How to Outmaneuver the Giants in a Mature Market (Video + Transcript)

At SaaStr Annual 2018 a few months ago, Sam Parr, Co-Founder and CEO of The Hustle, interviews Shan Sinha, Founder and CEO of Highfive. They talk about Shan’s history in SaaS including Google acquiring one of his previous startups, DocVerse, which created the foundation for Google Drive and his most recent endeavors as the Founder of HIghfive.

Here are a few key takeaways:

  1. When trying to enter into the market -> “And the question that we had to struggle with and figure out is not only how are we going to build a product that’s going to be unique, but then how are we actually going to get it into the market in a way that people would actually pay attention and listen.”
  2. “And I think that people forget that far too often that distribution is equal, if not more important than how good your product is.”
  3.  Regarding giants being in your market -> “I think the biggest thing that I would say is don’t be scared. I think at the end of the day that if you have large companies in your market, usually that’s a good thing, and they are typically operating off of very different incentives than the ones that would ultimately lead to a successful new product in a category that might be around. And so I would say don’t be afraid, seek to understand what’s motivating those companies. And then find your way through. And there usually are always opportunities if you know that the customer problem remains unsolved. “

Also, don’t miss out on discounted prices for SaaStr Annual 2019 tickets.

Transcript

Sam Parr: What’s happening everyone? How’s everyone doing today? Good. So my name is Sam Parr, I’m the founder of a company called The Hustle. Is there any Hustle readers here by any chance? Cool, a few of you. So The Hustle, we’re a daily newsletter that goes out to about 600,000 people and tells everyone the business news they need to know in the morning. And they asked me to come to talk to my buddy over here, Shan Sinha. The Hustle at our company, we use Highfive on a regular basis and we’ve been friends with this company. And they said you guys just got to come and talk to him. And so here we are. And so Shan, I don’t know if you guys read this or not, but Highfive just had some big news today. But Shan, do you want to give a very quick 15 second on what Highfive is and who you guys are?

Shan Sinha: Yeah, fantastic. Has anybody heard of Highfive before? Yeah, all right. Well that’s good. Highfive is the easiest, simple video conferencing system that you can deploy across your entire company. We do hardware, software, we put an end to that first 15 minutes of pain that anybody who’s ever worked in an office is familiar with. We’re now five years into the company, we’ve just announce this morning we’ve raised over $75 million in capital. We’re busy growing and scaling and doing all kinds of fun things here in 2018.

Sam Parr: Wonderful. So before we get into it, I always ask people these questions because I want to know who we’re talking to. And we want to make sure we give you all the information that you want. So The Hustle, we’re a 20 percent company that’s still very much a startup. Highfive has just kind of left the startup phase. But the story that we’ve been asked to talk about is very entrepreneurial with Highfive’s and Shan’s journey. So I want to know where are you guys in your journey? So many of you guys here work at a company that’s under 40 people? Wow. Okay, let’s do over 40 now. How many work at over? Okay how about over 200? Over 1000? Okay so cool, mostly small businesses. Two more questions. How many of you are at the executive level at your company? Okay. How many of you are one of the founders? Awesome. And how many of you one day want to start your own business? Okay cool. I think we have an idea of who we’re talking to.

Shan Sinha: All right.

Sam Parr: This is an amazing amount of small business and small business owners. So what we’ve been asked today, what I was asked to talk to Shan today is about how Highfive has grown very quickly in an industry that just has huge competitors. You’ve got Cisco, you’ve got Polycom. These are huge multi billion dollars, tens of billions of dollars valued companies. And the way in which they’ve grown has been really unique. And so what I wanted to do is first hear about for five or 10 minutes, your background and your story, and how this company actually came to be. And then I would love to dig deep into some of the strategies that you’ve been able to use to attack this huge market because you guys are like I said, doing wonderfully in an industry that is very competitive. So would love to hear your background. I know you had a company before this, maybe we could start there and then go into about five years about how Highfive got started.

Shan Sinha: Yeah totally. So I’ve been in the world of technology for my entire career. And what ended up happening was 15 years ago I started off in the world of collaboration. There’s a product called Microsoft SharePoint. I don’t know if any of you are familiar with that. I like the laughs, that’s like the first thing that happens every time somebody says SharePoint. The promise with SharePoint was to help people collaborate. And it turns out that they didn’t quite deliver on that very well. But the product was really fast growing. And so that’s where I got my sort of introduction into the world of collaboration. I left Microsoft and started a company called DocVerse. That company was a tool that helped people bring documents to the cloud. It helped you synchronize documents, have conversations, all of that. The company did reasonably well. We ended up getting bought by google.

Sam Parr: What year did you get bought?

Shan Sinha: So we got bought by Google in 2010. And once we got to google, the product that we built at DocVerse, we turned it into Google drive. I imagine most of you are pretty familiar with Google Drive, and so that ended up being a pretty exciting experience. As part of that process, I got a chance to run google enterprise apps. And Google Enterprise apps. How many of you are Google Enterprise apps customers g-suite, I guess now? Yeah, I guess a reasonable amount. And so what was amazing about that was early 2010, you see this move to the cloud. What you saw happening those couple of years was there was this question of, and this will become relevant here in a second, I promise.

Shan Sinha: There was this question about why would I move my stuff to the cloud in the late 2000s. And right around 2010, 2011, seven or eight years ago, what you saw happening was companies and customers not asking the question why would I move to the cloud? The real question was, “When am I going to move to the cloud?” Because at Google what we were selling was email to small and large companies alike. It was a pretty amazing opportunity to see how that market was evolving. And I think you look at a room full of people here that are, large majority are founders or executives of what I presume are SaaS companies. This was, the very beginnings, the late 2000s, the 2000s was the beginning of that trend. We didn’t even have vocabulary at that point in time like ARR, churn. What’s your CAC to LTV ratio, what’s your payback?

Shan Sinha: All these metrics that are now very well understood, they just didn’t exist. And it was a pretty amazing opportunity to not only see how collaboration technology was moving to the cloud, but also the emergence of more sophisticated and mature cloud business models, that really are now the norm. And so now fast forward a few years, now mid to end of 2012, we saw a pretty massive opportunity to solve a problem that was something that I think all of us are familiar with. That first 15 minutes of every meeting is a joke. You talk to somebody and you and I talk about it all the time. Your initial instinct is let me just take this thing and throw it out the window. And that’s a pretty commonplace experience that everybody in the technology world has, everybody in the world has faced. But who’s going to fix that outside of people in the technology world? And so we sat down, saw a bunch of things from our customers at Google, and saw a huge opportunity to leap and start Highfive. And so that’s ultimately what led to Highfive.

Sam Parr: So you and a partner?

Shan Sinha: That’s right. Me and my co-founder who was with me at my last company that came over to google.

Sam Parr: So I guess this leads into the second part of what I wanted to talk about, which is your framework for attacking the market, but I imagine that was there early on. And I forgot to mention, at the end I’m going to be taking questions so you guys can tweet at me. My name is over here. So Sam Parr, but it’s @theSamParr is my twitter, so tweet at me and at the end I’ll try to get to all the questions. But anyway, so in 2013 you said clearly there’s something wrong with video conferencing. These first 15 minutes I want to throw my computer out the window. But if you said that to me in 2013, I’d be like, “Well there’s Cisco, there’s all these other companies.” What made you actually think that you are going to be able to take these folks on and what was your framework for addressing what is a really hard problem?

Shan Sinha: Yeah. So it starts from a couple of different places. I think number one, whenever you think about entering a market, I think there’s always a question that you have to be very honest with yourself about. This is startup number four for me, the first two didn’t really go anywhere. And so I think through all those experiences of trying to bring something new to market, one of the first questions I like to always ask not only myself or companies that I’m either advising or helping in whatever set of ways is what sort of market are you actually in? And I think question number one is are you in an established category that is well understood? Or is the thing that you’re building giving somebody the ability to do something they hadn’t been able to do before?

Sam Parr: What are examples of each?

Shan Sinha: So for example, if you’re talking about when Google Docs came out 10 years ago, being able to write a document in the cloud and share and collaborate, that was something that didn’t really exist before. Now the act of writing a document did. But that idea of this collaborative surface was in some ways representative of a new product category that was emerging. You look at our category, video conferencing. This is a very well understood category. It has 20 years of history. You’ve got dozens of vendors in the category, and you’re entering a space that is call it well understood. And so I think the way you think about entering or building something in each one of those different types of scenarios is very different. You’re going to have to deal with a larger foundation of expectations from customers and users, in a market that’s well understood. In a market that is new and kind of primarily centered on early adopters using technology that they hadn’t used before.

Shan Sinha: Another good example might be Amazon Echo and some of the automated assistance that you’re seeing at home. That’s a market that didn’t really exist before. So the job there is to disproportionately delight your end users, and figuring out what that key is becomes much more important. In our case, it was while you have all of these different tools and technologies, you have big vendors. Cisco, Polycom, Microsoft, everybody had their own offering in the space. And the question that we had to struggle with and figure out is not only how are we going to build a product that’s going to be unique, but then how are we actually going to get it into the market in a way that people would actually pay attention and listen.

Sam Parr: I think that my friends, whenever we’re always just a brainstorming, talking about new businesses and just having fun, they’ll bring up some crazy idea. It’s like okay, that idea is neat. But nine out of 10 times they forget the second part, which is actually maybe more important, which is how do you get that into a customer’s hand?

Shan Sinha: That’s right.

Sam Parr: Because we can all name thousands of products that are horrible, but because we just saw an ad for them or because we saw them at the store or because they were convenient, we bought them. And we also can name a whole bunch of other products that are fantastic products. We just don’t ever buy them because they’re not convenient. And obviously the first one is the winner.

Shan Sinha: That’s right.

Sam Parr: They’ve just won.

Shan Sinha: That’s right.

Sam Parr: And so distribution is so important.

Shan Sinha: That’s right.

Sam Parr: And I think that people forget that far too often that distribution is equal, if not more important than how good your product is.

Shan Sinha: And that was one of the big things that we did uniquely when we started Highfive. So a lot of times there’s this tendency, particularly in the earlier stages, and I think this might be more targeted at some of those folks that aren’t in the earlier stages here. But in the earlier stages, you spend a lot of your time obsessing, and correctly so, obsessing over what product you’re building, what’s the feature set, what do you need to do, what’s a user’s reaction to the things that you’re describing. But if you’re tackling a more entrenched market, if you’re tackling a space that is well understood, it’s an equally important question to ask is the message that we’re going to say about our product something that will resonate and land in a differentiated way?

Shan Sinha: And so there’s a number of different exercises that I’ve always liked to do particularly in the earlier stages. And I’ll describe a couple of things that we did here at Highfive, but one thing that I always love to do is I call this my cocktail napkin test, right? You’re at a party and you’re having a cocktail, and you want to tell somebody about some product that you just bought. What are you going to say in that conversation that’s going to catch someone’s attention? And what you’re really trying to do is reverse engineer as a founder, as a builder, what you’re really trying do is reverse engineer that set of things that somebody’s going to say in that circumstance.

Shan Sinha: And the thing that’s really critical about that is when somebody is in that context, they’re going to be talking with a budget of maybe 30 seconds or 45 seconds. I bought this car because it was safe, reliable, whatever it is. What they’re not going to do is they’re not going to go through and list off all the features that it can do this X, Y, and Z. and so I like to turn that into an exercise that we use to go and figure out is the message that we’re going to say about the thing we’re building going to resonate. And that is always the first step to figuring out what your go to market distribution strategy can look like because you got to first start with what are we going to say? The next thing, and I’ll describe one other thing that we did that was particular unique about something that we did, which was we brought somebody on to do product marketing for as one of our first six or seven folks in the company.

Shan Sinha: And so the question is what’s a product marketing person going to do if you don’t have any product built yet? And we spent two years building our product. Well, what we did was all kinds of crazy things. We built a fake company that had multiple different product products that we were creating. We were testing all of these different messages. We were running outbound campaigns to go measure conversion rates on value props and things like that. And of course it didn’t land anywhere, but we actually got a bunch of insight into this value prop seems to resonate. This value prop seems to not resonate. And we spent I would say it might not have been 50 percent of our time, but certainly 20 to 30 percent of our first call it year and a half to two in stealth mode, trying to understand the value prop and how customers would actually react to the overall message, while we were busy actually building the technology itself.

Sam Parr: So I think that’s amazing. It’s something that I’ve done for years when thinking of an idea, and that makes you able to start stuff very quickly. And I’m wondering for everyone out there who raised their hand when I asked if he worked at a company above 400, you’re constantly trying to create new products or new services for your customers. Do you think that that type of mentality … So the whole point of this talk is out outmaneuvering giants. Do you think that the ‘giants’ even think about that stuff or have the ability to do those types of rapid testing?

Shan Sinha: Maybe they do, but I think the thing that’s really interesting about competing with large companies, and I did that in my last startup company and definitely doing that here. I think the thing to understand about competing with large companies is that the reason why they’re large is because they took something that worked and they just kept scaling that. And oftentimes what you find with large companies is that there’s just the bias that comes from that saying well look, the thing that we do works. And as a result, there’s an organizational disincentive to go and experiment and try new things.

Sam Parr: And like break your own shit.

Shan Sinha: And break your own, yeah exactly. Exactly. And so you look at that and if an organization is unwilling or maybe unwilling is kind of too harsh of a word, but if they’re more risk averse to doing something that they fundamentally or intrinsically believe is working or has worked for them, then until they’re compelled to have to break something that’s working, there ends up being a general advantage that smaller companies can take advantage of.

Shan Sinha: And so one of the philosophies that we are, one of the values that we spend a lot of time talking about internally is speed matters, experimentation matters. And so getting into a mode where you’re not only experimenting and iterating both on the product side and the go to market side is really critical to being able to find your way through. And I think it’s one of the things that I think we’ve done a reasonably good job of over the course of the last few years

Sam Parr: And to go back to entering this market and what you guys do now, which is you go directly to your customer. Can you talk a little bit about how that methodology has helped you guys outmaneuver some of these larger companies and also give context as to how other folks typically do it?

Shan Sinha: Yeah. So what’s interesting about this whole category, there’s typically you have a bunch of old technology that is converting over to new technology. I know I’m talking about our context. I’m kind of using it to hopefully provide insight that may be relevant to everyone here. I think what you tend to see is you have all these old companies like Cisco and Polycom that are selling all this technology that’s now 20, 25 years old. And the way that they had really built their businesses made sense for where the world was 20, 25 years ago. They’re working with, they built some technology and their focus is on being the technology provider. And then they tried to partner with people that you know are indirect distributors of their technology to their customers.

Shan Sinha: So they work with resellers and integrators, and value added resellers and things like that. And the entire ecosystem evolved around that. And so there’s a multibillion dollar industry. There’s industry conferences that we go to that have all these folks there. And what we decided to do was take a different approach. What was unique about as we were doing hardware and software, so I think there were some interesting constraints that came from doing that. But what was unique about what we decided to do was we decided to take this product that had both hardware and software components, and just sell directly to customers. And the reason why we felt like we could do that was all the complexity of legacy technology that required distribution partners and value added resellers to get it into customers’ hands.

Shan Sinha: We had a more consumer like experience with our solution. And you’re a pretty good example. We have a product that you can buy online. You talk to our folks, we will ship it out, you plug it in, and it just works. And we support customers that are as small as 20 to 30/40 people like The Hustle, we support customers that are a thousand to 2000 people. And the big shift that we saw was that customers of all sizes are enjoying or are preferring to buy in this particular way. Now that said-

Sam Parr: Yeah Clayton over here, he came to my office. We had to give them a ladder because we told him something wasn’t working. He had to get a ladder and just get up there and fix everything. It was awesome.

Shan Sinha: Totally. So I think there’s this model of being able to sell directly to customers that is more viable today than has ever been before because people are used to buying things online. Think about what’s happening with Amazon. You just buy all this stuff and it just shows up at your door now. You don’t have to necessarily go to the store, you don’t have to have somebody show up and do anything like that. Now what’s interesting for us is not only was that a way to get into market more quickly, but you also learn about what’s working and what’s not working. Not only from a product perspective, but is this version of the pitch working? What does their onboarding experience need to look like? You get firsthand experience selling to customers. And so for some of you that are building more complex technologies, it’s an interesting question to ask whether you’re going to sell directly to customers, or whether you’re going to sell through partners and integrators.

Shan Sinha: And one of the things that we’ve gotten to at this point now is after figuring out this customer experience and what that really ultimately needs to look like, the onboarding, the training, all that kind of stuff, now that we’ve arrived in 2018, we’re very much focused on working with partners and what’s called the channel, to go and distribute our product because we feel like we have a superior end to end experience that you can’t get with any of the other solutions. And that’s going to be value added to these channel partners as well. And so we announced some funding this morning. And one example of that is that that funding came from a company that is one of these resellers or these system integrators. And so thinking about how whether you’re going to take it directly to market directly to customers, thinking about whether you’re going to go indirect, that’s really where the complexity shows up whenever you’re thinking about go to market models and distribution strategies. And in comparison to where the Ciscos and the Polycoms are, being able to figure out how you’re going to differentiate there is a big part of the equation.

Sam Parr: Where’s Sahil Mansuri? You here? There he is, okay. You just tweeted at me and you asked how that’s different from Zoom. And to me the point there is you’ve just explained now how you’re different from the giants, but are a lot of the other startups or smaller companies doing similar strategies?

Shan Sinha: Well, so I think the answer is yes and no. I mean, I think what we would say is I think there’s a whole bunch of old technology that represents tens of billions of dollars of spend that’s turning over to new technology. And Zoom, us, companies like BlueJeans, etc., that’s representative of the shift that I was describing, which is a move towards pure cloud based models. And so I think what you’re seeing is that migration of old technology over to more cloud based models. And so from that perspective, there’s a lot of similarities. All of us are delivering cloud based solutions, us, Zoom, etc. We’re delivering cloud based solutions that make it super easy to do conferencing and meetings. Where we’re different is that we take an approach of providing an end to end solution.

Shan Sinha: So you get everything you need, you get room based video conferencing, you get web conferencing and audio conferencing all in one place. And that comes from us, and one of the things that makes that particularly unique for us is that because we provide both hardware and software and have a business model around that, that creates an opportunity for us to work with distribution partners in a way that some of these other folks aren’t as great fits for. And so that does absolutely create an opportunity to differentiate. It might not show up as end user differentiation, but it does show up as a differentiation in business model.

Sam Parr: Do you think that going directly to your customer or selling online, like you guys are now, for anyone else out there who has a company that isn’t in video conferencing but is in an industry that’s old or has been around for years and years and it’s kinda been stagnant, do you think that strategy could work across industries? Are other industries already doing it? What’s your advice?

Shan Sinha: Yeah. I think going direct to customers is hugely valuable. I would start going directly to customers regardless of what idea or technology I had. I’m mostly speaking about B2B technologies. I would go directly to customers, unless there had to be a strong reason not to. And the reason why I think that’s important is you learn way more quickly by working directly with customers. Now that said to grow and scale. So for example, for us, the challenge this year for us is take what we have that’s working and now we’re going to be focused on growing and scaling and scaling it internationally, scaling it to different market segments and things like that. Now that we’ve got the fundamentals of what that customer experience really needs to look like, then you can start to layer on more complex go to market models.

Shan Sinha: But the reason why they’re complex is you’re adding layers of indirection. So for example, if you’re working with, if you decide to go with a more indirect distribution approach where you work with a partner to get your technology out to a customer, the challenge that you inevitably run into is when it’s working, everything’s great. If it’s not working, if you’re not seeing the kind of traction you want to see with customers, is it because of your product, your technology, something that you’re doing? Or is it because of not having the right incentives in place for your partner? Is it because they’re trying to sell something else at the same time and that’s not resonating? So there’s all these additional layers of questions that interfere with whether you’re actually doing a good job for your customer in and of itself.

Sam Parr: Okay. Of your 90 people, how many are sales folks?

Shan Sinha: Our sales team ow is about 15 to 16 people.

Sam Parr: 15 to 16 people?

Shan Sinha: That’s right.

Sam Parr: And so those guys and women are going out and are selling.

Shan Sinha: That’s right.

Sam Parr: And you with your model, not only are they selling, they’re getting the feedback.

Shan Sinha: That’s right.

Sam Parr: Can you get really specific and tactical and tell me how that happens? We have a sales team and I’m sure a lot of folks, probably everyone in here works at a company with a sales team. Can you explain why, or how you’ve set the sales team up in order to make feedback part of the product creation process? Because I know that you guys have done that pretty well.

Shan Sinha: Yeah. So we do a lot of things. So we definitely pay attention to tooling. So we’ve got two databases that we maintain. One is the actual product service database, so that includes usage metrics and usage patterns, and customer deployment information and things like that. And then we have, we’re built on Salesforce. And what we’ve done is we’ve spent probably a disproportionate amount of time relative to I think maybe what other companies of our size have done, of tying all these systems together. So for example, our sales team whenever they close loss and opportunity, they have a checklist of things that they are required to fill out at a product level on why did this opportunity not close.

Sam Parr: Can you name me one or two questions?

Shan Sinha: So it might be missing this particular feature, or it might be need this platform support or something like that. And so they fill all that stuff out, and they’re required to do that. We make it mandatory. And then that turns into a regular report that our product teams evaluate every six to eight weeks, so that we can go and adjust our pipeline. So if for example at a leadership team level we say the priority this quarter is to go raise our conversion rate on the sales side, we at least have some useful data that’s coming back from the sales process that can help drive that. Now we do all kinds of other things like that. At the presales level, at the post sales level, uh, we’re doing regular account reviews and it’s taking that feedback back to the product team.

Shan Sinha: But we also flip it around the other way. So all that usage data that we have, well we send that back into Salesforce. So when a sales rep pulls up their information or they pull up a particular account, what they can see is they’re using it this much. They have this many units deployed. They have this many users on the system. And now let me go and understand at either a competitive level or whatever it is, or sorry at a deployment level. Are we getting the maximum value out of this? And that ends up being another way to get feedback when we are able to answer questions like what would it take for this account to use Highfive more? And so we end up driving those of conversations. Our sales folks can have those types of conversations with our customers.

Sam Parr: Wonderful. Okay. I’m going to ask two more questions and then I’m gonna start doing some twitter stuff. So if want to ask me some questions, my name is up here but my twitter handle is @thesamparr on twitter, and I’ll start reading some of those. But I wanted to ask two more questions. I’ll make the easy one first, which is I know a bunch of your coworkers. I know a lot of them don’t seem to have worked, I don’t think a lot of them have worked at some of these bigger companies who you’re trying to compete against. Has hiring people outside the industry been as effective as you as you thought it would have been? Can you explain your hiring practices?

Shan Sinha: Yeah. I think that’s been an advantage for us. One of the values that I think we live pretty well inside the company is this idea of thinking from first principles. And I think one of the things that we’ve seen is that folks that have joined us, everyone’s familiar with the product and the technology and the opportunity. And so the folks that have joined us are genuinely joining us to really deliver a better experience and solve this problem. So I think it’s helped from the perspective of we’re finding people that are definitely very driven by this mission to fix this particular kind of category of technology. But at a competitive level, I think what I’d say is that we’re able to come up with ideas that aren’t necessarily done before, or have not been done before. And we come up with ideas where our technology works differently than the way that the industry has kind of settled on as a standard pattern.

Shan Sinha: And so while our hit rate hasn’t been 100 percent, there’s definitely times where we do something different and it’s actually doesn’t land as well as we’d like it or as we thought it was going to land. More often than not, I think what our customers tend to appreciate is Highfive does work differently. And I think that’s directly a result of, it works differently but better. And I think that’s directly a result of the fact that we look to hire people that care about solving this problem, as opposed to folks that have been in the industry or category for a long time. Now that doesn’t necessarily mean that we’re not hiring folks from the industry or who haven’t worked on this kind of technology, but we certainly are having bias toward that.

Sam Parr: I see. Last question. You talked earlier about how some of the larger companies can’t, it’s not that they can’t, but they don’t experiment all the time or as much as you because shit works.

Shan Sinha: Lack of incentive.

Sam Parr: Yeah. Right. Why mess with something that’s already working? It’s like we don’t need this at the moment. But if you and your investors get your way, you’re going to be a huge sluggish company one day. Right? Are you already thinking about how do I fight that?

Shan Sinha: It’s a good question. So I think we’re at the very beginning phases of starting to figure that out. I think what happens as you start to approach, I think we’re going to be probably 100 people over the next month or so. And one of the things that has become very clear to me as we’ve reached this size and scale is that figuring out what values you’re going to promote is a explicit effort that you have to dedicate attention to in order to do it well. And one of I think the values that we seek or that we’re seeking to instill in the organization or in the company is this value of moving fast and continuing to iterate. And it’s not like any company grows up and says you know what? I want to be a big and slow company.

Shan Sinha: It’s what is it that makes that happen. And I think that spirit of being willing to question and break something that is working now, I think we need to find a way to instill that spirit and that value.

Sam Parr: Have you found a way to do that?

Shan Sinha: And let that scale. I think the answer is no. But what I can say is that at least not yet, but what I can say is that one of the things that certainly whenever I get involved in different groups and threads that are going on in the company, a lot of my focus is always on going back to the root question of asking why? And now I think the challenge that we have is how do we make that an institutional value that everybody feels comfortable asking, and that it’s never looked upon badly to ask that question. Why are you going to do something? What outcome are you trying to achieve? And what would actually enable you to do that 10X better than you did?

Shan Sinha: It’s something that I feel like take a company like Google where I was at, it was a really fortunate experience to work at Google. Where I think at a 40,000 person company, they did that amazingly well of really instilling that spirit of let’s get down to the root of it and let’s actually try to solve our problem and truly upgrade whatever solution that we happen to have in place.

Sam Parr: Got it. Well we’re gonna do rapid fire from some of these questions because we got some good ones. So we’ll try to keep each answer to 35 seconds.

Shan Sinha: Okay done. We can do that.

Sam Parr: Yara Cohen asks what do you do to match the exposure that your large competitors are getting?

Shan Sinha: So a lot of it focuses primarily on delivering a great customer experience to start with. And then we look for threads and alleys that they’re not paying attention to. And so you have be surgical and smart and find opportunities where you can arbitrage your way through, whether that’s maybe PR driven, maybe that’s markets that are not being paid attention to.

Sam Parr: Oh here’s an interesting question. You guys have just raised funding 78 million.

Shan Sinha: 77 I think is the number, total. And then this last round was 30, just over 30.

Sam Parr: Could you have gotten to where you are do you think without funding? This is from a Dhalia, she was asking about if you could still do this without funding?

Shan Sinha: No we knew that this idea is going to be something that requires capital. Not only were we building a product that was going to require a reasonable amount of capital because we built hardware and software. And it turns out the technology here is also another big slug that represents a need for large capital. But go to market, B2B SaaS companies require capital to fuel that growth. I think there are models that, the models where you can grow capital efficient, very small amounts of capital are always appealing. This particular category that we had some insight around, we knew it was going to require some capital.

Sam Parr: Great. Okay. Sanket wanted to ask when you guys were testing different value props for your products, what were some other ones? What did you test and what were the ones that won out?

Shan Sinha: We tested a whole bunch of different things. I have to go back and remember, but I remember we were testing video conferencing at 1/20th of the cost. We were testing make every meeting face to face.

Sam Parr: And you did that by just creating landing pages with that headline and seeing-

Shan Sinha: Yeah, we did all kinds of things. We did landing pages. We created product images, we created company identities, we did email campaigns, we did all sorts of things.

Sam Parr: You spend a lot of money doing that?

Shan Sinha: No, not really. I mean I think it was, I don’t know, I don’t remember, it was probably thousands of dollars maybe a month or something-

Sam Parr: Just like different landing pages?

Shan Sinha: Yeah, that’s right. That’s right. And so there were a whole bunch of different value props that we tested and we weren’t sure if it was gonna be about the room or the software or no download or, so I think there are all these things that we tested. And easy, simple, 1/20th of the cost, these were all different parts of it that did resonate. And so overtime that’s influenced a lot of what we’ve become today.

Sam Parr: Okay. And here’s an interesting question. Looking back at the problems that you saw in the video conferencing industry, what other industries have you seen that were kind of controlled by these large, sluggish brands that have a lot of room for new competitors who have a similar Highfive strategy? Someone out there is thinking of starting a business apparently.

Shan Sinha: Yeah, that’s a good question. From ones that I’ve seen, you know, the whole world of sensors and automation and things like that, there seems to be a lot going on there. There seems to be a lot in logistics and supply chain management. It seems like there’s some pretty interesting ideas there. At least those are a couple things that I’ve seen. I think you can go look at a lot of the enterprise software is in process of being disrupted. I think folks in this room are probably in the middle of being the ones that are disrupting all the enterprise software. So I don’t know, those are a few that come to mind.

Sam Parr: Cool. Well the last question is was there anything that you didn’t say that you think this room would want to hear about outmaneuvering the giants?

Shan Sinha: I think the biggest thing that I would say is don’t be scared. I think at the end of the day that if you have large companies in your market, usually that’s a good thing, and they are typically operating off of very different incentives than the ones that would ultimately lead to a successful new product in a category that might be around. And so I would say don’t be afraid, seek to understand what’s motivating those companies. And then find your way through. And there usually are always opportunities if you know that the customer problem remains unsolved.

Sam Parr: Wonderful. Thank you.

Shan Sinha: All right.

Sam Parr: Thank you everyone.

Shan Sinha: Thank you.

Published on October 16, 2018

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