Subscribe to The Startup Stack
Eyeballs. Modern marketers live or die by them. Who is looking and for how long and where did they come from and what did they do when they left? These days, you don’t have to guess.
To learn more, we invited on Matt Pru of the growth agency Stackmatix. Matt & Louis talk about today’s tools for tracking ad spend — and how to make sure every dollar counts.
“If you can’t measure you can’t optimize.”
🎙 Highlights Include
- What is a growth studio?
- What is performance marketing & how does it work?
- At what point do companies tend to contract with a growth studio?
- How long do companies generally contract with a growth studio for?
- What are the biggest emerging growth trends of 2021?
This Week’s Guest
Founder & Managing Partner @ Stackmatix
Matt Pru is a founder and managing partner at Stackmatix, a growth agency that combines insights from engineering, advertising, and sales to drive results.
The Startup Stack’s Host
CEO, Co-Founder of Rocketplace
Rocketplace is a curated marketplace of high quality professional service providers. A 3x founder, investor, and board member, Louis began his tech career as a partner at Andreessen Horowitz. When he’s not working or podcasting, Louis enjoys cooking for his family. His pizza, he’d like you to know, is incredible.
Full Episode Transcript
[00:00:00] Announcer: Matt Pru_Final Transcript
Matt Pru: What’s a pirate’s favorite content format?
Louis Beryl: I don’t know.
Matt Pru: WebinaR-R-Rs.
Louis Beryl: [Laughing]
Matt Pru: Preferably one that’s B2C. No pun intended.
Louis Beryl: I love pirate jokes. This is great.
Matt Pru: I got another one for you too.
Louis Beryl: Oh, go for it!
Matt Pru: What kind of marketing does Dracula do?
Louis Beryl: Don’t know.
Matt Pru: Account base marketing.
Louis Beryl: [Laughing] Pirate jokes and Dracula jokes coming to you from The Startup Stack. This week, we’re talking about clicks. The kind you pay for online and occasionally spend way too much money chasing. Here to explain it all is Matt Pru, the founder and managing partner of the growth studio, Stackmatix. Matt and I talked tests, click-through rates, keywords, ROI, the walled garden problem, and more including why your human brain might actually be better than Google’s algorithm. It’s growth hacking week at The Startup Stack. Let’s get into it. I’d love to hear more about Stackmatix. You guys are two and a half years old. You’ve [00:01:00] been working with some really high profile companies that have raised hundreds of millions of dollars, and Figma’s a client. Tell us, you know, what does Stackmatix do?
Matt Pru: So we’re a growth agency. We work with companies everywhere from seed funded to series C series D some of our companies are bootstrapped and just profitable from day one. But the general criteria is we work with very ambitious growth focused clients. Uh, we all come from a background of working with enterprise customers, uh, over the course of our careers. And so we feel we’ve seen what we’ve seen, what the promised land looks like. We understand what a great marketing stack looks like, where you can track everything across channels and optimize across all these channels. So we try to do is we try to work with companies at a very early stage to start building out this architecture in a smart way from the get-go. And so the earlier stage we can work, the more autonomy and freedom we, uh, get to work with these [00:02:00] customers to build out these growth stacks as we call them. That can span not just the marketing context, but can also go into sales with your CRM and your sales automation. Or we say engineering, just because there’s a lot of systems integrations that’s needed to make this all work.
Louis Beryl: You know, I know you work with seed stage to even later stage companies. Tell me, like when a client first approaches you, when’s the ideal time for you to start working with them. What is the challenge that they’re facing that they should be asking themselves? Or I should be working with a growth agency, like Stackmatix?
Matt Pru: Definitely. I think one of our biggest, uh, lines is you can’t measure, you can’t optimize. And so that’s a common starting point for a lot of engagements that we have. We have a lot of B2B customers where they get leads at the time a lead comes in. We don’t know the value of that. We’d, uh, you know, at some later context, once the leads gone through a sales process, what that lead is ultimately worth, and if they convert into a customer. And that poses a lot of [00:03:00] challenges for companies to understand what is the value of their marketing and to optimize their marketing campaigns on an ROI basis. So that’s a huge area where we come in and help out.
Louis Beryl: So do you help them figure out how much is the customer worth to you? Like step one or do they really need to know that before they engage Stackmatix?
Typically folks have customers before we started working with them, um, most companies are seed funded because they have traction and now they do have capital to invest in things like digital advertising and other systems that can help expedite that growth. So in a lot of cases, they either haven’t tested these channels. The key channels that we work on are paid search. Uh, so running your Google search or Bing search advertising, paid social Facebook, Instagram is the big focus, but it could expand into Twitter, Pinterest, Amazon, any of those other platforms. And we also have a big background in programmatic [00:04:00] advertising, which is largely focused on buying display and video ads, which is usually for larger brand focused advertisers and brand focused campaigns.
Really awesome. You know, I’d love to take a step back for a second and hear a little bit more about why you founded Stackmatix? I think you were, uh, in sales before you founded Stackmatix. I’d love to hear about the beginning and what need you saw and why you decided to start the company?
Matt Pru: So I started the company with my business partner, James, and we started about two and a half years ago. Uh, James and I have known each other now for six, almost seven years. As we worked together at mighty hive and mighty hive was a marketing technology and services company. And so I was talking to, uh, marketers all the time in that process and talking to them about marketing technology, how to build a stack, how to measure the customer journey across the things like search, social and [00:05:00] display when you’re running all these channels concurrently. And so that’s where our background of experience and expertise came into play into starting this business. And I started this business with James just cause we have very complimentary skill sets. I was the head of sales and he was in the account operations function and he was working with a lot of our enterprise clients and he was working on very technical projects. And so together we were able to go-to-market. We’re able to reach out to marketers and very much do what we were doing. But like I said, we’re really trying to get in at the ground level just because we feel we can make the biggest impact. At Mightyhive we were working with larger enterprise customers, and usually we were filling one gap. We were filling one function on, perhaps we tried to expand over time from there. But we really try to today with Stackmatix get as much autonomy as we can to finding opportunities, whether it’s in these ad channels or it could even be things like improving your landing page, improving your marketing automation and the way that you follow up to leads when they come in. [00:06:00] Or other aspects of the process where we can find leverage.
Louis Beryl: And at the beginning, when you started Stackmatix, what were some of the challenges you faced? What were the hardest parts about starting the agency?
Matt Pru: I think being too ambitious out of the gate, we figured we would just sign Fortune 500 clients off the bat just because we had experienced working with large customers of that size. But I think despite our experience, we need to develop a brand and reputation for Stackmatix itself. And so that’s been the biggest focus for the business is to show that we can drive great results and do that at increasing scales. And so at first that’s what we did. We went after very large clients and a lot of those sales processes didn’t materialize. And very quickly, what did materialize is when we reached out to founders in our network that we already knew who were able to activate us more quickly and to give us a lot of autonomy to drive results. And so we built up a big base of clients, uh, that were smaller. And over time we’ve [00:07:00] been taking on larger and larger projects. And we’ve been working through those longer and longer sales cycles. But that was the biggest challenge is just getting the ball rolling. And then I think we’re at the challenge now, or yeah, once the ball is rolling, then, uh, keeping up with the demand is the bigger challenge and figuring out how to strategically scale the business to keep managing this increase in customer base. And so largely we just focus on finding the best people we can to help out with that. So far so good, but yeah, I think scaling is really where we’re at.
Louis Beryl: Tell me a little bit more about that. So how have you scaled so far and how do you think about scaling into 2021? And I’d also love to learn a little bit more. I mean, is your team remote right now or, you know, are you hiring all in, in San Francisco? How do you think about it?
Matt Pru: So the business has always been remote. I’m primarily located in Austin, texas. Uh, my business partner, James lives in San Francisco. We brought on another managing partner who’s in New York. Our head of search marketing is in San Jose [00:08:00] and that sort of business has always been that way. And it will always continue to be.
Louis Beryl: Let’s dive into that kind of bread and butter service that you provide. Digital growth advertising.
Matt Pru: I think me and my business partner, James are ultimately fairly technical. And so we can do a great job of always setting up the analytics and tracking, and we’re great search marketers and digital marketers as well. Uh, but at this point we have dozens of customers and most of them are running Google Ads, profitably. It’s not always the case that we can make campaigns to be profitable, but ultimately that’s a lot of work to manage. Two weeks before Christmas, last year, we had a company sign with us called Playbook Products and they make, uh, sports-related products featuring the greatest sports players of all time. And so we only had a two week window and helping them to just spend a few thousand dollars. We sold tens of thousands of dollars worth of product. And so then all year we’ve been planning and strategizing and getting [00:09:00] ready for the holiday season this year, having the full two months of runway and having the chance to activate across in that case with the two weeks, it was just Google Search. But now we had Facebook running, we had Amazon ads running. Everything across the gamut and we 10x sales a year over a year.
Louis Beryl: Wow! What strategies are you using? I mean, besides doing better digital advertising, you know, what exactly is it just being smarter around keywords and why do you think the companies can’t figure this out themselves?
Matt Pru: I think they could Austin’s testimonial on our website is, he’s the CEO of Playbook, very smart guy. He could figure this out, just like we had to figure this out ourselves at some point, but he has a lot to manage and to build a great business, you need to build a team. And so we don’t commonly work with folks who have 10 years of digital marketing experience who are the CEO and founder of their company. Commonly we’re in relationships where it’s a complimentary skillset. Where we bring this digital expertise [00:10:00] to them and it allows them to scale their business more seamlessly. And so I do think that’s worth considering I have talked to folks who have a marketing background, tried to help them out, but there’s not as much of a partnership there.
Louis Beryl: There’s a lot of growth agencies out there. And so I wonder when a new client is meeting a growth agency, how do you differentiate Stackmatix versus all the other growth agencies?
Matt Pru: Yeah. I think that a couple of the biggest things are just that me and my business partner are very involved in the client work. And we have years of experience usually at the executive level of growth agencies are not commonly involved in the client work. And I think in a lot of cases, they may not even have the requisite expertise to be doing that level of work. Our level of expertise is pretty wide and it’s pretty uncommon. I’m personally certified on HubSpot and Salesforce and [00:11:00] have about a decade of sales and sales ops experience. In addition to having run campaigns myself on Facebook, Instagram, Google, Amazon, LinkedIn pretty much all the platforms. And then the last component is having worked with Google tag manager, Analytics, segment, any of these tracking analytics platforms. And it’s having the ability to consult on all of this for any client. So sweet spots definitely has been B2B because of my breadth of expertise there. And understanding that we can’t just be trying to drive leads. We need to be driving as much ROI as possible and being able to advise again not just on getting the lead there but what’s done to that lead afterwards.
Louis Beryl: Hey, do you like our show? I do too. If you want to support The Startup Stack the best way to do that is by subscribing and rating us on Apple Podcasts or wherever you listen to us. Also, send Dad jokes, or if you have them actual good jokes [00:12:00] to email@example.com. Feel free to send us feedback there too. If you were going to give advice to a friend of yours who might be looking for a growth agency, what do you think the questions are that they should be asking the growth agencies in order to evaluate different agencies. And you just brought up, maybe companies promising a certain level of growth, you know, are those red flags that they should also be watching out for?
Matt Pru: Well, generally you want to keep the risk really low. Like we’ve talked to a lot of folks who have paid agency’s 10 grand a month and have been locked into contracts of really any length would be bad at that rate especially if you’ve never done this before. Like, If you, if you’re an earlier stage company you should be trying to test this stuff in a much, much lower risk capacity however you can. Like you should be trying to jump into the platforms, yourself trying to find a contractor or whatever it is because the answer’s not just like outsourcing it and paying a lot for it cause it’s never going to be economical, but there’s a lot of different things people can do. They can run your search [00:13:00] ads, they can run your social ads, they can help you to improve your SEO, they could be helping too if you’re B2B automate email outreach campaigns or B2C but LinkedIn automation. Ultimately there are only so many channels. So that’s ultimately the question. Which channels are you going to handle? And then all you really care about as a business owner is I’m paying some amount and then I’m going to make some amount. And am I going to have an ability to track this for this channel? And then yeah, what’s the risk here? How much do I need to invest in order to see a result? That’s the biggest factor? Like your cost per lead or cost to acquire a customer tells you a lot, like if you are selling, say coffee for like 20 bucks a bag. Hopefully you acquire customers for like 20 bucks a bag or something like, your test shouldn’t be more than hundreds of dollars if you spent hundreds of dollars and nothing’s happened, that’s bad. And so yeah, the idea of paying an agency a lot of money to help run that test for you to figure out it doesn’t work isn’t a great idea.
Louis Beryl: Is that one of the biggest [00:14:00] mistakes that you see people just spending too much money right off the bat where they could be doing these tests much more cheaply or are there other big mistakes that you see companies?
Matt Pru: Yeah, that’s a big one. And like, thinking that any one thing is going to be a silver bullet, like I think you should be doing everything that you shouldn’t be trying to test Google ads and Facebook ads and improve your SEO.
Louis Beryl: I was just reading about Airbnb early days and one of their advisors and the advice was do all the things.
Matt Pru: No one thing is going to make your business successful. Like you, you need to fight for it every single day. And these are all just channels in ways to reach the consumer. And yeah, there are trade offs of time, investment and money investment, but yeah, you need to figure it out. Like there’s a reason why Facebook and Google are two of the five biggest companies in the US it’s because it works. If it didn’t work people wouldn’t keep putting money in and increasing quantities. And it’s just because that’s where people are and that’s how they find things. They search for things. Or like they’re just [00:15:00] online. You hit them with ads. Uh, they check their email. Like you can call them. But again, there’s only so many options and yeah, you do want to make sure you’ve thought about each of them and what the impact can be and get each ball rolling so you can compare the two. I think the biggest piece of advice I’d give is always run an A/B test. Like never run a Google ad campaign and have one ad. Like always have two ads or never run an email marketing campaign and not run an A/B test. And don’t waste it. If you have a list of 5,000, like A/B test a hundred people first for each before you send bad copy to all 5,000. But that’s all it really is. As long as you keep getting better on each channel, your business will keep getting better. In general.
Louis Beryl: You’re clearly very experienced in this, but you must meet clients, you know, they’re early they’re seed stage. They’re less experienced. How much client education do you need to do with some of those early clients?
Matt Pru: Expectation setting is big. I mean, that’s sort of the consultative [00:16:00] angle comes in is, client comes in, what do we do? Where should we start? Like while we want to eventually be firing across all cylinders, that’s never the recommendation. It’s like, okay, like we really need to improve this landing page analytics isn’t going to cut it. And Google ads will probably work here we think. So that’s where experience comes in because you need to dissect the situation. And we always try to just sign NDAs first exchange platform access, get access to your analytics, your ads, so that we can provide a proposal, making it clear what we think we should do. To give you confidence about what we’re going to do and what the impact can be. You should try to put some lines in the sand, like you should put a CPA target and whatnot. But my biggest recommend another big recommendation is never have goals. Like always have them, but like always have the inputs. Like it needs to be a funnel.Because if you miss the goal, otherwise you don’t know which of the inputs is off. So yeah set a goal and do all the inputs but expect to click through it, expect a cost per [00:17:00] click, map it all out cause otherwise we’re not really going to know where to models off.
Louis Beryl: And for some of our listeners, could you just jump into some of those things? What do you mean by click through rate and cost per sale with ads?
Matt Pru: The big thing is a CPC = cost per click. What do you pay for the ad click. With a lot of ad platforms you’re not paying when the ad shows up but just when a user clicks on it. And so the click through rate is the rate at which people click through. So how many, uh, times that I click over. How many times was it shown in total.
Louis Beryl: And are there like industry benchmarks? What would be a good click through rate? What should people be looking for?
Matt Pru: Generally speaking for search ads, say 7%, like anything, double digits, pretty high, anything, you know, lowers may be low, but it varies like these numbers vary for things like remarketing, where like someone comes to your site and you show them banner ads. Those rates are much lower, like half a percent, 1%. Or for Facebook and these other channels. The big thing though, is I wouldn’t worry about click-through rate too much. [00:18:00] Ultimately you really just want to stay focused on ROI, a click through it will just tell you for like a certain search term. For example, do you have a click through rate of say 1% and that’s very profitable. You have a chance to spend more on that. There’s more opportunity there and potentially stay profitable.
Louis Beryl: Break down for me for a sec and how people should think about ROI.
Matt Pru: Generally you should factor in all the costs. Like it does matter to, you need to hire someone to run your campaigns or pay an agency or contractor, or the time costs of doing it yourself, that should factor into your model and then otherwise you’re paying for the ads and they’re going to make you money. And so a big component of that is you can’t track that, correct? Which ads brought you the money. And then for a lot of businesses, they have costs of goods sold. And things like that. Like if you’re selling a physical product or, but even the other things, like we have sales or just other overhead, we need to keep in mind. But yeah, you ultimately are trying to drive towards [00:19:00] profitability, keeping all your costs in mind, because if things are profitable, then you should keep spending and potentially in increasing quantities. But if it’s not, I’m getting more aggressive in marketing usually means declining profit margins and so you’re losing money already they’re just going to increase the rate that you’re losing.
Louis Beryl: If you were going to give advice, how long do you think it takes a company to really get a good signal on these experiments you’re running? Is this days, weeks, months. How long are you working with clients initially to get signal on ROI?
Matt Pru: Three months is a good timeline. Just to have the chance to set up the tracking, optimize the different channels, to really get a good, uh, idea of what’s working. What’s not working, but it depends on your business. If you sell something, if you’re an e-commerce product and people can check out right away. I like to say most weeks in the US look pretty similar, like obviously with seasonality for something that varies. But if you’re an e-commerce business, you can turn around profitable results right away and measure [00:20:00] that.
Louis Beryl: Yeah.
Matt Pru: For B2B the challenges is if you have a long sales cycle and leads come in you don’t know again, what the value of those leads are. So you do need to qualitatively look at them and like talk to your sales team and figure out is this stuff good? Is this gonna close? Because we need to start getting feedback sooner than later to optimize the other thing too, is for something like B2B, your cost per lead could be much higher. If you’re selling a hundred thousand dollars per year contracts then maybe it’s okay to get leads at a thousand dollars each, um, and you’ll still be profitable. So you need to keep that in mind, the lower your cost to acquire customer and the faster people assign, the faster and cheaper it to test, the bigger your price point, the longer your sales cycle. Usually the longer it’s going to take to test and the longer it’ll take to figure out your profitability and what’s working.
Louis Beryl: Have you seen big changes in how this is done or the tools people use over the last few years?
Matt Pru: I think generally more and more is [00:21:00] moving towards automation. I think Facebook’s always been fairly automated, but I think on the Google side of things, you can automate more and more algorithmically, which is helpful. And I think another big update is just that Google has B2B data that you can use now, which has never historically been the case where you can target based on company size and also by vertical. Microsoft also acquired Linked-In and there’s very high likelihood and it’s kind of like in the works where you’ll be able to use Linked-In data to reach, use that data on being searched or potentially on other channels over time. We’re really excited about B2B in part, just because of the advanced sense in the market and the capabilities, which have generally been lagging compared to B2C. And then, yeah, I think that’s really, the big thing is just more and more automation, but despite how much automation there is, you always have a walled garden problem other you work with Facebook, you work with Google, you work with [00:22:00] Amazon, and there’s not total transparency in terms of tracking users across these platforms, the platforms don’t really let you do it. And so there’s always a little bit of mystery, as much as you want to set up the perfect tracking you do need philosophy and system, um, to make decisions because even things like your reporting is delayed and make it so that you can’t just be optimizing on the data. Like you need to use your human brain because your human brain actually has better data in systems that itself, the system doesn’t even know something happened yet, but you might be able to assume what’s happened based on historicals.
Louis Beryl: I’d like to move to some other trends and see how they are affecting your business. You know, we’ve got big things happening in the world from COVID to Black Lives Matter. How have you seen the COVID pandemic effect affect your business?
Matt Pru: Yeah, I mean, it had an impact on a number of our clients. We had clients in the travel space who paused their [00:23:00] advertising because it didn’t really make sense as folks weren’t going to be converting for that anymore. Or we had folks in the retail business. So pause advertising there because they’re not able to serve as customers in person. On the flip side, we also had customers who offer a video solutions and so target customer for them, for example, via COVID was, uh, churches who no longer could do live ceremonies now needed a solution to live stream though to their audience. And so they saw a big uptick in demand because people need solutions like theirs. That is really the impact and I think that’s the impact I’ve seen like in the stock market. And otherwise that impact has not been, even from a company perspective, some companies has benefited, some companies have been started because of this trend. And other businesses like retail travel have been hospitality hit especially hard because of their in-person nature. And so, yeah, we kind of saw the same impact. So some ups, some downs ultimately were mostly [00:24:00] distributed as a team. So it didn’t really affect our day to day too much. From that perspective, continue to work from home.
Louis Beryl: If you could go back and give yourself some advice before you started Stackmatix, what would be the advice you would give yourself?
Matt Pru: Well, I started a company right after I graduated from college and we worked on it for eight months and we found traction, but ultimately we thought it wasn’t going as fast as we expected. And we felt kind of disappointed with it in a way and thought we should go do other things. But looking back on that experience all that I think is, wow. Especially with a lot of developments that have happened since then if we stuck it out and just endured probably would have worked out. And yeah, just the idea that like eight months is really not a lot of time. Like our business here is one that’s services focused. You go to market right away. We already have a network of contacts. We’re not building a technology product off the ground. And this still took two years to build a solid foundation in our opinion. Yeah. Just technology companies in general, I think take a little longer. And [00:25:00] yeah, if you’re young, just to realize it takes time, like everything’s like three months, like you take classes for three months or five months in school, things like that. And so you start thinking that’s a lot of time or like a full school year is a lot of time just realize you have decades in your career. Be patient and spending a few years, getting something off the ground is well worth it.
Louis Beryl: That’s great advice. Maybe a final piece of advice for entrepreneurs and listeners out there. Do you have a, like a single piece of tactical advice around growth marketing that you think people should know for the upcoming year?
Matt Pru: So a couple of things. If you’re B2B things that generally works the most is going after your competitors in some capacity, I think a lot of B2B companies don’t do enough research on their markets. And a lot of times companies are started and they think there’s nothing like this on the market. And that’s not always the case. Usually there’s something kind of like it. So I’d say that definitely invest in your B2B research. Figure out who your competitors are. What’s similar and figure out what they’ve been [00:26:00] doing. And if people are searching for those businesses, then there’s a high likelihood that they’ll also be interested in your product. And if those businesses have done different things to promote their business, there’s a high likelihood. They’ve researched that those distribution channels are a good place to find common audience, and you should consider those opportunities as well. Regardless of the marketing channel. The landing page is one of the biggest levers because everyone funnels to it. And I don’t think people give enough time and investment to that. Do a little bit of research on what makes a good landing page. Research examples in live in the market that are great and try to emulate some of the things you see because it will literally make your business twice as productive if you double your conversion rate and, uh, that will help a lot.
Louis Beryl: Matt, thank you so much for. Telling us all about Stackmatix and for all the advice. I really appreciate all the time today on The Startup Stack. Yeah.
Matt Pru: Thank you. Louis it’s been great being here and, uh, looking forward to hearing more jokes on the show in weeks to come.
Louis Beryl: For more in our conversation today, visit [00:27:00] www.rocketplace.com/podcast. We upload a new episode every week. So if you haven’t yet make sure to subscribe to The Startup Stack in Apple Podcasts, Spotify, or wherever you listen to them. Thanks again for joining us. See you next week.
Announcer: The Startup Stack written and edited by Hannah Levy, produced by Leah Jackson.