Hidden signals of discount asks đđ
Dissecting discount requests, the inherent upsides (within the many risks) of the compliance space, and deliberately catering to multiple horizontal categories.
Welcome to the fifty-fifth edition of The Baton. A fortnightly newsletter that brings you three, hand-curated pieces of advice drawn from the thoughtful founder-to-founder exchanges and interviews taking place on Relay (curated with đ at Chargebee) and the interwebz. So, stay tuned!Â
In this edition, youâll find instructive and inspiring pickings from the brains of (#1) Showpadâs Pieterjan (PJ) Bouten, (#2) Vault Platformâs Neta Meidav, and (#3) Merge APIâs Shensi Ding.
Recently on Relay:
AMAs (upcoming!): Weâre really looking forward to hosting Showpadâs co-founder, PJ Bouten, for a Relay AMA, tomorrow. From doing CRM implementations across Europe, to venturing into startups at a social network that preceded Facebook, to starting and scaling (0 to +âŹ75M in ARR) a category-shaping SaaS business, PJ has long abided by âsolving massive problemsâ and âreiterating value at every customer touchpoint.â If youâre not on Relay and keen on joining PJâs AMA, please request an invite, here.
#1: ââŠin the early days, we discounted way too aggressivelyâ â Showpadâs co-founder and former CEO, Pieterjan (PJ) Bouten, summons hindsight and dissects real issues that underpin early-stage discounting. (Source: SaaStr)Â
So I think discounting for me is related to value. If youâre discounting too much either the customer doesnât get the value or your sales reps arenât able to articulate the value well enough.
Or you donât have enough proof points to demonstrate the value. Maybe your pricing is just too high and you should rethink how youâre going to market.
Looking back at Showpad, I think, historically, in the early days, we discounted way too aggressively. Especially for bigger enterprise customers. And we did it just for the sake of winning the deal. And yes, in some cases, obviously because of the logo.
I would honestly ask thatâŠsome of my customers have come up to me after they were a customer for 1 or 2 years as weâve developed a great relationship with some of the executives.
And they would say, âPJ, the way you guys went to market in 2014/15, you were cheap. If the price was double that and youâd have added a $100K in professional services, we still would have become a customer.â
Itâs that balance that you need to find. And itâs not an easy thing. You learn it by going out there, selling your product, asking your customers for feedback, and as you develop some of these better relations with customers and get a better understanding of the market, you also get a better understanding of the value.
#2: ââŠnot just compliance, but GRC (governance, risk, and compliance) as a whole is having a momentââ Vault Platformâs co-founder and CEO, Neta Meidav, illustrates the enduring opportunities â amid the endangering risks â of serving a space with ever-changing regulations. (Source: Angular Ventures)Â
I think itâs definitely a challenge but also an opportunity, when regulation is ever-changing and your platform enables that compliance, you constantly have the opportunity to release new products within your suite. You constantly have the opportunity to upsell customers as well.
And you have the opportunity to hold the know-how. These days Vault is partnering with leading law firms around the world to create a knowledge centre that puts us in a position where we know the changes that are coming before the industry even knows them.
We have the opportunity to educate, and through education, we have the opportunity to sell. And to innovate with the industryâŠThatâs the strategy.
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I think the main problem with compliance or at least the way it has been perceived (for good reason!) is that weâre talking about a very risk-averse audience by nature. Weâre talking about a target audience that doesnât respect the underdog, the disruptor, or the innovator. Theyâre used to going with check-the-box solutions.
But I think whatâs really exciting about this market right now is that, not just compliance, GRC (governance, risk, and compliance) as a whole is really having its moment today. Same way as HR had its moment close to ten years ago with the whole employee engagement movement coming to light.
[GRC isnât] as saturated. They donât have an abundance of tech solutions and capabilities as their colleagues in the HR department. And they need better data, they need technology to really transform their business.
And this is a great opportunity right now. Our customers, for Vault specifically, would never be check-the-boxers.
The business weâre growing is very much on the back of kind of the new generation of compliance leaders [or] legal leaders.
[For them] checking the box is no longer an option, they need to prove incredible value to their organization and truly defend it from risk and therefore theyâre looking for technology that takes them way beyond the check-the-box exercise.
So our early adopters are eager to find new technology solutions and to adopt them quickly.
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A mistake that Iâve made early in the days is that I didnât want to appear as being too small or too young as a company. So I wasnât really open about the roadmap and what it brings about. I thought letâs just find customers that are bought into the product as it stands today.
But what Iâve found and Iâve found this specifically with compliance buyers is that they truly appreciate the opportunity to have their input into the tech developments in their areaâŠ.They find this truly valuable.
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Today weâre very open about this is what the product does today, this is what the product is going to do, come and help us build it. Itâs your moment now. Itâs this communityâs moment to shine.
Weâre finding that a great way to improve our product in a way that really serves the need and to sell. Enterprise buyers, not just compliance buyers, love having their footprint on the roadmap. And the minute theyâre involved, theyâre more keen to buy.
#3: The foreword-looking wins (across product and culture) of building for different categories at once â Merge APIâs co-founder, Shensi Ding, on why they pressured themselves into solving for two different categories from the get-go instead of following convention and honing one. (Source: VentureFizz)Â
We actually decided to do two categories at the same time. The reason why we wanted to do that was because we wanted to make sure that we start from the get-go being a cross-category product. We didnât want to build one [and then] get siloed and stuck with it.
We wanted to be able to start proving out, over time, [weâll] keep expandingâŠOne thing we thought about was how could we choose categories that were a little bit different, so we could invest in longer term features for the product that might not be relevant for the first one.
So HRIS doesnât have as much data as ATS. A single ATS can have (say, for a mid-sized company) millions and millions of candidates.
And that amount of volume is so much more significant that forces you to invest in scalability upfront. We had to do optimisation. We had to make sure the database was able to handle that load.
We also had to make sure that we were accounting for certain things like custom fields, all these different end points, receiving web hooks, and all these different things that we knew were going to be huge problems for ATS, we were forced to also address for HRIS, and made our HRIS product a lot better.
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As we approached two categories at the same time that were very different, it forced us to make sure that the product overall was much high quality.
We also wanted to make sure that we had the pressure of two different categories to support upfront too and just have a culture of making sure everythingâs going to be good [as we grew] instead of focussing on one and having [other categories] as lost children.
Until next time,