Seldom do early stage travel startups have a chief marketing officer - and that’s a good thing, according to two experts in venture capital.
“Startups sometimes move too quickly to fill C-suite positions before they're ready to bring in real talent,” says Chris Hemmeter, managing director for Thayer Ventures.
Rampant job title inflation is a problem in travel startups, with an alphabet soup of C-level titles - including CMO - impeding growth in some companies.
Hemmeter, who has founded several brands in the travel sector, believes that it is better for the company to bring in more experienced talent when the business is mature.
“I have seen many startups where they say, ‘I'm the CEO and so-and-so who was my roommate at college is the CMO and so-and-so who was my best man in my wedding is the COO.”
As the company grows and requires a more experienced person, it is unlikely that the initial CMO is going to relinquish the job title.
Calling it “one of the biggest risks” for early stage startups, Hemmeter says that new companies unable to “attract world-class talent” sometimes bestow the CMO title to a young person who is talented but lacks experience.
A startup is like a party where once you get into the front door, there's no one there.
William Bao Bean - SOSV
“If the company is successful, it will ultimately reach a state where it needs to upgrade that position, and you've got a problem because you're turning over an important executive, which is always disruptive,” says Hemmeter.
When it comes to the CMO title, startups should be very careful before adding it.
“Somebody shouldn't have the CMO title unless they have a ton of very relevant experience, one heck of a toolbox and a great network of people that they can call on."
William Bao Bean, a general partner at SOSV and the managing director of startup accelerator Chinaccelerator, echoes the sentiment.
“When you have a startup, you don’t put the word 'C' in too many titles, except for CEO,” says Bao Bean.
“The skills required in the early days are different from the skills required later, and it's often hard to demote people.”
Bao Bean says that startups should avoid bringing on a CMO because “a startup by definition is looking for scalability and repeatability and there is no point in selling something that is not scalable and repeatable.
“Startups shouldn’t hire a CMO until they have something in the market, and you don’t have something in the market until its scalable and repeatable.”
Bao Bean says that companies with a CMO generally have “product, market and fit,” but an early stage startup likely hasn’t achieved this yet because it doesn't have a product that people want.
“A startup is like a party where once you get into the front door, there's no one there. A customer journey needs to be in place.”
Consumer vs. SaaS
Consumer-based travel startups are more likely to hire a CMO before their SaaS-based counterparts, but it really depends on the nature of the business.
“Some SaaS [software-as-a-service] businesses focus on the small business space with an inside sales approach and are trying to drive a lot of inbound sales,” says Hemmeter.
“In that case, having a very strong marketing organization is critical because you're really trying to drive a lot of low-cost acquisition through marketing.”
Whether it’s a consumer or SaaS startup in travel, having an appropriately scaled and sophisticated marketing strategy before hiring a CMO is key.
But is there a risk of waiting too long to hire a CMO?
“There could be a point that not bringing everything under one core leader to create a unified voice and a sophisticated strategy could be an issue because startups are expected to grow,” says Hemmeter.
“If you wait too long to launch that strategy and growth falters, that can be the death knell for a startup.”
Alternative titles
When early stage startups eventually need a core marketing leader, it is recommended to have a vice president of marketing or a senior director of marketing before giving away the precious CMO title.
“Really early stage companies shouldn’t be trying to fill that role,” says Hemmeter.
Instead of hiring a CMO, Bao Bean recommends filling a head of growth role first.
Subscribe to our newsletter below
“You need a head of growth from day one,” he says. “You never move from startup to company without somebody who's using data to drive a startup.”
Eventually, once "product, market and fit" is achieved, then it is time to split marketing responsibilities away from the head of growth and to hire someone to fill up the funnel.
Alternatively, Hemmeter suggests that a true SaaS business with an enterprise product and a limited number of customers should aim to fill the chief revenue officer role first.
“A CRO is going to be sales-driven,” says Hemmeter. “They're going to drive everything in the organization that's contributing to revenue, which would include typically owning marketing, sales and arguably even product.”
Either way, it is best for travel startups to wait until hiring a CMO.
Says Bao Bean: “There's no need to have a dedicated marketing role until there's something to market.”