One explanation is the phenomenon of “stack fallacy.” The term, coined by Anshu Sharma partner at VC firm Storm Ventures, refers to “the mistaken belief that it is trivial to build the layer above yours.” The merits of Sharma’s theory are well discussed as they relate to challenges in the IT and SaaS industries, but its application to martech is undeniable – large martech players are finding it difficult to innovate. Stack fallacy helps explain what’s happening in the martech landscape and what we can expect in the future.
CMOs and marketing teams want the best-of-breed solutions and they are more than willing to mix providers. In fact, a recent Morgan Stanley survey found only 9% of surveyed CMOs stated it was necessary to purchase all solutions from a single vendor.
These two macro forces – the failure to move upstream by larger martech companies and CMOs willingness to cobble together many providers – have created a perfect environment for smaller martech startups. Thousands of newly minted providers have established profitable business models on layers above the big players, offering up-stream marketing services like email marketing automation, webcast hosting, and content management.
Which points to the emerging #1 problem: integration. And Zapier just doesn’t do everything you need from a completely integrated stack.
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