This is the toughest business environment that I’ve seen for marketers since I started my career. Inflationary pressures, peaking at 9.1% in June 2022, combined with the Fed’s eleven interest rate hikes between March 2022 - July 2023, completely changed the paradigm in which marketers were operating. For over a decade, the canon was growth at all costs. Blitzscaling and unicorn status, even if just on paper, became the goal. The revenue and profitability model could come later.
But, at the drop of a hat, the paradigm changed: profitability became the mandate. Many of the hyper-growth, iconic companies and darling startups that had been created since the 2000s started doing mass layoffs.
If you’re a marketer, you know this story because you’ve lived it. But, don’t lose sight that your CEO, CFO, board and investors have been living it too—just from a different vantage point. They’ve been feeling just as much, if not more, pressure as you.
For context, COVID was a boon for the IPO market. SPACs became all the rage. 600+ of the IPOs in 2021 were SPACs. But, since 2022, the IPO market has hovered at 10-year lows.
Similarly, M&A activity experienced relative stability 2015 - 2019, and then spiked in 2020 - 2021. But, 2022 - 2024 activity has been low due to rising interest rates, economic uncertainty, and increased regulatory scrutiny.
Why should this matter to marketers? Because our venture capital and private equity investors’ funds are maturing, and they have had limited markets for liquidity. If they can’t exit companies through IPOs and acquisitions, then they can’t return profits to their limited partners, can’t raise the next fund and can’t invest in the next round your company needs to sustain the business, let alone continue a high-growth trajectory.
So, leaders need to manage their businesses to be more fiscally sustainable (i.e. profitable). This means that investments in the business are under higher scrutiny—including marketing investments. If we marketers can’t speak the language of the business, and communicate how the investments that we are proposing will deliver profitable growth back to the business, then we simply won’t get the investments we’re asking for.
Last week, I spoke with the StartUp Marketer community and shared some thoughts on how to more closely tie marketing investments and activities to the business. The presentation covered:
The Growth Equation
Measuring Pipeline Velocity
Bottoms Up Funnel Design (or Stacking the Funnel)
Understanding these three items will help marketers better communicate the value of their activities with their C-Suite and board. AND, importantly, it will also help hold marketers accountable for the activities they spend their time on.
Below is the video recording of the presentation I gave on Funnel Fundamentals. While there is certainly more marketers can do to tie their activities to the business, these are the fundamentals to start with.