Try as we might, summing up this past year’s strangeness, seems an impossible task. We’ve all found ourselves sinking farther and farther down our respective chairs, attempting to make sense of things.
And, perhaps, it’s quite late now to undertake such an assignment.
What luck, then, to summarise the opposite. What we saw unfold on Relay all through the past twelve months and are delighted to report here, was, to say the least, a salve.
In founder-to-founder AMAs, some spanning hours, across hundreds of equally thoughtful responses and questions, we witnessed remarkable generosity and vulnerability.
An attentive, 942-word probing of a fellow founder’s roadmap challenges. A veteran bootstrapper’s sincere alerting of what one must be willing to forgo to tread a path like hers. Someone seeking urgent clarity, having just parted ways with a co-founder. Someone else earnestly admitting how “it took 8 years to build an amazing 3-year-old company.”
There was great advice, of course; kind, observant, and skeptical of received ideas. Also, diverse points-of-view; some long-held, prim and ironed, others rugged and work-in-progress. All bearing traces of “muscle memory and scar tissue.”
More than anything, though, there was a recognition that even the most universal SaaS themes can be understood very differently, when seen from the unique vantage of others. A collective lens for negotiating one’s own long, slow ramp.
“But in the end, stories are about one person saying to another: This is the way it feels to me. Can you understand what I’m saying? Does it feel this way to you?” ~ Kazuo Ishiguro
So, without further ado, we’re excited to share, in chronological order, 23 gems resulting from these incredible exchanges; from 17 founders who’ve collectively spent 144 years (~350K hrs) building remarkable SaaS businesses. Here goes!
#1: “Try a lot of things quickly, but don’t be reckless.”
To kick things off, nothing better than EnjoyHQ’s Sofia Quintero on the many paradoxes and unknowns of being a founder and how one must come to terms with them.
If I have to give any advice to anybody who wants to start a software as a service business, this would be:
- Try not to raise money from traditional VCs. Plenty of new alternatives are available out there.
- Be an example for your team. Do not expect anything from anybody that you are not willing to give yourself.
- Find a therapist or coach, probably both if you can afford it. Your mind and emotions will be the biggest challenge—not the business.
- Learn how to talk to customers. It’s not enough to talk to them, though; you need to know what to ask and how to interpret what they say. Make the best of each conversation. Listen, and forget about your ego.
- If you are not technical, as in being able to code, learn how the sausage is made. You will have much better conversations and the ability to lead product development efforts more effectively.
- Try a lot of things quickly, but don’t be reckless. This one is hard. You will understand the balance with time.
- Try to understand the difference between persistence and idiocy. I still don’t know it.
- Be good to people; your reputation and relationships will survive beyond your business.
- Don’t lie to yourself. Pursue the facts with optimism.
- Unfortunately, most stereotypes about lawyers and accountants are true. Find good people who understand your space, and constantly remind them that you need them to translate what they do in plain English so that you can make better decisions.
- Related to the above, if you don’t understand something, ask as many times as needed. Looking stupid is better than being stupid.
I can spend all day adding stuff to this list =)
#2: “Doubling down on things you can’t write a check for”
Limitations and possibility are often held together in a familiar clasp. Help Scout’s Nick Francis recounts how a “beautiful constraint” of resources has helped them rescript conventional ways and pave a stand-out path in a crowded market.
I really love being in a crowded market. It means there’s a big opportunity, the market/problem set are validated, and you have to be creative to stand out.
Having fewer people and fewer resources than other companies in a large market has been a beautiful constraint in my experience. It forced us to focus on a specific segment, be thoughtful about how we used capital, and to make big bets on the brand.
From a distribution standpoint, I describe it as doubling down on things you can’t write a check for. We can assume all our competitors are very smart and will out-spend us when possible. But there are many marketing channels you can invest in that require commitment and effort – you can’t just write a check to be successful.
Content marketing is my favorite, and we have invested most of our marketing efforts up to this point in content. Our friends at Wistia have a term called “Brand Affinity Marketing” and we’re big fans of using these sorts of tactics to stand out…
In terms of differentiation, we tend to overestimate the power of feature functionality in the buying process. Your company should probably be talking more about why your values mirror your customers’ values. Oftentimes people like to buy from companies that share their values and have a similar view of the world.
For instance, there are many ways to view customer service as a business – we differentiate by saying that we built Help Scout for the world’s most customer-centric businesses. We believe customer service is your most effective marketing tool, and we’ve created products that embody those values. Companies that aren’t onboard with that should probably choose something else. It’s an asset for your brand to have an opinion, and to seek our specific types of customers.
The point is to make it about who you are more than what your product does. I can buy a jacket from hundreds of companies, but I always buy from Patagonia because it’s a company with values that speak to me on an emotional level. That’s the foundation of customer loyalty.
#3: “You can put your thumb over the end of a hose…”
Product-market fit has had plenty of long-contested definitions. In deploying a vivid, immediately graspable metaphor for niches, Crossbeam’s Bob Moore lends indispensable clarity to the subject.
You can put your thumb over the end of a hose and it’ll cause water to come out faster, but it kind of masks how big the original opening actually is.
The niche thing is like that – you can iterate more rapidly, get more pointed feedback, and generally create value faster by focusing on a core group. But it masks the data about the size and applicability to your total addressable market. That’s the tradeoff.
Make sure that the universe is large enough and the problem you’re solving for them is significant enough. THEN you can layer on additional segmentations such as industry, geo, etc, to give you a more focused market and messaging – but without majorly pivoting your core value proposition to the persona.
That way, later on when you need to zoom out (take your thumb off the hose), you can remove those segment filters but not have to pivot off of your core persona that sat underneath them.
#4: “What needs to be true in order for a low-touch model to work”
There are persona reasons. Then there are product reasons. Bob reveals how understanding that distinction lies at the heart of untangling the knotty, high-touch/low-touch call at any stage.
There are two key inputs when trying to roll out a low-touch model:
- Does the buying motion of your user persona allow for it?
- Can your product actually support a self-serve or low-touch user experience?
You need both of these to be true in order for a low-touch model to work, and they are both very difficult to change once the snowball has started rolling down the hill.
Many people don’t realize the persona issue until it hits them. Sooner or later, even with companies like Atlassian and Slack that you mentioned, you end up moving upmarket, selling to large enterprises, and hiring high touch sales reps. This is for persona reasons and not product reasons – people need a high touch just to survive their company’s procurement processes.
… with a very early stage business, it is probably still doable to move to a low-touch model, but it has to be part of a comprehensive strategy. Put lines in the sand around who your product is for and what their experience needs to be like in a low-touch UX, and commit to living in that world comprehensively across your business.
This happened to us at RJMetrics. We marketed ourselves as a self-serve product and focused on end users who wanted to self-serve. But the product never caught up to the vision because so much of our functionality was built around the crutch of high-touch services from our early days. That gap was a major source of friction, contributed to churn, and ultimately was at the core of a lot of our biggest issues in scaling the company.
#5: “But we do all share two things: values and aspirations”
Imagine countless 2 am conversations. Imagine, too, countless hopes and worries; spoken, overheard, and unsaid. And you begin to arrive at a fragment of the deeply affecting relations that co-founders can share. ScreenCloud’s David Hart reflects on 16 years of building together with his co-founders and distills what has worked.
Yes, me, Mark and Luke started our first business together in 2004 and since then we’ve launched and sold (and lost) several side projects/businesses.
So we’ve been through the highs and the lows and what we’ve discovered is that we’re quite different in some ways: we have different appetites towards risk, we have different strengths and weaknesses and we often have differences of opinion, too. But we do all share two things: values and aspirations.
That means that we don’t spend a lot of time debating whether something is right or wrong, but more whether it gets us to where we want to be as efficiently as possible. It also means that if we disagree with each other, we know it’s not personal… we all want the same thing after all.
So my tips would be:
try and establish that you have shared values early on. If you aren’t aligned here: if one person thinks creating a great working culture is important and another thinks that it’s a waste of time and money, then you are going to spend too much time debating that every time it comes up
find consensus, even if that’s a compromise, then execute that plan. Don’t look back: decide on something as a group then just do it, even if you weren’t 100% in agreement.
talk all the time. If you are frustrated or worried, talk to your co-founders. Don’t let it linger and fester.
don’t make it all about work and understand that people have lives outside of work. We’re all human beings trying to do our best and we all have flaws.
then finally, play to your strengths and accept your weaknesses. In our business, I love metrics but I’m not as technical as I’d like to be. Mark hates numbers but is good at understanding the technical complexities. Luke is CTO so obviously gets the technology but traditionally hasn’t had much to do with sales and customers. We can’t all be good at everything.
#6: Maximize learnings early on, “especially ones that help you figure out what people are willing to pay for.”
FYI’s Hiten Shah boards the proverbial time machine, with a decade and a half of building and scaling behind him, to share the one thing he’d do differently.
For Crazy Egg what I would do differently is instead of starting with a free plan, I’d start with a trial and paid plans only. I would use that time to discover both what people are willing to pay for and also develop a free plan in conjunction.
This way we would have a strong pulse on paying customers and their needs versus focusing on converting free customers to become paying customers. It’s a strategy that I don’t see mentioned often.
Folks are usually debating whether to have a free plan or not instead of focusing in the early days on exactly what needs to be built for customers in order for them to pay for the product. I’m a huge proponent of having a free plan, I would just sequence it in at the right time.
The one caveat I’d give is if you are in a market where free plans are the norm. Then you probably should start with a free plan that’s similar to competitors and build in appropriate upsell opportunities to start that mimic what the customers in the market are used to.
The above is even better than any specific learnings I’ve had. Overall the one thing you want to solve for early on with a product is maximizing the learnings, especially ones that help you figure out what people are willing to pay for.
#7: “Three things matter right now or during any crisis…”
Hiten, again, laying out precisely what matters when “the parameters of how to operate like you normally do are thrown out the door?”
Three things matter right now or during any crisis in no particular order:
- Your team
- Your customers
- Your cash flow
It’s more than likely your team is dealing with a lot right now with the uncertainty related to a pandemic. This impacts everyone. You need to make sure your team is OK and do whatever you can to help them get through these times. Which first and foremost means not pressuring them like you might normally to hit their targets or goals.
This is an unusual situation and the parameters of how to operate like you normally do are thrown out the door. Be compassionate and think about what each and every team member might be going through, ask them what their challenges are and help them the best you can. Being reassuring and supportive is the best way during this time.
Your customers are also going through the pandemic. Being customer-centric is really critical at this time. This means that whatever you do, make sure you find out what problems/challenges your customers are having right now and if those have changed from what they are normally dealing with.
A pandemic like this where everyone has to work from home and schools are also closed means that this isn’t your usual remote work situation. Day to day your customers’ needs might be different than normal and might even be changing on a regular basis. Staying close to your customers and figuring out how their mindset is changing can be helpful for you to figure out what to do for them.
This is how you’ll make sure you are aligned with customer needs. Whatever you thought you knew about your customers, you should be considering reevaluating it to ensure you really know what’s going on and how to support them best with your business.
Cash is king. Especially right now. My biggest piece of advice during this time is to spend energy to figure out what kind of cash position your business is in and do some scenario planning. To the point where you have a best case, moderate case and worst case scenario in mind.
The decisions you make should be based on the fact that a lot about the future is uncertain. Having enough cash in the bank for as long as possible is key. If you don’t have a lot of cash in the bank, you have to think about ways to increase your cash reserves so you have time. This might involve some really hard decisions that it’s likely during normal times you wouldn’t consider.
#8: On the necessity of eschewing “judo solutions”
“Interviewer: You and Larry David wrote Seinfeld together, without a traditional writers’ room, and burnout was one reason you stopped. Was there a more sustainable way to do it? Could McKinsey or someone have helped you find a better model?
Jerry Seinfeld: Who’s McKinsey?
Interviewer: It’s a consulting firm.
Jerry: Are they funny?
Jerry: Then I don’t need them. If you’re efficient, you’re doing it the wrong way. The right way is the hard way. The show was successful because I micromanaged it—every word, every line, every take, every edit, every casting. That’s my way of life.”
KnowYourTeam’s Claire Lew echoes Jerry Seinfeld when she brings up to light our collective obsession with “paretofying” everything and encourages founders to embrace the fact that sometimes, making something meaningful, just takes a while.
Constraints have become something that I’ve changed my reception of, I think, slowly over time. Previously, I think I’d always been searching for the “judo solution” amidst constraints. That is, how can you get the maximum outcome by doing the least?
And while that’s a useful frame for some problems, I think other times, in the face of certain constraints, it’s frustrating. For example, when you’re faced with certain constraints in your business (e.g., capital, people, time), yes, you can totally seek out the minimum thing to do that gets you the maximum effort. But also, I think if you want to create something special or meaningful, sometimes you have to accept that the constraint just means something will take more time – and that’s okay.
I think as entrepreneurs, when we’re faced with constraints, self-imposed or not, we can be hungry for the “hack” or elevator that zooms us up to the top. But when we don’t find that, it haunts or burdens us. Instead, I think realizing that amidst constraints, something will just take longer, is an important truth to accept.
A perfect example of this I think is the writing we do on our blog . I could’ve looked for the judo solution for creating organic traffic (e.g., hire content writers + editors) – but I had a specific vision for what I wanted the content to be.
And I knew that we had the constraint of cash. As a result, I’ve chosen over the past 6 years to write every single one of our 100s of blog posts myself (with maybe ~4 exceptions). And we’ve gotten incredible traffic because of it + built a loyal audience. But it also took 6 years. And I wrote everything. There was no “judo solution” because of the constraint, and I chose to be okay with that because of the vision I had in mind.
#9: "Position your product so it IS a must-have…”
What if a product, which happens to be a pain killer, finds itself in a much-less-promising mould of a vitamin? Claire Lew has an excellent method to switch course before an unwanted positioning cools and hardens.
1: Find a way to position your product so it IS a must-have + directly contributing to the buyer’s balance sheet. This usually means a few options. You can:
- Position your product to only a segment of your original audience that feels the need, stronger than anyone. (E.g.: We specifically seek out working with /new/ managers because they are feeling the pains of not knowing what to do as a manager. As a result, KYT is a must-have to them, versus someone who has been managing a team for 5+ years).
- Show how your product affects your buyer’s balance sheet. (E.g., We have a One-on-Ones Tool that talks about how 89% of managers see better performance from their team when they’re doing regular one-on-ones).
- Change your product so it delivers on a promise that affects your buyer’s balance sheet. (E.g.: We have a Heartbeat Check-in that saves our managers hours of times every week. And for managers, time = money.)
2: Appeal to the most painful, frustrating moments that your customers are facing – and then alleviate them. A product doesn’t feel like a must-have if the customer isn’t feeling the problem strongly enough. So then you’ll need to ask yourself:
- Are we tackling a painful enough problem? Or is there a different one we should tackle? (E.g., We used to be focused solely on tackling “lack of team feedback” as the problem – but then realized “accidentally becoming a bad boss” was a more painful problem. So then, we rebuilt the product to be what it is today.)
- Are we focused on a customer segment that is actually truly feeling this exact problem? Similar to what I described above, you might not be focused on the right people – and perhaps there’s another subset of users who is experiencing the pain + frustration that your product will alleviate.
#10: “The thing I try to remind myself of is that a goal is purely a tool, and you should look at that tool periodically and ask if it’s working for you…”
Did we try it for size? Is it really working for us? Asks Wistia’s Brendan Schwartz, in his simple yet profound questioning of goal-setting norms. And, in so doing, displays an admirable way to approach all “standard” notions.
We set yearly goals at the company level, then teams set quarterly goals (most of which roll up to the company ones, but don’t have to), then individuals set goals in support of team goals. We’ve been fairly loose about the individual goals and spend most of our energy making sure the company goals are right and clearly communicated.
FWIW, this is a process we more strictly adopted when we were 80+ people. Prior to that we’d try different things each year. I think the most valuable parts of this process for us are: 1) forced prioritization and debate about what’s truly important for success because this leads to focus, 2) having a simple and clear plan that’s communicated over and over is really helpful in maintaining that focus throughout the year. Most companies, even large ones, don’t have laser focus. So if our team of 115 people is all incredibly focused on a single opportunity, we can out maneuver much larger teams.
It’s certainly something that varies from person to person or team to team, and the conservative goal setting is what I’ve found to work best for me personally and Wistia as a company. In our case, we’ve always been quite ambitious about growth and are never quite satisfied, so that motivation was always there. But that feeling of being behind each month was very demoralizing.
I think one way you could try to balance things is to set longer-term wildly ambitious goals, perhaps things that don’t have numbers tied to them, but make your annual goals achievable. The thing I try to remind myself of is that a goal is purely a tool, and you should look at that tool periodically and ask if it’s working for you. If it’s not helping you achieve what you want, try another tool or change the way you’re using it.
#11: “Sustaining a business, through lean times, comes down to being able to be a cockroach.”
That’s ProdPad’s Janna Bastow with a brief, bracing reminder on the essential ethos of growing sustainably.
I admit that I’m not expert at running a business in Covid-19 times. Frankly, no one is! These are incredibly tough and bizarre times, and sometimes there are no easy answers.
Sustaining a business, through lean times, comes down to being able to be a cockroach. It sounds gross, but cockroaches are able to live on very little and are hardy as anything.
In business terms, this means operating with minimum excess overhead, and without running a month-on-month cash deficit. During this coronavirus crisis, it’s the businesses that are able to hunker down and not run out of runway that will see it through to the other side.
If you’re not making money now, move your focus on to ways you can charge for your product or services, even if it’s different from what you would have done pre-Covid-19. After all, there are a lot of new problems to go solve for the world now, so perhaps there’s value to be added and money to be made there.
If you are making money now, look to keep your costs below your revenues. We don’t know how long this will last, and every month you can buy yourself gives your team that much more of a chance to survive and come out the other side.
#12: “I think the common trait of ‘scratching your own itch’ as a successful starting point for entrepreneurs is muddied with survivorship bias…”
Of all the enduring founding beliefs, scratching one’s own itch, holds a towering presence. In a heartening note to her past self, Janna articulates how the world’s at a loss when more and more founders pursue personal itches as the only “successful starting point.”
It’s true that we build ProdPad to success by scratching our own itch. After all, we were both product managers at the time and needed tools to help us do our jobs better.
However, I think it’s remiss to assume that the best thing I could have done was to solve the problem closest to me. Had I taken a bigger step back, I could have explored a wider range of potential problems to solve, and likely found other opportunities that were just as, or even more lucrative than the path I went down.
I think the common trait of ‘scratching your own itch’ as a successful starting point for entrepreneurs is muddied with survivorship bias and the inability to measure what could have been. I think that if more entrepreneurs spent more time in pure research and discovery mode, before picking a product/service to provide, we’d see a lot more value being created!
#13: “A lot of the mistakes we’ve made over the years have been around treating them [product and pricing] as isolated disciplines”
GoSquared’s James Gill recollects the realization of the porous boundaries that pricing and product share as disciplines; this, too, shaped by his admirable verve for placing customers at the center of everything.
I think product and pricing are totally intertwined, and thus everything that spawns from that – it’s all integrated, and hard to separate out.
A lot of the mistakes we’ve made over the years have been around treating them as isolated disciplines – e.g. setting prices higher while still having a low-touch SaaS model, or on the flip side, building functionality at higher price points and seeking feedback from free tier users.
So these days we tend to make sure we look at things as a whole. For example, we’re working on a huge new part of the platform, that we’re calling Automation, and it’s all about helping our customers act on the customer data they have in the platform, and ultimately to engage with their own customers in dramatically better ways.
With this new product, we’re very conscious that we’re in a competitive space, and that our customers have many alternatives available to them. But we’re working on this product because we know our customers can be more successful with the platform by doing it in GoSquared, we know that it fits our wider goal of helping businesses grow online, and we also know we can offer a product at a very competitive price point.
Pricing is such a hard thing to test and experiment with. We are certainly not the experts, but we’ve tried many strategies over the years, and it’s always a trade off of a few factors:
- Are we competitive in the market?
- Are we making enough money from our customers?
- Can our customers understand the pricing — is it simple enough?
- Can we implement the pricing structure / system without eating away at our time dedicated to delivering more value to our customers?
#14: “Not everyone likes to juggle the last day’s take on Stripe”
In a steady, veteran’s voice, YouCanBookMe’s Bridget Harris pins down and cautions against the still-persistent demands of bootstrapping.
Bootstrapping is an art not a strategy. It’s not for everyone, some people genuinely like the cashflow and support from investors, and it works for them.
Not everyone likes to juggle the last day’s take on Stripe to manage payroll or wheedling out last minute overdrafts from banks to keep things going. But it felt right for me and Keith, my co-founder, as a way of deliberately slowing things down so we could work at exactly what we wanted to do and not take on someone else’s cash and burn it on the wrong thing.
I don’t think there’s anything particularly special about bootstrapping companies, it’s actually called in another world ‘building a business’ and people have been doing it for many thousands of years.
The difference in the last few years is the enormous bounty on offer for being in the first wave of software tools that has attracted venture capitalists and private equity, looking for huge gains.
But that is their business model — not yours.
If you want to bootstrap, you need to know long term what your profit model looks like, and whether you can scale that with more customers without adding exponentially to costs (by having to hire more people) which would wipe out your profit.
YCBM made a loss for 5 years in a row — but we were also growing really quickly, so I knew our income loss was offset by a cash-in-advance cushion and a long-term gain.
But it’s a long-term thing - there are no quick wins to bootstrapping and I would recommend NOT sacrificing everything for the sake of what you want to be a 2-year flip, which turns into a 20 year labour of love. Your family and friends won’t thank you for missing all the parties!
#15: Hiring’s “principal/agent” problem
Are mission/vision decks the new ping-pong tables? Alluring proxies for rallying talent? The all-encompassing ‘why’ is all that matters, right? Or does it? Bridget implores us to confer as much if not more attention on the ‘how’ of doing things.
Hiring people is the hardest and riskiest thing to do — as you are essentially trusting people to make good decisions on your behalf (the ‘principal / agent’ problem).
In reality — people have people problems unrelated to your business - and giving them a ‘top down’ vision isn’t necessarily going to help motivate them.
I think the operating culture of the company — who people work with, how much autonomy do they have, can they see results, are they supported by their team and budgets, are much better ways to motivate your team than getting them to sign up to a vision.
In YCBM, a while ago, I set out our vision which was to be ‘a Tiny Company that does Big Things” which means, we want to stay small, lean and agile to enjoy the team and individuals we work with, but also to ensure we can be incredibly productive (less meetings / less management / less barriers).
We have huge ambitions for our product and the way we serve customers, but equally our day to day satisfaction comes from delivering small things repeatedly over time with great people.
#16: “AI is often a hammer looking for a nail.”
The buzz, the crackle, and the unrelenting energy of new new things is in the very fabric of tech. But there’s a vital prerequisite to sift through the hype and identify what really produces value. Vue.ai’s Ashwini Asokan deftly explains how they’ve accomplished just that.
There’s been so much hype and noise about AI. Very low signal:noise ratio honestly. And while there have been a lot of new businesses coming up in the space, we rarely actually hear about the ones solving real problems in verticals. Here are some of the challenges I’ve seen:
- Lack of an actual problem to solve. AI is often a hammer looking for a nail. A lot of companies I’ve seen in this space, fail because they fail to use AI to solve a real issue.
- The category is non-existent and the job of the company is to create the need and change human behavior. This is a gargantuan task. And one that I’m deeply familiar with because we’ve been going at this for years at Vue.ai. I’ll get back to this in a moment. There is a huge component here that is entirely about educating the audience. It took us years of educating, engaging with the audience before we could crack them on scale. And we were acutely aware that the industry we were dealing with was largely kitted out with legacy tech.
- Helping humans who are doing these jobs get over the fear that their job will not exist in a few years. This is a very real issue. People in companies using these systems are very suspicious of AI systems and very unforgiving, as well. Often with good reason but it’s a challenge, regardless.
- Lack of understanding on RoI & emotional impact of AI on users - Our users often said things like “ya the machine failed this once when I really needed it, so we might as well do this manually”. This meant they overlooked the fact that productivity and throughput tripled when compared to non-AI based systems or manual labor but focused on the one time that they looked bad in front of their senior management.
Here are some of the things we’ve done over the years to counter some of these:
PRODUCT MARKETING FTW:
We invested heavily in product marketing from day 0. This was perhaps one of the best things we did. Whether it was demos, FAQs, use cases, new ideas - our goal was to constantly demonstrate all the ways in which our systems could help people reimagine their work, reimagine new workflows with a 10x / order of magnitude growth in either revenue or savings on the expenses/cost side.
CUSTOMER MARKETING FTW
We invested heavily in customer marketing from the time we were at $1M ARR. A big portion of category creation is showing that the category is being adopted by the industry, telling stories about that behavior, RoI and more. People constantly want to know what everyone else is doing. You’d be surprised but the #1 question we get on sales calls is: “What are other retailers in this space doing”. A lot of this process had to do with normalizing, familiarizing the category and making it less ‘other’, alien to their daily work.
TEACHING THE AUDIENCE ABOUT RoI of AI
This one was huge because it helped us show people we were not there to put them out of their jobs but also help them produce 10x better work. The language took us a while to iterate and learn but eventually we realized it was not about how AI was the star of the show, it was about how the AI made those users the star of the show.
HELPING THEM TEAM REIMAGINE THEMSELVES AS EDUCATORS NOT COOL AI PEOPLE
The early years of a startup’s journey are exciting, filled with adrenaline rush and a lot of ups and downs and emotional outbursts. I can tell you when we crossed our 3 year mark, for me it was all about helping the team undo, unlearn, rethink, remake and rebuild themselves not as people building bleeding edge tech but about helping them think of themselves as people who have a responsibility to help the world around them become AI-Natives. I can tell you this is one of the best things that’s happened to the org as a whole, maybe we should have done it sooner. But the responsibility that comes with enabling people with AI is a very real one and that can help counter the fear and the high threshold for change.
#17: “If you only flip 5 times, it’s quite possible that all 5 times, you land on heads.”
Trainual’s Chris Ronzio with a short primer on the discipline of probability. On sticking around long enough to sight even odds. Applications? Gauging the potential of acquisition channels and much else.
In terms of acquisition channels, I think many people give up on a channel too early without fully vetting it. Consider your target acquisition cost – say for instance you want to acquire customers for $500 each to make sense for your unit economics.
You might have to spend 10-20x that before you can actually determine that the channel isn’t working. It’s kind of like flipping a coin… if you only flip 5 times, it’s quite possible that all 5 times, you land on heads. But over time, the number of times that you land on each side of the coin begins to even out. The same is true for your ad spend when you test a new channel. Don’t give up too early.
Next, when you have a channel working, continue expanding your focus/budget on that channel, but dedicate 10-20% of your resources to continually testing new channels. Over the last few years, we’ve developed a few different channels that compete with each other for lowest acquisition cost, but it is an iterative process.
#18: “Over time I’m not ‘running a startup’ but ‘doing work’. And with ‘doing work’ comes a different perspective.”
Burnout stems partly from buying into a certain narrative about startups. That they’re ceaseless treadmills and there isn’t a lot one can do. Chameleon’s Pulkit Agarwal talks about how he found himself in a world adrift and how relief arrived when he framed a new language for work.
In the early days I assumed the startup was a sprint and I had to sink all my energy into it. After a few years I realized that I had a similar state-of-mind, regardless of progress and problems. I felt hurried and assumed at any step the whole thing could come crashing down.
Over time I’m not “running a startup” but “doing work”. And with “doing work” comes a different perspective:
- Work is not the only thing in my life; I have other key priorities
- Work is meant to be fulfilling and rewards
- I should enjoy my work each day and each week and each month
If I was in a job and work took over my life and I was unhappy then I’d quit. So why do I need to create an environment where work isn’t the things above.
Some specific things that have worked for me:
- Confiding anxieties in a partner or co-founder or mentor. Having someone listen that can reassure you that things are okay
- Making physical health a priority; exercising every day / regularly
- Celebrating all the small wins in a big way
#19: “Things are always messy and chaotic even if it doesn’t look like that from the outside."
The rosy, perfectly-arched world that PR spins is seldom real. We know that. Yet it’s hard not to let that dictate our own goals and aspirations. Bringing jolting clarity to the matter, Geckoboard’s Paul Joyce urges founders to weigh their own truths and reasons.
It’s easy to get into a downward spiral if you read the tech press or the humblebrags from founders of unicorns or the next new hotness
This sort of thinking can also impact team morale and has literally no upside
It seems rooted in that destructive human tendency to compare yourself with those around you
Comparing ourselves to others (esp carefully crafted PR messages) makes it easy to minimise your achievements and forget what’s important to you
But there’s a pretty simple antidote that works well for me when I start to feel like this. Being grateful:
a) Remembering why I started this in the first place, using that as my touchstone,
b) Focusing only on the things that matter, and
c) Acknowledging and embracing that I’m exceptionally fortunate to be in this position
I started Geckoboard because
a) I believed this product wanted/needed to exist, and
b) I wanted to work in an environment that I felt was both positive and productive
By keeping those at the top of my priority list and hiring people with similar values then the tendency to to look outward and compare ourselves to others diminishes
The team and I really do care about how we work with each other and really care about the problem domain and believe in our approach
These are hard but incredibly rewarding challenges to work on, anything else is a distraction
If either of those things change in the future, then that might be the time to reassess, but as long as they remain true, then reminding myself of how lucky I am to be working on something I care about with people I care about is ample
It also helps that every hyper-successful founder I’ve spoken to privately about this is happy to acknowledge that this is just a cost of doing business regardless of size your business or how fast it’s growing
Things are always messy and chaotic even if it doesn’t look like that from the outside
#20: “Pricing hasn’t gotten any easier, even 10 years in.”
Is pricing “more alchemy than science?" Here’s Paul Joyce’ attempt at an answer; a rich, absorbing snapshot of a decade and more of risks taken, systems built, and a “fleet-footed” manner acquired for addressing pricing iterations.
Pricing hasn’t gotten any gets any easier, even 10 years in
Between value positioning, pricing psychology etc it feels more like alchemy than science
Despite that, our ASP is now 10x higher than it was when we started
Pricing surveys, interviews etc can get you so far but the best way to learn is to try new pricing schemes
We had to be prepared to take some risks in order to learn, the bigger he risk the great chance of busting out of local maximas, but that increases chance and magnitude of downsides also
The best way to militate against the downsides of pricing risks is having the ability to execute quickly once we had made a decision
a) We found that instrumenting pricing touchpoints and having the ability to rollback or change pricing quickly gave us the confidence us to be bolder and take riskier bets
b) This changes the attitude to pricing experimentation from something that needs to be substantially right, to something that allows us to learn
Being able to segment our customers into different groups based on how they perceive and articulate the value they get from the product is probably the single most important thing we did
We’ve used various approaches using customer interviews, mapping to JTBD, understanding their journey in the product and as a business
These are shared around between the team working on pricing
Based on that, we then punt around some ideas, decide on one, model the upsides and downsides then, tweak it again then push it live
Of course, this is an iterative approach and isolating signal from noise is difficult
So stay fleet-footed and on top of the data
#21: “So, yeah, great product ≠ success. And terrible products ≠ failure. It’s more complicated.”
SparkToro’s Rand Fishkin contemplates the non-obviousness of product success and the “bad product, but right timing, positioning, and marketing paradigm.”
I definitely believe that having a great product is not nearly enough to get adoption, even early. I’ve seen plenty of products fail in early and mid stages that were phenomenal, and plenty of terrible products go on to do well. There was a bookmarking+search tool called Trunkly in the 2010s that I absolutely loved. Amazing product. When I convinced folks to try it, they loved it, too. But sadly, it didn’t survive.
Then I look at something like Soylent - terrible product. Generally worse than a slimfast shake. Gives a high percent of people who drink it diarrhea. Tastes bad (intentionally). But… It’s marketed toward a segment of folks who love the positioning, buy into the benefits, and wouldn’t consider the long-standing market alternatives like Slimfast or others because they’re targeted to women.
Most every crypto-currency fits into this “bad product, but right timing, positioning, and marketing” paradigm. So do most conspiracy-theory cults. Qanon has had extraordinary success as a product, sold tens of millions of dollars or merchandise, overtaken people’s entire lives, but it’s obviously a terrible product.
So, yeah, great product ≠ success. And terrible products ≠ failure. It’s more complicated.
All that said, I’d definitely rather have a great product.
#22: “The low lows aren’t there, but neither are the high highs.”
A short, stirring assessment of what starting up again feels like, from the author of a marvellous, “painfully honest field guide to the startup world,” Rand Fishkin.
I wasn’t entirely sure how much my previous experience would help on the planning and structure sides of things, but honestly, it’s been much, much easier. I can definitely see why many investors want to back 2nd and 3rd time entrepreneurs, because when I compare this journey with SparkToro to my first few years trying to build Moz, it’s night and day. The path is not just clearer and more obvious, but also easier. I don’t have nearly as much of the rocky emotional ups and downs.
Casey and I certainly went into SparkToro with a lot of the “floor plan” set. We knew how we wanted to raise money, how we wanted to build, how to get our initial email marketing list together for launch, how to structure our workdays and balance that with our lives (well, at least until Covid). I have a lot less fear and uncertainty this time around.
All that said, the one thing I do miss from the early years of Moz… the excitement. The low lows aren’t there, but neither are the high highs. If we’d achieved at Moz what we have in SparkToro’s first 6 months, I’d be jubilant, elated, bouncing-off-my-chair… I do kinda wish I could still feel that way about hitting business goals. Now it’s more a sense of relief and “OK, got that done, time for the next thing.”
#23: “I wish it didn’t sound crazy, because caring for people should be a priority above all else.”
Wildbit’s Natalie Nagele brilliantly examines the assumed rigidity and fixedness of how we define work. “I am curious about defining a work environment that prioritizes what ‘enough’ is, instead of prioritizing a set number of working hours.”
I wish it didn’t sound crazy, because caring for people should be a priority above all else. There were many moments where it was less about defending the decision, and more using it as a basis to make better decisions. An example is when our product Beanstalk plateaued in 2012.
We felt lost, so we started tweaking and experimenting because it’s what other SaaS companies were doing. We didn’t drive with our purpose of being people-first. We focused instead on what we thought the business needed. When we turned that around and asked ourselves “why”, we realized that we were going about it all wrong.
Instead of thinking about how to grow Beanstalk, we focused on making the people at Wildbit happy and fulfilled. That led to us putting more energy into Postmark, which was a tiny baby at the time. We were excited about growing things, not about competing on features or going upmarket. Beanstalk needed us to growth hack. But the people wanted to enjoy their work.
That’s probably one of the most important decisions we’ve ever made. Not only did we end up growing Postmark to significantly surpass Beanstalk, but we did it while building a powerful team that loves what they do.
We absolutely questioned ourselves in the early days about choosing to work 4-day/32-hour weeks. But the beautiful thing about being private is that there’s not a lot of risk in these experiments. Maybe we’re naive, but we’ve been doing this long enough to know that being late to the market with a feature release would never be make or break for a product.
It just doesn’t matter that much. By that logic, if the biggest risk of 4-day weeks is shipping late, it’s actually not that big of a risk. When we reflected a year later, we actually shipped more that year than in most previous years. So we knew we were on to something.
There are days even now that I question the 32-hour work week. Mostly because I’m not sure that work, in general, should be so rigid. There are some weeks that I work less than 32 hours, and some weeks where I probably work 40 hours. I am curious about defining a work environment that prioritizes what “enough” is, instead of prioritizing a set number of working hours.
But, if I project a bit on your question, we have never felt that working 4-day weeks would be a competitive disadvantage. And given the growth we’ve seen in our products over the last few years, it feels like an advantage now. (Especially as I welcome a lot of new customers from our biggest competitors daily :).
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