[ Interview ] Serial Entrepreneur Dan Martell on Learning From Early Product Engagement

A few weeks back, I spoke to 5x entrepreneur and angel investor Dan Martell for The Lean B2B Podcast. We talked about customer development, customer research, growth, and various strategies to learn from early product engagement.

You can watch the full interview below, or access it on iTunes, Google Play or Stitcher.

Interview Transcript

Dan Martell on Product Engagement for The Lean B2B Podcast

Etienne Garbugli: My guest today is Dan Martell. Dan is an angel investor. He’s the founder of the SaaS Academy where he trains and coaches high-performing SaaS founders.

Before that, Dan founded several technology companies, three of which – Spheric Technologies, Flowtown and Clarity – were acquired. He raised millions of dollars in funding. He was an advisor to billion-dollar companies like Intercom, Hootsuite and UDEMY and he’s a fellow Canadian 🇨🇦. So, Dan welcome to the podcast.

Dan Martell: Thanks for having me man. I am super pumped to be here and I appreciate the opportunity.

Etienne Garbugli: That’s great. So, maybe start with a big question. If an entrepreneur were to start a new business tomorrow, how would you recommend they go about doing that? And what would be the starting point?

Dan Martell: Dude, that big question freaked me out. I thought it was gonna be like, you know, what’s the meaning of life. I was worried I wasn’t ready for it. So, I mean here’s the way I think about it. The biggest risk of any business or entrepreneurial endeavor is building something for a customer that doesn’t want it and.

So, every company I’ve ever started. I’ve always gone to the consumer, to the customer to the individual first, and then work backwards from that. The way I do it is pre-selling, and people are like, oh you can’t pre-sell this or you can’t pre-sell that. Well, the beauty of today is I’ve got crowdfunding to just you know point to and say hey, you know, crowdfunding is probably about a three or four-billion-dollar market a year, maybe even bigger at this point and every one of those projects essentially are pre-orders, pre-sales to the product before for most of them ever build it, right.

They might have a design. They might have a prototype, etc. So, the first thing that I have always done in every company is pre-sell it so maybe some examples will help. When I started my company Maritime Vacation, my first customer was my dad. He owned a cottage. I thought you know, he kept getting phone calls from people because he was listing the vacancy in newspapers. It’s hilarious now that I think of it. He ran classifieds.

And he kept answering the same questions, you know. Yes, it’s available these dates. No, it’s not. No, we don’t allow pets. It’s in this location. It was built thirty years ago. Like, all literally. I mean, this is 97-98. So, I just asked him if he’d be willing to pay and I charged him a lot more than everybody else because I needed the money for the servers, but he paid I think it was a charged him 500 bucks or 600 bucks because it was like a hundred dollars a month for these servers that built in this programming language called Cold Fusion.

But I pre-sold it to my dad and then I went as far as pre-selling it to a bunch of Bed & Breakfast. So, the way I did that is I found a list in in every province there’s a tourism guide and I looked at I found out that they have all their addresses in the tourism guide and I created a mail merge in Word an Access database for the data that I got my little brother to fill in. A Word doc form-letter that said hey, there’s this thing called the Internet. You want to put your Bed & Breakfast on the you know, and it cost like 30 bucks. Send me some photos and some cash and dude people did it. They sent me money in the mail, and I was 17 at the time. So, I’ve been doing this my whole career, you know, this is 20 years later.

I’m 39 now. 20 years later and I’m still doing this with every company I’m involved in because it’s just, the fastest way to validate that your idea. Etienne, here’s the big thing is people disconnect the fact that it’s not that the customer may not have the problem. It’s just they may not want the solution you’re selling.

So, some people think they’re doing customer development or pre-selling by saying. Hey, do you have this problem? I’m going to solve it, pay me money. But what’s more interesting to me is the I’m going to solve it this way, do you want that. Because those two things can definitely get you in trouble.

Etienne Garbugli: So, how would you adapt that to B2B SaaS for example. Like you’re talking about an example that’s more B2C, like if you’re looking at B2B specifically.

Dan Martell: No, that was B2B. I mean every one of those vacation Bed & Breakfast, those are all business customers, right? It’s no different.

Same thing. So, so I coach a ton. I think I’ve got over a hundred coaching clients right now in my SaaS Academy program. All incredible B2B SaaS founders. And I would say 60-70 percent executed the same playbook and what cool is they continue to do it for new product iterations, right? So, they’ll pre-sell new add-ons modules, etc., and then co-create it with the customer.

So, the way you do that is you want to essentially create a one pager. So, you spec out, you know problem, solution, feature. So, let’s say three core features product, product promise. And then you go and talk to your what I call a perfect-fit customer, right your ideal customer profile, your target, whatever you want to call them.

But essentially, I think this is the right customer for this solution, and you try to get 10 people to buy. Most people make the mistake at that stage of changing the specs on the product for every conversation. So, if I’m talking to you Etienne, and you’re like, hey, Dan, I love this. You know, but it’s missing this feature.

If you add it, I’ll buy. I’m in, right and then all of a sudden now, you’ve got 10 new customers, and 10 new features to add, and it’s essentially professional services. It’s not you know, so what I always tell people is pre-sell based on, because here’s the deal is and again I’ve been doing this for so long that I know all the rebuttals like people going to say, well my customers are not early adopters blah blah blah blah blah like you name it, I’ll give you the reason why you got to overcome it, but it can be done.

I mean just the idea of an early adopter, right if you look at I think it’s Geoffrey Moore’s Crossing the Chasm. I always mix up Geoffrey and Clayton Christensen. I think it’s Geoffrey Moore. Yeah. So, essentially the people that you know are the early adopters, the innovators they’re willing to invest to have competitive advantages before the rest of the market gets something and those are the people you actually want to find. Those are the ones that you want to figure out where they’re hiding and they’re the ones that are going to be early adopters and help you co-create the product and I mean, even one of my mentors and again I can walk you through dozens of examples, but one of my mentors are Marcel Lebrun, another great Canadian, essentially from New Brunswick built a company called Radian6 and they did the exact same thing with Radian6 for Fortune really 2,000 customers, where they pre-sold, they co-created and they built out the product from that point of view.

Etienne Garbugli:I interviewed Alan Klement a couple weeks back, the author of When Kale and Coffee Compete, and there’s a great story in that book on how your team used the Jobs to be Done framework at Clarity. So, what’s the role of JTBD, and how do you use it today?

Dan Martell: Yeah. I mean, to me, it’s kind of like, you know, I think it’s Bob Moesta, really who’s the pioneer behind it the idea.

I think I actually. First off, I’m going to say I think Jobs to be Done is probably the worst-named framework ever, and I say that with a lot of love and admiration obviously. Because it’s not sexy, right? Lean Startup is sexy, agile is sexy, Jobs to be Done is a little flat, right? Now, I think they would have called it.

Yeah. So, like I just always thought it hasn’t got as much prominence as it should because it’s so incredibly powerful, and a large part to that is probably some positioning. That being said, the way I think about it and it’s you know, it’s Henry Ford, you know, his whole thing was the job that people wanted was not a Faster Horses, they wanted to get to point A to point B faster, right? And in many ways, this is the way Elon Musk thinks when he talks about First Principles, right when he looks at transportation or rocketry or electric cars, etc. He looks at the First Principles of physics involved in saying, if this is the Jobs to be Done, then how do we really look at reducing the cost of making it a better product?

So, for me when I was looking at Clarity, the biggest challenge like, you know, and I’ll be honest when I started I was full of, you know, enthusiasm and excitement because I was like, wow, I can’t believe nobody had thought of this yet. Right nobody thought. Hey, there’s all these experts in the world is all these micro-celebrities, how do we connect them with the people that want their attention? If they obviously have a followership, if you have people following you on Twitter, Instagram, Facebook, et, reading your books many of them would pay a premium to get on a call to ask you specific questions around their context and get some solutions.

So that was the premise for Clarity. Now, when you dive into okay, you know total addressable market, you know, specifics. What is the Jobs to be Done? Here’s what I realized, what I remember. I came across one of my early early adopters guy named Omar out of Miami and he spent like seven thousand dollars on Clarity in a week, right?

So obviously I was like, okay, I need to figure out what he what does he believe, what does he know that made him do that ROI calculation, and him decide to pull the trigger. Like I didn’t know, I’m like this is this is kind of the first like not influenced by Dan Martell, don’t know their group of friends.

Like he saw the product, understood it, and went nuts and did about, you know, half a dozen, a dozen calls and the way he framed it for me was hey, man. I used to spend way more money traveling to events, standing in line in a Q&A to ask a question that might get answered that really only got answered high-level because it had to be relevant to everybody else, and even if I tried to talk to the speaker after they get off stage, it was hit or miss. And now you let me get access to those same quality of speakers today, and I don’t have to wait, and for honestly a fraction of the cost that I used to spend going to conferences and events. He goes, I can’t believe people don’t get that.

And that’s when I realized that the Jobs to be Done, one of the primaries was for a certain type of business owner, an entrepreneur that are looking to make strategic decisions that have a belief set that has to be true. I think that this is like when we talk about perfect-fit customers, I think if you don’t take into consideration the corporation or the individuals’ values, you’re missing a huge opportunity because what I realize is, you know, entrepreneurs in general if you grab a hundred of them. It’s actually only about 20 to 15 percent that are growth-minded. And people are like well, I don’t get it. Every entrepreneur is growth-minded. There’s a lot of people that are freelancers, you know, self-employed, etc that are quote unquote entrepreneurs.

That do not have the same belief, you know growth abundance mindset. And so, if you take about like that target market in the Jobs to be Done, it was really for a growth minded entrepreneur that valued council, advice, expertise that believe that investing in themselves or their team was a good investment.

So, all of a sudden now the market size gets a lot smaller, but the beauty is understanding that Jobs to be Done allowed me to say, okay. Well, what’s true about that customer, right? So, if I take Omar and I zoom back and I go okay, what’s true about Omar in the context of who he is and his values and his business, and etc. and we found out some really smart things one.

Most Omar’s use Evernote, right which is an obvious thing in hindsight because A) it’s an advanced tool back then, right. Most people didn’t know about Evernote. B) it showed that you were somebody who collected information, right. Because that’s the core premise of Evernote to just like capture, take your digital bond and put it in a better format and C) that you believed in kind of investing in yourself and like investing in tools, right?

So, a lot of people don’t invest in tools. They don’t invest in a day-timer. They don’t invest in, you know, simple things right software, project management, software workflow. So. That was the big you know again, I don’t want to waste all like you got questions, but that was the big thing is just trying to understand at the core of this when you, and I call them bright spots in your product, in your customer usage, there’s bright spots people that are getting a disproportionate amount of value in your product, you need, to you need to zoom in interview, Jobs to be Done framework then extract, what’s true, and then go validate that with your other bright spots. To see is this true there. Can I can I go and find that on these other companies and then if those things are true, then how do I use that understanding for positioning and marketing?

Etienne Garbugli: Okay, so maybe going to come back to this, but like if we take a step back so like once the product is out, how do you start learning from your users?

Dan Martell: Lots of different ways. So, it’s kind of like right time, right action. So that’s why I call everything I do growth stacking because I really believe there’s things you do when you’re at this stage and it’s different at this stage. And you kind of stack your growth tactics, but let’s say if you’re just starting, one of my favorite things is doing Smile and Dial Thursdays. So, every Thursday, I would pick at least eight clients because not everybody would answer and I would call new customers. And I would go through a series of questions.

I wouldn’t even tell them it was the founder because I felt like the advice was skewed. So, if you’re the founder of the product and people don’t want to hurt your feelings don’t want to say anything bad. So, I would always say, you know, this is John, you know product manager at Clarity. I noticed you signed up on Monday.

Some people would be like shut up, this is Dan because they knew me. However, I’ll get but the then it was really just trying to find out how they heard of you because like there’s all these things that you need to learn in the early days. It’s you want to figure out kind of like, what’s what made them sign up, right?

What did they understand about the product, I mean, this is the big thing I’ve learned is and this is another strategy that I call the Product Profit. It’s a survey format, but one of the questions you ask is how do you explain the product to a friend or colleague, right and if you then filter that answer in the survey to the people, that would be very disappointed, so essentially, if they could no longer use the product, how disappointed would you be, the very disappointed people those people have a different description than what you have on your home page. I see this 80% of the time. When I start working with a client we send out the survey I look at the data. I zoom in on it. I show them, and then I go okay. Here’s your home page, here’s what they’re saying. Do you see a disconnect?

So, what happens is the motivated users figure it out. And those are the ones that are very disappointed, and everybody else didn’t figure it out because your messaging is off.

So that’s what I’m always looking for in the early days is understanding, you know, how did you hear about us? What did they say? How did they explain our product? What made? What did you think you would discover when you signed up? What problem are you looking to solve? Etc, Etc, Etc. So, there’s all these like product questions, but I do that every week, you know, at least I want to get on at least three calls in an hour, and I usually have a queue of 8, so it means you gotta get some sign ups, but that’s the way you do it in the early days.

Etienne Garbugli: So, you’re trying to get at the value proposition like the messaging itself first, and then how it ties to the product?

Dan Martell: All of the above. I mean, because you have time you can get through all of that.

I think in the early days, usually your products’ pretty straightforward, you know, it’s almost like a feature, it doesn’t do a whole lot. First version of Clarity was pretty much you know, like you call. That was it. Like there was no Q&A, there was no there was literally it was like handful of experts. There was no marketplace, you know, you couldn’t search, as like here’s some experts on these topics. Okay, I’ll call them.

So, yeah, it’s all of the above, it’s figuring out. The way I think about it is there’s a mental movie that customers create in their mind, and we want to create that mental movie to tell a story that is deliberate, that we believe is the best story for them to propagate in the market, right? Like that’s that’s the way I think marketing’s marketing’s job is to craft the mental movie around the problem you solve and how you solve it, who you solve it for, and what makes it unique and interesting, and some of the results you’ve gotten further clients, and if you do that in a way that uses their words, right? So, this is the other thing, just from a copy point of view. You know some founders will call them. I mean think about different industries have different words for customers, right. Gyms call them members, doctors call them patients, lawyers call them clients, like every like so just little nuances like that makes such a big difference when you’re trying to position the product.

So, trying to figure out the way people describe the product, figure out what problem they’re trying to solve. The you know understanding how they wish it would have been solved. So, if there’s a disconnect between what they expected and what you did which you know goes back to the Kano model. I think is worth understanding that gap, but to me it’s refining the mental movie and knowing that everything from who first introduces them to the solution, to the homepage, to the signup flow, to the first-time user experience, to your retention re-engagement emails, etc are all going to, hopefully, be a thoughtful consistent clear, you know mental movie of the problem you’re solving, and I think if you look at the best products in the world, that’s what they either did consciously or unconsciously.

Etienne Garbugli: So, okay. So, in one of your talks, you were mentioning that you created a customer advisory board for Clarity, and how it really helped with validation, features, and all that stuff. So, how would you recommend founders think about that specifically, and maybe set it up if that’s that’s still something you advise companies to do.

Dan Martell: Yeah, so I call it the CAB, customer advisory board, or internally at Clarity, we called it the A-Team, you know, it was essentially our advisory board, our A-Team.

I think that, depending on the product engagement and the engagement of your A-Team, you might you know, you might want a dozen people to 25 people. I think at the height we had probably 30 because I just keep adding people. So, the big mistake people make is letting customers opt-in right which I call the vocal minority.

I think a lot of times there’s very enthusiastic. I mean, this is probably the saddest part about building a company is when somebody’s like oh my God, I love you. This is so amazing. What a great product. Oh, yeah. I love it. I love it. So great. You’re the got all this amazing and then you go look at their account and they haven’t done anything.

They’ve never used it. They signed up once six months ago, you know, which is not horrible because they’re out there being an advocate and an ambassador, but you know, they really. If you actually got their feedback because a lot of these vocal minorities will tell you stuff. Like you know, what you’re missing is you got to add a get add a bookmark link or you gotta add a mobile app or you gotta add integration with this tool and they’re actually not users.

So, the big thing for me is step one, you decide who you think would be a great person to add to the the customer advisory board. And then the way you engage them to me is I think is and even though so clickable prototypes is a kind of a concept that I’m a big fan of both in pre-selling and in product development.

So, a lot of people do the clickable prototypes to validate their idea to get pre-orders, etc. And then they stop doing it when it comes to product development, which I think is the hugest opportunity, right? I remember one time we were working on a browser extension for Clarity, and I was showing it, I built the clickable prototype, which is super simple. Like you can use Balsamic, you can use UX Pin, you know, if you want to get fancy and go to InVision app. We use Keynote. We literally built a design template style guide in Keynote with all the widgets and all the tools in the interfaces for our product, our designer built it, and then anybody on the team could literally just take the templates retweak things and easily create a new flow.

So, I was working on the browser extension for Chrome and I showed it to some customers and they they just said simple things like that doesn’t make sense. The language you use on that page, the way you asked me to add it to my just doesn’t make sense or when you did this, I expected to see that and you’re showing me these little blue dots but that doesn’t tell me that I can call the expert, you should change it to this.

So, like being able to use your customer advisory board for product design, pre-building I think is so incredibly valuable because they’ll allow you to come out of the gate with a new feature, module that’s way more polished and on point than if you just, you know, build it and deploy it so that’s how I use them.

And it was really just for focus groups as well. So, like I’m a big fan of actually going into a customer’s world and watching the way they work. Right. So, with Clarity, for example, one of the big features that we never got to build that we were going to release was integration in the calendars.

So, one thing that we believed is as the Jobs to be Done was expert advice for your team and most of those conversations happen in a meeting with 2 plus people around things that they’ve never done before like we’re going to work on our SEO or marketing or you know, I’m thinking of bringing on a VP of sales or whatever it is.

They have these calendar invites and I wanted to make it seamless so that it would prompt you and say do you want an expert for this call? Right and then give you three options and you could say yeah and then it would just like it’s a pretty straightforward. So where was I going with that?

Oh, showing the customers how that would work and getting their feedback around how they think of advice today, and what advice they would feel comfortable allowing their team to pull from because that’s when it got really interesting when it moved away from just being the entrepreneur and then it being the team that had a budget essentially for expert advice and really trying to understand the team’s approach or mentality to it because some team members felt attacked or they were worried that they would look like they didn’t know what they were talking about if they brought in an expert, right? Because they were paid a hundred twenty-five grand a year to manage marketing and all of a sudden now, they’re spending 500 bucks an hour to bring in an expert, you know, they were worried that if they did that their boss, the CEO, the founder would think well, they don’t know what they’re doing, right?

So, just even understand that nuance. I don’t think I would have came to on my own because our culture was totally different. I gave everybody on the team a $500 budget to do Clarity calls individually, every person on the team should and could make calls to help their betterment. So that’s the way I think of using a great customer advisory board to essentially validate early when there’s not a lot of invested cost on ideas to quick because it’s all about speed right if I have to you know go and create a survey structure and find people to take it, etc versus if I already got this group ready to go and then we would even do like pre-releases made them feel special maybe mention them in the release if they help kind of guide the shape the feature, etc.

Etienne Garbugli: How do the techniques you use and the insights that you look for evolve as the business grows, like now you’re talking about the customer advisory board, you’re talking before how you don’t do all these interviews. Does that remain or do you change the way you learn and the way it moves?

Dan Martell: What happens if you think about it, it’s qualitative versus quantitative, right?

So, you got these two ends of the spectrum and I think in the early days, let’s call it zero to a hundred million or a hundred million zero to a million in ARR, or annual recurring revenue, $83k a month in revenue for B2B SaaS. A lot of that is gonna be qualitative. Working with the customers, talking to the customers, watching them work, right?

One question I love to ask customers is what do you do three minutes before or three minutes after you use our product, right? To really get an understanding of what I call share of wallet. How do I get more of the full problem space that they’re looking to solve in our solution, etc. and that is very qualitative in the early days.

Right? And then, later on, million plus two-three-four million now, it’s more data analytics, surveys, etc because you have a bigger pool of customers. So, if you could in the early days it would be great to do that stuff, but you just don’t so it moves to more split testing, NPS scores. You know just product engagement data, right?

So, like when we work on product features, I use the RICE scoring concept, which is reach, impact, confidence and ease, and being able to then like get the data of like, okay, we have 500 and then segmenting out by like by plan so the other thing is a lot of people they look at retention as like this global number, but to me, it’s like you gotta separate the small versus the medium versus the large churn numbers because they’re different customers, they’re different appropriate experiences, they’re different expected outcomes.

And then once you’ve got that then you can use the surveys to dive in and look at things like pricing, would be like willingness to pay right. So, I just feel like that’s the way to think about it in the early days. It should be very like, to me the founders should be in the support tickets. Like there’s some gold in there.

I did support for two years at Clarity, the first two years and again under a pseudonym name because obviously if you’re the founder, it sounds romantic and people are like, oh I’m gonna do it as a founder, but the truth is is that it clouds and it muddies up the feedback and. You know. If it’s Jason at 37 signals, my email to him is going to be different than Sarah, our customer support specialist.

Etienne Garbugli: So, and today like how do you recommend that founders prioritize features or functionality groups by the value or by what brings most value to the user base?

Dan Martell: Well, that’s using the RICE score. Well, so there’s like a few things right because it’s one part of it is.

You know, it’s I remember Sean Ellis who created the term growth hacker. He said if all we did was split test everything we thought we’d end up at porn, you know, and I’ve never forgot that because it’s just a simple idea of like we can’t always look to just optimize the local maxima problem. Right?

So, you know, sometimes the big opportunity requires us to go down the valley and rebuild to get to this next level peak in opportunity. So I think. It’s yes, it’s using the RICE score right, reach, impact, confidence, and ease. And that’s for I think for existing customer bases, but you should also still have a product vision, and my rule and the underlying question I’m asking myself and the team always is how do we create more value for a customer than anybody else in the world?

And if we are always trying to answer that question from a product experience, to a customer experience, to a marketing experience, I think that it’s a good true north star and that I think can’t be forgotten in light of like we can make the product better that’s great, but at a certain point we need to bring innovation to this market. We need to be thought leaders. We need to we need to be pushing the innovation. If all we do. If Slack stopped at just chat and didn’t add other features, if Dropbox just stopped at file storage, etc. You know as they get more competitors out there then those people are going to be the innovator.

So, it’s kind of like a two-headed thing where you need to make sure the product keeps getting better for your install base. But then you also need to be looking at where’s this market going? What’s true in the culture? What’s changing? You know, and I look at Snapchat as just an incredibly innovative company, right?

I mean, if you’re getting if everything you build is being ripped off by Facebook, you know, or Instagram like you’re doing some really smart things. And yeah, so I think that’s the way I think about kind of prioritization is yes using improvements. But also, we need to have an eye on the vision.

Etienne Garbugli: Okay, and are there like in your opinion some customer research techniques that you think more businesses should be using like those that are maybe neglected by SaaS founders.

Dan Martell: Well, I mean, I don’t think SaaS founders are doing Jobs to be Done, so that’s a big one. The Kano model I thought was just a fascinating way to think about, you know, the customer needs, and this came from my buddy Merv.

He worked in a manufacturing business for years. It’s kind of more old school, but the idea that there’s kind of three things that we need to focus on is the three Es of the Kano models is Expected. So, what are the things the customer expected? What are the things that they’ve expressed? So, this might be in your support tickets, in your interviews, in your conversations or even in public chat, so like or public support group?

So, one of my favorite things to do is go read the Q&A on my competitors’ public Q&A chat sites if they exist which for the most part they kind of do or even community forums right to really understand, you know, where the gaps are in the market and then three is exciting, right which is back to that question, how do we create a product that adds more value to our customers than anybody else in the world, because in answering that I think we’re going to find those opportunities to excite the customer and that’s why I like, you know creating those surprise and delight moments I think are what separates the brands like a MailChimp to you know, Fresh books, you know sending birthday cakes, like just these simple things that are just so powerful when it comes to retention, loyalty and word-of-mouth marketing and that whole VWOM is what I call the Virtual Word of Mouth marketing like it’s more prevalent than ever. I mean, especially with like sites like Capterra, and others like your ability to get new customers from a positive customer experience is exponential and it continues to get better, right. Review sites, distribution channels, your mobile reviews, your Google reviews, Glassdoor for your employee reviews. I mean, it’s pretty neat that if you can do things that are just better than everybody else and get recognized for that, it has such an exponential impact to your growth.

Etienne Garbugli: Maybe the reverse, are there some techniques that you think less businesses should be using. Some that are overrated, that people use or things that people do that are not worth it, sort of.

Dan Martell: My biggest pet peeve is people hiding behind their data. So that’s like my biggest pet peeve. Yeah. So, the way I think about it, yeah super early on for sure they’re doing it and even later on.

I mean, here’s what I think about if I have a retail store. And I own that retail store and I hide in the back, you know in the closet, you know in and around me is like these closed-circuit televisions and I’m watching our customers come through the front door and they’re interacting with staff and I’m just like spying on them essentially. I’m just watching, you know as they come in the customer says, you know, do you need any help with anything and they’re like, no, I’m fine like okay or you know, like you just spy on them and then they leave without buying right? And a lot of these tech founders, they just sit in this friggin’ room and watch these TVs and see things happening and never once it like dude if I owned the retail store that sold jeans and people walked in and left without buying and like three or four people did that in a row. I would run out after them and apologize for frigging being out of breath and say hey, I just got to ask you. You came into the store. So, you were looking for something or you were interested in something what was missing or what were you expecting back to the Kano model, right, expected because if I don’t solve that that day like it doesn’t get better day 2-3-4 so I just think a lot of founders get really giddy on their Profit Well, or their Baremetrics, or their Chart Moguls or their, you know, their Segment data and they don’t actually stop and say those are people behind those emails or data points and if I see a behavior, I should engage.

So, like when we were building we built the product called Timely and our activation was like 10%, it was super low from what we expected. It was a simple tool to let you auto-schedule your tweets so that they would be published in the best time to amplify based on your audience, right? So, we looked at the data and then we say you don’t have to tell us when to schedule it, we’ll schedule before you just queue them up. And people weren’t using it and I didn’t sit there and try to fix it and try to guess. I picked up the phone and email I emailed them and said, hey John you just signed up for Timely, you got 5 minutes or you got three minutes? Here’s my cell, text me like, I just want to get on a call.

And the craziest thing happened they all kept saying this is amazing. I love the idea signed up, but I’ve queued it up. I’m going to look at it next week or look at it tonight or less so they didn’t take the action at the beginning, and then I realized is that the big reason was they had nothing to tweet.

So. What I changed is essentially I gave them a prompt. I thought what’s the most universal types of tweets that I could present for them to add so that they can if they don’t publish a tweet through Timely they’re never going to come back because we never showed them the core value, we never get them the aha moment and we showed them quotes, you know, motivational quotes.

It wasn’t for everybody but they were pretty generic, pretty straightforward that they thought. Okay, I could share this and then they would just add it to the queue and it would tweet but then they would get the email and it would say oh this quote and the cool thing is quotes get a lot more engaged in the most people’s, you know personal life tweets.

So, it was just a way for us to say like, oh shit this tweet got five retweets. My tweets never get retweets, you know, and then they’re like, I gotta go use Timely so it’s those little things that if you don’t talk to the customer, you know, you might just look at the data and think there’s something wrong with the product and there is but the real insights is going to be from the conversation.

So, I’m just not a fan of hiding behind the data and that’s the thing. I think people need to stop doing.

Etienne Garbugli: Why do you feel like founders are like some of them are afraid to do that, is it fear? What do you feel is the reason?

Dan Martell: Yeah, I think it’s I think its fear to have somebody criticized their product.

I get it. I’m the same way man. I don’t want to hear I already know it’s broken with the product. I already know that it’s not great. You know, I’m having a hard time getting out of bed just to keep building and grinding because I’m not getting paid and it’s you know, like the revenue didn’t happen the way like I get it it’s hard.

It’s like, you know, it’s like lining up to get kicked in the stomach, you know, but if you know that the opportunities on the other side of that activity you just you gotta you gotta have the faith and push forward.

Etienne Garbugli: Maybe last question. So, like if we try to put everything back together like so I’m a subscriber of your newsletter. There’s a lot of great content there. But also, I’ve noticed there are a lot of experiments. How do you go about validating and iterating the SaaS Academy like your current business like how do you go about experimenting, testing, growing.

Dan Martell: Pretty much everything I’ve just told you, I do for my coaching business.

So, I have a customer advisory board. I measure everything. I’m interviewing the customers, we get surveys, we get NPS scores. We get feedback at every event we do. We do a post event survey at the event so that there’s you know, a hundred percent completion. My customer success person is continuously monitoring and getting feedback.

We have a process for doing that so. My marketing team, same thing. They’re continuously split testing. We’re coming up with ideas every quarter to kind of say, Hey, let’s try this positioning. Let’s try this this messaging, let’s try this email format. So, I don’t know like to me what I’ve always just loved so with SaaS Academy, you know, essentially, it’s not a subscription there’s a commitment so it’s a three-year program with the one-year commitment, but I let people you know pay it off every month and I just love that. I’ve always loved business models and that’s why I fell in love with software that were just predictable right and because they’re predictable every month. They’re predictable in the sense that they pay every month and because of that every month I need to earn that investment, right? Because I think every time I pay $89 for Trello or $250 for my email marketing tool or you know a hundred bucks a month for Slack or whatever it is. I’m asking myself, did I get that kind of value out of the product and I just love that honesty and purity of that exchange and I think that you know, sometimes enterprise products don’t get that.

They don’t get that alignment and I just think it’s just such a beautiful thing that I will always I can’t think of a business that I’ll ever get involved in that doesn’t have a subscription model be even like some of my clients they pre-sell 2 years contracts, which is a great way to bootstrap up-front. It’s very dangerous in the future. So, again right time, right action. In the early days, it’s a great way for cash flow, you know, if you’re three or four years in 2 to 3 million ARR it’s actually really bad for you because you’re not getting the data set that you should be getting. You’re not monetizing as properly too because if you’ve got good retention, why would you give a discount just you know, so there’s all these things that to me I just love the purity of it, and SaaS Academy, I treat it like a software business and I do all of this stuff we just talked about with my clients because I also don’t want to be a hypocrite. I think a lot of coaches out there are, and that’s just a fact, you know, I mean I’m just going to say this, Etienne, most business coaches never ask their customers for their financial numbers.

I posted that one day, I asked: does your business coach ask you for your P&L like your financial numbers, do they ask on a monthly basis? Does your business coach and review it with you to help you understand it. Everybody was No, no. No. Yes. No, no, no like 90% was no. I don’t know man. If you’re a business coach, and you don’t truly understand the person’s like to me, the financial numbers are the scorecard. It’s the school degree. Yeah, it’s like all this other stuff that you know, the playing entrepreneur and doing fun things and feeling motivated and inspired. All this stuff is great. But if it doesn’t translate into increased gross margin, and you know retention and all these other metrics that are going to show up in the P&L, and they don’t matter. So, I mean, I just I just have a really hard time when I see.

I do what I teach and that’s just a personal thing from an integrity point of view. I think it’s really weird. You know, it’s like I say, you shouldn’t trust a fat life coach and I’m cool saying, you know, it frustrates a lot of people but it’s like dude if you can’t get your shit together, go start there, like that’s just my thing is start with your own stuff. And then if you feel compelled like I’ve done to share with others then that’s cool, right. But again, that’s you know, I also believe some people are researcher experts and they you know, blah blah blah blah blah. I get it.

There’s always exceptions, but the norm for the most part that’s that’s how I think about it.

Etienne Garbugli: Thanks for taking the time Dan, that’s really appreciated. Where can people go to learn more about your work?

Dan Martell: Yeah, so if people have retention issues because most people do, just go to danmartell.com/churnbuster, and I’ll share with you guys my Churn Buster cheat sheet.

It’s nine different strategies to increase your retention and really monitor your customers, and then on my YouTube channel, I published every Monday for the last three and a half years. So, I’ve got hundreds of videos there and if you want to see the behind the scenes like these folks here on Instagram because I’ve been live streaming, just follow me on Instagram. It’s kind of where I share my journey, the deals I work on, my client stories, my team, my family stuff. It’s kind of like the behind-the-scenes.

Etienne Garbugli: Perfect. So, we’ll share your links as well. Thanks for taking the time. That’s really appreciated.

Dan Martell: Thanks so much man.

More on Learning From Product Engagement

[ Interview ] Sachin Rekhi on How to Get Actionable User Feedback for Your Product

A few weeks back, I spoke to product management and entrepreneurship thought leader Sachin Rekhi for The Lean B2B Podcast. We talked about customer development, customer research, and various strategies to collect (and learn from) user feedback.

You can watch the full interview below, or access it on iTunes, Google Play or Stitcher.

Interview Transcript

Sachin Rekhi – User Feedback Strategies

Etienne Garbugli: Great. So, my guest today is Sachin Rekhi, co-founder and CEO of Notejoy, a collaborative notes app for teams. Sachin is also a thought leader, writer and speaker on product management and entrepreneurship. Previously, Sachin was the founder of anywhere.fm and Feedera, both of which were sold to large organizations.

He’s also worked at LinkedIn where he incubated and launched LinkedIn Sales Navigator. He worked at Microsoft in the beginnings of his career. Nice to meet you, Sachin.

Sachin Rekhi: Great to be here. Yeah.

Etienne Garbugli: I have a few questions today for you. So, trying to figure out how you go about learning from the market, you go for about learning from different hypotheses, so you can make products move forward, and you can reach product-market fit initially but later on as well as keep learning from your users and your customers.

So maybe first question. If an entrepreneur work to start a new business tomorrow, I would you recommend they go about doing that like, what’s the starting point?

Sachin Rekhi: Great question, you know I have started, you know, multiple companies now and my approach has been kind of all over the place. You know, when I started anywhere.fm, my first startup the origin stories as crazy as it gets basically we came up with a startup idea. We pitched it to Paul Graham at Y combinator and Paul actually said, you know, I hate your idea, but I really like your team.

So, you guys are in YC only if you come up with a new startup idea. And so, we were required to very quickly kind of come up with a new idea. Did very little due diligence on the idea and then ended up kind of building out anywhere.fm. That was in stark contrast to the next startup I started which was Connected a contact management tool that ultimately went on to sell to LinkedIn.

But what was interesting about that one is I got the opportunity to be an Entrepreneur in Residence at Trinity Ventures. And so, I actually really kind of dedicated my entire time my EIR which is almost five months to really thinking through and vetting ideas in a very specific way before embarking on the idea in the first place.

And that has sort of become the mainstay of how I kind of think through these things. And so, what I always suggest is actually come up with what I call the eight product-market fit hypotheses for each startup idea. And so, the idea is that you basically create just a two pager for each of your startup ideas that covers each of the key elements or the hypotheses that you’re making for your startup.

So, this includes everything from things like who’s your target audience? What’s the problem you’re solving? How are you planning on acquiring new users? How are you planning on monetizing? How are you going to differentiate from the core target audience? And ultimately, what are your success criteria and KPIs look like.

And the reason why I like this approach is that it’s very easy when coming up with a startup idea to very quickly get excited about maybe the product and the product differentiation, but we all know a startup to be successful takes way more than just a really compelling product and by detailing each of these key hypotheses, you’re kind of looking holistically at the business and you might find for example that, while you know while you have a great product differentiation you haven’t yet come up with a great user acquisition strategy to acquire new customers to the startup. You know, if any of these dimensions doesn’t have a solid plan. It turns out you still don’t have a viable startup and it becomes a great holistic view of looking at all of the key dimensions.

The reason I recommend this over some of the traditional approaches like a business plan is, you know, a business plan ends up being something that could be 10-20-30 pages long, and unfortunately that length sort of gives you this false sense of precision that you kind of know what you’re doing and you have all these details so it must be right instead the short one to two pager with just a paragraph on each of your key hypotheses.

I find is the right fidelity to allow you to iterate on it. It feels easy to change a paragraph as opposed to change 10 pages and that’s what you want to be doing at the earliest stages of your startup iterating on each of these hypotheses as quickly as possible but looking. Holistically at the startup idea.

Etienne Garbugli: Okay. So now you have a plan you’re putting in place so you can start thinking about that iterating on these hypotheses a little bit. Once you’re satisfied with the basis of that like, how would you move forward in terms of figure out if there’s a market demand if it’s going to connect with the market.

Sachin Rekhi: Yeah, so I think the way I like to do this is initially when you’re coming up with your startup idea, you know you want to talk to as many people as possible to really start to vet out, you know, are you solving a real pain point this could be industry experts. This could be other entrepreneurs. This could be other venture capitalists. All of those are really helpful when you’re kind of thinking through, you know, ultimately is this going to be a sound business. The reality though is the number one person you can talk to is definitely your target customer.

They’re the ones we’re going to provide obviously the most interesting insights into whether you’re solving a real pain point and early on in the process. I think the key thing to understand is less about kind of the product design and the product details you’ll get to that later but early on it’s all about, are you solving a real pain point that’s actually fairly painful for the end-user right and ultimately the end customer and you know, I think it’s really important to really understand. Are you building a vitamin or a painkiller? And this sort of style of kind of customer research early on is all about pain point analysis.

And so, you’re really trying to get at when you’re talking to your customers understanding their day-to-day workflow of their tools and software or whatever they might be using and then trying to get at. You know, where is the pain in that workflow today? And then sort of bringing up this idea of hey, I’m thinking about building this product or business that might address this pain and then really trying to understand whether that concept resonates with them.

And again, you’re trying to still assess how painful is that pain because it turns out so many things are kind of inconvenient, but do they go to the point of being enough of a pain point that it will cause your customer to completely change their workflow cause them to buy your new product that is a certain level of pain that’s much higher than just an inconvenience.

Etienne Garbugli: So in that case, you’re talking about painkiller versus a vitamin, how do you figure out what are so the signals that you’re looking for to figure out that this is a painkiller or this is going to be a vitamin?

Sachin Rekhi: Great question. I’d say that it frankly isn’t an easy answer some of the things that we looked at when we were building B2B products.

So, for example, when we were building LinkedIn Sales Navigator at LinkedIn, we were building a brand-new sales product from scratch and you know, while LinkedIn had a general subscription for sales professionals, you know, they have really hadn’t built something kind of dedicated in a deep way to sales professionals.

So, what we wanted to make sure when we came up with what the key value proposition was going to be for this product that it resonated with potential sales professionals. And one of the best questions we had was as we came up with a product and got to the point where we had even kind of a high-level kind of mock-ups of what the product might do and what’s useful we started to ask our target customers: Hey if this product existed today, would you put it on your road map for next quarter to implement it? And we were talking to specifically the people that would be responsible for this. In our case, when you’re selling a sales tool, it’s often sales operations or sales leadership that end up being responsible for the rollout of any new sales tools to the organization. And so, we went to the sales ops team. We presented our concept and we asked them would this be on your road map for next quarter. And what’s interesting about it is you get all sorts of answers you get things like well, you know, this is really interesting.

But you know turns out we have all these other high priority things going on. So, like. You know, it turns out probably not next quarter maybe a couple quarters from now and you know while that might sound like an anecdote that’s very specific to a given customer when you hear that five times, it means you haven’t yet come up with a compelling value proposition because they keep delaying and delaying it and you have a vitamin not a painkiller.
And so that was one really helpful question that really got us to the point of believing we had or had not product-market fit specifically with the concept in a B2B case. And so, I think that’s one question you can use on the B2B side. I think the consumer side frankly is a little tougher, but definitely one question to think about.

Etienne Garbugli: Okay. So, in that case you guys had a pitch or an idea of what the solution was, you did not build a product but you were still approaching these potential customer potential organizations and you were trying to see what were their hesitations and the objections that they had in terms of going with the product.

Sachin Rekhi: That’s right. Actually, it’s completely right we had you know at that point what I described the product as is a PowerPoint deck. PowerPoint deck talking about hey, here’s the pain points that we perceive in your existing sales workflow. Here’s how we think LinkedIn can actually make that entire workflow better by taking advantage of all the unique insights and data that LinkedIn can bring to bear on its hundreds of millions of members and here’s the specific value props and features we’re thinking about building to solve for that and over time this initially started with just value prop statement. So, we’d go talk to customers and we literally have you know, a value prop that we wanted to kind of talk to them about in our case. It was you know, help find the right prospect that is likely to resonate with your product would be, you know, one value proposition or you might have another value proposition around help find the best path in to get a warm introduction to your potential prospect that you’re reaching out to and we kind of asked them which of these resonate which of these don’t resonate which ones do you feel like your current tool solved well enough and which ones don’t after we iterated on those concepts and came up with sort of a short list of value propositions.

That’s when we actually started putting designers to work to kind of come up with what might this look like as a user interface. We knew that. You know, the initial designs weren’t about kind of coming up with a final UI but really try to illustrate kind of the concepts and so we’d come up with these UI designs and then ultimately, we kind of made this kind of click through prototype of what this product might look like and that became the bulk of the deck.

And so, when we were doing these interviews, we were walking them through this deck and then seeing how well this resonated and at this point we had done zero engineering work against the actual. Like every little focused on customer discovery and really understanding do we have product-market fit on the concept that we’re planning a building.

Etienne Garbugli: I find it very interesting. You were mentioning in a different talk about how you really separate the problem from the value proposition and the solution. So, can you maybe talk a little bit why you keep the value proposition very separate in that case. And how would you go about selecting which one to move forward with?

Sachin Rekhi: Yeah, great question. I’d say that you know distinctly understanding the problem independent from the value proposition and the solution is super important. And the reason is because it’s easier for customers to help you understand their pain points and the problems with their existing workflow because they live and read that every single day.

And so, getting a clear succinct understanding of what that is. Is it is independently important than your solution I think too often when you’re doing customer discovery you jump to getting validation on the specific solution you’ve come up with without spending enough independent time understanding the pain point and the reason that’s really important is because it turns out you’re likely to keep iterating on your solution. Your solution is going to be changing either entirely through a pivot or through small pieces of it, and what gives you a sort of confidence being able to do that is the fact that you deeply understand the problem space. And so it’s really important to kind of separate the two and then you might find for example that your problem is resonating but your solution is not and then that allows you to go back to the drawing board to come up with potential other solutions or value propositions to address that pain point more importantly what you might find is that you get a lot of head nods to your solution, but the biggest challenge is that the problem that you come up with that that solution solves is a nice to have not a need to have. And now even if you go and build this product in this solution, you know a customer is desire to completely change their workflow and pay for a new product to solve a nice to have tends to be way lower than you expected.

Even if they upfront told you that the solution is more elegant than whatever they’re doing today.

Etienne Garbugli: Hmm interesting. So, in that case like within that phase, how do you make sure that you’re actually making progress that you actually like learning forward and getting closer to your objective of reaching product-market fit and beyond?

Sachin Rekhi: Yeah, so like one of the key techniques that we use for building LinkedIn Sales Navigator was actually doing what we call waves of customer discovery interview. Okay, and so what we would do is we might for example in a given week set up five different interviews with potential customers and normally, you know, in our case we’d have them come in for maybe an hour-long session.

And then we’d schedule like a 30-minute debrief after each session and you know, we then actually would set up maybe five of these either in one day or maybe you over a couple days in a given week. And what we would do is we had come up with that as I mentioned that kind of PowerPoint deck that we’re using as the basis of our customer discovery and we presented through them walk them through it get their feedback at their insights and after each 60-minute interview, the customer discovery team would do a 30-minute debrief and our customer discovery team would include product managers, designers, ux researchers, and even engineering leads and test leads and we bring them all together. We’d be watching these interviews live in real time. And then we had that dedicated 30 minutes of post-mortem.

That was really important because then we talked about what insights did each of us see from that conversation with the customer. What I love about this approach is that it’s in stark contrast to the way a lot of teams work. A lot of teams work is you have one ux researcher out doing the interview and then he kind of summarizes his findings and sends it to the team, you know while that might feel more efficient from kind of a cost perspective of number of people involved I find that loses a lot of great insights because what I find in every one of these debriefs is that it turns out people disagree on what they heard from the customer might they might actually say wait a minute. Why did you draw that conclusion? I saw it completely differently and then it forces people to get to what observation they made from that customer interview that led them to that conclusion.

And then it allows you to get to some sort of consensus on, Oh, what did we all really feel like we heard in terms of takeaways. So, then we do this for each of the interviews say the five interviews and at the end of the week, we’d come back and again in a session really debrief on what were the commonalities that we heard across these five folks.
And what do we think are things that are clearly things that are resonating as well as what are things that are not resonating. This would lead us to some kind of understanding of what changes we were going to make to those concepts those value props in that deck that we were going to present and then we’d make those changes and then we do the second wave of interviews the following week.

We did, you know five or six waves of interviews for Sales Navigator and you know, this this is kind of an expensive process you’re talking about bringing in, you know, 30 or so folks to go make this happen, but it was worth it because it allowed us to really deeply understand what the product offering needed to be well before wasting engineering resources, which is far more expensive. And I think that that was our process but to your point question on how do you know you’re moving the right direction? You know, what we realized is that you needed to come up with some kind of exit criteria for your concept to get a sense of and we’d ask this in every interview question.

The one I mentioned earlier is the one that we used initially which was, you know if this product existed today, you know how likely are you to adopt it in your quarterly roadmap? What we ultimately transition to as we got into later waves was hey, we would love if you’re excited about this concept to sign up for a pilot of this product.

And so, you know, we had formalized what the pilot program would look like. Initially the pilot program was completely free. So, there’s no cost but it turned out, we did require them to onboard their sales team on to the product at least a subset of them and to go through user feedback sessions where they’re giving us feedback on the product which is committing, you know, the time of a lot of their current team to use a new product to give us feedback.

And so, they really had some skin in the game if they actually chose to say that they’re signing up for. The program and we actually made those like a mini little contract that they had to sign basically say hey, are you signing up for doing this deployment, even though it was a free product and what we realized was again initially when we did the interviews we’ve got friction like well, you know, I really like the concept but again, I don’t know if I can commit my team to it but once we started to get to the point where we are hearing the majority of folks being like yeah sign me up.

That’s when we felt like, okay great. The concept is resonating even the designs are resonating. We feel like we’re really at that point where you know, we have a good sense of this is going to work.

Etienne Garbugli: Okay, so in a way you guys set a metric in place you did its guys decided and then you iterated based on the user feedback towards that objective that you guys were trying to reach or get customers to move towards.

Sachin Rekhi: That’s right. And I think what’s interesting about that is so many people when they think about A/B testing or quantitative analysis. They think about having a core goal metric which is also important, but I think what people are doing UX research and really trying to iterate a product to a point of do you have confidence that we’re ready to build it? you can again use a metric. It’s a more qualitative metrics for sure but it still is a guidepost of are we heading in the right direction? That you would use any sort of A/B testing metric.

Etienne Garbugli: Okay, so you kind of set a destination and at least at that point you can sort of decide or figure out if you’re going the right direction.

Sachin Rekhi: That’s right. Okay.

Etienne Garbugli: So in wonder you’re talking made a distinction between our product teams can learn from their users pre-product versus post-product. So how would you go about identifying gaps in the knowledge for your product strategy after launch once the product is in?

Sachin Rekhi: Yeah, great question.

So, it turns out that pre-product. Obviously, you can’t have people using the actual product. And so, you’re using these other user research techniques, whether its pain point analysis, card sorting exercises eventually get into usability test where your walking people through user experiences mock-ups and click through prototypes.

So that sort of the realm of user research and customer discovery that you can do before your product launches. Once your product launches you can still do those things, and you still should do those things but you’re opened up to a whole new realm of customer research that you can do and this is because now you can have people actually using the product and so the obvious one is definitely metric space analysis.

And this is understanding the usage of the product by actually looking at you know behavior. And so, this requires you to instrument the application in such a way that you can tell exactly what features people are using with what frequency using any of the off-the-shelf available analytics tools anything from Google analytics to an Optimizely whatnot.

And now you can kind of look at the aggregate behavior of all your users to understand which features of the using, which ones are they not using, how engaged are there, how often are they coming back, how retained are there for example, and so one of the things I always suggest teams do is to set up at least three dashboards from metrics to really understand kind of the health of their business.

And those are the user acquisition dashboard, engagement dashboard and the monetization dashboard. And so, the user acquisition dashboard is all about how you’re acquiring customers. How are they finding out about your site? And then how do they get through that kind of initial onboarding experience?

Then the engagement piece is all about what features are they using in the product, how often are they coming back, are they being retained? And finally, you know, ultimately, we’re in the business of making money. So, it’s important to understand how well your company is doing in terms of monetization and that will depend on the type of business.

If you have a freemium business, if you have a B2B business if you have an ad-streaming business. Those metrics will look different, but we all have some way that we’re making money. And so, it’s important to use those metrics-based analyses once you’ve launched. That being said, that’s not all you want to do.

I think what ends up happening is that I see some teams end up doing kind of classic UX research pre-launch. Post-launch relying significantly on the metrics, but the key thing to understand with metrics is that metrics are great at telling you what’s happening what the user is doing, but you’ll certainly never figure out why. And so, you still need to supplement your metrics analysis post-launch with customer feedback, direct voice of the customer that you’re getting to allow you to really understand why your customers are doing what they’re doing, what’s resonating, what’s not resonating, and what you need to do to improve it.

And so what’s important here is that in addition to leveraging the concepts of classic UX research like we’ve talked about you can again still do usability studies you do pain point analyses, but there’s a whole new set of techniques that are more qualitative in nature that come at your disposal once you’ve launched the product and you know, I’ve talked about this with the concepts of a feedback river and a feedback custom system of record that we can get into as well.

Etienne Garbugli: Well we can keep going that direction. That’s super interesting.

Sachin Rekhi: So yeah. Yeah, I was just going to say that, you know, one of the concepts that you know, I’ve come up with is sort of this idea of feedback river and let me kind of explain why this is important as I mentioned so often you end up in this case where.

Before product launch doing a lot of customer interviews, but post product launch you get so busy just iterating on the product in the features that it often becomes difficult to do these formulas kind of customer discovery sessions. And the reality is while they’re great in terms of like the feedback you get.

Most teams probably only do customer research maybe once a quarter at best frankly even less frequently because of how expensive it is to kind of conduct these studies you often only do it for major product redesigns or brand-new features, but not for continual improvement. And that’s because I’m kind of the expense of doing it on a regular basis, but you know as we talked about there’s a huge gap from simply looking at metrics.

And so, what I found as a kind of additional way to get user feedback is to come up with a continuous feedback loop a way that you’re constantly hearing feedback from your customers on a regular basis. And so, I think one of the best ways to do this is to develop what I call is a feedback river and the idea is that create one central place where all the feedback that you’re automatically already capturing from your customers is being funnelled into one place that anyone who’s interested in the team can access it. And so, what are the we actually built this as a Slack channel.

So, we have a feedback channel inside of Slack where all of the user feedback actually flows in for Notejoy.

And so, let’s talk about the different elements of feedback that flow into this. It’s anything from things like when a user cancels their accounts within Notejoy we ask them, Hey, can you please tell us why you’re canceling your account? And then that automatically goes into our feedback river so you can actually see when people are canceling their accounts.

We do the same thing when someone cancels their subscription. We also have an NPS survey that we run on every user 14 days after they’ve actually completed using the product and so after 14 days we ask them: Hey How likely are you to recommend this product to a friend or colleague on a scale of 0 to 10 and then we ask them: Why did you give us an answer? And so again this actually flows directly into our feedback channel and so because every user is hitting this on their 14th day of joining Notejoy, we’re constantly every day getting NPS survey results. And what’s great about it is when people love your product, they tell you why they love your product.

There’s something that they don’t like about your product. They tell you exactly what feature, what thing is bothering them. And so, this becomes continuous user feedback that we’re getting we also have done really interesting things where anytime anyone searches in our help center, that search query is sent to our feedback river.

Yeah so that end up being really helpful because it’s helpful for a couple things. First, it helps us improve our help center content. So, we run every search query that anyone else has executed against our help center and make sure that you get a good result. If we don’t, we add content we add keywords, we write more articles and we’ve been doing that quite a bit so we can help people self-serve but also what they’re searching for also gives you insights into what is likely confusing about your product.

We all attempt to build products that are super intuitive, but you know turns out it’s not always something that we can understand but when people are always searching for something, I remember initially with Notejoy people to always search for how do I add a notebook and we realized it wasn’t that intuitive to add a notebook.

So, we made it more intuitive to add a notebook. And so, we got a lot of insights from those search queries. We even do things like any time anyone mentions Notejoy on social media, Twitter and LinkedIn and Facebook those mentions flow into our feedback river. And so, what’s great about this is that now you’re continually getting feedback from your customers every single day.

And so, I dip into the feedback river in Slack just like I dip into Twitter. So, I’m standing the Starbucks line I have a few couple minutes free instead of going to my Twitter feed I go to my Slack channel feedback and listen to what customers are saying about my product right now and this sort of kind of allows anyone in your team require responsible for product development and product design to constantly have a pulse on the product.

What’s great about it is when you launch a new feature you tend to get more user feedback about what you currently launch. And this ends up being an incredible way to make sure you’re always getting voice of customer direct from the customer. You know, what I see when teams scale one of the challenges becomes they start to outsource a lot of their customer discovery work.

Maybe it’s a UX researcher doing research. Maybe it’s product marketing talking to customers and then the product development design team is kind of having a buffer between them and the actual customer research and primary research is incredibly important for anyone that’s in customer discovery and responsible for that because it turns out that you know, there’s lots Lost in Translation when there’s various people that are summarizing or synthesizing user feedback and it’s really important to get that directly and the feedback river is one of these ways to continuously get that feedback, but reduce the cost of it significant.

Etienne Garbugli: So you’re purposefully trying to stay very clear to the voice of customer to be able to learn about whatever is not going as well as you would like with the product and the business but as well.

Sachin Rekhi: That’s right and try to do it from a perspective of excuse me of understanding why because you know, the metrics analysis is going to tell you that hey people aren’t using this feature or people are being retained.

But the why is the hardest part and that’s where there’s no substitute to voice of customer to understand that.

Etienne Garbugli: Okay, maybe along that line. So, you made a really interesting distinction you’re writing about how. When you’re making changes, it’s either about increasing precision or about changing and hypothesis afterwards.

So, could you explain that a little bit more? And when do you know which avenue to take? When do you know which is which?

Sachin Rekhi: yeah, so like, you know, one of the interesting things is when we talk about kind of product-market fit hypotheses, you know those initial 8 hypotheses that every project or product or feature has, it turns out that you always start with a hypothesis that you came up with and I think when people think about kind of doing customer discovery and customer research, they simply think about this idea okay, I’m either validate the hypothesis or disproving the hypothesis. So, they’re thinking okay great the feedback I’ve gotten from my customers validates the hypothesis I had so let’s move on with the world. Or it doesn’t validate it. So, we need to change it. And so that’s the concept of simply kind of pivoting on a hypothesis.

So, you might decide for example that when you’re talking to a customer, it’s validated great or you might decide that no, it’s not resonating with the customer. So, no you need a pivot on it or change it. So that actually does happen. But what I think people forget is the more common thing that you should be doing is increasing the precision of your hypothesis.

And so, let me give a great example of this when we started Sales Navigator building Sales Navigator at LinkedIn. You know, we’re like, okay we want to go after sales professionals. That’s a very kind of broad statement and what we ultimately did through lots and lots of customer interviews is to increase that precision of who our target audience was.

And that was by understanding the core assets that LinkedIn brought to bear, understanding the kind of value propositions we were gonna solve for, and really by interviewing lots of different kinds of target customers starting to understand who these value propositions and solutions actually resonated with. And what we did is we went from this idea that LinkedIn is building a sales tool for sales professionals to LinkedIn is building a B2B sales tool specifically focused on B2B sales reps, not B2C sales reps.

We were also deciding that we were going to have sort of a focus on enterprise sales reps. We wanted to build something that was enterprise-scalable that works with the largest organizations and largest sales teams, but we also got into specific sectors. We knew that LinkedIn’s tools would obviously resonate with people in the tech industry, but we also found financial services as a strong secondary market to go after.

Okay, so now we’re getting pretty specific about the target audience we want to go after. B2B sales reps, you know in larger enterprises, with either a tech or financial services industries. And that is an example of increasing the precision of your hypotheses by virtue of doing customer research and it turns out actually most of your time spent in customer discovery should be increasing precision because our hypothesis in general was probably somewhere in the ballpark of right, but not detailed or granular enough and that’s why I think it’s super important to spend that time on increasing precision and think about your iteration not as just validating and pivoting but instead as adding meat and substance to the understanding of that hypothesis.

Etienne Garbugli: Maybe last question if you still have time. How would you prioritize those learnings in terms of improving the product? How would you go about figuring out what is coming out of the feedback river and everything else, and then figure out like, what’s the next thing?

Sachin Rekhi: Yeah, great question.

So that kind of jumps into the next concept I have which is developing a feedback system of record. Okay, and the idea here is that the feedback river is amazing for getting direct voice of customers that anyone can tap into, but it’s not enough to start making product development and product roadmap decisions.

And so, what you need independent of a feedback river is a feedback system of record. And this idea is that you have one place that you can go to look at the tallied-up customer feedback across all of the sources of user feedback. And so, the idea here is that this is sort of a CRM for customer feedback.

And so, you have basically this place where you can go, see all the feature requests that you’ve gotten and see how many people have actually requested that and, in some cases, or even putting specific names of those customers that requested it and. Way we’ve developed this at Notejoy is that we’ve actually made our feedback system of record public.

So we actually have a webpage called feature requests, and it’s a page that any of our users can go to actually vote up various features that they want to see added to the product and anyone can add new features anyone can vote up on existing features, but what’s important about it is not only is this end user facing but what we also do is we’ve made this actually something that we use internally, so when a customer sends us a support request and asks for a feature, we go and upvote on their behalf in that same tool that feature requests and that makes it so that we have one central repository for customer feedback. And I’ve seen what happens inside of organizations more classically is that they have even if they have a customer facing tool, the internal system that they have is completely different, and that’s unfortunate because now you have two different systems with two different tallies that really aren’t talking to each other. And so, we really built this in a way that it’s one system and often when we reply to the customer. We actually tell them: Hey, thanks for the feature request, I’ve upvoted this feature on your behalf on our feature request page. We link them to these request pages. And now next time they have feedback, they automatically go to the feature requests page themselves to go add feedback and participate in this discussion. And that allows you to have one central place where you have feature requests and tallied results what this allows you to do is that when you go into your roadmap planning, whether it’s your quarterly roadmap planning or Sprint planning, now your you often want to be using customer feedback and now you just can quickly pull up your system record and see hey, what’s the top requested features? What’s trending amongst? What’s now become very popular?

Given the themes that we want to take on for this upcoming quarter, what are the areas that customers have been asking for most? And what’s great about it with our system of record is it’s not only kind of a upvote list of features, but there’s a whole discussion forum on there.

And so. You actually get specific feedback that are like hey when you implement this, I hope you implement it this way or don’t forget to do this or don’t forget to add this feature to it. So that’s super helpful. But also when we start designing that feature now, we can go back to a set of users that are very committed to this feature maybe even send them mock-ups and we’ve done this in the past where we send them designs and said, hey guys, I know you’re super interested in this, here’s how we’re thinking about, what do you guys think about it? And we involve our customers into this process and involving the subsets that are really kind of interested. And so now the feedback system of records becomes kind of an important piece that you can use to actually prioritize your ideas to come up with that roadmap.

Okay, one specific caveat I do need to mention though. Is that when I first describe this to people like, okay great, I got my system a record. Now. Let me just implement the top request, right? That’s all I need to do. And actually, unfortunately the answer is no. Actually, simply implementing the most requested features is not a great product road mapping strategy.

It’s certainly an input to the process but it’s not the end-all be-all and there’s a few reasons for this. It turns out, you know, there’s a lot of things that you’re optimizing for in a business, you know, when we talked about these kind of three pillars of user metrics, user acquisition, engagement and monetization.

What you find is that when you’re getting feedback from customers and you actually implement those improvements that’s likely to improve the engagement bucket. It’s likely to get your existing users to use your product more regularly and to get them to retain more heavily. That’s great. But it turns out as a business owner you have to care about these other two dimensions as well. How you acquire users and how do you monetize them.

Rarely are you going to get feedback from a customer being like you should charge me more or you should put some feature behind a pay wall. So, you’re rarely going to get monetization feedback, but you still need to action that into your roadmap and you’re rarely going to get user acquisition feedback because it turns out the customers you’re not talking to are the ones that you aspire to get through user acquisition.

And so, there’s things that you have to juggle in the business that are independent of user feedback. And so, it’s important to take that holistic view as you’re coming up with your room. Equally important it turns out you might have ideas where to take the product that your customers aren’t even thinking of and so customer discovery is no replacement for getting rid of having a vision for your product.

And so, it’s still very important for you to have a vision and to independently come up with big innovative ideas that your customers might not be coming up with and then to prioritize that according on the road. And so those are just some of the reasons why you can’t just take you know, the list of customer requests and implement them, but it’s an incredibly important source of information that you certainly want to take very seriously when you’re doing your roadmap planning.

Without such a system of record, unfortunately what I see is a lot of recency bias where people are working on the roadmap, they decide: Oh, we should implement these customer requests and it’s literally the customer request they heard last week from kind of the loudest kind of most angry customers, as opposed to taking a holistic view on what really is the challenges across your entire user base and that’s what the system of record solves for.

Etienne Garbugli: So you’re because of that and because you’re looking at the trends you’re able to determine like what are the patterns that are coming up, and what’s currently the bird’s eye view of what’s really happening.

Sachin Rekhi: That’s right. And you’re able to have that bird’s eye view and then to put that in the context of what your business goals are that to decide what the right kind of roadmap elements need to be.

Etienne Garbugli: that’s super interesting.

Thanks for taking the time to chat today. That’s really appreciated. I think the listeners will get a lot of value from that. Where can people go to learn more about your work and to give Notejoy a try?

Sachin Rekhi: Yeah, so like if you’re interested in more of my thoughts on product management, I write a blog at sachinrekhi.com.

I’ve written over a hundred blog posts, videos, podcasts kind of talking about product management, product research, entrepreneurship. So definitely check that out and would also love for you to check out our product Notejoy, which is a collaborative notes app that makes it super easy for you to capture notes and then share those notes with anyone on your team.

So, just head over to know Notejoy.com to give it a try.

Etienne Garbugli: Awesome, so, we’ll share the links and really appreciate it. Thank you very much.

Sachin Rekhi: Thank you. Thank you.

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