Jake Stein on when he began to believe in Commonpaper's product market fit #productmarketfit

So there's a multi-product journey here that can lead to a very big business in one industry alone.

Correct. Correct.

Yeah. What has been the biggest surprise since founding the company?

I think probably like the biggest surprise so far at Common Paper is what a big unlock it was when we like targeted our customer acquisition and our like product energy on early stage startups. Because when we, we knew that this would be sort of like a long burn. Like this is not something where like you make a product, someone decides to use it and they go because like standardization is something with like a cold start problem. And so it's like, how do you get critical mass? How do you develop that flywheel? And like, we believed it would be a more durable thing once we got that going, but it takes longer to get started. And that decision to like focus on startups in terms of user acquisition was just like, I was really surprised how big of an unlock that was. And that had tons of downstream decisions about how we built our product, which standard agreements we prioritized, how we talked on our marketing site and things like that, all that. So yeah, like if I had known that we would have been doing that on day one, but that in reality was a year or so in that we made that refinement.

Had you initially thought like growth stage or lower enterprise?

Yeah. And we were, we sort of thought it was like, and I still believe this is just as applicable up and down the stack. And like I was talking to large public companies, I was talking to mid-market companies and talking to early stage. So I thought the right segment was B2B SaaS. But like once we stepped back and we said, okay, where are we actually having success? Who does this message resonate with the most today? It's, it's the early stage folks. So what would it look like if we quadrupled down on them? And the vision is still absolutely, we will get everybody up and down the stack, but this is where, like, how we refined our initial wedge. Um, and you know, we have acquired customers now that are 20x larger than when we acquired them, uh, as a customer. Um, But yeah, that was a kind of sort of a tightening our aperture.

I'm interested in your psychology for a second, and that's— it sounds like you knew you were going to go— you described it as a long burn, but it's effectively we're steeling ourselves to try to operationalize and productize a standard. And I wonder if you agree with this. I almost feel like there's, there's something sort of similar to the idea of category creation in, in that direction. Um, and category creation is fraught with risk. Creating standards is fraught with risk. Have you at any point in the business felt like, I'm worried that this is, this is not going to have a fast enough take rate for us to go build the standard? And how, how did you deal with that if you felt that?

Yes, uh, that's, that's smart. I actually hadn't thought about the parallel with category creation, but that's actually a really good point. Um, I, I wouldn't say we are doing category creation, but I think it's a similar sort of like risk profile and like big payoff if it works, but increased or lower probability of success. And there absolutely have been points where, like, I never questioned whether this should work or whether it could work eventually. But I definitely, like, there were periods where, I mean, there were periods where we just like, we could not get anybody to use our stuff for free. And like, we were just like, we would look at our charts and be like, ah, yes, someone closed the deal last week. And then the next week it was like, Well, fuck, no one is logging in. And, you know, it's just like, you know, we, it's tough. It's tough. And like, I think there's also, you asked about my psychology. Like, I recently was stressed out and my wife asked me what was going on. And I was like, oh, you know, there's just like so much customer support the past day or two. I feel like we're not getting fast back to them fast enough. We're not fixing their bug or adding their feature or whatever. And I'm like, worried we're letting people down. And she's like, weren't like a year or two ago, weren't you really stressed out because nobody was using the product? I was like, yeah. She's like, isn't this a better thing than that? I was like, oh yeah, that is right. So like, I think to me personally, to some extent, I'm just get stressed out about stuff. Uh, but yeah, there, there are definitely were some periods where I was just like, I think this needs to be a venture fund business because we need to make this big investment up front, and it does have the opportunity to have this huge, huge outcome. Um, but part and parcel of like being on that venture trajectory is like, can you show the acceleration and velocity? And for a while we weren't.

When did you start to believe?

I think, I think I always like deep down believed, but I I started to— it started to become a rational belief rather than an irrational belief. I would say maybe a year ago, year, year and a half ago, I think something around then. Like, um, and it was— I don't think it was like one particular thing, but just like looking at all of our charts, like, it's, you know, I think once we started to have people making money on our system and then making increasing amounts of money, that was just like, okay, that's real. And I'm not counting on— because in the early days when we were doing customer support, customer development calls, almost everybody was like, oh yes, this should exist. I hope you succeed. I don't think you're going to succeed, but I want this to happen. And people were supportive but skeptical. And the difference between people being nice and supportive versus just saying, these people are trying to make money and they are using our stuff to make more money, that gives me confidence that this is going to work out. And these are actual data points where I'm not counting on their benevolence or the fact that they like me personally or they're Ben's friend from his prior job. These are just people trying to grow revenue for their company. And so we didn't even have a sales contract at first. We started with NDAs. So once we added the sales contract, once that started to get used, once it started to get used for bigger deals, just as that chart looked better, that's sort of what gave me more and more confidence that this is going to work.

Strangers on the internet are using us.

Exactly.

Oh yeah.

That's, that's a big thing too. When it like expanded past our, our, our personal networks. Into just sign up, use it. They get paying customers and they become a paying customer for us. That's, that's big.