The Demand Audit | w/ Rob Snyder

Well, Rob, welcome back, man.

We are back and I threw a curveball this week with the, with, with some late changes or what? With, yeah, yeah. With, with like a, like, uh, sent you the, the blog post buttoned up, ready to go like days in advance. And then an hour before we record, I'm like, you know, I just wanna change all of it.

So let's, yeah. So I'm, uh, if, 30% of the things that I say don't make sense, or if anybody goes and reads the blog afterward and they're like, yeah, that wasn't in there. Well, it's, that's on me. But, you know, we'll, we'll, we'll do as, as well as we can.

The other thing, the other update I wanted to give is I got a, I got a new sweatshirt here and it's, that's important because the number one piece of feedback we got on the like vibe of this podcast is that it looks like I'm in a prison essentially in the, like this just totally bland walls. And so I figured, what would go better with bland walls than a gray sweatshirt?

Yeah. Meanwhile, I've, you know, I've bought some skulls that are up here, so we've got some like Mexican decorations. So I'm, I'm trying to, trying to carry some of the weight for both of us. Uh, but hey, this week we are, uh, jumping into some pretty practical stuff around, uh, around demand, around— today we're going to talk about the demand audit, which this couldn't come actually at a better time, uh, because that is like where I am. I feel like I've— I'm in a spot where, uh, I've got some like lukewarm demand. We've, we've signed some contracts, we're moving forward with some stuff, but, uh, I'm not— what I thought was promising demand has kind of petered out a little bit, and now I'm a little— I've, I've been scratching my head around it. So this is a perfect blog. Everybody, welcome into the, like, the problems that I'm experiencing as a founder. Hopefully, uh, for a few of you, maybe, uh, if you're, if you're wrestling a little bit with Loopworm Demand that'll Resonate. But Rob, what's, you know, what's going on? Who's this for? And what was going on that you wrote it?

Yeah. So, so this is somebody commented on something at some point. I don't remember. You said, I remember you sent me a screenshot of something that was like, cool, I get this demand thing. I'm not feeling it. What do I do? And so I was like, okay, that's interesting. That's basically the common thing, right? Like if you're, if you've really found intense demand, You really don't come talk to me except to say, hey, cool, thanks for your stuff. Like, that's totally how it works. And it's nice. Uh, if you haven't found intense demand, then you're kind of in this space where it's like, I feel like I'm pushing, it's not quite working, and I'm not sure what to do. There's a million things it could be, right? Like, and, and I don't know if it's that I'm just bad at sales. I don't know if it's that, right? Like, there's no actual demand here. Like, what the heck is happening? And so One of the parts of that sales sprint that we recorded a while ago is this activity where you just analyze your calls and say, what the heck is going on here? And so we're just pulling that piece out and calling it a demand audit because that sounds important.

Yeah, it's kind of like a, um, I'm confused. I don't know what the answer is. You've got a very practical set of steps that founders can go through, um, in order to like look at their calls, like diagnose, uh, we're We're going to get into the difference between like a demand problem and an execution problem, which is I find to be a helpful way of bifurcating like actually what is, what is going on here. And, and the, the medicine that you need to take for both of those is slightly different. There was, there was one other thing that you wrote before we, before we jump into some more of the specifics that jumped out to me. You wrote, if you're not seeing demand in any of your calls, Good. Don't waste your life pretending that there's demand where there isn't. It is harder to build a small company around a weak pull than it is to build a big company around strong pull. And this, you know, that really— when I read that, I was, I was just like, wow, that's so right. Like that if you've got this force behind you, which is, you know, customer pull, it's just like, yeah, it's just like the, the difficulty of building companies does not scale with the number of customers. It's like more related to do you have demand that is like pulling your product? Yeah.

Yeah. That's exactly like, so now it's hard to see this because in Silicon Valley there's like all this lore about working nonstop, but what you used to be able to see if you went and looked at a fast-growing startup and then looked at a not fast-growing startup was that fast-growing startups didn't actually work harder than the not fast-growing startups. In fact, the not fast-growing startups often were working much harder because they were like, just to get a single deal done, they had to twist arms, they had to kiss babies, they had to do like all this stuff to, to get the, like one of the fastest growing, I can't say the name, but one of the fastest growing startups I've seen that's like one of the fastest growing startups in Silicon Valley. In the last 10 years, like they were working 9 to 5, like basically everybody there was working pretty much 9 to 5. They just found really intense demand, built a very tight sales process, and then just repeated a ton. It was like, you know, stuffing lockers basically versus like magically making things happen. And so that's the important, like you can either just keep pushing relentlessly to, and just keep twisting arms, or you can just figure out where there is demand and design around that. And my kind of call to you is to stop pushing where there isn't demand. It just sucks.

Yeah. Yeah. And I don't know why, for me personally, my instinct is to push where, uh, is to like get things across the line and, and really that's just, it's just the wrong thing to be doing. It should be like kind of withdraw from that and take a step back and figure out like, where is their pull or what do I need to do in order to find pull? I don't know why I find that personally hard to prioritize, but it's not my instinct as a—

So it's not your instinct because like we just, again, coming back to the physics of sales, right? We just believe that the way that sales works is we have to convince somebody to buy something versus The whole activity is to find somebody who needs no convincing.

Yeah. Yeah. And you know, we'll, we'll get into some confusing examples, but also sometimes you're selling and it starts like, it starts good or there's, there's like, there's some, there's something there and you're like, you're just incrementally chasing that something. You're like this. And it just, for me, I feel like I linger on the, okay, have I actually found demand piece? Longer than I need to when it's like, it's actually becoming more clear that it's not actually there.

Yeah. The other thing I'll call out about this topic too, is that this isn't just for like B2B software or AI startups that are at the idea stage or at their first couple of customers and trying to scale. Like I've literally done this with companies that are $20 million ARR and like consumer companies too. And so this is just like a, way to analyze what the heck is going on. And is there, is, is the buyer actually applying force? If so, what do we do about it? If not, what do we do about that?

Yeah. Yeah. And let's, um, before we get into the actual, uh, elements of the demand audit, let's maybe do a recap. You have a really, uh, I never get tired actually of being reminded by like, what is good demand and what is like not actually demand because I've, I, just continually make mistakes around that. So you write— I'll go through a couple of these and maybe we can pick one or two to talk about. Not, not going too long on it, but you write, you know, what is good evidence of demand? Like, what does that look like? One is a customer buys weirdly fast. You know, a customer leans in during a call. You actually write something very interesting here. One potential customer really leans in during a call, quotes, "Wait, you can help me with that?" And then you say, even if they eventually lean out and don't buy, like what, what's going on in that situation?

Yeah. What we're, so the way I want to contrast these is from last week's episode, right? Like it's, we're looking for evidence that they are applying force. That's it. Right. And the best evidence is that they buy really fast. Right. That's, that's great evidence, but we might not always have that. Or like another example of that is you do a sales call, they ghost for 6 months or whatever, and then show up and buy in a week. And you're like, where were you? Right? Well, okay. Something happened in their world that changed their to-do list such that they started applying force in this way and they bought really fast. And so what we're looking for is just evidence of force in the, oh wow, we're actually trying to solve for that right now. We're trying to make that happen. That's on my to-do list right now. Right? Those are those things and, and the like energy that is that, that you can see the leaning in the, like, I'm actually trying to do something is evidence. Even if at the end of the call, they wind up ghosting you because, right? Like, again, I'd, I'd want to take a look at the call specifically, but what often happens, and we'll get into this, is that they lean in and then we describe a product that has, that is just so nonsensical to them that they lean out. And that's an execution problem. That's not a demand problem. It's like, You know, it's like, I'm trying to do this. And then you're explaining to me how like the physics of Mars works. And I'm like, I don't need that. I'm trying to solve something here. And so like, of course, but, but we're looking for evidence of force. And that's what like, that's what demand is. It's not like them just complaining, right? Bitchin' ain't switchin', classic Bob Moesta quote. It's, it's not them saying, oh wow, this product is really interesting. Congratulations on building it. Right? Like that is enthusiasm. That is not demand, right? There's a difference. Oh, cool. I love— this is, this is exactly where the industry is headed is not saying I am trying to accomplish this. I'm trying to get this off my plate. I'm trying to do this thing. Right. And the difference there is everything.

Yeah. Thinking about, you know, some of the chats that you've had with, with other founders, I can't, I don't know, probably a dozen instances come to mind where a founder has written to you on Slack and be like, this is what's going on. Like they're kind of frustrated and they've, you know, you watch 3 of their sales videos and you're like, oh, demand is very obvious. Like it is, it is like the demand is there. It's like maybe the supply doesn't match it or maybe the way they're communicating or they're going too fast in the demo, whatever. There's all these other things that are going on. But the demand is actually if you, if you take a step back and stop thinking, do people want my product? And instead think, What are they trying to pull? Um, like it, it's, it's actually very present there.

Yeah. Are they applying force, right? Is like the main question. And it might not look like what you expected. Like I was watching one recently and, um, I'm going to try to like generalize this. The potential customer was like, like she was basically like, hey, I am looking to apply AI in my my like job so that it, so that when I'm doing interviews, 'cause I don't think this company's doing super well, that when I'm doing interviews in a couple of years from now or a couple months from now, I don't look like a dinosaur. Right. And the founder was like coming at it from like a much more functional perspective of like, well, you don't have XYZ, like your project isn't this, but like that demand that she had was super intense. And so it's, it's like this kind of like existential, like, I am trying to demonstrate that I like am worthy of my next job, right? Which you can then harness, um, in that case. And so that's like an example here of somebody is applying some sort of force against their status quo that might not be super repeatable, that might like whatever, but in that specific call, there was a path to be taken and the founder just didn't see it.

Can we— let's pause on that. And I'm going a little out of order here, but I think that's really important and I don't want to forget it later on in this conversation. Okay. So let's say that that happens, like you're a founder, you're in a call or you're, you know, you're doing sales, you're in a call and you observe that kind of a response which does not meet— like that would have— you call this off-roading, I guess, sometimes. Like, what do you What would you say to that founder or to a founder in a similar situation? That's like demand just appeared it doesn't— your supply does match it? Like what do you— Or you've never heard of before maybe it's new how should they react to that?

Yeah I think in that moment be curious right it's like oh so I'm hearing blah blah blah blah blah blah blah blah blah right like I'm hearing that trying to kind demonstrate for this next job that A.I., da-da-da-da-dah, Tell me, how are you thinking about that? And basically in your mind, you're just filling out the PULL framework there. And then you say, okay, cool. So given this, it seems like you're trying to accomplish this. You don't have very good options. You're— and so you're looking for something that would help you do this without this. Right. And, and all of that is you kind of like scoping out their world. And then it's like, okay, given that, here's what we do. Does this kind of fit what you're looking for? Right? And, and you can see that, but what the, what we tend to do in that situation is when it, when it's, well, one, we don't know to actually fill out the pull framework. Like that is the point of discovery. Discovery is just filling out the pull framework and then describing our product in a way that fits. That, that's, and then demoing like whatever fits that, but Um, but, but yeah, like in that moment, what usually happens is we hear that, we're like, that's not what I was expecting to hear. So let me just like move on to what I want to talk about.

Yeah. Yeah, exactly. It's like you're, you're on train tracks, um, a little bit with your, like my, my deck is structured in a certain way. And so we are going to walk through it in that way rather than they've, they've actually invited you into something, but you know, there's another I, I, maybe this relates to what you've written about people have a single priority. Like, what would you say? Like, oh, actually, like maybe they would still be interested in your product, but this is this other pull. Like, can people have multiple things that they are like fighting against the status quo on, or is it more limited than that?

Yeah, they can only prioritize one thing at a time, but right, like at any one point in time, different priorities are competing in their heads. For, for kind of like, what am I going to actually put effort against right now? And so, yeah, we're going to, I've got, I'm working on something on this concept, which is just like, we just need better ways to understand what buyers are trying to do in their lives and how different, and like how we can position in ways where like they're going to buy 100% of the time versus 10% of the people buying 10% of the time. That is a, thing I've been like working on with a couple startups and we'll report back on that. But stay tuned there.

Yeah, maybe one, one more. Actually, this is in the evidence of a bad evidence of demand. You know, you talk about like where the industry is headed, you know, the complaining. The third one that you had there jumped out to me. Like, I do a lot of work with universities and with professional associations, zoos, aquariums, like, like family entertainment kind of stuff or wildlife conservation, they often talk about like a mission document or like here, here's the like 5-year plan that's been outlined by, you know, by the new president or CEO. I think I paid way too much attention to that for a long time. It was like, these are the company priorities. That's different from the individual priorities that the person is— that the person's working on. And so I don't know, how do you see that for my— a lot of folks aren't selling to the types of organizations I am. How does that appear when people are talking about like company priorities and, you know, in B2B?

Yeah. Oh no, it's like super common where, um, the way to think about this is that if it's not on an individual person's to-do list, it's just not going to happen. And so what you'll hear is, oh yeah, we've talked about this a lot at the executive team level, right? It is a stated problem for the company. When you hear those words, that means nothing's happening. It's not on somebody's to-do list until you like double-click and say, okay, like, who's actually owning this? What are they trying? Is that you? If not you, cool. Can you put me in touch with them? Right? Because it's, it's, if it's not my project on my to-do list, then I don't have demand. Only the person with the project on their to-do list has demand. And then when they have demand and you fit their demand, then your job is to help them sell that internally.

Hmm. Hmm. I'm going to be— I'll be thinking about that this week and going forward while I'm talking to some organizations. Let me— I'm going to pull up your blog this week. Let's, let's talk about— you have, you have two buckets here for anybody that's just listening. We'll put the link to Rob's latest newsletter. In the, in the show notes, recommend pulling it up. He's got, he's got two buckets. I'm just going to read through these real quick. The left-hand side is the demand problem, or like you have a demand problem. If you're struggling with, with sales and you've got a demand problem, the two possibilities are there's no demand here, or the second one that Rob calls out is there's lukewarm demand or demand but not pull. You know, there's— you're not seeing that force. On the, on the right-hand side, you've got execution problems. Then we'll, then we'll pause and talk about the difference between these. And it's, you know, we're not talking to enough potential customers pipeline. We didn't hear their demand. We pitched something totally irrelevant to their demand. Something in our sales process caused them to lose faith that we could fit their demand, or we're not selling to people who look like our best fit customers. Maybe before we'll walk through like these 7 different, you know, parts of the diagnostic. But first, demand problem versus execution problem? Like Rob, what's, what's going on here?

Yeah. So often when I'm watching a founder's sales calls, the founder comes to me because they're like, listen, we haven't found demand. And we're like, demand is super weak. And then you listen to the calls and you're like, this is not a demand problem. And, and what a demand problem is, is basically a customer is not exerting force against their, their status quo. They are not trying to accomplish something in particular, right? Or their existing options are good enough. That's what demand but not pull is, right? Like they're trying to accomplish something and they can do it in a spreadsheet. Their existing options are good enough, right? And so, so those are demand problems, but most of the time it is an execution problem, which is like we didn't hear them when we didn't hear them when they articulated what their demand was, or we just kind of like, went into a 37-minute demo of totally unrelated things that caused them to just say, I have no idea what this person is talking about. Right. Or, or right. Like we lost them in the sales process or something like that. So there's, I'd split them into two categories because demand problems are ones where you do have to go back to the drawing board and like really revisit your pull hypothesis. Who are we targeting? Who do we believe actually has demand? And what do we believe it is? Execution problems are like, how do we stop getting in our own way? And, and those problems are like, they're a lot more fun to deal with because there's like, like you can visualize it in your mind is customer is trying to make progress and they're blocked. And then we show up and just block them more with our approach to sales. And so it's just like, how do we, how do we unblock ourselves there? Yeah.

Yeah. Um, and so the, what, what I'm hearing from you on this is actually you've said something interesting, which is like most of the time it's an execution problem. Is that because they're, why do you, why is that the case? Like, why is it, why do you find that that's the, that's the challenge more frequently?

Yeah, it's, it's interesting. We've just never been taught how to listen to sales calls. Or what we are looking for in sales calls. And so the, what usually happens is the potential customer, this is, I don't know, like 5 out of 10 cases, I would say I watch a sales call and the potential customer in like a 3-minute introduction to why they're taking the sales call explains pretty clearly why, like what their demand is. And also explains a bunch of pain points, a bunch of rel— like what they believe to be relevant context, talks about some solutions and like, and so there's like a jumble of things in there that we like, I just was never taught to, to like actually unpack that and say, okay, what in here is demand or what is complaint? Like what's happening in this? And so we get this information and we're usually like, Okay, that's gross. Let me ask the questions on my list. And we just totally miss it. And then, and so we go spearfishing after that for things that are totally irrelevant. We learn useless things. The customer's confused at this point. They're like, I'm getting questions, uh, like, I don't know what these questions are, but I suppose I will answer them. And so the call just becomes like mouth movements on both sides where we're just kind of like talking past each other. And saying words because words are nice to say and otherwise it would be awkward. And so that's usually what is happening. And so once you, once you actually look at it, like learn how to look at a sales call and extract demand out of it, and then you learn how to like ask the question, okay, given demand, what should we pitch on the supply side? That solves a lot of this, like a lot of this. There are some times when there just isn't demand., right? And that's, that's a big problem, but like a lot of the time it is just, we're not listening.

Yeah. Yeah. And the solutions are very accessible on the, on the execution side. Um, much, much less traumatic for your, like, for you as the, as the founder or, or the founding team. Um, Rob, are there things that, you know, the, the first two on the, on the demand side, you know, there's no demand here. Um, there's lukewarm demand, but no pull. Maybe I think we've, we've probably hit that first one. It's like there's no force. They're not trying to solve it.

Yeah, there's no force. We're not trying to solve it. They're not trying to solve anything. They're, they're just talking, right? Or they're, they might be complaining, but they're not. And so what you do in that case is you want to go take a good hard look at your pull hypothesis or, and unlike who you're targeting with it, or you want to say, okay, cool. I'm seeing this in these calls. But these people bought fast and are happy. So like, I need to deeply understand the difference here because I need to under— why did those people buy and these people don't seem to have demand at all? That the contrast between those two is usually where you figure out what demand really is.

And is that the same solution for what you say in the second part? There's, there's lukewarm demand, but no pull. Is that, is that just a different, is that like a gradation of the first one?

Yeah, it's, it's so it's the most dangerous one because you, you hear that, oh yeah, we're considering prioritizing this. Tell me more. Right. And that, that feels like leaning in, but it really is lukewarm. Or it's like, yeah, we're definitely prioritizing this, but a spreadsheet's probably good. Like, but we're probably going to build this in a spreadsheet, right? Where it's, where it's either the force isn't very strong against the status quo, or the force against the status quo is strong, but the force against their existing options is not strong. In those cases, what happens is you're just kind of in this limbo state where it's like, uh, like it, you're, I wrote it, I think, as you basically have enough positive signal to be optimistic, but not enough to survive. Right. And that's a bad state to be in because you intuitively like, ah, maybe if I just do a couple more calls here, maybe if, maybe if I just spend another couple months, it'll fall. And usually it's like, no, you have to go back to your pull hypothesis, tear it down to the shreds and like go attack in a, in a slightly different angle.

Yeah. Yeah, totally. Um, that one's speaking right at my soul right now.

Uh, well, let's, let's talk about your situation though, where, where like this week you, you sent me a message. I'm gonna put you on the spot here. You sent me a message where you were talking to an aquarium museum, something like that.

It was a university.

Yeah. Yeah, that too.

Yeah. In South America. And so as a media product, I don't know, we have a media product, we have audiences that are spread all over the world. The challenge that I ran into previously, which was like as a marketing vehicle for local institutions, It's very hard. Is this the one you're talking about? Yeah. So as a marketing vehicle for place-based experiences and institutions, our value proposition is like too diffuse. And I'm like, I ran into that for a very long time, like frustratingly. However, talking with this university, it's University of Chile, they, they brought up, you know, we were talking to him, he asked us about our audience and I, and I thought he wanted to hear like we have a huge Chilean audience. Which we have a Chilean audience that's like fine. It's, you know, about this, about what you would expect given the global population of Spanish speakers and how many of them are in, in Chile. And, but when I said like most of 'em, you know, 90x% are outside of Chile, he was like, oh, that's great. Like what we're trying to do is like really grow our inter— like international across Latin America, across the United States, Spain, uh, you know, other parts of Europe. That's, actually where we do have a, like, a much stronger value proposition is like reaching beyond or, you know, there's maybe a couple of the things that we can do locally, but really it's less strong than just like we have this huge audience that's dispersed. And so I, you know, my reflection to you was like, okay, now there was an interesting, surprising thing that happened in that conversation. And so it was time to go back to like the pull framework and say like, okay, what are the organizations that I expect, or who are the human beings that I expect are focused on a— are having a hard time establishing a very broad, you know, brand recognition or something like that. And I think travel agencies is like one of them, like that are focused on bringing, you know, bringing people to a location. It's like they don't actually want to reach people that are already there. They want to reach people that are outside. There's probably a couple other ones, but like the new sprint will be focused on that type of organization.

Yeah. So, so like, let me, let me put that in my words of like how, how I understood this, which was basically you were having a, you've had a series of frustrating sales conversations with like, well, I'll just say like museums and, and whatever. And, and, um, those conversations have all had the character of like, cool, we're trying to reach our local audience. You offer like some awesome media products. Tell us more about that. And then they learn that you have this kind of very broad audience and they're like, uh, we're actually just looking for people who are right, like nearby. Yeah. Right here. And so you're expecting that to happen and then something surprising happens. They're like, oh, amazing. That's great. Like we want a much broader audience. And so in your mind, your, your like pull hypothesis kind of like shifts. Right. It goes from like, find, like find an audience nearby to like attract a global audience of XYZ kind of people that like all the additional details there. And then it's like, okay, if that's what this person is trying to do, who is actually trying to do this all the time? It's like, oh, well, tourism bureaus, like, like these kinds of places are ones that have that shape of demand. And it's like, way less random than one kind of like university's XYZ person having that.

Yeah. Yeah, yeah, exactly. The other place I've like taking that into other conversations, um, like there's certain government agencies that we've produced with that are like focused on international reputation. Like there's, there's other types of, uh, organizations that it's like the, the thing that I, I was previously thinking about as a major weakness that I had to overcome was actually turning into something that was like, oh, interesting. Like that's a, that is something that XYZ person or me and, or, you know, them saying me, um, have been actively trying to solve and we haven't, we haven't cracked that yet. So, um, I don't know if there's anything else to add on that.

We can move on. I think that's, that's, that's like a common thing. That's why you do these demand audits and look for things that are surprising. Like that's the surprising applications of force are like, like that's, that's essentially an example of it. We had this, we had a kind of like similar thing where I was apologizing for, uh, we didn't have a, our customers from $0 to $1 million ARR could not log into a software platform. Uh, and we were selling software, which, well, you know, you kind of apologize for that. Like, I promise it's right around the corner. We're like working on it. And one customer was like, listen, I don't want to learn a new tool. That's not something I care about. And so then we sold it as like, and you know, we'd say like, one of the best parts is you don't even have to learn a new software tool. Everyone was like, cool, amazing, awesome. Right. And then it just like, didn't like, yeah. So, so, uh, there's just like a lot of ways in which either like demand is surprising or the way in which we're getting in our own way is surprising.

Yeah. Yeah, totally. Um, why don't we, Rob, hit some of these other execution problems? Yeah. Um, uh, one is we're not talking to enough potential customers. We could probably link to some of the pipeline stuff like that. It's like you haven't earned your demand problem if you, if you're not having the sales conversations yet. There was a— I feel like this is one we've hit a couple of times from a couple of different directions. There was a demand signal. I just didn't catch it or double-click into it. You know what you said about basically having the mental model of the pull framework, which we can, we can link to as well, and just like thinking about, okay, just heard demand. Let's run through this pull framework to actually understand it. Anything else you'd say on, on that one, Rob?

Yeah, no, this one's just like wildly— this and the next one are insanely common.

Yeah. Let's talk about that next one. Their demand was pretty clear, but I'm not pitching anything that fits their demand.

Yeah. So what will happen is you, maybe you get lucky and they show up and they're like, all right, I don't want you to ask me any questions. I want to explain to you exactly what my pull framework is. That, that's ideal. I love when that happens and it's like, cool. Okay. I get entirely what your demand is. And then for some reason we feel like we need to pitch them on the entirety of the theoretical history of software applications and why cloud beats da da da, like, and just like a bunch of random stuff that, um, that, you know, you, what you'll find is that a pitch, you know, you'll describe your product for like 4 minutes and they, you've lost them at minute like one half, right? They just like totally don't get it. They've zoned out, they're checking Slack, whatever. Right. And, and, oh, and the same thing happens in a demo where whenever you pull up a demo and you're like, all right, now this is the home screen. This is where you log in and let me jump into the settings page. So you get how all the permissions work, right? Like they're, they're already just like looking for a door to just hit their head against or something like, and so what, what usually happens there is like, we think that we need to describe this as a very big thing to wow them and convince them to buy it when we actually have to describe it as, and demo it as the smallest thing that fits their pull possible with the least number of concepts they need to understand, the least number of screens they need to see. It's like, yeah, I can see how this fits my pull. Awesome. I want it. Let's move on.

Yeah, yeah, yeah. I forget exactly what episode that was. We talked about it, but about the consequence of understanding pull being your product gets smaller and the way you describe your product gets, gets smaller and more focused specifically around these specific tasks that they are, the specific project that they're trying to solve. Let's— there was— let's hit number 6 real quick. There was a demand-supply fit and then there wasn't. And this can there's a couple things that you describe with this. You know, one is a great first call that like sort of peters out or you get actually pretty far. You give it— you give an interesting example here where they, you know, one of your— the founders that you're working with, they were getting pretty far into the sales process and then the CFO was just like— or different CFOs were just consistently destroying it. And you said, you know, what, what your analysis of this is, is it's not a demand problem. It's a, we need to help our champion not get wrecked by their CFO problem. What's, what do you, you know, what would you say about like that kind of situation?

Yeah. So, so what will happen is you'll have like a good call one or you'll have a good like demand part of call one. They'll be like, oh yeah, this is exactly what we need. Right. And it's like, cool. At that point, like it's They, they want it. We need to help them buy it. And something in that process of like help them buy it causes them to drop off, whether it is we answer some question in a way that they're like, wait a second, I don't know if these people are actually real. Or it's like they go running face first into their own company's internal processes. Like, and another example here is you get brought in for a group demo. Your champion is super enthusiastic and then you just bungle the, the group demo so poorly that the champion needs to go into hiding for a few months and then like just to keep their job like this, these things are like quite common. And so it's okay, we found demand fit, we found supply fit. Everything after that is like not really sales, it's project management. And we just mess up something in the project management stage. And so the thing is just, okay, figure out what we messed up and never mess that up again. Like design around that being part of the sales process. So example in the CFO case is, okay, instead of our champions just getting clotheslined by their CFOs every time they try to get the deal across the line, like let's give them a way to not have that happen.

Yeah.

Yeah.

What, what, what were the steps? That they took? How did they figure out how to effectively support the champion?

Yeah. So, in like this case, it was just starting to provide something for the champion. Before, it was like, cool, I'm going to go talk to my CFO, should be good. Provide really nothing to them and the champion just gets run over. And so it's like, okay, let's go back to the champion. And let's maybe talk to a few CFOs at companies where they have bought it and figure out how they, you know, like what did they need to see? And, and, you know, maybe it's a business case, maybe it's something else, TBD, but you just kind of figure out what's the shape of thing that fits what they need at that point.

Yeah. Yeah. Um, and that has to do, or it's closely related to one of the, one of the other pieces of advice you've given in the past, which is like talk to customers that where it didn't work or that were a failure or something like that. Maybe they didn't buy or maybe they disappeared, like do whatever you can to get on the phone with them to actually, you know, and it's not trying to sell them again. It's like understanding what happened, like what was actually going on. I find that in those kinds of conversations, if I'm like, hey, can you just shoot me straight? Like, you know, people aren't telling me the truth and I'm trying to understand it. People will often like open up and just try to help you out.

Yeah, 100%. And like sometimes you might even like need to go fly there, right? And meet, you know, take them out for a beer or whatever and purchase them. Like, but continuing to hit your head against this same wall repeatedly is insanity. And so it's like, cool, this is, this is our bottleneck right now. I'm going to find the fastest way to attack this bottleneck, fix it, get to truth and like move on. And assuming that if I fix this bottleneck and we're, we have demand, we have supply fit, and we're just getting run over at this point, fixing this bottleneck Yeah, should like at least move the bottleneck downstream. Maybe it's onboarding and maybe it's like retention, maybe it's something down there, but like we are no longer blocked at this part.

Yeah. The last one that you talk about is their demand doesn't look like our best fit customers' demand. And you know, you— this is where you've talked a little bit about contrasting here, but some customers buy super fast and are satisfied. Some buy super slow and aren't very satisfied. It's unclear, the two. What do you do if, uh, you're a founder that has that kind of bifurcation? Um, like how do you, how do you get over that?

Yeah, so this is, this is the super common thing that I've seen kind of like post-seed stage when we're trying to grow really fast. What you tend to find is that like some, there's almost a total bifurcation of like deals that close fast. And like customers are happy and deals that close slow or customers aren't happy and understanding the difference will tell you what to do. So like an example is you have, you have like 2-week sales cycles and you have 12-month sales cycles. And, and sometimes you can get those 12-month sales cycles to buy in 6 months, but then they churn, right? And it's like, okay, what the heck is going on here? What you'll usually find is that like the 2-week sales cycle is like, or actually the 12-month sales cycle is actually like 11 months of waiting. Plus then something happens in their world that causes a 2-week sales cycle. And it's like, okay, like that's, that's the, that's the thing here. And so based on that, we actually need to like rethink how we approach pipeline so that we're not wasting 11 months following up with people who don't have demand. Yeah. Or you'll find that like, okay, what we've been doing at that moment, like when we have one of those long sales cycles is we're just throwing a bunch of like urgency things and offers to these people before they have pull. And so if they buy, they buy for the wrong reason and then aren't satisfied. They don't implement, they don't really exert effort and our entire company is just like over-rotated on making those people who aren't going to be satisfied, like trying to shoehorn the product into their, their workplace. And so that's, and then I'll explain the other example of like, oh wait, there's just two different kinds of people here.

Yeah, actually I thought we were going to start there, which was, uh, but I think this is very interesting. It's more about the when. Um, like a little bit about the why, like that, would you say that, um, like throwing in a big discount is, um, sometimes it feels like you need to do that in order to get early customers. Is that, when is that the right strategy and when is that the wrong strategy?

Yeah. So like what I've seen is that basically if there isn't demand there, if they're not actively prioritizing something, then you're going to interpret that as an urgency problem. Like, that's what we do by default. And so, oh, how do we, how do we create urgency? And you're going to devise a set of tactics to create urgency, which include discounts, which include whatever, right? Like, yeah, a bunch of questions to amplify the pain. You're going to use challenger sales to twist their arms, right? And And like my sense after looking at like, that can close deals, but we care about retention in the product market fit game. And what often happens is the us imposing urgency on customers leads to them not necessarily making the best long-term decision in their minds. And so they don't exert effort to implement and like get it right. They just buy 'cause it's cheap now or because whatever. Right. And so what you're seeing there is there's no real, there isn't strong demand. And if we had just waited a couple months, there would've been strong demand.

Hmm. Yeah.

And they would've implemented successfully, but instead we're just kind of like, we're, we're throwing CSMs at these people. We're, we're like, trying to just make it work when they're basically, we are substituting the lack of force from their side with a ton of force from our side. And it is just, this is a very common thing. It's, it's just a design thing that you have to design away from. And, and you really just want, like, you can, you can add urgency when they have demand. You give them a reason to buy sooner versus wait. Totally reasonable. But when they don't, trying to add urgency usually just leads to like customer success problems.

Hmm. Interesting. Let me, let me try to repeat that back at you. Uh, what, what I'm hearing from you is, um, you know, creating, creating urgency, helping to like get it over the line, like that's legit. However, if that's a requirement to get all of your sales going, if it's like If you have to do it, apply it to like such an extreme level, or if it feels like it's not, I don't know. Like, I think I'm still wrestling a little bit with how do I know if there's really demand there if I'm having to subsidize it? Is it the extent of the subsidy or like, what do I, what do I do with that?

Yeah. So, so like they demand is pretty binary. Like it's, are they trying to exert force or not? If they are trying to exert force against their status quo and we're just giving them a reason to exert sooner, great. That's fine. Like an example is one of my friends' startups went from $500K to $50 million ARR in a couple of years, and they had a one-time onboarding fee, like $10,000 or $50,000 or whatever it was. And they never charged a customer that. It was literally just used as a reason for customers to buy this month versus next month, because if you buy this month or by whatever date, Like we're going to waive the onboarding fee, right? That as a tactic is fine, assuming that customers are actually trying to accomplish something, assuming that they're applying force and this is giving them a reason to go to their CFO, for example, and say, hey, listen, we should do it this month because we'll save $10K. Yeah. Okay. That, that is a, that's a, like, interesting. Applying urgency when there is demand, just kind of like, like puts, uh, it is a tactic to help them make a decision faster versus applying urgency when there isn't demand is trying to create like false scarcity. So they make a bad decision.

Yeah. Yeah. Like when, um, in this case, like with the discount, what's, what's helpful there is it's an execution problem that you are, you are actually designing to help ease the purchase rather than creating demand that, you know, trying to create demand through a pricing strategy. That's, that's super interesting. Okay. And then you were— we were going to hit, you know, the person that you're reaching out to. So we talked a little bit about the like the when and, you know, some of the why. Talk a little bit more about, you know, when, um, it's, it's maybe it's the wrong person that you're reaching out to or the wrong role or something like that.

Yeah. So, so the last thing that you might find when you're in this stage where it's like some people are buying fast and some people aren't is that you actually, when you compare them, you're like, oh, there's actually something that's meaningfully different about them. It's not just the same person at two different points in time. And so this is actually how like you get kind of market segmentation. And this is almost like a bottoms-up, like, or emergent market segmentation when you realize that, oh wait, like, we just shouldn't serve these people who suck, right? Or whatever. They're like not a good fit for us for whatever reason. And, and so it could be right. Like it could just be, oh wow. It turns out that really small customers aren't a good fit for us. Or it turns out that former lawyers as CEOs, just not a good, like, it's just random. It could, it could be random or it could be kind of like it's often something that just like makes a ton of sense after the fact, but you couldn't have predicted it in advance. And it's just like looking at these, these people and you're like, they look the same to me. What is actually different about them? And you figure out what it is.

Yeah, I, I like that. Let's use that to get into the demand audit itself. Um, I'm gonna pull up, uh, just like a little diagram that you have basically. And, and these are maybe one thing to, to mention, you've got a, a Miro that you've just open sourced. I highly recommend people like get in there. It's got way more than the, the, you know, audit. It's, it's a more a broader compilation of your kind of overall theory on, you know, on how startups work, on how founder-led sales work. What you've— what I'm pulling up here is an example of a post-sprint demand audit that you ran with your company. Tell us how you like How did you, what were you trying to do here and what are the elements of this? Like how were you running your demand audit?

Yeah, this part is in public because it actually is linked to actual call recordings with people. And so, so, but, but, um, but yeah, like this is, this is something I share with startups that I work with just so they can see me going through these calls and, you know, see that you do not actually have to be good at them. You just have to kind of like know what you're looking for. Um, and so Uh, yeah. So what this was is I had a hypothesis that we were going to have a certain kind of customer and that customer was going to be a certain kind of engineer who had a certain kind of skillset at a certain stage of company. And so I was like, cool, I'm just going to schedule a bunch of sales calls with those people. And so I did, and I assessed, you know, kind of like I put the recordings here, I linked to the timestamps and I linked quotes in there. Of them, and I was basically assessing a couple things. One, is there demand here at all? And if so, what is it? And then like, does that fit what I had expected? Then if there is demand, does our supply fit their demand? Why or why not? What were they expecting? And then like, third thing, which is the most important, is did they pull for next steps, right? That, you know, we can hear a lot of things in sales calls. What really matters is What do they do when the strike like comes and like, and that can be kind of like, that's, I don't know, it can be binary, right? Do they, do they request access? Do they actually sign up? Do they pay? Right. Versus do they just kind of like say, cool, love to, love to keep in touch. And in doing this and comparing across these, I was able to more clearly figure out who exactly are target customers and what exactly we're pitching them. Yeah.

Yeah. And you're, I, I find it helpful in this, this specific example isn't in the Miro, but you do have a, um, a, the template. That's, that's open source that people can be filling out, you know, them themselves too. And what you end up doing is like, yeah, like the colors are helpful. Like it sounds— I don't know, I feel sort of stupid saying that, but like you go left to right and you're like, wow, like there's a lot of green on, you know, person A and person C. There was like, there is something. And then it just naturally begs these or surfaces these questions around the differences and I think sometimes they're not super complicated to answer, but until you look at them side by side, you just don't.

Yeah. There's something in this of, right. I remember like coming outta college, reading a bunch of business books and being like, this is, this all seems like blindingly obvious. Like, why are these, why is this written in books? And it turns out that like most of this stuff is pretty straightforward. It's like, look at reality with a kind of Somewhat of a framework here. Demand-supplies is kind of like my suggested one. Look at reality and see, I don't know, see what comes out of it and like, yeah, color code. Is this what I expected? Is this good or is this bad? And compare and contrast. And, and you know, we, we, we went through the most expensive MBA program ever for me to just say, is it green, yellow, or red on demand? Yeah.

Gosh. I, I've, yeah, I can't, I can't recommend enough. Like I'm, I'm running a sprint right now targeted at a, you know, a new, a new pull hypothesis and a new pull framework. I find it's super helpful and highly recommend people give it a shot. Rob, anything else you want to, you want to add before?

Yeah, no, I think you, I think you did good for a, for a last minute curveball on this one.

Yeah, hopefully not. Hopefully it was not dramatically more painful than the, than the standard that we've set for this.

Yeah. Well, it's funny. I saw someone post about this on LinkedIn, like recently, and it's like, wait, I forgot we posted these. So it's good to get some, some feedback that, that people are listening.

And Rob, as a reminder to anybody that accidentally made it, made it this far, Rob But we'll read the comments. We do. If there's questions that you have that come up from this, drop them in there. If there's things that you want Rob to write about, drop it, you know, drop it in a comment on YouTube or on Spotify or on the newsletter itself. Rob also has a bootcamp coming up in November if you want to run like this type of sprint with another, with a broader group of founders. Starts early November. There's a couple weeks left. Um, the link to information we'll put in the, in the description. Anything you want to add on, on that, Rob?

I think, I think like the most important thing is kind of what we keep coming back to is like, especially in today's, is it is, if you watch your own sales calls, the answers are generally in there, but you, but like, you often need a kickstart, like you need to watch somebody dissecting a sales call so you can look at your own, right? And sometimes you need, you need, you know, like just another founder to look at your sales calls. And so that's kind of what I've found to be most effective is just seeing sales calls and starting to be able to assess what is going on in these, what should we be pitching given this? And, um, getting the clutter out of our minds there too about like pain points and stuff like that. It's just like super helpful. And so Yeah, I would. This is the thing I wish they had taught us in school and it turns out we gotta do it ourselves.

So awesome. All right, well thanks listener for making it this far if, if you're still there and we'll catch y'all or you next week.