Q&A Session: Craig Cannon
Craig Cannon Q&A Session is happening on 27th February 2019 at 10:00 AM PST (1:00 PM EST)
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Craig Cannon is, among other things, the Director of Marketing at Y combinator.
The Q&A Session with Craig was held on February 27th, 2019. This transcript has been edited for punctuation, grammar, etc.
For those of you who don’t know about YC, we provide seed funding for startups.
We’ve funded about 2k startups since we’ve started.
What’s are your recommendations for getting new users, Craig?
The specifics are going to vary widely based on the product. If you want to provide more info I can help there. But the short answer is the YC motto – make something people want. To do that you should aggressively iterate on your product and talk to your customers.
How do you seek out emerging trends?
Everyone at YC has their own interests, and we kind of rely on each other to keep tabs.
To be sure, are you focused on marketing Y Combinator or marketing the startups of YC?
YC and sometimes I help out YC companies during office hours.
Is it true?
Yup, it was an accident… if that’s the question. We accidentally flipped the wrong switch in the code and emailed the denied people.
In your opinion, how does marketing like Geico’s (random entertaining bit with a logo/tagline tacked on) compare to more traditional marketing? Does it work? Is it better or worse? Thanks!
Geico was probably ahead of the game for a while, but that style seems traditional now. Dollar Shave Club was original, and that’s now traditional. Sandwich Video is the same. I think it works, but for a small company probably a bad idea, because it relies on real volume over time.
Do you have any advice on attracting millennial users?
What are the scope of your responsibilities, so we can better pose some questions- SEO, PPC, Content Marketing?
YC is small, so it’s a bit of everything, but it’s mostly content (blog, podcast, yt, social, some seo) and events.
What are the top marketing strategies to beat big competitors in Appstore?
You have to launch aggressively with lots of reviews and be smarter about what your product is called. A YC company is called The Podcast App for this reason.
What are the most important marketing challenges faced by startups that you work with? Is there something they all seem to need to figure out? Do they know that’s the most important challenge?
Yeah, so usually the problem is that they’re trying to find initial users and they want it to be easy. It’s not. In the beginning it involves a lot of painful cold emailing, etc.
How did you get to where you are today??
I was graphics editor at the Onion, started a company around a hackathon series called Comedy Hack Day, then took 5 months off to bike tour, and my friend asked me if I’d like to contract at YC and now it’s 3 years later 😊
What do you look for and recommend in working with a *PR*; agency, contractor or first hire? Where have you seen the most success?
For a PR person, we look for someone who has a network, is conscious of what stories would run where and by which authors, understands the story you want to tell and can help you craft it, and is not constantly stressed out because emergencies are common in their work, and you want a chill person to navigate them. Also, someone who’s willing to have metrics.
What’s your challenge this year at YC as the CMO? And what was it last year?
Same as it ever was. Finding the best founders by any means possible.
I’m super interested in your thoughts on AR as a marketing tool for ecommerce. Do you see it as a gimmick or do you expect it to have long term relevance as a creative format?
Do you mean like trying furniture at home? It seems like a cool feature but not really a product. Can you clarify what you mean in terms of marketing?
How do you define your target audiences? And what are your primary marketing goals?
We define them by looking at our past successful investments and determining where those people came from. We also keep in mind that that will include some bias, so we try to keep an open mind. Our primary goals are to convince talented people to have the confidence to start a company and then apply to YC. But really just starting is the most important part. Many people are overcome with fear and make up excuses to not start. So we deal with that a lot.
We’ve been showing a 20% growth in MRR on a regular basis starting from the first month and already have 1200 paid users. Could you tell me if we can try to participate in this stage?
That’s great! Just apply and see how it goes.😊
What resources do you draw inspiration from? And thank you for taking the time!
Because I do a lot of content marketing, I’m actually pulling from all sorts of places, and honestly a lot of them aren’t other YCs. I love the profiles written by Gay Talese, the essays by pg. the podcasts by Joe Rogan and Russ Roberts, and a random collection of YouTube channels.
On your side, what’s absolutely mandatory to affirm a Startup is a DNVB? For example, if a DNVB sales a mass market product through retail (+ a premium product online), and offer the user experience of a DNVB, what would you say about it?
I’d have to know more. What’s the goal of this question?
Do you happen to select consumer hardware startups in the program(profitable & female founded)?
What are your thoughts on Sarah Tavel’s pyramid with regards to how she spots the next non-transactional (engagement based) $1bn company?
1) Growing engaged users
2) Retaining users
3) Self-perpetuating (viral loops/network effects)
4) $1bn valuation
Yeah this all aligns with what we talk about just with more words.Basically making something people love in a big or rapidly growing market.
What other elements do you look for at Y Combinator as to how a product is performing in the market? Also, is there a minimum acceptable amount of users/data you look for to see reliability?
We look for products that users absolutely love, especially products that are solving a hair on fire problem. i.e. users freak out if it goes away. There’s not a minimum amount. We have people apply with an idea and people apply with 20m revenue
What’s your favorite success story for one of the startups YC has had in the program?
Well one of the craziest ones is Brex. They went into YC as a YR company, and a few weeks before demo day pivoted pretty radically to being a credit card for startups, and now they’re huge. That was just two years ago.
Can you tell us the story of a startup that defied all odds/expectations?
Hmmm. You may have heard the Airbnb story, so I’ll do Twitch. Twitch (previously Justin TV) was running out of money and couldn’t raise. They buckled down and built their own encoder, which allowed them to become profitable, then eventually realized that gamers loved their product, so they went all in on that. And after years of grinding they became one of YC’s biggest exits when they sold to Amazon.
What is YC’s take on crypto startups? Did any actually make it into a program recently?
We accept them all the time. I don’t have one off the top of my head, but we’re still accepting them even in the bear market.
Crazy that you set a climbing world record. So cool. I like my big Down Hill bike, big jumps and not climbing a mountain.
Haha. Nice! I’m terrified of that stuff.
Are there any relatively common unethical business practices that you’ve observed in the VC world? This can be either from the VC side or the startup side.
Hmm. This isn’t unethical, but one annoying one is people saying they’ll invest when a startup gets a lead investor, or only if so and so other fund invests. There’s a lot of non-answers in YC, because people don’t want to miss opportunities down the road.
Our social following is growing ten times faster than our product sign ups. What would you say is a good mix of social content value vs social product selling?
It seems like you’re spending way too much time on social. How’s your conversion rate from social? That’d be an easy place to start improving those numbers.
You think branding and domains are important?
Branding yes, domains not really.
What shifts have you seen in how you spend the marketing budget in 2019 vs. 2017?
Lots more on video. Less on FB ads.
What marketing tools do you consider most important for a SaaS project in themarketing and design market? What kind of resources should we try?
Mixpanel or a similar analytics tool. That’s really all you need for just a project.
How does YC use video in its marketing?
We post a video or two a week. They get much fewer views than the podcast, but the SEO on YouTube is amazing. If you have a podcast it should be on YouTube, too.
What marketing problem do you have that a tool is not solving well right now?
I’ve really enjoyed your podcasts with YC founders. I’ve been working on a marketplace and I’m fortunate enough that my skills can provide the supply. However, for demand, I’ve found it hard to recruit users without being spammy. I know I’m solving a real problem because I have it myself, but I want to authentically recruit new demand without being spammy. What are your suggestions for recruiting demand for your first users without being spammy or promotional?
Thanks!Can you tell me what it is? Without knowing the space, I’d say you need to just be sincere when you reach out, don’t take too much time, and try to provide real value.
Love that you focus so much on content! This year, there’s been a lot of talk around whether brands should take a stand on political and/or social issues (ex. Nike + Colin Kapernik, Gilette + toxic masculinity, etc.). What’s your take on this?
Thanks! I think you have to weigh the pro/con. Some issues are just noise. Other issues have a real following and might have many silent supporters. Other issues will ostracize your customers and be neutral with new ones. And then at the end of the day, you should consider what side of history you want to be on. But it’s a case by case thing, in my opinion.
Does YC ever invest in digital companies that aren’t ‘changing the world’ or inventing anything new, but rather replicating a proven business model in an existing space with a competitive advantage like a superior founding team or lower CAC? An analogy would be like building a Walgreens/CVS at the corner of the best intersection in town; an insanely high probability of success.
We’ve done a lot of this with other markets. Stripe for Africa, for example.
When making a video to pitch to potential investors for seed funding, what all aspects of the business should the video focus on?
I’d question whether you actually need to make a video. But let’s say you do. It should be insanely short and to the point. I think you can find the Dropbox YC application online, and there are a ton of YC applications online with a video that you can check out. Basically one minute on the product and the team.
There’s been a lot of buzz around messenger bots for the last few years and with thought leaders like Larry Kim starting up MobileMonkey, there’s certainly been a heavy resurgence of interest. *Have you seen significant data across companies you oversee supporting this narrative that Messenger marketing is capable of driving legitimate business outcomes e.g., sales, revenue, leads?
Hmm. I haven’t worked with a company that’s using messenger bots in any big way…
Do you have a good solution for tracking podcast performance?
We use our podcast host backtracks. But the hard part is what you do on device isn’t tracked well. Apple analytics aren’t good yet.
Privacy is a hot topic currently. Do you see companies using it as an angle in Marketing (like Apple is trying to do it here and there) become more prevalent? Could this be a trend and a differentiator for startups and up and coming companies? Thanks!
For sure. Duck,duck go.
I’m curious to know what marketing outlet you think is most beneficial for a startup to leverage to see initial results?
Find out where your customers are and go there.
With AI and new tech constantly coming out, I think that current tech marketing is broken and needs to evolve. What are your thoughts?
How is it broken?
For the modern marketer, *excluding any sort of computer science knowledge and having proficiency in all major paid ad platforms*, what skills do you think are important to have? In my mind, I immediately think of a BI skillset (i.e. SQL, statistical analysis using SAS/STATA/SPSS etc, and Data Viz with Tableau).
Well I’d say it depends on what kind of marketing you’re working on. But yeah, being able to handle stats proficiently is big. Honestly though, I think a willingness to learn the right tool for the job is the main thing.
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