A Product Market Fit Show | Startup Podcast for Founders
00:31:37 · Pablo Srugo, Rahul Shivkumar
[00:31:37] S0: What happened? Do you know? [00:31:38] S1: Yeah. I think it was a little bit of like reputational gain. It was a big dermatology practice that signed with us. It was our biggest contract at the time. And then we kind of used that name to get a couple more dermatology practices. And we're like, oh, wait, we're this is like such a good vertical for us. Right. And that's another thing within health care. Like a lot of a lot of it is specialty based. So if we close like Mount Sinai as an example, and we went to the largest private equity backed dermatology practice, like that logo doesn't mean anything. Like Mount Sinai doesn't mean anything. They're like, oh, cool. That's like totally different. It's almost like you're it's almost like going and saying, I work in FinTech. Now I'm trying to get like a health care customer. Right. So it's very like specialty focus. And that was a big learning lesson for us. It was like, hey, every time we try to go after a new specialty, like get the first logo as quickly as possible, even if it's a small one, even if the deal terms aren't like super ideal, like that first customer like unlocks an entire like specialty for us. Yeah.
00:32:40 · Pablo Srugo
[00:32:40] S0: It's interesting to think about and I haven't figured it out, like, but what are the products where being super hyper verticalized, which is kind of what you're talking about? You're already in a vertical because you're selling to health clinics, but you're talking about hyper verticalized where it's like dermatology versus, you know, hospital versus this, versus that, where it matters and where it doesn't matter. Right. Like there's obviously many products that are very horizontal. Right. Like you look at the CRMs as an example, the old school, you know, Salesforce, HubSpot. And it's like, there's some verticalized CRMs like Surge Titan, whatever, but it's like, does it really matter? Do customers really care? It sounds like in your case, they do really care. easier than even if the product doesn't change that much, you know, if you'd had Mount Sin or whatever, as you said, but I don't know what the answer, I got, I've just, I always wonder to myself, like, because obviously we meet a lot of founders. It's like, you know, okay, yeah, you're verticalizing. Is that truly competitive edge that you're super verticalized or is actually customers don't really care? It's, you know, whatever, they'll buy whatever they need to buy.
00:33:33 · Rahul Shivkumar
[00:33:33] S1: I think it totally depends on the type of buyers, right? My guess is, you probably see this even in the companies that are selling AI to like any sort of like SMB businesses, right? Like maybe they're selling it to certain types of like retail stores and then they're selling it to, you know, like health focus retail stores on one side and then like, maybe it's like clothing brands on the other, right? Like I have a feeling that even there, the social proofing actually is becoming more like narrow. It's like, okay, you're saying this worked for a retail store, but does it work for like a clothing brand like me that has like a retail store? You know, like does it work specifically for me? I think my guess there from what we've seen in healthcare at least is what matters a lot. Each of them thinks their vertical is like extremely special, right? It's like, hey, the dermatology is so unique, right? Like orthopedics is so unique even if like a large portion of it is an overlap, like when they think of social proofing, they think of themselves in a smaller cohort.
00:34:27 · Pablo Srugo
[00:34:27] S0: Perfect. So let's move to the kind of the tactical, right? Like super high value pieces, right? So the first thing I want to talk about is two of them is on the BDR side. So on the BDR side, it got really popular for a while to do these kind of AI, you know, BDRs. They'd go out, they'd do everything, right? They'd find a list, they'd go, they'd reach out, et cetera, et cetera, and kind of like book you demos. In some cases, like, I mean, they're still, I mean, it's still a thing, by the way, and they're like, maybe they'll do the demos for you. Like, that's the next piece. You never kind of went down that way, right? You went down the full human BDR route. How did you structure it? And also, like, how did you start create it? How did it work? Why'd you do it? I mean, tell me a little bit about that.
00:35:01 · Rahul Shivkumar
[00:35:01] S1: Yeah, we looked at the AI BDR solutions at the time, and I think the interesting thing we found, at least in our space, is the old school things like cold calling works really well in healthcare. People pick up the phone because a lot of transactions still happen over the phone in healthcare, so if someone's getting a call, they assume, hey, it could be an insurance company or someone reaching out, so the pickup rates are a lot higher. They're actually, what we're seeing is our pickup rates are close to about 8%, which is like really, really, really high. I think I've heard in other industries it's like closer to like 2% or something like that, so it's like 4x, right? And whenever you see signals like that, it's like, wait, that medium is all of a sudden so much more effective in my industry than it is in other industries, so maybe we shouldn't take a lot of what people in those other industries are saying as like gospel, right? Like we should actually question it because we're seeing data points on our space that show that this could be a better medium. I think we did that pretty well. Like we questioned a lot of, I think, like popular beliefs at the time, which was like, hey, you can automate this, you can have hyper-personalized emails, you can do this, you can do that, and I guess it came down to like, if everyone did it, it's going to get saturated, right? Which you've seen in everything, right? Like the early days of Google Ads, like the few people that advertised a lot were capturing a ton of value and then CPCs and everything went up because everyone was doing it, so I think that was one part. The second was like really understanding like, hey, what is so unique to not just the industry we're in, but the ICP that we're in, right? Like our ICP picks up the phone, right? So like, are these AI SDRs really good on a phone call? No. Right? Like it was like so obvious early on that it sounded robotic and people were hanging up and they were actually getting like really pissed off. So I think that the decision of not going forward with it was solely based on that data point, right? It was like, hey, 8% pickup rate, they're not doing well on phone calls, let's hire people, right?
00:36:46 · Pablo Srugo, Rahul Shivkumar
[00:36:46] S0: What about now? Like do you still have the same kind of outbound calling motion? Yeah. So tell me about, yeah, the setup now, like how many BDRs do you have? How many calls per day that I have to do? Like what's the whole setup? [00:36:55] S1: Yeah. So we have six BDRs. They're probably averaging somewhere between 150 and 200 calls a day. [00:36:59] S0: With an 8% pickup rate. So they're doing about like whatever, 20-ish calls, actual calls. [00:37:04] S1: Exactly. So they're talking to at least 15 human beings every day, right? Times five. So that ends up being quite a bit of shots on goal where you're actually talking to a person. On average, our BDRs book about like two meetings a week. It's like close to 1.9, I think is like the average or something like that. [00:37:22] S0: So it's kind of a 10% first call to demo book ratio. Yes. What's the show up rate on those demos? [00:37:28] S1: The show up rate is about like 80% or so. [00:37:30] S0: Oh, wow. [00:37:31] S1: And there's like obvious things you can do, right? On the call being like, did you get the calendar invite? Great. Are you confirmed for this? And then the day of like send them a text being like, hey, this is me. I know we have a call. [00:37:40] S0: Was that ever an issue though? Like have you, have you through that increased the show up rate? Yeah. Well, how low was it? [00:37:44] S1: I think, I think the lowest of was was like 60-ish.