"Top 10 Questions Every SaaS Founder Needs to Ask Their Customers" Canvas Ventures @Casetext

Rebecca Lynn, co founder and general partner at Canvas Ventures, and Jake Heller, CEO at casetext. Hi and welcome everyone. Today. Thank you for coming. I know you guys probably out a bit late last night, but welcome today to our talk about really listening to your customers. We're going to do a deep dive for you today on the top 10 questions every SaaS founder really needs to ask their customers. And it's the same kind of questions that I ask when I'm evaluating whether or not to do a deal. And with us today is Jake Heller. You want to tell a little bit about yourself or should I introduce you?

Sure, I'll do it. Hey everybody, I'm Jake. I'm the co founder and CEO of Casetext. We had been in business for about 10 years creating AI technology for lawyers and law firms, and just a couple weeks ago closed a deal where we were acquired for $650 million.

Cash. All cash.

All cash.

And the most interesting thing that Jake didn't say is Jake's casetex was the most robust, I think most fully Featured implementation of GPT4 to date. And their, their team, it didn't happen overnight, it didn't happen in a vacuum. They had been really involved in the LLMs really for the last 10 years. Right. So we'll touch on that as we go through a little bit. And I'm Rebecca Lynn, Canvas Ventures. I invest in sort of series A and B companies, mostly in fintech and health tech and happen to be a lawyer and an engineer. And similarly, Jake himself was a lawyer. We'll forgive all of us for that. Right. But also a coder. And you were developing until the company probably still today, I bet you're probably still going in coding right now. Okay. So we're going to dive in. So the part of the journey that everyone kind of likes to talk about and I'm not seeing these slides pop up on the back though, I'm not seeing them back here. Are you guys seeing these? And I don't know how to go backwards, so we're just going to go with that. So the part of the journey that everyone likes to talk about is how it's all up and to the right in the party and the IPO and all of that. However, that's not usually the case. In fact, very rarely. And so case techs in particular, Jake, you had a few near death experiences, right?

Yep.

So why don't you tell us about a couple of those, maybe just to get us all onboarded in the right way.

Sure. A lot of you probably read The Hard Thing about Hard Things by Ben Horowitz, where he describes how many companies have a oh shit, we're fucked, it's over moment. There's an acronym about it. And I remember reading that before. I was just starting my company, I was like, that's not going to happen to me. And then it totally happened to me a number of times. And they happen in all kinds of ways. It happens when you think you have product market fit. We did a number of times scaled up sales and marketing and we didn't. And sometimes you find out the hard way that your sales, you were able to sell it as a founder, say, and maybe two other people were able to sell at your company when you tried to scale it up, the product market fit wasn't strong enough to really scale it. Twice in our company's history, we had to go through one of the most painful things, if not the most painful thing you go through as a founder, which is letting go of a lot of your colleagues. And each time was around that same kind of pattern. And like Rebecca says, it's not all up and to the right. Of course at moments it must be or else you stop existing sometime over that ten year history. But sometimes it fits and starts where things really are taking off and you're like, oh my God, we're going to take over the whole world. We're going to raise capital, hire a bunch of people and conquer the world. And then reality just doesn't play out that way. Things that work on micro don't work on macro. Things that work with some subset of customers, you hypothesize it'll work with a bigger subset of customers and it doesn't. Early adopters behave differently than late adopters and so on. And so we can go into more gory details if folks want, maybe during the question and answer period. But exactly as Rebecca says, it's not always up and to the right.

Right. And the path really depends on when things aren't working. You think you have product market fit and you hire a bunch of. And I gotta tell you, this happens in every company we're involved in. Like we think we see that early indications. It's always better to wait a couple beats. It's really hard to make yourself do it. Right. And I'll give you huge credit, Jake, I mean, he's one founder in particular that took very early action as soon as he saw it, and then would do what every founder I believe should do. He took a step back and he would say, let me go talk to the Customers. And that was the next step that you would do. So really your path really comes down to one simple thing and it's understanding the customer. I actually learned this in the old school way, I will say. I was a chemical engineer in my old life and I was at Procter and Gamble and I got tapped at P and G in a really unique way to work directly for the head of the product category, one step down from the CEO and helped launch new products in new markets internationally, which meant Mexico, Japan, Canada and Germany. And you wouldn't believe what the product use cases are for the same product, like paper, laundry detergent, whatever, in those different countries, they're dramatically different. And so what you learn very quickly is that you need to listen to the consumer. You need to put all of your biases and how you think and how you feel in it doesn't matter, right? And so what P and G taught me really early and what I try to impart to the founders is what you think doesn't matter at all. That's great that you can start with a hypothesis, but put it aside and listen to the customer. Because if you listen well, you'll figure out your direction you need to go. And oftentimes it's much easier than you think it's going to be. With doximity, we learn that, you know what we do have to rely on a fax mistake machine. We hate the fax machine. But the only way to take a medical product to market is by fax, right? But we listen and we figure that out. It's kind of a shocking message. But again, the customer is 100% always right. And then the thing people forget oftentimes is they don't want to hurt your feelings. You got to listen for what they're not telling you, right? And that is equally important to what they tell you. And then your magic words to see, well, show me how you do that. Can you tell me, show me how you're using that, right? It's often again, different than what they say, right? And then, you know, anything of any kind of subjective issue or where you're going to have some kind of, you know, somebody should balance their bank account, right? Well, they're going to tell you they do. But then show me how often do you do that? Show me how you do that, right? Those are the three kind of magic rules of thumb when you're doing this that I really learned in the old school CPG world.

Let me add just one thing. A lot of you founders out there may be like me, where you would have been the user of your product, and then you founded a company to solve your problem. And so you think you know what other users will want. And that's actually one of the most dangerous places to be. I turned out to be a pretty atypical lawyer who is much more tech forward and tech advanced than other lawyers that I ended up selling to. And so while your domain expertise is a super strength and part of the reason why you probably founded your company and you know your customers really well, it could also be an Achilles heel. And so the need to talk to your customers is in some ways increased because of your domain expertise. If you're one of those founders, I can't.

I can't even like, say that loud enough, right? At every freaking company, that's the case. And I will look at them and I'm like, you are not the target audience. You are. You. You are doing this company. You are not the target audience. Right? And it's a really, really hard thing to get your head around, right? Because you know how it should be. But you're not the target audience, and it's a very different thing in the hands of your customers. So we will roll forward. We'll try to not sort of walk through this step by step. We'll skip around. But the first question I kind of start with when I'm evaluating a new company is just who I'm talking to. Where am I at in the organization? Who is this person? How long have they been there? And I'm doing this, and I'm making small talk. How long have you been there? Where were you before? I'm trying to feel out what the political situation here is at this company. Do they have any ability to. To sign the purchase order? Right? Or who do they have to get permission from? What else is going on in their life? What are the other 10 things you're working on right now? Right? Where does this fall in the stack? You know? And then are they even going to use the product? Is this person the right person to talk to? So I spent a lot of time, and it might seem fluffy, but I spent a lot of time figuring out just who this person is and where they fall. How do you handle this when you're trying to reevaluate?

So one thing actually, before we dive into specific questions, and I think it's on the next slide anyways, the one discipline that I did that really helped over the last 10 years of running the business that I'd recommend for everybody is find time in your calendar to talk to five customers a week as a CEO, as a founder.

Very good.

And what you'll find, I think, is that though statistics and metrics matter, of course, because they tell the big picture story, they don't tell a lot of the story. In fact, your metrics probably suck. They suck in ways you don't really anticipate.

Well, they can mislead you, too, or tell the wrong story.

Yeah, they tell the wrong story or, you know, they're saying the numerically accurate answer. But there's a reason why everybody's stuck at step B and it's not the reason you think it is or whatever it may be. And I, you know, this is maybe sacrilege at a place like this. I learned way more talking to customers than I ever did from all of our metrics. In fact, if I could choose just one, I would dump all the metrics and just talk to customers and probably make better decisions that way. Of course, you can have both, so use both. But. So this question, this first question from the investor perspective is like, hey, who are you and what do you do? Et cetera. Usually you know that as a founder, especially for early enterprise sales, but sometimes you don't just share a quick story about that. Once we sold an enterprise account, and then very quickly afterwards, the individual who was the kind of main purchasing decision dude was let go because apparently he's sexually harassing his people are very human. It's a very human business you're in. So he was sexually harassing his colleagues. Oh, my God, this is terrible. And I can't believe we're working with this guy. Awful. And then we were down to square one. We had no champion at the law firm that we were working with. And you quickly have to start talking to that kind of, I call it like backup, I guess. Next person in line, who is the next person there. And you may find out pretty quickly that without that initial champion who did your purchase, you have to do a lot of work to find somebody else within the organization who is going to be your superhero within the organization and really prioritize your application. Again, this human stuff will happen. It's more often like they'll leave to another job or whatever, retire. But sometimes it's coming totally out of the blue like that, and you need to be ready. Best case scenario, you have other champions, other people who already love your product. But if it happens early enough in the purchasing decision, you have to be really quick about getting on with the right people within the organization or else you risk losing the enterprise, enterprise deal.

Very much so. And then also sometimes you're just wrong. Like we do a lot of health tech stuff and you know, the thing that the mistake founders make is they're building a product and thinking they're selling to the doctor. Not at all. Almost in no case, right? They're selling to the gal, we call her front office Sally, right? And you better, you know, bring pizza and feed people lunch and you better design a product that shows appreciation for her or him, right? And so you really, this whole, like, who are you selling to? Who are you talking to? Know it really well and don't kid yourself, right? Because it's not you. You're doing a company. You know, if they could do a company, they'd be doing that too. It is different, right? The next one is, you know what the really basic, you know, what problem are you trying to solve? Leave it super open ended, right? Let them talk. How big is the issue? What does it cost you? What do you spend spending in terms of time and people and effort and energy and how are you working around it today? And just like, just this is one I just like let marinate, right? And I just let them just vent sometimes. Do you spend time here?

Oh, a ton. And well, first of all, there's a simple framework that I like to think through, which is like in terms of problem solving for a customer, you're either making them money or you're helping them save money, or you're helping them reduce risk or you're effed. Those are your options usually, or you're dead. So sometimes you listen to what problem they say they're solving for you, and it's not one of those things even indirectly connected. And that's a sign that you either need to position your product differently or you might need to totally revamp your product. And I think a lot of SaaS founders fall into this trap, I know I did early on of like, oh, we make this incremental improvement to X, Y and Z. And that, that really mattered to me when I was a practicing lawyer. It really mattered to me when I was in X, Y or Z industry. But that actually doesn't make them money. Save them money, reduce risk within the organization. Again, it's kind of in that order, I'd say of importance and it puts you in a really tough position. I'd say the other thing that sometimes you ask what problem they're solving and the real answer that they're not saying, but that you can get to if you have enough conversation may surprise you. And again, it may or may not be good or bad. Here's just one example. We recently came out with a new AI product based on GPT4. As Rebecca said, we were very lucky to have worked with GPT4 for over a year now, working mostly in kind of private beta, and built a great product around it. And that's the reason I think we.

Ultimately exited it passed the bar.

Yeah, it did just pass the bar. Decimated 90%. So. And that's, that's GPT4's credit. But we did a lot with, with the tech and, and I think we put us in a really great position to build a, a product that really helped our clients, but talked to a lot of our clients at first, the very early adopters, and what became pretty evident is the reason they were buying it is because for marketing purposes, the law firm wanted to show the rest of the world they're doing an AI thing. Right? Because everybody's talking about AI and they needed to be on top of this AI thing. And so, I mean, on the one hand, great, you get an easy win, like a sale, because for them, spending even 500,000 or a million dollars a year is worth it to show their clients that they are on top of this latest trend, etc. But it's also a very dangerous place to be as a founder and as a company because they could very easily buy the product for a year, get the PR win, and then, you know, quietly disengage later. And so if that becomes the real answer, and that was true only for, thankfully, a few of our clients, you have to very quickly pivot to making sure that the company you sold to is actually going to get the real value out of the product, the value that again, makes the money, saves the money or reduces risk, or all the above. And if you don't do that, you don't put yourself in a position to win. Right. So sometimes getting the problem you're solving goes beyond. It goes to the heart of how you're engaged with that customer over the long term.

And be sure to hear the bad stuff. Welcome the bad stuff. Right?

Yep.

I think when I wrote this, what I was wanting to do to talk about too is just the inversion of the marketing messaging. Right? What problem are you trying to solve? I mean, I can't tell you. Every company starts out feature, feature, feature, feature. Here's all the features we have. AI, we have this, we have that. That is not the problem. Right. Their problem is I'm spending too much money here. I need to get work done faster. I need to cover my risk. Lead your marketing message with the problem that you're trying to solve, your features and how you do that solve that problem. That's called a reason to believe. Right? And that's all that is. And so again, everyone inverts this. And as soon as you figure out the actual problem that you're trying to solve, you're out of the feature war and you're on a new trajectory. But it takes so many people way too long to get there. And that's what we try to help kind of everyone with in our portfolios. What is the problem? Right. You know, you're trying to make this person a hero. How do you do that? The next question, we'll try to move this up a little faster, hopefully. But this question is really to help source later. How did you first learn about the company and what other solutions did you find in the consider in the process? So from my perspective, I want to know the competitive landscape from their seat. Right. What did they consider as other alternatives in this process? What about you, Jake?

Well, this is an interesting question for me because I think a lot of folks here spend a lot of time thinking about your marketing spend and are we going to do more in digital or more in press, whatever. I had a really interesting experience that actually led to me letting go of my marketing executives. So I was talking to five customers every single week, and we asked this question to basically every single customer we talked to, and I got a very consistent answer from everybody. How'd you hear about us? 100% of the time it was from press and peers every single time. And so we had great word of mouth and we were doing a pretty good job, at least at the time. The legal technology press being covered by things these people were reading. And so after like seven or eight weeks of this, consistently, I went back to my marketing person and asked her for her impression of what was going on. And she would swear up and down that everything was being driven by digital ads. Right? Never, of course, it's almost never the case.

Right? Almost never the case.

But of course, digital ads probably had some sort of impact. People would see the ad and they kind of implanted in their brain. I'm not saying it had no effect, but the disconnect between what I'm hearing on the ground from talking to customers and what our metrics were telling us was pretty stark. And that was, for me, one of the first warning signs that we had somebody who was disconnected from what was actually happening in real life. And again, thus the discipline of talking to customers after 40 or 50 or 60 conversations of hearing the exact same thing over and over again. It's not like a random, you know, it's not like a potentially small random occurrence. It's real. And it informs your strategy not just on product, but across the board.

And any marketing and product person who's not talking to five customers or more a week should no longer be in your company. I mean, I'm so tried and true, like being from the P and G world and running marketing at NextCard and running my own marketing consultancy, like they need to. I don't care what the numbers say. Like, you gotta tell me the context of that, right? And so when you hear these organic stories, you know what actually works then, which is hilarious. But coffee cups, T shirts, like all of those things. Cause they are hanging out with other lawyers all the time. And we call it the Lululemon approach, right? And then they ask questions about, oh, how did you get that? And then they can give a chance to talk about case text, right? And that it's grassroots and it works especially for high value targets like lawyers. What was the success? So this is when I look. So when you're talking to the buyer at the company, what was the success criteria for purchasing the product? And if they don't have one, you just run away because you want. This is like death by pilots, right? And oftentimes they start with a poc, but if they don't have a clearly defined way of how they're going to measure your success, you thank them and have a good day, right? And then you want to talk about how they established it, how they thought about it. And then afterwards, did the product meet the success criteria or not? And what could have happened differently. But I'm a big fan, I mean, of success criteria. And at P and G, we didn't sneeze without deciding what success criteria would look like. And at any company I've been a part of as an operator, you know, we had a one pager of what success would look like if we did any initiative. Because if you don't know where you're headed, I mean, who knows if you want, I mean, it doesn't make any sense to me.

Some buyers are really terrible at this, whatever it's worth.

Terrible.

Some law firms in our world especially, they're like, I don't know, just if it's good, we'll buy it or something.

But you can help them figure it out.

You can help them figure it out.

And then you set your success criteria. You can say oh well, if it just does this then you'd buy it, right?

Yep. We did a lot of work at times with it's customized to their needs and each of your customers will be different in ways that will surprise you. Even firms in our case that look the same on the outside and law firms were our primary target audience, they look very similar to the outside, might have very different success rates. This is a conversation at least in the enterprise sale. Right. If you're doing something scaled in SMB it may be different, but for the enterprise sale it will be different and should be customized. But you can help them think it through because oftentimes they won't.

And it's sort of like setting your own criteria. You're setting your own bar, right? Oh well, you know what you can accomplish. And so you get a commitment, at least a verbal. If we deliver X to you or X many people using it getting value, would you buy this and then get them to say yes and then put that in an email as a follow up? This is our commitment to you. We're going to make sure this happens and we look forward to you buying our product. Right. So there is an opportunity if they don't have success criteria, but use it to your advantage. I like sales if you can't. So next question. What was the experience like using your product? And this is how long did it take to implement the product? Was it easy to do time, people, resources, they have to hire somebody from the outside to get this done for them. And then what was the company like to work with as you ran into bumps along the way and how fast did they respond? Because you know, time to implement cuts on both ways. On one hand you want it to be super, super easy and turnkey. On the other hand you kind of don't because you want to see commitment. So we have a company called OfferFit in our portfolio and it's a heavy, heavy, heavy install. However, the people that use it know what they're doing. It's you know, Capital One and Yum brands and they pay half a million dollars a year. And because it's in the Marcom stack, I love that it takes a long time to install because it'll take even longer to rip out. Right. So, so you want to know this, how did you approach this question, Jake? You want people going right away?

We're generally. And again, this may not always be the right answer, but we were generally like try to make it as turnkey as possible.

For your case, it totally is the right answer because you have A standalone product.

That's exactly right. And you know, one of the things that we found this is like a unique, weird way that we developed. We both catered to the SMB market, which was entirely product led, and to an enterprise market that was sales led and enterprise sales with the same product. And that can't always happen, but when it can, it obviously works really well to your advantage. And having a product so tuned to an SMB user with a completely self serve kind of onboarding experience meant that by the time an enterprise user was using us, they went through a very similar, if not identical onboarding process that is meant to be no touch easy on your own time, et cetera, and put us in a position that the rollout was quite fast. And actually this is one of the things that really mattered in our acquisition. We had taken so much of the market so quickly with our new AI product over the last year or so, and so we saw usage grow so.

Dramatically it doubled overnight. Right? You went from like 10,000 customers to like.

Yeah. And their revenue doubled over the last four or five months, basically. Right. And so that scale of acquisition of customer and then getting into it, using it, loving it, and this especially works if you're like a first mover in a market where there's an active acquirer. And that ended up being the right process for us, the right path for us, you know, just being so far out ahead so quickly really mattered. I mean, one statistic we actually only learned post acquisition, there are some of our customers, they had this product called Westlaw. Any of the lawyers in the field know it's like a very heavily used, maybe not the most heavily used legal technology product. And it turned out that our product, though having been only rolled out like, you know, three or four times three or four months ago for some of these clients was being used far more than Westlaw. Right. So that quick ramp up of usage was a really important factor for them in their acquisition process.

Number six, when you're talking to these people and they're talking about how they're using the product, don't assume you're not the target user. Remember what is the most important feature of the product for them and who is currently using the product and how can we get more people to use it, you will almost always be surprised by what the most important feature is. Do you find that's the case?

100% no notes. Every time you'll be surprised. And sometimes it's the stupid little box on the left side of the screen that you forgot. Even put There that an engineer added in just for fun. And that's the most used feature that becomes the product that can happen to us twice actually.

I remember when I came into how I did a lot of consulting to revamp marketing and sales groups after I left Nexcom and I was at a company called Commission Junction and helping them get ready to be sold to Value Click And I had been a product user for and I'm like I just need you to be able to dedupe a freaking batch file. That's all I need. Right. And the engineering group would show me all these cool whiz band things that they do. And so I'm pretty hardcore about not having end drawn product unless they are actually talking to the consumer and having a group between product and marketing, between engineering and marketing that their job is to talk to the consumer and translate those results because otherwise it's really cool to add a lot of features that nobody ever uses. But they're very cool.

And less is more by the way like find out that the users just love the little tiny left box on the left side of the screen or whatever. There are times where it makes sense to take away everything else. Yeah, company value. Kill it or kill it. It's kind of cheeky. But you either something is doing really well for the company, it's killing it in Silicon Valley parlance or you kill it, you just don't do it anymore. And that process of taking away features. Taking away it's the iPhone. Yeah, exactly. It really ended up. And sometimes by the way you take away a feature that the people don't answer is the most important feature and then they come to you with pitchforks and you're like then you know, then you know. Ok, well something about our question or whatever just wasn't there. Bring it back. It's not that hard. Just control Z. Right. Whoops. Features. Exactly. But you know, vast majority of the time actually these things die a silent sad death after putting a year of.

Engineering and if there is a debate, just take it away and see what happens. Yep, it's really easy. I just, I kill the debates. I'm like, you know what guys? Let's just rule no feature and see what happens. And I'll tell you, I mean I lost a company this way. There's a war story. Is this whole, you know, the Slack competitors. I had a company that was a slack competitor, phenomenally featured product. I mean that company was amazing in terms of workplace collaboration and the CEO would just roll his eyes like they're using gifs and emojis. Can you believe that? Like, he was like, way below him. Right. And I'm dying. You know, being a product person, I'm like, let's just roll with that.

Right.

And so sometimes, like, give the consumer what they want, what you think doesn't matter. Right. So, yes. Okay. Anything on how to get more people to use it, or should we skip to the next slide? Okay, I like this one. This is kind of a piggyback on the other one. But what would happen if we took the product away tomorrow? It just evaporated. What would happen and what would you do instead?

Some of you have probably heard of the Sean Ellis test. If you haven't, it's an interesting one where you ask this exact question and then you give them four options. I'd be very disappointed. I'd be somewhat disappointed. I wouldn't really care. Not applicable. I'd no longer have the product. The four options, basically. And what he found over time and we found actually kind of correlates, is that if 40% or more people say they're very disappointed to be without the product, that's some indication of product market fit. If 80% say they'd be very disappointed, then you may be onto something. And I will say we kind of implemented that as a main metric for the company for a period of time. We were addressing a new market with a new product, and we asked that question a lot and we made changes until we got to that 40% number and above, and that really helped us. So on the one hand, it's actually a pretty good guide to getting to product market fit as a metric. Just turn that into a metric for your business. On the other hand, I will say when we finally hit, like, extreme product market fit with our most recent product, resulting eventually in our very rapid growth and acquisition, this question didn't matter anymore. And you're kind of beyond that. Once you get real product market fit, you kind of know. But this could be a helpful guide towards gearing you there or sometimes frankly telling you you're not there, because 10% of people would be very disappointed. It's also, by the way, a really good way of eliciting what the alternatives are. It turned out for us, for example, with an older version of our product before the current one, people at the enterprise had a very, very easy time switching off our product to another product, really to Westlaw, to our competitor. And so they'd answer kind of earlier, eh, you know, whatever, right? This is an improvement. So I'm using it. But if I Had to switch, no big deal. And then on the SMB side of the market they're like, this is it. This is the only thing I can afford. It's the only thing I like using. And so it helped us target and micro target with an SMB because that's a pretty big space, obviously who actually really cared and who didn't. And so that ended up becoming like breaking this down. This question by cohort ended up being really important.

Yeah. I think for me as an investor this is a pretty binary question. For me I expect a visceral reaction and often silence. Right. And so probably my biggest, one of my biggest misses, we're always judged by our portfolio, not our anti portfolio was Sentinel 1. And I called the CTO of Netflix and I was like, what would happen? And it was silence. And then he led me on a complete lecture about how he's seen everything in the market and this is it. Unfortunately, I don't do security. I pounded the table to get it done, but I don't do security. So I couldn't get it through at that time. In hindsight that was a big mistake. But that's the question here. It was such a visceral response. I didn't need to know security. I just needed to know what that customer who knew security better than anyone knew security, how they felt about it. Right. And that showed me in spades. Jake also said they had two different customer sets, which is hard. Right. And unusual. That responded differently to this, the small business and then the enterprise. And there were a lot of debates, you know, in the company of do we just focus? Do we just go like onesie twosies lawyers or do we keep serving the Kirkland and Ellis's of the world? And you know, it was hard. We debated. I'm so glad that we stayed the enterprise course because it gave us something to grow into. And it took a long time for Jake to establish that. And then the Kirkland and Ellis guy told us at the closing dinner, which I had never heard before, which I found a little annoying. But the reason they invested was because he went to all of the junior people at Kirkland Ellis and said, hey, are you using this? And they were. And they were using it as their initial cut to do their work internally. So again, had he talked to not the senior buyers at Kirkland, but gotten to the day to day users and said, hey, let me talk to some junior people here, we probably would have gotten the right answer too. Right? Number eight, have you recommended the product to anyone else or other companies? And if so, who and what did they do? Do you ask this ever?

So one of our other metrics, I think this is probably true for many of you, is nps. I think some people make it into like the metric. And NPS stands for Net Promoter Score. For those who don't know about that. It's basically on a scale of 1 to 10, how much would you recommend this product to appear? It's pretty good. It's a pretty good metric of figuring.

Out what if people talk to each other, but doctors don't talk to each other, lawyers don't. You have to watch it.

Lawyers often would answer this question.

Doctors and lawyers don't talk to each other.

If you're talking to my individual ones, they'd be like, especially the smaller firm lawyers. They chose to work at a smaller firm, like a solo practice, because they just hate other people. And they're like, no, I don't talk to anybody.

I like to be in their room.

So he gives you a negative weird signal. But you ask the question, would you, on a scale of 1 to 10, maybe in an email survey, would you recommend this to a peer? Sometimes even those curmudgeonly lawyers are like, oh, yeah, I'll 10 if I talk to anybody.

I would if I like them, maybe.

Yeah, exactly.

And then this is my personal favorite question. But I always ask this, and I'm going to caveat this with saying, I know, having grown up in P and G, that you cannot ask a consumer to write a new feature for you. You have to give them something mocked up in a prototype that they can react to. They're not going to tell you the cup needs to have a handle on it. They just won't. However, I do ask the magic wand question. So I say, if you had a magic wand, you could change anything about the product or, or the company, anything at all, or add to something, what would it be? And this is my favorite. And initially, maybe they're stumped and you get one of two responses here. You get a litany of things, right? Or maybe one or two. But what I like is the engagement. I want to hear that they have thought about it and that they're like, I love this product and if it just solved, I trust it to solve this problem for me. And now if it only did all this other stuff, I would love it even more. And so what I'm listening for here is not my product roadmap. I'm listening for how engaged are these people, right? Are they loving this product? Are they just like wanting to Dive in and use it more. And so it's a little bit different than I'm not trying to get my product roadmap. I'm trying to get engagement. I'm trying to get how much they care. Totally.

Yeah, exactly. What Rebecca said, the ideas we had from some of our, our users, some of which we kind of blindly implemented in a younger, kind of part of our history, were terrible. They're terrible product ideas. These people are not product people. So don't just do the thing they said every single time. Use your own judgment, put it through your filter of how do you build a great product? That's the art. That's the hard part. But there's often something very revealing in this answer. Often something very revealing in the answer to this question.

Yeah, because what you'll usually get is, can you just put the button down and to the right and make it bigger? And it could flash. Right. I mean, that's where. If you let it happen that way, I will say the company that has done this the best I've ever worked with in spades is Doximity. And they'll have a user conference once a year and they will invite their top 20 to 50 doctor users and doctors do use that product, and they will completely mock up and wireframe maybe five to ten different ideas, and they will sit them down in groups of five and run full on focus group groups and be like, how do you think about this? But again, it is completely mocked up. Right. And then they get their input on that. And that's how they've developed a lot of their dialer products, including the telemedicine product that launched right at the advent of COVID which couldn't have been perfect. More perfect timing. So I don't know if this is.

Apocryphal or if they still do this, but I think they used to fry everybody to Napa and have everybody.

They do that.

Yeah. Like buy out French Laundry and take all their users, which caused the board.

A heart attack initially, but it was totally worth it, like, dollar costs. Like, that was like such a great investment.

Right.

Did you ever get to go to Napa? No. Okay, well, we'll do Napa. Okay. So number 10. I like this one at the end. This one is really, if you're talking to an executive, Right. And you know, if you could, would you take your annual bonus and put it in this company in an early stage round?

Yeah. We never asked folks to invest, by the way, but about 10 to 20% of our dollars raised somewhere in that range Ended up coming from customers. And so that's a sign that I think something is going pretty well. Rebecca was talking about Kirkland Ellis is the closing dinner, not because they were the lawyers representing us in the transaction, but because they invested, I think, seven or eight million dollars in us over time.

Yeah. Huge testament. Or if it's a lower, if it's a more junior employee, would you work there? Would you want to work at this company? And, you know, this is really telling to how much they really love your product. Right. And then, you know, bonus question. This is one where we're trying to expand in terms of a company, we've gotten a lot of their time already. We've got these people on the hook. They're thinking about what the product can do. We've set the stage, and now I want to sell more. Right. And so I ask them, always, are there any other use cases in your company where this product could be helpful? Any other pockets in your organization that we should be talking to? Right. And then if they tell you all these things, well, what's preventing it from happening? How can we help you? How can we help you get this thing built off more? And this is really helpful then to feed back into your sales group. Of course. Right. What about you, Jake?

I'm sure ditto. We're going to save time for questions from you all, so we don't go into this one too much.

Perfect. So don't forget what you think doesn't matter. Listen to five customers or more a week and listen to what people aren't saying and use your magic words, which is. Is show me when they tell you what they're doing, because it might be different than how they're verbalizing it. And with that, we'd love a few questions from the audience. We didn't save that much time, but we have time for a couple. Please don't be shy or I'll cold call you because we're lawyers. Any questions? Yes, thank you.

Yeah, I'll do one for you. Great conversation, great questions. I get lost in how to organize that or to capture all that, because that conversation has a natural flow to it. So how disciplined are you in capturing the notes, sharing them with others?

What's that structure look like when I do these? I mean, I will often, like, record them just for any purposes and transcribe them and then delete the recording or whatever. Or I'll have somebody with me that's taking the notes. I try to let them go if they're on a flow and a trajectory and Talk a lot and kind of go where they lead me. But then these are the core 10 that I need at the end of the day.

So for better or for worse, zero percent disciplined. I would take notes. Actually what we do at the company that is maybe an interesting discipline for other folks to think about here is we have one of our Slack channels was just user feedback. And every time anybody said anything about the product, we would just write up some notes and share with the whole company. And the whole company subscribed. So everybody's getting this kind of like constant heartbeat of everything that's being said, the product, good and bad and everything else, product and company. And so I would always just kind of like write up my notes and impressions, bullet points and share that with the whole company. The point for me as a founder is to develop an instinct around what users are saying. So this is almost like almost intentionally non numeric, non, you know, non structured. It's just about having enough conversations that you can anticipate what they're going to say. At some point the customer is going to say before they even say it.

I mean, you need to have somebody at your org who is the customer, who is the voice and the thoughts and the actions of the customer. And in case text it was you and you spent a lot of time doing that. And it often should be the CEO, especially if they're really leading product. Whoever that product person is, is in the shoes of the customer. And the minute they say I think or I would do this, that's a big red flag. I'm very careful about disseminating these because when I was at P and G, we would do hundreds of focus groups, especially going into new countries, and you might get one read in one group and a different read in another group. So I'm pretty careful about doing a lot and then looking holistically and distilling down. Right. Because you can get one customer who's kind of aberrant, essentially. And if you treat that aberrant customer at the same weight as you treat other normalize customers, you can be led. Somebody in the group can see something and they're like, oh, we should do this and then you've wasted a bunch of time. I think your team is particularly savvy on how to do these things. A lot of them aren't, so I'm pretty careful with that.

Thank you.

One more question.

Oh, signal that maybe we don't have time for any more questions.

Oh, are we getting.

Yeah. All right. Well, we can easy find me. I'm jakestex.com until I'm some Thompson writer's email I guess. But for now jakestex.com and happy to talk to anybody afterwards as well.

Yeah, I hope everyone found this helpful in some way, but thank you for your time.