🔕 Why you should stop using estimates, move people into different roles, ...

I listen to 10 hours of podcasts a week, so you don’t have to.

This is the 39th edition of Best 3 Podcasts of the Week 🥉🥈🥇, featuring Lenny’s Podcast, Nudge, and Rework.

What you need to know

• ⭐️ Can branding improve your product?

• 🔀 Move people into different roles

• 🔕 Why you should stop using estimates

BONUS segment

• 📱 Tactics to increase referrals

⭐️ Can branding improve your product?

🥉 Third place (4 min read vs 27 mins listening)

Many of us conflate brands with logos. We struggle to put a value on the intangible, reducing brands to what we can see.

A brand is much more than a name and a color palette. A brand is a set of values and behaviors that evoke a deep feeling inside of us. So much so that it can alter our perception of reality.

With the help of the Nudge podcast, I’m going to demystify branding and explain how startups should approach brand building.

What they say

The impact of Nike

Give somebody generic golf clubs and have them hit driving range golf balls.

Give them a generic golf club. Then give them the exact same golf club but just slap a Nike logo onto it.

People in the Nike group actually hit the golf ball about 10 per cent further.

Matt Johnson

The magic of Advil

If you're really in pain and want pain relief, do not be cost sensitive. Do not go for the generic brand. Go ahead and pick up the Tylenol or the Advil.

Studies have shown that while the chemical composition is basically the same across the generic and branded label, the branded label has a placebo effect that will have a more potent effect on your pain.

The really crazy thing with these studies is even when you explain to the person that there's a thing called the placebo effect, they're still impacted by the placebo effect.

Matt Johnson

The power of branding

This is a question many marketers debate. What should branding try to achieve?

Matt answered the question nicely. Branding is about building associations that change the way you perceive products.

When someone thinks of Nike or Advil, they don't judge the product independently, they also think of the associations they have with the brand, whether that's high performance or faster pain relief.

Phill Agnew

What I say

Why it matters: It’s clear that your brand can positively impact your customer experience. But how much should you invest in your brand as a startup? And how can you justify budget when ROI is difficult to measure?

Startups experience diminishing returns when investing in branding. It’s easy to spend tens of thousands of dollars and months of your time crafting the perfect brand. Instead, you can reframe investment in your brand in line with scaling your team:

0-5 employees:

• Focus on finding product-market fit

• Take the time to deeply understand your customer

• Establish a brand and start to build awareness

• Document your vision and mission

5-10 employees:

• Codify your brand values and behaviors

• Cement your positioning in the market

• Ensure the visual elements of your brand match your positioning

• Avoid spending more than 5-10% of your budget on branding (unless you’re a lifestyle or fashion startup where your brand is essential for gaining traction)

10-50 employees:

• Ensure your team embraces your brand values and behaviors

• All communications and behaviors should reflect your brand personality

• Revisit and finalize your vision, mission, and purpose

50+ employees:

• Build a compelling brand story

• Invest in brand marketing campaigns

• Start tracking share of voice

Between the lines: Your brand can also be a growth driver in and of itself. The key thing is timing your investment. Take Airbnb. They stopped performance marketing in 2019, saving $800 million. Since then, they’ve never looked back. Over the last few years they’ve invested heavily in brand marketing. The result? More than 90% of traffic is now direct or organic.

There are other benefits to a strong brand: recruitment, retention, community, fundraising, and press coverage, to name a few. The challenge is hiring a great brand consultant that’s exceptional and affordable. My tip? Hire Lucas Wickens. He leads brand at Medicspot and is one of the best marketers I’ve ever worked with. You can thank me later.

🔀 Move people into different roles

🥈 Second place (5 min read vs 1 hour 26 mins listening)

Your top talent are often multi skilled. You give them a problem, they find a solution. However, many companies are rigid in their job roles and aren’t quick enough to deploy the right people to the solve the most pressing problems.

Sahil Mansuri is the CEO of Bravado, the world’s largest online sales community. He described his radical team restructure in response to the recession and why you should consider a similar approach.

What they say

The state of B2B sales

The average enterprise sales cycle was 62 days. It's now like 115 days. Customers are dragging their feet. Everything is going to ‘No decision’.

No decision typically means 'I'm not going to say yes now because I don't want to spend the money. I actually like the thing but I'm not going to buy it.'

When times are tough people hoard. People trust the safety of those they know versus those they don't. This is basic human psychology.

In a world where you can't sell to new customers, your only hope is to keep the ones you've got for long enough to survive and hopefully upsell and cross-sell those customers into new products.

If you're a company that doesn't have a lot of customers and you're trying to go out to market and sell your product, I think you're in a lot of trouble.

If you're a company that has a large customer base and you've done a shitty job of engaging, retaining, and maintaining relationships with them, this is your alert.

Sahil Mansuri

A radical strategy you can employ

Most sales orgs are divided into pre-sales and post-sales. Pre-sales work with companies that are not yet customers to get them to sign up.

Post-sales work with companies that have already signed up to help them find value or renew or upsell.

You put your best people in pre-sales because it's harder to sell a new customer than retain the one you have. 

The most dramatic thing you could do is take your best sales people and make them customer success managers (post-sales).

There's no point in having your best sales people sell. What's the point when people aren't going to buy?

What we cannot under any circumstances do is lose our existing customers because replacing them is going to be impossible.

Sahil Mansuri

Sahil is walking the walk

There are a lot of people who will listen to this and think that's crazy. They’ll say ‘Why would I take my best performers in a tough market and move them to to post-sales?’

I can't predict the future any more than anyone else can. But, I can tell you it's what we're doing at Bravado. It's not just talk it's action.

I do a decent amount of angel investing. I'm telling everyone in my portfolio companies to do the same.

Sahil Mansuri

What I say

Why it matters: I’d take Sahil’s advice with a grain of salt. There are various scenarios where this would be a very, very bad idea:

• If you have <12 months left of runway and need to grow in order to breakeven

• If you’re in a market where your competitors will eat your lunch

Between the lines: The important takeaway isn’t to follow Sahil’s advice to the letter, but to think more broadly about the biggest problems facing your business.

Ask yourself ‘Am I putting my best people on the hardest problems? What are the repercussions if I leave the status quo and fail to achieve my goals?’ Consider moving people into different roles and creating a culture that embraces change.

BONUS segment

📱 Tactics to increase referrals

Say to customers 'Hey, in this market you're finding value in our product. Who are 1 or 2 other folks that you know in the same position as yourself that might also find value?'

Start collecting a bunch of warm interests but don't just stop at getting the name. A lot of the teams stop here and say job done.

The right way to do it is to say 'Great, can you make me an e-intro right now? Even better, can you connect me over text?'

One tip that I have for all founders and all sales leaders is to stop using email. Email is where deals go to die. Text message is where deals get done.

Here's the other fun part: Don't take the introducer off the thread. Keep the introducer on a little bit to hold the person's feet to the fire to actually show up for the meeting.

Sahil Mansuri

This is golden advice. You can apply this to deals outside of pure sales. Use text or WhatsApp to build more personal relationships with investors, journalists, board members, and suppliers. Deeper relationships will put you in better stead to getting what you want in the future.

🔕 Why you should stop using estimates

🥇 First place (4 min read vs 24 mins listening)

You can count on one hand how many software projects have shipped on time. But if estimates are always wrong, why do we use them? Jason and DHH argue that you don’t have to settle and there’s a better way of working.

What they say

Stop estimating, start budgeting

If you’re trying to do anything novel at all, you’ve got to accept the fact that we’re all awful at estimating. You can’t design it all upfront.

At 37signals, we don’t estimate. Instead, we work with budgets. We say ‘We think the problem we’re trying to solve can be done in this amount of time.’

We have a rough sketch outline of what the problem is and how we want to go about tackling it.

The specific scope, how we implement it, and if we want to implement all of it or not is left open so that we can deliver something good in the amount of time we budgeted.

This is flipping it on its head. Don’t ask someone ‘How long is it going to take to get exactly this?’ Say ‘You have 3 weeks to make a great version of that.’

David Heinemeier Hansson

Las Vegas analogy

One way to think about it is to say you’re going to Vegas to gamble. The smart way to do this is to say ‘I’m willing to lose $500. That’s it.’

Compare this to ‘What’s your estimate of how much you’re going to lose?’ You don’t know so you don’t have a limit. You keep losing and losing and losing. Then you try to make it back. You double down.

This is how software projects work too. It keeps going and going and going. You can’t give up now because it would be a huge waste of time and the whole thing is a sunk cost.

So, what are we willing to spend on this problem? Different problems get different budgets. Hopefully, this metaphor helps people to better plan their software development projects.

Jason Fried

Humility and trust is essential

You’ve got to accept that you’re not going to get everything that you want. You realize you’ve got to give something up.

We call it trading concessions. I’ve got to accept the fact that I cannot make it all happen in 3 weeks.

There has to be a level of trust between the people working on it and the people asking for it that they will come up with something good. It won’t be perfect. It won’t be everything you wanted.

If we can consistently ship good things inside these time boxes that we call budgets, that’s a really repeatable process. The continuity of this is super duper important.

David Heinemeier Hansson

What I say

Why it matters: The best podcasts are those that have a real, tangible impact on how you work right now. This is one of them. It worked out that I listened to this podcast on Sunday night and attended a company offsite on Monday.

At Medicspot, we’re in the process of pivoting a business unit and need to move quickly to de-risk our core assumptions. I summarized this podcast for the team and advocated that we adopt many of the practices shared in Shape Up, including ditching estimates.

Between the lines: I’ve embraced working with budgets rather than estimates this year. It’s allowed me to balance my day job, family, and friends, while building websites like Podup, Best Dentists, and Best Opticians.

I’m a big advocate of shipping the best version you can within a budgeted amount of time. I couldn’t recommend it enough. Hopefully, you consider this approach and get the same value I have out of it!

Shoutouts

When I find newsletters, podcasts, or books worth sharing, I’ll feature them here:

• Want to dip your toes into AI? You can now build AI apps quickly and easily using Zapier’s OpenAI integration.

• Want to be scared of AI? Watch this.

SaaS Trash 🗑🔥 @saastrash

we’re fucked 😂😂

Note, these quotes were pulled at different points of the episode. Some sentences were left out to make the narrative clearer and more concise. Podup is not associated or affiliated with any podcast (unless otherwise stated). All roundups are independently written and do not imply any sponsorship or endorsement by the podcast.