As a successful Minnesota entrepreneur, Scott Litman — along with longtime business partner Dan Mallin — has built five companies and founded MN Cup, the largest statewide startup competition in the entire country.
In their most recent venture, Equals 3, Scott and Dan created Lucy, an AI-powered companion for marketers. They seek to “democratize data” and help more people at big companies have clearer, simpler access to the data they own.
At their Minneapolis headquarters, Scott chatted with me about the adoption of artificial intelligence, the key to successful business partnerships and what businesses are still getting wrong about marketing automation.
DISCLOSURE: Scott Litman is a member of Brandpoint’s Board of Directors.
Nels: Tell me how you’d describe Equals 3 and Lucy to someone who’s not as well-versed in artificial intelligence.
Scott: I’ve had a long career in marketing services and ad-tech and I’ve worked with a lot of different companies. A common challenge that businesses face, particularly in sales and marketing, is they have so much data that they can’t use it.
Think about a big retailer like a Target or a Best Buy or a big packaged goods company like a General Mills. They have data about who’s been on their websites. They have data about the search marketing terms that people use to find them. They have data about people who talk about them in social. They have data either in their CRM, which are their customer databases, or in their loyalty databases.
And these things are all different systems that house marketing data. But that’s just one type of data.
Then they also have subscriptions. They buy research from places like Forrester and eMarketer. They buy media data from places like Nielsen. They buy audience data from places like Axiom. And the list of who they can license from goes on and on and on.
And then they’ve also got files. Imagine a company like a 3M, a General Mills, a Best Buy. They probably have millions of PowerPoints, PDFs and Word documents that are sitting in file systems that will never be opened again.
So they’ve paid for all this but it’s more information than any one person, or even a team of people, can be physically aware of. And so our premise was that, in a world of machine learning, we could read every document, every row and column of every database and spreadsheet, and we could make that information available to people when they need it, not unlike the way they ask for the weather or movie listings or sports scores from Alexa or Siri. I could ask our Lucy questions but it’s about the data that marketers own or license.
N: So it’s a way to synthesize all these massive amounts of data that companies have access to into one easy, searchable tool?
S: Yep. Imagine. I can sit there and ask:
- What was website traffic yesterday?
- What was our traffic last month versus our competition’s?
- What were our best-performing products?
- What were the keywords we used to get to those products?
- What were the campaigns that we ran to help us promote those products and how did they perform?
- I had this great idea on the campaign for a promotion for this product. How did it work?
All these kinds of questions I can ask. I don’t have to go down the hall to ask the website analytics person to run their report that I’ll get in two days. I don’t have to go down the hall to the search marketing person to find out their stuff. I don’t have to go to the marketing automation team. I don’t have to go to the media team. I can just ask Lucy. Because she is my AI-based companion.
N: So not only does it help organize, it can also make that data a lot more accessible to a lot more people.
S: Yes. We democratize data.
I went to a huge IBM event and they get to draw VPs and up from big companies. And so we had a bunch of retailers, some of the biggest retailers in the U.S.
And in each case, I’d ask them, “How big is your marketing department?” And they’d respond with either hundreds or thousands of people. Then I’d ask, “Is your website important to the overall performance of your business?” And they’d look at me like I asked a question out of 1990. Of course it’s important. Then I’d ask the killer question: “How many of those hundreds or thousands of people could tell you how the website performed yesterday?”
They’d raise their hand with two or three digits. They’ve got Sally, Al and Steve. Those three know.
But aren’t there hundreds or thousands of people making decisions every day based on the effectiveness of media programs and the website, what’s converting, the effectiveness of your email campaigns? How can they do that in a bubble and not know any of this?
The status quo is to operate with the absence of data even though the company owns it.
N: We’ll talk more about AI in a second. I want to take a step back and talk about the Twin Cities community. There are lots of Fortune 500 companies and successful marketing and advertising agencies around here. Is that why it’s such a hotbed for marketing and ad technology or is there something else at play?
S: The huge natural advantage for Minneapolis is the preponderance of Fortune 500 companies. There are more Fortune 500 companies either headquartered here or with major operations per capita than anywhere else in the U.S. And that means these great companies, whether that’s Cargill or Carlson or massive private companies or public companies like 3M, Medtronic, Best Buy or General Mills, need local resources. So you have both a vibrant entrepreneurial community and agency community that flourish in the wake of these giant companies.
Yes, they can buy from competitors on the coasts and sometimes they do. But there’s so much talent here. Wouldn’t you rather buy from someone who you can have a meeting with in person? Plus the tax you pay for working with resources that are outside this market is significant. We’ve [Scott and business partner Dan Mallin] always had a view in our past ventures that we would take our A-team over whatever is being assembled by national competitors from various offices any day.
[Get Started With Your Twin Cities Content Marketing A-Team]
I’ve been very fortunate as a Minnesota entrepreneur to build businesses that benefit greatly from local clients. That doesn’t mean we haven’t had national clients, but it sure is a lot easier to drive across town than to get on a plane to win business.
So yeah, the success and the depth of the Fortune 500 in this region has a direct correlation to the needs for entrepreneurial ventures to serve them and agency and marketing ventures to serve them.
N: While we’re talking about entrepreneurial ventures, let’s talk about Minnesota Cup, the startup competition that you and Dan Mallin founded. So how did you get the idea for this?
S: When I was a kid at the University of Minnesota, Apple Computer put out a competition. This dates me a little bit, but the premise of the competition was: “Design the Computer of the Year 2000.” They ran it across campuses in the U.S., and 2,000 people participated in this competition and mine finished third in the country.
I had an opportunity to go to Apple, meet “The Woz” and Jean Louis Gassee and a bunch of other key people in Apple’s universe at that time. I got in the media because all of a sudden, this local kid goes out to Apple to meet all these people. I met people in the Apple ecosystem locally and, when I graduated from the U of M on the heels of that competition and the recognition that I got, I started my first business and it was an Apple dealer.
Can you guess how hard it is to become an Apple dealer? That was multiple ventures ago and I don’t think Apple has authorized a new one in the Midwest since. And they hadn’t authorized one in the years before.
Had I NOT been a part of that competition, I wouldn’t have had that opportunity. I wouldn’t have met the right people, I wouldn’t have gained the right notoriety, I wouldn’t have been credible to investors backing this long-shot startup that became a success.
And so years later, we had sold our third venture and had finished the management contract and there was a period of time where we were going to be locked up under some non-competes.
So I came up with this “pay-it-forward” idea. We had been successful Minnesota entrepreneurs and Apple’s competition had been beneficial to me. Can we do it for others?
So I woke up at 2 a.m. one night with almost a fully fleshed out idea for the Minnesota Cup. I thought it was a great idea but couldn’t find anything nearby to write it down. This was in 2005 so we didn’t sleep next to our phones. So I said to myself, “If I remember this idea in the morning, I’ll tell Dan.”
Luckily, I remembered so I told Dan and he thought it was a really cool idea, too. He came up with some challenges and questions and bettered the idea, which is something, as business partners, we do for each other. So we thought, let’s do it IF we can get the right people to support it.
And so we thought about who would need to support it. We said the U of M, because we knew education needed to be behind it. We said let’s go to the governor’s office because we need the state of Minnesota behind it, and let’s go to a large commercial entity and we chose Wells Fargo. We said, if we can get the U, the state of Minnesota and Wells Fargo all behind this within 30 days, we’ll launch the Minnesota Cup.
Within 90 days, we had a press conference with the governor and announced it.
One of the things about entrepreneurialism is sometimes coming up with an idea that is so outlandish that it can’t possibly work but being ignorant enough, dumb enough or confident enough that you make it work. So we met with all the constituents within 30 days and they all backed it. And within 90 days, we announced it and now we’re in the 14th year of the Minnesota Cup. We’ve had over 13,000 participants, the top finishers have raised over $200 million in capital, there have been tons of exits, it’s created a lot of jobs. It’s been a good deal.
N: Is this something you and Dan still oversee?
S: We’re still involved. And there was a point in time where we oversaw it and ran it in a really hands-on way. I was the project manager for the first three Minnesota Cups. Then we started bringing on project managers and program directors.
Now it runs out of the University of Minnesota’s Carlson School of Management and we have a full-time staff that does nothing but run the Minnesota Cup. So Dan and I are still judges and we’re still spokespeople and attend major events, but we’re more like board members now.
N: Over the years, you and Dan have been involved with a lot of successful projects. What’s the most valuable thing you’ve learned from that partnership and what has it meant to you?
S: Dan and I have been partners now for over 20 years and it’s a marriage. Successful business partnerships are marriages. I’m married to my wife and we have two kids. I’m married to Dan and we have five businesses (plus the Minnesota Cup) as our offspring.
Over time, successful partnerships create greater connectedness. We can finish each other’s sentences and, if we go to a restaurant and he’s late, I can order for him.
But the bigger thing is that there’s a level of trust. And it means not having a scorecard. It’s not having to worry about what the other person is doing. I won’t say, “Oh man, I just brought in this deal and this deal. What is Dan up to?” Because there’s going to be a day or a week or a month or a quarter or more where the person who created the value is him, and not me.
I overcome Dan’s greatest weaknesses and he overcomes mine. His strengths play off of my weaknesses and my strengths play off of his. It’s the idea that you’re better together than alone, even to the extreme.
For example, when Dan’s mother passed away, I just said, “I’ll see you when I see you. Go take care of your family.” I told him I’d see him at the funeral and whenever he came back, he came back. While he was away, he didn’t have to check in and worry about the business because he knew I had it covered.
N: Because you knew he would come back when he was ready.
S: Right. And I didn’t want him back until he was ready.
I was set to speak at an event in front of about 200 people two days before my second child was due. And the morning I was supposed to speak, my wife went into labor. I’m not speaking at that event.
I just sent a text to Dan that said, “Be me today.” Look at my calendar and do whatever I’m supposed to do today. We did have a backup plan and I sent him the presentation already. But later that night I was getting emails from people who hadn’t caught on, congratulating me on a great presentation. I told Dan we should do it more often because I think he got more fans out of that presentation than I usually get out of mine.
N: Let’s bring it back to marketing and artificial intelligence. It seems as though AI is inevitable in the marketing space. Are you starting to see some real traction yet or are you sensing some hesitation still?
S: We see both. The hesitation relates to just how new it is. This isn’t something people have ever bought before. They don’t have anything to compare it to. Is this really going to change the way they work and should they really believe in it?
You have to be a bit of a maverick or a bit of an innovator because it’s still new.
It’s unfortunately surrounded by too much hype as well. We’re getting to the point where a lot of products claim to use machine learning or AI and oftentimes they don’t legitimately have it. I can prove to you that Lucy is a learning system. You can ask me a question, I can train her on the answer and she’ll be better for it. She can read content in the future and, based on her past training, interpret that content and put it to good use.
That is a form of AI, the ability to demonstrate learning. Too often, people have algorithms that have been around for years that they just call AI now and that’s a whole different deal.
So you have a lot of products that, because they talk about machine learning and AI, create a lot of misinformation in the market.
In terms of traction, we’re in trial projects to see how Lucy scales. We’ve got an agency of 10 users and now we’re trying to figure out how we go to hundreds or thousands. We’re working with large Fortune 1000s and it’s the same thing. They’ve got teams of people working with AI, working through the use cases and the benefits, where they can plug it in and what problems can they solve.
From a traction standpoint, there are early-stage deployments at a great many Fortune 1000s and very large agencies. They’re not at the point where they have tens of thousands of users, they’re still figuring out how AI can change the lives of tens of thousands of users. We’re even seeing agency holding companies to see how AI can permeate through the entire holding company. So Publicis announced something called Marcel. Marcel is going to help people at Publicis agencies find other people at Publicis agencies who have the skills and knowledge to join their projects.
So let’s say I’m at a Publicis agency in Buenos Aires and I’ve got a client looking for specialization on Facebook ads in the U.S. I don’t have it in Buenos Aires but I can check the network and see that there’s a gal in LA. who’s got it and a great portfolio. I want her on my team. It doesn’t matter that it’s Saatchi & Saatchi in Buenos Aires and Fallon in LA.
So you can see how it’s evolving.
N: You mentioned there’s a lot of misinformation around what exactly AI is. How would you advise a marketing professional who’s thinking about whether AI is right for her or him?
S: Number one is: What are the core problems you’re trying to solve? What keeps you up at night? What are the pain points? Because it MAY be that there’s an AI solution but there may just be a solution.
You also have to look at your business priorities. Maybe you’re trying to make your media more effective or trying to figure out how to get the work of 10 people down to four because budgets are tight. What are the things that just bog you down?
We find it’s common in businesses that too much is demanded of too few. Then we look at, of the too few, what are the processes they have that just eat up time?
So you shouldn’t deploy AI for the sake of AI. You should look at your business challenges and what are my solutions, and perhaps AI is on that continuum.
The OTHER thing is, in evaluating AI, ask yourself the question: Is this really AI? Does the system learn? Does it get better over time, not because the company is sending out a quarterly patch or update but because it is learning my business?
Think about your phone or Microsoft. Microsoft and Apple send patches and updates all the time to make the software better. A learning system becomes better simply because you use it.
N: So what’s next for Lucy?
S: Two things: For the enterprise world, what’s next is how we go from early-stage pilots where it’s a customer’s first deployment of AI to how it proliferates across the entire enterprise, understanding how we go from a pilot to 10 users to a thousand. How do we make Lucy not just a tool for the innovator looking for the next piece of technology that’s going to change their business?
So we’re trying to figure out how Lucy can go more mainstream and how she can affect more people and solve more problems.
The other thing is that we’re trying to take Lucy down-market. Today, Lucy is ONLY available to the Fortune 1000 marketer and the big agencies because they have the largest amounts of data. But we’re starting to work so much with these data providers and recognizing that some of these folks create great data but it’s untouchable to mere mortals. A five- or 10- or even a 50-person agency can’t afford multiple subscriptions to Forrester and eMarketer and Nielsen and all these great sources of data and research.
So we’re trying to work out a model with some of these providers where we could license their data inside of a Lucy for everyone and get the small marketers. It’s a good thing for the small guys that are currently at a huge deficit in terms of data and it’s a good thing for the data providers who can address and make money on a market they can’t serve today.
N: Sure. And what a unique challenge for a small marketing agency or team. They probably spend more time doing the things that AI can help you do but don’t necessarily have access to the amount of data that necessitates an AI tool like Lucy.
S: Yep. The world today is based on an uneven playing field.
Think about retailers. Let’s say I own a shop at the Galleria. But I still have to compete with Amazon, Target, Walmart and Macy’s. Because the thing is, as a consumer, you’re going to do what’s best for you. You’re looking for who’s going to serve you best.
But businesses don’t get to say “Well, I’m just little, I can’t afford it.” The user doesn’t care.
The smallest companies and agencies have to compete against the people with the biggest amounts of data and the best tools. So for us, when we go downstream, can we give some of those “best tools” to the little guys.
N: You and I have talked before about relevancy and personalization, especially when it comes to marketing automation. What are some things that businesses are still struggling with when it comes to using this data in a marketing automation platform?
S: Here’s the challenge I see. Let’s say a business or an agency has a new initiative, whether that’s to get better at one-to-one marketing or to evaluate technologies to help. So they bring in and evaluate all these different platforms. They go through a six-month review process, they grind the vendors down and negotiate contracts. Then they go through the six-month deployment of the new technology and go through every level of pain and suffering through things being late or over-budget. And when it’s all done and they’ve given birth to this brand-new platform, they’re exhausted.
And they forget one really important thing: The content.
The thing is, whether you have Salesforce’s marketing cloud or Adobe’s marketing cloud or Oracle’s marketing cloud or IBM’s marketing cloud or whatever you want to call it, they all allow you to send messages to your massive list of people you need to connect with through multiple forms of communication. And they allow you to create journeys to package different content for different behavior and those journeys can become more and more granular. Every one of these software packages do that great.
The problem is that, the more and more granular I get, what am I going to send them?
When it comes to raw promotional offers, they have sort of a Cuisinart of data where you can create different offers to different people.
But creating real personalization and message resonance means creating really great content that is intended for the audience segment you’re going to. And the thing is, the technology allows me to serve up thousands of segments but at the end of every segment needs to be a message. And the success of that platform isn’t that I buy Salesforce’s or Adobe’s. The success has to do with all of these other variables:
- Did I train my team effectively?
- Do I have the right service provider so I’m supported well?
- Do I have the right content so that all the segments are getting the right stuff?
The technology, which is the primary thing people are buying, is almost a commodity. It’s all this other stuff that impacts whether it works or not. The hard stuff that dictates success is what a lot of companies aren’t paying attention to.
N: With these bigger organizations you work with currently, what are some of the marketing challenges they struggle with the most?
S: We see they have an overwhelming amount of data and they can’t use it effectively. It’s really hard for them to get their arms around it.
The other thing is that sometimes they have systems that have really potent data but it’s not in the hands of more than a handful of people. In some cases, even the handful of people are using these archaic systems and it’s really hard to extract the data out. So those are all things that we’re helping companies address to drive efficiency.
N: You’ve had quite a few successful projects over the course of your career so far. What’s the best piece of advice you’ve ever received?
S: The best advice came from my parents. They taught me from an early age to believe in myself. If there’s something you want to get done, you can figure out how to get it done and you can be successful.
And that’s served me really well because as entrepreneurs, we come up with ideas and we believe they’re viable and we believe we can make them work.
Generally, most of the good ideas entrepreneurs first share have people scratching their heads, saying they don’t get it. When I tell you an idea and I truly believe in it and you’re scratching your head, then I’m probably onto something.
This blog is part of the ongoing content marketing interview series where we talk with marketing professionals about their career, unique perspectives on the industry and some key advice they’ve learned along the way.