00:15:52 · Rob Zuber
[00:15:52] S7: When I joined in 2014, the pricing model was established. Around that time, as people were getting more and more comfortable with things like elastic compute and cloud offerings, they were getting more oriented towards capacity or usage models, meaning use this VM, you know, an EC2 for X number of hours and I pay exactly for those hours. Those models were even shifting to like by the minute pricing. So pricing was becoming much more dynamic based on usage and our customers were asking us, why am I paying for this fixed bandwidth on the weekend? We shifted our entire pricing model to be usage based, and that took a long time to transition. I mean, introducing new pricing is hard, getting people to shift is hard, and then getting the last people, right, from a tech platform perspective, you don't get to turn off all those parts of your platform until you've gotten the last customer off of them, right? It's like the first customer is exciting, but then you're doing two different things. So we went through a big transition, but that has ultimately paid off. So my takeaway and advice from our changes in pricing strategy is that ultimately when customers feel like what they're paying you is directly aligned with the value they're getting, they're much more likely to pay. So in the usage based model, for us, it's when I'm building software, I am paying you to help me build software, and when I'm not, I'm not paying you. That much better aligns with their perception of the value that they get from us, versus a capacity model where even when I'm not using it, I'm paying for it. And so that transition really allowed us to have a better relationship with our customers around value and them paying for the value that they get from us.
00:17:33 · Jim Rose
[00:17:33] S5: Startups don't die. Startups run out of money. What you want to do, depending on how much money you have, is you want to give yourself as many chances to find product market fit as possible. That means you have to keep your development cycles as short as humanly possible, and you have to keep the feedback cycles as immediate as possible. So even big, well funded startups that maybe don't succeed or they fail, oftentimes the length of the development cycle is way too long. They're spending months, if not quarters, and in some cases years, perfecting a technology that they have no idea if anybody's actually going to use. So what you want to do is you want to be able to build something that's meaningful enough that when you put it into the customer's hands, the customer can actually react in a way that's going to tell you whether you're on the right track. Especially with your early users. Your earliest users are going to expect that first version of the thing that you put into their hands it's gonna be rough. It's gonna be jagged. There's gonna be things that don't work. But if you find something that directly addresses the customer need, they'll grab it. Right? Even though there are, like, rough edges in the product. When you find product market fit, you will feel it. You won't know why it happened.
00:18:49 · S0, S1, S2
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00:20:15 · S2, S3, S4, S6, Jim Rose
Ad[00:20:15] S2: This episode is brought to Ad[00:20:16] S3: you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs. Ad[00:20:44] S4: The secret society of semi homemade? Listen up. Sam's Club has premade dishes for a Thanksgiving feast that's ready in two hours, all while tasting suspiciously homemade. Come join us. Ad[00:20:56] S6: Sam's Club. Individual oven times may vary. [00:20:59] S5: But you'll feel the market pull. The only way you can find that out is to ship fast and ship early.
00:21:04 · Rob Zuber
[00:21:04] S7: Having product market fit and keeping product market fit are not the same thing. So don't assume that now you've nailed it and it's always gonna be the same. Usually you hear the thing that got you here won't get you there, but the paranoia and drive to absolutely understand your customer and their need should stay. The desire to iterate quickly and always be improving and always be experimenting, don't lose that because you suddenly feel like, oh, we found it. Now we do something different. So it's a question of building on top of your drive for brilliant product, not parking that and doing something else. Now what else do you add on top of that? You're going get much higher leverage sort of go to market marketing strategy when you have a product that people love. And then depending on the scale of your customers and the type of your customers, you might also do direct sales. Direct sales can be an expensive big proposition, so you want to know that you're at a place that that's the kind of customer you have to go after. The more you can do on self serve product led growth, think the better you're going be in the early days. And then a lot of it is tweaking like, okay, people love the product, but boy, is it a lot of energy to get into the product. Maybe the onboarding flow is complex or hard to understand or whatever. How can we tighten that? Where are we losing people? So really paying attention to how people are flowing through. Because pre product market fit, you probably don't have enough numbers going through your product of users to really even understand. But now you're seeing okay lots of people are going through and they all get to this spot and something goes wrong. We lose a bunch of people here. What is that? Can we go talk to customers? Can we look at the data? How do I improve that? So really opening up the funnel to make sure people are converting and then marketing. Pour fuel on the fire, drive people in but pay attention because you'll drift from product market fit If you lose it, now you're pouring money into something that's not working.
00:22:53 · Jim Rose
[00:22:53] S5: Developers and the technologies that people ultimately select oftentimes are selected because somebody else said it was cool. A technology would kind of come and go maybe every three to six months. Now it's like five to ten days. And in the world of generative AI, it's going even faster. You know, you talk to most development teams in generative AI, you kind of plan your world on six week cycles because the technology that you started with six weeks ago may not even be relevant six weeks later. And so you want to stay as close to, at least in our case, the developer and the user and the practitioner because they're the ones who ultimately best understand the technology that they're using and can give you the greatest feedback because they will continue to use the technology that actually solves their problem, and they are very quick to throw away stuff that doesn't actually work. I would say as a company or an entrepreneur, if I were looking in the AI space is one, I would just slate clean and try and find things that I thought were inherently unique and just get very, very creative. Again, it feels very same right now. I think that people that are really going to succeed come up with ideas that today are going to feel very radical, but in two or three years are going to feel incredibly normal. But what's normal in three years is going to feel very different today. I would encourage people to be as creative as possible. I think the second part of that is I would think very deeply about what can you do that's uniquely valuable to the customer that is defensible over time. I think what you're seeing right now is as people have tried to take similar activities that we did before generative AI and have just tried to bade them, a lot of it just gets easily displaced. The big foundational models, big vendors of today basically look at kind of a unique niche application that somebody might have and they just do it better and they can do it more cheaply than some of the other providers can. And then you watch entire parts of the market disappear. I think that's pretty natural. But if you're an entrepreneur, you want to find something that you think is inherently defensible.