The Startup Chat with Steli and Hiten

In today’s Startup Chat, Steli and Hiten talk about product marketing (the cross-section between sales, marketing and product) and discuss how this business function is defined differently across different organizations. Steli shares his approach to product marketing and how he is ready to step up his game in this department. Tune-in and get insights that will help you determine how to integrate this important function into your organization. Time Stamped Show Notes: 00:03 – Today, we are going to talk about Product Marketing 101 00:43 – Send out an email to Steli if you feel that you are the right product marketer for his organization 01:15 – Product marketing has different definitions 02:00 – It’s in a weird position that crosses sales, marketing and product 02:23 – “Product marketing is the art and science, conveying to people what your product can do for them with the goal of engaging, conveying and retaining” 03:04 – Difference between positioning of a company and product 03:11 – Often brand and company positioning is done through marketing while product positioning is done through the product 04:13 – All domains of a business: sales, marketing and product end up suffering if product marketing is neglected 04:46 – Steli has been indirectly marketing products to customers through content marketing 05:46 – Prospects end up reading relevant content and falling in love with the brand 06:08 – Whenever the prospect comes to the market wanting to purchase a CRM, they consider Steli’s organization first 06:31 – Has not been targeting customers who want to purchase a CRM immediately 07:55 – Has built up a strong brand, but has not focused on product positioning 09:19 – Some organizations think of product marketing as a top of funnel function 10:00 – The initial launch is done with the intent of driving traffic and trials 10:20 – Think of increasing adoption rates among existing customers 10:51 – Some people think of product marketing as a function spread across the entire lifecycle—from driving traffic to retention 11:24 – Product marketing can be concentrated on the top of the funnel, end of the funnel or across the entire life cycle 12:00 – While organizations generally research the pre-market launches extensively, there is a need to concentrate on the post-launch metrics 13:00 – Today, product marketing is concentrated more on the product team and less on the marketing; historically, it was otherwise 14:04 – Hiten prefers that product marketing remain a part of the product team which makes it more customer-centric 14:29 – Product marketing team should delve into case studies, take up research and customer development, coordinate with different teams and be involved in updating website assets 16:16 – As companies get larger, product marketing acts as a bridge between different departments 16:56 – Product should be closest to the customers—learn what their needs are 18:30 – Hiten has hired product marketers who ended up becoming part of the marketing team 19:34 – The structure of your organization determines how you approach product marketing 20:15 – While some business functions are very well defined, there are other new positions that are not clearly defined 21:27 – Send out an email to Steli if you feel that you are the right person for this product marketing job 3 Key Points: Product marketing is the art and science that conveys to people what your product can do for them. Product marketing can be concentrated on the top of the funnel, end of the funnel or across the entire life cycle Product marketing is the cross between sales, marketing and product. Steli Efti: Hey everybody this is Steli Efti. Hiten Shah: And this is Hiten Shah. Steli Efti: And today, the sound track, we’re going to talk about Product Marketing 101. What is  product marketing? How do you hire somebody for product marketing? How do you successfully do  product marketing? Here’s the reason why I want to talk about this with you, Heaton,  because surprise, surprise Close.io is hiring our first product marketer. By the way, if you  listen to the episode and by the end of it, you still think that you  are the right person, please shoot me an email at steliclose@io. I want to hear  from you. But as we’ve been in the process of hiring our first person in  product marketing, I have just been in this fascinating world of interviewing people for this  role, interviewing other successful SaaS founders that have great product market teams, figure out how  they do it. And it’s just a funky, funny space where there’s a lot of  confusion. I feel like there’s very different definitions of even what product marketing is, how  to do it, what to do and how to do it right. So like I  need to talk to my main man, Heaton about this because it seems to an  area that’s fascinatingly blurry to most companies. So, first let me ask you a question  that I asked a lot of people that I’ve interviewed for this position. Which it  seems to be such a basic question, I shouldn’t have to ask it. What is  product marketing and how is it different from other marketing functions in the team? What’s  your definition for that, Heaton? Hiten Shah: Yeah. It’s a really good question. Product marketing is a really weird role. It’s almost  weirder than product, although a lot of product people are also product marketers. And the  reason the role is weird is it crosses sales, marketing, and product. And often times,  executives, leaders, CEOs are also involved. Those stakeholders really care about the messaging and what  the product is. And so for me, my definition of what it is, and I’ve  said this a while ago actually but I’m going to lay it out, is basically:  product marketing is the art and science of conveying to people what your product can  do for them with the goal of engaging, converting, and retaining. And that’s really it.  And you know it’s very product centric because it’s got product in it, so it’s  one of my like my topics of choice. So I’m assuming, and I wanted to  ask you a question, but I’m going to just make an assumption and see what you think. I’m assuming you folks are ready to basically start thinking a lot more  seriously abut the positioning of your product in the market. Not the positioning of your  business or brand because I think you’ve got that from a marketing stand point. But  more the positioning of your product. Is that correct? Steli Efti: What’s the difference between the positioning of the company and brand and the positioning of  the products specifically? Hiten Shah: My blunt answer is that there should be no difference. My more honest answer is,  companies reach a scale where brand and company positioning is done through marketing while product  positioning is done through product. And through meeting what’s the part of the business that’s  communicating that, what’s the part of the business that’s responsible for it. So companies often  hit a scale when their company positioning, their business positioning, their marketing position, like how  they’re viewed in the outside world is not aligned with their product. And the reason  for that is the business gets to a point where it’s working. And all of  a sudden you’re like wait, are we considering what our product does? Are we considering  the people who are using our product when it comes to all communications with the  outside world? Are we updating our website enough? Are we launching at a higher velocity  new features? Is there much more competition? But the truth is, all parts of a  company’s sales, marketing product end up taking the brunt of this problem without knowing it.  Until you’re at this point where like, product marketing becomes a thing that you need  to address and think about. So like I said, I made a bunch of assumptions  but my first question is actually, “Dude, why are you hiring a product marketer. What  made you come to that conclusion?” Steli Efti: Yeah. That’s a good question. So here’s how we thought about this right, and why  we came to the conclusion we want to hire somebody there. The one core reason  is that all of our marketing up until this point has been very indirectly marketing  our product to customers, right. So all of our marketing has been content marketing. And  our content is very like kind of sales, thought, leadership, teaching our future customer how  to do their job really well and how to succeed in the market place. And  it’s never been directly marketing our product to them. Right? So we teach people how  to sell and we teach companies how to do sales successfully. These people read our content because they have these questions on how to hire sales people, how to scale  sales, how to do sales well. We have answers for them and they start becoming  … Falling in love with our brand, falling in love with our content, becoming our  audience and our readers. And down the line, this might take six months. This might  take 12 months of them engaging with our content. Eventually, there’s a moment, there’s an  infection point where they either, for the very first, time need a CRM or enough  has happened to make them so unhappy with their current CRM that they’re in the  market for a CRM. And the moment where they are in the market, we are  top of mind and they’re like, “I want to check out Close.io product.” I know  they have a CRM. I’ve been reading their stuff and their content is so great  that I want to give their product a shot. That’s half of all our trials  come from that kind of journey. We have never done up until this point is  to think about the person that is in the market today that is like, “We  need a CRM right now or we need to switch CRMs right now.” And they  go out online and they try to research what are CRMs for unique case, for  our specific needs. And they do a bunch of research, they find a bunch of  solutions and then they compare these solutions trying to boil down to the right one  for them. So people that are just in the market right now, we’ve never marketed  to them because we never do marketing around our product. All our marketing up and  to this point was around our content and then people discovered and fell in love  with the product as secondary step. That’s one big reason why at this scale of  the business, we started thinking okay, it’s increasingly irresponsible for us not to have somebody  that worries about marketing the product, positioning the product in general. But also specifically to  people that are in the market for our product right now. Independently from if they’ve  ever heard of us or not. Does that make sense? Hiten Shah: I really like the … Yeah is the Company going more outbound from a sales  perspective, yet? Steli Efti: No. It’s still all inbound. Hiten Shah: Okay. Cool. Steli Efti: And the interesting thing … So I like what you were saying. I didn’t think  about it that way, but I do think that in a brand-wise and company-wise we  have a very clear idea what our positioning is in the market and we have  a very strong position. And a big part of the brand we’ve been able to  build has directly contributed to our success in the market but we’ve not thought as  much about the product positioning, especially in relation with everything else that’s going on. And  also as the products that are competing with us have vastly changed and shifted. And there have been a lot of new entries in the space and some old that  have entered our space. The companies and the products that we were competing with directly  four years ago, it’s not the same space anymore. And it’s been a lot more  crowded, a lot more differentiated. A difference of of features and the way people put  together their sales stack and all that and think about how the product and our  features and future work, like how that compares in positions within the greater market. I  think that at this size of our business this becomes a more important question that  we just didn’t care about back in the day when first launched. One interesting thing  that I’ve seen asking people for their definition of product marketing is that I’ve gotten  like … There’s not a single definition for this and there’s like this wide range  of answers that I’m getting. And it seems like some people and companies, they think  of product marketing as a topa funnel function, right? So we’re thinking about like we’re launching a new significant feature every month, coordinating the launch of that feature, finding partners  to promote this with, writing all the content essence around that on the website and  the block on the support desk software. Coordinating within the new team on how to  communicate this new feature to new people. Creating landing pages for the feature. Thinking about  the new competitors and how their feature is related or compares with this feature. And  just doing just a bunch of positioning around a new feature or product and then  doing the initial launch with a big focus on driving adoption and driving interest and  driving trials and traffic. Versus some people and companies they think of product marketing much  more in kind of mid and end of the funnel. Of like, any time we  launch something new, how do we communicate this with our existing customers? How do we make sure that our existing customers adopt and use this new feature or product? How  do we make sure that people that are already trialing product know about all the  different important key features related to their interests or their customer profile and we convert  them from a trial to an engaged trial and from an engaged trial to a  operated customer. And some companies and people they think of product marketing as something that’s kind of like the entire life cycle. From driving traffic, to helping onboard and engage  to retain, retention right? How do we make sure that customers that wanted certain things  as we roll out these things they know about them and they stay happy and  stay kind of long term successful. How do we make sure that we do a  lot of customer training and education on our new features and our product and all  that good stuff. So there’s three kind of distinct definitions where one is very heavy  at the top of the funnel, the other’s very heavy at the end of it and then there seems to be one definition that just takes just the entire life  cycle and adds responsibility. Do you think that all three could be good? I mean  it really depends on the company. Do you think that some of them are confused  and are actually kind of counterproductive? Thinking about product marketing, where do you sit in terms of what part of the funnel and customer journey, the product marketer or the  product marketing team should own and care most about? Hiten Shah: I’ve seen the role differ a little bit here and there. The way I think  about it is pre-launch in the future there’s a lot of communication and research that  can be done, typically product marketers end up doing that research, so that’s one really  strong angle I would consider. And then post-launch, there’s a whole bunch of work that  needs to be done that’s more around like helping the sales team. What typically is  called sales enablement. You know, essentially as I mentioned like earlier, making sure people are  retained and engaged. And so, one way to think about it is product marketing owns  the communication throughout the whole life cycle. But it’s all very customer-centric, not necessarily like  what marketing would do, which is demand generation and things like that. We’re just getting  into like, in my mind, a lot of formalized roles and formalized disciplines. Like demand  generation, it’s a discipline of marketing. Product marketing depending on the company is either, it’s  turning into being more on the product team, less on marketing. But historically it was  more on marketing, less on the product team. Just because how the world was and  how people had a different viewpoint on some of this stuff. So in my mind  like I look at this and say okay, if our company is not doing as  much customer development or learning about messaging for features that we’re building then, then product  marketing team or person can really help with that. And they should be really good  at interviewing customers, customer development. They may even creating a lot of the case studies,  depending on how your business is set-up and teams are set-up. And they’re also communicating  with sales and marketing and product to basically figure out what’s coming, what are those teams need to support what they need to do? And if product marketing is inside  a product, how can product support it? And so I found that more recently companies  are pushing for product marketing being inside a product, but I’ve seen people debate that  it should be a part of marketing. But reason I like … Yeah go ahead. Steli Efti: No. Go ahead. Hiten Shah: I was just saying the reason that I like it a part of product is  cause it’s very customer centric and it isn’t just about pre-sign-up. Steli Efti: I like that, that’s cool. I never thought about like product marketing sitting with the  product team versus the marketing team. Independently from where the position sits, talk a little  bit about basic assets that a product marketer owns and activities, like one on one  what your product do all day, right? You mentioned case studies. We mentioned research and  customer development. We mentioned coordinating with different teams, the product team the support team the  sales team on how to launch and communicate a feature and make sure that everybody  within the company is aligned on this new feature or this new product that is  being launched. We mentioned the website, you know? Updating assets and that nature. But I  also heard from some really successful SaaS companies that the product marketing team owns the  email list and all email communication with customers, trial users, marketing leads, whatever it is.  What’s kind of like, on a practical level, what is top of work that product  marketing in your opinion should own and do? And what are some of the essence  that you seen is best when product marketing owns these types of essence of channels  versus it’s actually not that great if they do all these types assets or channels? Hiten Shah: Yeah. I think the simple question is, how close to the customer is it, the  channel? Steli Efti: Well what do you mean by that? How close to the customer is the channel?  I mean obviously the website is probably an asset that is further away from the  customer because a customer will not typically visit your website every day to read things  about you, right? Is that the definition of thinking process here? Hiten Shah: Yeah. Cause a formalized approach is like okay parts of the website, marketing owns parts  of the website product owns. And the truth is like historically, product marketing has been  a big company role. It’s just something that as you get larger as a company  or you’re in a big company, you have all these product marketers but what do  they really do? They’re just some form a bridge type of person between different departments. That’s usually what products should be doing. So the absolute truth for me is like,  and again I come from a place where like I believe product marketing should sit  in product, not in marketing. So if I come from that place, I’m like well  product’s not doing their job if they need a ton of dedicated product marketers versus  just a few. Or just like it ingrained in their processes. But then that goes  back to how does product determine messaging if the skill-set doesn’t lie in product for  messaging? I would argue that skill-set should lie product because product should be the one  closest to customer in terms of learning what their needs are, learning how to make  the product better, and more importantly learning the positioning in the market that the company  needs. Now this can be super debated because if you’re a great marketer, you’re thinking  about positioning all the time. So then it’s like wait, like who’s actually responsible for  product positioning and value proposition and also like how we communicate, what we do and  who we do it for? And this is why I like, I think people invented  product marketing, you know. It’s like wait, like this is … To me this is  one of those topics that get so freaking confusing simply because it’s like one of  those roles I think was made up because there’s a bunch of deficiencies between the  teams. And so this is like a role that crosses … It’s a marketing discipline  to determine positioning, historically. Right? If you look at the history of this, but it’s  a product discipline to talk to customers. But yet if you’re doing positioning well, you’re  actually talking to market and customers. So, I just go back to the question to  like the places that actually touch the actual customer or someone when they’re close to  buying or close to like signing up is probably more a product marketer role. While  marketing is responsible for topa funnel, acquiring customers, right? But now I’ll throw a freaking  wrench in this by saying, “Well what about growth?” What about the growth people or  the growth key? How does that impact all of this. So to me, it’s like  a fascinating topic.Number one, my friend Steli wants to hire product marketing. Cool. That’s fascinating  to me. Number two, I’ve hired people who you call product marketers and they usually  sat on the marketing team because they were great at copy and we thought as  a team copy was a marketing thing. But when you looked what they did, they  did a lot of things that overlapped with what the product team did too. And  you could think of it as a hand-off and where it’s once product has figured  out a bunch of stuff about the feature, the copy side of it goes over  to product marketing. So they may be helping to run the early access process of  a feature to understand what really matters. But then they still have to work product  to inform the roadmap right, if that’s what they’re going to do. So I would  say that just hearing like what you’re saying, I think you want someone more on the copy side of it that probably will sit more in marketing and that’s totally  cool. But then how do they determine the right copy for different parts of your  website and different parts of the customer life cycle. Well they’re going to have to  talk to the customers, right? Steli Efti: Everybody has to talk to the customers- Hiten Shah: Yeah, but like- Steli Efti: But yeah, I mean absolutely. Hiten Shah: Yeah so, to me, I personally think that a lot of this of where they  sit and what they do depends on how your organization is structured. Steli Efti: Yeah, and that’s why probably this varies so differently between different companies because companies are differently structured, right? I’m not going to even feel … I think that this was  a fascinating little like deep dive in what is product marketing but also I think  it’s clear that there’s not one definition that will fit for everyone. I’m not going  to even throw in there the question of how does product marketing and product management,  what are the real differences and how do they interact with each other because that’s  going be another 20 minutes of us talking about all kinds of possibilities. But I  do think that it’s fascinating to see some roles that you hire for some functions  within a team and a company, are kind of like been around for every, very  well defined and it doesn’t really … There’s always some difference but 80/20 almost every  company is thinking about this one role or this one position very similarly. But there  other positions and things that are kind, as you said, they’re inventions because there were  deficiencies between teams and the handoff of teams as things are evolving, like the product team now has … Talking way more to customers and taking more and more of  the communication positioning responsibilities. Where, back in the day, they had none of that and  it was all on the marketing team. So as the world changes, there’s kind of  these new positions that are being created that are not as clearly defined and that are still, I think, being defined and shifting around as companies try to figure out  how to do this stuff really well. Hiten Shah: Yup, totally, still new stuff. Steli Efti: Awesome. Still, new stuff. Alright that’s it from us for this episode. If you listened  to all of this and you’re like, yes I’m the right person to work with  Close.io and to help. And I could be amazing, shoot me an email: steliclose@io. Sorry  about the shameless plugging of this position. Hiten Shah: Do be sorry shameless plugging, like you have an amazing company and I’m sure there’s  a ton of people that would want to work there. So seriously, if you think  you can be a product marketing at Close.io. They are a remote team and they  have an awesome company culture. They do these great retreats and what not, as well as you get to work with Steli. So, what’s up? Steli Efti: What’s up. There you go. Hiten Shah: You should have pride. Steli Efti: My man. Thank you for the pitch. Hiten Shah: Of course Steli Efti: That’s it from us. We will hear you guys very soon. Hiten Shah: Bye. The post 259: What is Product Marketing appeared first on The Startup Chat with Steli & Hiten.

In today’s Startup Chat, we talk about Hiten’s recent article, Why Trello Failed to Build a $1 Billion+ Business. Trello was recently sold for $400 million. Hiten’s article expressed that Trello could have been a much larger business had they monetized earlier on, focused on greater productization and thought about ways to ensure greater client stickiness. Tune-in as Hiten and Steli discuss how sound strategizing would have ensured a much larger topline and a greater customer base for this much loved company. Time Stamped Show Notes: 00:03 – Today we are going to talk about why Trello failed to build a billion dollar business 00:28 – Hiten recently wrote an article that expressed his thoughts about Trello and how it was one of those rare businesses that could have become much larger than it did 01:51 – With minimal effort, Trello could have been HUGE 02:02 – Hiten wrote this article with good intentions since he cares deeply for Trello 02:51 – If someone criticizes you because they want you to do well, it should not make you feel bad 04:05 – A lot of people engaged with his article—both positively and negatively 04:54 – The strongest reaction came from those who just read the title 05:22 – Lessons learned from Trello’s failure to scale up 05:22 – Trello did not monetize fast enough 06:01 – They offered free services for too long to chase high growth 06:16 – Failed to study cases of how different people were using this generic tool 06:42 – They should have productized or verticalized the product to a higher degree 06:58 – Airtable is doing a great job of productizing 08:09 – Important to ensure that the product integrates with other tools which will ensure greater customer stickiness 08:53 – Important to think of how a product fits into a person’s workflow 09:51 – Integrating Trello with other tools will ensure that you do not need to log on to Trello 10:22 – Understanding customer behavior will bring about greater stickiness 11:12 – Workflow should be updated; not just in Trello, but in all integrated tools 11:51 – Trello should have attempted to emulate a tool like Dropbox in terms of its stickiness 12:58 – Trello did not capitalize on their initial success to build an enterprise model 13:16 – Read and share Hiten’s article 3 Key Points: Do not wait too long to monetize your product—capitalize off the first-mover advantage. Do not sacrifice profits and cashflow for growth. Integrate your product with as many different tools as possible to ensure client stickiness. Analyze how different people use your product and work on PRODUCTIZING. Steli Efti: Hey everybody, this is Steli Efti. Hiten Shah: And this is Hiten Shah. Steli Efti: And in today’s episode of startup chat, we’re going to talk about why Trello failed  to build a one billion dollar business. This is an article that Hiten has written  recently, and it’s an article that’s gotten a lot of attention. It keeps getting like  … My timeline there’s not a single day that I don’t get a few of  the … A few people that I follow sharing this article of yours. But, there’s  controversy, right? Not everybody loves this one. So, I thought we should chat about it. Hiten Shah: Yeah, absolutely. So, first of all, what I learned about myself, and I think you  can relate to this, is when I write content and I’m really passionate about it,  it turns out really well. And, this was a topic that even before Trello got acquired, was bugging me. And what I mean by that is, I’ve tweeted about this  even and the tweet’s in there, before I even wrote about it. Before they even  sold, and they happened to sell and I’m like wait, this business could’ve been much  larger, right? So, I titled it the way I did because I really believed Trello  was one of the rare businesses that could’ve been unicorn status. And, I want to  make this absolutely clear because people read the title, some of them don’t read the  article, they still read the article and they like tweet at me, like, what about  your businesses you didn’t do that. I’m like, dude, do you not understand the …  Read the article again, I was very complimentary to what they did. At the same  time, it’s rare to see a business that could have been much, much, much larger,  and to me it’s clear how they could’ve been larger. So, I wanted to start  there cause it’s like, look, I titled it the way I did because, personally I  felt like they could’ve been much larger with not as much effort as it takes  many of us to get that large. You know. Steli Efti: So, two things to this, right. One, I think intent matters, right? What you are  saying, I think what many people are missing, I didn’t miss this because I know  you fairly well, right, but there’s difference between criticizing somebody because you think you’re better  than them or because you think you’re smarter than them or because you just like  to tear down others. Or because you are, you know, even when people succeed you  want to see the flaw in it. There’s a difference between that and a difference  between you seeing somebody even when they are successful, and you criticize them because you  deeply care, and because you’re passionate about what they do and because you’re a champion,  and fan, and an early adopter, and because you wanted that company to become all  it could be. There’s a big difference there to me, and I’ve talked about this  with Paul Graham. Often times, like when he criticizes you it never feels bad because  you can sense that it comes from this innocent place of wanting you to do  well, right, and being curious, like harshly curious about what it will take for you  to do well, versus some people that criticize you where it comes from a place  of ego or a place from like just being negative and all that. So, you  were harsh and it was bugging you, because you cared. Right, you really cared about  it. Right, that’s it, that’s it so- Hiten Shah: I’m like look, this is a business that could’ve done so much more for the  world instead of getting acquired by another business. You know, and these people they were  all well meaning. But, they had certain things that we can all learn from that  they did that … Honestly, it was also, I want people to learn from it,  because I did. And, I felt like I could share that because I didn’t see  anyone talking about it in that way. Steli Efti: There you go. And then the second thing is, I fucking love that headline, and  I feel like a way of doing great content is doing it a way that  sometimes will be misunderstood right? When you do the type of content a bunch of  people will love and nobody will criticize, that’s not bad either and you and I,  we don’t do a ton of stuff that’s super controversial, right- Hiten Shah: Correct. Steli Efti: It’s not really our style. But, I was loving seeing people tweeting about this article.  Lot’s of people were just sharing, it or sharing it with awesome read, but then  there were a few that were sharing and saying “Here’s how out of touch Silicon  Valley people think a 400 million dollar acquisition is a failure”, like that type of  a … How could you criticize a 400 million- Hiten Shah: That’s pretty awesome. Steli Efti: My God, out of touch arrogant, you know startup founder, investor dude. And I was  like, I was loving … I was hearting all of these. Because … Especially hearting  them, because I was like A, this is wrong, but B, I don’t have a  problem with this. It’s fine you’ve just given this a very strong headline and some  people it will rub them the wrong way, but I would bet that almost every  single person there, did not read the article. This is usually … The strongest reactions  come from people that just read the headline, never really care to read the article.  Alright, so either way, let’s dive … I just wanted to quickly go though these  lessons because I think they’re valuable lessons to all listeners. And for people that want  to digest in more detail, because this is going to be a quick episode, you can go to producthabits.com and you can find the article, Why Trello failed to build  a one billion dollar business, but let’s go though the key four lessons that stood  out to you and let’s start with the first lesson. Trello didn’t monetize free fast  enough. Let’s talk about that. Hiten Shah: Yeah, so the key lesson in there was simple. They built a product … There’s  a few, so one, they built a product at a time when this drag and  drop interface, with the columns, was actually a technical challenge to build. Basically just web  technologies weren’t where they are today. So, they built a product that was innovative, that  did something very intuitive in the browser, and they were one of the first to  do it. But, the reason that it worked for them, and got popular, it because  they made it free. So, that’s number one. Number two, is they kept this attitude of not monetizing it early, which I think was actually smart because then they could  grow it and make decisions that were focused on free, and growth, and people using  it. Now, what happened though is they might have done that for a little too  long because, they didn’t seem the use cases of how people were using this generic  tool. This tool that allowed you to basically create … Organize your world, you know,  organize your task in a very intuitive way that soccer moms were using, all the  way to Product Managers, which, is a very wide group of people. So, my whole  thesis in the article is, if they were doing their homework, or if they did  their homework, they would have realized that they could productize the product even more. And,  what I mean by that is they could verticalize it and say, okay, if you’re  a Product Manager here’s how you would configure the product. If you’re a soccer mom,  here’s how you would configure the product. And thankfully, there’s a company out there that’s actually doing a pretty good job of this, which is called Air Table. They’re basically  a spreadsheet online, you know, I’m butchering it, they’re a lot more than that, but  they have productized the experience so that they don’t get Trello’d … Basically is what  I call it. And so, what happened, fast forward a little bit and every other  product has the exact type of board that Trello has. Why did that happen, and  what could have prevented it? That is what I went into in the article. And,  I gave you a gist … You know … I know you read it, so  that’s a gist of the highlights of what I said. So, to me, like I  look at a … It’s amazing when you can build a business that’s based on  a free tool that’s super innovative and that gives so much value to so many  different types of people in the world. Right, they have like millions and millions of  users … This is a ridiculous scale that they hit. But, what they missed out on is building a very large business. Monetizing, basically, and monetizing successfully, and if they  just did that they would have turned into a much larger business, much faster. That’s  the whole thesis, that’s my, I guess, opinion. And, I wrote a big post about  it. Steli Efti: The second thing you talked about, which is somewhat related, but I want to highlight  still is the stickiness of it, right. Saying, hey, this product was just not sticky  enough for SMB specifically. Why wasn’t it sticky enough, and what should they have done  to prevent that from happening? Hiten Shah: The stickiness? Steli Efti: Yeah. I mean you talk about like integrations as one big thing, right. Today, when  you sell to SMB’s, I know this very well firsthand with clothes, you know the  customer doesn’t just use your product in a vacuum right. It wants your product to  play well and integrate with three, four, five, six, other tools they’re using. And it  seems like that was something that they missed out on and something that you think  they should have invested in a lot more. Hiten Shah: Yeah. So, for me I think workflow is so important. And workflow meaning how do  you fit into someone’s daily workflow? Does it matter if they’re soccer mom, planning parties,  or planning like every soccer on Trello and being really diligent about it? Or, if  they’re a Product Manager planning a product road map, and how people get stuff done  in Trello. The problem comes when people are doing things before they’re in Trello, that  are in other tools, or after they’re in Trello, that are in other tools, or  even on pen and paper or whatever. And what Trello … My whole thesis is,  you do use your research. You do customer research. You study how people are using  the product, and then you figure out which integrations make sense, and how you can  basically productize the experience, right? Like the soccer mom might want to integrate it with  email a lot more, for example, or her calender, right? While the Product Manager probably  wants to integrate it with GitHub, you know? And in a way, where these things  are syncing, because engineers are usually not in Trello, they’re in GitHub. Right? And so,  if you can bring Trello to GitHub … Which honestly, GitHub is now done, you’ll  get engineers to at least have an experience you will save … Have an experience  that kind of, you know, they can touch Trello without going into Trello. But also  the Product Manager’s happier because they’re not pasting tickets, or items, or, cars or whatever from Trello into GitHub. Right, so it really … My whole point was this workflow  is the solution. Determining workflow, understanding usage, understanding user behavior in that way will help  you figure out how to keep the product stickier and stickier over time. And also,  today there’s more SAS than ever, and there’s new SAS tools, probably dozens if not  hundreds coming out everyday. And, as a result, you want to keep up with integrations. You want to keep up with the tools that your customer base is using and  the different types of customers you’re using, and then support it. So, imagine if Trello  built a concept of templates. Not like their small idea around it, around like you  create a board and you can share it, although that was awesome, but you create  a board, you create integrations, you create a little more templateing than they had. You  double down on that feature, and then all of a sudden it’s like oh, take  this recipe, which is a template plus integrations and then all of a sudden you  can basically do these really amazing things that make it so your workflow’s not just  in Trello, but it’s updated in other places while your working in Trello. And I  put my Product Manager hat on, but like that’s an example of the kind of  things you could do if you did the research and realize exactly the workflow people  have, even if it’s not in your product. Steli Efti: I love it, and you know many people might listen to this and think, wait  a second, you know, there’s other tools out there that were somewhat generic in terms  of use case and that didn’t really focus on monetization early on and that weren’t  like that deeply integrated Dropbox might pop up as something … But I think that,  and correct me if I’m wrong, but I think that the thing a lot of  people misunderstand, especially when they take their company, and they are like we’re just going  to do what Dropbox did, is Dropbox was … Is inherently insanely sticky, just like ridiculously sticky, in the degree that Trello never, never was and never had a chance  to be on it’s on. Like, you didn’t just do a Trello board and then  forever you were like, never going to leave that tool and everyday you would add  more and more data in there and kind of … Dropbox is like a Pandora’s  box that once you open it, you put something in, now it sucks you, and  sucks all your data into it and you put more and more data and you’re  just stuck in a certain degree. So, Dropbox was able to make a lot …  do a lot of things not wrong, but ignore a lot of market opportunity and  still win because they just had this unicorn level stickiness that just is unparalleled as  almost no other product that is at that level sticky. And Trello wasn’t so they  had to … They had to work a lot harder to make it sticky and  they just didn’t work as hard as they could, could have. Hiten Shah: Completely agree. Steli Efti: Awesome, alright we’ll wrap this episode up. I want to … There’s a third really  important lesson here, which is how Trello didn’t build for the enterprise and didn’t really  monetize on that opportunity in the right way and think about it in the right  way. I actually agree with you on your analysis in there, but we’re not going  to share it on the Podcast- Hiten Shah: No. Steli Efti: Because, I want people to spend the six minutes to read the actual article- Hiten Shah: Aww, thank you. Steli Efti: It’s damn fucking good. Go read it, share it. Do me a favor, share it  and write something like, Hiten Shah is a horrible person for thinking … And then  cc’ Steli and I’ll heart and retweet it – Hiten Shah: Awesome, do it. Steli Efti: Just for fun . Go to producthabits.com why Trello failed to build a one billion  dollar business. Read that article. Learn the lessons. So much, I think, wisdom there for  all of us and we’ll hear you guys very, very soon. Hiten Shah: Later. The post 258: Why Trello Failed to Build a $1 Billion+ Business appeared first on The Startup Chat with Steli & Hiten.

In today’s Startup Chat, we talk about the various challenges involved in scaling service businesses. It is common for service businesses to fold when faced with certain challenges—like maintaining consistent quality and client churn. However, if a service business is able to work through these challenges and scale up, you can achieve success and healthy profit margins. Tune-in as Hiten and Steli provide insights into how you can rise above these seemingly insurmountable challenges and take your service business to the next stage. Time Stamped Show Notes: 00:05 – Today, we are going to talk about the various challenges involved in scaling service businesses 00:51 – This topic is particularly relevant since quite a few people are either shutting down their service business or are considering starting a new one 02:20 – It is incredibly hard to find good people that meet client expectations 02:50 – Often businesses run into challenges as experiments fail, data is not conclusive and investor pressure mounts up 04:08 – Over a period of time, a client may build an internal team and choose not to work with you 04:54 – Like any other business, you need to focus on sales, delivery and repeatability 05:56 – Instead of experimenting and pushing through, most people tend to give up 06:42 – Discuss the possibility of the client migrating services in-house and build it into your contract 07:42 – Be mindful of missed revenue opportunities 09:14 – Client engagement will continue; bring value to the table by carrying out key, critical tasks for the client 09:33 – Service companies look at the total revenue and do not consider how it evolves over time 10:16 – Think about the entire lifecycle of the service business instead of just focusing on the beginning 10:32 –  Achieving quality consistency 11:21 – Quality suffers as the founders are no longer the ones managing a client 12:01 – People who start a service business are not conscious of this problem 13:39 – The person who is in charge of business development is often not the one managing the account 14:52 – Pay attention in a way that you used to, especially if your service business is running poorly 15:06 – Accept the fact that your job is to solve problems; scaling a service business will yield incredible rewards 3 Key Points: Discuss the possibility of your client migrating services in-house and build it into your contract with your employees—it’s common for service companies to miss out on revenue opportunities. Quality suffers as the founders are no longer the ones managing the clients. Scaling up is one of the biggest challenges faced by service businesses today; if you can solve this problem, you will reap rich rewards. Steli Efti: Hey everybody, this is Steli Efti. Hiten Shah: And this is Hiten Shah. Steli Efti: And in today’s episode of The Startup Chat we’re going to talk about the challenges  of scaling a services business. So, here’s why I wanna talk to you about this,  Eaton. Beyond the fact that both you and I have run services businesses before and  had run software businesses, so hence lots of people come to us with the question  of transitioning and we recorded an episode about that prior and people can search and  find that. I’ve had, I have had a number of cases recently where either friends  of mine are shutting down their services of consulting business or their currently pondering or  considering starting one. And, I’ve heard myself repeatedly talk about some of the challenges that  people should anticipate and they are always surprised by those challenges. And I realize we  never talked about A) these challenges and B) ya know, ways to deal with them. Right? As you wanna scale it. So, here’s the deal. Like, a year ago, one  and a half years ago I had a friend that wanted to start a growth  marketing agency for startups. He was a founder, has done two successful startups before, one  sold for, I don’t know, $60 million or something, had managed a big marketing team,  knows a lot about marketing, founder, awesome guy, smart and all that, and when he  started consulting startups on growth market again and stuff like that, he was seeing that  there was a ton of demand for his time and there was a ton of money ready to be made in that space. So, he was like you know what  maybe I should not just do this myself, maybe I should just hire a bunch  of people and make this a real business. And when you start at the early  days where it’s super exciting, everything was awesome and anytime you talk to me about  this I always told him the one challenge I think that he’s gonna run in  to down the line, which is that you know in the beginning, he is amazing,  so I don’t have a problem seeing how lots of companies would want to pay  him a ton of money and get his time and energy, but once he’s trying  to hire other people, it is going to be incredibly hard if not almost impossible  to find people that are as good as he is. It’s going to be really  hard to get, keep the quality and expectations at a certain level with clients. And  also, a client in a servicing business in the first month when they come with  all their hopes and dreams and their problems, that’s a much more exciting conversation than  three, six, nine months down the line as the messiness of reality shows up, right?  As you’ve done a bunch of experiments and nothing has really worked yet. Or you’ve  gathered a bunch of data but the data’s not really conclusive in one way or  another. Or as they have all these pressures from investors or other sources that make them want you to do shortcut things that might not make sense or you know  all these problems that come up and so scaling a services business by hiring more  and more and more people and scaling a services business by retaining your clients over  a really long periods of time and keeping them happy seems to be one of  those things that is very hard to do. I was telling him about that, he  was ignoring me on that, and a few months ago, two months ago, so he  shut down the business because, as amazing as the beginning was and he was hiring tons of people and getting tons of clients, ya know, as messy it became a  year into running that business and eventually it was like “this sucks I hate my  life, I hate running this company, so I’m just gonna shut it down.” And I was just talking to a founder yesterday in person that was thinking about starting a  services business, again because he’s amazing at what he does, he has lots of clients  and is a consultant himself, so he’s now thinking about hiring a bunch of people  and scaling this up and I was telling him about this challenge of scaling the services business and I had an email this morning I just remembered as I’m rambling  on with you of a founder that we both know. I’m not going to name  his name, but he’s been running a business and his main challenge has been that  he gets these new clients and they do this job for them for six to  nine months and they do really well and then the client hires internal people and  builds a team and doesn’t want to work with the outside person anymore. So he’s  like running into this retention issue. So, lots of challenges, none of this I’m sure  you’ve ever heard before, but let’s dive into it and talk a little bit about  like, ya know, how to avoid these or how to address these challenges, because there  are service businesses that have become really, really fucking big. So, there is way to  deal with it. But, I’m curious to hear your thoughts on that stuff. Hiten Shah: Yeah. I think it’s like any other business. Which is, you need to create  repeatable processes across everything in the business, from sales to delivery of whatever your product  is, whatever your service is, all the way to retaining clients. So- Steli Efti: Let me stop you right there real quick. Hiten Shah: Yeah. Steli Efti: What color is your shirt today? Hiten Shah: Gray. Steli Efti: Gray. I’m sure it’s a dope shirt and you look really, I like the new  shirts that Eaton is rocking. He looks dope, we need to make new pictures. But,  you’re scritchy scratchy on the- Hiten Shah: Okay, let me work on this. I’m gonna fix this, I’m gonna fix this for  you so I don’t have to hear this shit again. Okay. Steli Efti: Alright. Hiten Shah: If it keeps doing that, please let me know. I have made some changes. Steli Efti: Alright. You’ve made adjustments. I like it. Thank you. Hiten Shah: Yeah. Absolutely. I haven’t been able to find great headphones, with good mic. So,  I think Apple needs to do some upgrades. So, to me, when you’re running a  consulting business, you tend to come up with these common problems and most people, instead  of like solving them by looking at the problem and thinking through how to solve  them and either running some experiments or making some changes, they tend to give up.  Because its much easier to just give up or much easier to go do something  else. What I found is that when you push through, you actually discover how to  build a very successful, very large, highly profitable cash flow business. And, there’s some natural  tips that I’d give somebody. So, I think you mentioned a bunch of objections. Number  one objection you mentioned, which I call it number one because it’s probably the most  common and people don’t know how to deal with this. When a client wants to  bring it in-house. So, what I would say is, up front, the biggest, best, baddest-ass  thing you could do if you’re a services business and you’ve heard that clients bring  it upfront or you experience that, is in the first conversation with them, you set  expectations that say “Look, I would need to know before we start, if you want  to bring it in-house.” I would want to know what your timeline looks like. And  then, I would also want to create a roadmap and a plan where you’d pay  us, we do it, and then we help you bring it in-house. Otherwise, I am  not interested in this business. And the reason is you’re not a good customer to  me if you show up six months from now and tell me you’re going to  bring it in-house. That means a lot of different things. It could be we’re doing  a poor job or it could be like you realize that like it’s cheaper if  you bring it in-house. So we’d rather align with you now and determine what that  path might look like and build that into our contract. The reason I say that  is, there’s missed opportunity in services businesses, where you could be also a recruiter- Steli Efti: Yeah!- Hiten Shah: And actually get a recruiting fee. Right? Steli Efti: Yep- Hiten Shah: So for me, services businesses are all about finding more and more ways to make,  to add value for your customer and make more money. And so, and you bake  it in. I think what happens is people are like “Oh, I’m getting paid ten  grand a month” or 20 grand a month or 5 grand a month or 50  grand a month and they think it’s gonna last forever and they design, they don’t  even design a PNL or anything like this, ’cause they’re not that crazy, go back  to our episode about math and PNLs and finance, but like, ya know, they don’t  even think of it like that they’re just like “oh I’m making 50 grand. If  I get ten customers, I make 500 grand a month,” ya know, and I know  I’m talking about extreme numbers, but you can say it’s five grand, if I get  ten customers I’m making 50, whatever, but then they don’t have any churn built into  it. They don’t think about, like when is this customer gonna leave me? When is,  when are they gonna do some math and realize that they can do this in-house cheaper and they, and we’ve built up their skill set internally to do that. So  for me it’s all about alignment and having that alignment in the first convo. I  actually had one of these conversations because I was helping a friend with a deal  and it came up right away and I told him straight up, “Yo, find out  if they want to bring it in-house.” He’s like, “Yeah, they do.” I’m like “When?”  “One year.” I’m like “Cool, can you come up with a plan on how that fits into budgeting and everything for you?” He’s like “Absolutely.” Can you come up with  a plan where you help them do that and you transition from month nine to  twelve? He’s like “Absolutely.” “And they keep paying you right?” He’s like “Yeah.” And the  other thing is like there’s no reason, you shouldn’t be willing to reduce the engagement  at that point. You don’t have to get rid of it, you can reduce it.  And if you’re doing key things for them, right, you reduce it so you’re almost  equivalent of one or one and a half head count, but you’re still doing some  key critical things for them because you built the trust and the processes with them.  So, I think that, like companies get really used to, services businesses really get used  to the total revenue that they’re getting from a customer every month and don’t think  about how does that evolve over time? Steli Efti: Yep. I love that. I love especially the idea that if you look at some  of the, kind of the biggest, most recent examples of services businesses that scaled, a  lot of them adopted this model where eventually to be, like part of their final  end transition is to hire this talent, build these teams for you and then act  as a recruiter where you can hire these people, you know as full time internal  resources. And that becomes part of their pitch in terms of hiring great talent, is  like you come here, you work some top brands and companies, and then you can  get hired into great positions after all the experience that you’ve got. So, thinking about  the entire life cycle of what you can provide as a service business versus just  the, you know the beginning of it and then losing all these customers and being  frustrated about that I think is a massive missed opportunity that I see many, many  companies do. How about the challenge of kind of quality consistency? Right? You know, knowing  how to, hiring the type of talent that can do the work really well, but  then also ensuring that quality is done at a certain level that you don’t run  into these big differences where, you know one … One of your consultants, let’s say  you know is generating a lot more revenue and making people a lot happier than  the other, or you’re pitching a certain value proposition, but you know that there’s a  range of talent that you have internally, in terms of how that value is going  to be delivered. What do you think about how do services businesses deal with the  challenge of hiring and delivering quality work that is consistent? Which is what I think  the toughest thing for most of them. Hiten Shah: it’s easy when you have less clients ’cause, you know I’ll, okay how bout  this? The number one reason services businesses don’t have consistent quality is because the people  who are running the show earlier on, per customer, are not the ones running it  anymore. Which goes back to the repetition scale problem. So the number one reason is  the founder or the founders of the business are no longer the ones managing the  clients, running with the clients, and what not. Right? And managing the processes, managing what’s  going on and they take their eye off, what I call, the ball. Right? Steli Efti: Yeah. Hiten Shah: Or they don’t make it so that information is transmitted to whoever is doing account  management and the services and what not and running that team. So, I see that  as like a very common problem. And honestly Steli, like you might have noticed  this, but the people who start these businesses are not conscious of that problem. They  don’t even realize that’s what’s happening. Steli Efti: Yeah. Yeah and I had the, on the receiving end, I had like a business  recently that was trying to do kind of a contract with us and being a  service provider and one of the people that were talking to us was one of  the, you know, founders and he was laying out the project plan and this, that  and the other, and he was amazing to talk to, but very early in the  conversation I was like “Buddy, like working with you will work really well for us.  I can already tell that working with you would be a pleasure and we’ll be  successful, but you’ve never mentioned, so far in all this communication, you’ve never mentioned who’s  actually gonna be servicing us? Who’s gonna be our account manager? And I assume that’s  not you and I’m telling you if it’s not you, I’m not interested.” Right? Hiten Shah: Mm-hmm (affirmative). Steli Efti: And that person was like, you could tell literally how he had like an “Oh  shit” moment, where he’s like “Oh, hm.” And then he mumbled on saying “Well, you  know with you guys, we could probably make an exception and I could be your  account manager.” Like yeah buddy, but are you gonna do a good job? Because my  sense is that you’re out there, like, bringing in business, which you’re doing an amazing  job at, but are you gonna be able to spend enough time with, like, servicing  us if you’re main job is bringing new business, doing sales and business development? And  he just was not prepared for that question. Now, to be fair, I would assume  that 90% of the people he talks to would never bring this up, but I  think that’s a problem. Because a lot of times the person that is selling the  services business and is doing the business development and is like buttering up the clients  and making them fall in love, builds a relationship, the client is gets accustomed to  certain style and person in quality communication and they think “This is gonna be our  guy” and then, boom, the moment you sign the contract, you wire the money, boom  there’s this new person you’ve never heard of, there’s some kind of introduction call with, ya know person XYZ and now, ya know, good luck, hopefully you like that person,  and hopefully that person’s awesome and hopefully the person is somebody you wanna work with.  Like services businesses do a terrible job sometimes communicating their transition, having, setting realistic expectations,  but also thinking internally, how can we make sure that there’s no big disconnect between  how we bring in customers and then how we treat them along the journey and  how do we make sure we’re the founders, that once we have done all the  account management ourselves, that we don’t just go “Let’s hire a bunch of people, have  them deal with everything.” As you said, losing touch with what’s really going on. Hiten Shah: yeah. If you are running a services business right now and you’re listening to  this, like I think we just gave you the biggest thing you can think of  right there. Which is like go pay attention to what’s going on in a way  that you used too. Especially if you were wondering why your business isn’t working anymore  and it used to. Steli Efti: And the other thing, which I love, which is such a fundamental truth, but I  want to highlight it to wrap up this episode, as you start your business, you’re  going to run into problems. Doesn’t matter what kind of businesses, services or not services.  Once you run into these problems, you can decide that these problems make it no  fun and these problems are bad and, so you don’t wanna do it anymore, or  you can accept that you’re reason for existence is solving problems and the harder the  problem is, the more valuable it is to solve. So if you are running a  services business that’s going well, and now you are hitting some scaling challenges, solving these might be very difficult, but if you do solve them, there’s a big price that’s  waiting. There’s, scaling a services business to something really large is incredible. As Eaton said,  it’s the type of business that has great margins and massive cash flow and it  can be, and all your competition is gonna be failing at scaling the way that  you did. They all stop at some point. So, there’s big opportunity at the end  of it. But, the price you have to pay to get to that size, to  get to that type of awesome business, is solving some challenging problems and not running  away from them. I think that’s it for this episode from us. Hiten Shah: See ya. Steli Efti: See ya. The post 257: Scaling a Services Business (Challenges) appeared first on The Startup Chat with Steli & Hiten.

The Inside Sales Summit is a virtual summit where about 50 sales leaders talk about the best practices, tips, and strategies that have put them on the road to success. To get access to the Summit, simply go to www.InsideSalesSummit.com and submit your email. Hiten Shah gives listeners a sneak peak into topics that will be discussed at the Summit including: how to perfect your sales funnel, outbound sales for SaaS companies, and how adding value needs to be your number one priority for success in sales. Time Stamped Show Notes: 00:18 – Today’s episode is an exclusive interview with Hiten regarding The Inside Sales Summit 00:28 – There will be a virtual summit, Inside Sales Summit, where around 50 sales leaders will share their tips for success 00:49 – Learn more about the summit here: www.InsideSalesSummit.com 01:08 – There will be NO upselling, just GREAT sales content! 01:34 – EXCLUSIVE offer for The Startup Chat listeners: EARLY access to Hiten’s interview 03:00 – Curating and perfecting the sales funnel is one thing Hiten has perfected for his products 03:17 – He starts his process with the very reason why people didn’t continue a purchase 03:51 – “There’s something in the middle” 04:55 – Ask what convinced the person to buy rather than asking why he bought 05:33 – Try to understand how people use your product within their workflow 06:12 – “If you don’t understand why people are buying and what ways they actually use your product in their daily lives, you’re not actually understanding what’s going on” 06:27 – How products fit into people’s lives is what companies miss all the time 07:11 – One big shift Hiten noticed in regards to SaaS companies starting from enterprise sales 08:04 – “Outbound sales has become something early-stage companies do more and more” 10:07 – There are so many tools available to help you in outbound sales 10:39 – Hiten recommends founders to do prospecting and sales first 11:53 – Salespeople miss big components like the idea of measurement, metrics, and iteration based on feedback 12:46 – Small things like listening to calls and giving feedback to reps have huge impact 14:27 – Salespeople tend to be the best 14:49 – In Hiten’s opinion, the founder is the first sales rep of his or her products 15:13 – A salesperson should be excited about the opportunity to help the company understand the language they use with its customers 15:23 – A healthy relationship is when the sales department gives you input early on 15:55 – The first salesperson needs to be the one who really cares about the product 16:35 – Through his own deals, Hiten has learned how an organization works and how they buy products and services 18:19 – A must-do practice when trying to sell to a big company is to take as much time as you can to understand their actual problems 19:02 – “Find your ‘champion’ even if they don’t have a budget” 19:50 – Selling to other teams is one of the biggest things you can do in enterprise sales 20:51 – Hiten realized that when you’re communicating, you’re selling something 21:23 – “Every time you communicate, there’s something you’re trying to get someone else to think“ 21:56 – “If I’m not adding value, no one’s going to listen to me” 22:20 – The best email is when you find something wrong with what that person is doing and you tell them 22:44 – Adding value can be as simple as saying “thank you” 23:58 – Personalization is KEY for adding value 24:07 – As a founder, your job is to add value 24:44 – Be genuine about wanting to help people 25:53 – Connect with Hiten on ProductHabits.com 26:20 – Go to www.InsideSalesSummit.com, put in your email and get instant access to the interviews 3 Key Points: Curate your funnels by finding the reason why a person did not continue a purchase. You should know how and where your product is used in your customer’s workflow. No one will listen to you if you’re not adding any value. Ryan Robinson: Welcome to the InsideSales Summit. This is our interview with Hiten Shah.  Hiten has started three SaaS companies since 2005, Crazy Egg, KISSmetrics, and Quick Sprout all  with his co-founder and fellow Summit speaker Neil Patel. Hiten is also an active advisor  and investor in startups like Buffer, Drift, LinkedIn, Lyft, and more. Hiten also co-hosts the  Startup Chat podcast with Steli Efti where they’ve done over 240 episodes talking about all  things business. Now Hiten is focused on creating content marketing software through Quick Sprout with  the goal of helping anyone who’s blogging to increase their traffic. Hiten, welcome to the Summit. Hiten Shah: Thanks for having me. Ryan Robinson: Hiten, one thing I know you’ve worked a lot around within your own businesses over  the years is curating and perfecting your sales funnel. If you’ve got a product that  you know your existing customers are getting value from, but your sales funnel is just  leaking leads now for some reason, where do you begin trying to diagnose where things  are falling off the rails? Hiten Shah: Yeah. Where I start, where I see also a lot of other folks not starting  is really trying to understand why people didn’t continue. If people decided not to purchase  within your sales funnel, whether it’s an online sales funnel or even with salespeople, you  basically have to go talk to the people that didn’t do it. That’s one big  source of learning. The other big source of learning is pretty obvious, but the opposite,  which is the people that actually did it. When you combine those two, you start  getting an understanding of what’s missing in the middle. Really, there’s something missing in the  middle that’s making it so that some people are getting through, that’s cool, but the  people that aren’t getting through, which tends to be the majority, sometimes a vast majority  of them, you don’t really understand why. Once you start figuring out why they’re not  getting through and understanding why the people that are are getting through, you can start  making really smart decisions. It’s not just about, how do I get more of those  people that aren’t getting through through. It’s actually learnings like, oh, the type of people that get through, they care about X, whatever X may be. The people that aren’t  getting through, they don’t care about X. Let’s find more people that care about what  those people care about is a counterintuitive I guess example of what companies tend to  miss. Ryan Robinson: Yeah. I think that’s actually a really good point. Aside from the question obviously of  why didn’t you buy, or to the people who did buy, why did you buy,  what other kinds of questions might you want to ask some of the people that  have already come through and decided to do business with you? Hiten Shah: What I really like is a little bit of a tweak on the why did  you buy question, and more so what convinced you to buy, or even more clearly,  what’s the number one thing that convinced you to purchase our product today? That opens  up a different discussion than if you just say why did you buy. People can  off into all kinds of different areas if you ask them generically why did you  buy. If you tell them, “Hey, I really want to understand the number one thing  that compelled you to purchase our product,” they really have to think about what was  the most important thing. They will give you an answer that’s so much more valuable  to you when you ask it like that. Another example would be trying to understand  what it is that people are actually doing with your product in their workflow. I  really like thinking of it like a product has to fit into someone’s workflow in  order for it to be used. Generally it doesn’t matter what kind of product it  is. Think about even something totally off topic probably like coffee in a coffee shop,  or even beans, coffee beans, roasted beans that you buy and all the tools you  used to basically make those at home. Coffee fits into people’s workflow, that’s why it’s  so popular. Simple as that. So does your product. If you don’t understand why people  are buying and what ways that they actually use your product in their daily lives,  you’re not actually understanding what’s going on. You’re not understanding how your product fits into  something that we all have, which is lives. How does it fit into their lives.  That’s something that I see so many companies miss and so many people think, you  know, they’ll just buy our product and then they’ll use it. Actually, wait. They buy  your product and they actually use it to improve their lives. If you don’t understand how it fits into their daily lives and into their workflow, you’re not going to  get a really great understanding of why they’re actually buying and what they’re doing with  it. Ryan Robinson: Yeah, yeah. I think that’s a really good point. You’ve been in the world of  SaaS for over a decade basically. I’m sure you’ve seen a lot of trends come  and go as far as how SaaS sales functions and something like the predictable revenue  model being a really big one. Do you feel that there’s been any large changes  recently in how SaaS leaders are approaching sales today? Hiten Shah: Yeah. I think the one big shift I would say that I’m noticing is that  we started sales with a lot of enterprise sales back in the day, especially with  software because they were selling really expensive software or hardware that you had to install  or these boxes, network boxes and all this other stuff into your data centers because  everyone had those. Now that we’ve moved to the cloud, the friction of software is  much lower. You can sign up online and use a product. I know this is  all obvious, I’m getting to my point. The big trend that I’m seeing today, now  that software’s so easy to build, now that there’s a lot of attention paid to  sales tools is that a lot of the things that we thought were something that  would scale a business in the long run end up being really important much earlier or valuable, or even something we’re seeing companies do more and more. I’ll give one  example, which is probably the biggest one I have, which is outbound sales has become  something that early stage companies are starting to do more and more. Here’s why I  think that’s important. In order to scale a company past a certain amount of revenue,  you have to go get leads in an outbound fashion, not just inbound. You have  to go call them, you have to go email them when you don’t know them  yet, when they’re not even in your marketing funnel or anything. This is just a  definitive, if you want to scale your business, you better have that channel, because it’s one of the most valuable channels out there. Right now, there’s a ton of sales  tools out there that help you do that at scale very efficiently. If you needed  a whole outbound sales team or an outbound outreach team to send these emails, now  you can do that with one tool. There’s about 10 flavors, actually probably 50 flavors  of that tool out there right now and that just happened in the last two  years. I don’t think these tools were really popular until the last two years. The  main reason is, email is now so mature, it’s really easy to use tools to  go do outreach. It’s also really easy with tools like Clearbit and all these prospecting  tools to get lots of information without actually knowing somebody’s email address, or just by  knowing somebody’s email address, getting so much more information and getting these lists of emails  and things like that. I would say that we’re seeing a trend where earlier and  earlier stage software companies are starting to do outbound. Even like literally the first month of launching a software product, you might be just doing outbound and it might actually  start working for you. That’s so different than what I remember when, I don’t know,  12 years ago. Ryan Robinson: When you’re just getting started right, you’re a founder of maybe a couple of founders.  You don’t have a big team to do outbound sales with. Do you recommend that  founders take outbound serious as like, this is our sole focus as soon as they  have an MVP to test with? Do you recommend that someone who’s just getting started outsources to maybe a contractor who can help with the prospecting component at least? Hiten Shah: Yeah. I think there’s so many tools out there that I wouldn’t outsource it to  a person, I’d probably go spend time researching some of the tools that are out  there to help you with outbound. I think that’s probably going to make the biggest  difference, which is like, what actual tools are you using, what tools can you use  to do outbound prospecting, and I’d start there, because you’d be surprised at how much  these tools can do for you these days compared to having to hire a person.  Here’s another thing that’s kind of related to what you said, which is like, I would actually recommend founders or early stage team members that are really close to the  founders and the product to actually do the prospecting and sales at first. That was,  honestly, people love to hear mistakes and stuff, I made that mistake. I outsourced sales  too early in one of my businesses to the point where it was detrimental to  the business. It took much longer to get sales to work just because of that  idea that hey, there’s someone who’s better than me at it. Here’s the thing. Early  on in sales in a business, you understand the business, the product, and you should  understand the customer better than anyone else on your team, regardless of their expertise. You  should be heavily involved in the process. I hate being that prescriptive and dogmatic, but  every time I’ve seen a founder get involved in sales, the business starts moving faster,  especially early on until there’s a lot of clarity on the sales process, the sales  funnel, why people are buying, and all that good stuff. Ryan Robinson: I guess on that point, something you mentioned was a good salesperson. Even though it  ended up being a mistake outsourcing sales early on with your previous business, have you  ever met a salesperson, regardless of whether it was that one or with another company  that you’re doing, that was particularly impressive to you? Hiten Shah: Yeah, that’s a great question. I would say on average the salespeople that are out  there are missing one big component. That component happens to be this idea of measurement  and this idea of metrics and this idea of iteration based on feedback. It’s rare  to meet a salesperson who viscerally understands that. Because of that, I would say that  these days instead of worrying about the suits they wear so to speak, the language  and the way they speak, I’m so much more worried about hey, can you tell  me how you improved the sales process? Honestly, what I want to hear is okay,  in the early days, I got on every call not to speak or help the  sales reps on the call, but to listen in. We recorded every call. We heard  every call. I listened to every single call the reps were making in order to  give them feedback on their calls. It’s small stuff like that that has such a  big impact. I want to hear the sales leader be in the weeds and really  be thinking about how do they enable their sales team to have repeatable processes, to  give feedback on these calls, and really help every single salesperson get better. Sometimes even  the sales trainers on an at scale SaaS business that has a massive sales team,  like 50, 100, 200 more people, they’re not doing that. It’s like you’re losing out  on this opportunity when you have these people in sales, or the first touch point  with customers typically, and you’re not helping them understand how to sell your product better.  My advice regardless of who you are in a company, especially on the sales side,  is like, if you’re a founder and you have other people doing sales, go talk  to the salespeople, go understand what they’re saying to the customers and help them say  it in a way that’s effective. Also, even if you know nothing about sales and you listen to a sales call, you’re going to be able to figure out, as  long as you’re a third party, not the salesperson, not the customer, exactly how to  make it better. Ryan Robinson: Yeah. I think that also goes back to what you were saying about as the  founder or as an early sales leader knowing how to sell your product best and  then helping other people to do so, rather than giving them, “Hey, here’s a bunch  of leads. Go figure out how to sell to them.” Hiten Shah: Yeah. Exactly. Ryan Robinson: I know you’ve been a part of growing sales teams with various different companies over  the year. When a founder or a sales leader is looking to hire their first  couple of people on the sales team, what kinds of traits or qualities should they  be looking for in those people? Hiten Shah: Yeah. I think first salespeople tend to be the best, tend to be really deep  into wanting to have a very good understanding of the product. The reason for that  is that product has to match a customer need. Often times when you hire your  first few salespeople, you haven’t really figured out exactly how to message the product to the outside world. This goes to the point of like, in my opinion, the founders  are the first salespeople. Typically, they do a horrible job of creating a systematic process  for sales. Then they expect to hire salespeople and think a salesperson is going to  do bad. No, a salesperson is going to be on a call, and they’re going  to try to close deals, and they’re just going to try to meet their quota.  That’s what a salesperson does, that’s what they’re trained to do. That’s historically how you  incentivize them. What I love is when the salesperson is so excited about the opportunity,  that they’re there to help you understand the language that needs to be used with customers. They can inform marketing, they can inform product development. A healthy relationship is when sales is giving you inputs to inform those things early on. Honestly, this is very  rare. That’s why some companies will just say, okay. You’re a product person, you’re a  marketing person, or you’re somebody who really understands the business today. Why don’t you go  start try doing sales? It doesn’t always work, but there’s a reason that it keeps  happening out there. It’s because those people tend to be the closest to the customer,  the closest to understanding what the product can do. For me, the first salespeople have  to really care deeply about the product and really believe in the opportunity of the  good it can do for customers. Ryan Robinson: Shifting gears a little bit now. What do you feel is the most important deal  you’ve ever personally been a part of during your career? Hiten Shah: Yeah. That’s a great question. At our consulting company, there were a ton of deals  that we did that were very focused around large corporate clients. What I always found  fascinating is when we could convince them to buy from us and spend like seven  figures a year. We weren’t selling software, we were selling a service. You can say that’s harder or easier, but at the end of the day, that process and what  got me excited about it was what I learned about how an organization works and  how they buy and how there’s a hierarchy and you need the decision maker on  every call, or a decision maker on every call. To move things forward, there are  a lot of tactics you learn that are still valuable to me in almost everything  I do, because it’s a communication thing. It’s like, look, I’m trying to sell them  something and take money from them, and they don’t want to spend it. When they  do decide to spend it, it’s a lot of money. We had deals with Samsung,  Hewlett-Packard, and this was back in like 12, almost 14, 15 years ago, we started  getting deals with these companies to help them with marketing. It was just amazing at  how involved that process was, about how much you can learn, and what the impact  is at the end of the day to the business, as well as to yourself  when you actually close that deal. Those are not easy deals. People often say those  take six months and longer. In a consulting business, they take a little bit less time, because you’re not just selling them software, you’re selling them your time to some  extent or your team’s time. That was some of the greatest learnings, and I had  that relatively early, and I had a consulting business before I really got into software  and SaaS. It’s been tremendously helpful for so many reasons. Ryan Robinson: One of the things you mentioned I think is really important to highlight. It’s that  you have your decision maker or a decision maker as a part of every single  meeting you’re doing. Obviously you want to make one of these decision makers your champion  who’s going to help push through the deal to make it happen, right? Aside from that learning, does anything else sort of stick out in your mind as a must  do best practice when you’re trying to sell to big organizations like that? Hiten Shah: Yeah. A must do best practice for big orgs is like, spending as much time  as you can understanding their actual problems. I find it silly that companies that are  trying to sell to enterprise don’t do that. There’s a whole discovery phase. Ideally if  you’re crazy, you could do it in one call, because you’re just barraging them with  questions and they’re open to answering them. That’s typically not how it happens because of  my first point. There’s multiple decision makers, there’s honestly some hierarchy. It’s sometimes unclear in  the first call who’s actually making the decision around the budget. You have someone who’s  a buyer usually, and then someone who’s the user, and there’s usually two champions or  more that you need to advocate for. Also, one other tip I’d give on the  topic of champions is find your champion, even if they don’t have a budget. They’re  the ones that’ll advocate across the whole organization for you, and honestly, those champions are  your long-term relationship in the organization regardless of what level they’re at. The last thing  I’ll say about this, in enterprise sales or larger deals, you have to make the  person who’s buying and/or the person who’s using and/or your champion feel like a hero.  You have to understand what their motivations are. Here’s the goal. If by using your  product or service, they’re able to get a promotion, everybody wins. Really digging into what’s  going to cause that, even though it sounds wacky and weird because that’s not your  problem, it’s your problem if you want the renewal. It’s your problem if you want the deal in the first place. It’s your problem if you want that person, when  they go somewhere else, to talk about you, wherever they go. Also, with enterprise sales  one of the biggest things is selling to other teams in the company. You won’t  get that unless you’re helping that one person do better in their job. Ideally, my  goal when I go into those deals after learning, is get that person a promotion.  Find that champion, figure out how to get them a promotion because of your involvement  in their business. Honestly, for lack of a better way to say it, you have them for life then. Ryan Robinson: Yeah. This is actually the perfect example too I think of balancing the emotional needs  of the person you’re selling to with the actual business needs they have, right? Hiten Shah: Yeah. Correct. Ryan Robinson: Alright, Hiten. This is my last question for you. I’m curious to hear, what would  you say has been the best investment you’ve ever made in the context of building  your selling skills? This could be in the form of time, money, online tools, experience,  or otherwise. Hiten Shah: Yeah. That’s a really good question. I think it’s actually more so for me a  big realization. I’m going to give a realization instead of the one thing. What I  realized is that every time you are communicating, regardless of who you’re communicating with, when  you’re communicating you’re selling something. People feel like that’s so dirty, right? Selling implies that  you want something. No, what I mean is like, I’m talking to you right now,  there’s an audience. I’m selling something. I’m not selling anything I want money for, but  I’m selling my knowledge, my advice, or whatever. You’re asking great questions, it’s my job  to deliver. For me, it’s about this whole idea that every time you communicate, there’s  something you’re trying to get someone else to think. You’re trying to get them to  think differently. You want to add value. To me, it has everything to do with  adding value, and honestly sales is all about adding value, I know everyone says that,  but the way I think about it is not just sales that’s all about adding  value, everything is all about adding value. You walk around this Earth. If you’re not  adding value, you’re extracting value and not giving anything in return and/or just giving. This  whole idea, and it just viscerally really clicked for me as I started doing or  trying to do more sales and closing deals is like, if I’m not adding value, no one is going to listen to me. Ryan Robinson: One quick follow-up on that. Since you brought this up, I really love this topic  of adding value to people. As a salesperson or a founder, how do you add  value to your potential clients before you ask for something in return, before you ask  for their business? Hiten Shah: Yeah, that’s really great. I’ll start with like an outbound sales email. The best outbound  sales email or the best any kind of email where you don’t know the person  is when you find something wrong with something they’re doing, like a typo on a  blog post, that’s just a small example, and you tell them, “Hey, I found this  thing. I was looking around, I found this thing.” Adding value is like, “I was  reading this from you, and I learned XYZ. Thank you for sharing it.” Adding value  could be as simple as a thank you. Really when you find something that they haven’t noticed or that you think is a problem that they have that’s really definitively  one, and that’s why I bring up a typo. A typo is just something really  small, but it’s impactful. There’s so much behind telling someone they had a typo on  a blog post if they did or on their website. What that means is that  you were thoughtful enough to go look and read and do all of this. People  love it when they think you’ve been thoughtful. Not just think it, but when they  feel it and you really bring that value to them. I think value is this  thing that people might think of as like, I’ve got to do all this work.  No. You just have to think with the lens that when I look at some  prospect’s website or potential lead that I’m going to email’s website or business, I’m thinking  through what could be most valuable to them that I could say to them. Sometimes  it’s as simple as, “Hey, I noticed you won this award at your business. That’s  pretty awesome. Here’s what that means for the market,” or, “Here’s what that means for  me,” or, “I can’t imagine how hard that might’ve been for you,” right? Adding value  is as simple as listening to them and giving them some kind of feedback on  what they did, even if you can’t find a typo or something, it’s really about  personalizing it to the point where they feel like you’ve done your homework. That’s a  simple way to add value. I think this topic’s really interesting in general because as  a founder, your only job is to add value. It’s not for yourself, it’s for  your team. You’re going to be responsible for at least a handful of people if  not hundreds eventually. Adding value to their lives, making their lives better, making improvements to  how the work environment is, all these things are adding value to other people. I  feel like it’s absurd when people think that like, hey, I can’t add value, right?  You can add value in many different ways if you just take lens and just  say what does value look like, what is going to be valuable to the other  person? To me, the simple trick or thing is like, not even worrying about what  you’re trying to get, and really being genuine about, I just want to help you first and foremost. Honestly, even on sales calls I say, “Look, I’ll tell you what  this is about. I also number one,” this is where one of the things I  said comes back, “Number one thing I want to do on this call is understand  what your problems, what your challenges, what your opportunities are in your business, whichever way  you want to describe it. If I can do that, I’ll be the first one  to tell you whether we can add value to your world or not. If we can’t, it’s great to meet you.” Right? That’s it. I think that kind of attitude  is genuine if it really comes from a place of like, if I can’t help  you, I’ll be the first one to say I can’t help you. I’ve done that  on so many different sales calls, and what ends up happening is, these people that  you do that with, they become advocates even if they don’t buy your product because  you just want to help. When they see someone who can use your help, they  go tell them about you and they make an introduction. You didn’t do anything. You  just didn’t worry about yourself and you worried about them. Ryan Robinson: I love that. Show that you care and then it could lead to referrals even  if they’re not a good fit to work for you personally. Hiten Shah: Exactly. Ryan Robinson: Hell yes. Awesome. All right, well, thank you for joining us. Hiten, can tell everyone  where they can go to check you out online and learn more about everything you’re  doing? Hiten Shah: Yeah. I got a newsletter, I talk a lot about product development. It’s at ProductHabits.com.  Check it out, sign up, hook me up. I’ll hook you up. Ryan Robinson: All right. Yeah, Hiten, thanks for being here. Hiten Shah: Thanks a lot. Ryan Robinson: Cool. That was perfect. Hiten Shah: Awesome. Ryan Robinson: That was really good. You got on such a good riff with the adding value  too. I’m really glad I asked that. Hiten Shah: You did it, you did it. It’s your fault. Ryan Robinson: Man, cool. Enjoy your recording with Steli, I’ll let you run to that. I’ll keep  you posted on when we’re going up with this. Hiten Shah: Thanks a lot. Let me know if I can help. See you. Ryan Robinson: Cool. Have a good one. The post 256: Hiten Shah’s Inside Sales Tips for Startups appeared first on The Startup Chat with Steli & Hiten.

When a business grows and scales up, it’s very easy to lose touch with the lifeline of your business—the customers. Many people begin to outsource their customer support and the gap between the CEO or founder with the customer grows wider and wider. Steli and Hiten warn against the tendency to forget about the importance of retrieving those customer insights. Since customers ultimately drive our success and inform us of how we can improve, Steli and Hiten talk about the different ways we can keep the connection going strong. Time Stamped Show Notes: 00:27 – Today’s topic: tips on how to stay close to your customer 00:38 – Customer intimacy is what Steli and his team discussed on their team retreat in Dublin 01:28 – Hiten’s tip if you’re in sales: consider getting a sales call 02:06 – “Sales calls give you one type of insight” 02:32 – Doing customer support is also useful 03:27 – For Hiten, customer support is key 04:00 – In Close.io’s first year, Steli’s team answered customer tickets the whole time 05:15 – Outsourcing your support is one thing Steli will never understand 05:46 – Visit and spend time with your customers in person 07:11 – Steli has been doing customer meetups this year and the results are powerful   07:42 – Now, Steli and his team are thinking about having customer dinners in small groups 08:41 – Think about how many customers you want to connect with during the week 10:01 – As Close.io grew, they fell into the trap of talking to managers and high-level decision makers instead of talking to their users 11:46 – Stay in-touch with the end users 12:16 – Have parts of your company talk to end users to get feedback 13:56 – When your company grows, you get so busy internally that you forget about external factors, including your customers 14:55 – Fight forgetfulness 15:40 – Without customers, you don’t have a business! 3 Key Points: Staying close to your customers is one way to check the pulse of your business. Handling customer support yourself is the best way to connect with your customers. Never forget that without your customers, you don’t have a business. Steli Efti: Hey, everybody. This is Steli Efti. Hiten Shah: This is Hiten Shah. Steli Efti: In today’s episode of The Startup Chat, we’re going to do a tips episode on  how to stay close to your customer as your business grows. We’ve talked about this  many times with Heaton. Whoever understands that customer best ultimately will own that relationship and  will get those customers. This was a big topic recently in our team. We just  did a team retreat in Dublin Heaton and … Hiten Shah: Cool. Steli Efti: A big topic was customer intimacy. How can we stay close and close into our  customers to serve them better, to understand them better, to get more insights. So why  don’t we just go back and forth on the tips and share ways that people  can stay close to their customers and cultivate customer intimacy as they’re building, launching, and growing their business? Hiten Shah: Okay, I’m going to start by asking you a question. Steli Efti: Boom. Let’s go. Hiten Shah: This is kind of a tip, but it’s like, when’s the last time you got  on a sales call yourself for Close.io? Steli Efti: That probably was four or five weeks ago. Hiten Shah: Cool, great. I think one tip I have is if you’re doing sales and you  have a sales team, as executives under CEOs, even the marketer on the team, whatever,  should just consider getting on a sales call. Whether it’s to listen in or actually  do the sale. That’s my crazy idea to kick it off. I’m glad you said  four or five weeks ago and not a year ago. Steli Efti: I love it. Yeah, and I feel even guilty saying that, because I was like,  Yeah, I … Hiten Shah: Yeah, I figured. Steli Efti: I feel like I should do this more often. All right, but building on that  tip, so … I think there’s almost … There’s a few function in the team  that are going to be really close to the customer, right? Sales calls gives you  one type of insight. Hiten Shah: Yup. Steli Efti: Usually you’re talking to prospects. People that are not yet customers. You could do support.  I just saw recently some … A tweet became really popular. It was showing a  founder doing customer support. I think in email and on the phone. A founder CEO,  and then it was just some famous VC tweeted it, and it became a whole  thing. But doing customer support even if it’s just one week out of the month  or one week out of the quarter or a day, could be super useful. Hiten Shah: Yeah, for my first two products, I did customer support for the first two years. Steli Efti: They go two years? Hiten Shah: For most of that time, it was doing it myself. It’s just because nobody else  … Yeah, there’s just nobody else on the teams to do it. It just wasn’t  their problem, and they were doing other stuff that was much more important that doing  customer support. I was doing it. That made it so that I was so close  to the customer. We were able to iterate on that. Even at Crazy Egg, after  those two years, my wife Amy does a lot for that company. She was just basically literally we built a lot of product just by looking at customer support and  improving it based on what we heard. Then until we kind of built the team  out and things like that. I would say that for me customer support is key.  I mean right now for any of the products that we have that are kind  of at earlier stage, it’s literally the founders doing support. We don’t have a support  team. We don’t outsource it anywhere. We just do it, so I can’t highlight what  you said enough. I know that tweet that was shared. I retweeted it too was  out there, but I almost started laughing. I actually literally laughed my ass off when  I saw the tweet, because I’m, “Wait, this should be something everybody does. I don’t  understand why this tweet is so popular.” Steli Efti: Yeah, it’s because they don’t. For us, I think for … When we launched Close  the first year, basically everybody was doing support. We’re a team of six people. We  all had accounts on our support desk software, and we all would go in there  and answer tickets at all times. Then as support started ramping up, one of the  tree co-founders Antony basically became the first full-time person on support. He for the three  or four years was full-time doing support as one of the founders. He built a  support team and just this year, he kind of was pushed out of support. He’s  now just going in there occasionally like we all do, but for the first three  and a half – four years one of the founders was doing full-time support. Being  super, super close to the customers that way. Doing support regularly is just a super  powerful way to hear the pain points of your customers, to understand how they truly  feel about your product, once they’ve been using it for a while. It’s super important  thing to understand your customers. Outsourcing support is something that just I will never understand.  How? Why would you want to take this amazing thing that gets you really, really  close to your customers and give it to a stranger? Then lose out on all  that relationship building. Lose out on all that understanding. Lose out on all the ideas  on how to improve your product. That just seems crazy to me. All right, so  but in the vein of going back and forth, another things I’ll point out and  another thing you should be doing. I’ve said this many, many times, and I’ll keep  saying it: visiting your customers. Spending time with your customers in person. There’s really …  There’s three flavors to we’ve tried out a lot this year. The third one we’re  just about to test and try out. One is you can go and visit your customers, especially if it’s B2B, you can just go to their office and visit them.  There’s nothing more powerful than that. There’s nothing more powerful than visiting your customer in  their natural habitat. Seeing how they use your product. See? There’s also something incredibly gratifying.  I was just in London and we visited a big customer, and walking to a  room full screens where there’s I don’t know, 50, 60 people, and seeing your software in all these screens. I don’t know, but there’s something uniquely gratifying and fulfilling about  that, that you can’t get by just looking at a dashboard with X amount of  users using your product today. You can just see your software out in the wild  being used by real people just can be a big boost for motivation and inspiration.  But talking to these users, hearing about their problems, seeing what other software they’re using  on their computer setups, talking to management and asking … Learning about their growth goals  and how your software is going to help them or hinder them. There’s so much  insight, so much context. When you visit customers it’s just … It’s one of the  most powerful ways to develop intimacy. On top of that, one thing we’ve started doing  this year and it’s been very, very successful is doing customer meetups. We visit a  bunch of customers, but then we’ll throw an event one night and we’ll just invite  all customers in the city to drop by, have drinks, talk to us. We’ll show  them a little bit about the roadmap and the things we are about to build  in the future and get feedback and get Q&A session with them. These events have  been incredibly useful and powerful. Having our customers mingle with each other, give each other  tips that’s been super, super useful. One thing we are about to try out, something  we haven’t done yet is to do customer dinners. So going to a city and  inviting a smaller group, but instead of doing a big meetup with tons and tons  of folks showing up, you just select maybe five to 10 people and you’d invite  them to dinner. You have two hours of a really intimate dinner with them, where  you talk about their goals, their challenges, your product, their products, what they’re doing. Just  establish even more intimate and really in-depth, good relationship. We’re going to be trying that  out soon, but just spend time with your customers. Visit them, invite them to parties  and events, go out for dinner with them. It’s one of the most powerful things  for you to understand your customers better and build the right things for them and  succeed. That’s a really, really big one. Hiten Shah: Couldn’t agree more. I mean whatever you can do to get close to them and  do it on a regular basis. That’s just exactly why I started with my question.  I think there’s a really simple trick, tip, whatever, that really works, which is just  think to yourself how many … Whether it’s the beginning of the week or end  of the week, how many customers am I going to talk to this week? Regardless  of what part of the team you’re on. I think that can be really useful.  I know sales people are doing that all the time, because some customer support people  are doing it all the time. One of the key kind of challenges as a  company scales that people have is the founders getting further and further away from the  customer and relying on team members to stay close to the customer. That’s why I  like … One thing I’ve seen really great CEOs do is they … Especially when  they … Let’s say they take over as CEO of a company, they actually do  customer visits in person. As part of their onboarding process into the company, so that  they can get a really intimate perspective from the customers about what’s up with the  product and what’s going on and say hi to them. Steli Efti: I love that. Let me ask you this. One thing that we realize is sometimes  you start … As you start building your product, you’re serving a specific user. In  our case, we were the first CRM to really focus on the salesperson, so not  to build CRM to sell to management, but we’re building a CRM to empower the  end user, the salesperson. That made us make a lot of decisions very differently from  all the other competitors in the market. That really formed a product philosophy and point  of view, and made Close what it is and what it was. But as the  business grew, one funny thing is as we started building a success team, as we  started taking care of our biggest customers, we fell into a potential trap of spending  more and more time talking to the managers, the admins, the high-level decision makers at  our customers. Have them be kind of the gate keeper and the filter through which we were receiving feedback, so we would have … The earliest we would talk to  every single user, but as our customers grew and as our business grew and now  we have a shit ton of customers, we started naturally just getting a point of  contact. That point of contact naturally started being some manager or some higher up person that’s not really doing the job of sales. So now instead of talking to those  40 people that are using the software every single day to close deals, our success  team would talk to that … The head of growth or revenue whatever who was  responsible for managing these people and setting processes in place and all that, but not  using the software every day themselves to close deals, to drive revenue. This happened in  such tiny tabs, steps that we really missed it. We just recently realized, wow we’re  now spending a lot more time talking to these gate keepers than talking to the  end users. We just started thinking about ways for us to reverse that and balance  out that trend. I’m just curious to hear about your thoughts and how do you  … As your business scales and grows, how do you make sure that even bigger  customers … You stay in touch with the end user on an individual level, and not just with some person that … A lot of times these end users they  won’t send support tickets. They won’t call us. They will be talking to their point  person internally and that point person comes and talks to us. How do you circumvent  that to make sure that you don’t just get a very filtered version of reality,  but you still stay in touch with the end users which we care a lot  about? Hiten Shah: That’s great question. The one way I learned that you can do that is by  actually having … I’ll start by saying different parts of the company talk to different  types of customers. The part of the company that tends to talk to that end  user is the part of the company that needs to worry about that end user  experience. Usually, it’s either customer success, customer support, whatever you want to call it, or  product. Usually end product. If you’re doing more user research and actually trying to improve  the experience of the product, you’re generally going to be talking to end users. If  you’re a CEO or an executive or somebody in the company who generally doesn’t talk to the end user, then you can go to that team and do a user  research session with end user and start learning more about them. For me it’s as  a company scales, different parts of the company really start talking to different types of  customers. Just like you said, sales talk to prospects. I consider them a customer, because  they give you a certain perspective. They might be a customer of someone else’s product  right now. But they’re still a customer and they’re still important. All those different types  of customers or different stages of the customers that gives you a different perspective. My  short answer is just support and product tend to talk to that end user a lot more than sales, let’s say. Steli Efti: Right. What else? Is there another tip? Another thing that we can think of in  terms of how to generate customer insights? How to stay really close to a customer  as the team goes? Is there any other pattern that companies fall into as they  start growing where they start losing touch with their customers? Hiten Shah: It’s almost like you get so busy with operations and the internals as your company  that you don’t … You forget about the externals. The externals being people that are  outside your company, those customers. It’s almost like out of a forgetfulness. It’s almost not  out of laziness usually. It’s just out of being forgetful about it. So for me, and I know we’ve talked about this a bunch, but for me, product is everything  and the customer has to use the product. If the product sucks, customer won’t use  it. Oftentimes, they won’t complain about it either. What I’ve seen is if you were  good at founders looking at the product and making improvements, if they were engineers or designers or whatever on their own, over time they have other roles and other jobs.  Someone else is either tasked with either improving the product, or it’s just not getting  improved as much just because you got product market fit. Not you felt like you’re  done, but you kind of felt like you’re done. That’s not the case. To me  it’s just forgetfulness that I am always looking to fight. Fight in the perspective of  … As I said, how many customers did you talk to this week? How many  are you going to talk to next week? Those kind of just questions in your  head regardless of what part of the company you’re in can be really helpful. Because  if you’re not talking to at least a few customers every week, you probably don’t  have a good pulse on what’s going on with the customer. You can look at  data and see that there’s issues or problems or whatever, but at the end of  the day, it’s that customer touch, that customer conversation that’s really going to have the  biggest impact in your learnings about what to do. I think it’s just a forgetfulness.  We all forget at some point that … It’s because we get busy with other  things. But yet, the customer is what matters because without them, we don’t have a  business. Steli Efti: I love it. Let’s just wrap this episode up on that note. Such a powerful  one. All right. Don’t have fear of missing out, have fear of missing touch with  your customers, right? Hiten Shah: That’s right, I like that. Yeah, I like that. Steli Efti: All right. So go and spend time with them, talk to them, listen to them,  and then you’ll be able to serve them better and that’s going to be …  The foundation’s going to allow your business to grow and deserve that growth. That’s it  from us for this episode. We’ll hear you very, very soon. Hiten Shah: Later. The post 255: Tips to Generate Customer Insights appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten discuss the best practices to launch your product. Hiten uses his own launch of Draftsend as the basis of this discussion—a new platform that allows users to create and share their interactive presentations. Listen as Hiten gives listeners a behind-the-scenes take on a very unique and successful product launch where he leveraged social media and invited customers to take part in the launch itself. Tune-in to hear Hiten’s process firsthand and to learn how you can adopt these extremely wise strategies. Time Stamped Show Notes: 00:27 – Today’s topic: how to launch your product 00:34 – Hiten recently launched Draftsend 01:47 – Steli congratulates HIten for Draftsend’s launch success 03:01 – Draftsend’s launch was all over social media 03:13 – Draftsend is a platform that allows you to create and share interactive presentations; you upload a pdf and audio and Draftsend acts a viewer 03:23 – “It feels like a video, and people are able to listen to a presentation” 03:33 – For those creating , you can record right on your browser on top of the pdf while going through your slides 03:45 – One key feature of Draftsend: all presentations are public 03:51 – Draftsend can feature your presentation right on their website 04:01 – “If you’re building a CRM, you don’t have the same opportunity to be all over social media, because your product should be shared on social media all the time” 04:32 – We had 20 people share their presentations for our launch day; we tweeted and promoted their content throughout the launch day 04:48 – Take advantage of the opportunity to share your content 05:07 – Having a definitive launch date encouraged those 20 customers to finish their presentations in time 06:04 – Our goal by having these 20 initial customers was to demonstrate what our product could do so that people could get inspired 06:18 – If it wasn’t just Hiten’s content that was displayed by Draftsend, he knew others would be more apt to share it 06:36 – Draftsend was launched in Product Hunt 07:14 – This product was so unique they wanted to access Product Hunt’s audience as opposed to just launching to their own existing audience 08:09 – Steli cannot believe a product like Draftsend did not exist before Hiten launched it 08:53 – Product Hunt has a very positive community 10:11 – Product Hunt gives tons of exposure; and people really care about giving their feedback 10:46 – Draftsend initially had 110-113 comments in Product Hunt 11:29 – “Launch when you know the thing will NOT fall down” 11:51 – Solicit feedback in your community and engage with the audience 12:43 – The launch date is not the birth of your product 13:59 – Product Hunt has an upcoming feature where you can set-up a “coming soon” page for your product 14:38 – The launch went well because Hiten and his team kept adjusting and learning thru the feedback they received prior to its actual launch 15:51 – Hiten already had hundreds of people suing Draftsend before they launched it on Product Hunt 16:16 – A launch is not just a launch where you can expect to just sit back and collect—it’s a small event that encourages you to refine your product, create growth loops, gain more users etc. 17:01 – Some people think they’re work is done after a launch, it’s just beginning and it’s NOT the hardest part of the process 17:33 – Your launch is like the beginning of business 19:25 – The number one goal for Draftsend’s launch was to get as much feedback as possible 20:07 – The second goal for the launch was to do everything Hiten can to maximize what happens—make adjustments on the fly during the launch to maximize user experience 22:13 – They were deliberate in asking for feedback 22:28 – Don’t have any expectations, so you don’t get disappointed 23:39 – Please give us a rating and a review on iTunes! 3 Key Points: Try to leverage social media with your launch to maximize your visibility. Your launch date is NOT your birth date of your product or service—test run your product way before launching to get feedback and make the necessary tweaks and adjustments. Set goals but never set any expectation for your launches. Steli: Hey everybody, Steli Efti. Hiten: And this is Hiten Shah. And on today’s episode of the Startups Chat, we’re going  to do something that commonly happens, which is Steli just comes up with a topic,  and we talk about it. And usually it has something to do with something in  one of our lives, and recently I launched a new product on Product Hunt. It’s  called Draftsend, D R A F T S E N D.com and we want to  talk about how to launch a product because I just did it and honestly, this  morning Steli just launched another e-book, I believe, right Steli? Steli: Yes. That’s true. Hiten: So, Steli’s launching stuff. I’m launching stuff. So we’re going to talk about launching stuff.  Yeah, so where should we start Steli? Steli: Well, first of all congrats, right? Hiten: Thank you. Steli: I’ve been launching e-books this year quite frequently but when it comes to a real  product, something that I know that you’ve put a lot of time an energy and  doing customer research and really just going from one discovery til the next until you  found a product that you guys had enough data to support that you really had  that could have been potential and that a lot of people could utilize and use  it, get value from, that’s a really long journey all the way up until launching  something. Even just observing your launch make me really excited, that make me realize it’s  been long time since I launched a real product out there. So, first of all,  congrats. Congrats on the success. I was seeing Draftsend everywhere. Hiten: That’s great. Steli: It’s just like dominating all my timelines. And usually I get annoyed by this if  I’m not involved but yesterday I was secretly living through your experience, you know, like  living through your launch, and every time I saw someone talk positively about it, I  took a little pride in it and I was like smiling and excited for you. Hiten: I appreciate that. Steli: So yeah, there’s a lot that’s going on before the launch but this is the  way that I think will provide the most value to the listeners. It’s just talk  us through … There was a moment where you and your co-founder, you guys decided  okay, this is a … This product. We’re going to want to launch it publicly.  Tell us what the plan was. The thinking. How did you guys chose the date,  and the day of the week, what you did to prepare the launch, and then  how it was to go through the day just the 24 hours of like posting  … Launching your product , being in the social media world when, and how you  reacted to things. Just guide us through the pre-launch and then to the launch day  itself. A little bit of you guys’ thinking on the strategic level. Hiten: Yeah. Sounds good. It was all over social media for a very specific reason, and  I’m going to start by saying that depending on what your product is, you launch  it in a slightly different way but the steps are the same. So Draftsend is  a product where you can put a PDF, upload it, add audio, and then you  get this … I should say beautiful viewer, because that’s what other people say. And  in that viewer, it feels like a video and people are able to listen to  a presentation. And the people who created that video have this experience where they’re recording  right in their browser on top of the PDF and going through their slides. So,  what we realize is … And the one feature we have is that for free,  all the presentations are publicly. So what we realized is there’s a bunch of great  content out there, and we can actually ask some people if they want to feature something and be promoted on that day. And that’s what really helped us do a  lot of social media. And the reason I started there is because if you’re building  a CRM, you don’t have the same opportunity to be all over social media because  your product should be shared on social media, all the time. Steli: Right. Hiten: So if we’re successful with this product, there’s Draftsend links of people’s presentations being shared  every day. Right now there aren’t. We have a lot more work to do. But,  at the end of the day, on the launch day, we knew from a strategic standpoint, we could have a lot of tweets going on for ourselves and other people  and even the people that recorded these presentations, by just coordinating a little bit. So  we had about, I think, right under 20 people who ended having presentations that they  were comfortable sharing publicly and we were able to tweet those throughout the day. So  that was a big helpful thing outside of even a product launch or anything like  that. And so if you have an opportunity where you have content created in your  product or some tweets that are really something like that … That’s really powerful. And  so that was a key part of our strategy and we actually … One thing  we learned, which no one’s going to take as a surprise, especially you, Steli, is  that until we had a date of our launch day, and it was definitive, it  was very hard to get those 20 people to finish recording. And record something for  us. Not because the product was hard to record with. People actually loved the way  it records, thankfully, because that was a little nerve-wracking for a bunch of reasons. But  it was because once they had a deadline they were like, alright cool, I got  to do it by then. Yeah. And where am I going to go? We’re going  to do a bunch of tweets. We’ll see what happens. So it’s not like we  were promising them anything besides some level of promotion, but it ended up being really  cool, and those people also, if their experience was good with the product, which it  was, they started commenting on product and tweeting it out and sharing on Facebook and  it was just … It wasn’t like, some people like, oh you need influencers or  something. We didn’t pick out these people because they’re influencers. We just needed good presentations  and good things to say. We could have probably spent more time finding people with  larger audiences and things like that, maybe it would have helped. But our goal wasn’t  that. Our goal was just to demonstrate what the product can do and have enough  of these example videos so people can get inspired when they look at the product.  Otherwise we would have to record all these videos or something like that. And so  that was a key part of our strategy, and if it wasn’t just our content,  we knew that more people would share it. So I think that was unique part  of the launch of this product. I haven’t had a product where I could launch  it like that, and so that’s why the social media thing you said, I think  it has a lot to do with that aspect of it. Yeah. Steli: Now, you guys decided to launch on Product Hunt, right? Hiten: Yes. Steli: Although you’ve been a very active and influential member of the Product Hunt user group,  this is the first time you launched on there. Hiten: Yeah. This is the first. Steli: So tell us about that experience. Why did you guys choose to do that? I  know that it has a lot to do with the audience that you want to  reach with this product. And then how was that experience differently from just launching it  on your own website basically? Hiten: Yeah. So, a lot of our other products that I’ve built, they don’t really …  They already have an audience long, long before we launch it. This product was a  little bit unique where we didn’t want to use any of those audiences. Number one.  Number two, we felt like Product Hunt as a crowd, being product people and the  kind of people that are really curious about new products, would really appreciate this product  because it’s something you can’t really do anywhere very easily. We looked around. And when  it clicked for us, we got really excited about it and realized that it’s a  little bit of the cutting edge of like kind of different, kind of innovative, but  we don’t know what’s going to happen next. Honestly. Steli: Let me say something … Let me say something on this. When you first showed  me Draftsend, I could not believe this doesn’t exist. I was like, this is cool  and then I went online, I went to a few places and I thought I’m  sure one of these tools has this. And then I was like, no, they don’t.  It’s one of these things where it’s so obvious now that I’ve seen it that  it’s still hard for me to believe that this didn’t exist before you guys put  it … It’s like how is it possible this didn’t exist before? But I couldn’t  find a solution. That’s super cool. Hiten: Yeah. It’s one of these weird things, right? And it’s really weird. And it’s been  weird for us too because we looked around and were like, why doesn’t this exist?  So, you know, for us, the strategy on product development, and I do want to  talk about that because I have a bunch of lessons that I haven’t shared yet  and don’t know when I will at this rate. It was the first product that  launched on Product Hunt. I can explain the social media strategy, which was just because  this product is unique and we can do that with this product. The thing about  Product Hunt is that it’s a very positive community. And we knew that, because I’ve  been a long time user. I’ve submitted many products. I have the most popular collection  on there called Free Stuff for Startups and it’s a community … I wouldn’t say  I’m like a big time commenter, but I will comment maybe once a month, maybe  twice a month sometimes, but I’m all over it in terms of looking for products  and looking things up and submitting my fair share of stuff. And the thing that  I was pleasantly surprised by is, but it was also delivered on our part for this product, is how positive people are and also if you ask feedback, how much  feedback they’ll give you. So we literally both … Marie, my business partner, and I,  had written up our comment that we wanted to say. They were a little bit  different. Hers talked a lot about use cases. Mine talked a lot more about why  we built this product a little bit and what we learned. And our whole purpose  of it was just to get as much possible feedback as we could. And that  was a goal with this community. Because what we know and what everyone who’s listening  should about Product Hunt is, it isn’t one of those communities or one of those  sites that’s going to necessarily get you a ton of sign ups of people that  are going to be paying customers. What it will get you is a ton of  exposure and a ton of people who really deeply care and have used almost every product out there. Many of these people are very active on Product Hunt in terms  of looking at products and discovering products and wanting to know the newest, greatest, latest  thing. A lot of them are product people. Some of them are designers. Some of  them are engineers. Some of them are founders. But overall … And a lot of  them are investors too. But overall it’s people that are really into discovering new products  so they’ve tried a lot of things. So when you put yourself out there on  there, and you really ask for feedback, you get it. We had like 110 …  113 something comments. And it’s because we were engaged. Everybody that commented, we had something  to say to them, and we really even dug in deeper. We got a ton  of messages even on our site because we had drift turned on across all of  it. So that’s another tip, which is like turn on that chat thing and be  on it. Both Marie and I were on chat. That whole day was like a  blur now because neither of us talked to each other all day, which is like  totally weird, but we were on our computers literally … One, making sure nothing went wrong and our engineers were ready, but that we took care of. We were actually  delayed by about five to seven days on launching because of some issues that we  noticed after we let a bunch of more early access people in. When you were talking about date, you launch when you know the thing will not fall down. It’s  the best idea I have. Because ours was falling down at one point and we  thought we were launch a day before, and we were like nope, not going to  happen. Or it turned out great because more people published those decks that we needed  and wanted and all that. For us, the community, I would … The biggest piece  of advice I have for people is solicit feedback from that community in the comment  that you make after your product is posted and then engage with them. And the  main reason is, you will get feedback that really helps you. For example, within the  next couple of days, we’re going to send an email to everyone that’s signed up  and actually explain to them what we learned from the launch in terms of about  this product, and ask them some questions about what we should do next. And it’s  not like questions like, oh what should we do next? It’s more like, some very  deliberate type of surveying so we can understand what features are important to them because  this is a feedback-oriented community. This is a community that wants to tell you what  the heck’s wrong with it, to be honest, and how to make it better. Steli: So one thing I want to highlight and then have a question for you. So  the one thing I want to highlight, because it seems obvious to you and me,  I’m sure it’s not obvious to all people, I know for a fact it isn’t.  The launch day is not the first … It’s not the exact birth of your  product in the sense of like the first time a user or a person could  come to your website and sign up for your service. That’s not the official launch  date. You could allow people to use your products for months and months and months  … For a year. And then have a big launch date. People always think that  the moment they hear about something as it’s launching, is the very first moment everybody  hears about it, and that’s just not true. That’s just like when you read in  the tech news about some company raising out of the ground. It doesn’t mean that  it happened that morning. It could have been a year ago that they raced around.  They just decided to announce the financing that very morning. So you guys were allowing  people … Bringing people in very deliberately to use the product, to try the product  and, you know, gathering feedback. And eventually you decided to go and launch it really  publicly. Hiten: I can’t stress this enough. You’re right, we had a relatively long early access period.  We actually had people using this product several months ago. One thing I want to  point out on a related note is Product Hunt has this feature called ship. We were one of the first users of the feature, and it has this, I guess,  feature, called upcoming, where you can basically put a pre-launch page up on Product Hunt  and they will … The Product Hunt user base will basically come there and say  they want early access to your product. So we had about 1,800 people who said  they want early access to the product, and we were bringing a bunch of those  folks in slowly and having them try the recording. And we were learning a ton  about the user experience and kept refining it, because people would hit some issues. And  so one of the reasons the launch went well and people really liked our specific  way that we do recordings, was because we kept learning prior to launching on Product  Hunt exactly where the issues were and we fixed as many of them as we  thought we could before we launched. And because Product Hunt has this feature and then  they have a free plan on it too … They have some paid stuff as  well. You can use it to basically get early users. Even if it’s a few  hundred, that’s still better than zero. And all those things … That whole ability to get those early users, I used to have to do that on my own manually.  Whether through advertising or lots of sharing or tweets or pleading with people to sign  up or joining some communities and getting them to be really into the product. And  Product Hunt has made that really easy because like I said, they have this community  of people who love trying products and giving feedback. That’s essentially what that community’s all  about. And obviously, as a lurker, who’s just viewing it, even if you don’t have  an account, you’re discovering products. So there is some level of people who will discover  it, you will get exposure. But the primary on Product Hunt, for me, is that  you get even more feedback. And if you can refine the experience prior to that  you’ll get that much better feedback when you launch it. So you’re absolutely correct. We  didn’t launch on Product Hunt and say oh no, here we go, first time anyone’s  going to see it. We actually had hundreds of people using it prior to that  so we could validate it and make sure that things were working and we could  refine it. I’ve been doing that so you’re right. I’ve been doing that for every  single thing I’ve done since 2005. It’s just something natural. It’s also a part of  … At the core part of the lean startup principles where a launch isn’t a  launch. You shouldn’t just be launching and then expect the world to change for you.  You should actually refine your product. Launch just ends up being this small-ish event …  I mean, the way I look at it now and the way I talk to  our team is that hey, we’re barely starting now. We did all this work already  to get up to here, the day was great, we got a whole bunch of  people playing with the product, trying it, and all that kind of stuff. Now it’s  like when the real work begins because there isn’t another launch. It’s not like we  get to launch this thing again and then expect lots of people to use it  on a single day. Now we have to actually do all the hard work to  create the growth loops in it, make it actually work, figure out how to get  users and paying customers, iterate the product. All that stuff that I think some people  would … I’d even go further Steli and say some people think you’re done. And  I don’t mean you’re done, but this was the hardest. This was actually the easiest  thing. And then I can’t say it was easy. And I don’t think would when  they put their product out there in the world. I guess those are my thoughts  on it. As somebody who’s launched products before, and yes, just like you, I haven’t  launched a product in a very long. On Product Hunt or anywhere else. It was definitely an awesome experience and something that I think just is almost like the beginning  of a business in a lot of ways. When you put out there publicly and  it’s fully open, and anyone can use it. And anyone listening should definitely check out Product Hunt’s upcoming feature so you can get early users. It was the easiest way.  The best experience I have had at getting users early. And then, should basically consider  posting it on Product Hunt when they’re ready for feedback. Not necessarily customers. Because I  don’t think Product Hunt is the best place to get customers for every type of  product. Only for a few select type of products like a product manager tool or  a productivity tool. Things like that, that you think would work with that audience, definitely  you can get customers. But most products that are out there, Product Hunt isn’t the  place to get customers. In fact, most channels like Product Hunt where there’s community and  people are looking at products all the time, isn’t the best place to necessarily get  customers. Steli: Alright then. That should be useful. I just want to ask one more question and  then we’ll wrap this episode up. From all … And again, this is something that,  I intuitively understand what you’re doing and aligned with it, but I want to highlight  it because I’m afraid somebody might miss this. When you launched, before you launched, did  you set the goal on the launch date, we need to get whatever, 100 upvotes.  We need to be the first, the most popular product on Product Hunt that day.  Or did you set a goal like we need X amount of comments, or we  want to have 1000 sign ups. Do you set these kind of like metric goals or not? Or was there something else that was … How did you measure success  yesterday during the day and at the end of the launch day, what was your  number one focus that you’re trying to accomplish with the launch, and how did you  measure if you did accomplish that? Hiten: That’s a great question and I do have an answer. Number one goal, get as  much feedback as possible from that community. Steli: Yup. Hiten: I know I’m like a broken record in this podcast- Steli: No. I wanted you to say it. Hiten: Dude. Number one, get feedback. Get as much input from these really voracious people that  use almost every product out there and hear their opinion. And really spend time to  … We crafted the message that we wrote to make sure that we were soliciting  feedback and people understood where we stood with this product. Because no product is complete,  ever. So when you launch it on Product Hunt, you have this amazing opportunity to  get so much input from people about what they think. And then you can determine,  obviously, what you want to do based on that, but that was number one. Number  two was make sure we do everything we can to maximize what happens. That I  think is super important. We cleared our schedules. We made sure that we didn’t …  The engineers were ready. We made sure it was on a day when nobody was sick. We actually had an engineer sick the day we wanted to launch too, last  week, so we’re not going to launch then because half the engineering team is sick.  So things like that. But honestly, number one was feedback, number two was maximize it  and make sure we did everything we could. Put our drift up. Be ready to  iterate if we had to. We already made a change on our pricing page based  on the fact that it was the number one support request was “Do you have  a free plan?” The answer is yes we do, but we did not put it  on the pricing page originally. Now it shows it on the pricing page. Little stuff like that you learn. And we wanted to be ready to ship, iterate, et cetera.  And also make sure the site didn’t go down. But we did not have any  goals around number of votes or number sign ups. The reason the majority of the  time when you launch something, it is completely unpredictable as to what’s going to happen.  Because it’s the first time you’re putting it out there, there’s no heuristics or metrics  you can use. I honestly made sure … Because I’m supposed to be the expert  on Product Hunt, or whatever, because I’m a top user. That’s what people think even  on my team. And probably out there in the world. Honestly, I don’t know what’s  going to happen when I launch your product or when I launch my own product  on Product Hunt. All I know is I like to set myself up for maximum  return on that, and that means opening up my time and making sure I’m there  to respond to everybody. Making sure that people are getting responses on drift, and making  sure the social media and all that stuff is covered. But I would have been  happy with a few hundred votes. That’s the honest truth. On my end. And I  made sure our team was aligned with that thinking because it’s like look, if we  got a few hundred that’s great. If we got a few hundred sign ups that’s  great. We launched. Now the hard work begins anyway, so whatever happens that day, we’re not expecting anything but tons of feedback. And we did get a ton of feedback.  We solicited it. That’s why we got it on top of everything else. We could  have just launched and said, “Hey, here’s our cool thing. Thanks for trying it, or  try it out.” But we didn’t do that. We were very deliberate about wanting the  feedback and all that kind of stuff. So I think a lot of people set these goals on these kind of things. I totally get why. But even myself who’s  launched a bunch of products on Product Hunt for other people as well as now  one of my own, I had no expectation. And it’s because if I did and  either I’d be disappointed or I’d blow it away and it doesn’t matter. Like I  said, I would have been happy with a few hundred votes. We got number one of the day and we got over 1,000 votes by the end of the day.  Obviously once I started seeing it go I was like, alright, I want 1,000 votes  now. Once I started seeing it hit 6-700 I was like, alright. Are we going  to get to 1,000? What’s going to happen here because this is pretty awesome if  we do. But that was about it. Steli: I love it. Well, thank you so much for … A lot of people behind  the scenes and look behind the curtain of a big launch like that. Hiten: Correct. Yeah. Steli: I think that there’s a lot of lessons there for everybody that listened today and  now I’m so excited like, what can I launch next? I don’t know. Something. There’s  something beautiful about it, but there’s also, just like you said, once you’ve done it  a number of times you realize it is just the beginning of a really long  journey that’s going to be much harder than that one day, but it’s an exciting  day and I think it’s fine to enjoy it as well and to bathe in  its excitement. So alright, so this is how you would launch a product. I hope  you guys enjoyed the episode. If you did, make sure to go to iTunes and  give us five star rating and write us a review, and we’ll hear you very  soon. Hiten: See you. The post 254: How to Launch Your Product appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten discuss the need to start a blog. Hiten is often asked if it’s wise to start a blog and how to begin the process. Blogging can generate an online presence for one’s products and services, but does that mean it will benefit every kind of business? Steli and Hiten address this question and more. Tune-in to find out if you’re cut out for creating a blog and the scenarios for which a blog may not be worth it for you. Time Stamped Show Notes: 00:26 – Today’s topic: the need to start a blog 01:18 – “You don’t need to have a blog” 01:25 – Hiten believes that everyone thinks they need to have a blog because everyone else is blogging 01:47 – People build their products’ online presence via a blog 02:07 – There is also potential Google search traffic they can get from their blog posts 02:56 – Steli started their blog in 2013 03:43 – If you can write one post a week to build your brand, then you can create a blog 04:10 – If you see the SEO opportunity from Google search traffic, then you should definitely go for it—just remember, it takes time 04:45 – There are other options available aside from having a blog 05:00 – Not everyone needs a blog 05:16 – “Most blogs just suck” 05:35 – Steli thinks that if you start your blog from a brand perspective, you can get the SEO benefits over the long-term 05:58 – They don’t really need to create compelling content, just something for Google to read certain keywords 07:08 – Fundamentally, people start their blog because of the benefits of the blog, but they miss out on writing something others would really want to read 07:40 –  There are blogs out there that only exist for the SEO 08:20 – If your blog stands out, you can build your blog faster and get more organic followers and readers 08:57 – Some of Steli’s blogs are evergreen that are still driving organic traffic up until now 09:24 – Generating traffic for your blog is an incremental thing 09:41 – The hardest part of starting a blog is keeping it going (being consistent with your posts) 10:30 – There’s NO quick success for blogging 11:05 – For starting a blog, check out Episode 68 as a reference 12:30 – Blogging is the MVP for Steli 12:40 – If you have started a blog, ask people for their feedback on how to improve it 13:20 – If you’re not excited about having a blog, then it’s not for you 13:48 – Leave a review and rating for Startup Chat 3 Key Points: Blogging isn’t for everyone—if you’re not excited about it and can’t commit to its growth, just don’t do it. Most blogs aim to rank high in Google search traffic. This makes their brand or service known in the online world. Blogging is a long-term play for marketing—you need to commit to it and expect at least 6 months of time to see any traction. The post 253: Should You Blog? appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten tackle branding for your startup. It’s a common assumption to think branding is important for ALL types of businesses. Steli and Hiten challenge this notion and explain why certain businesses need to focus more of their attention on their branding. They explain how your “branding” is different from your actual brand and outline why your copy is the best place to start to establish your company’s voice. Tune-in to find out whether branding should be your priority and how to tap into your strengths to create your brand. Time Stamped Show Notes: 00:24 – Today’s topic is branding 01:15 – “Branding only matters if and when the customers will care about branding” 01:41 – “Branding” is different from one’s brand 02:18 – If you’re a B2C business, branding matters more as opposed to those who are a B2B business 02:48 – Intercom didn’t care about branding until they were many years into their business 03:03 – MailChimp, on the other hand, cared about branding from the start 04:10 – Your brand only matters in the eyes of the customer 04:27 – In the SaaS world, your branding matters because of how competitive the market is 05:48 – It’s essential to differentiate from others 07:02 – Steli thinks branding will get worse within software companies 09:19 – The simplest thing you can do for your branding is work on the copy of your website 10:08 – Add some personality to your copy 10:28 – How you communicate to people is your brand’s personality 12:10 – With Close.io, instead of using generic screenshots to show samples of their content, they infuse humor 12:51 – Think about your copy and the ways you can express your team and company’s personality 13:20 – If you’re a B2B, don’t invest too much on branding UNLESS you know what you’re doing 14:44 – If you don’t have a strong idea about the kind of voice you’d like to convey or don’t have the skillset to write your copy, just use the resources you have within your team and see if you can achieve your branding goals 15:00 – Don’t spend money on an outside party to help you with your branding 15:43 – Facebook is Steli’s favorite example for branding that is simple 16:21 – Use the strengths you already have in your business 3 Key Points: Your branding will only matter if your customers care about it. A B2B business does not have to focus too strongly on branding. Use your internal strengths to create your brand’s voice and personality. The post 252: Startup Branding – Does It Matter and How to Do It Right appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten discuss how startups can enter the US market. There are several myths that say tapping into the US market is the answer to a startup’s success. While this may be true for some, does that mean one needs to relocate to the US in order to grow? Steli and Hiten argue that not only is moving to the US a nuisance, it is also UNNECESSARY for growing your US client base—especially if you’re a SaaS company. Tune-in to learn when moving can be beneficial for you and why it’s important to prove your product or service in your own country first. Time Stamped Show Notes: 00:26 – Today’s topic is entering the US market with your startup 01:09 – Hiten is approached often with questions about entering the US market 01:24 – Steli believes you do NOT need to move your life to the US to be able to enter the market; it’s not necessary 02:05 – It’s more than possible to start your company where you are and build your brand and customer base in the US 02:28 – Entrepreneurs don’t realize that startups cost more money in the US than in most other countries 03:56 – Money isn’t the only issue living in the US – the change will disrupt your life 04:48 – A lot of people think that being in the US will mean BIG business for them   05:29 – Moving to the US does not guarantee success 05:38 – Steli shares an example using Greece’s economy 06:48 – If you can’t get local traction for your business where you are, chances are that US customers won’t like what you have to offer 07:10 – You can always visit the US frequently 07:41 – Visiting 3-4x/year will let you accomplish many things 08:32 – Start experimenting with your marketing by targeting US customers 09:10 – If you don’t get any success through marketing, there’s no guarantee your startup will make it if you move to the US 09:59 – You can still find success in your market even if you’re not in the US 10:13 – There are a lot of myths that say business is easier in the US 10:50 – If you’re building software, being in the US is never necessary 11:58 – If you have an accent, OWN it, but make sure you’re being understood 12:37 – It’s a shame when your accent affects your confidence 13:24 – Work on confidence, not just your accent 13:46 – If you don’t want to talk to people, hire someone who’ll do that for you 14:23 – Your accent matters less in New York or San Francisco 16:19 – Hire a freelancer or have a friend look over your written copy on your website 16:48 – “People are very conscious about cultural differences” 17:21 – If your copy is on point and your product is of value, Americans won’t mind your culture 18:45 – Reach out to a startup that had success entering the US market 3 Key Points: Moving to the US is NOT necessary for you to build your brand, following, or business—it’s not even necessary if you want to grow your US client base. Visiting the US a few times a year can help you accomplish your goals for your business. If you can’t acquire business in your own country, it’s likely that you won’t be able to acquire business in the US. The post 251: How to Enter the US Market With Your Startup appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten talk about the benefits of using freemiums (free plans) for your startup. SaaS companies are known for implementing free plans and with good reason—it’s an incredible way to get people hooked onto your product or service. Tune-in to learn the pros and cons of implementing freemiums and how to turn your free users into paying ones! Time Stamped Show Notes: 00:03 – Today’s topic is freemium 00:37 – The first episode about freemium was The Startup Chat’s 3rd episode 00:58 – Listeners say the freemium episode was one of the best episodes of this podcast 02:21 – Hiten’s opinion of SaaS companies having freemiums has only grown stronger in the last two years 02:31 – If you have a SaaS business, you NEED a free plan 03:39 – “If people start using your product, why would you ever want them to stop?” 04:08 – A free plan helps you bring people onto your platform 04:19 – Without a free plan, you are missing a growth opportunity 05:04 – Having free users is a long-term marketing play 05:36 – In Close.io, there’s a distinction between their audience, people who engage in their marketing, and people who engage in their product 05:55 – When you have people using the free version of your product, they are still part of your marketing and are not actual customers 07:11 – Hiten often finds that the product team is responsible for the free plan users 07:38 – Sales want qualified leads; these leads can be those who have signed up for the free plan 08:34 – Freemium has activity points that people reach that qualify them for sales 09:21 – If you’re not into long-term marketing, don’t offer freemium. Or, you can offer it, but have an outbound strategy for sales with a paid product right away 09:53 – The free plan gets you marketing, word of mouth, and lowers your customer acquisition cost 11:04 – Do you have an opportunity for a free plan in your market? 12:02 – The key to setting up a free plan is knowing your limits 12:18 – A CRM tool with one free user is a classic example of a per-user charge 13:08 – Advanced settings or upgrades are also a great strategy for opting-in your free users 13:18 – If you are product-challenged, don’t use free plans 14:47 – Mailchimp is a great example of a company who gained success from freemiums 15:27 – Hubspot is also an example of a business with freemium offers 16:01 – if you dedicate your business to having free plans early on, you don’t miss out on the early customers in your market 16:12 – “If you don’t do free, someone else in your market might” 17:30 – If you have examples to share regarding using freemiums or not, send an email to Steli or Hiten 3 Key Points: Freemiums are a MUST for SaaS businesses because a free plan lets potential customers experience your platform for free. Setting up a free plan for your business is dependent on your offer limit. If you’re product-challenged, don’t do a freemium as it will only create problems. Steli Efti: Hey, everybody. This is Steli Efti. Hiten Shah: And this is Hiten Shah. Steli Efti: Today we’re actually going to revisit a topic that’s been one of the most popular  episodes that we’ve ever done, and that was the freemium discussion we had and freemium  episode. You know, I didn’t realize this, Hiten, until I just looked it up, but  the freemium episode was the third episode we released. It’s number three. I don’t know. Hiten Shah: Wow. Steli Efti: If you had asked me I’ve would’ve said like maybe … I knew it was  an early one, but I would’ve said like the 30th or 40th one or something.  I didn’t realize it was the third. It’s one of the most popular ones, and  one that I frequently encounter when I talk to people that listen to The Startup  Chat. Oftentimes, especially folks in SaaS, they say that, “Oh, the freemium episode was awesome.  I really love …” What people especially liked is that we disagreed on this, or  we had different stances on this, and people often ask me if anything has changed  since then, so I thought it would be a fun thing to revisit. For people  who haven’t heard it, just go back and look for episode number three of The  Startup Chat, and you’re going to be able to hear the first freemium discussion we had about this. But here’s the basic premise, right. The basic premise was that you,  Hiten, and correct me if I’m wrong, but you were basically saying, hey, you’ve done  a number of SaaS, and one thing you’ve learned is that you would not do  SaaS anymore in today’s world without having a free, a completely free version of your product, ’cause it’s such an important part of the marketing strategy for a SaaS product,  and to be competitive in the SaaS space. You know, we were and still are  very firmly in the camp of … We don’t have a free product, right. We  actually are pretty premium in terms of our prices, so we don’t even have a  super cheap version of our product. So let’s talk about that. Does that statement, A,  is it a fair representation of your opinion back then, and has anything changed? I  mean, this was in June 2015, so this is a little over two years ago.  SaaS and the world has changed a ton. Has this changed in your opinion, A,  is it true what I said, and then B, how do you think about SaaS  products and freemium today? Hiten Shah: My opinion of it has only gotten stronger. So, the sentiment I had then is  only stronger today, and so I’ll repeat it, just like you did, which is like  if you’re going to start a SaaS business today, or any business to be honest,  but let’s say a SaaS business, you need a free plan. I don’t mean a  free trial. I mean an actual full on free plan. I do know, Close.io, your  business, doesn’t have a free plan. A lot of products in CRM space do not  have a free plan, a majority of them I would say, and so there’s a  lot of risk and other in a business sides a free plan, and a lot  of times people … One kind I’ve seen is that people start really free with  a product, and then end up over time making the free product more crippled, or  just getting rid of it, and just going to a free trial. That’s a very  typical model in SaaS. I even did it with one of my businesses, and I,  honestly it’s one of the biggest things that I wish I could go back and  change. I wouldn’t say I regret it, but I would definitely go back and change  and bite the bullet, and have a free plan that’s enough, and also leads to  people upgrading. One big reason, and it’s just a very psychological reason is like and  a philosophical one, is people start using your why would you ever want them to  stop? It feels like you put all this effort into they’re using it, and then  because it was a trial or something along not ready to pay, you let them  go. And you say sayonara, buh-bye. One of the proof points I have with this effect, and what happens is eventually they come back, if you’re still relevant to them,  you’re a good product or they’re still entertaining ones, but really, if they leave, it’s  likely they picked another product. Well, if you have a free plan, it just brings  people in a lot, lot easier. It reduces the friction to them getting in there,  and I think that that’s super important to get a growing business going, and if  you don’t have a free plan, you’re missing out on a ton of growth opportunity,  just like if you’re not blogging, or doing something at your top of funnel for  free, or sending e-mails for free, building out your sort of top of funnel, and  it’s not as efficient and the business and the customer acquisition costs tend to be  a lot higher. So, that’s kind of my quick why I love freemium and all  the benefits. I know there’s downsides. I know you know them, so let’s talk about  that. Steli Efti: Let’s rock and roll. Hiten Shah: Let’s talk about that. Yeah. Steli Efti: Yeah. So, I don’t even want to fight or combat you as much, although it  might happen anyways, but the one thing that I want to zero in a little  bit more, I think the thing that most people don’t understand is that having free  users is much more of a … It’s a long term marketing play. It’s not  kind of like some short term magic bullet that will get you a lot more  paying customers immediately. Obviously, it’s probably going to get you less paying customers, right, which  might be for many self-funded SaaS companies a real good reason not to have a  free plan. In their mind is that it’s going to get them slower to the  point where they are breaking even or being able to pay all of their expenses.  But in our case, let’s say Close.io, in our case there’s a very strong and  easy and simple distinction between our audience and people that are engaging with our marketing,  and then our customers and people who are engaging with our product. There’s a little  overlap, and that is we do have a 14-day free trial, so it’s not like  there’s no overlap that exists, but when you have a free version of your product,  and you have a lot of people who use your product for free, these people,  in your world, I would assume, these people are a marketing … They’re still part  of the marketing funnel, and still part of what the marketing team is thinking about  much more so than the sales funnel or the product team. Who is responsible for  the free user? I think that’s my question. How much overlap? How does that overlap  really effect things in terms of when you have a free user, marketing is still  responsible to a degree, but obviously product is also responsible to a degree, support will  be responsible to a degree, and depending on what kind of customers you have and  what kind of free users maybe even sales? Who has responsibility for that user? Where  does that person sit in the overall funnel of your company? That’s one question. The  other question I think that I didn’t realize I had, but I formulated that I  know you have an opinion on, is the whole like this … Is free something  that even self-funded companies should do, but then they should just live with the fact  that it might take them a little longer to break even, because they’re giving out  a lot more free product versus just paying for the product? What’s your opinion on  that? Hiten Shah: Yeah. Most of the time what I find is when the product team is responsible  for free, and is paired with like growth and/or marketing to make sure that there’s  an optimized funnel, copy is well-written, and there’s retention going on, free works out really  well. Then also, once you get the … One of the key things about free,  and I know this is going to come up as we talk, is in sales,  sales wants qualified leads. Some of the best qualified leads are what people are starting  to call product qualified leads, which are these leads that have … On a free  plan, or even during a free trial, to be honest, are doing a key activity,  and once that key activity points are reached, sales starts reaching out, and then you  have such a more rich conversation, ’cause it’s contextual to what people are already doing  in your product. So one of the most valuable things for sales out of a  free product, is this concept of a product qualified lead, and when you start really  digging into that and start seeing some of these businesses that are out that are  using freemium really well, they’re doing some form of a product qualified lead and actually throwing sales a ton of leads that are very qualified because they’re already using the  product. One of the risks there is that sales should’ve known freemium, that doesn’t make  sense. They’re trying to close deals, but sales starts getting some really interesting deal flow  and prospects when you think about freemium in that way, where it’s like there’s activity  points or certain engagement that people reach in a free product that leads to a  much better conversation for sales. Realistically, much faster close once someone reaches that point. Steli Efti: What about the kind of bootstrap founder, or … I said it right all the  time, but I said it wrong now. Hiten Shah: That’s fine. Self-funded. Steli Efti: Self-funded. Hiten Shah: All good. All good. Thank you. Steli Efti: I’m totally on the self-funded bandwagon for you for years now with you, right. Hiten Shah: Appreciate it. Yeah. Steli Efti: I’m right behind you on that quest. So, what do we tell a founder that’s  like self-funded, single founder and is like, “Hey. I need to get to a certain  amount so I can quit my job, and if I have a free version that’s  going to prolong it for way too long.” Hiten Shah: You know what? Don’t have a free version. Or, have a free version and go  after outbound sales with a paid product right away. In fact, in one of the  products I’m launching very soon, we have a free product, and we’ve already started building  out a trial funnel with paid ads. So, if you build out a funnel, and  you know the features, and even if it’s not a funnel, if you start doing  outbound sales and have a free plan, there’s nothing wrong with that. You just got  to be really smart about what’s included for free and what’s included in the paid  product. Here’s the thing, right, like the free plan gets you marketing. The free plan  gets you word of mouth, and the free plan actually lowers your customer acquisition costs,  which tends to be a much harder problem when you’re self-funded. You don’t have money  to buy leads. You don’t have money to do marketing in the same way, while  a free product can do the marketing for you, as long as you’re dedicated to  keeping on improving it, and making sure that leads to people who buy. So I  like the parallel track where I’m building a product. Why not let people use it  for free while I’m figuring out the sales process, and actually going outbound to go  get customers? The reason is when you’re a solo founder or a self-funded or whatever,  don’t have a lot of capital, you have two problems, one, you don’t have money,  obviously, to go do marketing or anything really. You’re the do the marketing for you.  So that’s my first sort of statement. You’re the founder. Go out there and get  sales. You have to do that, too. So it’s moreso like how do you structure  your product, how do you structure your business so both of those things can work  in parallel. It doesn’t mean you have to listen to me and do freemium. What  it means is you have to just entertain and then think about is there a  opportunity to have a free plan in your market that you think is going to  lead to people paying. Steli Efti: What do we tell … How do we structure a free plan today, right, because  what I know is that there’s a bunch of companies out there, they have free  plans that if you actually look at it, it’s kind of … I don’t know.  It’s a little farcical. It’s like such a bullshit zero value thing where with it  … It is free, but if you want to do anything with it, it always  will prompt you to upgrade, right, and it … To me, I don’t know. That  just rubs me the wrong way where I’m like, “It’s not a really free version  of the product.” Hiten Shah: Yeah, me too. Steli Efti: Are you just … And it’s basically just a free trial, but you’re lying to  people pretending there’s a free version of your product, but it’s not really free. How  do you design a free version that’s not so powerful that nobody ever needs to  pay you, but is useful enough so it’s not total bullshit? Hiten Shah: You know, that’s a great question, and a very common one, and the key there  is to figure out where your limits should be, whether it’s a certain number of  things you allow people to do, and after that they’re capped out, which is more  of a free trial based on usage not on time. Which is fine. That’s a  good step in the right direction for free. For example, a CRM tool with one  user for free can really help you capture a certain piece of the market, and  then as that company grows, or that business grows, if they grow, they want to  add more users, they pay you more money, so that’s a very classic way to  think about freemium if you have that per user model of charging per user, and  that doesn’t hurt your word of mouth or whatever. Another opportunity is when you really  think about, “Okay. There’s certain type of user that’s going to help us grow the  business and bring us more users.” Those people have different requirements than people who want  to pay. Those requirements tend to be, they need a simpler product, an easier to  use product, something that has less complicated features, and then you kind of upgrade. You  get upgrades because people’s usage leads them to wanting more from your tool, so advance  settings is a great example. Any kind of advanced settings or advanced options are things  people would gladly pay for once they’re really happy using your product. I would say  that if you are product challenged, and what I mean by that is you don’t  naturally think about product development. You’re much better at sales, much better at marketing, and  feel like you don’t have the energy, time, experience to really dig into product development  and think about different sort of types of users and how they should have different  features, then don’t do free. Please don’t. You’re going to have all the challenges of  doing free that we’ve brought up before and we’re bringing up now. You’re not going  to dedicate yourself to building a very great free product. You’re going to think it  needs to be crippled or whatever in order to make it work, and maybe your  market isn’t right, because you’re so into sales or you’re so into marketing that that’s  your strength. One of the things that I’ve come to that’s different from a few  years ago is, maybe I was more dogmatic before, but I’m not dogmatic about, “Hey, everyone needs a free plan.” What I’m saying is you should entertain it, and if  you feel like you’d rather sell, you’re better at outbound sales, you’re better at marketing  than you are at actually thinking through product, don’t do free. It’s a product problem.  That’s really the truth. That’s the conclusion I’ve come to. Steli Efti: That’s interesting. Do you think that … I mean, I would assume you would say  it’s much easier to start with free than to introduce it later on. But are  there any really good examples of a company that was doing … Only paid for two, three, four, five years, whatever, and then introduced a free version and did that  well? Hiten Shah: Yeah. I think MailChimp’s a good example. They went freemium many years into their product,  almost a dozen years. They’ve written a big blog post about the benefits of it  for them, and now they’re doing like $400 or $500 million in revenue a year.  They’re in one of the biggest markets on the planet, which is e-mail, they’re an  e-mail provider, but they’re a classic example. They’re also self-funded, and they’ve been around, I  think almost, I want to say almost close to 20 years now. Steli Efti: That’s a long time, yeah. Yeah, yeah, yeah. Hiten Shah: Yeah. So, they had a big change, and they went free, and dedicated themselves to  it, and it’s had tremendous growth, and it was hard, right, so that’s a good  example. Another example, which I think is an example of freemium early, and then they  went freemium again, and I’ll explain, is HubSpot. They have their grader tool that they’ve  had, which got them a lot of leads, but I wouldn’t consider that freemium, because  it was just meant to generate leads for them, not meant to be engaging or  get retention. Now, they’ve got like a bunch of ancillary products. Their CRM is completely  free, and they’ve got a bunch of products that are free in their portfolio of products, and it’s a much newer thing for that business, you know. That’s a pretty  good example. If you look at their filings and the growth of the company since  they’ve gone public, I’m sure free has helped them tremendously, too. To me there are  examples. I would say that if you dedicate yourself to it early, then you don’t lose out on the early customers in your market. One other reason, which is a  little bit of a fear uncertainty doubt reason, which I don’t like, but it is  relevant, is that if you don’t do free, someone else in your market might. It really depends on your market. In your case, Steli, I’m sure you guys are doing  fine, ’cause you have such a great marketing top of funnel. If you didn’t have  that, then entertaining free would probably be a much stronger thing for you, ’cause otherwise  how do you get users. Steli Efti: Yeah, I think that that would be a big thing, and not to say that  we never. We have the freemium discussion quite regularly. Once in a while we’ll take  a hard, good look at our funnel, and we’ll ask ourselves “Is our pricing still right? Should we lower the pricing in any way?” But I do think that because  of the brand that we have, and because of our marketing, and the numbers that  we see our funnel in terms of conversion rates and all that, it makes a  big difference. Also, the size of the team. We have a very, very small team,  and we’re accomplishing a lot with it, so we’re always super careful in committing to  too many things, or committing to things that we’re not going to be able to  do with excellence. I think that’s been a big part of this. And we like  money. But I think we’re on the same page there with you. You just believe  that it’s a better way to get more money than we did in the early  days. Hiten Shah: Yep. That’s the bottom line for me. Exactly. Steli Efti: Awesome. Well, and there’s a lot more to talk about this. Maybe we’ll do even  a third episode at some point, but for today I think we’ll wrap it up,  but if people have examples to share of successfully going freemium, successfully moving away from  freemium to paid only, or anything in between, or have questions about this topic, we  always love to hear for you. Shoot us an e-mail. HNShah@gmail.com, Steli@Closer.io, or ping us  on Twitter. Yeah. I think that’s it for this episode for now. We’ll hear you  very soon. Hiten Shah: Yeah. Enjoy the freemium debates in your company. See ya. Steli Efti: See ya. The post 250: How and Why to Do Freemium in Your Startup Today appeared first on The Startup Chat with Steli & Hiten.