The part of the startup journey everyone likes to talk about is how it’s all up and to the right, but that’s not usually the case. Rebecca Lynn, Co-Founder and General Partner at Canvas Ventures, and Jake Heller, CEO and Co-Founder at Casetext, share the top 10 questions every SaaS founder needs to ask their customers to course correct when facing near-death experiences.
Casetext was acquired for $650M in cash, but they, too, faced near-death experiences. Sometimes, you think you have product market fit and try to scale up sales and marketing just to find out you don’t have it. Other times, you might have to let people go.
One truth holds for every founder: understanding the customer. You might think you understand the customer, but you have to put your biases aside because they don’t matter. Starting with a hypothesis is great, but listening to the customer is essential.
Three Rules of Thumb
Before we dive into the top 10 questions, let’s address three rules of thumb.
- You are not the target customer
- Listen to what people aren’t saying
- What people say and what they do are often different
Many founders become founders to solve a problem they had as a user, so you think you know what they will want. That’s a dangerous place to be. You might be more technically advanced than your users, as was the case for Jake vs. other lawyers he was selling to.
So, while your domain expertise is a super strength, it can also be an Achilles heel. You need to talk to your customers because you aren’t the target audience, even if you think you are.
Secondly, the customer is always right, and they don’t want to hurt your feelings, so listen to what they’re not telling you. And finally, use the magic words “show me.” Show me how you’re using the product. It’ll often be different from what they tell you they’re doing. When they show you, you see the truth.
Question #1: Who Are You?
Who am I talking to? Where are you in the organization? How long have you been there? Do you have the ability to sign a purchase order, or who do you have to get permission from? Will you use the product? Are you the right person to talk to?
Who are you might seem like an obvious and fluffy question, but it’s critical. For ten years of running Casetext, Jake made it a priority to talk to five customers every week as CEO.
You’ll find that, though statistics and metrics matter, they don’t tell the bigger picture and can be misleading or even wrong. Or, if they’re numerically accurate, they don’t give any context as to why everyone is stuck on step B.
“If I could choose just one, I’d dump all the metrics and just talk to customers and probably make better decisions,” Jake says. Of course, you can have both, so use both.
You want to have more than one champion within an organization or have the ability to quickly connect with the right people in an organization because if you only have one champion, what happens if they move on or get fired? You’re back to square one.
Question #2: What Problem Are You Solving?
How big is the issue? What does it cost you? What are you spending in terms of time, people, and effort? How are you working around it today?
Leave it super open-ended and let them talk. Let it marinade. There’s a simple framework Jake uses for customers in terms of problem-solving.
- You’re making them money
- You’re saving them money
- You’re reducing risk for their organization
If you aren’t achieving one of those three, you won’t win. If you’re listening to their problem and can’t connect your product to the problem, that’s a sign you need to position your product differently or revamp it.
A lot of SaaS founders fall into this trap of providing incremental improvement to XYZ problems, but if it doesn’t make money, save money, or reduce risk, you’re in a tough position.
Another note is to avoid talking about features when you’re addressing problems. Lead your marketing with the problems you’re solving. Features are only a reason to believe. As soon as you figure out the actual problem, you can escape the feature war and set yourself on a new trajectory.
Question #3: How or Where Did You First Learn About the Company?
What other companies or solutions did you consider in the process?
Many folks here spend a lot of time thinking about marketing spend. Will we do more in digital or press? Jake had an interesting experience that led to letting go of marketing executives. He spoke to about five customers weekly and got the same answers every week.
100% of the time, companies heard of Casetext from the press or peers. They had great word-of-mouth and press in technology magazines. So, after 7-8 weeks of consistently hearing this, he returned to his marketing person to ask for their opinion.
They swore up and down that digital ads were driving everything. Of course, they probably had some sort of impact, but there was a disconnect between the metrics and on-the-ground customer information.
That’s why it’s so important to always talk to your customers. What you learn from them is real and informs your strategy across product and marketing. Any product or marketing person who doesn’t talk to at least five customers every week shouldn’t be at your company.
Question #4: What Were Your Success Criteria for Purchasing?
How did you establish the criteria? Did the product meet it?
When talking to a buyer at a company, you need to know the answers to these questions. If they don’t have a clearly defined way of measuring success, you should use it to guide them to your advantage or walk away.
You want to talk to customers about how they established their measures of success and how they think about it. After implementation, they should be able to determine if they met the success criteria and what could have happened differently.
With Enterprise customers, you’ll likely need to help them with these measures of success and customize them to their needs.
Question #5: What Was Your Experience Using The Product?
How long did it take to implement, in terms of time, people, and resources? How was the company to work with? How quickly did they respond? Did they have to hire someone from the outside?
Time-to-implement cuts both ways. On the one hand, you have an easy, turnkey solution. On the other hand, you don’t have the commitment. Rebecca has a company in her portfolio company with a heavy install. The people using it know what they’re doing and pay half a million a year.
Because it takes a long time to install, it takes a long time to rip out. Casetext was different, being as turnkey as possible. A unique thing about this product is that it catered to the SMB market as product-led, and catered to the Enterprise market as sales-led for the same product.
That can’t always happen, but when it can, that’s great. The product was so tuned to the SMB customer with a completely self-service onboarding experience, which meant the Enterprise user went through a similar, if not identical, onboarding process.
Question #6: What is the Most Important Feature of the Product?
Who is currently using the product? How can you get more people to use it?
You will almost always be surprised by what the most important feature is for customers. Sometimes, it’s a little box on the side of the screen that engineers put in for fun. That becomes the product.
Find out if users love the little box, and if it makes sense to take away everything else. Either something is doing really well, or you don’t do it anymore.
The process of taking away features shows a lot. If people come out with pitchforks, put it back, but most of the time, these features we love have a silent, sad death. Give the consumers what they want because what we think doesn’t matter.
Question #7: What Would Happen If We Took The Product Away Tomorrow?
What would you do instead?
You can ask customers this question using four options from the Sean Ellis Test.
- They’d be very disappointed
- They’d be somewhat disappointed
- They wouldn’t care
- They’d no longer have a product
Over time, Sean found that if 40% of people say they’d be very disappointed, that indicates product market fit. If it’s 80%, you’re on to something. Casetext implemented this as a main metric when addressing a new market with a new product.
They made changes until they got to 40% or above. It’s great for determining product-market fit, but the question doesn’t matter once you hit extreme product-market fit.
This question also helps listen for alternatives. Some Enterprise customers might easily switch between your product and competitors. Yet SMB customers can’t switch because this is the only one they can afford. It shows you who really cares and who doesn’t.
Question #8: Have You Recommended The Product to Anyone Else?
Who are they? What do they do?
NPS, net promoter score, is sometimes the metric people use. On a scale of 1-10, how likely are you to recommend this product to a peer? NPS is great if your customers talk to each other, but doctors and lawyers usually don’t. If that’s the case, you can ask them in an email if they’d recommend you to a peer. Some might give you a 10, saying, “Yeah, I would if I talked to anyone.”
Question #9: If You Had a Magic Wand, What is the One Thing You Would Change or Add to the Product
With the caveat that you can’t ask a customer to provide a new feature for you. You have to give them something mocked up that they can react to.
Initially, they might be stumped. You may get a litany of things or one or two. You don’t ask this question to inform your product roadmap. You ask it to listen for engagement. How engaged are these people? Are they loving the product?
In the early days, companies may implement these ideas from users blindly. But you want to ask this question because there’s often something revealing in the answer.
Question #10: If You Could, Would You Invest Your Annual Bonus in the Company?
Casetext never asked folks to invest, but 10-20% of the dollars raised came from customers. It’s a sign that something is going well. This is a question for executives. If you have a more junior employee, you might ask them if they’d want to work for this company. This is telling to how much they love your product.
Bonus Question #11: Are There Other Use Cases in Your Company Where This Product Could Be Helpful?
What is preventing this from happening? Are there any pockets in the organization we should talk to?
If they tell you all these things, it’s helpful feedback for your organization, and don’t forget.
- What you think doesn’t matter
- Talk to 5 or more customers a week. Listen to what they aren’t saying
- Use your magic words of “show me” when they tell you what they’re doing
