Transcription
So, uh, just to start off, uh, give a little background on myself. Uh, again, I'm Brian Long. I'm the CEO and co-founder of a company called Attentive. Attentive does personalized mobile messaging. Our goal is to create magical conversations between businesses and consumers. Um, you know, the company's been around for a little over six years and has reached over 350 million dollars in revenue, has raised uh about 850 million to date and over 5,000 uh plus customers that we're working with today, sending and receiving billions of text messages each month. Today, and uh before uh starting at Attentive about six years ago, I was also the CEO and co-founder of another company called Tap Commerce. Tap Commerce was a mobile app uh marketing and analytics software company. Um, I started that in 2012 and uh sold that to uh Twitter for nine figures in 2014. I ran the mobile app Group at Twitter for a couple years um before starting uh Attentive. So, uh and before that, you know, worked in a variety of different startup uh software companies and some larger uh software and media companies as well. So a host of different things over uh, you know, the last 15 years or so, and uh hopefully bring some of those learnings and mistakes made uh to today's presentation.
So today I'm going to be focusing on Waze, um to uh smooth it out and and make your go-to-market processes a lot a lot better, so you can smooth your funnel out and drive more customers. But I think the the headline note that I would just uh bring to you and and hope that you can bring, you know, to some regards your companies each day is just remember that go-to-market innovation uh today is significantly undervalued. And what I mean about that is when a lot of companies talk about innovation today, you know, they often immediately jump to what that means for, you know, engineering and product, and you know I would just encourage everyone when they think about innovation to spend a similar amount of time on how they can innovate in their go-to-market team um and their commercialization just as much as they spend that time talking about and sort of evangelizing innovation within their product. Of course, product innovation is is very very important, but I think that we we often forget how important go-to-market innovation is, and if you make innovations there, it can compound very quickly and come back into the product very quickly and help you grow a lot.
And just as a basic place to get started there, you know, I like to go through um every one of our departments uh in each one of the processes they do on a regular basis and just constantly ask the question of, should we be doing this process differently? Are we doing it the best way we could? Um, and just dissecting that process, and you know you might have had it right a year ago or two years ago, but something has changed, or there's new there's new software, there's there's some someone on the team found something really cool they're using now, and you should roll that out to everyone. I think you'll you'll find a lot of opportunities tinkering and innovating in your go-to-market side that maybe uh you didn't think about before and were sort of under this umbrella of innovation.
Now I'm getting a little more specific uh into the sales funnel and how to smooth uh the sales funnel. You know, uh to state the obvious, getting your sales funnel, particularly, you know, pre-sale as well as post-sale with your customer service customer success team um is extremely important. Uh, these these things are going to be some of the primary drivers for ultimately how your business is valued um and what sort of cash flows your business can generate in the future. Um, you sort of all the important uh ratios that you're going to look at as you're scaling your business are going to be driven a lot by what you're doing right and what you're doing wrong uh within that sales funnel, so it's something that's worth spending a lot of time getting right um and that's going to lead to a lot of important decisions that you end up making in the future.
When I think about uh ultimately what stops a buyer, right? What are the key friction points uh within the sales funnel, uh I like to simplify that down really into three buckets of things: Number one is time. Uh what is the investment in time that the buyer needs to make to set up and to use your product? Number two is risk. Um, you know, what sort of risk, perceived risk, whatever it is, uh is the buyer taking by choosing to use your service? And then number three is money: What budget do they actually have? And and I would actually say for me, I think this is the priority order, and I and I think oftentimes um, you know, obviously, look, this comes uh with a caveat that of course it varies from buyer to buyer and and from product to product, so it's an oversimplification, but you know for me I think sometimes when you say what stops buyers, people really jump to this third bucket, they really jump to money, but for a lot of buyers, um particularly medium to large business, you know, that's not so much the issue; it really focuses on the time component and the risk component, and I think not enough time is is often spent in those components, and probably too much time is spent just focusing on the money. The money matters, but uh we'll we'll spend a lot of time today talking about time and risk.
So starting off with time, I do think this is usually the number one issue. People are often very busy, and people don't want to add more things that they have to do; they they don't want to add more workflows, especially if it's something recurring that they're going to have to do all the time, and they also it's not just the buyer's own time; buyers are often very worried about the time that they will need from other resources within the company, particularly if they don't control those resources. Right, that's something that uh is going to make them unpopular; it's going to make them unable to deliver and use maybe the software that they're buying. So you really have to think about the time that your buyer spends, but also how that time is is spread across the organization, whether or not they control uh those areas of time across the organization. So I I kind of like to break that time down into a couple different buckets: Um, first bucket is decision time, so ultimately, you know, who is making the decision on using your product, and how much time is that going to take for them to make that decision? Number two is integration time: um, how long does it take to actually set up your product and launch the product? You know, what sort of resources does that need? And then finally, maintenance time: Once that product is up and off the ground and and flying, you know, what does it take to continuously service and use this product?
So let's say, you know, you you do all this sort of analysis and you figure out that your product doesn't need a lot of time. Okay, step back for a second; that's great. You need to sell that immediately, right now, today. If you are someone who has a low time need across these buckets um and it really is that easy and it and it takes care of itself on an ongoing basis, that needs to be front and center and message continuously throughout your pitch. I think that there's a lot of businesses that um find that they're low they have a low time need, but they're not doing enough to really market that low timing and and hit the customers with that. But I think there's a lot of software, you know, probably the majority of software that does have a significant time need, and when you look at that, you need to think about every way that the buyer is spending that time, and how can we remove that burden from the buyer in spending that time to make it easier for them to say yes and to want to jump in.
So I'll give a quick example um from experience with Attentive. Just another reminder, at Attentive we do text message-based marketing communication tools for over 5,000 different brands. You know, our goal is to drive a lot of revenue for each one of these brands, and in order to get started um with Attentive uh in the beginning, it was taking about 30 to 60 days when we when we really started and uh started the company and started scaling it, and this was leading to a lot of meetings, a lot of resources both at our company and across their company: engineering, design, marketing, finance, a lot of different stuff to get off the ground. And then on an ongoing maintenance um on an ongoing basis, there was a lot of maintenance too, right? They had to do a lot of work to schedule programs, set up programs, etc. So it was a significant amount of time to get the product off the ground uh when we were first getting started and scaling our business, and we spent a lot of time thinking about how do we make this a lot easier.
So just a couple examples of the type of things we did um to reduce that time spent. In order to get people off the ground, instead of relying on the customer to kind of do all of their get-started process and do everything themselves, we actually had a team that would step in and do all the work for the customer that they needed in order to get started. And you know a mindset I'd get here overall is this bullet point at the bottom: Instead of a a world where you have someone kind of require input and have to think a lot in order to get to the output to to ultimately, you know, be ready or run, get to a world where you're just doing approvals. So if you can get to a place where the customer really just has to approve stuff rather than having to continuously add in stuff and think about stuff, it's going to go a lot smoother because people ultimately want to approve it, and and I think that actually can work a lot to your benefit too, because if you can get your your product and processes at a position where they're just approving stuff, then guess what: The stuff that your team does is going to be more in line with the stuff that works for your product, right? And and the stuff that that ultimately will lead to higher retention uh and and more happy customers.
As another example of this, uh you know, initially we we had to create all these different signup units for customers um so that consumers could sign up to get text messages from the brand. We changed that so that um everything was pre-built for the brand, and again they just had to approve it, and this significantly smoothed out how easy it was um for for brands to get started. And then finally, we used to count on people to write a lot of their own copy, a lot of their own materials. Now most of that is automatically pre-written within our product uh and and you know that's also made it incredibly easier for people to get started and and to scale their programs. So that's the first bucket, time, and and I would spend the most time on that first bucket of time because I I think that people often forget how important that is in the sales process.
The number two thing in the sales process for me is risk, um so and and again, you know, I I have a leaning more towards larger bid, market-to-enterprise type of companies, and I think that these companies, the enterprise buyer, is almost always going to pick the solution that doesn't get them fired, right? It is a much more uh risk-sensitive role, generally speaking, um and they are going to lean for most buyers to that solution, the one that doesn't get them fired. So it's very important that you understand the risk that buyers are taking by selecting your solution and help them to not feel concerned when picking your solution.
So I'll just go through a couple quick examples for how we encountered this on Attentive. Uh you know, first, in the early days of Attentive, people were worried that by doing SMS, it was going to cannibalize a lot of their email-based revenue. Uh number two, um SMS is a highly regulated space, and companies were very worried about getting lawsuits um for doing SMS-based communication with their consumers. And then finally, uh people were worried about annoying their consumers with SMS-based messages. So we spent a lot of time on each one of these problems and came up with solutions for each. For the first bucket, you know, for the first year and a half or so of the company, we only collected SMS signups, and what we found was people really liked us for the first four to six months, and then after six months they noticed that the email signups was lower, and they would freak out and want to find ways to grow their email list too, and that would kind of call call it an issue, their SMS-focus collection. So we came up with a new way for customers to capture both email and SMS signups, and you'll probably notice that on, you know, the the majority of retail and e-commerce businesses in the United States today are now using, you know, a version of us in order to capture email and SMS together.
Number two, um is on the legal side, um so you know we found that uh there were a lot of brands, particularly larger brands, very worried about this uh on the regulatory side, so we built out a legal team and then worked with that legal team to help us build products specific to compliance, and those products have shielded our customers from this tremendous legal risk that no longer exists and now has become a major differentiator for our product. Number three, uh on annoyance, we set up a system so that we could automatically not send too many SMS messages per consumer, so we keep track of how many messages we're sending per consumer, and if we see that you've gotten a message, you know, within X time period, let's say in the last 12 hours or something, then we will suppress additional messages from being sent to you. We also found that that was the biggest driver of people opting out from getting messages, so um also helping the program uh in a long-term basis. So that's the second piece, risk, and if I just uh spent another second on risk, I'd say it could be helpful to go through your own buyer and really understand what are the biggest risks and concerns they have and how can you spend time making these types of products um so that they align to solve your customers' risk points because uh again, I think we we often put money is the number one thing, but I I do think that time and risk are are higher up in importance in smoothing it out.
Okay, number three is money, and I don't think that's that's gonna surprise most people here. Um, I think that there are three types of uh software companies: software that makes money, software that saves money, and software that you're not really sure what it does. And I think in the uh economy that we're kind of moving into right now, um you're gonna see a lot of movement towards software that makes money and saves money, and you're going to see people pulling back on stuff that they're not sure what it does. So you know you need to find a way to position your product as clearly as possible on how it makes or saves money, um or your buyer problem needs to be just absolutely on fire, but I I do think that these days you really are going to see companies gravitate towards the make-money and save-money buckets, and you need to find a way to associate your solution uh with one of those two pockets, making money or saving money, to be successful.
You know, at Attentive, uh we also have experimented uh with a couple other ways to smooth things out on the make-money side. Um, obviously there's a bit of big a big trend for a while now within SaaS software around free trials, but something I heard, you know, relatively early on and heard from, you know, a number of of investors and folks was, well, you know, you don't need to get free trials to, you know, that that company because they're a public company and they don't want to do free trials; you know, they want to sign big commitments, they want to assign big contracts, they don't like to try things out. And just in our experience, we found that not to be the case at all. Uh we found that big companies often have the same level of appreciation for uh free trials just as much as medium or small companies, um and it really in in many cases helped us to sign very significant, ultimately very significant customers that um you know didn't have the dollars uh initially in order to do a one-month or two-month uh proof of concept, and we were able to get them to sign on to, you know, doing that free trial and then convert into being a paying customer, you know, 30 days, 60 days later or whatever it might be. So you know I I think that um you know we we saw that work tremendously, and I was very surprised by how much a relatively small and inexpensive trial had a very big impact for, you know, Fortune 500 brands that um you know people people thought there's no way that they would they would need a trial.
A few other uh things to keep in mind uh when optimizing for the money side of things, you know, I I think that people um can also feel a lot of trepidation when they see a very big sticker price, and you know I I think finding a way to have lower sticker prices but that just kind of on themselves grow over time uh is is a much better strategy. And again, I think this is also true across different customer sizes. I think that there's a fallacy that big companies have big money all the time to spend. Number two, um I I think this this there was this idea of kind of like a big decision, right? That you go through a sales process and you have like a very big contract and you need to get to a company to make a very big decision point, and you know it's good if you close one in five of those. I think it's much better if you can break down those big decisions into a bunch of much smaller decisions, and those decisions uh sort of compound uh and and snowball if you will as you you grow, and you're going to have much higher close rates by breaking it down into those smaller decisions than sort of one big go or no-go decision that I think can can lead to uh inaction on the side uh of the buyer. And then finally, you know, I think you need to be comfortable charging more as you add more value. You don't want one price to be there and then you know it's kind of the same thing two years later, but you add tremendously more value two years later, so don't be afraid to add billing, add pricing as you grow more value, but that also means to price in line with your value, particularly where your customer might be uh in their life cycle.
So uh in summary, uh before we jump into questions, just a few highlights that that I've hit here: Um, I would break down the smoothing uh of your buyer process and sales process um into the three things that I think have the most impact for the buyer's decision; those things are time, risk, and money, and I think that's in priority order. I think that time is is often the thing that people do not give nearly enough credit for but is extremely important um for how the buyer makes their decision, and you need to figure out what sort of time your product requires uh in order for them to say yes. Number two uh is risk; I think almost all products come with some component of risk with saying yes and trying out that product, and you want to minimize that risk as much as possible; you want to understand that risk and then work in your product to build against that risk so that it makes it much much easier for that buyer to say yes. And then finally, on the money side, you know, we all know the money side is important, um but be creative uh and you know really embrace that go-to-market innovation um to to to be creative about what you're ultimately doing um so that you can set a really nice customer flow and have very very smooth onboarding. So that's that's the extent of uh prepared remarks, and now I'm happy to go in and answer any questions people might have.
Great. Thank you so much for that, Brian. Lots of great questions came in um both be in the room and on our social media live streaming. Uh we'll try to get through as many as possible, but super detailed, so we got a lot of questions that came in. Um, first and foremost, you mentioned time as, you know, the number one blocker to buying; it was the first one that you went into detail in. Um, for those who maybe aren't measuring this as great or as uh maybe as sophisticated as you you might be, uh what are you doing, you know, to measure that time and duration? Any recommendations there for when people might just be getting started or they're feeling like, you know, time has become a barrier for them?
Yeah, I mean, look, I I think that the easiest way to understand that time um is to go talk to your customers or potential customers, and I think that you should be very open to heavily compensating uh your customers to or or potential customers to get that understanding right, um offer, you know, 50, 100 gift card, whatever it is to say, look, you know, how are you spending your time using my product? You know, what what do you what do you how much time are you spending per week in my products? How are you spending that time? Like, sure, you can look at your own analytics and and see what the analytics show, but it's almost more important what the buyer thinks they spend their time in your product versus how much they how much your analytics might say it is, because what you might find is they say, well, you know, sure, I have to log into your product, but before I even log in, I have a separate Excel spreadsheet that I'm doing a bunch of work in that I spend three hours doing, and then once I'm done that, then I open and make a product and go use the product. You should say, well, you know what, you know what I should do? I should build a tool that solves the problem of what they're doing in the Excel spreadsheet for three hours beforehand before they go in my product. So I think you're you're often surprised by what you learn talking to the customer rather than just sort of relying on your own analytics. You got to be comfortable talking to customers because you know that's how you're really going to learn that the analytics on their own is only going to get you so far.
Yeah, and who's doing that? Is it is it still you? Is it your CS team? Like, where's the where's that um time being spent right now? I mean, I think you have to have leadership and you have to have product talking directly to the buyer and the consumer. I think you have to always be doing surveys; you have to be getting on the phone; you have to be hearing them out. Um, you know, I'm a customer dinner uh last night talking to customers about, you know, what their problems are. So you have to, yeah, the the minute that I you just can't rely on someone to translate that directly to who's making it because you're not gonna you're not gonna understand it; you have to be also be able to to dig in, right? Someone says something, you need this; oh, that's interesting; I want to double-click into that; I want to understand more of that.
Yeah, and when so you just did it in or you got a bunch of customer feedback, your team is getting feedback from, you know, the surveys and meetings that they're taking; how quickly are you guys to implement that feedback? Like, does it depend on what it is? Like, how do you guys kind of prioritize what did that implement? Well, you know, that's I think that's where the art meets the science a little bit, and and I think that you you know need to look at that feedback and and validate it across, you know, more than just one source of feedback because you know you hear something once, you're not so sure; you hear something 20 times, you're feeling pretty good.
That that that's a real that that's a real problem. I I would say, if I was giving any additional sort of tip on a strategy, there's something I I like to ask, is to say, "Okay, I understand this is a problem. On a scale from one to ten, one being the lowest, ten being just, 'Oh my God, you have to solve this tomorrow, it's a huge issue, it's my biggest problem,' give me your score." Because I I think sometimes someone will say, "Oh my God, you have to fix this, whatever, whatever," and you say, "Okay, give me the score," and they're like, "Okay, it's a six," and you're like, "Whoa," you're like, "What? To me, like I said, yeah, I thought we were at an 11." You know, and it goes both ways too, because you know, if you're pitching a new product to them, you know, "I came up with this solution to your problem. Oh, it's so cool," "That's great," "Okay, great," "And and how would you rank that?" And they're like, "I give it a six," and you're like, "Wait, I thought you just said it was really cool," and they're like, "Yeah, it seems cool, it's a six," yeah, but it's a six. And I think that that's that's I guess that's a bigger reminder I give people, which is that you are going to get—it's very hard to get critical feedback, very very hard; almost no one wants to give it, and when they do give it, it's often done in a very polite and and sort of wrapped-up procedure. Yeah, that it's very hard to give them the space where they can actually give you the critical feedback that you really want to learn from.
So I do think systems like having someone score it, and if they give you a score that's less than an eight, you're like, "Okay, that's really bad," you know, that that's like a terrible score; they don't they don't really want that thing, they're just being polite. So I think you have to remember that that feedback is is almost always non-existent. Now, there's something good good tips and reminders: if it's something there's really a question; if it's something that the latency issue, even if maybe the customer's worth it as a fixed, do you personally score it as like an 11 as a CEO and you're like, "It's the latency thing, like we got to jump on it?" No, I I would say that, okay, look, I think that there's there's two things that you can determine what gets prioritized, right? Is it really really important to the customer, or is it really really important to, you know, my business in some way, right? Like there could be a risk component for me at the company that I'm like, "That's really important," like, you know what, like security can be very important, but like the customer isn't banging the table saying, "Your product needs to be even more secure," but I know I need to be have it be more secure because I need to protect the business, right? So there's there are things that that maybe the customer doesn't rank high that you do, but that there I I think much more so it's the case—it's the stuff that the customer really has to rank high, because there's very few things that that if they're not for the customer, what are they for? Sure. No, that makes sense, right? Um, okay.
You mentioned this concept of getting to a world of approvals rather than, you know, um maybe uh like you do these constant improvements, but you mentioned this concept of getting to a world of approval then which you make it easier for the customer to use the product, right? Like lower their time um or maybe barriers of time and make it more sticky for the customer. You mentioned it helps with your retention for those who are maybe crystallizing on this concept for the first time and are now thinking about how to get the world of approvals for their product. What are some of the things that you guys started out with to get that going? Because it sounds like and maybe maybe you've got it going back or like, you know, I don't know how long that journey quite was, but what do you recommend for people who are maybe just, you know, a light bulb went off for them today and they want to start getting to a world of approvals for their product? Yeah, I mean, look, it could be a hard road, and it's one that I think you've got to uh, you know, commit to and and spend time, you know, thoughtfully making product within um because you are ultimately automating, you know, part of what your uh buyer would have been doing, right? So it's something where you probably need to learn from what the buyer does manually, and you need to see what the best buyers do, and then you want to replicate that behavior into your more automated products so that it does turn into a world of approvals. Uh, but if you do get it into a world of approvals, that means that more of your buyers are going to be doing the right thing in your product, right? They're going to be doing the best practice in your product, and so they're going to be more likely to succeed, they're going to be more likely to spend more money if your product is is kind of usage-based and things like that. Um, and then, you know, on top of that, I think the retention uh is also going to be tremendously higher because, "Oh wow, I go on this product and it like automatically has this stuff teed up for me. If I go somewhere else, it's going to take me 5, 10 hours of time," right? Most people don't want to sign up for that; they don't want to sign up—it's going to go take five to ten times, you know, five to ten X time or whatever, you know, even if it means saving a little money, I think most people will stay on, but they value their time the most is is I guess the message there. Yep. Okay.
And when you look at, you know, you know what, who, for both, how often are are you in those kind of like templates that you've made to continually approve it so that it doesn't fall out of a world of just approval? Yeah, you've got to constantly be updating it, um, you know, regularly to see, you know, "Are we doing it the best way possible," right? And I kind of go back to that um uh maybe a shortcut here: find the people that have done it really well and then replicate that. So who are the who are the companies that are doing really well that use your product? Learn from them and use them to inject that into what becomes your best practice and your standard. That's the great thing is there's always going to be some people that are pushing it and and making sure making it better. Yeah, yeah, no, that makes sense. So you kind of lean on your power users there to kind of see like, "Okay, what are they doing? What can we steal from—definitely what can we leverage from them?" Yeah, what can we help them to make the product better for all of us? Yes, exactly. "Steal" is a very dangerous word, but no, leverage and enhanced for them in order to make the platform better. Exactly. Okay. I'm watching more questions come in from our live stream here. Um, you mentioned risk as one of your your blockers, I think it was the next one after time for maybe companies who are starting to do, you know, SMS or working it into their marketing next. Can you share a few high-level examples of maybe what works and what to avoid, right? Like what's the hard like what's a hard path on SMS? I mean, it was a hard pass for most companies for the first couple years of the company, right? Right. And and I think that some of the biggest objections that we ran into um were, you know, "Consumers don't want this," you know, I they would say, "I myself don't want this, so therefore, sure, I don't believe my consumer wants it," right? So that was that was that was a very common objection, um, and that was one that it took us a lot of time to overcome. And you know, the the response there is, "Well, let your consumer decide," that you know, "Put put it up for a day and see what your consumer does, and if they don't sign up and they don't engage, then you're right, but if they do sign up and they do engage and they don't opt out, even though you made it very very clear—much more so than email—how to opt out, then the consumer did want it, and you can't really speak for your consumer," right? And I I think that too often that's that's the the thing that you need to gently remind the buyer, and we should remind all of ourselves, is that we're all different people, and you know, maybe you don't understand what that consumer wants, right? Um, and and that's something that you need to need to figure out and and have a realistic conversation about. Number two uh biggest issue for us there was just around the legal risk. So there are a lot of companies that got into trouble for doing text message uh communication the wrong way uh, you know, a decade ago, and they'd say, "Oh, you know, a decade ago we had a lawsuit for X million dollars, it was a whole mess," you know, "It's we still have the same general counsel, and they just said no way." And I think for them, you know, you need to show what the monetary impact is of saying no, you know, so that so that it's it's clear that the money that they're giving up and it's worth it and protection. And for me, I'd be like, "Well, look, you're spending X amount of money uh, you know, basically to to not do this, so just understand how much this is costing you by by not doing it." And I think once they have that position and they just kind of say, "Well, I'm balancing two different costs," then it's much easier to swallow. What is the heart and pastoral by the way? I mean, I don't know if you know um so for companies who are, you know, maybe into '23, they're going to start doing at the mask, can they send one without an opt-in if they already have their phone number as an opt-in, or do they have to get the like formal opt-in first? You can't send anything that's a marketing-based message without the consumer given express written consent that they want to receive those messages. Um, so yeah, that's that's something companies have gotten in trouble for is sending the text message to say, "Hey, will you sign up?" Well, guess what, the message you just sent was a marketing business. Yeah, so so you so you you can't do that; you can't do that. Okay, good to know. Another question here that's come in for the live stream that's related is there's, you know, maybe some mobile marketing overload, and you just mentioned it just you know, you said you said this to a bit earlier on the earlier question as an answer of making sure that it's super clear—even more than email—as an opt-out for SMS. So now that more you know companies—both B2C and B2B and tasks—are doing SMS marketing, um, how much is too much, right? Because they're already getting a lot of emails, they're probably starting to get a lot of text messages. Do you know off the top of your head like um what's the right nick for your customers of how many messages it's the right you know kind of mix to send when it comes to FMS? Yeah, look, I mean, the the simple answer is that SMS, although it's it's uh getting a little uh hot today, the saturation in SMS is still very minimal, right? Okay. Yeah, like the majority people are are still only signed up for, you know, one or less SMS programs today, and most people, you know, if you if you went into that higher bucket of 80 percent of consumers, you know, 80 are still on these sign up for like two or three programs. If you compare that to email where the average consumer is getting like 110 unsolicited emails a day or something like that, uh, it's it's a very big world—it's a very big world of difference between the two channels. So I'd say that SMS is like, you know, first inning or before that.
That being said, in terms of best practice, you know, I I think that really comes back to the company and whether or not you have something relevant to send to that particular consumer, right? So um if you're a business that is constantly launching new products and interesting things and you're sending that to an audience that has signed up to get that type of content, you might have content that is worthy of being sent every day or every other day or something like that that the consumer actually likes getting, right? Like I've seen, you know, uh sneaker companies that have a different sneaker drop they do every day, yeah, and they do the job right, and people love it—love it. I mean, like, you know, cluster rates over 100, they want it. Yeah, yeah. But then you have other cups where they have four SKUs or three SKUs, and the SKUs don't change—it's been the same SKUs for two years—and there's nothing to update there, right? And and unless they have content or other interesting things and ways to engage the consumer, which you know they should be doing, right? They should be making that content, they should be explaining the value prop, they should be engaging with the consumer, they should be serving them and asking them things and learning from them, and there's a lot of different things that they can do within that channel to build their their relationship there. Um, but that that's one of those cases where I think it comes back to, you know, "Does your company have relevant enough information to send?" Because if it's just the same message, you know, a couple times a week, that that's not a that's not a value prop to the consumer. Yeah. And right now, do most—do you see most companies have they're just leveraging their existing, let's say like email marketing teams to also do SMS? Maybe they're also doing social, or you're starting to see like a breakthrough of dedicated teams just for SMS? Yeah, we've in the last couple years we've seen a big change where now you do have dedicated teams, right? For a long time there was uh there weren't anyone who kind of knew how to do it right; there was very very few companies doing it, but now you do have a whole bunch of talent that know how to do it, and now that it's become for a lot of companies, you know, if not they're number one, it's within their top three sources of revenue now, they do have someone who's dedicated to it, right? And can make it can make it really great um by by spending more time, you know, working on it and tweaking it and using, you know, tools and strategies to make it better. Okay. No, these are great insights. There's still more questions. I'll try and get to a few more before and out of time here. Um, you you've also identified and mentioned earlier on um in your formal presentation on me, you know, you guys minimize risk by adding a legal payment a legal component where it was templatized as much as possible. You guys also added email in addition to SMS is like an additional plan of tool. Um, how is the that you're able to almost forecast and predict these issues maybe seemingly before they happen?
Well, you know, I don't I don't know how much we were able to do anything before it happened. Uh, I think we I think we we learned from uh hearing customer feedback, uh, whether it was, "Hey, we just tried to you know sign this customer and they're not going to sign because they want to see XY7 activity legal product," or, "Hey, this customer has been live for three months and they like it, but they're gonna turn it off uh because you know they want to grow their email list faster too unless we add that product." So most of what we're doing is in reaction to learning from the customer. Um, you know, I think whatever you're whatever you're doing anything on the product side that's coming from like your your own true you know idea and you know whatever I'm I'm God complex and I'm just gonna make this because this is the way it should be, you should probably stop for a second and say, "Uh, I'm most worried about those things," um, because you know really the the customer should be and telling you, but you know what what they want as much as possible. And if you're not getting that from the customer, then you just need to spend more time learning about how to speak to the customer and how to get that information out from the customer about what they need, which I do think is one of the hardest things to do, you know. And how often I've seen product people, you know, get on a customer call and say, "Oh, I did the call and you know the customer loves my idea," and you're like, "Well, okay, uh, I'm not so sure about that, because you know how did we how did we reach that end point?" Well, we got on the call and I pitched the idea and they said, "Really cool," and again to our our earlier point, I think if you can find ways to um really question that and and going skeptical and say, you know, "Really, do you think that how like is this absolutely necessary?" And the person's like, "No," you know, be more real uh about getting that that type of critical feedback, which is very very hard to get out of uh the buyer. Yeah, it can be hard to do sometimes. So how—just related question that we got through with—how much of your product roadmap is then informed medical customer? Is it 100? Is it 90? Because it sounds like it's you guys are very reliant on like that real-time feedback, whether you're implementing it right in real time or not, you guys are using it very heavily. Yeah, I mean, look, you have to you have to I think everything that you're doing, you know, most of it has to come back to the customer. There are components of a roadmap that are going to do some things that aren't customer-facing, right? Um, "Hey, you know, we've got to limit how much money we spend on X thing, so we're going to spend some time building something," or, "Hey, uh, we've got to get some internal billing system, right?" Which is kind of customer-facing, but maybe it's not, right? Maybe it's like do some migration you have to do or something. So there is going to be some stuff that that that doesn't fall, but I think you want to make as much as possible um fall into that bucket. Now, that's not to say that every idea comes from the customer, but I think that the problem has to come from the customer, right? They're the higher-level problem—have skept the customer. I think where you see companies run into the biggest issues, and by the way, I think the reason that a lot of startups fail is that their solution in search of a problem, and they like came up with a solution and they're like drastically just trying to find a problem for it. So you get—it has to start with what the buyer problem is and and then move to the solution. You could have some interesting ideas, but those ideas have to be tied because that's that's really where the value is is is making a great solution to a buyer problem. Yeah, you're just constantly iterating on the pollution. So as much of that as you can incorporate to the roadmap, the better. And there could be high-level problems like, "Let me tell you something—no one told us that there were there were not—no one—there were not a lot of companies that wanted to do SMS-based marketing communication in 2016 and 2017, right? But there are a lot—but there was a huge problem, which is we need to find ways to make more revenue, and email uh performance is declining significantly, and I don't have a good way to communicate and reach my customer." They didn't know that SMS was a potential solution, but they had a very big burning problem. So I, you know, I I don't want to discourage people from coming up with creative solutions, um, but but understand that it has to solve a real problem. And again, I'd come back to that that bucket of software that makes money, software that saves money, software I'm not sure what it does. Uh, make sure that if it's if it's in that third bucket, folks like you you really you got to have a really really important operational burning problem, or it's going to be very unpleasant selling that product. I've I've sold stuff in bucket three, and it's it's a it's a really hard—it's a tough sweat. Yeah, especially now. Um, okay, two more questions I want to try and hit before we run up time. Um, you you mentioned costs and obviously money as a barrier, we're kind of discussion on it now. Um, have you seen, as you know, folks are going more up-market or even try to just land a few enterprise customers, have you seen just from your perspective any sort of change in the landscape and how enterprise customers would want to pay you? Like you mentioned a bit earlier, right? It's it's maybe not those big multi-year contracts anymore; it might be even I don't know as if you would go with bar to say, but now it's monthly, and like they're they're putting it on credit cards like bypassing to a pyramid, but maybe what are you seeing in the fifth these days? I think that most companies right now are in cut mode, right? Most companies are in cost savings mode, right? So even if your solution saves money, you know, they're going to be hard-pressed to actually prove, "Why am I adding on something?" So so I think in a world where everyone is in cost-cut savings mode—not everyone, but most most businesses are—your value prop uh needs to be very clear, and you need to make it very easy to prove that value prop, and hopefully you can prove it before they have to pay you a dollar, right? Now, it's totally fine to prove it and then charge them and have a clear story on why that's going to be the case, but I think you got to prove it first in this in this world a lot more so than it was a year ago. Yep, makes sense. Um, have you seen anything actually—sorry, related question, but um have you seen anything in hesitation with sales maybe as they get you know more more enterprise customers that are maybe wanting you know not multi-year deals but maybe just one year or monthly? Like have you seen any hesitation in the sales team itself on like how they approach that buyer because it's you know it's becoming more of an act a constant ACT versus like, "Okay, I only have to ask you one for five years, you're locked in," like how do they kind of get over those nerves to maybe ask you know SAP for money more than once a year? Well, I mean, look, the good news—I I think that the other side of that argument, right? On the one hand, you know, people like the idea of, "I'm going to sign a contract, it's great for five years, and that's it," yeah, but there's a big downside uh to that contract, right? That means you are locked in to that price for five years; that means that it's much harder to upsell because you don't have those opportunities. So we already signed on to that for five years—oh, we should have been sold that at that time. So I think these really long-term contracts can actually be a perfect detriment, right? Now, I I don't think a place to land for most businesses—month to month is a great place to be either—but I think you want to have contracts is where they're refreshing pretty regularly, and you have opportunities to to upsell um the customer very easily, um hopefully with like more usage-based type pricing when possible um in order to to really grow, right? Because if you're not if you're not growing the account year over year, then you know the the the the NDR numbers become really challenging. Yeah, and there's a lot of risk in that. Okay, maybe last question if you have time for one more. Um, you you mentioned a free trial, um you know, obviously this is the age-old question—free versus paid, right? Like what have you seen? What's maybe your final advice on converting those free users from free to paid, and is it working? Look, I I think that free trials uh should be offered um to all of your medium to large customers. I think that the real thing that a lot of businesses probably don't um spend enough time not doing is saying no to small companies.
Small customers? If your free trial has real costs and time associated with it, right? So being able to say no, actually, um, to smaller companies is probably the thing that I think a lot of companies uh don't do enough of.
And uh, instead, embracing the upside potential uh and the basic unit economics of medium to large customers? Because when you do—you use in economics—I mean, there's a reason that almost every company ends up wanting to grow up-market. The unit economics have worked much better up-market, right? So most people want to find a way to grow up-market because unit economics are much better, and the numbers are much better. Um, so you know, I I think you should smooth it out for up-market as much as you can and then step back.
Um, and look. It might sound a little unpopular, and I've seen some some companies uh, you know, like like Brax and other folks who've taken some heat for not serving the long tail, but it it really, if you if you add that clarity, uh it helps a lot. And I think that very few—I think it's very hard to find businesses—there are some—but it's very hard to find businesses that effectively um service both the long tail and the larger bid market enterprise um with one product. Right? It's very hard to make them both happy because the product roadmap, because the buyer problem is very different um from, in most cases, for both those cohorts.
And of course, you know, you can call it examples like a a Slack or something and say, "Oh, they serve us both." I might go back and say, "I don't know. I think Enterprise Slack users want something very different than long tail Slack users." Yeah. And and if and if you were really focused in Enterprise, you might do a bunch of different things in that Slack product um if you were trying to make something that really stands out for Enterprise. So there's there's I think you you pay a price if you really try to go across and reach everyone.