On 13th April 2018, I hosted a panel discussion with Varun Shoor, founder of Kayako and Pallav Nadhani, founder of FusionCharts. It was an experiment to see whether a many-to-many discussion between SaaS founders turns out to be useful for early stage startups.
To ask questions to the SaaS founders panel, I had received 19 applications, out of which 5 were selected. The call was not recorded so that the founders could talk frankly. Here are some generic notes and insights from the one hour call. (We all realized that one hour for five founders isn’t really sufficient.)
Questions were categorized in three broad areas.
- Product Roadmap
- Demand generation – top of the funnel, Partnerships and Gotomarket
- Focus – what to focus on
Major insights in each category are as follows. (I’ve attributed Varun and Pallav to the best of my memory – we didn’t record the conversation).
1/ Just because you have the technology, you shouldn’t attack multiple markets. For example, the same technology – sending emails – has made many different multi-million dollar companies that focus on specific niches.
2/ Serving everyone is not the answer at an early stage. You need to have depth in a particular industry before you go broad.
3/ Entrepreneurs generally underestimate the size of a niche – so they say: “everybody can use our product”. When MailChimp launched, it was an email marketing service. Now it is more than $400-million-a-year-in-revenue powerhouse.
4/ There are 100s of CRM for different industries. ‘Anybody can use this product’ leads to a mediocre outcome. Generic tools won’t be able to compete with you if you go for depth in one industry.
5/ @pallavn: Founders are techies at Heart. We see everything with the lens of product. We should let the customers drive out the solution… what features to prioritize. For this, we should be very clear about ‘Who is my Customer?’
6/ @pallavn: There is a structured way of building a product. Ask these questions. What are the segments for my product? What needs these segments have? How to prioritize? Understand your ‘Market’ – ‘Who’ are my customers? Talk to them everyday.
7/ Talking to customers will not only help for feature prioritization but also to answer questions related to your GTM. At Wingify, we have A/B testing and Heatmaps. We thought about having Heatmaps as a separate product to compete with other companies like Crazyegg and Clicktale. Our entire GTM including inside sales, development methodology, pricing has been defined after extensive conversations with customers. Everything in your company shifts/changes depending on the slice of the market you focus on. Each segment needs a different approach. Focus matters for selecting the right distribution channel and how also how to structure your organization.
8/ @varunshoor: I have seen a very different way of working in the product companies in the valley. These companies are doing really well in solving problems of the customers. Their discussions are always about solving for the customers and at the very end about features. This was an enlightening experience for me.
9/ @pallavn: In case of FusionCharts, we had to scale horizontally (Developers) which is opposite to usual Business users. For Business users, tech is not important. What matters is that you solve their problem, speak their language, get integrated in their workflow. The product terminology and narrative must be mapped to their domain and their current problems. When we talk to a developer, the narrative is related to his charts. When OS (Open source) came, the narrative changed and focussed on compatibility.
10/ @pallavn: At an early stage of a startup, I also advise against going after customers who are paying for customization – feature/s that are not applicable to others as later on you will have problems around it.
11/ To summarize, there are 2 ways to look at a company. First is Reactive – go on building products driven by environment and people. And 2nd is to imagine a company like a Rocket, defining its focus in terms of integration and partnership strategies too. We underestimate focus at the early stage.
Demand generation – top of the funnel and goto market
12/ @varunshoor: Let me tell you the history of Kayako. We sold right from the start. For the first 3 years, 100% of our base was web hosting companies. When the customers of these web hosting companies visited the websites, they saw “Powered by Kayako Help Desk Software” on the websites. Eventually the web hosting companies dropped and others picked up.
13/ Major companies use Adwords because it is the easiest way to get traction.
14/ @pallavn: You should ask your customers to describe their days and life. Find out where s/he is actively consuming info and how to reach these personas.
15/ I would go one step further. Product purchase decisions are never snap decisions. They typically involve a long cycle. If you reflect on your own purchase decisions, you will always find some triggers that lead to the purchase. Maybe the car was not smelling nice or the it broke down and you started ‘Passively looking for’ a solution. The same can be applied to our products. Take 20 of your recent customers. Ask them to walk you through the moments when they decided to purchase your product. We did a similar exercise. What came out was that many of our our customers buy VWO when they have launched a website but find out it is not performing as well as they thought. Then they hit the ‘Panic’ button. Also, we came across situations when customers said, ‘My Boss came from another company’. When someone changes a job, they have the drive to impress people at new job by bringing in a new tool. Study those days and moments in the journey when they made decision to ‘passively’ and ‘actively’ start looking for a solution.
16/ Outbound/ Marketing messages can come off looking pushy. Find out the real ‘Motivation’ why people are buying your product. Customers don’t buy a product just because Product does xyz.
17/ @varunshoor: Outbound can come of as spamming. There is a saying about it which we often quote. “There is no such thing as spamming. It is a wrong message at a wrong time for the wrong motivation.”
18/ Your Adwords ad has a job to fulfil same as your products – to create value for the customer. Same goes for outbound emails. You have to discover what value your outbound mails create for the customer. For example – If someone recently joined a company, you can send them a guide on Q&As related to their roles.
Focus – who to focus on
19/ With regards to User vs Buyer, it really boils down to who has more power in the professional settings. In some settings, developers have much more say in products that they are using, and in other setting, someone like a CTO has more influence.
20/ @varunshoor: I would divide power into different categories. Who has implementation power and who has buying/ pricing power. Most of the content should be tailored to individual who has implementation power and sales pitch should be tailored to individual who has buying power. If you start separating the kinds of power and influencing decisions that each persona has, that will help tailor the marketing/ sales messaging.
21/ @pallavn: for us, at FusionCharts, the user is developer but the key buyer are Product managers or CEO/CTOs of small companies. For the developer, we show them goals, features, developer documentation but for a PM, that is not important. So we show them the value of adding visualizations in terms of dashboards. The pitches to both are very different. To developer, we say that create your first chart in 15 min with simple API and customizations. To PM, the pitch is about fear – If your dashboards aren’t great, your product is missing out on sales, demos, it will look worse than your competitors and so on.
22/ @varunshoor: and in your case, you really see a developer influencing the pricing. Pricing page structured to personas who is driving those decisions vs a concern that a developer might have. Documentation and the initial quick start guides might be focussed at Developers to make sure they get the value asap.
23/ @pallavn: what this also changes is the medium of communication. A developer won’t be interested in a PDF, PPT or watching a video but if it is for a PM or business role, they want a brochure, a PDF.
24/ @pallavn: regarding the KPI of a business user, what I have seen is that if the product is not helping the person get promoted or look good in front of his manager or not solving his top 3 priorities of the quarter one step way, it becomes difficult to sell. First, it becomes an education problem – this is what we do and then a convincing problem – this is why you should choose us. Value of the product has to be in one of the top 3 KPIs of the buyer for the current quarter.
25/ Educating and uplifting the entire market is a very big task. A single startup can’t do it. It has to happen on a broad level where all your competitors help educate customers.
26/ Here’s how you interview customers: if they have chosen your product for very specific reason, which is not very clear, we should have very open ended conversations and focus on the moments they decided to purchase your products. Then you would know the motivation and where the message should go.
27/ Your lead generation strategy is determined by your customers. If your customers do not hangout online/ don’t prefer checking emails, you really can’t use that method. Also, I have come to suspect the value of written content these days. What worked 7 years earlier won’t work now. People’s expectations have evolved, they are much more video orientated, their attention span is going down.
28/ @varunshoor: I saw my customers as a liability. This is a very honest blunt admission. I would rather prefer to code during the founding years than talk to my customers. Any moment of interaction with the customers was a chore rather than an opportunity for learning what they wanted. That was my biggest mistake. I saw Paras talking to his customers day in and day out. And that’s a goldmine. If you are repeating the mistakes (avoiding interacting with your customers) that I did, I would recommend to correct it. Talking to customers leads to amazing insights and answers to all kind of questions that you are facing.
29/ Most of the mistakes that startup founders do (including me) is this cognitive bias that comes in from living and breathing the product the entire day.
30/ On International focus, you can target mid market and SMBs internationally but not enterprises. Because enterprises require feet on the street. It requires going to conferences, and having presence in that geography.
31/ If your product is meant for mid market and SMBs then, you are making a mistake by not thinking internationally. It is very likely that the problems that Indian (or local) mid market customers have are same as those that American or European customers have. Why not target them? If someone in US is comfortable picking up the phone and swiping the credit card for $500. But If yours is high touch enterprise model, then you cannot realistically do it sitting in India.
32/ Getting your hands dirty competing internationally will give you a broader perspective. Any company, unless it solves very India specific problem, can go internationally. At high price points, you would definitely require meeting them and having experienced sales people. If you want to sell Enterprise in India and SMBs Internationally will require two very different focus, not probably feasible at this stage. If people come organically, it’s a different matter. Actively you will be able to focus only on one.
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