Ex-Squarespace CEO on how to sell to SMBs, build tight feedback loops, & stay close to customers even after raising $200M+ | Dane Atkinson, Founder of Odeko

Small businesses pay for solved problems, not free data tools

Selling to small businesses works when a founder picks one customer and solves that customer's operational problem end to end. SumAll's free data tool drew huge usage but little revenue, while Odeko's trucks and consolidated deliveries gave coffee shops savings they could see. Staying in the shops every day tells the founder whether the product is really working.

Takeaways

• Odeko solved coffee shops' real operational problems. Odeko's first product was a predictive sales model that cut waste, but shops struggled more with vendors that failed to deliver and prices that rose unexpectedly. Fixing that needed infrastructure, so Odeko took on trucks and drivers in 14 cities despite investor warnings about its multiple.
• Heavy free usage does not mean winning. SumAll reached about half a million small businesses and added 20,000 a month, yet usage did not turn into payment, since small businesses struggle to calculate the impact of data as enterprises do. Atkinson says founder ego mistakes free usage for winning.
• Shorter trials convert better and teach faster. Squarespace's shorter trials converted better than longer ones, and about five modules built predicted payment better than time did. Shorter trials also let the company test features faster. A free year and a half before any cost sets the threshold too loose.
• Consolidated delivery produces real unit economics. Combining five vendors' goods into one truck drop cut delivery cost by one-seventh. Shops paid 17 cents for cups a supplier would sell for 3. Focusing on one vertical, Odeko grew from 50 to 10,000 customers in two years at 99.5% delivery success.
• Win first customers with closeness and visible savings. Atkinson gives first customers advisor shares and visits coffee shops daily. Small business buyers need savings they see immediately, such as cheaper Oatly, rather than long-term calculations. When Odeko missed a pastry order, he replaced it with pastries from other bakeries.
• Growth without sales signals product-market fit. Atkinson points to growth without sales or marketing as the sign of fit, and dismisses funding and branding as signs of success. Srugo agrees hiring numbers are vanity metrics. Atkinson says overhiring interns during scaling was duct taping problems with money.
• Founder desperation can hide a failing product. Atkinson says the venture capital cycle can leave founders so desperate for a product to work that they keep forcing it and stop seeing that it is not working. Choosing a specific customer makes it easier to judge whether the problem is solved.