A Product Market Fit Show | Startup Podcast for Founders
00:24:56 · Pablo Srugo
[00:24:56] S1: I'm really worried because, listen, like you've been listening for like, what, 10, 20, 30 minutes now. Clearly, you like it. And the thing is, the next episode is way better and you're going to miss it. You're going to miss it because you're not following the show. So take your phone out and hit that follow button. Design partners is an interesting thing. Like it's the playbook now. Beta customers and beta side partners, whatever. It's been played for a long time. The big danger is it's usually I find most founders can get at least some beta design partners because ultimately it's free and you're like, I'm going to build stuff for you. It's like, okay, why not? Right? But the problem becomes you build something, you respond to feedback, you do all these things and you never really solve such a fundamental problem that all the other stuff that's supposed to come after, like the market pull, the payments, the referrals just don't come. As you're going through this, what are the tells for you? What are you looking for to make sure that you're solving like a true top priority problem and the stuff you're building is going to lead to true demand?
00:25:53 · Nick Fleisher, Pablo Srugo
[00:25:53] S0: The worst mistake you can make there is just saying yes and doing everything that someone asks of you, right? Like when you're working with early design partners, it's so easy to just say yes to everything. And that's how you get led astray into doing things that like aren't high value because it's like, especially in legal, some company has some random workflow that no other company does that they really want you to nail. And so we made a point in like every piece of feedback to say like, can we find five or six other clients that we think of that like actually have this problem in order to justify the value of doing, even from like our first clients. And we had some early design partners that we like, you know, fired, if you will, where we were like, your problems just aren't aligned enough to the market. And so we're not going to work with you, but we'll circle back when we feel ready. [00:26:35] S1: And in person, was this just a sales tactic or were you using this as a design partnership was happening just to get more understanding of the problems and more of the subtleties?
00:26:35 · Pablo Srugo, Nick Fleisher
[00:26:35] S1: And in person, was this just a sales tactic or were you using this as a design partnership was happening just to get more understanding of the problems and more of the subtleties? [00:26:43] S0: I would say both. Like we very consciously know that it's a sales tactic. Like if you look at our win rates and our close rates, they are significantly higher in person by a long shot. Like it's not even close, but it's also the best way to learn of what's going on in a company. Like at McKinsey, we used to talk about like walking the halls. Like you were supposed to go to your client and just sit there and like be annoying. And we do that here too. Like I literally, you know, even still, I go to the clients and I'm just like being annoying, finding people for coffee. Some of these clients have security rules where they have to like walk around with you and it's really frustrating. But like it's the best way to one, learn their problems and two, build a relationship. And now like clients will text us things like, hey, this other part of the org is doing this. Like how do we solve that? Like it's not just like finding better ways to build product, but also like in the large enterprises, they're very complicated orgs to sell into. And like the only way you can really nail it is like if you understand the complexity there and you have to build the relationship to do that.
00:27:41 · Pablo Srugo
[00:27:41] S1: I'm going to put you on the spot. Do you remember in those early days when you're going through these design partnerships and you're spending time in person, something important that you learned through that about the problem or about the workflows or whatever that matter, that made an impact like to product development or the way you sell or whatever it is. Some story you can share about why it's so important to be in person.
00:28:02 · Nick Fleisher
[00:28:02] S0: Yeah. One of the biggest ones for us was we built these teams and Slack bots early on where you could drop the bot into a channel and it would triage and help manage and answer legal questions. And then it would pass it on to the right lawyer person to work on. And we were like, these legal teams told us they were working on this much stuff, but we're only seeing like this much come through Slack. And so we're sitting there watching these folks do their workflows on their computers. And we're realizing like their Slack DMs and their team's DMs, like their one-on-one messages are actually like so many unreads, like way more intense than any of the channels. And we realized like it was just a common behavior in some of these companies where like people would go to the lawyer that they knew best. And so that's when we like really invested in like building out the intake and triage capability from private DMs rather than just group channels, just because we saw people doing that. I think the second one is like most of our integrations have been through like us watching how people jump around different systems. So like it's obvious to say we need a Salesforce integration because everyone does the CRM integration. But like our biggest integrations today are actually procurement tools like Coupa and Zip. And we discovered that because we're sitting there watching someone drag an agreement out of Coupa, download it, drop it into Sandstone, then use Sandstone to work on it, and then drop it back into Coupa, right? And then we said, okay, like that's something we're going to automate. We sat there, we worked with them to figure out how to automate it through Coupa. And now that integration is powering like tens of thousands of contracts or agreements a month. A lot of times the clients or customers just don't, they don't know the art of the possible yet. I mean, so you have to kind of watch their current state workflow actually happen. Like even when we're doing remote sales and post sales, we make clients screen share, right? Like it's the most powerful thing just because you learn so much more than doing it on your own or like, you know, running it through a mock instance.
00:29:49 · Pablo Srugo, Nick Fleisher
[00:29:49] S1: When do you actually start, like you do these design partnerships, when do you start selling and go to market? [00:29:54] S0: We raised and we quit in July, August. We had all these design partners. We started to like really do real sales towards the end of the year. Like we wanted to see the design partners convert to feel like we had real product market fit. That's the same time where we saw that design partner go introduce us to a bunch of different accounts and say, hey, you need to work with this. That's like the end of 25. And then into 26, like we started to build a real pipeline and sell. [00:30:18] S1: Is that when you hired an AE?