Product Development June 1, 2020

Lessons learned after 6+ months in beta and 3 acquisition offers.

Alex @kaizen

After 6+ months of work we're finally launching Crawlify. You can now go ahead and signup.

We're live on Product Hunt. Free credits for anyone who upvotes us.

Today I want to take this chance to share some of the things we learned and improved upon during this long beta phase. We kept the product in private beta for months to iterate on it based on early users' feedback and ensuring that the voice of the customer is integrated at each stage in the process. We keep pivoting quickly to our customer’s reactions, suggestions, feedback, ideas, and our analytical findings from transactional data.

I really want to thank you all in this community. Seriously, it's been an incredible source of inspiration and insights during this journey so we wanted to share some of the lessons we learned along the journey.

Without further ado here's what we learned and tried in the past 6 months to get to 1k MRR.


👀 I. Growth hacking is bullshit - there are no hacks.

The last six months taught us something that we always thought true, at least for us: that there are no hacks. You need to relentlessly focus on building a great product, all the rest comes later. Growth hacking is the continual promise of silver bullets: red buttons increase signups 80%, headlines with font sizes of “33px” increase revenue 30%, cutting prices decreases churn 27%. But, growth doesn’t come from silver bullets, growth comes from winning a thousand tiny battles: 0.5% here, 1% there. Real growth needs a whole load of lead bullets. Real growth originates from the very first line of code, from a great product, and from the work of an entire team. It’s important. Don’t hack it.

We took the time to manually onboard the first users, we handled intelligent positioning diligently and really focusing on providing value to the users focused on simplicity. While in beta several customers became paying users and other clients worked with us patiently to develop other API's. This was probably the biggest validation and made us feel like we were on the right path.


💻 II. Early customers are critical to the development and success of your product.

First customers can be tough to find without a plan in place. Often we see indie hackers launch a product and then scratch their head at how to find their first customers. Your network is a key piece to leverage in order to engage and find your first clients. Your prior relationship-building will prove critical very early on in your startup growth.

With Crawlify we 've followed this approach and it worked really well.

1. Find people who already have the problem you're solving. We started with market research to validate our problem hypothesis. We spent the time to research the right community, platform as well as early customers that could try the product and give feedback.

We broke down user needs by persona, identifying the right channel to reach out and we contacted people within our network to create a growing early access list of around 100 people. We picked 20 of them which we considered a fit for your product and they became our initial batch of leads.

2. We built the smallest version of our product that begins to solve that problem. We asked these first selected early users to join us on a quick 30min call, so we could ask some questions explain the product and demo an alpha version of our platform. We started with a simple AI model then started reaching out to our early users to quickly validate the model against real-world traffic or data.

This relationship created a constant need to release early and develop with users in mind. User feedback is crucial to understanding how to add value to a product. From there on with the help of our early customers, we iterated and build progressively more complex and better quality models. Although collecting and analyzing feedback can seem time-consuming, a simple piece of feedback can change your product focus for the better.

We added additional beta testers as we went along. We continued to test with larger audiences. We set up weekly discussions with our beta testers to stay on top of how things were going and what improvements needed to be made. Once your MVP is usable, you can find people who talk about the problem you are solving and you can offer your solution sincerely. We replied to IH, Reddit, Twitter or Hackernews threads. The next step is to make it easy for them the try it out. If they were interested, I personally emailed them a beta invite to try our data extraction APIs.

** Customer Interviews revealed priceless insights for us:

  • In product development we had a much better understanding on what we should prioritize and which APIs/solutions customer would like to get next;
  • We validated the idea we want to base our business on.
  • In short, we design and build simpler and better products.

Some tips for people who want to do these calls:

  • Form an interview team. When conducting the interviews, one person ask the questions and another should take notes. Each interview session should have a note-taker and a moderator. If you do the interviews solo consider recording the interview, but obtain permission first.

  • Be prepared to listen and learn. Let them speak and focus on what language they use in describing their problem and how they see your product. The goal of an interview is to observe and listen to users’ frank feedback — not to convince them your product is great.

  • Craft an interview script. Brainstorm at least 10 possible questions. Then trim it down start by cutting any questions you can easily answer with a "yes" or "no" and ask things that can give you actionable insights.

  • Dig. Use fact-based questions “can you tell me more?”, “can you expand on that?” or “why is that the case?”. These will encourage the potential customer to keep talking and you can uncover a lot of intelligence buried beneath the surface.

  • Don’t ask if they’d buy your product. Remember, they don’t know that yet. What you should do instead is to ask questions that reveal their intent to use it/purchase it. Questions on the customer’s costs, budget, operations, efficiency, etc. That will offer a good reference for your price point.

Mistakes we made:

  • In our first calls, we brought up our MVP/Demo too much. Your focus is to learn as much as you can about the customer and their perspective on your industry. A demo of your MVP is just a distraction. Let them test that after the call.

  • We focused very much on the number of interviews and collecting a lot of feedback. But you should remember that building a truly customer-centric business is not about how much feedback you collect—it's what you do with it that counts.

  • The proptech industry is booming with startups that need real estate data to train their algos. In retrospect, it would have been smarter to do some of these calls before writing a single line of code to better assess the market and inform our decisions towards the focus of our first solution.

  • Insufficient MVP Scalability - One of the biggest eCommerce players in Europe wanted to test our solution at large scale and we had to ask for another day in order to accommodate it. Many startups do not consider the scalability factor of their MVPs, but it is an important parameter in case a sudden increase in the number of users early on. Now we scale automatically on demand.


💵 III. Monetize as early as possible

We wanted to determine our product’s worth by charging upfront. If someone signs up for your free trial, you’ve only learned that someone was willing to exchange a small slice of time to try it. That teaches you very little about whether you’ve built something useful. For the Product API we gave our early users just a 30-day free trial to try the service at whichever scale they wanted. 80% of early users became paying customers.

I think we had the time and the chance to demonstrate the value we provide for them. We patiently built a relationship pushing steady updates which showcased a lot of commitment. We are very grateful for the valuable feedback/insights they gave us because they truly helped shape the product.

We didn t get too hung up on a pricing model because we felt that it’s less important what we charge — and more important that we charge. Pricing something you’ve put your heart into creating is tough and often emotional. Accept that your first attempt won’t be your pricing for long. Optimize to learn.

Mistakes we made:

  • We currently have a complex and unintuitive pricing model. A good pricing model appears simple and logical to the customer. We spent a lot of time fine-tuning our algos and infrastructure, which allow us to operate at a 98% accuracy with low logistical costs. We will soon switch to only 2 plans: startup and corporate.
  • What we learned is that the more you narrow down your target audience, the better you can position your plans. From there, price with them in mind, focusing on clarity and simplicity. When someone looks at your pricing page, they should understand which plan, if any, is for them.

📝 IV. Understand your market and define your positioning

"Give me six hours to chop down a tree, and I will spend the first four sharpening the axe." - Abraham Lincoln

It took an explanation from my co-founder (who managed a branding agency) to understand the real significance of positioning in our strategy. We entered a crowded space where there is an endless amount of data extraction tools. There are over 100 SaaS tools in this space. Positioning and messaging is a key factor for us to cut through the clutter and survive.

We wanted to define our unique stance in the marketplace. This was a big shift for us. In the past, we would have just scraped together a fast launch plan, relying way too heavily on getting #1 on Product Hunt (we've all been there!) and hoped for the best. Positioning is something that is often overlooked by SaaS brands, yet it is one of the most significant activities for any kind of product marketing. If you want people to pay attention and make the move to sign up with you. Staking out your own unique piece of SaaS-land in an increasingly crowded market is vital.

In order to effectively position our brand in the market, we had to define our core consumers and differentiate ourselves from the competition. In order too do that we started answering some of these questions to get important clarity.

  1. Who are the customers that we’re targeting?
  2. What is the ultimate outcome they are trying to achieve?
  3. Why do all the other solutions fail to achieve this outcome?
  4. How will our solution help make their customer's lives easier?
  5. Can we prove it?

📊 V. Define your key metrics & measure your progress

With all of the data sources and KPIs out there today, it’s understandably easy to get obsessed with tracking your business’ performance. Establishing goals in any company is a critical element in that company’s success but selecting the most appropriate KPIs is just as essential for measuring success or difficulties. The successful implementation of the KPI program is one of the best choices we have made so far. They keep us on track and the business can quickly adjust our strategy

Below, we’ll cover the main six KPIs that we monitor closely.

  • MRR ($)
  • Customer Churn Rate
  • CAC
  • NRG
  • LTV
  • Sales Pipeline, Funnel & Cycle
  • Burn & Cashflow Management

While it's not a perfect system it helps us to have a great overview of how the product is performing, and spot any criticality.

Mistakes we've made:

  • In the beginning, we were obsessing over KPIs tracking way too many variables. After speaking with some interested investors we mapped a system that works for us with KPIs that measure our performance enabling us to track relevant factors and the effectiveness of our processes.

VI.👩‍🚀 No matter how bright you are, rarely you can do it alone.

Being part of a team, especially one where everyone encourages and supports each other, makes the whole trajectory so much more bearable. Whilst fundamentally technology is at the center of the value proposition for all SaaS businesses, none of it couldn’t happen without brilliant people. Talent is the lifeblood of your business, not technology


That is it for today. There are many other lessons to learn, and I really want to thank you all in this community. The most valuable thing you can make is a mistake. Be willing to fail because the startups that survive aren’t the ones with the most experience — they’re the ones that can learn the fastest. There will always be challenges, but those are opportunities to improve. We are continually looking for different ways to underscore the value of our business, and our employees, and build on those strengths.

If you want to check out the product itself it's here.

Cheers!

  1. 1

    This is a great post @kaizen. Thanks for sharing your insights and lessons learned.

  2. 1

    I'm curious to hear more about the acquisition offers, how far they got, and why you declined?

    I've recently had one and I'm wondering how to navigate it. I've made a post about it :)

  3. 1

    Hello Alex,

    Thanks for the article. One question though: what is the meaning of NRG (listed among the other KPIs)? Cheers

  4. 1

    How much did they propose you for an acquisition ?