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The 2nd age of Martech, marketing technology black holes, China and data sovereignty, and stopping your friends from buying a CDP. Welcome to the first ever edition of Big Martech - a weekly show from Scott Brinker and Juan Mendoza about the biggest stories, ideas and topics in the marketing technology industry.
In another BIG week in Martech:
🗞️ The Headlines
- Stack management: Do marketers understand their own marketing technology stacks?
- US vs China: And the role of data sovereignty, privacy and ethics in the Martech industry
💁♂️ The Big Chat
The 2nd age of Martech. The 1st age was defined by dichotomies but the 2nd age is all about cohesion and integration. Scott takes us through what this means for the industry and Juan offers a perspective on the third wave of Martech - start up activity after the 90's dot-com boom and the cloud revolution of the 2010's.
- Friends don't let friends buy a CDP: A hypothesis from CEO Tejas Manohar (Hightouch Data) on why data orchestration on the warehouse is a better choice.
- Transmit Media: A very cool and very retro looking way to aggregate news, stock prices and research in the Adtech industry.
▶️ Listen now on Apple, Spotify, and YouTube
📚 Talked About On The Show
📖 Read The Show: Is Martech Heading Towards Its 2nd Age?
Juan: Let's dive into the big chat for this week Scott, what is the 2nd age of MarTech?
Scott: I am so glad you asked. So, it's actually a pretty simple matrix to me. I was looking at the three dimensions by which the first stage of MarTech was defined.
There was this whole debate between suite versus best of breed in professional services. It was very much this debate of if you're a software company or you're a services company.
And then even in any sort of custom software that companies were building. It was this debate of are you're gonna build, or you're gonna buy? At that stage, the whole MarTech industry was like really being driven by these dichotomies.
You had to choose one or the other. And to be honest, neither of the choices were particularly great. Okay, well everything in the suite should be well integrated, but what if I want to do something that isn't supported by the suite. Then get best of breed.
If you were trying to raise money as a software company, having services as any sort of like real component of your business, was just considered like you were somehow cheating like and vice versa for a lot of services companies.
Software and service companies really saw themselves in that position of the value is by the hour. Services are purely intellectual capital as it's being leveraged in hourly engagements.
Now I call that the first age of Martech because there was definitely an explosion of all these Martech, products and services around. But they were kind of being squeezed into dichotomies.
What is really exciting to me is over these past few years, and for the sake of just having a nice delineation, I'm gonna say starting here in the 2020s significantly, we moved into the second age of MarTech where instead of X or Y. It really became about X and Y. It's all about platform ecosystem.
This idea that yes, you want these large platforms that have a tremendous amount of functionality out of the box to be, you know, the foundation, the center of your stack has become very central to the industry.
But you also want the flexibility to make sure those platforms have open APIs, that they have vetted ecosystems of these more specialist apps that have built out of the box integrations to the platform. So that for any of those other more specialized capabilities you need. You can plug it in.
You see now so many software companies that are including different kinds of services in what they do, whether it's from onboarding or training and education services. Ultimately people realize in SaaS, that services are a game about customer retention and customer retention is a function of customer success and customer success is frankly all about helping your customers, from a services angle, to be able to achieve something.
Companies can build more and more software behind the scenes to optimize their implementation, to provide better solutions faster, more of that economically, or even take it a little bit further and package up some of their capabilities to make it available in the app stores of these platforms.
So now we we're seeing these blended models of software and services. If you're building something completely from scratch in the MarTech world at this point, you better be really sure you've got a justification on that.
And then even the platforms, whether it's HubSpot or Adobe or Salesforce or any of these that also have their own APIs, your ability to basically leverage all of that existing capability, not reinvent the wheel, but to be able customize the specific aspects of your internal application capability is a game changer.
So deep breath here. I think it's a really exciting thing to in general, having moved from a world of the first age of MarTech where it's X or Y trade offs that weren't really efficient on either side. We're now in the world of X and Y. And this is what makes the second age of MarTech really cool.
Juan: The blue in this chart is all about the age of dichotomy. It's either this or that. Whereas the second age is all about integration and it's all about collaboration perhaps across the industry, but, also how tech leaders are thinking about how they work out MarTech in their own company as well.
So I think there is some interesting aspects to this because when I first read this piece, I was thinking about something completely different, which is the third age of Martech. Which was talking about the start up ecosystem and how many marketing technology companies are being built and launched over say the past 20 years.
And there's some wonderful data that was provided by Cabinet M. They do MarTech management and they've been tracking the industry for a long, long time now, but they sent me some data and I analyzed it. And there was these really interesting two peaks. You had the late nineties dot-com boom.
And then you had the 2000 to 2015 smartphone, mobile revolution in the cloud. And you had these two really interesting peaks where you had a really arbitrary marketing technologies back in the late nineties.
A major change happened when the iPhone was launched, when Salesforce came into market said and said - hey, you can put a CRM in the cloud! You had all of this new innovation as SaaS as a category really took off from around 2007 to 2015. But since then, we've been on this interesting three to four year decline.
And this ties into, perhaps what you're saying here Scott about the second age of MarTech, and I'm seeing a lot of these companies are far more integrated into existing platforms and systems.
One great example is the ecosystem around Snowflake and all of the reverse ETL orchestration tools that are being built around the data warehouse. Doing data management enrichment on top of an existing database. Now that plays into the second age, which is about custom apps built on commercial platforms.
Now, that's why I think that's really important. I think a lot of start-ups are starting to see having a start up in isolation. And building a company, a solution in isolation, doesn't make a lot of sense. Now, everything is so integrated. We're living in this API economy. One great platform is actually had a, a gentleman yesterday on, on my podcast talking about a click up, which is a process manager platform for marketers and product.
So I think maybe there's not a conflict there. Third wave is actually riding into the second age of MarTech. What are your thoughts?
Scott: Yeah, I love it. And I think you're exactly right. I mean, we see it on both levels, certainly from a technical level - if you're building a product, a MarTech startup, you need it to integrate with the core platforms that your customers, prospects are gonna use.
At the same time, it's even better than that because, the biggest challenge for start ups in a world where there are now literally a hundred thousand plus SaaS companies out there, is how do you effectively go to market? And we're seeing a lot of these start ups get very effective at leveraging the platform ecosystems as a go to market channel.