early stage growth. Therefore, our recommendation would be to hire your VP Marketing, CMO, or CRO as someone who can manage a performance-marketing team and lead strategic partnerships with distribution channels.
Who should you hire as “Head of Brand Marketing”? This is a more classic domain that prioritizes the ability to articulate concepts compellingly and is highly culturally dependent. We recommend hiring for this function someone who previously managed content marketing at a company operating in the geo-market you are selling into and at a company with a similar domain of operations to your company.
>> 2. Direct Response Paid Marketing or Performance Marketing
This pillar includes Search engines, Social Platforms (FB, Instagram, Twitter), Video Marketing, Linkedin ads, Native Advertising (Taboola and Outbrain) etc. Anything that is paid ads that the team can track and optimize relentlessly for a positive ROAS (Return On Ad Spent) is under DR Paid Marketing.
Do you need a “Head of Performance Marketing”? For B2C & SMB startups the answer is unequivocally yes. In the earlier stages, a B2C & SMB startup needs to quickly identify and circle around a core audience that finds their product useful and worth paying for. It also needs to prioritize between backlog features and optimize the core messaging for those identified cohorts of highly interested buyers of your product. The best way to do this is to run small campaigns on the usual digital channels and A/B test different target groups, different messaging, and carefully measure the users' behavior from impression to click to conversion.
In this day and age (2023), it isn't enough to rely solely on super-efficient marketing machines; those days are gone. While this is a viable starting point for B2C & SMB startups, it must not be the only growth engine. It is also imperative to build strategic partnerships and product marketing teams, starting from the mid-seed stage where the company already has a sense of what’s working and the user persona.
Who should you hire as “Head of Performance Marketing”? We recommend hiring someone from the Israeli talent pool. We may be biased, but it's also true that Israel has some of the best talent in the world for Performance Marketing. Israeli professionals have experience and the required characteristics such as agility and a knack for hacking. There are many successful Israeli companies that have achieved growth through performance marketing. Our advice would be to hire people who have managed a DR marketing operation at companies such as Wix, Fiverr, Lightricks, Kisstera, Lemonade, and Deel. The ideal candidate should have two primary characteristics: analytical and resourceful. They should be able to plan ahead and react quickly to data.
>> 3. Distribution Partnerships
Under the "Partnerships" pillar, we can include any distribution channel that pays for converted users (CPA), or a share from revenue, or not paid at all if your product is a value-add service to their client base. We can split this domain into two categories: Embedded and Non-Embedded.
Embedded partnerships are the most valuable, but they are also the most challenging to execute. They take longer to set up and create a significant MOAT, especially if your embedded distribution partner is a marquee brand name. For example, Buy Now Pay Later startups are getting users by being embedded on a merchant's checkout page, or the acquiring gateway stack (like Stripe). Getting that Checkout placement is very hard, as there is fierce competition on this scarce inventory and many bidders for the spot.
Non-Embedded partnerships are easier since the technical framework is simpler, and they're not so exclusive compared to embedded ones. It could be advertising on popular sites or email lists, podcasts, or certain communities. As long as you’re paying on a CPA or revshare basis.
Do you need a “Head of Partnerships”? Once you have some core growth motion, say $0.5M-$1M ARR, it's a good idea to have an in-house capacity for partnerships. It takes about six months to a year to sign and onboard the first partners, as your Head of Partnerships will need to A/B test their pitch on different partners. This can be a large enterprise, and the team will need time to prepare appropriate technical documentation for partner onboarding. Think of it as a mini B2B SaaS operation within your B2C/SMB organization.
Who should you hire as “Head of Partnerships”? To execute embedded partnerships, you need a BizDev function, usually a senior and experienced one with connections to marquee partners you covet. At the later stages (from the A round more or less) it is worth sourcing this function from the target market, not necessarily from Israel. On top of business development skills and experience, this domain requires a technical framework, as you’ll need API documentation or similar, or the ability to plug into your channel's APIs or similar. Therefore, your Head of Partnerships should be technical enough to guide your product leaders to the required documentation and be able to discuss such technical scope with the partners’ teams.
>> 4. Product Marketing
Under the "Product Marketing" pillar, we can include the development of landing pages, side pages such as calculators and widgets, proper SEO indexing, keyword density under the domain, conception, and implementation of viral loops and hooks, continuous optimization of the core user funnel, and a Data Team to rule them all (Tolkien reference 😉)
Product Marketing is a relatively new domain that gained popularity around 2018, largely due to the success of startups like Wix in Israel. This area covers the development of landing pages, side pages like calculators and widgets, SEO optimization, and the implementation of viral loops and hooks, among other things. It also requires a data team to track performance and optimize the user funnel.
Do you need a “Head of Product Marketing”? For B2C & SMB startups, creating a strong user experience and highly converting user flow is essential. To achieve this, a methodological approach is required, including the development and release of new viral loops and hooks regularly. Therefore we would recommend including such capacity from the early Seed stage.
Who should you hire as “Head of Product Marketing”? Again, we would advocate that it's best to choose someone from the excellent Israeli talent pool, as many Israeli companies have implemented successful product marketing strategies. Look for someone who has managed a product marketing operation at one of the B2C & SMB companies founded in the last twelve years, such as Wix, Fiverr, Joy Tunes, eToro, Next Insurance, or similar. The ideal candidate should be methodological and analytical, able to generate ideas, test them, and analyze their contribution.
If you're interested in discussing further, feel free to contact nufar@on-ventures.com. Best of luck to all B2C & SMB founders!
