How Carta found product-market fit: Henry Ward on distribution-led product strategy
Aug 18, 2022
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Henry Ward, Co-Founder and CEO of Carta, talks about scaling their startup to product-market fit. They discuss building products designed for distribution, early go-to-market lessons, why they didn't start with self-serve, and changing pricing model without upsetting customers.
Carta initially focused on solving the problem of managing cap tables and issuing stock certificates, which led them to create a new category of software and equity management.
Henry Ward emphasizes the value of having salespeople who can drive demand generation and set up meetings, while founders bridge the gap between sales and product decisions during the sales process.
Deep dives
Building Carta's Vision and Product Market Fit
Carta co-founder and CEO, Henry Ward, discusses the motivation behind starting Carta and their vision to build a private stock market. They initially focused on solving the problem of managing cap tables and issuing stock certificates, which led them to create a new category of software and equity management. The cap table business served as the infrastructure to fulfill their vision of building a private stock market. Henry shares how they navigated the challenges of introducing a new product and revenue model outside the typical SaaS Starter Box and the importance of customer referrals and credibility in early customer acquisition. Eventually, Carta expanded their services to include investor portfolio management and made the transition from a transactional to a subscription-based business model.
Go-to-Market Strategies and Hiring Decisions
Henry Ward highlights the importance of getting the right go-to-market hires in the early stages of a startup. He emphasizes the value of having salespeople who can drive demand generation and set up meetings, while founders bridge the gap between sales and product decisions during the sales process. He warns against making marketing departments solely responsible for driving sales and advises focusing on product-market fit before investing in marketing. Additionally, Henry reveals the critical role of onboarding managers and product specialists in educating customers about the product and how sales and hiring decisions evolved as the company grew.
Navigating a Brand Change and Subscription Model Transition
Henry Ward discusses the factors that led to a pivotal decision to rebrand the company from eShares to Carta. He explains that the change was necessitated by a domain squatter owning eShares.com, posing security risks. This presented an opportunity to reimagine the brand and involved employees in the renaming process. Additionally, Henry shares the proactive approach Carta took in transitioning from a transaction-based revenue model to a subscription-based one. He describes the challenges and successes in communicating the change to customers, highlighting the importance of explaining the reasoning behind the transition and building customer support and understanding throughout the process.
The Power of Product-Market Fit and Adaptive Strategies
Henry Ward emphasizes the significance of product-market fit and its ability to solve multiple problems within a market. He encourages founders to adapt their business models over time, based on what works and to reimagine their product offerings as they achieve product-market fit. Henry reveals how Carta's focus on securities accepted as a North Star metric helped drive the network effect and customer referrals. He also stresses the value of bringing customers along on the journey by explaining the reasoning behind changes and how it aligns with the long-term vision of the company.
Henry Ward joins us to talk about how his team of fewer than 20 employees scaled their startup, then known as eShares, to product-market fit and eventually became a household name in equity management software.
Henry Ward is the Co-Founder and CEO of Carta. This $7.4B business has created a new category of software in equity management by helping companies and investors manage their cap tables, valuations, investments, and equity plans. Henry gives us insight into the early stages of Carta: the initial products that Carta built, gaining validation through investor networks, closing their first 100 customers, and how they found product-market fit on their way to acquiring 28,000 customers.
Join us as we discuss:
How Carta built products designed to get distribution
The early go-to-market lessons that Carta learned about when to focus on sales vs when to start marketing
Why Carta didn’t start with a self-serve experience
How Carta changed its pricing model at scale without upsetting customers
About Unusual Ventures — Unusual Ventures is a seed-stage venture capital firm designed from the ground up to give a distinct advantage to founders building infrastructure software and application-level companies. Unusual was founded in 2018 with the mission to reinvent the venture capital engagement model by serving entrepreneurs with an unprecedented level of hands-on services. Described as a partner versus a top-down stakeholder by its portfolio companies, Unusual is laser-focused on serving exceptional founders and teams building innovative products. With offices in Menlo Park, San Francisco, and Boston, Unusual has invested in category-defining companies like Arctic Wolf Networks, Carta, Robinhood, Harness, and Vivun.
About Sandhya Hegde — Sandhya is a General Partner at Unusual Ventures, leading investments in enterprise SaaS companies. Previously an early employee and executive at Amplitude, Sandhya is a product-led growth (PLG) coach and mentor. She can be reached at sandhya@unusual.vc and on Twitter (https://twitter.com/sandhya) and LinkedIn (https://www.linkedin.com/in/sandhyahegde/).
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