A Product Market Fit Show | Startup Podcast for Founders
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.
00:37:44 · Rahul Shivkumar, Pablo Srugo
[00:37:44] S1: I think, I think the lowest of was was like 60-ish. [00:37:47] S0: Okay. So it was still decent and you got, you went from 60 to 80. Yeah. That 60 to 80 was mainly optimizations around calendar invites, you know, reminders, et cetera, et cetera. [00:37:56] S1: Correct. And then not booking a meeting too far out, right? Like there's, there's a lot of basic like hygiene I think you can optimize on once you figure out a medium is working pretty well. [00:38:05] S0: I mean, there's people that have way worse show up rates, like 20, 30%. I'm just, I don't know if you, given that you didn't experience this, maybe you don't know because what you could have is, you know, instead of booking 10%, you book 20%, but half don't show up. You know what I mean? Like a lot of people actually face that problem. Are you doing anything in those calls, those first calls to just make sure that the people that book are kind of clearly intentional and really actually want to speak to someone?
00:38:26 · Rahul Shivkumar, Pablo Srugo
[00:38:26] S1: Yeah. I think we're very good about the lists of like, we've honed in very well on our ICP, right? Like, and I highly recommend that by the way, like rather than spray and pray and talk to everyone in an organization, for us, there's probably in an organization of 200 people, only five people that really matter. You know, you go too high as an example, when you start off, if it's an organization of 200 people, you're trying to get the CEO on a phone call, he's going to no show, right? Even if you book him on a thing, he's like, it's just like not something that like the C-level gets on a cold call or a first call, right? Eventually, you want to talk to them. So I think you find a way to network to them, but there's like five people within the organization you really have to talk to and we've incentivized it that way, right? We're like, hey, this counts as a qualified lead if this person shows up to a call and these are like their titles, right? Like if it's going outside of that, like we, honestly, if you get the CEO on a first call, like we don't care, right? Like we want you to get one of these five people and I think that actually works super well because like when you incentivize smart people a certain way, they're going to follow those behaviors. Sure. Yeah. [00:39:28] S0: How, just taking a step back, actually, how do you build, what do you use to build a list?