At first you might call Bento’s existence an ingenious sleight of hand. A fascinating trick pulled straight from the pages of some dusty, long-lost SaaS playbook. Sheer wizardry.
You’d be wrong.
A few moments in, reason would step in. And you’d posit, ‘well, it definitely serves a narrow, pared-down niche then, winning on some obscure, long-tail use case. That ought to explain it!’
You’d still be wrong.
So were we. How else does one interpret a one-person, self-funded team, operating with consultants, based out of the quiet bounds of Fukuoka, Japan, taking on behemoths such as ActiveCampaign, HubSpot, and Mailchimp with absolute feature parity?
In the following exchange, Bento’s founder, Jesse Hanley (@jessefrombento), reveals the strategic and philosophical hows and whys that make the feat possible:
— How is Bento, as a product, poised to compete with giants
— Treating customers like their favourite, local restaurants
— How (on top of everything else) they make managed services work
— The (often) emotional affair of pricing for an established category
— How Jesse approaches work, a day at a time
— The self-restraint of growing on one’s own terms
We started out in the website personalization space. Which wasn’t quite fleshed out as a category back then. There were companies such as VWO and Unbounce that offered personalization, but it was mostly restricted to being an add-on vs a full-fledged offering.
We also had to add in analytics and tracking to share the performance of the personalization work. As we released those, we soon learned that users were interested in the data that these additions surfaced even more than the core of personalization.
Then I began pulling on some interesting threads. “We’ve got all this data (that people seem to be keen on), can we actually do stuff based on this data?” So we introduced email automation, followed by SMS, and sort of went deeper and deeper down that path over time.
Given such nonlinear origins, for the longest time I had avoided pigeonholing ourselves to the big, established categories such as email and marketing automation.
But the moment I gave up on resisting those categories about a year and a half ago, we started growing much, much faster.
Gradually, it became easier for customers to situate us on their respective tool maps, “oh, so it’s a direct replacement of XYZ?” Things became simpler for me as well, as I could be more focussed on the feature-set I was building.
And because I didn’t start out with the aim of building a marketing automation app, Bento ended up with some pretty unique features for these categories. Stuff that most of our competitors don’t do and simply cannot do because they’re just built differently.
For example, we don’t have the standard of contacts, we have visitors and emails, instead.
Which makes a bunch of cool, anonymous automations possible. You can tag all your users with certain bits and get rich histories on their profiles, all accumulated prior to them signing up. Whereas with other tools, you can only do things after you get the emails.
Guess I’m making it all sound too smooth. Getting Bento to feature parity took me 3-4 years of chipping away, bit by bit, at the problem, while I was running a full-time agency.
So it’s true that I had to hit a certain level before people started considering the product, but I didn’t care about how long it took as I was doing this on the side and having fun; teaching myself Rails and React in parallel.
Even at these large companies, though, there are PMs that go out to lunch a lot to connect with their engineers, and such big-team routines ensure that shipping happens slowly.
So, you know, you’d think you’re up against these ever-productive giants but really you’re up against that PM and a couple of other devs who don’t always listen to each other.
These incumbents are not as scary as you think they are.
I see Bento as your little, local restaurant.
A place where you really like the chef who does some lovingly quirky things with the food.
Vs. something like the Hotto Motto in Japan, one of the main fast food chains here. Reliable. Cheap. But which just doesn’t evoke the same feelings or emotions.
I believe the crowded marketing software space is a bit like that. People tend to pick tools where they have an affinity for the founder. Where they feel they’re going to get thoughtful, understanding support.
The whole of last night and this morning I was talking to a customer while they were in the midst of setting up their segments. They messaged me on our public Discord and I got on a call to help unblock whatever they were stuck with.
You don’t have similar avenues of support in our massive, large competitors. With HubSpot, to get any help you’ve got to pay for their premium support. In the case of MailChimp or Klaviyo, you need to bring in expensive consultants. If you raise a support ticket, a response arrives 24hrs later, and it usually sucks.
So it’s not that hard to compete on service. If you can also approach the product somewhat uniquely on top of that, you can carve out a happy, little profitable market for your product.
Recently I was reminded of another aspect I dislike about how service is approached in SaaS.
A VC-backed founder (who I’m friendly with) insisted that most sign-ups need to go through the self-serve route and they’d only ever worry about helping “big ticket,” enterprise customers.
I think that’s the worst kind of attitude.
At Bento, from a support standpoint, I treat a $30 customer and a $3,000 customer exactly the same. I always will. Because I feel it doesn’t really matter if you’re running a small business or a large one, you’d still need help!
For customers to stick around longer, stay loyal, and drive the whole word of mouth component, I can’t be worried about the efficiency of the support/sales pipeline. I have to help every single customer, no matter their size.
I’ve had customers that pay $30/month refer to customers that bring in $3,000/month and vice versa.
When startup founders, at least in the early stages, concern themselves way too much with being efficient, they just kill their businesses in a way. Unless, of course, they’re well funded and can push for more and more sign-ups.
If you’re a bootstrapped business, you have to treat every customer basically the same.
Because you can’t know who is going to drive more of their business through the product or refer similar customers. So you can’t quite quantify and thus optimize and make things more efficient in this regard.
Keeping the above as a given, there are places where I seek out efficiencies, albeit in a more community-centric way:
- I direct most support queries to a public channel on our Discord server instead of addressing them over emails. One response from me can help many folks at a time. And people tend to be nicer, more polite in that medium.
- Then I conduct weekly office hours across different time zones (just did one for our EU customers) where people can discuss their chief concerns.
- Plus I (enjoy) filming a lot of help videos that tackle common doubts and make the in-product experience better.
On the sales side, too, I work with a consultant who helps me manage our Close.com inbox. Essentially everyone who signs up gets contacted by him.
He sifts all the opportunities and works out who’s going to be a good lead, but I usually talk to a large percentage of people myself. I’ve got demos and walkthrough sessions queued up and I love that.
Again, we try to get in touch with everybody and treat them all the same. Sometimes you get people who look like normie consumers but turn out to be running massive businesses.
A story comes to mind.
Growing up, my dad would take me to these really fancy car dealerships in two different cars (a nice one and a terribly old one). He wanted to show me how we were treated differently based on our outfits and the cars we had driven.
The lesson that I learned from that is that you never know who the buyer is and what their in-the-moment intentions/goals are. It’s hard to judge a book by the cover, so it’s better to build a sales process that engages everyone.
Offering managed services on top might seem like a lot (as it’s still just me working with some consultants) but it mostly concerns doing stuff that’s way simpler for us than it is for Bento customers. At its crux, it’s just a paid migration and onboarding service.
Which means people pay a little extra to set things up, get their workflows going, and have all their questions answered.
They often downgrade from Managed Accounts to their regular subscription but by then they’re geared for getting the best out of Bento and thus retain longer.
In the past, we had even offered writing email copy as a part of managed services, but we found that it was just too hard to continue that with contractors, so now Managed Accounts is a completely technical service.
And for quite a few customers it’s profitable to have us on a retainer for ad hoc questions and builds, and these services often convert a $200/month subscription to a $1,200/month subscription. An excellent source of revenue for us.
It’s really difficult to price effectively as an email marketing or marketing automation solution. Mostly because these are among the oldest software categories.
I find, on the higher end (where we make most of our money), all our customers are coming from somewhere else. Anyone with an email list greater than 30,000 contacts, which is like $300 a month or whatever, is moving from another provider.
All of them often have grandfathered pricing or really unique deals and so we have to provide some flexibility to them.
Then, switching providers can also be an emotional affair. If someone is willing to move from ActiveCampaign or HubSpot after years of usage, they can be quite upset.
Acknowledging that is helpful.
That way you can be more perceptive and try to understand why someone is reevaluating their stack and willing to experiment with a smaller alternative, and even how they’re feeling about the whole thing.
Sometimes I learn that a payment receipt made them realize that they’ve been paying $800/month for a single broadcast each month and I can, then, really help them out with a price that they’d be happy to pay each month.
In NPS terms, enabling me to convert an active detractor of an existing tool into a promoter for Bento. That matters a lot for a bootstrapped company.
Plus, it’s worth noting that email and data are somewhat commoditized, so just beating our competitors, migrating customers over, essentially retains them for a very long time.
That’s why we barely register any churn. Quite a web hosting business. So my attitude towards pricing has always been to bend structures where necessary and get as many customers in.
Planning too far ahead and being too goal oriented actually made me sad. So I decided not to do that anymore. Every day I wake up and figure out what I want to do during the day.
For instance, today, I’m really pumped about redoing the marketing site. I’ve got a lot of energy for it. So I’ll probably spend the next couple of days doing that.
Last week, it was a new feature from a customer who gave me a cool idea. And I worked on that for three days. Then I tend to support, of course. I get to take up what I want to work on as it pops up.
Whatever seems the most important on a given day, I put in as much energy as I have to put into those things. I gave up on quarterly planning or even monthly planning just because I found, especially being small, that work starts demanding a lot of time away from what actually drives the business forward.
Same with backlogs. I used to keep a backlog of ideas that people had requested/suggested. But then I observed that I just wasn’t attending to the backlog.
The things I would end up implementing were things that people asked for many times anyway, so I kind of took a more Basecampy approach where I just waited for stuff to bubble up on its own.
If stuff keeps coming up, I’ll do it. If it doesn’t, I don’t.
And that tends to be a good way of staying focussed and working on features that are most critical. Some of these aren’t even worth doing/considering just so you can sleep on them a little bit and then tackle them later if you really need to.
For example I’ve been sitting on doing A/B split testing for the longest time, it even gets asked for quite a lot. From what I’ve gathered so far, though, I personally don’t think it’s effective. So I’m just not going to do it. It hasn’t made us lose any sales deals.
Some of these practices and attitudes can seem different, even strange.
Which is fine, because my goals with Bento are different. I want to build a profitable venture that allows my family to live a good, quiet life. And I contend with the question, “Do I want to grow bigger?,” a lot. In fact, I did so as I was heading to train this morning.
Growing bigger means onboarding more customers and more people to take care of those customers. And I really am at this calm, perfect spot at the moment. Why screw that up?
Similar to your favorite restaurant becoming a chain. The food gets cheaper. The economics obviously get better for the business but not every restaurant needs to be a franchise, not every place needs hundreds of employees.
It takes a dose of self-restraint to stop growing.
No, actually, we’re growing pretty well. What I mean is not growing at any cost and constantly fretting about the unit economics of every single thing.