Every week we take half an hour to talk just about any topic that crossed our minds during the last days and create a podcast for you (Listen to it in Spanish here and subscribe to our feed). We call it an Open Mic Podcast as we want to invite different people to participate, new ideas to take form, and to shed light on various experiences and perspectives on business development.
Quipu's turning four — learnings and becoming a sales-driven SaaS company
For a startup every year is like little life, with new people, new features, new users and new challenges.
The fourth year for Quipu has been, according to co-founder and CEO Roger Dobaño, the craziest in terms of changes.
We’ve almost built an entire new engineering and design team and we’ve also built a totally new marketing team. On top of that we’ve moving over to being a sales-driven SaaS startup, not only focusing on product.
Last year when Quipu turned three years old, Roger wrote a post on working in a startup and how every year feels like a dog year, an opinion he still holds:
Every year still feels like seven, but we’re growing up to be a mature software company, and that means a new set of changes.
The radical team change
Over the last four years Quipu has slowly but steadily been growing their team as their business grew year over year.
A small development team of a few people where each team members did a little bit of everything, has grown to a full scale team, with several team members dedicated to the back-end, front-enders, a product designer and an architect.
Co-founder and CTO Albert Bellonch puts it like this:
We’ve gone from a startup that more than anything prioritized shipping product and going super-fast, to a more established tech company, where we can use more time and resources on dedicated parts of the product.
Even though the seven person development team is growing to know each-other better, Albert is happy to be able to spend more time talking with each developer:
Before I was coding every day, but now I’ve got time to talk to each team-member, how they’re doing and how they develop themselves professionally. I think that’s super important the faster we grow.
CEO Roger believes there ‘s a clear reason why they’re so happy with the new team:
In the interviews we didn’t only test their code, but more importantly, we tested their ability to think deeply about hard problems.
The reason why we chose to do these tests is that we’ve learned that you can be fast, but if you don’t think properly about the challenges you face, you’ll have many long-term problems.
Also a new sales-team has been built from scratch, with their own sales manager in place to lead the new department.
Until recently Roger was the person leading the sales effort, but being in charge of both the sales and the company as a whole becomes challenging as the company grows:
We always had a competitive advantage with our product, but our sales effort has been too slow too long, and we needed to change that.
The last months Quipu has built a four-member team of energetic sales people to bring their “friendly accounting” software to the world (and they’re looking for more energetic people)
The issues of growing up
The first years of a startup’s life it’s easy to motivate people. The team is excited to be working on something new, something that’s changing the status quo, just like Quipu’s doing in the B2B finance vertical.
But something changes when the team grows and the startup becomes more established, according to Roger:
The phase we’re in right now is one of the most demanding periods for our company. And just as our company has grown the last years, so has our team, and the relation you have with them is not as “familiar” as it used to be. Keep building a strong company culture is as important as understanding that people have lives outside our little tech bubble. I think that’s essential in continuing to grow what’s one of Barcelona’s best teams.
2017 has also been the year of international expansion and the first customers in France has now started using the Quipu product under the new name Zyfro.
Our new marketing and sales team consists of several French people, the first feedback from customers has been good, and we’re eager to see how the rest of the French market responds to the product.
He adds:
That everyone can do business on the internet is the biggest lie I’ve heard. Even though the barriers are low, like any business in order to grow fast you need a notorious product, money and relevant mission.
Quipu has a goal of raising their series A-round sometime at the start of 2018.
The mechanics of growth with ex-Gmail product manager Itamar Gilad
Exponential growth is what most startups are searching for, and something most entrepreneurs never experience.
Itamar Gilad has spent seven years at Google managing products at Youtube and Gmail and have in both cases experienced what most entrepreneurs are dreaming about: seeing growth in the hundreds of millions of users that genuinely love your product (you’re probably one of them).
This is not an in-depth post on growth, so if you feel you got the basics covered, I suggest you book a private lesson with Itamar. But if that’s not you, please continue reading.
The one metric that matters
The first things Itamar suggests is that you pick one metric to grow.
One of the biggest mistakes companies does, is not choosing exactly what to grow. You have to find the one metric that matter.
Facebook uses MAU’s, Gmail has WAU’s, Whatsapp measures “sent messages”, Airbnb “nights booked”, etc. Find your own metric, and choose it wisely. But make sure that the metric you’re measuring is connected to how much value you’re providing to the users.
1st, 2nd and 3rd tier metrics
When you’ve found the one metric that matter to you and learned how to properly measure it, you should try to discover your KPI’s and your proxy metrics.
The KPI’s (2nd tier metric) include measuring CLV, MRR, CTR, etc. The 3rd tier metric is tougher because it’s very company specific.
As you probably can imagine, it’s a bit tough to ask a team of developers: improve monthly active users, you need to figure out what smaller things are driving growth for your product?
All successful companies have these pivotal moments when they discover a proxy metric that ends up driving much more growth than they anticipated.
- Facebook’s example is that they found that if a user got 7 friends within the first 10 days of signing up to Facebook, they would become MAU’s.
- Airbnb’s example was when they discovered that profiles with nice pictures ware rented much more often than those without good pictures. They started providing professional photographers the users could pay for, and growth skyrocketed.
The only way to find these magic elements is by deep diving into your product, into what you call a discovery phase, and when you find your product market fit, you hopefully know the most effective triggers to your growth.
Find and start your growth engine
So how does this loop of positive feedback from your users look like? And how do you start your growth engine?
First, you got (1.) retention: People that goes through your acquisition funnel, becoming active users and coming back for more. This means that people are finding value in your product.
Then you got (2.) referrals: People that like your product so much that they’ll recommend it to other people in their network. This, word of mouth, is very powerful.
The third one is (3.) revenue: Everything from subscriptions to in-product purchases, etc. That you can sell to your users. The important factor here is that each user generates more revenue than what it costs to get that person through the acquisition funnel.
The only good way to start this engine and get it to run fast is by producing a product that instantly gives value to your users.
A fourth part of the virtues loop is something very few companies manage to really utilize, which is (4.) learning: While the engine is running, you use data from your users and your qualitative insights to learn how people go through the funnel, and how to optimize it to make more people slide through your funnel in a better way.
Template for growth
- Choose one metric that matters to you and your team — let it be your north star.
- Identify proxy metrics and build a growth model
- Picture right growth engines (like above: retention+referrals+revenue)
- Optimize for your OMTM with research and experiments
- Focus on (demonstrable) value to user
REMEMBER: This was a brief rundown of Itamar’s talk, full talk here.
Continue reading startup stories?
How to develop truly conversational bots
Have you ever had a pleasant conversation with a bot? Chances are high that you have, as chatbots are getting smarter and better at helping us deal with the products we’re dealing with everyday.
Barcelona startup Caravelo is at the moment developing six chatbots for some of the biggest airlines in the world. The chatbots they build help millions of travelers to book and reschedule flights, provide customer service, act as personal concierges and much more.
Even though all their bots use NLU (natural language understanding), they’re not building their own solution, but are using existing NLU solutions to cope with all the different languages airlines need to speak with their customer, according to co-founder JoseLuis Vilar:
“If we would try to build an NLU solution for all the languages our client’s needs, we would be dead.”
Not replacing apps
Caravelo says beyond the hype, that the bots they’re building are not replacing apps, they just doing the same things very differently in terms of UX and UI, but also in terms of use cases.
“We won’t build bots for everything, only where it’s natural to have one.”
After being live with several chatbots for nearly 3 months, collecting thousands of interactions, they’ve already learned a lot of valuable lessons, the biggest being not ask the same questions over and over again.
According to the startup the distance between success and failure is quite short, so you need to get things right the first time around. And according to Vilar, even though the risk for failure is high, the reward for the customer when things go right is much higher.
Work on building a solid knowledge base
After tracking their bots conversations the latest months, Caravelo has found that 20 percent of the inventory of intents (Q&A’s) makes up around 80 percent of the total value. So you need to focus on that part first, building a really strong inventory to start all conversations, the right username and contact, pictures, etc.
The next 15 percent of value is based on the inventory of questions and answer (intents) where you need to build a solid knowledge base for your specific industry. In Caravelo’s case, they’ve built a database of 1000 FAQ’s related to the airline and travel industry, and this is based on interactions the airlines have had with their customers over the years.
The last five percent of value are from the questions a bot cannot answer, and the idea is this is the place where we get the human take-over, and a customer service agent will serve any remaining problem.
Key learnings
The most important learning Caravelo has done the last months is to avoid user loops, like shown in the pictures above. There are few things as annoying for a user to go through the same questions over and over again.
So far Caravelo’s solution to bugs like this one has been to build a small fix where the bot only can ask the same question a certain amount of times.
Another key learning is to use, but not abuse the NLU (natural language understanding). So for example, today they have some answers that go through the back-end from their database, and some answers that go through the NLU, but they classify the easy answers, like affirmations, to not go through the NLU.
Just as with any product, the on-boarding of the user is crucial to keep people talking to the bots. In the case of chatbots, you need to tell them what you’ll be doing for them, and give the user clear options.
The last take-away the Caravelo team has learned over the course of using bots in real life, is to not take too much advantage of bot trainers (external services), as they’re not building a natural language understanding themselves, and it’s easy to get too dependent on them.
To get the full value of Caravelo’s learnings, take a look at the video at the top.
If you want to learn more, take a look at our latest podcast about the European VC industry:
The lean methodology doesn’t apply to branding — it’s a journey
Branding is no longer about creating a name and a logo, it’s about combining product and magic, according to Marc Lite, CEO and co-founder of Firma, Barcelona’s most famous branding studio.
Marc has helped clients such as PepsiCo, Unilever and Esade, as well as local startups such as Badi and Bandit find their voice.
The following steps are what Marc thinks all companies need to go through, to begin the journey of building a strong, long-lasting brand.
However, before you invest anything in branding, make sure your product or service does three things:
- Works perfectly technically.
- Creating value for your users.
- And that the user interface and experience is very good.
Your brand is not LEAN
The main goal of you creating a brand for your startups is to clearly define a positioning statement that communicates through all the brand touchpoints.
This communication needs to be presented in a coherent and consistent way to your audiences.
Many small startups are used to rapidly changing environments. Being agile and lean means iterating and changing a lot to make your product better, and for working with technology and product development this mindset is great. For brands however, staying the same is better.
Take a look at the strongest brands in the world (Coca Cola, Apple, Orange..), can you remember they ever doing a major change to their logo or color? Of course not, it would be a disaster.
Even though you see your own brand every day, remember that most of your users don’t, and suddenly changing would weaken your brand a lot.
But before you start producing your coherent content, you need to take a sharp look at your company and ask yourself these questions about your brand identity:
Is it ownable? Can we own the segment or the market?
Are we relevant? Does our target audience find us interesting?
Is it different? Do we stand out from our competitors?
Are we durable? Are we positioned to last over time?
If you want to ALL the insights from Marc at Firma, check out the video at the top.
Or read this: