A Product Market Fit Show | Startup Podcast for Founders
00:34:57 · Pablo Srugo
[00:34:57] S1: So to move to the deep tactical segments here, and one of them is selling to enterprise and specifically converting from pilot to full customer. You have a 100% pilot to production conversion rate. And maybe that ties into this because that was gonna be my next question. Anyways, like, H and R Block, Arminino, for those to be your first few customers, obviously, you're drawing on your background and your credibility as someone who is a CTO of a very well known company at Brex and so on. But it's a huge leap still for them to be like, yeah. Sure. Let's let's work together. How like, how do you get into the room? How do you structure that and bring it down to a pilot that you can clearly deliver on with these resources that you have? Like, tell me all that, and ultimately, leads into this getting pilot to production conversion.
00:35:40 · Cosmin Nicolaescu
[00:35:40] S0: I would say the first thing that Sid and I felt very strongly about is being truthful to our customers. I think this is true in any industry, but especially in accounting. We've seen so much vaporware and so much promise and under delivering on those promises that erodes so much trust. And so from the beginning, we're like, we're going to be very transparent about what we do, what we don't do, what we will do, what we won't do. Ideally, we find people that are willing to work together versus be surprised. Because we've seen that over and over again where like you tell customers to do it, they get excited, and then you'll have to deliver on that. And if you can't, you're in a really bad place. Just starting with that attitude brings a lot of credibility. I do think our backgrounds probably helped in the beginning with the when we had nothing else, and compounded with this, it helped. The second thing is iterating extremely quickly. Like Sid and I, when we're it was just the two of us building, we would basically iterate on hourly to daily basis. Like we met with you today, by Monday we would show you some stuff, by Wednesday, Tuesday, Thursday, every day there's progress being made and and you get to see something that you're just not used to. And so people see that and they're able to project it forward and be like, well, if every couple of days this is the kind of progress these folks make, If I go a month from now, they will be so much further ahead. Here's what we'll do, we move quickly, we've done the thing, now let's go to the next thing, rinse and repeat over and over and over again, builds that credibility to kind of take that leap of faith. And the last thing I would say is, because we're both engineers, we're extremely structured in our thinking. It's just how our brains operate. And so we take the same approach to running pilots. We're like, okay, we're gonna run-in this way with these people, we're gonna set this up, here's the here's the different phases. Yeah.
00:37:29 · Pablo Srugo
[00:37:29] S1: Can you walk me through an example of that? Because I think that's where where the rubber meets the road. Like, how how do you boil down to something? How do you structure it and make it so so that it's clear, it's winnable, it's quick?
00:37:39 · Cosmin Nicolaescu
[00:37:39] S0: Yeah. So we obviously demo stuff. That already is stands out because at least in accounting, apparently, there's still product out there that, like, you don't get to even demo it properly, which is is is kinda crazy to me. But we run demos. Typically run several of those with different people depending on the the firm. Then we said, to get the right signal on a pilot, you need to find the the right balance between too little and too much. So we've seen firms that are very hands off, very little usage, and so you go through the pilot very quickly, but at the end of the pilot, they don't have high conviction. Because they're like, well, yeah, I mean, it was good, but we only did like a few returns, for example, so maybe we should do more. And now you've reset the clock on that. And so now it's like, great, now I'm running a second pilot, so you've wasted all that time. The other extreme is we're gonna run hundreds of returns with like dozens of people on our firm involved, also very dilutive because it's very hard to keep engagement higher across a large number of people when you go through a lot of returns. Like, if you run, like, a handful of returns or a certain complexity or a certain shape, you're not gonna learn much more from running, like, dozens of those. Like, you'll get the signal pretty quickly if if they're good or not, but having a lot of data makes it very hard to go in-depth. So we go, when we run a pilot, through returns of different complexity with different folks on different roles, and then we literally go return by return and give you a side by side comparison between your return that you finalized in our draft. If they're the same, great. They're the same. Not much to to spend time on. If they're not the same, here's why they're not the same and what led to that. And maybe it's on us. Maybe we didn't have document or context, whatever it is. But it's very in-depth and that helps bring credibility because now you have enough volume and enough variety in in kind of the data that was tested, and you've gone really deep on all of them to to get a good sense of will this product work, not work, for what does it work, what does it do, not do, and much more confident to move forward for for that. And I think the third one is, again, no smoke and mirrors.
00:39:40 · Cosmin Nicolaescu, Pablo Srugo
I've heard of pilots where you get something and they have AI, but then they have humans that go and correct things that AI got wrong, and then they give you the final thing. And it's like, well, that's not really the AI part. You should be upfront about that if you're doing that. I've seen others that will go through the same return multiple times and process it, because again, many of these systems are not deterministic and so you'll get different results, and then they take the best out of all these combinations and give you a final thing. I was like, no, that's like, that's not how real world world looks like. Like, you should be upfront about it and just run it like your customers would because when they'll run it, they'll just see these failures and be disappointed. [00:40:21] S1: And what about the flip side, which is on the customer side, like keeping them close, motivated, you know, on time and and getting like because the flip the flip side of the failure mode is you actually do everything you're supposed to do on your end, but maybe you don't get enough, you know, attention from them, in your case, returns from them, or maybe you do, and then now you're waiting a month for a decision. Like, how do you how do you kind of keep that momentum going throughout?
00:40:42 · Cosmin Nicolaescu
[00:40:42] S0: I think it has to do with finding the right champions at the right levels. So the thing that you normally hear with enterprise sales is find the CEO, they give you buy in, and then you can make decisions. That doesn't really work well because the managing partner or the CEO at an accounting firm is not going to be close enough to the details to to be involved in that. A lot of times, they end up being involved towards the end because they see the promise of accrual across all these business sides, and so it escalates to to their level. But all they can do is say, I want to deploy technology across my firm, go forth and and figure out how to do it. And so then it's typically like, how do I involve the right level of seniority to have the unblocking escalation path as needed? For us, if I think about our past year, it's generally been the person running tax, like the tax partner at that firm, because they get to make the decisions for their service line. Then there is, if they have a technology team, how do you get them involved? And the thing that they care about is, is it secure? Is it easier to integrate with? Is it just gonna be a pain for me or not? And so we try to be very clear about what we do, and the fact that we've built developer products, I think helps a lot in how we've approached things. Then finally, it's having people two or three levels down in the organization that are actually doing the work, they're excited about this. So the manager, senior manager kind of level, where they're senior enough to kind of know the organization and and experience and have credibility, but not that senior that they're not doing real work. And once you have that combination, then they can get folks around them to to be excited. And again, keep that number relatively small because you don't need to have a 100 people be excited about it, you just need a handful of people and that projects more broadly. And that is in the pilot stage. I would say post pilot in the rollout stage, because I think that is the even harder piece, is having the right folks to drive change, like project managers and working very closely with them. So you hear about four deployed engineers in enterprise very commonly now.