Startup lessons learned

#smartkrk

1. The Optimal Burn Rate" by Jerome Ternynck

2. "Getting to Product-Market Fit" by Maksim Ovsyannikov

3. "Gamification & generation of users' engagement"

by Danny Lee

4. "It's all about Heart - how to Leverage Emotional Leadership to Scale" by Brett Queener

The Optimal Burn RateJanuary 2014

Jerome Ternynck

Founder & CEO of @Smartrecruiters

Former Founder MrTed & Accord Group@JeromeTernynck #smartkrk

What’s burn rate?

Low Burn

Company: Accord GroupIndustry: Recruiting ServicesFunding: $2K

Outcome: Built a nice company (200 people)Took 9 years to get thereNever able to productize and

scaleManagement Buy Out

Mistake: Optimizing for revenue too early

Build custom products and never find your market

High Burn

Company: MrTedIndustry: SaaSFunding: $32m

Outcome: Built a nice company (100 people)Took 9 years to get thereNever able to scaleMissed the opportunityAcquired by competitor

Mistake: Built sales & marketing ahead of product

Could not pivot and iterateBurnt too much capital

Optimal

Product First

1) Build an awesome product and see who likes it

2) Figure out how you can make money

3) Scale

Don’t:Customize the product (even for a client who pays the bills)Expand to new markets/segmentsAdvertize to get tractionHire salespeople too early

Product/Market FitJanuary 2014

Maksim Ovsyannikov

SVP Product SmartRecruiters

VP Product Work.comVP Product Zendesk@maksim #smartkrk

What the hell is product/market fit?

(the feeling is truly wonderful)

Why should you care?

why do I care about product/market fit if I can sell an ice-cream to a monkey?

How do you achieve it?

Square peg CAN fit in a round hole quite beautifully!

the story of Zendesk

• Solve real problem• The problem had urgency• There was a buyer• Solution was simple• It was very cheap• It was zero-touch• Design was key

Zendesk

One side... The other side...

• Lots of competition• Are we CRM? Social CRM?• First-time founders• Pricing and packaging trouble• Enterprise?• How to manage the growth?• Adjacent markets?

Result = The help desk behind the efforts of world’s most helpful companies.

Highly anticipated 2014 IPO

the story of Rypple

• HCM - huge opportunity• EVERYONE saw the problem• NOBODY had the solution• Gamification• There was a real buyer• ...with a budget• Amazing founders

Rypple

One side... The other side...

• v1 didn’t work• v2 didn’t work• Traditional + New• Sophisticated competition• Marketing reach• Early demanding customers• The pace of innovation

Result = Acquired by the most innovative company in the world

Words of Wisdom

• Go for it…! Please go for it!• Fail fast• Win fast• Hire the best• Never be satisfied• Everything has its time• Be kind (4 asshole founders die every minute)• Pivot carefully• Use data more than advice• Keep your family happy

Gamification and Driving User EngagementJanuary 2014

Danny Lee

Director of Product, SmartRecruiters

Director of Product, Farmville@DannyGamify #smartkrk

Is there something we could be learning from games?

A Trip Down Memory Lane

“The use of game mechanics in non-entertainment environments to change user behavior and drive

engagement.”

What is Gamification?

Achievements

BonusesDiscovery

Epic MeaningProgression

Points

Story/Quests

Community Collaboration

Urgent Optimism

The Speed Camera Lottery

Follow a structured approach

Step 1: Know your users

Step 2: Identify your key goals

Step 3: Understand human motivation

Step 4: Apply and test game mechanics

Step 5: Monitor, measure and iterate

Gilt: a high-end fashion site

Starbucks: rewards for coffee lovers

Gamification in SmartRecruiters?

Closing thoughts

Gamification is another tool to build your product – be creative

Be structured and data-driven in your approach – stay focused

A good product is functional, a great product generates user delight

"It's all about Heart”January 2014

Brett Queener

Board Member Invoca

EVP & GM Marketing Cloud SalesforceEVP & GM Data.com

@bqueener #smartkrk

Clear Eyes, Full Hearts, Can’t Lose.

Inspirational Leaders

Clear Eyes, Full Hearts, Can’t Lose.

• Great for football. Even better for business.

• Winning companies know who they are

• Winning companies’ customers know what they

stand for

• Winning companies’ employees run through walls for

them

• Emotional leadership is the # 1 Multiplier Effect

Incorporated 2 years ago. $300M in Revenue. $3.2B Purchase.

Identity

Be Crystal Clear as to Who You Are

① What do we/our app/our service do?

② Who do we serve?

③ Why does what we do matter for whom we

serve?

④ In what way, is it unique or better than

alternatives?

⑤ How is it sticky and engenders long term loyalty?

Write it Down. One Sentence Each Only. Continue Until Your Mom Can Understand it

What Do We Do? On-Demand SFAPrivate Travel Membership

Service

Provide Ridiculous Burgers & Fries

Who Do We Serve?Sales Execs &

Their Sales Ops Leads

Upper middle class frequent fliers

within California

Everyone, especially on interstates

Why Do We Matter?Existing SW Hated.Easy to Use

Simple Deploy

Airline MonopoliesHigh Prices,

Inflexible Dates, Time is Money

Crappy Incumbents Poor Quality Food

A Better Alternative

How are We Unique?

No HW. No SW.Pay as You Go.

Customize & Upgrade

Subscription ServiceEasy to BookFlight Experience

Hi Quality FoodConsistency (NF)

Positive Experience

How Are We Sticky?DataCustomizations

Integration

Just Fly it. You Will Cut other items in

your budget.

Double-doubles contain drugs.

3 Screens(value discoverability)

Home PageAction PageAnswer Page

3 Slides(need / differentiation)

The Customer NeedTodays Challenges/ Options

Why You Are Better

3 Reps(close-ability)

Basic Trained Sales RepOr Unassisted Buyers

Repeatably

If You Pass this Test, It’s Time to ScaleIf You Have Yet to Pass, Tinker & Tweak Until You do.

Buyer says “Aha - I Get it” Trained rep says “I Got This”

Proving Your Identity Can Scale - A Simple Test

Pathos

Pathos: the quality or power in an actual life experience or in literature, music, speech, or other forms of expression, of evoking a feeling of pity or compassion

Brand: is a person’s emotional response -a gut feeling about an organization, a product, or a service - i.e the sum of the perceptions that are held about you, your company or your products.

A Clear Identity allows You to Be Felt

• If your buyer connects to you emotionally, this is far more

important than purely rational selections / choices

• When considering your path, look for the under-served

with which your product can make them successful or

change/improve their traditional patterns

• The one challenge is if you are successful here is that the

onus on paying off the rational justification is higher (i.e

don’t break my heart)

Target Customer

CRM Execs & IT

The 2% who travel w/in

state

RHBA Male who Wants Home HiFI

system

Yuppies in Cities

Average Consumer

(not IT Hobbyist)

Average Consumer

Existing Pain / Latent Need

Too damn hard to use,

change, deploy

United sucks (time,

flexibility, experience,

cost)

Too complex / expensive set

-up; single choice inputs

Finding & paying cabs a pain & time

waste

Overwhelming interfaces;

hw/sw integration

poor

B&M timely & expensive;

vast array of online

choices

Emotional Connectio

n

Elevated careers of

OPs/ IT professionals

Allows travel when you

want, how u want

Play what you want where you want with wife still happy

Much easier & better

experience ( find to pay)

It works better and feels better

to use; cutting edge

One place to buy

everything; easy to return & Amazon Prime

Brand Promise

Risk

Product becomes too

complex

Availability & Price Points Complexity

Price & Safety

(uberx)

Lose “cool” (innovation) edge; price

gap too high

Prices & Customer Service

Pathos Creates• Customers who care far

less about price - better and/or easier trumps cheaper each and every time

• Customers who become evangelists of your brand & product - dramatically reduce your marketing expenses

• Customers who are far more forgiving when you mess up (as long as you admit mistakes)

For tech - most scalable pathos is 1) your product and 2) pre & post

sales experience, marketing a distant 3rd.

Drive

Identity + Passion = Mission

• A mission is crucial to recruiting the world’s talent

• A mission makes it more conducive to have an highly engaged work-place

• However, missions can go awry if you don’t understand what motivates why people go to work

• If people make what they need - they may be financially committed.

• If people achieve what they want - they may be emotionally committed.

• Emotionally committed employees work harder + work smarter - they run through walls for you.

Challenges with Carrots & Sticks

• They can extinguish intrinsic motivation.

• They can diminish performance.

• They can crush creativity.

• They can crowd out good behavior.

• They can encourage cheating, shortcuts, and unethical

behavior.

• They can become addictive.

• They can foster short-term thinking.

What Really Motivates & Creates Engagement

Autonomythe need to be self directed; people being trusted to solve issues

the need to improve; people develop and better themselves over time

the need to be relevant; people are contributing to the mission at hand

Mastery

Purpose

Leadership

Leadership Not Management

• Young entrepreneurs everyone struggles with this

as the company is intrinsically linked with their

ego & id

• It’s not about directing work. It’s about motivating

the people you hopefully hire to do their very best

work.

• It’s about seeing your success & your company’s

success through their outcomes and their lens

• It’s not easy - this is the hardest thing to do well,

especially at a young age - we aren’t wired this

way

“If you want to build a ship, don't drum up people to collect wood and don't assign them tasks and work, but rather teach them to long for the endless immensity of the sea.”

- Antoine de Saint Exupery

• Own the vision (identity)

• Own the energy (pathos)

• Hire great people & let

them lead

• Drive priorities (No

PANDA)

• Review & revise the

previous 4

What About Style

• Be direct & honest with everyone you engage with

• Make the hard calls - but recruit your team into the decision process

• Always make decisions / take actions based on what is best for the cause

• Key - if you don’t know something, hire people that do

“Good judgement is the result of experience and experience the result of bad judgement.”

Clear Eyes, Full Hearts, Can’t Lose.

• It’s All About Heart

• Know who you are (Identity)

• Create emotional bond with customers (Pathos)

• Inspire & create engaged employees (Drive)

• Balance the above with conviction (Leadership)

Oh Yes – One More Thing.

“It's the game of life. Do I win or do I lose? One day they're gonna shut the game down. I gotta have as much fun and go around the board as many times as I can before it's my turn to leave.”

Tupac Shakur

Thank You

Startup lessons learned

#smartkrk