A Product Market Fit Show | Startup Podcast for Founders
00:05:44 · Pablo Srugo, Dane Atkinson
[00:05:44] S1: That’s awesome. You ran that company, what was like, 2 to 10 million, 2 to 15 million? Is that more or less when you were there? [00:05:52] S0: Yeah, it was that early arc. I don’t remember exactly what he was doing at the time we joined up, but we’d raised 40 million bucks during my time and had gotten to, I think, a pretty meaningful product market fit. It was more than 10 million in a revenue standpoint. We found a number of inflections both in product and in the way we went to market. I think that we continue to extend the utility of the platform, and we found ways to educate customers. One of the things that we ran into at the time was it was hard for customers to believe that you could actually design a tool inside of a tool. That sounds obvious right now. But at the time, you always hired engineer. It was a long process. The fact that you could do it yourself was an educational sell, so we had to find long formats. Truth, this format was one of our keystones to success. We found podcasters, and that ability for someone to actually share their experience with it really helped people understand what it could do, and open the category. [00:06:44] S1: You’re there till about 2011. How do you leave and end up starting another company? How do you leave a rocket ship like Squarespace to then go do it again from scratch?
00:06:44 · Pablo Srugo, Dane Atkinson
[00:06:44] S1: You’re there till about 2011. How do you leave and end up starting another company? How do you leave a rocket ship like Squarespace to then go do it again from scratch? [00:06:53] S0: My North Star is trying to help small business. Anthony is an incredible operator. I think in our chapter together, he learned a ton. I think the business, when I left, had really found its self-sense. It was going to be, and what did I think become is the way to make beautiful things online and to tell your story in that stunning fashion. I want to roll the dice some more, so went into the next one. That is probably company seven or eight in the sequence, so I am very much akin to this startup. Start in a room with an idea. It’s not the idea you’re going to end up with, but it’s an idea and keep going. [00:07:28] S1: Tell me just a bit about that company, SumAll. What was the idea there?
00:07:28 · Pablo Srugo, Dane Atkinson
[00:07:28] S1: Tell me just a bit about that company, SumAll. What was the idea there? [00:07:31] S0: We had seen this pretty demonstrative shift from the small business to start spending in digital from what was conventional advertising. It felt the time that Shopify was one of our earliest partners. Facebook and Google had a huge amount of data that they couldn’t get the attention to share with their customer. Actually, Toby and Harley, a bunch of those people were really early advocates as we put together a platform that let the user see and understand their data, but it didn’t work. The lesson I learned there, as hard as it was, and you do learn more from the ones that aren’t the rocket ships, but that struggled. We ended up with a half million small businesses, so we ended up with one of the larger platforms, but that data was very hard to action. We got swept aside in this, and I think definitely a topic we’re talking about, our customers just absolutely loved it. They would spend hours a day. They would print out the reports and share it with their team. I think it was like 15 times Google Analytics usage was our usage case, and we’re growing 20,000 customers a month, which having just come off Squarespace. It was a big number to get to early in your life. It didn’t correlate to people spending money. At the end of the day, we’re like, okay, now everyone’s using this. We want to start charging for deeper analytics or printed reports. What’s my data? Oh, am I going to pay for my data?
00:07:31 · Dane Atkinson, Pablo Srugo
[00:07:31] S0: We had seen this pretty demonstrative shift from the small business to start spending in digital from what was conventional advertising. It felt the time that Shopify was one of our earliest partners. Facebook and Google had a huge amount of data that they couldn’t get the attention to share with their customer. Actually, Toby and Harley, a bunch of those people were really early advocates as we put together a platform that let the user see and understand their data, but it didn’t work. The lesson I learned there, as hard as it was, and you do learn more from the ones that aren’t the rocket ships, but that struggled. We ended up with a half million small businesses, so we ended up with one of the larger platforms, but that data was very hard to action. We got swept aside in this, and I think definitely a topic we’re talking about, our customers just absolutely loved it. They would spend hours a day. They would print out the reports and share it with their team. I think it was like 15 times Google Analytics usage was our usage case, and we’re growing 20,000 customers a month, which having just come off Squarespace. It was a big number to get to early in your life. It didn’t correlate to people spending money. At the end of the day, we’re like, okay, now everyone’s using this. We want to start charging for deeper analytics or printed reports. What’s my data? Oh, am I going to pay for my data? [00:08:48] S1: Do you think this is because something like Google Analytics is free, so there’s that benchmark? Because if you’re getting value, presumably you would pay.
00:08:48 · Pablo Srugo, Dane Atkinson
[00:08:48] S1: Do you think this is because something like Google Analytics is free, so there’s that benchmark? Because if you’re getting value, presumably you would pay. [00:08:56] S0: I think it hit home understanding your customer cohort. In selling to the enterprise, as an example, it’s easier for there to be a calculation of impact. How is this data actually guiding decisions? How are we able to make real value out of it? Then you can attach a fee to it. A small business, and I’m talking about this a lot, is characteristically struggles to make those calculations. Even medium-sized business because at the time, it’s hard to assess that impact and there’s a lot of [unclear] to it. I think you’re right in part because some of the services out there were free, and the data inside Shopify was, you could download it if you went through the hassle. Same thing for Facebook, same thing for that. What was really the value of creating utility in that data? We knew from the functional side that it was huge. We knew that they were driving their business – that they were guiding their decisions, that they were taking on our automations, which would create content for them. All these things had effect. It was a small business. It was really hard to cross that chasm. Having come from a pay model, which was Squarespace, I want to try a freemium model. There are a lot of lessons on that model where you’re getting the conversion from that to a paid system. It really is only 3% or 4% of your customers that will come over, which is tough.
00:10:09 · Pablo Srugo
[00:10:09] S1: That’s the hard part is where do you draw the line? You need to let them in. You need to let them get actual value from your product, but you can’t let them get so much value that it’s never worth converting. I find that’s always the big place where at the early stages, founders are struggling with. What’s that line? What’s the feature that – Slack is one that everybody understands, and I find it’s such an obvious one, as the history. At some point, you hit a message cap or you can’t see your history or whatever. If you’re a serious user, you’re going to pay for that. If you’re not, you’re going to still get the value. It’s just that perfect word. Just works out the nature of the product lets that happen. But that’s not that simple in many other freemium cases where you look at your features side by side and you’re like, if I cut it here, no one’s going to use it. If I cut it here, no one’s going to pay. It’s a delicate balance.