The tech world has long perpetuated the “if you build it, they will come” myth — the idea that great products will inevitably find their market and fly off the shelves. But a great product is not enough. Without a clearly defined sales and marketing strategy, even the giants among us can fail. Wendy Lee’s recent piece on the uncertain future of #Yahoo CEO #Marissa Mayer brings to light a cautionary tale for tech marketers.
Mayer’s strategy for Yahoo relied heavily on attracting a talent pool to build great products, thereby drawing a large audience and hence, advertising budget. But without integrating product, sales, and marketing from the get-go, Mayer’s strategy amounted to a chain reaction that never set off. Successful strategists iterate the marketing and sales processes in tandem with product development. And you don’t need to be a Yahoo or a Google to get the job done – check out our survivor’s guide to #tech marketing for more on do-it yourself marketing and scaling effectively.
Fate of Yahoo CEO Marissa Mayer unclear
When Marissa Mayer took the helm at Yahoo in 2012, she was hailed as a savior, the best chance the ailing Internet giant had at turning its fortunes around. Employees pasted up images of her face and the word “hope” in the style of artist Shepard Fairey’s Barack Obama poster.
Four years later, hope has given way to change. Mayer can’t even say with certainty what her role will be after Yahoo’s $4.8 billion sale to telecom giant Verizon goes through early next year.
On Monday, she said she’s staying put for now and will see through the sale of Yahoo’s core business. “Moving forward, we’ll ultimately figure it out,” Mayer told Bloomberg in an interview.
Making it up as she goes along isn’t Mayer’s preferred way of doing things. She joined Yahoo after a long career at Google, where she tested even the most minute details of a Web page with exhaustive data, like which of 41 shades of blue users preferred.
‘Chain reaction’ fails
There was no easy way to test her plan for Yahoo, though. Mayer believed she could ignite a “chain reaction” by first hiring brilliant engineers and designers, who would then build great products, which would draw big audiences, and that advertising dollars would follow.
The chain reaction fizzled, with few new products to show for her troubles, which included spending billions of dollars on acquisitions of companies such as Tumblr and Brightroll.
Mayer’s failure at Yahoo calls into question Silicon Valley’s cult of the product genius. The belief that a good product solves most problems drove Mayer’s strategy. Yet some of her biggest stumbles came in areas like sales and marketing, where she had little experience from her time at Google.
The reality: Great technological products have been driven as much by clever (and expensive) marketing and ubiquitous distribution. Look at Apple’s splashy iPhone campaigns or Google’s savvy search deals. Those required resources that Mayer wasn’t able to marshal.
“She was given a tough challenge, for sure,” said Robert Peck, an analyst with SunTrust Robinson Humphrey, who thinks it’s unlikely Mayer will lead a publicly traded company again.
Few analysts expect Mayer will remain with Verizon for long, if she joins the company at all. If Mayer is terminated after Yahoo’s sale to Verizon, she would receive a severance package worth $56.8 million, according to research firm Equilar.
Good hires, acquisitions
Peck gives Mayer a “C” for her performance as CEO. She brought much-needed energy and urgency to Yahoo, recruiting talented engineers and pushing the company to make products for mobile devices. When Mayer joined Yahoo, only 37 of its 12,000 employees worked on mobile. Mayer acquired startups that specialized in mobile products, and the company now has 600 million monthly users across its mobile apps and websites.
But under Mayer’s leadership, there were also bad hires, particularly her first chief operating officer, Henrique de Castro, who was fired and given a severance package worth $58 million. Her bet on Yahoo’s big entry into social media by buying blogging platform Tumblr for $1.1 billion also flopped. Tumblr didn’t make its revenue goal last year and Yahoo had to write down the value of the purchase by two-thirds this year.
Verizon’s purchase of Yahoo is “probably tough to swallow given everything she has done and the strategy that she felt strongly about wasn’t really working,” said Neil Doshi, an analyst with Mizuho Securities USA Inc.
But Eric Schiffer, chairman at Reputation Management Consultants, believes Mayer could bounce back if she took a one- or two-year break. During that time, Schiffer recommends Mayer invest in startups or speak about her experiences as a female tech executive.
“She’s going to need to rebuild her reputation,” Schiffer said. “The best way to do that is to go in an area where she is not going to be under the scrutiny of quarterly earnings.”
Mayer drew a lot more attention because she was a female CEO, a fast riser at Google and had a distinctive personal style. That helped her recruit people to join Yahoo, but it also brought far wider attention to her struggles, Schiffer said.
2nd chances for women?
Female executives are more likely to be asked to run troubled or failing companies, said Margaret Neale, a professor at Stanford’s Graduate School of Business, making it harder for them to get a second act when they are unable to fix underlying problems.
But Peck said he believes there would be criticism over a CEO regardless of their gender if the company was not performing well. “Investors focus on numbers,” he said.
For now, Mayer said she will focus on continuing to run Yahoo. Until the sale goes through, someone has to mind the shop.
In an email to Yahoo staff, she urged the company’s employees to come together as a team and said “it is up to us to make Yahoo’s final quarters as an independent company count.”
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