A Look At 18 Months
Over the last 18 months, I have taken on a challenge that is quite unlike anything I have experienced before. In February of 2022, I joined an early stage startup that was looking to build and grow a sales organization to expand its reach. I imagined I'd start my job by understanding what the product is, learning the tools, working on a few deals myself, and then hiring and growing a sales machine. I imagined familiar challenges, I imagined struggling with closing complex deals. I imagined fighting to get certain features built to please specific customers.
Suffice it to say, the reality was nothing like my imagination.
What ended up happening that only a few weeks after starting at Kaizo, a reduction in workforce was in full swing. The team was slashed by 50%. Challenging market conditions and an over investment in people and tools has led to the company being short on cash. My world felt like it was crashing. I left my challenging but rewarding job at Instabug to join a company building something, and it seemed like I either misjudged my new role, or got greedy, or both, and as a result faced months of uncertainty. To top it all off, a global economic slowdown, and startup funding collapse hit at the same time. It made it impossible to continue raising money, and lowered Kaizo's prospects for growth significantly.
That's the background. The why behind the current situation.
As a one-man sales team, I was then tasked with closing renewal deals, bringing in new deals, spinning up outbound, managing upsells and downgrades for customers, owning account receivables and payments, owning tooling for sales and customers success, owning the inbound funnel, and working with product on new features, improvements to existing features, and delivering customer feedback on the current product. As a result, I got to live a breadth of experiences in a fairly short amount of time. And I want to share some of those with you.
Working primarily in sales, but having an eye and a seat in product conversations gives you a really unique insight to what should be built, why, and for whom. Engineering teams tend to associate the complexity of building a feature with its relative value for customers. Surely, engineers think, if this feature is really complex, it must mean that it will solve lots of problems and be valuable to our customers, and therefore we must spend time and energy into making sure this feature is coded well, scales well and should have as little tech debt as possible from the get go.
A good example of this is when Kaizo shipped an AI feature that had a little tooltip asking customers whether the AI's assessment was accurate or not. Customers liked the tooltip that allowed them to give feedback to Kaizo as much as they liked the AI feature itself. They went to extra lengths, to even mentioning this on calls with us. That's how much that little tooltip, that was last minute decision, meant to customers. So much so that it was mentioned in the same breath as the AI feature itself, as if the two were inseparable.
Additionally, working only in sales sometimes leads to hyper-focus on the deals, where nothing matters but the end result. Everything is either in the pipeline or it's not, and things that are in the pipeline are valued really highly, while things that aren't, well, aren't. Working closely with marketing pushes you to see from a much wider lens. Sure, some prospects that start at the top of the funnel make it to the end of the funnel, but lots don't. When working with marketing, you start looking at everyone that doesn't, and you start to focus on improving conversion, on looking at prospect journeys, and you start treating every step of the funnel as its own pipeline. You start to care much more about the website, the landing pages, the product descriptions, because you figure out that people who have made it to booking a call with you have gone through so many filters that there's something unique about every prospect.
It's also amazing what KPIs will do to your sense of what is important to work on, specially at a very small startup. At some point during my tenure at Kaizo, I had a KPI for converting inbound signups into customers. I started really looking at every signup, looking at every activation of every feature, and looking and what individual users were doing. Then, I even pushed for a change in our pricing. Freemium, I figured, was costing us so much money, and leading to too little conversion. Almost everyone who signs up for our product was happily fitting into the freemium plan. If we wanted to make money, we had to do something about them. So we did. We removed our free plan and put in place a trial, which improved conversion. It allowed me to make my numbers in some months, but it also hurt signups overall.
And it’s a tradeoff that I only learned whether I was willing to make or not after it had happened already. But if signups drop, is that good or bad? I argued it’s good since we were getting far fewer of those unqualified signups. Some would argue that it’s bad since there’s fewer signups inevitably means fewer product feedback. And here is when the dichotomy of good-or-bad falls apart. We are not operating on a spectrum of good to bad. Rather, the spectrum is goal dependent. If our goal is to have signups, regardless of whether they are qualified or not, then switching away from our freemium model hurts our goals. Instead, if our goal is to get and convert some customers to paid, then putting up a trial reduces the noise from the window-shoppers, the ones who would never buy anyway, and allows us to focus on the that are most likely to be our customer.
Over the last 18 months at Kaizo, we certainly have had our struggles. The few that I have noted above are a few drops in the ocean. What this allows you is to understand that decision making is often (no matter how hard you try) based on a limited set of inputs. If you were to consider everything possible, you would never actually make a decision. That goes for career choices, that goes for choices within your job, and that goes for other life choices as well.
Particularly, working at a (small) pre-product-market fit startup is about making decisions with a very limited set of knowns, and mostly with unknowns. In fact, working at a startup is all about uncovering these unknowns. If the unknowns were knowns, the product would’ve already existed and been a success, or the field would’ve been abandoned since there is no hope. So, when thinking about joining a startup, realize that an integral part of that package is dealing with uncertainty.