Extra Crunch: Building brands on Amazon, investing in customer success, quantum computing, and virtual reality

Wednesday, August 28, 2019 By Danny Crichton Let us know how you like this newsletter? Extra Crunch student discount It's back-to-school season, and we've lined up a special Extra Crunch promotion for students. We are offering students a special subscription rate of $50 per year (regular price: $150) with similar discounts for international members. All you have to do is send an email using your school address to extracrunch@techcrunch.com and our founder success team will get you all squared away. We also offer volume discounts for student groups.   How to use Amazon and advertising to build a D2C startup erhui1979 / Getty Images It seems like every week there is a well-funded team launching another new direct-to-consumer (D2C) brand. From mattresses to pet treats, digital-native vertical brands are seeing peak attention and funding from both founders and VCs. Part of the reason for all that attention is that it has never been easier to use the tools of the internet to build these brands from the ground up, opening up formerly closed markets.   Ecommerce consultancy VMG Ignite's Matt Altman and Tyler Elliston discuss their framework to using Amazon as a commerce platform with Facebook ads to build a new D2C brand. It's a deep and lengthy piece filled with actionable insights that can really help jumpstart your new product or category, or at the very least, giving you insight into how many of these modern brands come into being.   3. Product display ads (Limited to Amazon advertising console users only)   PDAs live on each product page below the buy box and a few other spaces on the product page. These ads can be used in a variety of ways since they allow up to a 50 character headline and a logo.   Three great ways to use them are for defense, frequently bought together, and competitor targeting.   Defense – You can buy placements on your own product pages to keep competitors off your listings. These are great to keep customers focused on buying your product since there are several ads featured on each product page.   Frequently bought together (FBT)– This is a great opportunity most sellers don't take advantage of. On every product page, there is an unpaid placement of items that are FBT. With the click of a button, all of these items will be added to your cart and it takes very few actual sales to claim these positions. FBT can be used to target your own products to increase basket size or complementary products to drive incremental sales from future placements on product pages.   Competitor targeting– You can also target competitor ASINs (Amazon Standard Identification Number) to be the last ad a person sees before adding a competitor's product to their cart. Make sure to use your 50 character headline to call out why your product is the better choice. Bonus Tip: Add coupons to the products you feature in these ads to grab attention and increase click-through.   Customer success isn't an add-on - start early to win later Topp_Yimgrimm / Getty Images Once you start building a brand or software product though, how do you handle your customers? How do you balance spend on sales versus customer success and retention? There are a bunch of theories on what works best, but now we have some actual data.   Dale Chang, an operating partner at Scale Venture Partners, and Jay Nathan of Customer Imperative crunch some data from Scale's SaaS dataset and find that investing in customer success from the very beginning isn't just critical, it's the key to driving higher revenues and ultimately higher round valuations. They look at how customer success is then structured based on the value of a customer contract.   Customer success for low-touch sales models has several advantages. The roles and responsibilities of Customer Success Managers can be clearly defined and operationally there are just a few transition points between Sales (booking new logos), Customer Service (onboarding), and CSMs.   When working in a low ACV, high transaction volume environment, everything is about repeatable processes and automation. Customers may not require the same level of support or proactive engagement that you see in a high-touch model — the product might be less complex, onboarding may not take as long, and training needs are not as high.   How to move from VP of Sales to CRO with leading exec recruiter David Ives Feodora Chiosea / Getty Images Talking about sales and customer success, I interviewed David Ives of True Search, who is one of the leading recruiters in the go-to-market talent space. We talk about the changing nature of the chief revenue officer, what companies are looking for in talent these days, as well as compensation changes in the industry.   Danny: How often do you try to grab someone who already has the existing title versus trying to upgrade someone from VP of Sales to CRO?   David: This is the other side of the domain versus athlete. This is the up-and-comer versus the been-there-done that. Most people say they want the been-there-done-that. It feels good to get someone who's driven something from 20 to 50 million in revenue and then they, say, have gone from 40 to a hundred million. They have a playbook, and they can point to it and tell you where the challenges were, how they did it, etc.   The difficulty with that strategy is that most of the people, particularly people that have driven something to a hundred million and had an exit, they then want to be a COO or a president or a CEO, right? But then convincing them to go back to do something at 20 million when they've just spent four years doing this major lift is just hard.   On the other hand, when we talk up front, we say, 'Look we understand that there's the center of the bullseye. But there are incredible number twos who have been head of Americas or run the East Coast or the West Coast or run Europe, who have sat underneath, carried a major part of that load, are highly instrumented, are incredible at what they do and they're ready for the next step.' It's a bit of an unknown, and it's a bit of a gamble because they haven't done it, but it's a pretty safe bet.   We try to get one or two of those candidates in to let our clients see that. Then ultimately it's up to the client, but I happen to believe in both. I think in a good search, you have to show clients both.   Why now is the time to get ready for quantum computing IBM If next-generation mattresses aren't your forte, maybe quantum computing is. Our enterprise editor Frederic Lardinois discussed quantum with IBM's Jay Gambetta, who is also joining us on stage next week at our TC Sessions: Enterprise event (and kind reminder that annual Extra Crunch members get an event discount on all tickets — just reach out to customer service at extracrunch@techcrunch.com).   Gambetta, of course, agrees that now is the time to start thinking about how to get ready. But he also noted that there's still plenty of misunderstandings around quantum computing. "Not everything is going to be sped up by a quantum computer," he said.   "That's kind of the myth and that goes back to people thinking that classical computers can do everything. Computers are so good that people have forgotten that there are problems that are really hard for classical computers. And we know they are hard, so we find ways around them, or we don't even you attempt to solve them. So what quantum does, it gives you a different lens that allows you to look at problems that you would never be able to look at with a classical computer."   The Void's Curtis Hickman on expansion, working with massive licenses, and the future of VR The Void Finally, TechCrunch editor Greg Kumparak explores The Void, a VR experience company that takes over complete spaces and transforms them into involved experiences, featuring major franchises like Star Wars and and Ghostbusters. Greg sat down with founder and real-life magician Curtis Hickman to discuss the company, how the team goes about building these experiences, and what the future holds for VR.   Greg Kumparak:Tell me a bit about yourself. How'd you get your start? How'd you get into making VR experiences?   Curtis Hickman: My background is in magic. I've been doing magic since I was in kindergarten.   I eventually got really into magic theory and magic design. I've designed things that some bigger names in magic have used. I got really into that magic community and doing shows. But I got tired of doing shows, and tired of traveling around after I had a family.   So I transitioned into my hobby, which was visual FX. I did visual FX full time for a while.   The Void, I think, is the culmination of these two careers coming together; this digital magic, and this practical magic making something new.   Kumparak:How does magic and magic design transition into something like this?   Hickman: Virtual reality is just an illusion. We're trying to create the illusion of a different reality — in my mind, that's something that magicians do every day.   The reality that they're presenting is one in which a coin can disappear, or an elephant can float… whatever the trick is, they're trying to present a reality where these things can happen. To create these compelling illusions of impossible things taking place.   I see that as the same thing we're doing here. You're stepping into Star Wars. Nothing about that is real! But we're trying to create the illusion that this impossible place you're standing in is, in fact, as real as we can make it.   Thanks To every member of Extra Crunch: thank you. You allow us to get off the ad-laden media churn conveyor belt and spend quality time on amazing ideas, people, and companies. If I can ever be of assistance, hit reply, or send an email to danny@techcrunch.com.   Let us know how you like this newsletter? Read more at TechCrunch.com ➝ View this email in your browser TechCrunch | ATOS | Customer Support | Unsubscribe Was this email forwarded to you? Sign up now. U.S. Region: Privacy Policy Oath Inc.: 701 First Avenue, Sunnyvale, CA 94089   Canada Region: Privacy Policy Oath (Canada) Corp: 99 Spadina Ave, Suite 200, Toronto ON M5 J1A7, Canada   European Region: Privacy Policy Oath (EMEA) Limited: 5-7 Point Square, North Wall Quay, Dublin 1, Ireland