• Read Time 4 min
What it takes to succeed in a new SaaS market with ChurnZero CEO You Mon Tsang
How do you determine product-market fit? What can you do to move ideal buyers through the awareness stages? How do you get customers to see your vision?
Every entrepreneur entering an emerging market faces these questions which (surprise) have no perfect answer. Finding the right solution takes continuous trial and error, steadfast persistence, and an eye for innovation. But there are a few common practices that all entrepreneurs need to know to succeed.
ChurnZero CEO You Mon Tsang joined the StartupCX podcast to talk about his entrepreneurial insights on how to compete in a new category, prove product value early on, and find the right business partner. You Mon also shares the one thing that new entrepreneurs must do in 2022 to win over customers.
Remarkable products are born from frustration.
“When I was a CMO of a company, I had all these incredible tools to manage my prospects. I knew exactly what they were doing. If I sent them an email, I knew if they were opening it. If they attended a webinar, I knew for how long. […] It was incredible. This was 15 years ago. Then one day, my span of control changed, and [my company] said why don’t you also manage the CSMs. The CSMs were managing 150 accounts each and all they had was Salesforce, their email, and a phone. Good luck. Go get them. It was like, why do we treat our customers worse? Why do we give [CSMs] the worst technology to service them or no technology to service them? That was really a flaw in the way we thought about managing our customers and managing our SaaS businesses.”
Bring a customer joy, money, or a fix.
“If you’re thinking about a product or service, either you’re going to bring [a customer] joy, you’re going to make them money, or you’re going to solve a pain point. With a Customer Success platform, you’re solving a pain where companies don’t even know what’s going on in their customer base. Once you fix that, retention rate goes up, expansion rates go up and then the CS team contributes to the growth of a company. That’s really making money. The hope is also making the CSM’s daily job easier with automation, with better metrics and that brings joy. If you can solve two of those three problems—fixing a pain, creating something of value, relieving stress, or creating joy—then you’ve got something interesting. Even if you’re early on and there’s no market, if you talk to a potential customer and they nod when you talk about a pain or trying to get them to a goal, you’ll find out whether you have something.”
Don’t focus on brand and product so much that you forget about the customer.
“There are a lot of fun things about starting a company. Producing a product is fun. Creating a logo is fun. Naming your company is fun. Those are really fun things. Those are things that have to happen. Pleasing a customer is work. A lot of folks just say why don’t I do the fun parts of being an entrepreneur first and I’ll deal with the customer later. It really does take a while for you [to realize this]. If I never have a happy customer, I’ll never have a business. You can have the best logo in the world, you can have the best website in the world, but it doesn’t matter without the customers.”
Talk to your customers or do their job to get perspective.
“The one thing that’s really important and most entrepreneurs don’t do is talk to all [their] customers until it hurts—you’re going to talk to 20, 30, 40 customers—or actually do [the customer’s] job to understand what their day-to-day looks like. If you have a certain pain you’re trying to solve, get right in the middle of that so you can understand. […] Sometimes, that’s doing the job for a month or sitting next to them or recording their screens. There are lots of ways to do that now so you can get a sense of how they experience the pain that you’re trying to solve.”
The right business partner makes all the difference.
“Starting a company is a lonely job. It is easy to get distracted and discouraged. I’m all for having a great partner. The best kind of partners would be the ones where you overlap a little bit so you can have good conversations, but then you focus on different things. Even though I’m product focused, I’m more on the business side. I’ve had really great technical co-founders. […] I encourage you, if you want to start a business where you’re trying to solve something interesting or big, a partner is super important. It’ll go a long way. Don’t worry about dividing the proceeds. If good things happen, those things don’t matter.”
First encounters with a product or service are by far the most important.
“In general, if you focus on one thing, it really is the first X days or X months of the experience. Some people call it onboarding, some people call it implementation. If it’s a B2C company, it’s the experience of using the product for the first time. Whatever it is, that first time you get someone involved with your company, that’s the only thing you should focus on. For some, it will be the first 10 seconds because it’ll be something that sits on the supermarket shelf where someone’s going to walk by it. For others who are selling a bigger product that requires work and data integrations, maybe that’ll be three months. But whatever that initial time to value is, that’s the most important part. Get them to that quickly. Make it easy for them to understand what it does and bring them value right away.”
To hear more entrepreneurial lessons learned from You Mon as well as how the market’s perception of NRR has shifted, check out the episode highlights from his podcast with CHURN.FM.