A Product Market Fit Show | Startup Podcast for Founders
00:22:05 · Mike Murchison
[00:22:05] S1: Mm-Hmm, <affirmative> . So, I think, I think the first thing, like , uh, as we learned, we really fought the temptation to write a single line of code that was really important. And I think for, you know, I think there's a lot of founders out there who think that, you know , they measure progress in code. They , they, they assume that like the way you make progress in the early days of a business is to build an MVPI, I think core to our, our success was actually a re a rejection of that premise. We , our, our goal was actually to go as long as possible without building a MVP, like without writing a single line of code. And the reason for that is because we just, we, we wanted to understand the manual processes that we, our software would eventually automate better than anyone else. And the one of the core beliefs there was that this core belief that software is not inherently valuable, like all software is at a , at a fundamental level, all software does is it, it, it replicates and scales some manual process that exists in the physical world. And our belief is the extent to which you can understand that manual process better than anyone else, or at least understand it incredibly well. A lot puts you in a position to build software that is truly excellent. That was the philosophy that was informed by, by Volley . And then we just set out, as you put it, to learn. You know , I think we, we learned three core things in the , over the course of, of being agents. We learned that first of all, 30% or more of the inquiries we were responding to were repetitive and mundane. In some cases, it was upward of 80%. And that was surprising. It's like you show up on day one to any new job, and then you expect that there's like this like onboarding period and take some time for you to become productive and a useful colleague. You know, in our, our experience, we were , we were effective on day one. That's how basic so many of these inquiries were. Two, we learned that the software we were living in, the agent experience that we had was like, far from ideal. It was super negative. You know, no one, no one was waking up outta bed in the morning going, I am so excited to spend more time in this enterprise customer service software. Like, it was just, it was, it was a painful product experience.
00:24:22 · Mike Murchison
And then the third thing we learned is that everyone, all our colleagues, they wanted to talk to their customers. Like they talk to their friends, which meant they, they , they just couldn't figure out like, why is it that I'm talking to this person on the phone and this person clearly who I'm talking to, hasn't been on a phone call in like a week, you know, that they're not using their phone for phone calls. They're like, why can't I message this person? Why can't I text them? It doesn't make any sense. Why don't we open up a messaging channel to , for customer service? And this we heard over and over again. And that idea was always rejected. And it was rejected, remember, because of the, the conventional customer service paradigm, which is reduce customer contact messaging, was, was thought of as, as, as likely increasing it. So that's what we learned . You know, the, we , we became , uh, amongst the most productive agents on each one of these teams. You know , we essentially , um, we just work really hard. Is, is the simple, is the simple <laugh> the simple way to say it. And we saw the impact of that work. Um, we, we saw that customers were less likely to leave. They liked our businesses more. Turn isn't exactly a novel insight. Like we all know this in the physical world. If you have to wait for four hours for your Starbucks coffee, you're not gonna go back to that location. Secondly, we, we learned that the, that our colleagues liked their jobs more and were far less likely to leave when we were handling as many of the repetitive inquiries as possible. And that was a big deal because we knew that attrition rates in contact centers are on average about 45% annually. Meaning that in the enterprise, about half of all customer service agents will leave their jobs every year. That's how repetitive and mundane the , the role is. However, if you remove the repetitiveness of the , of the job, what you're left with is something that's way more intellectually stimulating. It's way more challenging. It's much more conversational and consultative. And people, our colleagues ended up loving their jobs way more. And so that was, we were like, that's , that's fascinating. Like this is, we were, people just loved working with us as a result.
00:26:36 · Mike Murchison
And the third thing we, we witnessed was that the data that we were privy to these customer conversations, they felt like a gold mine . They had sales opportunities in the product insights, strategic information. We felt like it was pretty clear that businesses, our colleagues, our bosses, you know, VPs across the organization really should have been using this information to inform their decision making . But instead they were, they didn't even know it existed. And so it was, it was then, it was once we'd essentially proven the value of the software before it existed, proved it manually, we still to this day at ADA say, do it manually first when you're solving a problem that it was then that we set out to build the software that replicated that manual behavior we had engaged in. And, you know, the, the solution became, it sort of appeared, right? It was so painful that we were going through that . The software almost became medicine. It's like , take the pain away. And we took an ML approach 'cause we had access to so much data, and then we focused on making those ml techniques that we were developing as easy to use as possible. 'cause all our colleagues were non-technical. And those, those insights which have been absolutely core to ADA's success continue to be, to this day, we , there's no way we would've realized those, those are not insights that you glean intellect intellectually. Like you need to live those things. You need to feel them emotionally. And there , there's no way that we would've had them , uh, had, you know, ADA been developed through this academic, you know, business model, canvas exercise. It had to be something that, that we lived. And it, it , it's been core to the product that we've developed and the, the pillars, it's , you know, it's still standing on
00:28:24 · Pablo Srugo
[00:28:24] S0: This , I , I have to pull on this thread just because it's something I've, I've seen a lot, which is, and I've , and I've , we've , we've talked about this in, in other episodes, but Lean Startup is, is useful, but it's gotten to the point that when somebody has an idea today, the first thing they do is they build an MVP and they put it out and they , and they get into this test and validate mode. And what I've seen is that well , companies aren't doing enough of is before there's startup mode, there's research mode. And you gotta spend time in that research mode where you're really mm-Hmm . <affirmative> not building where you don't have a company, let alone , like , you don't have a company, you don't have a startup . You have some sort of insights and ideas, and it's really more of a project. And sounds like that's exactly where what you guys did for, for a long time when you were working as agents, is that you just stuck to research mode for a really long time. Until you, until the things that you needed to build were no longer guesswork, right? It was like , you know, if you build this feature, these companies are gonna buy it because you've lived it. That's
00:29:23 · Mike Murchison
[00:29:23] S1: Right. Now, you know, we, two thoughts there. So one, I completely agree that lean, the like philosophy of Lean, I think has been misinterpreted in, in recent years. You know , lean is about learning as quickly as possible. And sometimes, you know , writing software is the fastest way to learn, but in my view, it actually rarely is. It can be, but it rare , it rarely is. So I think we've conflated progress. We , we've , we , we've conflated like developing an MVP with, with Progress or Rapid progress. Those are two very, very different things. You know, as an , as an aside, you know, lean , the Lean Movement is, you know , the really, the, the , the, the founding father of Lean is Steve Blank , who was, you know, Eric Ries's, professor at, at Stanford wrote this book called The 12 Steps of the Epiphany. Highly encourage everyone to read that book. That really is the precursor to what became the Lean Startup. And the core takeaway from that book, in my view, is the importance of getting outta the building. That's right. That's the, it it , that's the research phase. It's, you know , you , you don't, you don't fi you don't find a product market fit, you know, by coding in your basement or, or by, you know, thinking up a solution. You , you, I think you find it by going out, usually your imm probability of, of finding it , let's say, of success is increase , increase dramatic when you get outta the building. So that's
00:30:50 · Pablo Srugo
[00:30:50] S0: A lot of, a lot of stars get outta the building by having 10 interviews where they try to sell, you know, people on there . And that's getting, and that's not getting outta the building, I think is part of the point, right? Getting outta the building is getting as close to the customer's day to day , in your case, doing the job, right, but getting as close to it as possible. Yeah. Before you have some clear preconceptions about this is what I'm building and I hope people say yes when I try out to them . Mm-Hmm ,