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Our customers are jumping ship to competitors - what should we do?
117 Plays2 months ago
This week’s Scale-Up Confession comes from Tom, the founder of a SaaS company specialising in workflow automation tools for construction firms. Responding to Tom’s letter, Rob is joined by marketing expert Nicola Anderson and technologist Tim Palmer, to discuss possible solutions.
Thanks to our panellists:
Nicola Anderson - https://www.linkedin.com/in/andersonnicola/
Tim Palmer - https://www.linkedin.com/in/timpalmer/ https://thinkbluehat.com/
Connect with Us:
Have your own business question or leadership challenge? Please email Rob at rob@mission-group.co.uk (and let us know whether you would prefer a private answer or are happy to feature in a future episode).
You can also reach Rob on LinkedIn via https://www.linkedin.com/in/robertliddiard/ or to book some free time https://www.eosworldwide.com/rob-liddiard).
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Transcript
Introduction to Scale Up Confessions
00:00:01
Speaker
Hello, welcome to Scale Up Confessions, the show where we expose what it really feels like to lead a growing company. I'm Rob Lydiard. I was the founding CEO of a software company called Yapster that was acquired in late 2022. I'm now a professional implementer of the Entrepreneurial Operating System, or EOS, which means I work with entrepreneurs and entrepreneurial leadership teams to help them get more of what they want from their businesses.
Tom's Challenges with Customer Churn
00:00:25
Speaker
Today's confession comes in from Tom.
00:00:27
Speaker
Tom's the founder of a B2B software business in the construction industry that's experiencing churn problems. He's not quite sure what the issue is. He just knows that he's losing customers for his point solution to bigger bundled rivals. And he's got conflicting advice coming in from various leadership team
Expert Panel Introduction
00:00:43
Speaker
members. So I've invited two of my expert friends, Tim Palmer and Nicola Anderson, technology and marketing experts respectively, to help us figure out what might be the root of Tom's issues.
00:00:55
Speaker
and see if we can help him get unstuck and get his business back onto the path that can deliver what he wants. I hope there are things in there that ah that if they if you can relate to the challenges that Tom's experiencing, that you too will be able to get unstuck with Tim and Nicola's advice and their details as ever in the show notes, if you wanna reach out to them to have a proper conversation about applying their expertise to your business. Enjoy.
Tom's Company Struggles
00:01:28
Speaker
And we're off, my good friends, Tim Nicola. Scale up confessions. It's a brave new world, new new format. Welcome and thank you both. Great to be here. I'm excited about getting this discussion going. Absolutely. Thank you, Rob. Looking forward to this. My pleasure. So in a second, I'm going to play um the the the recording of ah of of a letter from a founder. It's it's recorded by a voice actor. um I'm told it wasn't recorded by AI. It sounds slightly AI-ish to to me, but I'll play it so so listeners can be into the loop of the confession we're going to be responding
Improving Customer Feedback
00:01:59
Speaker
to. But before we do that, would you would you mind just each just giving like a just a quick summary of your kind of background expertise so folks can understand the contribution they'll likely be looking to you for in this in this discussion? Nicola, do you want to go first? Sure. So someone described me as a vintage marketeer the other day, which I was not delighted by. um but I've been working in marketing and in the startup space since 2000. So yeah, a very long time.
00:02:23
Speaker
So I worked at various companies as a marketing leader, including GoCardless and more recently my tutor. And now I'm really focused on supporting startups and scaleups with growth. And that's through a number of different ways. I run three communities across both GTM and marketing.
Integrating Third-Party Components
00:02:38
Speaker
I have a coaching practice. I do three days a week of growth advisory work and helping them make those senior hires. And to keep one foot in the trenches, I also do one day a week of fractional marketing work as well.
00:02:51
Speaker
Wow, check that follow that Tim. Yeah, um I am also a vintage, ah I would say, in terms of my background was in um finance and IT consultancy. I sell at Blue Hat in 2016 and we work um as fractional CTOs, CPOs with firms to assist them in the rapid growth phase of the business.
00:03:14
Speaker
I too spend time in the field. You know, everybody in Blue Hat are practitioners as much as managers. So I spend time on site as CTO, interim CTO sometimes ah working with companies trying to um get their technology and product services ready for rapid growth.
Balancing Product Focus and Customer Needs
00:03:32
Speaker
Brilliant. And both quick question, quick clarifying question before we go on. How often, like what percentage of your work is taking companies from good to great building on their funding press releases?
00:03:43
Speaker
versus fixing sort of impending or already realized disasters. like how Like how much of the work do you do is kind of fixing when things are really not working? Oh great question. I think, I don't think you can split them out because often getting from good to great is fixing some of these problems. So I would say it's about 50-50, but I think what is fascinating is it always comes back to the same critical problems. It doesn't matter what stage, how much revenue, it's generally the same issues.
Clients Leaving for Bigger Platforms
00:04:17
Speaker
Yeah, interesting. I'd agree. I'd say the um
00:04:22
Speaker
you You have problems on both sides. You have problems of of them trying to scale, and you've got problems which are um things they've brushed under the carpet for a long time. And a lot of the work that we do is, yes, 80% of what they're doing is just about scaling because they' they're really on their game. For example, they know where their product's meant to be going. But there's always that 20% left, which is a thing that's going to really bite them if they don't fix those problems before they get into that scale period. So it's identifying those.
00:04:50
Speaker
real gotchas that are going to hurt the business going forward. So I'd say probably 50-50 of companies when they come to us of whether they think they need to fix problems or whether they're looking to help scale, but normally it boils down to the same problems, the same issues. And often it's things that we know investors are going to uncover. So if they don't deal with them now, they're going to really struggle to raise that next round. Absolutely. Well, that is a very good segue to listening to to our our new friend Tom. I'm going to hit play If this doesn't come out super clear over the microphone, then well i'll I'll cut it in for our dear listeners. Right, here we go. Over to you, Tom.
00:05:26
Speaker
Dear Rob, my name's Tom and I'm the founder of a B2B SaaS company specialising in workflow automation tools for mid-size construction firms. We've spent the last five years building a solid product suite that helps clients streamline project management and track real-time costs on site. By all accounts, our software works well and we've always received positive feedback from customers who use it.
00:05:49
Speaker
However, over the last year, we've seen a troubling trend. Some of our longest standing clients, ones that have been with us since the very beginning, are leaving for competitors. We don't often lose clients to direct competitors. Rather, they seem to be moving to larger, more comprehensive platforms that cover areas beyond what we specialize in, like accounting integrations and inventory management. Our sales director has been flagging this issue for months.
00:06:15
Speaker
and our head of customer success has tried to conduct exit interviews to better understand the trend. The feedback is generally polite, but unhelpfully vague, often mentioning better overall fit or convenience. um Our current resources make it hard to develop everything in-house at the same speed as the larger players.
00:06:35
Speaker
I've always tried to stay involved in customer relations, calling clients myself to understand their needs, but our small team is stretched as it is. To make things more challenging, my head of product feels strongly that we should remain focused on our core tools rather than spreading thin by expanding into areas outside of our expertise.
00:06:56
Speaker
Meanwhile, our marketing director thinks that a stronger loyalty program or added customer training sessions might help. How can we keep our existing clients engaged and prevent them from jumping ship to these bigger all in one solutions without losing our focus or burning out our team? Thank you for any advice, Tom. Tom, there's some familiar themes in there. I'm sure that both of you will be experiencing over the last year with your respective client populations.
Understanding Customer Churn through Interviews
00:07:25
Speaker
What are our first thoughts getting? I know you both said before the call, let's not dive into like giving pontificating advice, because most of the time you need to put clarifying questions. Of course, Tom's not here for us to to do that. But like, yeah, just what what's what's what's on your mind in the universe of things we need to consider and know to be helpful to Tom, Nicola? I think the first thing is how can you extract more insight from your customers that are churning? So what did he say? Helpfully vague, or unhelpfully vague.
00:07:53
Speaker
and And it's the head of customer success doing these interviews. And my first question would be, how are they running them? How can they actually get some value out of this? Because what is causing this churn? Now, based on that short clip, you know you can have some hypotheses around it. you know Is it that actually the users aren't able in the buying group, so the ones that are actually using it aren't able to actually share the value of it? And so you know with budgets being scrutinized by CFOs, they're not able to really push forward the business case.
00:08:24
Speaker
is it that they're not able to really see the impact ah that the tool is having because they're not looking at the right reports. I think there's so much important information that they need to try and understand. And it's how can you actually either upskill your customer success team to be able to get this information. Or sometimes what I found in the past is customers hate sharing negative feedback directly, particularly if they've got a strong relationship. And it sounds like, you know, they've been working with them for a long time.
00:08:53
Speaker
So is there actually an opportunity to bring in external interviewers where they might be a little bit more open? But that's my immediate i first thing you would want to do.
Technical Integrations for Retention
00:09:05
Speaker
That's so heavy. So actually like three big themes there to consider. um they're not even getting the real feedback to begin with, so they can't even diagnose, just make sure I've got this right? um Is it that there is value in the product, but the stakeholders are not able to communicate it to their to their colleagues, their sponsors, that are then, you know, maybe a new executive's coming in and saying, I've used this other platform, let's just change? Or ah so there is value, but it's not being communicated? Or in fact,
00:09:30
Speaker
There isn't any impact, so it's really nice to have in a changing economy. Maybe they can't justify keeping it. Is that what you're saying? And that ties back into the whole training piece. Are they using it in the right way? Yes. But Tim, from a product background, love to get your initial thoughts.
00:09:48
Speaker
Yeah, it's interesting you picked up on that, Nicola, because i was I also felt that this the exit interviews didn't seem particularly insightful, but he did mention a couple of other things which were um around the product itself doesn't seem to have kept pace with the market demand of what the customers are needing. So if people are switching to bigger players,
00:10:12
Speaker
that's larger players, it's generally a sign of the lack of integration of their software. And there were a few clues in there of a technology team, I think, who were who are building rather than buying or building rather than integrating. And this sort of not made here philosophy, I think may be prevalent in that company, that the work that's going on is very common actually in smaller technology teams who are self-sufficient and have built a product from the ground up, do not look to external mechanisms to speed up their product of development. So I would be looking at some really challenging questions on the CTO, the product manager, to say, well, how can we accelerate our roadmap of delivery by leveraging third-party software and integrating that into our products? And we see that, you know I'm sure we'll catch it.
00:10:59
Speaker
We'll cover AI, I'm sure, later on. But when you look at the AI integrations, you don't go and build your own AI. You integrate someone else's. And it's the same across all other products as well. And if the product manager is raising around where we can't develop everything, we're already too stretched.
00:11:16
Speaker
speaks to me again of a very blinkered approach and maybe not using enough marketing and out outreach to clients to find out exactly what they want from the client ah from sorry from the product and are possibly spending too much time sort of in their own so echo chamber looking at their own product. and Tim, when you say integrate, there are um I think like salespeople will commonly kind of meet other neighboring software companies at conferences and then become BFFs and want the technology team to stitch those products together. But then of course, from the end customer's perspective, they're looking at two licenses or some like mutant bundle of licenses that then makes it uneconomic versus a bundle competitor. Do you mean that type of integration or do you mean like technical integration where the delivered product is a single priced product, but it's made up of things that we've built in-house and things like components that we've taken
00:12:07
Speaker
off the shelf or do you sort of mean both? I'm just thinking for a non-technical audience.
Enhancing Customer Communication
00:12:11
Speaker
I could mean both, but it's more likely the latter. It's more likely the case of you're looking at um third party.
00:12:19
Speaker
components that you can and introduce into your system. So I'm thinking of things like a chat window with a bot behind it to answer clients' inquiries when you log on. I've seen firms who've built that themselves. And it's, well, why would you do that? You can just integrate a third-party product. So that is a case of a third-party integration to a B2B SaaS product which would plug into your system.
00:12:41
Speaker
But equally well, you can look at cloud technology and what's available in AWS and the components in there, which have got sort of ready to go services inside there. And are they making use of those types of products as well to to accelerate development? The other thing is when you're looking, and it's back to Nicola's point, when you're speaking to customers about how they want to use a product, it's um it's very important to understand the landscape they're operating in. So if they're, let's say heavy HubSpot users,
00:13:08
Speaker
your your typical client are you integrated hub spot is that a very low friction integration in which case the clients could just plug straight into that or is it a case of it's a really messy integration possibly with some manual steps in there as well and that might be the reason for the churn.
00:13:24
Speaker
is clients are finding well actually this is fully integrated product is a much more effective one so it's not just about being integrated to products that you're bundling and selling it's also recognizing the clients already have got a landscape you're very rarely going into a client and selling onto a greenfield product environment where they've got no systems they will already have office 365 or google suite or hub spot etc etc i think that is such an important point because i've definitely said no to platforms that I really like in the past, but they just didn't integrate with our CRM or our marketing automation system. But I think you also say something else really interesting there, Tim, in in this echo chamber.
00:14:03
Speaker
Are the product team actually focusing on the things that the customers really want or is it what they think the customers want? And I did some advisory work a couple of years ago with a really interesting company where sales and product had really fallen out. And it was because sales wanted this product roadmap and the product team wanted another one. But rather than actually going to the customer, they were just arguing. And so I said, okay, well, hang on. We don't actually know who's right here.
00:14:28
Speaker
I know sales really wanted reporting and the product really wanted to build out um some of the the the product features. And so I said, I'm just going to go and do some customer interviews. And without fail, every single customer said, you know the one thing that would cause me to churn is if we don't get reporting soon. It's been promised, I keep highlighting it, and we're not moving. When I took these these recordings back to product, they went, oh.
00:14:52
Speaker
That's not what we thought. And they actually changed the roadmap. But I think often you just end up having these internal fights, but never actually saying, well, how can we actually make a decision here? Let's go back to the customer. And I think this is why these customer interviews are so important, because it could literally be something so simple. I was talking to another client recently. like and ah And they were saying that they turned from product because they weren't integrated into Salesforce.
00:15:18
Speaker
There we go, something so straightforward, and yet it hadn't even appeared as something for a future um product launch. Wasn't even on that. how How often is that the case, Nicola, that you meet a kind of like average, and I don't mean that in a pejorative term, an average tech small technology company, and they they they really don't understand their their current or churned customers? like In your lived experience, is that actually pretty common? like Why is that, and what have you seen them do about it that's good?
00:15:46
Speaker
i think One of the challenges that I have seen is customer success teams aren't always completely transparent about churn um because they don't want it to reflect badly on them. right And I think also there can be a tendency to get very hung up on a particular like one customer may make a comment and then everyone is laser focused on that even though it's one out ah of X.
00:16:08
Speaker
um I think it's it's really interesting because I would say pretty much all companies will have some sort of value around, we're customer first. But when you're running so fast, it's so easy to forget because it takes a lot of time or you have your favorites who are super loyal and that's what you base everything on. And you're not actually looking at those that have got that there were a few red flags around them. So I think it's like you've got to live and breathe. You know, there's that HubSpot story about how they had a Teddy in the in the leadership meeting room, which was always the customer. And I'm not sure saying that everyone should do that. But I think it really is how often you're talking to customers. And what's interesting is the founder here said he talks to customers on a regular basis. But again, is he asking those difficult questions? Because sometimes we don't ask the question if we don't want to hear the answer. And we want a lot of reassurance that we're going great. So
00:16:57
Speaker
Is he asking those right things and are the clients feeling very comfortable and is it in the right environment that they are actually sharing? The other part I would say as well is, is he talking to the right people in the buy-in group? Because if he's talking to the senior leaders and they're like, yeah, it's great, we've got a great relationship, but actually the users are struggling, then that's not necessarily going to be fed back.
Non-Technical Founder Challenges
00:17:20
Speaker
On the other extreme, what I've seen as well is customer success teams are having regular conversations with the users, and that's all great, but they're not talking to the decision maker. And often those users might be relatively junior. They don't have that sway when it comes to, yes, we need to keep this technology. And so when it comes to renewal, they don't have the buying power behind them and that decision maker. When I was found a CEO of Yapster, as I reflect on it, I was so guilty of not listening, not really listening, not actively listening to customers. i am You're drowning in stress. you
00:17:54
Speaker
got a huge scarcity mindset. You know that your runway is limited. You think that your team is limited. You can't really imagine changing your team either because you don't have the courage and the experience to do it, or you just don't think you have the time and resources to do it. And customers are trying to help you. And Nika, you're right, they do often speak encoded language because they don't want to hurt your feelings because you've made so so much effort to build good relationships with them that you just can't can't see through it. So that that's a super interesting point, and I hope people listening if you're vulnerable to it like I was, maybe you can get somebody in to have those conversations with with or for you. Tim, the other thing that happened to me was I often, because I'm not technical, I didn't know how to action product related feedback. And then I'd go and try and have a conversation internally. And the words didn't come out right, or they weren't un received, or I got bamboozled by the person who refused to receive the feedback that I was trying to pass on on behalf of the customer. And often what I ended up doing is going and using my
00:18:49
Speaker
limited charisma to persuade customerss customers that they were wrong. ah Which long term doesn't work? so can you just can you Can you just talk to me a little bit about that where you've got a non-technical founder that is trying to listen to customers and they're trying to fix a churn product problem through product and they just don't know where to start?
Role of CTO in Product Development
00:19:09
Speaker
I think if you start at the top on the product, what we see the most, so we we do a lot of due diligence reviews. We work with companies who are six to nine months out from their next major funding round and we work with them on product market fit their technology organization, their costs, and the team dynamics, and do they have the right team and the right people and the right roles, and will they be doing that when they move forward? And what we find when we work with these companies very often is they either have a backward-looking view or a forward-looking view on product. By backward-looking view, they're looking at ah history, they're looking at existing customers, and they're worried about churn, and they're worried about keeping those existing customers happy, and they're layering on more and more
00:19:54
Speaker
almost bespoke features for those customers to custom build a product around what they want. And the early clients that they've won, they've won them because they've given that sort of very hand-holdy level of service. And it sounds like the CEO, in this case, is doing that, that is able to go out and actually know have built a relationship with the clients and almost build what they ask them to do. The Ford-looking ones are, and there's no right or wrong here, the Ford-looking ones are much more focused on the strategy of what we're building.
00:20:21
Speaker
I'd say probably more the US clients are more like this, that they're more aggressive about saying, well, we don't worry so much about our existing customers. we want to We want to bring our product forward and build it faster. And you kind of need to do a balance between those two things. You need to stop churn. You need to keep recurring revenue coming in, particularly nowadays, which is becoming more important. And you also need to look at what you're doing in the future. And the challenge you've got, Rob, in your question there is,
00:20:50
Speaker
That's an impossible balancing act when you've got limited limited resources. nobody's got um you know Unless you're looking at meta or something like that, you're almost always going to be hit by resource constraints before you hit by anything else, and therefore you've got to prioritise and work out what really matters.
00:21:05
Speaker
And therefore, it's to to us, it's about putting product in the center of sales and marketing and customer interviews and getting them getting someone or a team involved in that who are really um switched on to all of those voices and able to get all the balancing and all the nuance in those conversations to build a product which ticks the boxes for everybody to a certain extent. You know it's going to be 100% pleased, but what you need to be able to do is to make sure at least Everybody says there's something in that product roadmap that's for them. And as you move forward, that evolves. Now, you may make a decision to say, well, actually existing customers, we're going to have to exit some of them because actually where the product needs to go next is not what the clients want. In this case, it doesn't definitely doesn't sound like that.
00:21:47
Speaker
And when you're looking at future direction, it may be actually we're going to temper what we want to do in the future because we can't pivot our business to become all things to AI and our product in the next six months. But maybe we want to make that strategic direction in three years time. So I don't know if I'll actually answer your question there, but it's, it's not an easy, it's never an easy and there's never a right solution. That's the bottom line. It's always going to be a compromise. Well, I saw Nicola nodding and I'm going to come, I want to ask Nicola's further thoughts. I just want to ask one clarifying question.
00:22:18
Speaker
um Tim, if I'm CEO and I'm lost, what should I be looking, what should I be expecting from a great CTO to help me navigate this landscape? So we talked about customer product insight. I'm just interested in your view of the respective accountabilities typically between a great CEO, a non-technical CEO and a great CTO. And then Nicola, I'd love to know your opinion on the marketing perspective, the wider exec team, and then whatever thoughts were occurring to you as Tim was talking. I think the great CTO It's really a partnership between the CTO and the CEO or the COO, whoever they're working to most closely with. And that's ability to communicate. The great CTOs who I've i've worked with are
00:22:59
Speaker
Yes, they're ultimately geeks. and theirre doubt you know it would That's what we're looking for in our CTOs, is someone who can really sort of understand where the technology is going. and But that's kind of table stakes of of a CTO, that you've got that ability. What you really need on top of that is the ability to communicate to non-technical people and be able to articulate what A request is going to mean in terms of technical costs, and that could be resource costs, it could be opportunity costs you're going to have to take, it may be on ongoing long-term infrastructure costs.
00:23:33
Speaker
the If you take the worst case rather than the best case, the CTOs who do struggle are ones who are, give me a problem, a head down, I'll lock myself in my bunker for for three months and I'll come back when I've finish fixed it. We see a lot of that. And those are great people. And don't get me wrong, the the CTOs who's done that has brought the business from zero to one ah in very fast way and it's built something which is very ah scalable. But if it don't develop those communication skills and the ability to ah communicate um with the business, the the important um levers that that the business can pull in order to direct technology, then the business will not scale as fast as it should be able to. That's so heavy and so true. like Not feeling like you have access to that lever as a CEO ceo is so brutal. Nicola?
00:24:21
Speaker
I just wanted to add one thing, um based on what you were saying, Rob, about you translating the customer needs to the CTO. I think one of the best things that we did at Go Card is, and then at my tuition, I wish I'd done it before, is we used to have customer days.
00:24:34
Speaker
And we used to present the roadmap and then have a customer panel where we'd ask questions like, what is the one thing that drives you mad about our product?
Engineering Teams in Customer Discussions
00:24:45
Speaker
If we were going to do anything next year, what would that be? And also have a real Q and&A around that product roadmap. And we'd make sure we had the product and engineering teams there. And it was always really interesting because some of the engineers and and product people say to me, this is the first time I've actually met a customer.
00:25:00
Speaker
because they don't go to the events, they're not on the calls. And so often they're quite siloed from it, and that had more impact than anything else because they were actually directly hearing and having conversations afterwards in the networking piece. And every time it's made, the team got, actually, do you know what? We need to be really focused on this.
00:25:19
Speaker
And I think we assume, particularly when we're in revenue teams, that everyone's hearing from customers all the time. And they're not. And even in marketing, you know you can ask a marketing team, when did you last speak to a customer? And if they haven't been running in-person events, it can be quite a while. They may not have even been listening to customer calls. So I think getting the customer out in front of the broader business is
Cross-Functional Collaboration in Scaling
00:25:40
Speaker
really important. And then they're doing the sell for you as a CEO. You're not having to translate it and potentially not speaking the right language either.
00:25:47
Speaker
and How do you think about like a well-configured executive team around, let's say, a first-time CEO that might be experiencing some of the challenges that that Tom in our confession is experiencing? Well, you know my obsession with five dysfunctions of a team. My favorite book that I have given to founders when I've joined companies. I think what's really critical is everyone treats it as their number one team. This isn't I run the engineering and product team, and that's my number one team. Ultimately, we've all got to work together, and it's about having a diverse group of people with different backgrounds and different ways of looking at things.
00:26:21
Speaker
so very happy to say that some of my best marketing ideas have come from my CTO. I can't seem the same. I don't think some of his best ideas have come from me most recently. But I think it's all about problem solving together, because we all have our conscious and and unconscious biases and our favorite projects and, you know, the nice new shiny thing that we want to go after or something that another, another CEO has mentioned that we think we must be doing too, or our competitors are doing. And it's getting that group together, where everyone is focused on the same North Star. And how is it that we as a group are going to get there? Now, that could mean that we're going to continue doing what we're doing. It could mean and I've had situations where I've said, you know what, we actually need to invest a ton more in product. And I'm happy to give some of my marketing budget
00:27:09
Speaker
to actually bring in additional people into product. Because without that, we're not going to be successful. And I've seen it work the other way around as well. Whereas if you're very siloed, this is my budget. This is my resource. Don't touch it. It doesn't work. That's a great point. I see Tim nodding vigorously. Guys, and Tim, if you've got a further thought on that, I'd love to hear it. But the I guess ah I know time is short. I'd love to finish by asking you a question.
Viability of Point Solutions
00:27:34
Speaker
bundling point solution. It feels like we've just gone through 15 years of you know focus, focus, focus, point solution. And then suddenly over the last couple of years, the market seems to have really shifted. You're hearing lots of founders saying that they're struggling to compete against these kind of bundled monstrous rivals. Can founders, I know it's difficult to generalize, but like how do you feel about founders still persisting with point solutions over the coming years? and if you're if you Is it the right thing to do? Does it is not once as fits all? If you're going to maintain a point solution strategy, what should you be thinking about? So on the point solutions, I think, you know, I um i love Nicola's comment on giving up some of the marketing budget for product and I'd love to work in that team because you that's that's a bonfire you quite often have. But I think the
00:28:23
Speaker
As a small company and as a startup, and you know you are almost inevitably going to be building a point solution. You're not going to have the capacity to go and build a rival, for example, the Salesforce. That's not going to that's not but going to be practical. What you can do, for example, you know if you look at WhatsApp and companies like that, how successful they've been on very small technology teams building solutions, which just hits the notes and just hit the tone of what needs to be delivered. The question comes as to what is the I hate to say exit strategy but because it's not all about exit, but it's where does this lead us to? If you build a good point solution, do you then have to integrate into other products, i.e. you get acquired and your product gets merged into a wider sweat of set of tools? Or can you be a standalone product at Infinitum and run that effective point solution for a long time? And that comes down to are you
00:29:16
Speaker
in a um a sector which is well serviced by lots of companies doing similar things, in which case that consolidation may be what you need to do. And that's certainly what we've seen in the last few years, where a lot of SaaS business has been acquired by larger firms who've consolidated and integrated those into bigger tool sets. And then you end up with, for example, workplace automation, HR solutions.
00:29:39
Speaker
you know five years, ten years ago you'd go and find a system which did holiday tracking, now you'd actually find that integrated into a suite of tools and also do ah HR performance reviews etc. So we've worked with companies who are in in the space of saying well we want to be acquired, we recognise that we can't scale the business to where we need it to be by organically growing it up or indeed by going out and raising more VC funding.
Focusing on Core Strengths and Value Propositions
00:30:03
Speaker
But that's not to say there are lots of companies out there who are able to um be self-sufficient and survive as a smaller business. And you know if you're looking at a SaaS business and you're you you're running 1,000, 2,000 clients on a good annual fee, you know these smaller businesses can survive long term. It might not be the unicorn growth model that VCs or some VCs would expect.
00:30:25
Speaker
It's nothing wrong with doing that. And we work with one very successful company in the reg tech space who have grown organically and doing very well. And they've not done that ah by raising money. And they've not done that by ah trying to build everything. They focus on what they're good at. And they're getting better and better at doing that. And they're becoming more and more to go to a place to go and run that that's type of business. Fascinating. Nicola, what do you think?
00:30:50
Speaker
100% with what Tim just said around being laser focused on what you're really good at because these one size fits all, they're generalists and they won't have the expertise that this business has in this particular area. I think what they need to do though is go back and think about their positioning and their value prop and their messaging. How are they getting across what extra value and impact they are going to have? And it might even be, I know they've already got quite a defined ICP, but going back to that, I don't know how how large that that market is, but being really focused on the companies within that that are gonna really benefit from this. So I think it's about going back to the basics and revisiting them because they may well need to adapt some of that. And that's how they're going to stand out.
00:31:38
Speaker
Fantastic. What a great conversation.
Contact Information for Further Discussion
00:31:40
Speaker
Nicola, Tim, thank you so much. Are you happy for folks that are listening to to reach out to you if they want to pick your brains more? What's the best way to to get you? And I'll put those details in the show notes. Yeah, absolutely. Find me on LinkedIn. yeah Always happy for a chat. Likewise. Thinkbluehatch dot.com is the website. And I'm also on LinkedIn, obviously. Thank you so much. Till next time.