What A Virtual CMO Can Do For Your Startup
Stage-specific hiring for senior talent and operating executives is important for startup founders. The challenge of recruiting top talent outside the founding team is finding highly experienced people with proven track records willing to start over. By definition, the people we want to recruit have demonstrable track records and are already employed or have any number of companies ready to throw huge packages and perks.
“A positive trend for startup founders is the move by some senior marketing executives to work for a few companies simultaneously as a virtual CMO.”
Before remote work became the norm in 2020, employment trends shifted to independent careers as executives sought flexibility and a wider range of experiences. Consultants working in this capacity refer to their role as a “virtual” CFO, CIO, CRO, or CMO.
For the company, hiring a virtual executive provides flexibility by working with the executive that fits your needs now versus hiring someone in a stretch role or where later they may not meet the organization’s needs. Though the entire c-suite outside the CEO can be “virtualized,” the CMO role is often the first to be hired or converted into a virtual capacity for an earlier stage company.
Virtual does not mean half-effort.
A Virtual CMO (sometimes called a Fractional CMO) is much more than a “part-time” marketing leader. Their ability to walk into the role and hit the ground running represents a tremendous benefit to the startups they support. This person will function in the same capacity as a full-time executive and commonly have a team of FTE individual contributors or freelancers dedicated to executing marketing programs.
“An effective Virtual CMO will have repeatedly built marketing functions and have extensive experience in the same or adjacent industry sector.”
For a Virtual CMO to be effective, they must report to the CEO to have a direct and open dialogue about the company’s business goals and objectives. A high impact Virtual CMO will make strategic business contributions and guide critical decisions around much of the following:
- GTM strategy and marketing tactics
- Category design planning
- Demand generation
- Sales enablement
- Messaging frameworks
- Branding, market communications, and PR
- Marketing spend budget and allocations
- Marketing team personnel management
- KPI definition and analysis
Though most Chief Marketing Officers will have broad-spectrum strategic capability, they will always have an area of specialty. Some excel at brand strategy, others at demand generation and driving revenue, while others will be heavily product-oriented.
“A startup moving quickly through the initial stages of growth where the need for brand development is not as great as the need for revenue should hire a Virtual CMO with a strong product and revenue orientation.”
When you hire a full-time CMO, you are locked into that person’s strengths and weaknesses. Fractional or Virtual CMOs enables companies to experiment and differentiate between their long-term and short-term strategic needs.
For a startup faced with needing to secure problem and product-market fit, working with a highly experienced marketer that precisely fits the business’s needs at this stage could represent the difference between winning and losing.
If you are interested in hiring a Virtual CMO, you will often seek someone with deep domain and ecosystem experience. Treat this list as a framework for your discussions with consultants and candidates for the role:
Remember, you are hiring a marketing leader.
The Virtual CMO will ultimately control the direction of your marketing focus, priorities, and organization (working in tandem with the CEO). A Virtual CMO should be adept at analyzing your competitive set to assess the opportunities and gaps to allocate your marketing investment.
They will need a sense of the company’s ideal place in the market and how to maximize the probability of getting there, e.g., possess a strategic vision with firsthand knowledge of the competitive landscape.
IMPORTANT INSIGHT: Many Virtual CMOs are seasoned brand marketers with a heavy strategic orientation around building a competitive brand. A strong brand is a part and parcel of building an enduring company, yet for earlier-stage startups struggling to reach or scale their product-market fit, they are not in a position to invest in the brand.
Be careful of the big-name CMO where every company they’ve entered, the first thing they did was a branding exercise. When interviewing a Virtual CMO, the critical question is how they define marketing strategy?
Have them tell you the core elements of their approach to ensure that they will map their tactics to your business requirements. It’s easy to look busy when the primary marketing focus is branding, but getting to $5 million in ARR over the next 18 months separates CMOs that produce from those just executing on brand.
Though this person carries a “virtual” title, they are C-level and need to be a leader. The marketing team will look to them for tactical direction, role definition, and career development. The Virtual CMO establishes the roadmap for improving the organizational structure and providing clarity for an individual role.
Marketers often wear many hats at startups, so early marketing hires are usually generalists. Sometimes they do not have formal marketing training or backgrounds. Figuring out an employee’s ideal focus takes management know-how, and leadership ability since virtual CMOs often are faced with refining an existing marketing team structure than building one from scratch.
Specialization and structure can take selling in a startup environment since it can threaten the generalist’s job security. Keeping the existing team together while adding and scaling much-needed roles is a significant job of the Virtual CMO.
IMPORTANT INSIGHT: A world-class Virtual CMO can look at a marketing team to identify and prioritize needed roles. An excellent way to screen for leadership ability and assess the speed of impact a Virtual CMO can make is to ask how the marketing team should look.
After learning about the team, they should tell you the gaps and suggest whom to recruit or turn to for the role. Having a network of experienced marketers “on-call” is an excellent sign that the candidate will make a positive impact quickly.
Go-to-market strategic ability.
A common pitfall for technical founders is to believe that their solution or technology is so great that the market will discover it and when they do, it’ll be evident that they should buy.
It’s not that these companies have not found selling opportunities, and they likely have some baseline evidence that demand exists for the product. But, if they don’t educate the market and thus created demand, there is no basis for a go-to-market engine.
A successful go-to-market (GTM) plan requires a strategy to detail how the company will engage customers to convince them to buy our product or service. A go-to-market consultant producing a GTM strategy must include tactics and executions around pricing, selling methods, marketing channels, the buying journey, product launches, category design, etc.
IMPORTANT INSIGHT: There is a clear differentiator between the CMOs that move from success to success as they switch companies and those still trading on that one big win earlier in their career.
The universal truth is that the CMOs who seem always to be successful are the ones that have learned the art and the science of building a penetrating market plan that brings the team together to conquer the market and establish a new category. When you interview Virtual CMO candidates, you should continue the search if they cannot talk with specificity and detail about how they will approach building and driving a go-to-market plan.
A virtual CMO needs the fiscal savvy to manage a marketing budget.
They should be able to measure the impact of each marketing initiative their team runs and adapt spending accordingly — all while keeping an eye on return on ad spend (ROAS) and conversion rates, but the ultimate metric: profitability.
Ideally, virtual CMOs not only ensure a good marketing team, but they have a solid understanding of how the entire company spends (and makes) money. The marketing department doesn’t work in a vacuum.
A virtual CMO must understand how the business of the company functions, e.g., how it makes money and do everything to contribute.
Holistic business understanding.
Speaking of understanding the company as a whole — as C-suite executives, virtual CMOs should understand the entire company.
If marketing is an art, it can draw inspiration from anywhere: the supply chain, customer data, company culture, and more.
It would help if you understood how your product gets made. It’s not just about customer acquisition costs and what you’re spending on advertising, and it’s super-important for CMOs to understand a company’s entire ecosystem.
To best fulfill your business goals, you need a Virtual CMO who understands as much about the company and the market you operate in as they do the discipline of marketing.
This is what separates my work from others who, on paper, may have better “credentials” through education, previous companies worked at, or even the size of teams or budgets managed.
If you don’t know the business, you can’t build the business. Period. I make it my business to know the business of every company I work with, and this is why my average engagement is a minimum of eighteen months, with some lasting as long as four years!