Building The Sales and Marketing Machine that is now Silicon Valley Bank
I joined Silicon Valley Bank in 1995 and the experience has shaped me in a lot of ways including how I now think about marketing and how it interacts with sales. The following chart will give you some historical context:
|East Coast Employees||19||Well over 200|
|Loan Portfolio||$40 million||Best guess $1.5 Billion|
|Number of East Coast Offices||1||6|
|Marketing Strategy Maturity||No clue||One of the best in the industry|
|Sales Strategy Maturity||Half baked||One of the best in the industry|
Just to be clear, I was there and witnessed the transformation. I didn’t lead it…mine was a bit part to be sure.
The Bank in 1995 had successfully established a presence in Massachusetts. When Allyn Woodward, Ken Wilcox and Dave Fischer left the then failing Bank of New England, they took the vast majority of their clients with them. The bank offered checking accounts, working capital lines of credit and term debt (but only reluctantly – that’s why we considered the bank to only have 2 ½ products). There were other products including foreign exchange and some rudimentary cash management products but no one used them because they weren’t competitive.
Every day the meager lot of us would have lunch as a group in the conference room. The topic generally gravitated to ‘how will we build the business when we are competing against much larger competitors with substantially greater resources?” I’m sure that challenge sounds familiar to many of you. Most of us were young and inexperienced and didn’t have a clue as to how to build the business.
Here are some of the key market, product and sales positioning insights that we had along the way which helped to shape what is now the national leader in venture banking with 70% market share…
Deposit Gathering: we were a loan production office and had no local branch for clients to use. We experimented and ultimately rolled out a courier service to go out and collect deposits from clients. We initially charged for the courier and no one wanted to pay for it. They had a point – it wasn’t their problem that we didn’t have branches; it was ours. When we shifted to a free courier service, deposits went through the roof and offset the cost of the free courier by an incredible margin.
Marketing Brochures: We developed a pathetic tri-fold brochure for some of our services including our international services. It was a plain 8 ½ X 11 sheet of paper folded into a make shift brochure. It worked brilliantly – the brochure embarrassed the international department so much that they decided to pay for a professional design.
QuickStart: this was a controversial loan program that suffered some initial losses but ultimately proved to be the profitable product in the bank’s history. It was simple pre-packaged loan product aimed at startups…simple approvals and simple documents.
LP Investments: The bank decided to make small LP investments in venture capital funds. These investments not only made the bank a nice return but also gave us access to the venture funds’ LP meetings. That gave us great insights into their portfolio companies which of course were our clients.
In the end, it wasn’t one brilliant idea…it was a series of small things that built the bank’s business. There were also several dud ideas along the way but the culture tolerated and even encouraged quick failures.
I’m now at Eastward Capital which is about the size of SVB’s east coast practice when I joined it. We don’t have the world domination aspirations of SVB but the business is evolving in a positive direction because of many of the same shared attributes and culture.