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What happens when customers tell you that you’re selling the wrong product? Or when they tell you that your product is great, but that they aren’t the right people to use it? Thank them. Because they just saved your team the years of spending money and energy that it might have taken to find out these things on your own. Listening to these very first customers can be just the thing needed to save your company, a lesson FoodGenius founder and CEO Justin Massa said he found out since founding his company in 2010.
“Frankly, there was one top thing that our customers taught us about our product - in short, they taught us that we were selling the wrong thing,” Massa said.
When Food Genius was founded, the team was selling the food industry a dashboard for exploring restaurant and menu data. Massa said Food Genius landed a few customers who liked the idea of a self-service tool, but “we quickly learned that what our customers actually wanted were insights packaged for how they work.”
By now, Food Genius has found its secret sauce: providing answers to data questions in familiar formats, such as infographics, Powerpoints and tables. Since making that shift of focus from primarily providing a dashboard for exploring data to actually providing insights, Massa said that Food Genius has more than doubled its client base and revenues in half the amount of time.
Online contract solution Sertifi had similar feedback from their earliest customers who essentially told the team, “Well, no, we don’t want any of that,” co-founder John Stojka said. Back in 2005, Sertifi built a product with which users could log in and send transactions, but the team quickly found out that their customers just wanted Sertifi’s API to connect with their Salesforce and billing systems.
“We didn’t know how important it was; we were kind of dabbling,” Stojka said. “We had a lot of small customers at the time, but we quickly learned that, to get the deal with the large customers, we were going to have to have strong integration points.”
This realization “changed everything” for Sertifi - and the team quickly built out their API, spent more time promoting it and started building prebuilt integrations into Salesforce and Microsoft CRM. Now, Sertifi’s prebuilt integrations make up about 95 percent of the company’s transactions.
Narrowing focus in a broad market was the key for Sertifi in its early stages, but for another software company, BigMachines, the key was expanding its focus - which their first customers quickly made clear.
“Our early customers pushed us to go beyond just our product configuration core product to also automating the full proposal and ordering process with full integration to enterprise resource planning,” co-founder Godard Abel said. “This enabled them to go to a ‘lights-out’ order process and substantially reduce SG&A costs and order cycle time. That huge ROI ultimately was the basis for the company's entire success.”
Success is indeed the right word to describe the story of Deerfield-based BigMachines: in November, Oracle completed its acquisition of the 14-year-old company for about $400 million. Abel said it took a while to reach this point because BigMachines was a bit premature with the product it was selling, aka customers didn’t even know that they needed online sales configuration, pricing and quoting.
“In hindsight, we were too early for most customers in terms of being a cloud solution and offering a multi-tenant platform,” Abel said. “Many of our early customers and prospects still wanted to bring our product on premise for hosting. Luckily, we did not do that - even though it cost us a lot of revenue in the early years, but paid off big when Salesforce popularized the enterprise cloud a few years later.”
Although BigMachines didn’t listen to their customers in this case, they were in fact convinced by early customers to offer a hosted single tenant solution, which “which wound up working well for our big enterprise customers who are pushing 50,000 plus quotes through BigMachines each month.” Later, Salesforce even followed suit with a hosted single tenant solution as well.
TempoDB cofounder and CEO Andrew Cronk also said his earliest customers quickly let him know that there was more his company could be offering back when he launched the database service in 2011: “We released a database and storage system for sensor data and our customers quickly started asking for a real-time monitoring service since the data is inherently streaming to us; this can be viewed as an ‘economy of scope’ opportunity.”
The TempoDB team was not only able to help its customers by expanding its offerings with a real-time monitoring service, but also by providing advice for how to best use TempoDB; so Cronk said he changed his hiring plan to include a new Solutions Architect role to help customers with the integration process and he also focused efforts on the company’s blog to help customers with large technical issues.
Letting first customers’ feedback change a company’s course might be the best thing that could happen to a company, although it is ultimately the founding team’s prerogative how closely they listen to what customers are saying; the point is to just get the product out there and get as much feedback as possible in the early days, Stojka said.
“The advice I would give is just keep experimenting, testing and talking; get out there and ask customers what they like and don’t like,” Stojka said. “I think a lot of people raise the money because they think they know what works and they go out there and sell: sometimes it works and sometimes it doesn’t. But I would say experiment, experiment, experiment, ask, ask, ask. You just never know; you have your gut feelings, but customers may or may not be ready for that.”
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