In the following exchange, Loops’ co-founder and CEO, Chris Frantz (@ChrisFrantz), offers a clear-eyed account of how they’re treading the wavy line of selling to multiple personas in the oldest of SaaS categories with a multi-disciplinary product.
— Not just another email tool
— Not following the persona model
— Selling into an established category
— Moving towards a self-thinking app
— Aiming for an unclaimed vertical
— Introducing freemium confidently
Not just another email tool
When we applied to Y Combinator, we didn’t pitch ourselves as “not just another email tool.”
They wouldn’t have cared about that at all.
We went with something very different. A more radical take on the space.
We’ve been building the platform we need in order to execute on that idea. It just happens to have manifested as a delightful-to-use email platform that has customers such as Framer, Perplexity AI, Replicate, and thousands of small startups and indie hackers.
By the end of this year (three years in), we’ll finally have the thing we had pitched to YC.
Not following the persona model
A mistake that you see early founders/product people make is that they stick to the persona model. “I’m selling to Craig. He works as an engineering manager. He’s 26 years old. He likes walking his dog during lunch break. And that’s the persona we’re selling to.”
Or even, “we just sell to developers!”
That’s fine if you’re building Postman and you want to focus on API calls. That is your target audience. But it’s not fine if you need to sell an email tool; because they require buy-in from everybody.
You need devs to migrate/set things up. You need designers for polishing templates and new designs. You need marketers to write copy. Then the revenue team needs to approve it. You’ve already touched four different departments.
So it’s a mistake to say you’re targeting a single department/persona.
We decided to sell into a company instead and make an excellent email design product for designers, to make an excellent email marketing product for marketers, and so on. And we’ve been successful at it.
What we’ve realized while doing this is that if we’re going to serve these different teams why don’t we make all the tools they need available in one place. That’s how we’ve ended up with a platform that does marketing, product, and transactional emails.
They all pipe into the same thing.
For instance, we just released Save Styles, which means you can click any email template that we have and it’ll automatically populate all the styles you’ve saved. Ex: one-click setup for a reset password email, one-click setup for product updates.
Because we’re creating this for a bunch of different experiences, if, say, you change your brand colors it just takes a couple of seconds to update that across all your emails throughout your entire app.
That’s what we’re playing more into. Unified, unified, unified! Boil down many tools into one. Where it makes sense while also unifying the design system, unifying the analytics, unifying the customer, and everything in between.
That’s where a lot of startups make mistakes. Only a few have done it well. HubSpot is one. Salesforce is another one. But that’s where the list probably ends.
Selling into an established category
Email platforms are a very established category.
Everyone knows what they should do to a certain extent. What’s really hard to do is to sell a two-month old tool to somebody who has 20+ years of experience in the email domain. In such conversations, we’ve always been upfront about our limitations.
But what we’ve found to be successful was to match the timeline of our business with the timeline of our customers’ businesses.
That is, if you created your company six months ago and we are at the six-month point in our journey, it is likely that your needs are going to align with our abilities.
As we pursued this, our capabilities started to extend past our existing customers and then we started aligning them with different fundraising sets.
So, if you were a series A company, you were probably an okay fit for us at the end of year one. Towards the end of year two, we could probably handle series B to C, 80-90% of the time. By the end of this year we’d probably be able to serve series C/D to public companies.
Then, by the time we close out the following year, we’ll be able to scale from an indie startup to the most enterprisey company. Pretty confidently.
People think they’re ready to scale and they’re usually not. You need a way to generate invoices. You need SOC2. Different team visibility settings to protect PII. You need different regional settings. Lots of other things.
I know all of those are fairly unimportant for early stage product-market fit. But they’re definitely big limiters at later stages. Some that we’re beginning to run up to at Loops.
We are, in a way, self-limiting as well. You can come in, try out the product, check out our docs, and if we aren’t a fit, you can just bail. Loops is totally free to join. So, users self-qualify. We still don’t really do any sales.
Expansion has been great as well. We’ve noticed that there are some companies that start with the freemium plan and just a couple of months later they pay us hundreds of dollars a month. Because their business has taken off and they’re sending tons of emails.
Moving towards a self-thinking app
We’re obsessed with this idea of a self-thinking app.
We’ve not built it yet. But let’s say you’re an engineer and the app morphs to your expectations. If you’re a marketer, it transforms to that version. If you’re a designer, it places more design things upfront.
It’ll be very cool.
What we do today is that we have the same onboarding for all our users. But we have these in-app, call-outs, like “hey, if you’re a developer, click here and set X up,” If you’re not, you can still give the app a try and invite someone from a technical team whenever you’d want.
This gives the point person to get what they want fast or to onboard a relevant team member. And we really need three or four different personas in order to fully be inside a company. Tapping those folks in while it’s their right turn makes a lot of sense.
Aiming for an unclaimed vertical
We’re heavily targeted in terms of the types of companies that we want to bring on. We did this right out of the gate. SaaS was our big focus. As a result of that, you’re obligated to take a look at our product if you are a SaaS company.
This focus has helped a lot.
This is an underplayed mechanism to say that you’re the leader in some tiny niche that you invent for yourself or get into one that doesn’t have a leader.
How does it work? There’s Mailchimp for SMBs. There’s Braze for products that have the mobile element. There’s Iterable if you want to pay five thousand dollars a month for two years at a minimum. ‘But then there’s this new product that says it’s specifically for us.’
‘We have to check them out.’
This got us in contention really early in conversations that we shouldn’t have been based on our product level. We’ve since expanded beyond SaaS to just software.
Because we had a lot of interest from folks that weren’t SaaS. “Hey, I don’t do subscriptions but I do have a software product,’ or ‘we’re a software team at a non-software company.”
We’re still moving. Going a little bit broader. Going a bit upmarket. I don’t think we’re losing focus but we’re widening right now. Because our product capabilities are allowing us to.
Introducing freemium confidently
We knew we wanted to be at a certain stage when we offered freemium. Email tools are easily abusable. We had to have guardrails up there. Then, I don’t think you’d be at a disadvantage if you spent the first year of your company’s life talking to users.
We did that. For the first year and half, really. We onboarded everyone individually.
But freemium was always part of the plan, we just had to be in a place where we felt confident to introduce it. In retrospect, we probably could have put some of those guardrails a little bit earlier. Dropped out some of the features that we did put in.
That would have enabled us to go to market faster, but, honestly, I’m pretty happy with where the product is now. I’m going to be much happier by the end of this year. I’m glad we went the way we did.
I know Bobby [Pinero] from Equals. We met right before he published the freemium piece actually. He even told me he’d be writing about it. I was like, “cool, man, everyone writes a blog post, but that one really took off.”
I mean it’s great if the model works for you.
But there’s no real right way to do anything.
There’s this old article that compares Qualtrics with SurveyMonkey, with the SLG vs PLG lens, as each of these companies began with expertise in one. Different strokes for different folks, right? Work to your own skill set. It’s probably the best thing.
But I don’t think you can have a great product unless it’s freemium. You can have a successful product with a sales team, but not a great one. Freemium just forces you to build better.
When it comes to growth, we’re not actively thinking about the freemium funnel. We’re kind of in the “build a good thing and people will hopefully come,” space. We haven’t done much to improve conversions.
There’s a lot of low-hanging fruit there. Some of it is probably more difficult than we realize.
We’ve had a great amount of growth momentum. And we’re not actively looking to increase that. Weirdly, I guess, right now, we’re just trying to build a good product for the people that are coming in. Because our largest driver is still referrals. We want to continue that.
Related reading from the Relay archives:
— Nira’s co-founder, Hiten Shah, on sequencing the free plan at the right time
— Pulley’s founder, Yin Wu, on not building for an obviously large market
— Butter’s co-founder, Jakob Knutzen, on taking on incumbents by targeting a beachhead market