Jason Mlicki (00:01.364)
So Jeff, have I told you about my Marvel movie marathon?

Jeff McKay (00:07.324)
You’re a Marvel fan?

Jason Mlicki (00:09.564)
I am becoming a Marvel fan. I was not a Marvel fan, but I am now becoming a pretty intense Marvel fan. So

Jeff McKay (00:16.723)
I always thought you were juvenile, but do tell.

Jason Mlicki (00:23.742)
Well, so I I committed to my boys, so my two youngest boys who are sixteen and fourteen, that I was I wanna watch every Marvel movie in the timeline that leads up to the Avengers Doomsday release in December. So for like the last two and a half months, they have been taking me through systematically Avengers movies and Guardians of the Galaxy and Thor, every every Marvel movie that meaningfully leads up to this December release.

I’m actually getting really into it. so now now it’s

Jeff McKay (00:59.413)
Who’s your favorite hero? Who’s your favorite hero?

Jason Mlicki (01:02.27)
Man, that’s tough. It was always Spider-Man because I mean what’s he’s he’s he’s like the goofy, awkward teenager that just kind of stumbles around and gets things done. He’s amazing. I’m kind of getting into Thor now because he’s just like pretty much the coolest dude to ever live, right? I mean, like so but but the the the more what I wanted to tell you was that the thing I’m noticing as I watch all these Avengers movies is that whenever it gets kind of dicey, like when things look like they’re gonna fall apart, they break an iron.

Michelle Swan (01:12.642)
Mm.

Jeff McKay (01:15.977)
He’s just done, yeah. Mm-hmm.

Jason Mlicki (01:32.552)
Right, like Iron Man is the guy. Like they bring him in to fix the problem. And I feel like run this marketing, this research on the marketing org, trying to understand what’s going on. And I feel like we’re kind of at this point where it’s getting kind of murky. and so we’re bringing in an Iron Woman. So we’re bringing in Is it?

Michelle Swan (01:50.313)
I love that.

Jeff McKay (01:50.901)
Iron Man is my favorite hero. Yeah, and the Iron Woman that we have is one of my favorite guests.

Jason Mlicki (02:03.759)
Exactly my point. Exactly. I I thought about framing Michelle. I thought about framing you as Captain Marvel, but then I thought maybe that’s actually just too much pressure because Captain Marvel is kind of like can defeat anything. It’s kind of crazy. She’s unfair.

Michelle Swan (02:15.411)
I feel like Iron Man, the bar is pretty high. I feel like now I have to meet that bar, which puts a little strain on things.

Jason Mlicki (02:18.291)
No, you totally meet that bar every single day.

Jeff McKay (02:23.477)
Michelle, are you following all this? Are you a Marvel fan?

Michelle Swan (02:27.745)
Marvel fan. I’ve got three kids, big movie buffs, and my son is very into the whole superhero. In fact, he just wrote his college essay around that.

Jason Mlicki (02:37.211)
I I want to hear about that, but so well with us is was Michelle Swan. So of Tercera. So Michelle, welcome back to the show. I think we figured out this is your fourth time on the show, although Google Gemini scene thinks it’s five. So AI hallucinations are still a thing. yes, there you go. so tell I get tell us about Tercera real quick. Just give give us a quick update on Tercera. I think most listeners

Jeff McKay (02:38.736)
how about that? That’s cool.

Michelle Swan (02:55.927)
So we still have jobs, AI can’t do it all.

Jason Mlicki (03:05.809)
No know you and no Tercera, but I think it’s good ’cause a lot of things have changed.

Michelle Swan (03:10.133)
Yeah. so Tercera, just as a reminder, is a an investment and advisory firm that specializes in IT professional services. We tend to focus more on the mid-market. So call it, I would say 10 million in revenue to 40 million in revenue tends to be our sweet spot for where we invest. we’re six months in, six months, six years in, it feels like six months.

six years in we’ve made 10 investments so far. a number of platform investments, and we tend to focus on I would say kind of the up and coming ecosystems out there. So the Databricks, Snowflake, Anthropic, used to be Salesforce, Sales Salesforce is actually still pretty hot, strangely enough.

so tend to focus on the channel ecosystems. And then we’ve made a couple of really kind of early stage bets in more of the AI native side of things, which has been really fascinating to see how they build things versus the traditional IT services companies. and the more recent thing is we actually just introduced an advisory arm of the business where we actually go in and help consult on everything from AI transformation to

Go-to-market acceleration, everyone’s got a go-to-market problem right now. So good job security for us, I suppose. so we go in and help folks outside of the portfolio companies, which has been, again, really fascinating to kind of open up that aperture beyond just the 10 people who we work with day to day.

Jason Mlicki (04:45.703)
Yeah, no, that’s exactly why you’re exactly why you’re Ironwoman, right? So let’s jump into this. We we did a little bit of a pre discussion about this and I and I I’m just kind of curious to to hear just hear you talk about what you what marketing organizations typically look like in IT services firms in your experience. I mean you’ve built them both as a marketer, you’ve built them as an advisor, you’ve built them as an investor. What what do you and I I you know

Michelle Swan (04:50.039)
Yeah.

Jeff McKay (04:51.969)
Yeah.

Jason Mlicki (05:15.943)
Take this wherever you want. What what is what is a the marketing org typically look like or what does it look like in the past and what is it looking like now?

Michelle Swan (05:23.253)
Yeah. It’s so it’s interesting. It was a good exercise. You gave me a little bit of homework here. So you know, I grew up in a company called Aperior, which was one of the first cloud consultancies. in fact, we’re actually having our 20-year reunion of Aperiode next week in Indianapolis. And 20 years from the founding of the company, we ran it for about 10 years, grew it to probably hundred, hundred and fifty million in revenue, about up.

1500 people in five different countries. So it was an incredible run. And it was it like made me love services marketing. As weird as that is, but we actually have like 300 people coming to this event, which is kind of crazy in Indianapolis. But so I went back and looked at what my org chart looked like then at that size. And I think we have 35 to 40 people in the marketing organization at that size.

Jason Mlicki (06:06.939)
Awesome. Yeah.

Michelle Swan (06:18.965)
Which I didn’t realize at the time because I was just the person asking for marketing dollars. I wasn’t the investor saying no to them, which I am now. I didn’t realize how big that was and how much of a percentage of revenue that was at the time and how different that was from most of the other services companies. But you know, we were growing consistently 50% plus in revenue. and so it was working. So we kept spending money, but I would say.

When I look at what the marketing organizations today tend to look like, obviously much smaller, a little bit flatter. I think there are certain roles that are more important now than there used to be. I mean, marketing operations was we had a marketing operations person, but I wasn’t I wouldn’t say that had to be the most strategic person in the organization like it does now. product marketing, I think we were a little bit ahead of the curve then building.

Productize services. That was a little bit of our thesis back in the day, which I can have a whole different podcast on why product and services inside the same company is actually harder than it should be. So there are different, I would say, different roles that have become more important, but as a whole, kind of flatter, a little bit leaner. And the marketing dollars are just lower, partly because the dollars have to get spent in lots of other areas.

Jason Mlicki (07:48.712)
yeah, I wanted to ask you that. Y you said marketing dollars well you just said it, but like is it why are marketing orgs smaller? Why are marketing budgets smaller?

Michelle Swan (07:59.725)
Mm.

I think part of it is I think they’ve always been lean in services companies, leaner than product companies. I mean, I would say the even back, you know, ten years ago, the average percentage of revenue for us services marketing tended to be anywhere from two percent of revenue to four percent of revenue was like the sweet spot. I think Aperio back in the day was like 10% of revenue. so we were way above that.

I think it’s gotten squeezed because it’s easy to squeeze. it’s, you know, program spend, it’s easy to turn off program spend. It’s not as easy to track back everything exactly. Like I go hire a salesperson, I know I can give them a quota and I can expect a certain amount of performance from them. It’s not as easy on the marketing side. So I think because it’s less measurable, it tends to get cut a little bit more. And I think services.

in general has just gotten squeezed, like the budgets have gotten squeezed a bit is they’re trying to show higher margins. and you know, salaries are increasing, customers are spending smaller projects, you know, they’re not writing the publishers clearinghouse checks that they used to. it’s just it’s a little bit of a harder market out there. And I think a lot of that is squeezing the marketing budgets.

Jeff McKay (09:24.999)
In order to get that savings, you mentioned programs, but so much of a professional services marketing organization is is actually salaries. have those roles or have roles been eliminated? have tactics or strategies

Michelle Swan (09:38.349)
Mm-hmm.

Jeff McKay (09:53.578)
been replaced? Has technology evolved? what’s happening within the organization from your perspective that’s allowed that cutting to happen? Because the outcomes are still desired. But where where is where are those budget gains coming from?

Michelle Swan (10:23.657)
Michelle Swan (10:27.095)
Think the biggest

Michelle Swan (10:31.201)
I think I’m trying to think of where the biggest pressure in marketing organizations is right now. I mean, I think there is this constant like you can just do more with less. Like you’ve got AI now, you can churn out content a lot faster. You don’t need five designers anymore. You like you should be able to just put that through Canva or Claude or whatever it looks like. And I think the fact I mean, we all know that like there still needs to be a human that’s involved in this. So I think there is a a perception that is driving some of the

Jason Mlicki (10:48.849)
Well

Michelle Swan (10:59.745)
the cost compression down, but there’s still the performance expectations. And honestly, maybe that’s why the average lifespan of a CMO is 18 months. because everybody has these high expectations and sometimes it’s just really hard to meet those expectations. because there is this perception out there that AI can do probably AI can do a lot for sure. And I do think when you look at the marketing org of the future, there is

agents that are kind of built in. I think there’s an interesting role for a go-to-market engineer that helps kind of systematize a lot of the processes. but it’s still an imperfect science. I mean it thinks I’ve been on this podcast five times instead of four. so I I don’t think anybody is willing to let it just run rampant without some human guidance and oversight.

Jason Mlicki (11:42.387)
Yeah.

Jason Mlicki (11:52.114)
I I before I there’s so much I want to go into there, but I want to go back for one second because you both mentioned that everyone wants the outcomes. I’m kind of curious, do you think the yes, they want the outcomes, but have the expectations of the outcomes changed? And what I mean by that is like we talked about this in the setup. I feel like there’s less patience than there was. And

A few years ago, the expectation might be I want to build a brand that rivals Accenture or something. I have this vision that I want to be this highly regarded organization. And now I feel like it’s like I just want sales ready leads. I don’t really care about anything else. I mean, do you feel like the ex the the expected outcomes from the marketing function have changed meaningfully over the last 10 years, or am I looking at this in a microcosm?

Michelle Swan (12:45.197)
I think they’ve ch I think they’ve increased in some ways, they’ve decreased in others. Honestly, I think it depends on the company and the leaders in the organization. I think that makes the biggest difference. Like I have always been blessed working for leaders who have thought very highly of marketing, who have seen it as strategic, as I’m not just gonna go execute on the things you go tell me to do, but I’m gonna help you figure out the plan. And when that’s the case, then we sign up for those same outcomes. And so

It’s an easier thing to set expectations and say what’s possible and even exceed expectations. But when you’re coming in and the CEO thinks that just marketing all they are is just a demand creator for the sales team and you need to give me X number of marketing qualified leads, even though I don’t really know how to define that. I like that’s where people start to get into trouble, I think. but but I think it’s probably different based on organizations, even

Jason Mlicki (13:31.474)
Yeah.

Michelle Swan (13:41.325)
You know, we work with a lot of advisory clients now, even outside of our portfolio company, and just the spectrum of leadership and how they view marketing is so vastly different.

Jeff McKay (13:54.474)
I would agree with that. I I see that in the companies that I interact with, and those that have that short term perspective, I think are seldom successful relative to the more strategic long term thinkers. that I I mean i the leadership perspective is just the differentiator.

It it is. If you’re building a company of value, I think you have that long term perspective. It’s not to say that you you still don’t want that demand gen in leads. You’re just more realistic about the investment it takes to achieve a sustainable trajectory around that demand gen. so I I I’m seeing exactly what

What you described, Michelle.

Michelle Swan (14:54.636)
Yeah. And I I think a lot of that falls onto the CMO, to be honest, to educate the leadership team. Because I mean, most CEOs, COOs, CFOs, like anyone in the C suite, like they’ve never been in marketing. And so they have a perception of what marketing is probably based off where they came from. Sometimes that’s a great perception. Sometimes that’s not a great perception. And so I think a big piece of the CMO’s job is education and like

being part of those conversations. So you can translate both what the marketing team is doing up to the C suite, but also what the business wants to do down to the marketing team. you’re like that translation mechanism. And I think the CMOs who don’t do a good job at that end up parting out.

Jason Mlicki (15:47.162)
What let’s lean into that actually. Let’s lean into how you think the CMO job needs to change. how w what what what does the CMO of the future need to look like that the CMO of today maybe is not or or or or what or maybe contrary to that, what what stays the same?

Michelle Swan (16:06.914)
I think a lot stays the same. I think there’s just more on top of it, which is why it’s a really tough job. and I’m not just saying that because I have CMO and are very in my very small title. but I think you have to be part of I think CMOs in the future have to be a lot more customer-facing. partly because I think the market changes so fast. And if your job is to help translate what’s happening in the market and with the customer base alongside

Jason Mlicki (16:18.119)
Yeah.

Michelle Swan (16:36.088)
your head of sales and your CEO down to the programs and execution layer, then you gotta be in the mix. and that doesn’t just mean looking at gong transcripts and interpreting and talking to your salespeople. It means actually going out to conferences and meeting with customers. And I think that the best CMOs have always done that. but I think it’s just gonna be kind of an expectation going forward. So I think that’s one thing. I think the

The other thing is that they have to be more data oriented. And I mean, I’ll be candid that I I struggle with this a little bit. Like I grew up in I grew up in the PR world. the fact that I’m in private equity has been a major learning curve for me over the last six years to kind of understand the impact of marketing on financial aspects of the business and things like that. But I think that’s gonna be

a really important thing for CMOs in the future if they want to be part of those strategic conversations at the board level. and then I think the third thing, which is they’re gonna have to be more builders. Like they’re gonna still have to be the team leaders and the strategists and the guidance counselors for the group, if you will, but they’re also gonna have to actually go try to build stuff on their own to see what’s real and what’s not. so when

your board comes to you and says, cut marketing by X percent and just give it to AI, you need to be able to say what’s possible and and what’s not. and come up with new ideas that just didn’t exist before because you’re kind of the innovation arm of the business too.

Jason Mlicki (18:18.163)
I like that a lot. What let’s go back a little bit and let’s talk you because you taught you you alluded to, you know, you went back to the marketing organization you bud at a period and it was 35, 40 people deep. and it was 10% of revenue. If you were in that seat right now at a firm of that size, what do you think that more marketing org would look like now?

Michelle Swan (18:42.408)
Mm. So it’s funny, we’re actually doing a project right now with an advisory client trying to figure out what their more marketing organization of the future looks like. and it’s been it’s been a challenging thing because you can’t start from scratch. I mean, they have an existing marketing organization, so you have to like kind of retrofit something. But I think in that pro what what we’ve recommended is about 15 people. they’re about a hundred million in revenue.

so not that different, so very different from 40. there’s a lot more, I think, fractional consultants that are in the mix because I think there is you still need people inside to guide those consultants to get the best performance out of them, I think, but there’s a lot more really smart fractional people that are on the market that you can get a lot of guidance from, whether that’s product marketing support or thought leadership.

experiential programs, things that like I guess flex up and down, that you just don’t need on the team constantly every day. so I think probably more fractional support. There’s definitely I think there is a go-to-market engineer embedded going forward because someone because you are gonna have agents,

I don’t know that you treat them like humans the way some people talk about them, like they’re still a piece of technology, but someone’s got to document it, like tune them, make sure they’re still working, that they’re not drifting, decommission the ones that aren’t useful, help the team understand which because everybody’s building something of their own. So I think there is a a new role in the group that we’ve recommended. But I think it’s definitely smaller. But it’s about, I I think we’re still at like,

We still are recommending four to five percent of revenue, which is higher than what the benchmarks would say.

Jason Mlicki (20:38.771)
Interesting.

Jeff McKay (20:41.589)
And is that investment, I’m assuming includes that AI investment? Or is that is that fall falling under a more excuse me, more macro organizational budget?

Michelle Swan (21:00.558)
That’s a good question. It in this case, it the AI spend, the token spend is in the IT budget, not in the marketing budget, but the go to market engineer is in the marketing budget.

Jason Mlicki (21:16.285)
Yeah.

Jason Mlicki (21:20.239)
let’s talk about that a little bit more. The in some of the past conversations we’ve been having, the the the the hypothesis I’ve been hearing is that there’s sort of an idea that we the marketing function could be a collection of generalists. So they could be industry experts, industry ex what’s an industry, an industry expert that really knows private equity in and out or really knows retail in and out. And

But they’re sort of a marketing generalist. And a collection of those, or I was even thinking, you know, maybe they’re functional experts. They really understand human capital, you know, attracting and engaging and retaining employees exceptionally well across different industries. But anyway, the hypothesis is that you have this collection of journalists that are supported by largely by

By AI and the AI is kind of filling the specialist roles that were filled by people in the past. Kind of just curious to get your take on that. Do you do you think that that’s feasible? Do you think that it’s true, false? I don’t know.

Michelle Swan (22:31.096)
And when you say specialist rules meaning the execution of it or the specialized like industry nuance of it?

Jason Mlicki (22:39.717)
I I th I’m thinking the the execution of it, you know, and and again, I’m maybe I’m thinking about this over simplistically, but I often think about especially when you go into a l as you said earlier, a really large firm with a really large marketing organization, you find specialists in everything. You’ve got people whose full job is literally just SEO or literally just social media or just email marketing or or inside the marketing ops function, there’s someone who just owns the the

the knowledge management platform or the marketing automation technology. That’s really all they do. It’s just basically build nurtures and workflows and lead scoring models and report out data. so it’s sort of like specialists within the marketing activities, I guess, if that makes sense, is kind of how I’m thinking about it.

Michelle Swan (23:18.562)
Mm-hmm.

You’re still gonna have that. I mean, I think you’re gonna see more senior generalists that and I like I listened to the episode before this around with Brie, from Stitch, and I thought it was really good. Like her her point is like she wants someone to own something end-to-end. And I think that accountability and that ownership at every level is going to be really important. So I guess when you own something end to end, it is a little bit more of a generalist, and you can use AI to get more specific around like.

I’m never gonna hire a web copy person. Like I can do that in five seconds on ChatGPT now. so but if I’m gonna like, am I gonna not have a someone who owns global campaigns and like how to execute those across the organization? I’m still gonna want a campaign person, probably. product marketing, like same thing, solutions marketing. If if there are four areas of the business that

are really important that we want to drive revenue for that are important for identity, probably want someone to own each one of those things. So is that a specialist? Maybe, but they also don’t have to hire like four people underneath them to do all the customer research, all the case study development and all of that, because that is a lot easier to do than it used to be. I don’t know if that answers your question.

Jason Mlicki (24:47.901)
Think it does. I mean, I think it does. I I think that it’s you’re reinforcing what my hypothesis has been is that specialization will still exist in the marketing function. It’s just going to look a little different. You’re going, you’re going to rely on different types of specialists than maybe you did five years ago or 10 years ago. you know, but but I it’s it’s still unclear to me what those specialists are going to look like. I’ll put it that way.

Michelle Swan (25:05.709)
Mm-hmm.

Jason Mlicki (25:15.921)
Th it it’s sorta clear what’s what specialists are are are less in demand, but it’s not as clear what specialists will be more in demand, if that makes sense. So

Michelle Swan (25:25.164)
Yeah.

Jeff McKay (25:27.037)
I think one of the things that is never going to be out of demand is a type of person, a strategic thinker, a problem solver, tenacious, get stuff done, type of of attitude, business acumen, the embracing of technology.

to me that those are the elements of the type of people I want on my marketing team. Because things are changing so quickly, I find those people are most adaptable and they have a value orientation.

Michelle Swan (26:05.176)
Mm-hmm.

Jeff McKay (26:20.231)
So they’re always thinking about producing an outcome, solving a problem. and those I think those are the people that have multiple titles over their careers because they they constantly evolve. if if I were building a marketing team with so many of these unanswered questions, I would just load up.

Michelle Swan (26:37.218)
Mm.

Jeff McKay (26:49.755)
on those type of people, no doubt.

Michelle Swan (26:54.4)
Yeah. I and I think there’s another trait that is becoming more important in this new world, and it is the systematic thinker. It’s the like the person who can think through like what’s the problem? How do I break this down into pieces? Cause that’s how you’re gonna get AI to do the things right. and then how do I put it together in the end? And then what is the impact of that to delivery, to sales, to

Jeff McKay (27:01.897)
Mm-hmm. Mm-hmm.

Michelle Swan (27:20.428)
other pieces of marketing. So like the kind of thinking through the process. I don’t think that skill set is taught very well, to be honest, in schools right now. and I I think when I we’ve been exploring like what does the next generation consultant look like at Aperia. We t or at Tercera, we talk a lot about what that looks like as you as we’re building these AI native services firms, like what’s the profile? I think the same thing holds true for marketing.

Jeff McKay (27:28.117)
Mm-hmm.

Jason Mlicki (27:29.629)
Yeah.

Michelle Swan (27:50.136)
So you just you need that systematic thinking skill set inside the organization.

Jason Mlicki (27:57.108)
Can you share what that that consultant looks like?

Michelle Swan (28:00.911)
We’re still figuring it out. No, it’s interesting. We actually have just we’ve been partnering with a couple schools on this front just to kind of think through if you’re and because I and I think this is this is a ch a challenge that everyone’s gonna have is like if you’re not hiring a bunch of junior talent, which let’s be honest, like the internships are down.

Jeff McKay (28:02.929)
Yeah.

Jason Mlicki (28:09.501)
Okay.

Michelle Swan (28:24.026)
Yeah, organizations are flatter. There’s just not as much hiring in some of these areas. And so if you don’t have that junior level talent, it’s kind of like the consulting pyramid, which we think is more of a Pentagon now. But you still need those people at some point. So like what do those people look like? And can you build a training program to help them get up to speed faster? versus the old apprentice model, which just doesn’t it’s doesn’t really exist anymore.

Jason Mlicki (28:54.171)
Yeah, I’ve I’ve I’ve posited on this show a couple of times that I think that it’s putting more strain on the training and development programs of firms in the sense of when the pool was a hundred people and you just kind of see who came out of it, okay, now the pool’s 20. So you have less opportunities to find the the the the the five you need or whatever. and the firm’s going to cease to exist if you don’t have people coming up from within to lead it. And so it’s sort of a

Michelle Swan (29:07.937)
Mm-hmm.

Jason Mlicki (29:23.595)
a a pretty big problem that they have to tackle and they can’t ignore it. And I think a lot of firms are are ignoring it. I feel like I use this analogy yesterday. This it wasn’t on this particular topic, but I feel like there’s in marketing, there’s a lot of people running downhill with a jetpack on their back. where there’s another Iron Man reference. But but the idea is basically that like they’re optim they’re using AI to optimize yesterday’s marketing approach and they’re just running downhill faster. And so it’s like, well you’re not solving anything.

Michelle Swan (29:37.582)
Is that another Iron Man reference?

Jason Mlicki (29:51.378)
You gotta step back and think about to your point systematically, how is AI changing the buying process? How is AI changing what we need to be doing as marketers in general? And go after that, not spend all your time trying to, you know, crank out, I don’t know, fifty more blog posts because you can. so anyway. got us off track there a little bit. What let’s change gears little bit. So so

What’s what’s future cast a little bit? Let’s jump ahead and say it’s it’s a few years from now, it’s four or five years from now. What do you think we will when we look back at this period, what do you think we’re gonna say, boy, we got that way wrong? Like what what what why why are we doing that? What were we thinking?

Michelle Swan (30:30.317)
Ha ha.

Michelle Swan (30:34.038)
I think I think marketing becomes more important, to be honest. I I think there is this concept of like a mark marketing is being disrupted by AI for sure. and there’s lots of things that AI can do in marketing that it didn’t used to do, and it’s only gonna get better. but I think marketing as a function, and it’ll be interesting if it’s called marketing in the future. Like, is it more around

growth or I don’t I don’t know. I’m I’m curious kind of how the whole segment evolves, but it is so hard to stand out right now. I mean, we get, we’ve talked to, I think by now we’ve talked to probably a thousand services firms over the last six years. and in the last year, every single services pitch we get is I’m a data and AI shop. That’s what I do.

Maybe they’ve got a little vertical presence. but mostly I’m just a data in AI services. And when you put like what what about AI services? Well, we can do everything. like it’s just so hard to differentiate right now. and I f and and tell stories about outcome. Like everybody wants to buy an outcome. That’s the direction of this industry. that’s a marketing skill set. That is storytelling. And it is like,

Jason Mlicki (31:35.517)
Full service.

Michelle Swan (31:51.875)
Getting in with the delivery team, figuring out what those outcomes have actually look like, how do you package that up? I think I think marketing becomes more important, not less.

Jason Mlicki (32:04.797)
Do you think senior leaders are going to realize that? Or is it still going I I would posit that there’s have I used the word posit twice today? That’s pretty crazy. that there are that there are fewer senior leaders that really value marketing than not. Like that, like that subset of the of the ones you’ve described to me is is a small subset of the broader universe of CEOs. do you think that pie grows? But do you think I’m right?

Michelle Swan (32:33.536)
So. I hope so. I mean, I think when you look at like every year we have a leadership retreat for our portfolio companies and our advisory clients. and and we one of the things that we do in this leadership retreat is we say, like, give us one thing, one small thing that made a huge impact on your business. And we do like a little show and tell, kind of like grade school. but somebody gets up, it’s amazing how many of the stories are about marketing.

Just something that they did. I mean, that’s not all that is there too, but I think that I think people will figure it out. People will learn. They’ll see the people who have made the pivot, which I hate that word, have made the move, to that have seen growth where others are slowing, or just like hanging in and doing status quo. And hopefully they see that marketing had a role in it. I think the other interesting thing is,

It’s this investment in people too. I think people are starting to finally realize that. Like attrition is starting to pick up in companies. Like the really good people are making moves to places where they’re not just like the only person trying to do 50 different things where there is they’re held in higher value. and even the research that we did with the AI native services with AI services is the high growers were the ones that invested in people.

in account managers and sales development folks. it isn’t just the token spend.

Jason Mlicki (34:12.571)
Absolutely. Jeff, what do we miss? What have we not asked Michelle? What have we not asked Iron Woman that we need to ask her?

Michelle Swan (34:20.656)
Ha ha ha

Jeff McKay (34:23.157)
what is something unique that you’re doing or you’re seeing the portfolio companies do that really stands out to you?

Michelle Swan (34:40.475)
that is a great question. in marketing specifically.

Jeff McKay (34:46.577)
Well, I I would

Collapse it into what I call the IC triad, right? The marketing sales and delivery trifecta. because I think probably the most creative and dynamic organizations are collapsing some of those silos and opening up potential new ways of talking to and delivering stuff to the market.

Michelle Swan (34:54.35)
Mm.

Jeff McKay (35:18.973)
You’d mentioned productization is as one one of those those things, but something along that line.

Michelle Swan (35:27.392)
Yeah. I think everyone’s trying to figure out the productization. Do I create a whole new is it a labs thing? is it an actual product that is a separate part of the business?

What does that look like? Is it an accelerator or is it a true product? I think that that is an area of experimentation that we’re gonna see some interesting things over the next 18 months. I don’t know. I I don’t know if I know the direction that it’s gonna go, but it does feel like as services and software starts to come together and it’s not about implementations anymore, it’s about kind of custom dev, custom processes, like refining.

Processes tying together different tools, like maybe that that does start to be more be able to be more productized inside services companies. so I think that’s one thing, area of experimentation. And some companies are doing real, like it’s getting them into conversations that they haven’t been in before. Whether they’re being able to sell up sell a subscription to it for millions of dollars, who knows? I think that jury is still out.

I think there’s also some really interesting tools out there. so I’ll give one this company called Octor, which we are an investor, so I’ll say that there. But they basically have are creating an operating system for services companies. And it is helping to from the sales process all the way through requirements definition, and eventually they’ll get into doing some automated delivery around this, but it’s

Jason Mlicki (36:43.965)
Well you

Michelle Swan (37:13.12)
It’s pulling together in one system the customer conversations that you can use for so many different use cases that people are just finally figuring out. I mean, the concept was tried how do you how do you get to, you know, SOW’s scoping documents faster was the original perspective. Now people are

Well, they can get a lot better at fixed fee bids because they know what the customer conversations were and then what the actual output was, and they can have that traceability all the way back. people are using it to improve their forecasting because they’re like, okay, well, I can hear the customer calls over here and I can sense tone. so what the salesperson has in HubSpot doesn’t match kind of what the tone of what we’re seeing and what we’re seeing in the project. So

I do think that is gonna be an interesting element is like no we haven’t really figured out like a operating system for services companies that pulls the triad together. I don’t know if Octor’s gonna be I hope that Octor is gonna be that, but I think we’re gonna see some interesting things there.

Jeff McKay (38:18.387)
Hmm. I like that. Good answer.

Jason Mlicki (38:21.371)
Yeah, I I I do too. I I think it’s interesting is it kind of comes full circle to something you said earlier, which is that if you think about if there’s an operating system, okay, let me step back. I used to say that there was a time when a company would build a process and apply technology to it. Then they just said, Well, the software company built the process and we’re just gonna morph our process to that. Now, if we get to a point where AI is enabling this the software, I guess.

Michelle Swan (38:22.39)
Hmm.

Jason Mlicki (38:49.777)
Be the operating system and do some of the delivery, then the entire kind of customer experience collapses into the same for everybody. And so the only separation point is the marketing, right? The storytelling around it and the the way that you approach the customer, not just the way you deliver the work. I use the wrong word when I say customer experience. So it points to this new reality where the point of separation is entirely about the brand and the relationship and not about.

Michelle Swan (38:52.29)
Mm.

Michelle Swan (39:18.53)
And the experience that you can give your clients. Yeah.

Jason Mlicki (39:19.815)
Yeah. Yeah. Not about everything underpinning it. And it’s kind of an interesting time. So

Michelle Swan (39:26.476)
I th I can’t remember which one of you said it on a previous show, which is that marketing is the front end of client experience. I think that’s very true.

Jason Mlicki (39:34.461)
I’ll take it. All right. Well, other anything else that we should have Michelle, what did we not ask you that we should have asked you? I like to ask that question.

Michelle Swan (39:49.101)
my gosh, on my PR training to expect this question, and I don’t have a prepared answer for it. I mean, I think you’re asking a lot of the right questions. I think the I think the thing that just like is sitting in the back of my mind is like how do we create this learning environment inside marketing organizations? because things are moving so fast. And I do think the junior level talent, I mean, even just

Jason Mlicki (39:54.059)
Yeah.

Michelle Swan (40:18.476)
We’ve got one of these go-to-market engineers inside our tiny little Tercera team. And the impact he has made on our ability to get things done. like we’re coming out with our Tercera 30 in the next few weeks. And I mean, just that used to take four months to pull all the data together. And he has compressed that so much and created something like a system. So it’s in real-time data. It’s not just moment in time data. and he’s

one person. So I think that I learn something from him every day. And I feel like that kind of mindset, how do we get that into the marketing organization is really important.

Jason Mlicki (41:03.485)
Thank you, Michelle. It’s great to see you. Thank you for coming on the show. Thank you for sharing your expertise, your your perspective, your wisdom, all of that. where can people find you if they want to reach you?

Michelle Swan (41:18.014)
so tercera dotio is our primary website. There’s a bunch of contact information on there. There’s a lot of really interesting content. There’s a few that are on this whole go-to-market what that looks like in the AI world. So that’s probably the best way to reach me.

Jason Mlicki (41:35.395)
All right. Well, I’m told that on Saturday Night Live, the a five-time host gets a smoking jacket. So so if you come back for a fifth fifth visit, we’ll have to send you a you know something along those lines. Well, exactly. That’s that’s where it get that’s how I came to that conclusion. But

Jeff McKay (41:42.506)
Yeah.

Michelle Swan (41:46.636)
I mean ChatGPT thinks I already got that jacket. No, thank you. I love this show. I mean, that’s how I met you guys is I was a listener of the show and I was a total fangirl. So I’m excited to be on this many times.

Jason Mlicki (42:02.331)
No. Well, we we love having yawn. It’s it’s it’s really we really appreciate it. So thank you.

Jeff McKay (42:09.567)
Thank you, Iron Woman.

Michelle Swan (42:11.535)
I’m using that all time.