[00:00:00] Jonathan: Welcome to The Difference Engine, the show for tech founders, investors, and innovators.

Well, we'll be asking if Apple is at risk of becoming the new Sony, and address the eternal question, what is the right amount of tech branding?

[00:00:19] Paul: We'll also find out why Europe's home of tech, that's here by the way, is losing its grip.

[00:00:23] Jonathan: Yeah, but first up, we're turning our attention to Ireland.

Is a unicorn changing its stripes?

[00:00:31] Paul: Can Europe's biggest unicorn change its stripes? See what I did there, Jono?

[00:00:35] Jonathan: For those of you not aware, um, Europe's most promising, but slightly US based IPO candidate, Stripe, um, headed by Limerick's own Collinson Brothers has been shopping.

[00:00:46] Paul: So Stripe announced it would pick up a crypto stablecoin player bridge for, wait for it, 1.

1 billion. You have to love that extra 0. 1 billion. You wonder what the weekend just before the deal was and whether that 0. 1 billion was a deal breaker. Give, give, give us 0. 1 billion and then we'll do it. Um, so the question we've got from a category perspective is why a category leader in fintech like Stripe, why would it shell out nearly 2 percent of its quite big valuation for a crypto player in these times?

Well, the answer it

[00:01:18] Jonathan: seems from a strictly category point of view is in fact, it's all to

[00:01:23] Paul: do

[00:01:23] Jonathan: with timing.

[00:01:24] Paul: So. Stripe was recently valued at 75 billion, a lot of money, you think, but that's about half of what it was at its peak for its critics. Stripe has got a much delayed IPO. We thought it was going to go.

Is it going to go? Is it not going to go? So it is half the value of what it wants once in the crazy go go years, uh, in fact, uh, of yesteryear, which were just in. Two years ago, in fact. So is this an embarrassing drag on its reputation?

[00:01:50] Jonathan: Allegedly, allegedly, internal morale was, was kept up with, uh, secondary stock sales, which if true, that would, that would allow long serving employees with exit strategies and a bit of liquidity to buy the houses and so on that people tend to do.

Um, but it kept most other investors locked in.

[00:02:08] Paul: Yeah, that's a good thing, right? You want your loyal employees to have some money so they're not going to food banks and they're focused on making a brilliant tech company.

[00:02:16] Jonathan: To flip that around, um, Stripe is using what it has, you know, a relatively proven value to expand from its core.

Payments core to a new category of stable core in crypto. Um, so is that timing perfect for that? We have to have a look at

[00:02:34] Paul: crypto. So how good is this at which money are calling the largest stable coin deal to date? Here it is from the horse's mouth. Patrick Collinson, co founder of Stripe this week said.

Stable coins are room temperature superconductors for financial services. Thanks to stable coins, businesses around the world will benefit from significant speed coverage and cost improvement in the coming years. Stripe is going to build the world's best stable coin infrastructure. And to that end, we're delighted to welcome stable coin to Stripe.

[00:03:04] Jonathan: Yeah, this is, this is particularly interesting as, um, earlier this year, I was, I was moderating a day long conference put on by big, big, big, Picture insight when it was called snappily, uh, blockchain, cryptocurrency and web three, now plenty to go out there. Paul, you've just taken me back to one of the sessions, which was entitled stable coins.

Just how stable now, obviously one of the major advantages, stable coins is that there are crypto asset that are peg to another asset, such as commodities or fiat currencies, you know, like the pound or the Euro in order to stabilize their price. The clue is definitely in their name. Um, you know that being so, um, they have become an essential part of the cryptocurrency ecosystem and they do form a major on ramp currencies and are also providing much of the liquidity for crypto trading.

Defi. Now, , those of you who don't know what Defi is, it's the opposite of. Trad fi, which sounds like jazz, which would be nice. Um, but defy stands for decentralized finance, which is a financial system that uses blockchain technology and cryptocurrency to provide financial services and why that's important is the aim is to.

democratize finance by replacing the centralized traditional intermediaries such as banks, brokerages, exchange with peer to peer relationships. So this is all new paradigm and category creating stuff.

[00:04:35] Paul: It's riddled with acronyms and tech speak. So it's, you can tell it's a category rich area.

[00:04:40] Jonathan: What is sort of interesting is that the institutions that are enabled by this innovation may change.

but the need for stability in the economy remains. So this is where stablecoin wins. Again, the clues in the name that theoretically constant price stability versus the more volatile prices of other crypto assets. Gives a major utility and given the over 99 percent of stable coins by volume are pegged to the U S dollar.

Unsurprisingly, they've proven popular with States experiencing economic ills, such as high inflation or capital controls. And I'd say that was a win win for both crypto and the buck. It's not all been plain sailing. Um, there are concerns about how stable coins are backed and collateralized, and the impact of the de pegging of the algorithmic stable coin, TeraUSD, in May 22 led to the collapse of the TeraLunar ecosystem, and that wiped out around 45 Billion in market capitalization within a single week.

Ouch, ouch, ouch. Now that of course has produced a long tail of worry about the potential instability and the systemic risk of stable stable coins as an asset class. But you know, overall were this and the general rumors of crypto's demise oversold.

[00:06:08] Paul: There are strong rumors that neobank revolute and online stock site, Robin hood are also looking to buy into this crypto stable coin category.

If they are, has Stripe just taken the best property off the market?

[00:06:22] Jonathan: Oh, or will it fall under the auspices of Lina Khan and her beady eyed cohort of antitrust regulators? Or did the boys from Limerick bet on her not being around post the US election?

[00:06:33] Paul: Well, what do we learn? They say it's hard to time the markets.

We hear that time and again. That would appear to be true here in Stablecoin as it is everywhere else. If the Stripe leadership wanted to cash out the very top of the Zurb era, it could have done. It's bided its time. To be fair, they did not flinch. Now in the tech downturn and more generally in the post FTX world of crypto, could this be inspired timing to capture a brand new category?

We expect the old guard, the likes of Visa and Swift who have already tipped their toes in the water to react to this move.

Next up is Europe's home of tech now struggling. Some recent research suggests the UK is not only failing to create category leaders. But it's actually struggling to take businesses from startup to the scale up phase. That looks to us like a serious

[00:07:30] Jonathan: block to enhancing economic growth. The gloomy news is that the investment in early stage businesses has fallen to a six year low.

In the three months to September, there were just 32 fundraising rounds for startups, the lowest number since 2018. Now, that's six years ago, and down from 75. In the previous quarter.

[00:07:50] Paul: And in addition, a study commissioned by venture path, that's a group of investors, uh, who channel capital into early stage businesses reported the companies in the UK raised just 162 million pounds in the past three months.

By offering shares to external investors for the first time, again, the lowest figure in at least six years. Let's not be totally down on this,

[00:08:11] Jonathan: Paul. There was a bright spot. And the average amount received from firms from these so called class A funding rounds rose to over five million pounds in the quarter to September.

And that's up from 4. 2 in the previous three months to that. But back in the heady days of 2022, an average of 102 companies launched Class A funding rounds each quarter, with the average backing for each business is amounting to, yet again, 4. 2 million. Now, this is serious. Barriers to accessing early stage funding could further inhibit productivity growth by stifling technological innovation.

And just to remind everybody, productivity growth in Western Europe is a major issue. Um, so it should be obvious that a lack of investment stifling technological innovation is a downward spiral for any economy.

[00:09:03] Paul: The UK is not alone though. Alongside other rich economies, growth has faltered since the 2008 global economic crisis.

A financial crisis, as we know, and largely due to poor productivity improvements and slow investments.

[00:09:13] Jonathan: Uh, but what amused us was the response of Michael Moore is the chief executive of the British private equity and venture capital association, the sector lobbying group. And in response to this situation, he said, it's, it's clear that we need to get significant new capital into, into venture capital funds, uh, which backed the innovative businesses that will be the backbone of the British economy in years to come.

Yeah, that's, that's absolutely true. But if you actually look at most of the capital flows that have been coming in, to the funds in recent years that have been from North America. So, you know, what's happening, uh, in the European financial institutions, that means they are not putting money into these slightly riskier ventures.

[00:09:52] Paul: Well, just to maybe skip forward a little bit and, and to maybe flag up a future episode with Ben Morrell from, uh, Brega, very intelligent and, uh, A well read man on the subject, he has some theories around, uh, pension funds in the UK, uh, being not so generous with the dry powder they allegedly have. So more on that on the episode, which will follow with Ben from Riga.

[00:10:14] Jonathan: Yeah. So I think, you know, generally we need to get our facts straight here. Either the money's there or it isn't, uh, either there are firms worth investing in or there aren't, um, because not investing money, well, Sitting on dry powder is not the same thing as not having money to invest. The constant chatter amongst investors recently has been one of not seeing opportunities worth investing in, whether because of fashion, business plans, valuations, risk, or concerns about eventual.

Exit. So, and let's face it right now, the idea of a European company IPO in anywhere, uh, seriously is pretty laughable, perhaps with the exception of Stripe, uh, so it's understandable why some big bets are not being made. But what we are looking for in particular enterprise software firms that can scale to a hundred million AIR in.

a decade, you know, using the magic combination of potentially category leading idea and consistency of funding to make it happen.

It's occurred to me that Apple might be coming the new Sony.

[00:11:19] Paul: Well, it does look like it's facing a bit of a crisis of its own making. The company's misstepped a bunch of times recently. We won't mention the car. Could it be approaching this point of no return in transformation from a Category winning category, creating Uber force to just another indistinguishable consumer tech firm.

And we've got lots of those. Um, and as we mentioned on the recent, uh, episode we did with the crush iPad ad debacle, it's like the perfect metaphor of what the company has become out of touch with reality, lost its customer first design mojo as well on its way to becoming the world's most valuable company.

Despite all of this, Is it going to lose it all from a category point of view, it's an object lesson in what you need to be as a leader and where you need to focus if you're going to have any chance of creating and category leadership.

[00:12:07] Jonathan: You know, undoubtedly under Tim Cook's leadership, the company's cranked up its output of iPhones, iPads, Mac models, and it's sweated that foundation by creating a supporting group of wearables, home devices, accessories, um, not to mention a decent services and advertising business.

And if that means an evaluation terms, it's, it's pretty much richer than, than many countries and bigger than all banks in terms of valuation. First company to reach 3 trillion value. And that was bigger than the GDP of Canada. It's really interesting is, is that the revenue has exploded under Cook's command and it's mainly thanks to the Omiphone, which accounted for just over 50 percent of Apple's total 2023 revenue.

Sales, that's great, but there's a problem with all those eggs in one basket. You know, the smartphone markets has to be entering late maturity. And as we've seen shipments of iPhone have plunged recently. Um, and I think the strategic reality is much more worrying. You know, AI at the moment appears like the wild west.

We are entering a new era and that's going to redefine how humans interact with technology. And Apple who have been the masters of that interaction are behind. And I think we could be forgiven for thinking that Cook, for all his talent, is by nature a COO crank turner, not the visionary CEO that is needed to maintain Apple's very special DNA.

What really counts, and has always counted, um, and is the basis of the money making machine, um, that I think could be starting to slip away under Cook's watch, is Apple's former repeated ability to take To change the way we live, you know, it's created entire new categories.

[00:13:50] Paul: You know, we all know, um, storied brands that are troubled.

Um, you know, talk about Man United if you want, but in terms of things that, that, that are bad outcomes, being the top one, two or three, depending which week it is, and if it's Nvidia or it's Microsoft,

[00:14:04] Jonathan: not bad. Well, not bad. And, and, you know, again, if you go right back in history, the history of great empires were nothing wrong until they suddenly fell to pieces.

Um, because of a series of missteps, you know, anybody who knows Roman history, Austro Hungarian empire, and so on, it happens. And I think. The, the company is now facing an existential challenge that will require a whole lot more than the great iPhone business they've built to survive. They're not incredibly worried about this because Apple's been there before because the lessons from its own history are startling.

And look what happened to Apple between the. The eighties and the nineties. And in the eighties, Apple had a clear, cohesive product design vision and enabled by brilliance, uh, leadership and engineering that put Steve Jobs and Steve Wozniak to create the serious personal computer market with the Apple two, because before they'd been going around, we're essentially in consumers, but after the consumer, very unfriendly.

Uh, IBM PC arrived on the 12th of August, 1981 history lovers in 84, it was jobs and his uncompromising vision that produced the next big thing, which we all know, leading the world into a new computing area era with the first Macintosh, the Mac. And this is sort of sounds unbelievable now was the first commercial computer with a wimps interface called somebody a wimp now It's an insult in those days.

It was sexy as hell Windows icon pointer mouse. Yeah wimps w i m p s Amazing, you know it changed the world because it reframed And this is a whole category thing. It reframed what users should expect from a personal computer.

[00:15:48] Paul: The category existed to a certain extent with the lousy PC, etc. from IBM, but they reframed what it meant.

[00:15:54] Jonathan: And those customers instantly understood its value. And that's really important because they're paying many, many more times for that Apple product. And they were paying for all the IBM PC clones that then came into the market. The Mac anticipated and shaped consumer desires. Absolutely category classic, but as we all know from history, it all started to go wrong when jobs exited the company in 85 and ironically culled by John Scully, who was a former Pepsi's and Doritos, um, grown up business

[00:16:27] Paul: exact sugar water salesman.

Yeah,

[00:16:29] Jonathan: he joined in 83. Ironically at Jobs invitation. So he decided that he knew better and Jobs had to leave the company. Bit of a mistake in tech. Clearly the man wasn't used to tech. What happened? Jobs law designers and engineers left to following him to form next. During Scully's tenure. The guy who knew better, Apple did experience its first high profile failure, which was the Newton, and that was a sort of brick sized tablet and stylus computer.

I remember that, I

[00:16:58] Paul: was at the launch in the UK. It went spectacularly wrong, even Jobs couldn't save that.

[00:17:03] Jonathan: That was the problem, it had no vision. It had no clear purpose and you couldn't establish an ecosystem around it at the time it was launched. So it did instantly flop, that's for sure. As did all those other tablet and stylus at the time.

But for Apple, this was particularly bad timing. Um, it needed a new category success. Why? Because during that period, Apple was up against the commoditization of graphical computing. Why was that? Because the comparatively mediocre, but cheap and universally licensed Think Betamax, but VHS, Microsoft Windows had arrived.

So in a decade, Apple and its closed environment went from category leader to near death. And then. You know, Apple had to start thinking about what it was, what it was going to do. And in irony of ironies, they went back to Jobs. They purchased Next. That was a move instigated by Gil Amelio. So Jobs returns to Apple in 97.

Um, Dangerous move, maybe they thought. So they kept him as a consultant, gave him a, gave him a pile of Apple stock. Um, and they went from there. And what I find very, very funny about this was that it's emerged since that, uh, next wasn't Amelio's first choice, uh, to replace what was the council Copland project, which was their internal next generation operating system.

He'd actually started negotiations to buy BIOS. From B Inc. At the time, how life could have been different Absolutely. For a number of people here, yes. But the, the negotiation stalled when Jean Louis Gase, who was the BCEO, who was also ex Apple, said he wanted 275 million. Um, apple said, no, no, we'll give you more than 200 million bargain.

So that whole thing crashed and burned. Now meanwhile, um, they paid 400 million for. Next, you can only imagine what would have happened to Apple if Gase had been a little bit more flexible, right? A year later than all this happened, Jobs convinced the board to oust Amelio, and he became the CEO again.

Little palace coup again, and Jobs went on to do what Jobs did best, to recategorize entire technology. And music. In fact, industry's twice first with the iPod and then with the iPhone. So taking on both the nascent MP3 market and ushering in the era of interactive screen smartphones, again, fast following and change.

Um, so as most of you listening, we'll probably know. Um, both Billy Joel and Steve Jobs, Billy Joel once memorably said only the good die young. And unfortunately in 2008, Jobs health declined due to cancer. And he eventually resigned in 2011 and sadly shuffled off his mortal coil later this year.

[00:19:53] Paul: Yeah. And an amazing speech, valedictory speech, he gave to some students worth checking out on YouTube.

Yeah, yeah.

[00:19:59] Jonathan: Makes the hairs on my arms stand on end just thinking about that. So Jobs dies, unfortunately, and at this point, history starts to repeat itself. So Cook, a business operator like Scully, not a visionary like Jobs, becomes Apple's new CEO instead of the other person that was key to delivering Apple's value, Sir Johnny Ive, Apple's chief designer.

Yes. What a man. But after this happened, the legacy money minting just carried on. The Apple watch came out a classic Apple fan product, but barely sold at the beginning, but was saved from failure as it become one of the leading health and fitness devices competing in the market, you know, combined with AirPods and those other iPhone related product extensions.

These do jaws account now for about 10 percent of Apple sales, but to a greater or lesser extent, these technologies are. iPhone extensions, they are not new categories. So there we go. So you've got Johnny Ive still sitting there in Cupertino, keeping the vision alive, running on the remains of Jobs ideas and successes and some of his future plans.

But it was quite obvious that the Apple culture was changing around this time with the operations team getting stronger and stronger and stronger. You know, clearly defeated by Cook's new company, Zeitgeist.

[00:21:15] Paul: Johnny's a hardware guy. At this point, Apple was getting into services massively, ramping up all of the, uh, Apple Music and all the bundles you can get, etc.

So yeah, if there's not something made out of carbon, I don't think Johnny's going to hang around.

[00:21:28] Jonathan: After he left, things got worse. Apple quickly got through two new design chiefs. And then, which is to me the ultimate operational move, they decided to put the entire industrial design department under the control of, sorry Jeff, another bean counter, Jeff Williams, of course, was Apple's COO, just like Cook had been, repeat, repeat, repeat.

Now, if you're still paying attention here, you might be thinking, Come on, where's Cooke's new Newton moments, you know, well, that would be the aforementioned vision pro, which so far has really failed to reframe the public's needs or desires. Just go back to jobs for it for a second, when jobs returned to Apple in 97, as we said, first as a consultant before taking over again as a CEO.

He started to get the company back on track. He did some tough things. He immediately cut many Apple products, including the Newton, of course, in an effort to trim costs and save Apple from an imminent financial collapse. He was in fact cutting failed category contenders to focus on the projects like the iPod and the iPhone that could change the world for the better.

Uh, or at least a consumer experience there. Um, and much to his anger and engineers, Chagrin, who had been his biggest supporters, even Kando and Doc. And that, if you remember, that was a framework that allowed developers to create multi platform apps by combining different components,

[00:22:57] Paul: sort of a Lotus notes, SharePointy type product.

Yeah.

[00:23:00] Jonathan: But the point of this is that what Jobs understood and his engineers didn't, is that you've got to start with the customer experience and work backwards to the technologies. And that was a. A classic technology push project, so it was canned. The point of all this is regardless of Apple's, you know, apparently diminishing at the moment ability to produce piles of cash every quarter.

It's failed to follow up on the iPhone. It's now suffering from a lack of clear focus that I think is exemplified by Vision Pro. We've had a hard time imagining jobs arrive, considering the idea of a VR Headset, which is something that for years, nobody has wanted to put on their faces. Yeah. People don't even want to try it out at the moment.

Even uber fan boys have returned theirs. This history matters because we're entering a moment resembles those of the PC mobility and the internet in the early eighties and nineties and noughties moments that would totally reshape the way humans and technology coexist in recent years. Apple was concentrating on the Vision Pro, OpenAI and Google have started to create the next big thing with generative AI platforms.

So having rode the PC internet mobility waves, Apple appears to be years behind.

[00:24:16] Paul: Except they are making some moves, uh, recently with the announcement of the worldwide developer conference about Apple intelligence.

[00:24:22] Jonathan: Let's hope that is, that is the light at the end of this tunnel. But at the moment it's got some fancy goggles nobody wants, a junk car, and frankly, Probably a dilemma of signing a contract with Google, OpenAI, or someone else to remain relevant in this whole world changing AI race.

And the bigger problem beyond some vague promises about some cool AI, because I think that's sort of what they are, I haven't seen An articulate, cohesive and compelling larger vision coming out of Cook that makes Apple part of this new era. You know, without that sort of vision, which jobs for all this fault exemplified, Apple could just become another provider of consumer electronics and services that are increasingly indistinguishable from the competitions and whose value and price point it becomes harder to justify.

[00:25:15] Paul: That's when you get into the world. A bit like Sony, sticking brands on things, sub brands like Sony Bravia and things like this.

[00:25:21] Jonathan: Totally, and you know, post Walkman, which was Sony's big category play, yet it's hard to remember just how quickly Sony declined, um, and just produced this series of products, as you say, under these brands that were just better, possibly, until it killed its value proposition.

And you had this once absolutely must have good looking premium brand becoming who cares?

[00:25:47] Paul: So what did we learn here? I think, um, you know, great vision driven consumer focused design is the only way that Apple's going to make its AI play work for it. But that's going to take some visionary thinking.

Leadership. And clearly, God bless him, it doesn't look like that's Tim Cook style. Perhaps, um, perhaps Cook should buy with all that spare cash floating around OpenAI. Although, it's going to be difficult now they've got a partnership with it. And Microsoft have got their first. Um, or maybe they should go out and knock on Johnny Ives not inconsiderable door.

[00:26:19] Jonathan: Get the man back. Or they could take both. Even more radically, they, they could get, put maybe Sam Holtman and, and Johnny in control. Whoa, what's up with that? I know this is, I know this is radical. It's radical. But, you know, we do care about Mr. Cook and, cause he's done a fantastic job in many ways. Make himself president.

to ensure that the apple cash cow continues to be milked while they move on to a new paradigm and create new categories and the all important horses on Wall Street are not spooked.

[00:26:49] Paul: So you've left the best till last here. I love this prodigal son returns story. We love a boomerang. That is really history repeating itself.

And as Steve Jobs, I think, um, you know, some, some say eight, I think 11 years, Out of the fold. And Johnny, he's only been out for six so far. Maybe it's, it's time

[00:27:06] Jonathan: for that. This is radical, but they could be capable of creating the next big thing. And I think the reality is, if you look at what they're up to, they're all independently already working on it.

And you've got, you know, Apple's massive financial resources, the power of its current ecosystem, the brands. Of course, that brand is massive. They could bring category design back into the company and be a major player in ushering in the next tech revolution.

[00:27:28] Paul: We would love that,

[00:27:29] Jonathan: or Apple could choose to be the next Sony.

A once great company brought down by hubris and its own internal reality distortion machine. We don't want that, do we Paul?

[00:27:49] Paul: You've got to learn to

[00:27:50] Jonathan: earn. So this week we have a slight change here. I'm going to pass over the professorial mortarboard and cloak, uh, to Professor Moore here. What is it we're going to learn and learn about this week?

[00:28:06] Paul: What is the right amount of tech branding for a B2B tech company?

[00:28:11] Jonathan: Ooh, that's the eternal question.

[00:28:13] Paul: Yeah, this one's for the B2B tech CMOs really. We all know building a new category is about breaking the mold. It's a constant battle. You got to reframe the problems that your tech solves and grab the attention. Of potential customers and partners. Now that's not the case in B2C. A brand will often do you.

For B2B, a brand can signal that the category is new, but it can only do so much of the work. So, so what is the correct blend then? It's the classic question. As a marketing pro, as a CMO, you know the story. And thanks to category design, you know, your story. Oh, you should. Well, yeah, you better had. So your category, though, is on a multi year journey to greatness, to keep the investors and the leadership happy.

However, often, far too often, there's a problem. Guess who the problem is with? Sales team. The sales team. They're bitching again about marketing. It's a classic. We're not getting enough leads. Nobody knows who we are. The competition is in great shape with the analysts. And the killer Zed move. I cannot possibly make my quota with this new

[00:29:12] Jonathan: positioning.

[00:29:14] Paul: All of which will eventually lead to them departing. But in the meantime, they're going to make your life merry hell. And maybe it's not your fault. I mean, the new website that's been in production for months. They always are in production for months. Well, actually. It is your fault. Because the key to marketing tech.

Categories and tech brands in general is to balance the two sides of the coin. On the one hand, you want amazing brand awareness so that we get rid of the, we don't know who you are problem. And on the other hand, you need to be helping those whiny sales guys who pay everybody's bills. So only joking sales guys.

Uh, you need to have lead generation. However,

[00:29:52] Jonathan: you don't want to over index on it. You do not

[00:29:54] Paul: want to over index because if you're working on the front line without doing all the strategic work to build a new category and not building out marketing's demand generation top of funnel, playing to your strengths, you are in sales.

[00:30:09] Jonathan: Yeah.

[00:30:09] Paul: Which probably means, you know, a nice increase in salary, but a lot of stress. A lot of stress on things that you may not be experts at. Yeah,

[00:30:16] Jonathan: but neither is it. Frankly, should you obsess about awareness?

[00:30:19] Paul: The other hand is just as bad. You're playing then into the every cliche about marketing the sales teams ever had.

They don't understand. It's a waste of money. They have all the fun. So, um, instead of a team, you end up with two very pitchy rival teams. No, you don't build categories like that. You absolutely do not build categories like that. So you need your team. So what is the correct balance in all of this then?

Keep asking, yeah? Come on. How much brand awareness is needed? How can marketing help with lead generation in new categories? It's tricky, especially in the world of creating a new category. So perhaps we should have a look at this in some depth. Let's look, let's step, let's get the listeners some clues.

Let's step back into the midst of time. How strong are the strongest brands of B2B Tech? There's very few

[00:30:59] Jonathan: global B2B brands if you really think about it.

[00:31:02] Paul: And yet, these are the world's largest. Companies. Absolutely. And certainly the world's most highly valued, highly valued companies. So, you know, no question, Apple and Google, perhaps even Microsoft and Microsoft outside that, where are we going?

Dell, Intel, IBM, Cisco. Yeah, not sure. Have you noticed how the brands here are not necessarily as strong except for those who know? And where do we go with former champs like my alma mater, HP. Bracket ski. And VMware as well. And VMware slash Broadcom. Yeah. Do they still

[00:31:34] Jonathan: count? Were they ever brands? Well, what about the Acorns, the Xeroxes, uh, the Compaqs from my dim and distant past?

Yeah. And even, uh, The PeopleSoft?

[00:31:42] Paul: Well, you know, it's funny, isn't it? So Acorn I call, um, arm, yeah, I dunno what I call Xerox, the great giver of technologies for other companies to commercialize more effectively, I think is what you should call them. Zippy, uh, compact. I'm gonna call HPE. Yeah. And PeopleSoft.

I'm gonna call Oracle. And how about the new guys? You spend virtually nothing. On branding and pretty much everything on PR and awareness. Would open AI be one of those perhaps? Open AI? I can't even recall what their logo looks like. Have they got one? I don't know. Cohesity, cohere, square. So these guys spend large on building infrastructure, and I mean large.

But not so much on brand, and yet they still live rent free in the minds of all of us in B2B tech. So what are we thinking about overspending on brand? Do you remember monday. com? I have God on the tubes. And on the radio.

[00:32:28] Jonathan: Autonomy on Spurs shirts. The other Manchester team has, um, has TeamViewer on their shirts.

TeamViewer, German tech,

[00:32:35] Paul: I believe. I mean, like, what is it with loser football teams? Yes. and B2B tech brands. Maybe there's something in there. And this continues to this day. We know, we know, um, the glorious Sir Idris Elba to be and ServiceNow TV ServiceNow ads. Yeah, I'm sure he's looked into the tech stack very deeply.

I bet he has. Or maybe he just looked into his bank account. Who knows? How cynical of us. So our contention is that brands are just not that important in B2B tech. If you're the sort of CMO who spends a lot of time on that, You may have a problem. It's possible to tell your story to customers and the partners who count without bringing the general public into it.

So what's the point of all of this? What should our viewers take away? I just worry that some of our friends in, uh, our fellow marketing friends have forgotten What category is about and are confusing it with building a B2C brand. Let's finish with a real life story. And this is a current story from a senior sales guy.

You know, who you are, um, who contacted us recently to say how frustrated he was with his CMO and call for our help. Now, this company is challenging to redefine an existing multi billion dollar category, which has seen. Multibillion exits to very large tech companies. That's about all we can say without saying too much.

Now, the category though, that they're building is a newer take on a previous category and has a super large time, uh, just because it encompasses much more efficiencies. It makes more parts of businesses more efficient. That's enough of the details. So we speak to the CMO, uh, at the behest of his head of sales and he agreed his mission was to build a new category.

In fact, he had a wonderful. Wonderful, uh, sales deck with lots of like analyst quotes. It was really, really sexy. However, he just had to get his website done. Oh, the old website. Yeah. So guess what? He's invested most of his marketing budget months. And I mean, nearly years of his time and seemingly every ounce of his emotional energy in schmoozing the usual suspect analysts with predictable effects.

So I'm afraid in our view, that's just a really bad use of time. Fast forward six months, guess where the website is? Nowhere, not done. Guess what the analysts are doing? Trying to put them in their own categories and still playing him and still asking for consultancy money. And we've walked away. And the sales guy quote.

I've not had a single lead in six months. No shit, Sherlock. Good luck with that category, guys. And maybe focus on the POV and not the brand.

Thank you for listening. If you want to learn more, go check our blog posts on becategorical. com.

[00:35:12] Jonathan: If you have a category issue, then we can help. Get in touch with us.

[00:35:15] Paul: And remember, don't be better, be different.