Fractional CMOs: The Good, The Bad, and The Ugly with with Mike DiPietro | 3-Part Fractional CMO Special: Part 1 of 3

Erica Seidel  0:02  I have Michael DiPietro. Mike, welcome to the show.

Michael DiPietro  0:19  Hey, Erica, thanks for having me.

Erica Seidel  0:22  Sure. So the background of you and I meeting was kind of funny. Just for our listeners. A few months ago, I was working on a CMO search, and I found Mike. I tried hard to recruit him. My efforts were unfortunately fruitless, but we made friends, which is fun. He said to me, I've got a great gig. I work exclusively with one PE company and its portfolio companies. And I like what I'm doing, I'm enjoying it, and it would take a lot to kind of dislodge me. And so I thought it would be great to hear his perspective  On that kind of fractional marketing leadership role that he has, within one particular space, Mike started in sales he evolved into marketing and GM roles he spent over a decade at Kronos. Still, he was later CMO at a few different companies such as HealthcareSource and  Extension Engine, and now he has this very plumb gig. So, Mike, as you told me when we met

Michael DiPietro  1:27  There are no such things as Plum gigs. Erica, come on.

Erica Seidel  1:40  So with our current kind of uncertain economic climate, you know, I think there's going to be a lot of CMOS who are laid off or leave on their own steam, and they want to follow a path like yours. And first, can you talk about the different models that there are for doing This kind of work.

Michael DiPietro  2:04  Just for context, I've been doing this kind of thing. I did it part-time. I was doing a CMO job four days a week and then doing this one day a week. I did that for a few years. And I've now been doing just what sometimes is called fractional CMO or marketing consulting for a PE firm for the last year-plus. And, and it's interesting. I have a number of people I've talked to when I explain what I do, they say, Ah, that sounds awesome. I would love to do that. And it does, it has some real benefits, but it also it's not for everyone. There are different models, and a lot of people kind of group them all together. And there's probably a blog post somewhere on this a little bit more formally. Still, the way I look at it is there's a bunch of people who have just decided to be independent freelancers, their former CMOS; they just go out on their own And. They just make a run at it and, and they might do interim work, or they might do support work for a particular organization. You know, they might help out on projects, etc. But they're at a CMO level. So that's one.

The next would be a part of a collaborative, and probably the best example I could make up is there's a group that some of you might have heard of called chief outsiders, it's 40 or 50, former CMOS, that kind of work as an as a partnership. And then the last one is what I do, which is working for a venture capital or private equity firm, and not I shouldn't say I don't work for a private equity firm. I do work for a private equity firm, and that's important for everyone to understand. Few of these PE or VC firms hire people on the payroll; they more just align themselves. With specific consultants and bring them into their portfolio companies. And so that's what I've seen, at least at a CMO level. Those three models and I'm happy to talk more about those if you want

Erica Seidel  4:17  Why don't we talk about just the VC and PE kind of flavor? A little bit more.

Michael DiPietro  4:30   it's interesting. I think the catalyst for this was at least I focused on the SaaS business. So B2B SaaS, so many of you are familiar with VISTA is a very successful private equity firm. That's not the one I do work for, by the way, but they've gotten great returns, and a lot of it is they come in, and they tell their companies exactly how they should work, and they've got a lot of functional experts in that area. And I think That that was one of the reasons that a bunch of the other firms has now said we need experts, we need people who've done this job before who can coach and mentor and guide our, the CMOS in this case, but all functional areas within the companies and mostly for growth. Again, I do a lot of work for a growth equity firm. So that's what they care about. They're just like, let's go fast. So let's help these folks as much as we can. The model is, and my understanding is this is the case with most PE and VC firms. You are a freelancer, so you work for yourself. You know, you're an LLC, which has some downsides if you've never done it before. You have your expenses; you're you know, you're buying your PC, you're you got to have a home office or go to work or something like that. But then you work for the portfolio companies. And it's kind of nice; I guess it I think it's if you can get this gig, I got fortunate I got lucky that I just happened to get introduced at the Right Time. A lot of times, what they're doing started looking for people who have worked in their portfolio before. So when people ask me, how do you get a gig like that? I said, Well, if you've worked for a firm, go back to that firm, you know, that PE firm and see if they're looking for this type of a role. They want people who are proven and who also understand them. And, and that's, you know, that's the gig, and you're doing whatever their portfolio companies need to, you know, to grow in most cases.

Erica Seidel  6:55   is it more about whispering in an existing CMOs ear? Or being a CMO for some time?

Michael DiPietro  7:06  Yeah. And this is the hard part,  the answer is yes, and yes, and a lot more yeses. So, it is, being everything. And it's sometimes challenging. So sometimes, you are asked by a CMO to support them and their team. And they may say, for instance, I'm working with one company right now that has been experiencing rapid growth. Hopefully, that continues. We're recording this right amid the COVID-19 situation, but she just couldn't keep up with everything. And so she said, Look, I'm going to take these five things, you take these three things, I trust you, my team will look at you as their manager on this. Just run and take care of these things. I just can't do all of it. Sometimes you have that situation. Sometimes you have this CEO who will come to you and say, I want you to work with my CMO. But I'm not sure if my CMO is the right person or not. So can you not only help them but can you also evaluate them, which is tricky. And you know, frankly, sometimes you'll have the PE firms say, Hey, this is a young company founder's leg, they don't yet know what great looks like, can you kind of work your way in there and help encourage them and help show them a little bit. So you know, they can grow as fast as what we think they should grow.

And the type of work you can do is I've done interim CMO where you know; they're in between, I'm helping them hire someone. I am running the team kind of on a day to day basis. I've also done projects we were literally like before this call Erica. I was sitting here going through a website and making a detailed spreadsheet of little changes, copy changes and format changes for an agency. So you got to be able to do anything and everything, and there's a lot of variety in this job which is good and bad

Erica Seidel  9:21  yeah, so talk more about the pieces of the job that might not be so obvious from the outside in the spirit of sharing the good and the bad and the ugly a little bit more.

Michael DiPietro  9:34  Yeah. Well, let's start with that part that I just talked about. So whether you're doing this for a PE firm or as part of a collaborative or just on your own. So as CMO’s, you know, all of us kind of came up usually through one function. I happen to come up through Product Marketing. Still, whether you're a demand Gen person or a corporate communications person, whoever, you know, you're new real well, you grew, you might do a couple of different jobs, you became a manager came a director, you came to VP came to CMO. And, and your job for the last few years has been managing other people. And yeah, you provide some guidance, and you dig in here and there. But for the most part, when there's like some detailed work that needs to be done, you've got someone who does that, or you can call serious decisions or tapo. Or you can bring in a consultant. When you're when you are the consultant. You're there's this expectation that you know, everything with Great gaps across all areas of marketing. So, you know, tell us what our SEO strategy should be. Tell us how we should configure par dot for lead flow. Tell us how we do ABM and tell us what our campaign strategy should be. Tell us, give us branding. You know, do branding projects like it's all this stuff that you are almost expected to have depth in. And not all of us have depth and that I certainly did. I've learned one of the good sides of this is I've learned more in this job in the last few years than any job I've ever had because you're forced to, but there are very high expectations on that. So it is, and there's also an expectation that you're not coming in here and sitting around at executive meetings and, and, you know, talking and coaching people, you're doing the work, they're paying you good money, they want you to do the work. So, if you're not hands-on anymore, you don't wish to be hands-on, which is fine. This is probably not the right job for you. Most of the companies that need interim or help like this are smaller; they need people who can dig into the details, but also can work at a high level. And that's hard if you haven't done it in a long time. So That's, that's one of the things I'd say kind of, maybe people wouldn't expect. I also think this job; requires a very high EQ. You're jumping into an organization; you don't know the politics, you don't know the personalities, you don't know all the stuff that's going on in that company, you don't know the norms. And you're typical; you don't get the benefit of the doubt. It's different than joining a company as a CMO. You've gone through this interview process. Everyone loves you. They're all excited. They want you to be successful in most cases. In this case, it's like, Alright, Who's this guy? Especially if you work for their investor? Who's this guy coming in? What are they all about? And, you know, you've got to build trust real quick. You've got to adapt to different personalities; you've got to be able to make this judgment call on. You may be, if you're in a role like I have where you're working for a, you're hired by the CEO, in many cases, you're working alongside with a CMO, you're helping that CMO, but they're also a little suspicious, is this person trying to take my job? Are they trying to make me look bad, etc.? So, you've got to have a real high EQ and be ready for that. And you have to be tuned into that stuff where you will not be successful. I would also say you've got to have the right drivers. So a lot of us, you know, when you're a CMO, you're up and coming through your career. You're ambitious, you know, you want to win, you want to be part of that. You're one of the drivers is like, I'm gonna grow my career. I'm gonna show how great I am. I'm gonna, you know, be part of a winning company. Like there's that whole competition. The competitive side that most CMOS have in this job, you can't have that at all. You're there. You're a service provider, and you're not there to win, you're there for them to win. And in many cases, you want to lose if that makes sense. That sounds a little odd, but it is you got to be in the background, you cannot have an ego in this job. You cannot be driving for the same types of things that a lot of us did in a more traditional role that's hard to adjust to. It's just a very different thing. You're there as a service provider; you're there to make them look good and then to be good, and then you're there to step out. You know, that's not as satisfying for a lot of people. And then there's all the other stuff that people don't realize I think that they miss, you know,

 you're not part of the business strategy. In many cases, you're not sitting in the executive team. leadership meetings, you're not involved in some of the strategic decisions you don't have yet you help people, and you and you're supporting them, and you're coaching them, but they don't work for you. And so you don't have a team, you're not going through all those things that a lot of people get, get a lot of reward from being a CMO or any executive. And you're also not always going to do some of the other things that CMOS tends to love. So like, you're not an expert in the market, you don't get to be up on stage at the user's conference, you don't get to talk to the analysts. You're a functional expert; you're not a domain expert or product expert, or an expert in your company. And again, I think that's something I certainly Miss. And I know other people who do this job for marketing certainly missed that as well. Now at the same Time, Time. It's like I said, it is a ton of fun to be an expert in all things marketing or trying to be passive. And you do develop that muscle like, like more so than you would even imagine. And you develop new muscles, and you get the pleasure of working with lots of different companies with different types of peoples. You're, you're being challenged constantly, and they're new challenges. They're not the same old, same old challenges at one company. So you grow a lot, and you learn a lot in this, I think I would be ten times a CMO today as I was, you know, three years ago, just from everything that I've learned. So it can be rewarding, but the rewards are different.

Erica Seidel  16:49  So what's your advice, Mike, on how a CEO should pick a fractional CMO from all the ones out there but like what are the if you were advising a CEO who just didn't have access to somebody like you. What would you advise that person to do?

Michael DiPietro  17:06  Yeah, well, I guess, you know, at risk of stating the obvious, define the problem that you're trying to solve first. So, okay, my CMO left, I don't have a CMO right now, I'll go hire a fractional CMO. No, that's not the problem. What are you trying to do? Are you trying to have someone babysit the team? Are you trying to have someone improve the team? Are you trying to, you know, try before you buy? Do you have specific initiatives you want someone to come in and solve for, like, define the problem that you're trying to solve first, and then and then try to match the right person to that problem? I think especially on the am i just want a fractional CMO because I want to try them out and see if they'll work out. I think that's then very different.

You can hire someone who was just laid off.that's going to happen, unfortunately, soon with the economy. And so you could say, Yeah, why don't you give this a shot, and we'll see how that works. And if it works out, we'll move forward. But if you just really want someone who's going to come in for a specific period, and do this job until you can hire someone else, I do recommend you find someone who's done this job before now that CMO does this job, because it's a different job. It's hard, and as I've learned, I've gotten way better at being a consultant. When I first started this, I was a CMO pretending like I was a consultant. Now my consultants, you know, kind of, or at least they think I'm better at it. Because I've practiced at it, so I would look at that too. The other thing is, and this is on both sides. This is if anyone stays about it. But also, if you're a CEO considering hiring someone as a fractional CMO could be two days a week, right? As I want, I don't I'm a, I'm an early-stage company, I sub $10 million in revenue, I can afford 250 grand for full, you know, both CMO, so I'm going to get someone talented, but they're only going to work two days a week. Right? So that is, that is one model. But if there are two days a week, let's say it's Monday and Tuesday, guess what? That CEOs gonna want access to that person, Wednesday, Thursday, Friday, Saturday and Sunday sometimes, and that's also hard to manage. So how is that person splitting their Time? Or do you, as a CEO and the team get access to that person every day? How are they balancing if you've got a critical meeting? You're running the marketing department, but they're at a different client. Can you know, do they have flexibility? Do they not? You know, there are some logistics things you also have to look at and work through. But I think it's mostly that the first thing is, if you're just looking for someone, to, to babysit, that's one skill set. If you say no, we need, someone's gonna come in here, and he's gonna, you know, create more demand, or it's gonna get us into a new market or something, find someone with that specialty, and let them do that as almost like a project more than quote-unquote, interim CMO.

Erica Seidel  20:42  Well, Mike, this has been fabulous. I've learned a ton, and thank you so much for sharing your perspectives today.

Michael DiPietro  20:48  No problem. I hope it was helpful.