YouSaid · the spoken record

Jyoti Bansal

lines on the record: 78
first: 2019-02-03
most recent: 2019-02-03
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

“Like, you kn 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. What good is it if some enterprise bought one million? And if they're not using it.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“The renewals like you know the year two, year three, year four renewal of it. So if you spend 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.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you think about 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. 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.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, eventually, if your users are getting adoption and happy with the product, the money will come. So the margins will come, right? So you have to figure out people are getting value or adoption or not.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and we wanted, 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, and then we were like, yes, too much services, then the margins are low, right? But we found the right balance was about 10 to 15%. 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.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · 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.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and offlet, we are seeing scenarios in which once you go to the top, and if there are big enterprises, services are becoming a very important component of it. To be honest, bottoms-up developer adoption, great land. But once you expand and once you get into multiple product portfolios and into complex integrations, services is essential component of the enterprise sales.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, ours was a combination of both. In abdominics, we call it the sandwich strategy. You go from the bottom, you go from the top, you'll go to the developers and DevOps engineers directly. It was done through a freemium kind of model so that they will start for free and they can use a light version of our product for free. And then we will start going from the top, you know, where we will create air cover and when we have multiple users in an organization, then we'll go and sell them more. So really the sales motion was built on the end users can start for free. Then we will have seldom like some licenses, we call it Lend and Expend. The land deals, which are like, you know, say 20,000, 30,000, $50,000 deal. On phone, we can sell that. And then we'll expand into like half a million, million dollar, two million dollar, you know, now these days, when $10 million deals. So that you need traditional enterprise sales people inside sales.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's security needs, whatever, where a bottoms up design just doesn't work, right? In which case, then you probably need to start with a more traditional, I'll say a direct sales organization. It could be an inside sales organization or direct calling in and actually getting the customer. I mean, complex sales often requires multiple buyers, multiple parts of the organization to come together. And that's a skill set that a well-honed sales organization will know how to do.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I would say it all depends again on this product market sales strategy. A lot of companies that start with bottoms up only go after an individual user and then they get enough use on individual users and propagation from the bottoms up. I call that self-serve. So there's no complexity there. There's no multiple buying centers or whatever. It's not a foregone conclusion that you just that that is the way to go. Now after enough people are using the product, then you can come in with tops down and say, hey, did you know like everyone in your organization is already using the product? You ought to have a corporate wide license so we can private support and all of that. So that would be an example of bottoms up and then coming in on tops down. Because it may go across departments. It may be more”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“Had that strong belief, it's just that we have to break the barriers between engineers and customers. In the startups I worked at before AppDynamics as an engineer, people will say engineers don't know how to talk to customers. So let's keep them away from customers. So we are selling to engineers. Our products are technical and that just doesn't make any sense to me. In the early days of finding that business case, the finding where the budget will come from, One of the questions that we always ask, like my favorite question to ask to any customer was how would you make the business case to your boss to buy this? And that's when you would start hearing, okay, this is my business case. Like, you know, every time we have outage, you know, we normally spend six engineers on in a room for five hours to try to figure this out. With you guys, I can reduce it down to one engineer for 15 minutes. And that's my business case. And once you start hearing the business case, then you can.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, even for the product managers or the founders, it always helps to do a sales kind of play wherein how exactly you are going to sell and who is the actual buyer and who is the actual user. What are you going to say to the user? What pain points you're going to solve? And how exactly the user is going to use your product. I think working with the salespeople who are actually on the front lines to go and sell for the engineers and the product managers, it really helps. And in fact, at your company, you made a lot of engineers to go on those calls to literally understand who exactly is buying that product, how much is he going to pay. And for that, what exactly you need to build? So that connection for the engineers to go on those sales calls really help them to understand that sales motion and how to incorporate into that product. That's one of the best practices I love. So that's how engineers always got.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think in enterprise more than consumer, there is a budget, there's a certain budget dollar that you're going to go after in enterprise. Maybe it comes after out of the development budget, it comes out of engineering, marketing, sales. There's something for which you can at least start to frame this new thing, new market, whatever. Like one of the questions to ask is who's the potential buyer for this, even if it's a totally new market, right? But let's call it enterprise product somewhere. Doesn't exist before. Still, who's the buyer? And what budget does it come out of? And a lot of products actually where there isn't a market yet may span multiple buyers, in fact, may come from multiple different departments and span budgets, and you need to think about that. Like, okay, I'm creating this new market, but perhaps the buying motion and what the customers used to actually doing from a”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you're always creating either you're solving a problem significantly better than others have done in the past. And the dimension of what does significantly mean could be different. It could be your 10x more scalable, your 10x more easier, your 10x more cheaper, whatever it is, right? Right. It has to be 10x better in some dimension. So in an existing problem, or if it's a new problem that's emerging, then you still have, the problem has to be there. Either there is problem with existing vendors or there's problem because there is no solution there, but it has to be there. Otherwise, you don't have anything to sell.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“The annual recurring revenue, which is like, you know, do you have a product someone will buy and it's solving some pain. Then you're like, you know, a million to 10 million in revenue, that's where you're iterating on the go-to market strategy and getting the product to be aligned with that. And if you get that right, that like at 10 million, you should be there, you got the product market and sales fit as well. And then you can.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“Just to drive this point home, which I completely agree with, the product, the features of the product need to inherit part of the sales motion itself, right? And that if you're going after a certain motion or certain customer, the product needs to be reflective of that. And I think we often miss there. Like we build a product and even if we define a go-to-market,”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's think of phase one is like, you know, where is the most pain and where your product or your unique approach or whatever it is solves the pain in a way that people will pay for. And you're also validating your technology, does it really work? Can you really build the product? Does it really solve the pain? And then you have to figure out what is the sales strategy or go-to-market strategy that will work and scale. Does your product support that? Because if your product doesn't support it, many times people are like, you know, we're going to build a freemium strategy. But the problem is if your product is too complex, freemium doesn't work.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, abdynamics, I used to say it's a little bit misleading to just call it product market fit. We should call it product market sales fit. Oh, I love it. It's like, have we found the right market and you have the right product and we have the right sales or go-to-market strategy that works for it.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“The features of the product almost have to inherit part of the go-to market within the product itself, right? And a lot of product design, I think. Reflect the go to market attributes that need to be considered.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“And what I found was okay, the most pain is where they are these kind of medium to large companies which are building these complex distributed Java applications. So let me now focus more on that. So I started broad and then we started narrowing down a bit of the focus. But after that, once you identified, then it's very important that you marry the go-to-market model in your product thinking. Because these days it's all very tightly coupled together. You don't have like a sales is different than marketing is different, then product is different. It's all together in many ways, right? So if you have an open source model or you have a freemium model or if you have a SaaS, is it on-premise? Is it hybrid of it? Is it going to be lend and expand? And you have to engineer a product with that in mind.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“Know to me it was that people are building this complex software apps and they need to monitor them well. And I had the technology idea that if you can instrument the code and trace everything, then it would be a good product. But I didn't know who would buy it. I started like, okay, let me go and broaden it. Let me go and find people in larger enterprises to talk to. Let me go and find people in startups to talk to. Let me go and find people in mid-size companies to talk to and see where it sticks the most or where the most pain is.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would totally agree. The way I mentally think of this is two phases of product market fit. The phase one is really even thickening out where your target market market is. So for that one, you really want to start broad and then segment. Like if you don't know. Where would your idea or your product fit the most? Is it large enterprise? Is it SMB? Is it financial services? Then I would just go and interview all of them and not narrow yet and start building the product, which is a little bit wider.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“The product requirements and technical requirements may be May be a good thing to go and do. I think to sequentially order those. Issue, right? We go build something. Oh, like, who knows how to go sell this and all of that. Be useful to say To technical entrepreneur Order to do this, you The go to market as well as the product features”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of us start our careers as engineers. A lot of Construction of a business is around The And around what the product does. It's all technically Because what we often say is okay, well, if we have these features, then people will come Thought once you've built something, and I would argue in today's day. If you're going after small businesses versus large.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, the challenges completely change after you have your initial product market fit, they become all about sales and learning sales and scaling sales. And it's almost like the companies go through the journey, right? The pre-product market fit, the challenges are different. Then after product market fit, the challenge become about selling and scaling sales organizations.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“No market without the user. Exactly. You got the product side of it without the market side. I see a lot of engineers, to be honest, struggling about understanding that customer and user adoption and the engagement matrix. Without that good UI UX and really be it the open source strategy or the closed source strategy doesn't matter, but user adoption is what should be driving the pre-product market fit.”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“At least during the pre product market fit, a lot of engineers, even including myself, we get obsessed with the technology. I'm not so much about the user. At the end of the day, if the user adoption is not there, it's no good”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was working as an engineer in a company, and this was before the phrase you guys coined on software is eating the world. This was 2008, right? But it was clear that software is eating the world. And to me, it's like, okay, if everything is going to be software, something goes wrong in software, someone needs good tools to troubleshoot and fix it. So that was really the insight. Abdynamix was monitoring, building monitoring and troubleshooting solutions for complex software apps. So if you have an online banking and something goes wrong in your online banking, you will use AppDynamics to figure out the root cause and fix it. Or if Delta reservation systems are down and everyone is stuck on their pod, someone needs to find tools to troubleshoot what's the root cause of the problem and fix it. That's what Abdynamix build, those troubleshooting tools. So now it's like when I jumped into it, I didn't know anything. I didn't know how to raise capital. I didn't recruit anyone before Abdydydamix. So you had to go and figure out that out. I didn't know how to have lots of customer conversations or even find”
2019-02-03 · a16z Podcast · a16z Podcast: Product-Market SALES Fit (What Comes First?) · IDENTIFIED FROM THE TRANSCRIPT · source