VC Jerry Chen sees opportunity for MarTech startups in customer engagement

CLOUD

The MarTech stack is becoming a deeper, wider channel for connecting with customers and building relationships, and the common denominator is data.

The growth of mobile platforms has changed the landscape for how brands reach and interact with customers. This has led a number of startup companies to build businesses around leveraging cloud technologies and data to provide new platforms for customer engagement.

“In the good old days, MarTech was about your webpage and email,” said Jerry Chen (pictured), partner at Greylock Partners. “Fast forward 10 years and you have webpages, mobile apps, VR experiences, car experiences and your Alexa home experiences. We’ve seen both an explosion in data and an explosion of channel. You’re seeing a new generation of companies for this new stack.”

Chen spoke with theCUBE industry analyst John Furrier during the AWS Startup Showcase “MarTech Emerging Cloud-Scale Customer Experiences” event, an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed trends in the MarTech world and how startups can capitalize on technology that provides a genuine return on investment. (* Disclosure below.)

Connecting at decision point

In his role as a venture capitalist in one of Silicon Valley’s leading investment firms, Chen’s business is to observe customer behavior and anticipate how this will translate into digital opportunity. He has watched the way that technology has influenced consumers and their expectations of top brands.

“We want to engage with company brands or business brands … and the way we engage is different, like how or when, on chat or on a mobile device,” Chen said. “It’s also the moment when we need to talk to a company or brand, be it at the store when I’m shopping, in my car, at the airport. We want to reach the brands and the brands want to reach us at the point of decision.”

Making that key connection at the point of decision has become critical for MarTech firms. Success involves being able to build a system around crucial customer data and turning that into actionable intelligence not readily available to competitors.

“I call this systems intelligence,” Chen said. “By getting proprietary data to train your algorithms, recommendations and applications, you can still collect data that other competitors don’t have. When you apply the system of intelligence to the end user, you can create value. In marketing tech, the highest level is what we call a system of engagement, and if you own the system of engagement, be it Slack or the operating system for a phone, you also win.”

Pipeline becomes advantage

In Chen’s estimation, an ability to capture data from a myriad of sources, combined with the capability to enrich information using machine learning, could provide MarTech companies with a distinct advantage.

“Do you have machine learning models or some other IP that once you’ve collected and enriched the data, you know what to do with it?” Chen asked. “The pipeline is where a MarTech company can have advantage. Now you can’t just go from a website to email. It’s a website, plus mobile apps, plus real-world interaction to text message, chat, phone call, Twitter.”

In 2021, Greylock initiated a project to map multiple data points of the cloud computing ecosystem. The firm’s analysis documented what it labeled the “castles in the cloud” of Amazon Web Services, Microsoft Azure and Google Cloud, and how the leading providers have nearly unlimited resources and dominant control of distribution.

In the MarTech world, startups often challenge this dynamic, with a great deal riding on where data will ultimately be stored and processed.

“You’ll have these battles between these giants in the cloud, these castles, versus the challengers,” Chen said. “You’re going to have a battle between whether to work your data in S3 or work it in some other application.”

What will separate successful startups in the MarTech ecosystem from failures? Chen believes that customers will carefully evaluate the potential benefits. Startups that are capable of providing clear return on investment are more likely to survive in today’s competitive climate.

“Customers buying technologies are looking for a hard ROI,” Chen said. “Are you going to help me save money or increase revenue? Startups that have a strong ROI that can save money or increase revenue will rise to the top of the MarTech landscape.”

Stay tuned for the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of the AWS Startup Showcase “MarTech Emerging Cloud-Scale Customer Experiences” event.

(* Disclosure: Amazon Web Services Inc. sponsored this segment of theCUBE. Neither AWS nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE