YouSaid · the spoken record

Joe T. Bunsel

lines on the record: 68
first: 2022-09-03
most recent: 2022-09-03
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“More than Was a good discussion on the product market sales kind of fit. But my primary advice I will give to founders listening this is don't overthink too far ahead in many cases as well. Like, you know, the skills you need to master 0 to $1 million of revenue, find the product market fit, one to ten million dollars, find the product market sales fit, it rate on it, let's say $10 to $75 million, scale the sales organization and go to your go-to market. Then $75 million plus is when this, how do you build our product number two and product number three and product number four starts? Anyone listening this, I don't want them to, when they are in the 0 to 1 million stage, they're trying to figure out how to do product number two. There's no point spending time on that. So the skills that you have to learn and the organizationally, as an organization and also as a founder, they change as you go.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Scaling the operation behind it, which is like a machine that can process the requirements on customers, some sales, figuring out the right pricing, packaging, all of that, right? So you want different skills.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“We typically look for three aspects during the initial phases the empathy to understand the customer, to define your product. And the second aspect is the business aspects of, okay, how is it going to work with the sales? So literally the product managers, they travel with the salespeople and understand how do you position that value. Okay, now how do I price it and so on and so forth? And the third most important thing is execution. Once you defined it, product doesn't come out of thin air, right? You need to work with the engineers literally track your schedules and really execute it and deliver it to the customers, right? So these are the three aspects, the empathy and those business aspects. And finally the execution. So these are the three skill sets that I typically look for in a very strong product manager. They're very creative parts of product management than trying to come up with creative solutions as the second part.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, we had, I would say the profile is a bit different. The product managers, once you have a V1 product kind of going from there, the profile could be a bit different. But at that point, you need multiple product managers. So you still want the product managers who could go and help create something disruptively unique feature set, etc. But you also want like your product managers who are very good in understanding the how it's working out in the market and what's the adoption curve and what's the pricing working. So you really, the product management skill set also has different things to it, right?”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Depends on who your audiences are. To me, the product manager's first job is to understand the customer and the classic definition being the voice of the customer. So AppDown makes a product was technical or users were engineers in many ways. So all our product managers had an engineering background. But if I had a consumer product, I'm building a fashion app, my product manager probably would be very good in understanding my consumers as someone who's experienced in fashion. So for any business I'm doing, I would hire a product manager who can understand my end users very well. So it kind of matches.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“At the end of the day, it's all about marketing, getting products to the market, right? And for that, you have the classical four p's. So product, it doesn't go in isolation, product, the pricing, promotion, and the place. At the end of the day, it's the customer with an intimate knowledge of that customer and what exact pain process today and how you want to change it in the future, understanding that customer dynamic literally helps you define these four aspects. And that's what a good founder earlier on or a good product manager literally defines these metrics by understanding the customer.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, because we can't get like if our product is superior, the customer is getting superior value. Either we are lying about it or we are misguided about it or whatever, that we believe it is, but it's not, or we are not articulating the superior value.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“And they were designed more for SMB. Their product wasn't as strong as ours for enterprise. And so internally, sometimes what people will come in, hey, our competitor is charging much lower. Shouldn't we decrease our price also? And I'll tell them, do we really believe our product is superior? If our product is really superior, why would we not charge higher? So we've made a rule that we can always charge higher than them. We actually said that we always existed.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“That the fair part is important. The customer you feel is fair and you have to help them feel that's fair also by making that case. Yes, the competitive dynamic will also describe some of the price. If your competitor is selling for much cheaper, there may be some pressure on you to sell for that price as well, right? And Adnamix, we had a bit of that challenge. One of our primary competitors was price much lower than us.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“As soft as not standing up for the value that you're actually producing. And if you have the proper go-to-market, you have the proper product and you have the proper positioning, then you can basically get the maximum dollars that customers are willing to pay. And everyone feels like it's a very fair transaction, that the value being delivered to the customer is very reflective of the price that they pay.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, there's a couple of things which I've used in companies that I've run is if you look at competitive products, what are they, what's the chart, you know, how much do those cost? There's an overall stack of technology. And if you're providing a certain solution, what does that stack in general? How do people, how have they budgeted for that? And then I always like this concept of charge more than you think in there. And you can always discount back to make sure that you're not really leaving value on the table. I didn't say money. I said value on the table, which I think is very important. You know, the thing that is also I learned along the way is customers actually like to spend money for value. It's not a problem. We all do, right? Even as consumers, it's not a problem. And to come in with the low cost, like if your value is lower cost or whatever, that tends to be.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“In such a vague question, my simple definition is if you understand the business value of your product, that's when you know, and so the question that I used to ask in the product market fit phase was, how would you justify the business case to your boss? So like I'm talking to a director of DevOps. I'll say, okay, how would you make the business case to your boss if you have to buy Abdynamix? And they'll said, we had one outage a month. Every time we have an outage, you put six engineers there and this is how much it would cost us. And because our users have bad experience, we lose this revenue. This is how much it cost us. And once I start hearing it, I know like this is what I would like to teach our sales force how to make the business kit because this is how the customers are articulating. And unless you understand the business case, you don't really have a product market fit. Because that's what you have to engineer your product around. Right.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“We had a process called business value assessment, BVA. It went along with the sales process in which we always had that premium positioning. And we enabled our sales to convey why we are premium. And secondly, we had the steering committee meetings in which the big Czech payer, we literally read out the ROI value use cases back to them so that they can justify internally as to why they are paying that premium. So giving that message so that they can repeat internally and justify it, that's what helps the part of the process and the premium that we can extract from the hearing.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“If you put in a good ROI process as part of your sales process, that's how you guarantee you're not leaving money on the table. We had a very structured sales process. And in the sales process, we would look at what is your current state of doing this? How much is it costing you roughly, let's say? What would be a new state with Abdynamix and what would that cost you? And how much money are you going to save? And then price is a little bit of a function of, you know, how much money are you going to save and what's your ROI? And that's, you know, if we are charging more than what's going to save them, they're not going to pay for it anyways, right? Most companies I see the mistake of like, you know, especially you're selling into large enterprise and you're asking for half a million dollars to someone, you don't back it up by a business case, people are not going to pay you. And then you leave a lot of money on the table. If your business case is strong, you would not leave money on the table.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“This difference between consumer purchase versus enterprise enterprises, they need a little bit more certainty. You're getting it from a budget, right? They've already pre-planned. That's one. And they want certain...”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“I love the idea of this pricing framework. A lot of companies try to come up with a new model of pricing. So instead of price per user or price per application, it's price for the number of air vents your server has, right? Let's just say you have to come up with pricing that the customers used to actually paying for. If you start to create something that's totally new, it creates friction in the system. So it's typically users or capacity or numbers of something. I love the measurable piece. A lot of companies try to get overly cute and it gets overly complicated. And then salespeople can't explain it. And even if it's simple, if it's not understandable by the buyer, they're going to be like, well, we don't, you know, like, what does that mean?”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“After that, is okay, what is the price, like the dollar price of it for that model per license, how much you pay. That idea to me, it comes down to business value. And enterprise software, especially you're selling to large enterprise”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“And we can measure production systems in different ways, but that's how we price it, right? And it's at least simpler that your pricing philosophy is simpler for people. So that was my rule number one. The rule number two there was that whatever the pricing is measurable, because if it's not measurable, and now the customer says, okay, how many license do I need to buy? Our salespeople cannot even tell them very clearly like, okay, this is how you measure how many you need to buy. How are we, it will create to a lot of friction. Or once they buy it, we can't measure and track like, you know, how many they're using it. That's a problem as well, right? So if we can describe our pricing in half a sentence, that's one. Second is this measurable that people can measure pre-sale and people can measure post-sale, we have a good pricing system.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Pricing and packaging is a complex thing. Pricing is probably more complex than packaging in some ways. I look at pricing as more a function of what is the business value. If someone buys your product, is it worth $50,000? Is it worth $100,000? Is it worth $300,000? How would people justify? So that's definitely one function. Second is the rule that I've used for pricing is can your salespeople describe it simply? Like if a customer is going to ask you a simple question, so how do you price your product? And if you can't describe it in half a sentence, you have too complex of a pricing. And yes, there could be nuances to it and there could be details to it, but you have to be able to describe it. Like in AppDynamics, we are monitoring all kind of different systems, right? So the pricing was complicated, but we said, okay, the simple pricing philosophy that our salespeople can tell is we price by how many production systems you have. And that was kind of the rough unit of pricing.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“If you build from scratch, like you know, from zero lines of code, Us two to three years to get a reasonable product in the market. By the time we matured it and found the product market sales fit of it and all that. But if we”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“So at that point in time, it's a build versus buy. Do you raise more money and go build a team to go build something or do you go buy something and integrate it in and both have their challenges? But that's another function inside the company that usually comes about that point in time”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“And at that point in time is probably when you start to have an M&A function in the company to start looking at outside. You have organic growth, which is using your team to go build whatever needs to be built. And then you have inorganic growth, which is basically buying or licensing technology and teams that are not inside the company. Because I would argue if AppDynamics was growing to be a billion dollar company and you had the capacity to support from an engineering standpoint $200 or $300 million of product design, how are you going to build 10 new products if that was the envelope that you, or even three products, right?”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“You need to do both, you know, and find the intersection of what you can do bottom up, you can't build 10 new products. So what you can build and then what you need to build to get to some kind of revenue long-term goal you have.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“So, which was like, okay, from 100 million to if you want to get to a billion dollars of revenue, what would our business look like? And we realized when we did that math, and this is again a rough math, like you never know, that if we want to get to a billion dollars of revenue from 100 million in like seven years, let's say, or six years our plan was, we need to have like at least 40% of our revenue coming from these new adjacent products. Otherwise, our growth would not get there. And then we have to build this. So there was the part of like what you can do from bottom up investment perspective, like engineering resources and what you need top down to get to a billion dollar revenue.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Our process, I would say as a startup, most of it in our case came from the two third, one third rule. Like one third of our engineering investment we can put on expending our addressable market. Now two-thirds we put on serving our currently addressable market, which is like improving the product, adding features, capabilities, all of that. And one third we improve on new use cases, new adjusted markets, new adjacent users that we are currently not serving. So whatever will fit into that will define that. Another system that we use is working backwards from a longer term goal. We put in this plan call out path to 100 million revenue. And when we say, okay, we want to get 200 million revenue and how would our business look like and how much we can do at a fast pace without our existing products and what we would need to add to the new products to get there. And then we also have sort of a rough timeline with it. But that's once we got there, we put a new plan together, which is our path to a billion dollars of revenue.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Is very distracting because the sales force is expensive. So if you take your Salesforce that's doing and you try to give them too many immature products to sell, you're reducing their productivity, your expense goes up. It's not good. So you do want to get to that level of maturity before you give it out to your broader sales force. Right.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“The team, right? They rally the team around this. So it's very important to make sure you're focused on a few things that are really going to work well and don't let it from a leadership standpoint get out of control. Like it's great for people to try experiments and all that, but don't let it get mainstream until you know it's going to be mainstream. Otherwise, there's 50 products on the price list and everyone's fighting for visibility.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, literally what Peter said once we did this swap motion and created those initial amazing sales, the big dollar sales upwards of million and so on. Literally, we did internal sales. We had to sell to the rest of the salespeople. We got our CRO, our CEO. They literally are the brand ambassadors of this new product and say, the message is simple. The best new product, you can sell higher, more in the short time and make more money for our annual sales kickoff. That's a big message and we got our customers in there and we got the best selling sales reps and the rest of the sales team sees and”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“In a It's kind of like a flywheel. You have to get it going. And once it has some momentum behind it, everyone picks up on it. I would also say that as the regular sales organization starts to sell this new product, as managers you want to make a big deal about it, right? You want to promote it and say, hey, did you know in the East Region we just sold new product X and it was for $150,000 or a million dollars or whatever? And that gets everyone excited, especially if it comes from the CEO, salespeople. I mean, everyone loves to be recognized for their success. And if it's important to the company, then doing something as simple as that from a leadership standpoint also has very beneficial upside for all the other people who want to get that recognition.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“First 10 salespeople, they are cracking it, they are making more money with better incentives, then the rest of the sales force is like, oh, there is something big there that I also need to sell. So we had to do it in stages, but we literally did a swat motion for like eight months.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“So, for the first 25 customers for the new products, we actually got the product management team to really sell it the way your founders will sell in a brand new startup instead of hiring a new sales force for that. But after that, our Salesforce could take it. The phase two, they could take it, the phase three, they were good at it anyways. So for our fourth product line, which we call real-time business monitoring, this is exactly what we observed. The existing sales force was a lot more tuned to selling the existing product because it was well trodden path. For the fourth one, we literally constituted what we call a SWAT team. It constituted the product management, a couple of engineers, the best sales engineers and one solution architect. We literally went and sold some of the top deals and created the sales enablement material, the market positioning. And in fact, once we created that, then we used it to train the rest of the sales force, even not everyone. And once we hit that.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“So, what I broke into Abdomix was that we said the sales learning cover is three phases. One is my first 25 customers for the product. That's like phase one, which is very, very, almost the founders are selling.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Is the solution, however, it's expensive to go do that, to have a startup within a startup. Like here I have my sales organization. Now I have to go hire more salespeople that are different than the ones I already have to go sell this new thing. And at what point do you say, okay, we have to for every new product, do you have a new sales force?”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Just like you were in the beginning. Just like you start out, you don't even know what the productivity is. You don't know a lot of things. And you learn that across that new product line, just like you would do at the start of a company.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“And there's a sales compensation aspect to it also because the salespeople can sell the mature product and which is easy to sell at that point and make their numbers by doing it. Now you give them something, a new product which is much harder to sell.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Which used the same thing that worked for the very first product. So we reorganize ourselves in a model I called startups within startup. So we are a startup, but we'll form new startups inside it and we'll sell the same way the way our we sold our first product in the beginning.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“And we learned that at abdynamics in the hard way. Tell us how it was the hard way. Yeah, because we built our first product and it was selling and the sales process was mature. We have a mature sales organization. Now we started building our second product and said, if you have a mature sales organization, let's give them the second product to sell. They started selling the second product and they failed at it. And I was like, these people are so good in selling. They're just being so successful in it. But the challenge is when you have 100 customers and you have like 50 references and you have like you are in the magic quadrant for something and you everything is well refined and how you sell is different than when you have brand new product with zero customers with so we would they just started struggling and they say your product sucks and this new product is not good so we should throw this away we should not build any new product and i was like if you're not gonna build new products we are our growth will slow down so we have to learn how to make sell it so we internally structure is like okay we were good at selling a new product so what changed so maybe we should build you know a”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“That's exactly right. I mean, if I go back to the sales videos that I did, there was a concept in there called the sales learning curve, which says that at different stages of building out a sales organization, there's different people you need. When a new product comes out inside a company, you often need to start a new sales learning curve. It's not just the old one that you”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, but the interesting aspect, even during that expansion, is that the target buyer, because we had an existing sales motion target buyer and user, we didn't change that drastically because the sales motion is already oriented towards it. So it's like those agencies, be it.NET or the end user monitoring and so on and so forth. Still, it's targeting the same buyer and user. So that you can leverage your existing Go to Market sales motion. That didn't cost too much of distractions on the go to market side. That really helped expand your product portfolio. But at the same time, leverage your existing. Sales motion to go and attack and expand the market. So understanding that if you change both product and also your sales motion suddenly, then it's almost like again building from scratch and that causes lots of disruptions in the company.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and the rule of thumb that I followed there was two third of our engineering investment should go with our existing TEM And the one third of our engineering investment we should keep putting on expanding our time always. So our total addressable market. So when we started with our initial V1 product was application monitoring for Java applications and that was our TEM. Once we had that, we'll start putting one third of. After a year, that became part, the dot and our product became Java and.NET. Now we look, okay, what is the next adjacent market where I can put another one third of my engineering? And then we kept doing it systematically for seven, eight years, and we just kept expending our time.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Then sales is trying to expand and get more customers. So you have to work with them as well because there are competitive pressures, you have to catch up with the competitors on some features sometimes. And so you have to make sure you're winning enough in the market. You can get enough revenue and you prioritize that also. And but then there's a third part, which is like you also want to keep expanding your product, which are things that your current customers are not asking for, but you need them for expending your addressable market for customers, right? And that's where it's from a product perspective, it's a balance of those three things, right? What do we need to win more revenue today? What do we need to keep our customers happy? And what do we need to win more revenue two years from now?”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Depends on a different stage of the company. When you're in the very, very early stage, you're building the V1 product. You really want to use the customer feedback to figure out what you want to build that will sell, that will get your first 10 customers, first 20 customers or so. And you have to listen to customer. That's the product market fit exercise, the customer validation exercise and all that, right? Thank you for this thing too. Yes. And once you have customers, then how you prioritize becomes what you're hearing from customers, what will it take them to be successful and adopt the product more and buy the product more. And you want to make sure that the product team's ears are open, listening to customers, listening to customer support, customer success, they are watching the tickets, they are watching like, you know, what's working, what's not working.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“It's really bad from a product standpoint. There are lots of these minor features which are custom. They don't fit in the product. They actually fit well for the services. So that's why having a good combination of what's going into the product versus what should be left in the services. That's a good play for the product manager or the CEO to make that call so that the product adoption goes well. Adoption and the product services is a necessary component after some time.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“At the end of the day, adoption is what it counts for a product, right? And services help, and also keeping aside the financial aspects. Even from a product aspect, it's good in the sense that we hate shelf air. What good is it if some enterprise bought 1 million? And if they're not using it.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“And the renewals like you know the year two, year three, year four renewal of it. Like, so if you spend, if for the first year because you sold services, your margin may be lower, but because of services, the adoption is higher. So your chances of renewing in year two, year three, year, four, year, five are much higher, so the margins for those will go up.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Software margins, you come out way ahead. So you have to think about blended margin and the idea that services are often a leader into a company buying the million dollar, two million dollar license. It's just expected as part of that.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“If you think about it in that example, let's say services in that case leads the buyer to purchase a million dollars of license, the blended margin on that is extremely high, much higher than it would be on a $20,000 no services deal, right? So while services from a unit economic standpoint may be You know, a little more expensive from a margin standpoint if it drives very large deals.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, eventually, if your users are getting adoption and happy with the product, the money will come. The margins will come, right? So you have to figure out people are getting value or adoption or not.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and we figured out if they don't buy any services, sometimes no fault of our product, they just don't get that option that we want. So we were like, yes, too much services, then the margins are low, right? But we found the right balance was about 10 to 15 percent. So if in our products, if people are buying, let's say, if they're spending a million dollars with us on the software and they spend like $100,000 or 10 to 15% on it, on services, their adoption is much better and much faster.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source
“Reduces the margin is from the perspective of you as a vendor. But think from the perspective of a customer, like if they spend a million dollars on your product and they're not getting the value of a million dollars because they didn't have enough the right people in place to implement your product, that's not good for them. And eventually it's not good for you because you're building likely a recurring revenue business in some kind, right? When we started, we were like, we're not going to sell services, not from a margin perspective because we wanted our product to be easy enough that no one needs any services. And that was true for a long period, for actually for the first four years, we had zero services. And then we started getting into larger and larger enterprises and larger and larger deals where people were spending millions of dollars with us.”
2022-09-03 · a16z Podcast · How to Find Product-Market-Sales Fit · IDENTIFIED FROM THE TRANSCRIPT · source