“User-Manuals” and “Right-a-Lots”: ‘How I Work’ EP20 with Peter Zaballos (Authentic Brand)


Peter Zaballos is a Fractional CMO at Authentic Brand, a community of Fractional Chief Marketing Officers helping growing businesses build revenue and achieve healthy growth through a unique business model. Peter is a seasoned CMO that turned his 2.3 college GPA into a laundry list of SaaS success stories ranging from small tech startups to unicorns.

How I Work, Episode 20 with Peter Zaballos (Authentic Brand)

Peter joins Josh Becerra in episode 20 of How I Work to give insight into his user manual, a one-page document that lists the things he expects of himself and of the people he works with – and the concept of Right-A-Lots that he learned from Amazon and why he values it so much. Plus:

  • Attributes of a high performing culture: Risks, Mistakes, Curiosity, & Open-Mindedness
  • Why assumptions are what marketers should be focusing on
  • His most valued relationships as a marketer: The sales organization and the CFO

Learn more about Peter Zaballos and Authentic Brand: https://authenticbrand.com/

Explore more 100% free, curated content from leaders in the SaaS marketing community at https://augurian.com/saas-scoop/. Or visit our blog to find more digital marketing tips and ideas.

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Transcription: How I Work, Episode 20 (Peter Zaballos, Authentic Brand)

Josh: Hi everybody, this is Josh Becerra from Augurian. I am here with Peter Zaballos, Fractional CMO at Authentic Brand. Hi, Peter. Thanks for being here.
Peter: Hi, thanks for having me on. I’m super excited for the conversation.
Josh: Me too. For all of you listening, watching, Peter is currently engaged with Authentic Brand. He’s got a long-term assignment, but you were a two-time CMO once for a public company and then, also, had some fun working with a unicorn. Big companies, lots of great experience I’m super excited about the conversation. Before we get into it, can you just give us a little bit of that background, that story from your first job, and how you got into marketing in general?
Peter: I got into marketing totally because I was lazy in college and from the moment I got grades, they were always bad. I was the only kid in the very expensive private school, my parents put me in Berkeley, California, to not go to a four-year school. I went to a community college called the Diablo Valley College and that gave me a chance to reset. I learned that I actually like math and engineering and I transferred to Berkeley and got a degree in computer science.
Josh: Cool.
Peter: Still, never a great student. I was on academic probation three times and my GPA was 2.3, which is the license plate on my car now 2.3 GPA. There were two tech companies interviewing on campus. I signed up for interviews and one of them offered me a job in product marketing which I had no idea what that was. It sent me down this path of learning marketing on the job and getting into startup companies. A year later I was the 83rd employee at the semiconductor startup that ended up creating a whole new category in the market and going public. That put me on a path of getting into small tech companies. We’re growing a lot. I was in three companies total that went public.
Then along the way three of my colleagues and I started a venture capital firm in 2004. Out of Seattle we raised $105 million and that ended up performing incredibly well. We led the A round of a company called DocuSign and a company called Control4 both of which are public today. That was super, super interesting and fun. Then after that I spent two stints as a CMO once for six years at a public company called SPS Commerce in Minneapolis. It had a cloud-based supply chain platform for retailing.
Then a little over, well, almost two years at this unicorn, Qumulo, in Seattle that had a software-based file storage platform for enterprises. That’s an awesome company with great technology and had $250 million invested in it and they’re definitely going after a multi-billion dollar outcome. A couple of years ago I started working for Authentic Brand as a Fractional CMO and that’s where I’ve been engaged for the last seven months on the long-term client relationship.
Josh: I tell you that is amazing experience and we could probably spend a half-hour on just about any piece of that but when you and I were prepping for this, we went down this path around like culture and mindset and how that really impacts the efficacy of marketing teams. I just thought that was super duper interesting. While we could talk about your experience at doing the VC thing, we could talk about your early days taking companies all the way through to going public, for me, the audience here, I think for what would be really interesting to them is this idea around culture and mindset.
Let’s start there. Let’s talk about culture. What makes for good culture? What are the attributes of a high-performing culture? What have you been able to do in your different roles there?
Peter: We talked about this because it’s a super important, it’s not even a topic, it’s a super important belief I got that creating a culture where the people on your team feel safe to take risks, make mistakes, and to view mistakes as data, that is the foundation of a high performing organization. The first time I think I ever really came to realize that was when I joined SPS Commerce. it was the first time I thought I have an obligation to all these people in these departments that report to me to create an environment where they feel fulfilled and can do their best work.
We did create a culture where one of the observations I would make to them is there is no penalty for action. Course corrections come for free. If you’ve decided to just run in a direction and we find out later we need to change the direction, that’s great because you learn something, but if you’re waiting to be told what to do, then we have a really big problem. We don’t have a role in the org for that.
Josh: If you don’t course correct you end up being the Titanic.
Peter: Yes.
Josh: You run into an iceberg, right?
Peter: Yes, yes. That brings up another attribute of this is how do you create a culture where people are encouraged to be curious, open-minded learners. So much of what we do in marketing today didn’t exist two years ago. What we’re doing today is going to be obsolete in a year. The culture of the team that you assemble is so much more important than the experience of any one individual member. You may–
Josh: [crosstalk]
Peter: Go ahead.
Josh: No, I really think that’s true and I think it has to be a top-down thing, from the marketing perspective we need to manage up to the C-suite and make sure that there’s alignment, like CEO, CFO, they have to get this same mindset and culture, right?
Peter: Yes, you’re absolutely right. It all starts at the top. As a CMO, I felt like I’d go back to this obligation to say, “This is how we should behave.” What is the best way to get people to trust you when you say this is what we should do? It’s to live what you’re telling them to do. It has to come with a huge dose of transparency and humility. I have something called a user manual. That’s a one-page document that just lists all of the things I expect of me and my relationship with the people I work with.
One of the tenets in there is I am going to make mistakes and I’m going to own up to them regardless of how painful or embarrassing that’s going to be. By me being able to admit to the team I made a mistake or I thought this was the right thing to do and we just learned it wasn’t, what are we going to do about that? That’s how you get them to feel like, “Okay, I can trust that I can do the same thing and be greeted with that kind of response.”
Josh: I think modeling that behavior is so important. It liberates people all the way throughout the organization to feel like, “Wow, if the leader’s willing to go out there and do that then I sure can too.
Peter: I love how you used the term way because the first time I did that in front of 100 people it felt like 1,000 pounds came off my back just to be able to say, “You guys all saw it. You knew it was a screw up. I know it’s a screw up.” By admitting it to everybody, all of a sudden, it completely takes it off the table, takes it off your back.
Josh: There is a piece of this where when we can talk about reality and just facts and remove ego from it. It just makes everybody level set and everybody can contribute or function. There’s just better executive function. Better decision-making comes from people who don’t have to be thinking about ego and if they’re just thinking about facts and reality.
Peter: Yes. It doesn’t matter. That it might have been your idea to begin with. If you now know that we need to change, that’s the important part, not that you got credit for the idea in the first place.
Josh: I love this idea of a user manual. I’m going to ask you to maybe share that with me. Maybe I can share it with the group here. That would be really cool to see what’s all on that list. Another thing that we talked about was around mindset, like fixed versus open mindset. You told me a little bit of a story about something you learned from Amazon about right a lot. Maybe you could start there, and then relate that to this fixed versus open mindset.
Peter: Yes. A person that I worked with for almost 20 years, both at RealNetworks and then at the venture capital firm, is a partner at a large VC firm in Seattle. They happen to be the firm that led Amazon to A round. They’ve got a special relationship with Amazon. At one point, Jeff Bezos came over to the partnership and spend some time and the subject of right a lots came up. At Amazon a right a lot is someone who is right a lot about a very specific subject area. You have to be a real expert, and that you can’t be right a lot about 1,000 times.
The question got posed, what makes someone right a lot? Jeff said, “They change their mind a lot.” He went on to say, “Right a lot are people who will let go of the belief that they had about something when they encountered data that tells them that that belief is no longer valid or relevant.” These are super open-minded people who are constantly testing their assumptions about something. That ties into what you were just remarking on about humility. That’s going to be somebody who doesn’t have a whole lot of ego. It doesn’t matter if you’re right, a month ago. Today, you might be wrong. I just love this idea that you can label somebody as a right a lot because they’re the curious, open-minded person we should all be.
Josh: I think you nailed it right there. It starts with curiosity. It starts with someone being so interested in maybe this very specific thing that they just continue to explore it and explore it. I think it’s a brilliant concept. Anytime I’ve, in my experience, encountered someone who has this fixed mindset around like, “This is how we have done things,” or, “This is how it worked in this previous company that I worked at and we had a lot of success.” You said earlier, two years ago, we didn’t have anything that we’re using today and two years from now, it’s going to look totally different. If you lack that curiosity, and you think you got it figured out, you’ve lost.
Peter: At that company in Minneapolis, we basically built a marketing organization from scratch a digital marketing organization. We made a really important hire early on. This incredibly talented woman was our first search engineer. She was the most curious person on the planet. Still is, she’s just phenomenal. At one point, my favorite part of that job was when this woman would come up to me while I was walking through the group, and pull me aside and say, “I was looking at something.” Can I tell you about it?
Josh: Yes.
Peter: This happened and she said, “We’ve got two really talented copywriters here. I was looking at one of our more traffic pages and I thought–” What she’s describing is mainstream now to the point I just made, everything changes, but back then she said, “What if we wrote that copy with the search strategy in mind? Let’s get all the terms we want to rank well and then write a copy.” I did that. Then I did an AB test. It turns out, we got 10 times more engagement on the search optimized copy than just the copywriter copy.
That alone was just brilliant, following your nose, but then we had a culture on the teamwork, she then went to the copywriters and said, “Hey, guess what? We have a new way of doing this.” She was able to impart to the two copywriters how to go do this so that what she discovered was a new capability for the team instead of she could then go on and apply her curiosity to all bunch of other stuff. It totally raise the game of what we’re doing. Actually, that woman was part of a team that got us to a 37% close rate on opportunities from form submission to revenue because we optimized like you would not believe.
Yes, curiosity is the name of the game. It’s fun to see it happen when you just get out of somebody’s way and let them follow their nose.
Josh: Yes, for sure. I think if you as a leader are really trying to model that behavior and explain that, it’s like this idea of bridging this mindset and culture, and making people feel safe, you can hit on that like trifecta. I think that’s where really high-performing marketing teams live. I think you’ve nailed it. I love it.
One of the things that we also talked about, was your experience with the VC firm. Of course, as a VC, you’re looking at deals and you’re trying to understand should we make this investment, shouldn’t we make this investment. Part of that is understanding the underlying assumptions that are backing, like the thesis that the entrepreneur is pitching you. You told me we would always focus on assumptions. You also said you thought that this was a good thing for marketers to do, is focus on assumption. Can you talk a little bit about that experience and what you mean by that?
Peter: That’s something I learned. We’d look at 300 and something deals a year, and we’d fund two to three. You take 300, and then you’d find 30, that you thought were interesting, and you’d spend time on those, and then you went down to where you’re really looking harder at a couple. I would end up spending a lot of time with the founder, looking at their operating plan, their revenue plan, and really scrutinizing it.
What I was looking for was what are the assumptions about this business that are encoded in this revenue plan? At one point, I was with this guy in the conference room for a couple of hours, and he looked at me, he’s like, “Why are you grilling me on this so hard?” I said, “I’m trying to get clarity on the assumptions behind this.” I said, “As soon as you ship your product, all we know about this revenue plan is all the numbers are going to be wrong.” Now you’re in the market, and everything’s changed. There’s no way today that you know, what revenue is going to be in month 33? It’s just a guess.
Josh: If there’s one thing that’s certain, it’s that the plan is not right. [chuckles]
Peter: Yes, but what is really important is if your plan says that in month 33, 60% of my sales are going to be coming from partners, and you’re in month 7 of rolling this plan out and you don’t have any revenue coming from partners, then you’d start saying, “I’d better start keeping an eye on that assumption. Maybe I was wrong about the partners.” After that experience, I front-loaded this conversation with the next CEO I talked to, to say, “Let’s start digging into your assumptions.”
That playbook of focusing on the assumptions is just as useful in a public company that’s doing hundreds of millions of dollars of revenue because anything you’re doing that has any significance has got some assumptions underneath it, and you’re going to collect some data that’s going to tell you, “Are my assumptions still tracking or not?” In a marketing organization, this is just a foundational capability because you’ve got data everywhere and you’ve got unknowns everywhere.
The company I’m helping with now had done no search engine optimization of any kind. We have this super awesome search engineer on board. He’s trying to work with the finance department to say, “Well, what’s our revenue plan look like from organic?” He’s experienced enough to be able to say, “I can’t predict this.” You can’t predict how your organic growth is going to trend. You don’t know what pages those are yet, you don’t know what the search volume is but he’s doing a really good job of saying, “Well, let’s just start creating a model but let’s start writing the assumptions down about how we think our organic performance is going to evolve.”
Josh: It’s super smart. I feel many times, I will walk into meetings with prospects and they will say, “Hey, these are our KPIs. This is what we need to hit.” The first question I ask is, “How did you come up with those numbers?”
Peter: Yes.
Josh: A lot of times there’s data to back it up. Don’t get me wrong. People are using data-smart people. I’m not saying that, but there have been plenty of times where it’s like this is aspirational. It’s not actually based in fact or data. Those are the times where, as an agency, we have to really lean in and try to move people in this direction of like, “Hey, let’s question those assumptions before we get too far down the road,” or at least have them known labeled so that when we do see it’s not working out the way that the CFO projected, well, let’s talk about why that might be.
Peter: A couple of jobs ago I got in, to me, in marketing, the most important relationship I need to have, aside from being fused to the sales organization, is the CFO. A few jobs ago I had an awesome CFO and we were talking about, as we’re starting to ramp up page search, she was like, “Well, why don’t we just put more money into this because the ROI is clear.” I was like, “Well, there’s a thing called search volume.’ You can’t just keep pouring the money in. I said, “It’s a good question. We need to go find out where do we have enough headroom for pouring more money in that’s going to work, but you can’t just run those numbers forward because they don’t map to reality.” It’s a good example of where, yes, the assumption that you can just keep pouring money into it, not valid.
Josh: There’s diminishing returns on a number of different levels. One of those for sure is, “Hey, we ran out of people who actually are searching for this.” [chuckles]
Peter: [chuckles] Yes, yes.
Josh: Oh, that’s great. Well, I tell you what, this has been a great conversation. I really appreciate your time and expertise. That user manual that you mentioned, I’d love to grab a copy of that. If you want to come back on another How I Work and talk more about culture and mindset, I would be game to do it. I really appreciate it [crosstalk]
Peter: Thank you so much. Let’s plan on that and I will get you that user manual. Thank you very much.
Josh: Awesome. Thanks so much. Bye now.

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