Hi everyone! I’m the CEO of ChartMogul, we’re building the first Subscription Data Platform, and are best known for our Subscription Analytics product.
ChartMogul was founded in 2014, is a remote company of ~40 amazing people, with small hubs in Toronto, Berlin and Seoul. We’ve raised a total of $3.7M in seed money from Point Nine Captial, Alven Capital + some angels and we re-invest all of our customer revenues into product development and growth.
Prior to founding ChartMogul I spent 5 years at Zendesk, joining in mid-2009 as team member #9. I was responsible for the EMEA market (focus on sales/success/support) and then the Asia market (again same focus but different geo).
Happy to talk about:
Product (my passion)
Team building (my duty)
Startup/founder life, mistakes, successes, etc
Category creation
How to design your startups data stack
European/Asian expansion for SaaS
Anything about SaaS really
I’ll be back next week on the 11th of June to answer your questions! Looking forward to it and thank you to the Relay team for inviting me!
Note: This AMA is closed for new questions, but you can check out the existing conversations below.
In this AMA, we had Nick Franklin, the founder and CEO of ChartMogul and a SaaS veteran with behind-the-scenes access to the SaaS journey behind Zendesk where he headed the EMEA and Asia expansion. In this AMA, Nick shared his thoughtful insights on growth, product-market fit, people, churn, and more. Dive in!
AMA Index (Nick’s brain-pickings)
(founding insights, opinions, and observations; deftly examined and articulated)
Further reading/listening/pondering from the interwebz /
(Other insightful excerpts drawn from blog posts, interviews, and conversations)
On growth:
"Don’t assume if you’re growing at >20% MoM in your first year of business that you can do the same thing in your second year. …You read SaaStr and these other VC blogs and the no. of 10% or more, month-on-month, is often used as kind of a benchmark, ‘every successful high growth SaaS business must be growing at 10% month-on-month.’ It’s tempting as a founder to think well we’re growing at 25% m-o-m, so it’ll be easy to grow at 10% m-o-m next year but percentage growth very quickly compounds. So at 50K, growing at just 10% is an additional 5K in net new MRR. It’s not so hard. 9 months later that’s 10K in net new MRR. It very quickly compounds and what was kind of a gentle stroll in your first year turns into this vertical cliff.”
Source: 8 DOs and DON’Ts for SaaS Startups
On product-market fit:
“Don’t mistake latent demand for product-market fit. When a new SaaS company first launches, they often get a kind of initial spike of sign-ups or activity. This is usually due to latent demand. There’s often a class of customer out there that may just be waiting for exactly what you’ve built, often those customers are similar to yourself. This initial spike can often be short-lived, so the product needs to evolve quite considerably post that initial traction in order to be addressable to a wider market beyond those early adopters. And this is especially true in SaaS companies that build their product on top of a pre-existing ecosystem.”
Source: 8 DOs and DON’Ts for SaaS Startups
On people:
“I used to think something along the lines of… “yeah in big companies they always say ‘people are the number one asset’ but we’re a startup, our shiny new product is our number one asset”, and that’s completely wrong, everything that’s produced by the company is just a reflection of the quality and health of the team. So if I was to start over I would put far more focus on building a really solid foundation and culture earlier on. Jason Lemkin says it best, your job as CEO is to just to hire the best team you can possibly hire with the resources you have and then just support them. It sounds simple, but really hard to do in reality.”
Source: Founder Interviews: Nick Franklin of ChartMogul
On churn:
“Churn was something that kind of crept up on us, we had almost no churn in our first few months, so naturally we focussed on expansion vs. retention. But in reality we have some churn like every SaaS business, and in every B2B SaaS business retention becomes the biggest growth driver in a way, so it’s worth focussing on churn really from day one, perhaps even before you actually have any meaningful churn data to look at.”
Source: Founder Interviews: Nick Franklin of ChartMogul
On competitors:
“Some of our competitors have lots of different add-ons. We’re like, ‘Yeah, okay, we can make money there.’ But I feel it’s not in our core competency of subscription reporting and analytics. And so we should just stay super, super focused there and try to resist any temptation to move outside there. That’s one way to stay competitive. Any time spent in something else is time away from your core. And I still think we haven’t really solved the core for the whole market yet.”
Source: The good, the bad, and the ugly: ChartMogul’s Nick Franklin on navigating hypergrowth
Stay in touch:
You can follow Nick to stay updated with his discoveries and insights:
Nice to connect again this soon! A pleasant surprise to see you here. Thanks for doing this AMA! Really looking forward to hearing about lessons from the ChartMogul journey!
You’re a solo founder. Which is quite rare, not just in SaaS, but with startups in general. Even personally — having been fortunate to start Chargebee with three amazing co-founders whom I had known several years before starting — I have no idea what kinds of challenges being on one’s own brings about.
For someone contemplating a similar decision, it’ll be really helpful to learn how your thinking has evolved on the realities and implications of this since the early days of ChartMogul.
Thanks for taking the time for this AMA! We’re very happy ChartMogul users, so thanks for such a great product too.
This really resonated with me:
Don’t mistake latent demand for product-market fit.
What processes and strategies can you recommend to go from a small group of enthusiastic early adopters to Andreessen-esque PMF of “customers are buying the product just as fast as you can make it”?
One question - in your experience, and based on data observed at ChartMogul to the extent that you can share, what piece of data or data trend would you say is the most important leading indicator of future churn?
Would love to know what your experience is like in recruiting and selling in Canada/North America vs Korea/Asia vs Germany/Europe. Any cultural differences in terms of approaching potential customers, for example?
Thanks so much for doing this AMA with us. Congratulations on running a successful remote SaaS company! I have questions in the following areas:
Team building: How do you go about mentoring your team and ensuring they grow when everyone is remote? How often do you talk 1-1 to your people? Any insights you can share for all of us who are learning now would be most helpful.
Category creation: We, Kriyadocs are a document collaboration platform focused on the publishing domain. Our typical customer is not used to procuring such services through the SaaS route and hence we effectively are creating a new category. Thus far, we have converted our existing customers into a managed SaaS situation and are getting ready to be fully self serve. Any insights you can share about creating and marketing in a new category would be great.
Thanks for doing this.
Have always admired the wonderful content that your team at Chartmogul puts out.
Can you tell us more about your content strategy and operation.
I notice that there is a strong mix of top of the funnel + bottom of funnel + product marketing type content all in one location. What are your learnings around these.
How do you tie content to customer acquisition. Or do you look at content as more of a “Brand building” opportunity. And the weekly roundup. How does that tie into your content strategy. How big is the team and how is it structured.
An inspirational journey indeed! And some of these articles and blogs are such insightful pieces.
I have a couple of questions:
Do you think culture and employee satisfaction is a factor of company success? At an early stage when you experiment a lot, quickly change directions, there are more failures and in fact, success becomes a long haul. How does one keep the employees motivated in such a stage?
How do you educate customers when you are a category creator targeting SMBs? A lot of outbound may turn out to be costly, your unit economics may go for a toss. Inbound may not work at all, since you are a new category! What are some of the less costly education tactics?
My question, like many I’ve asked here in the past, is around the curious lever of pricing. ChartMogul’s value metric for quite some time was based on active paying customers and then it was changed fundamentally to be based on MRR; plus, you’ve also introduced and continued to experiment with a free plan in the mix.
— Having thought so deeply about data-driven decision-making, what kinds of metrics and insights (whether they have to do with segmentation/expansion revenue/churn/other aspects) have informed ChartMogul’s pricing iterations over the years? Would be great to get a window into that process. Especially with some of those early decisions when there’s very little meaningful data to work with.
How do you decide between “this is my core and so I will focus on this” versus “Competitors have built this feature and so there must be demand for it, so let me tap into it”? What is the biggest lesson you have learnt from your competitors?
Hi Rajaraman nice to connect with you here and thanks for your question.
Starting solo was mostly about me just wanting to get started quickly. There wasn’t anyone I knew at the time who was ready to take the plunge with me at the same time on the same idea. I think there are pros and cons. On the plus side there is no co-founder drama (which is a real thing), on the downside you don’t have co-founders to lean on each other for support. It’s a lonelier road in the early days without co-founders for sure.
However, I’ve been extremely lucky to have built a great team around me over the past 5 and a half years, and our current leadership team and some of the early employees have filled the lack-of-co-founders void perfectly
It’s also important to stay calm and together, for everyone really, but certainly for a solo founder and CEO. Self-care, whatever that might be for you, is super important. For me that means going to the gym regularly, trying to keep my sleep patterns in check and attending a therapy session about once a month.
Hi Neil, thanks for being a user of ChartMogul, nice to connect with you here and thanks for your question.
I don’t think the type of PMF you describe is probably possible for the majority of product categories. There are certain realities to the market and problem space for each new product which will likely dictate how fast you can grow. Of course you can polish your product, your onboarding, add features that deliver increased value, get better at sales and marketing, etc. However, the majority of startups don’t scale as fast as Slack, Zoom, etc. and that’s not because we’re not as smart or as dedicated as the people working at those companies.
There are two main factors which I believe have an out-sided impact on how fast you can scale. Market, e.g. how strong is the demand for a solution to the problem you’re solving. And secondly, the onboarding - this is so critical to rapid scaling. How easy is it for a large enough group of potential customers to get value from your product. If we look at Zendesk, where I used to work, they ticked these two boxes perfectly – there was huge demand for a way for teams of people to manage email support (there was also an an existing market, there just wasn’t any SaaS products), and secondly all Zendesk required was for you to setup email forwarding for your support emails into a dedicated Zendesk email address. This was a fairly easy and consistent onboarding pathway (email is a universal technology that hasn’t really changed in decades).
Sometimes just creating a company that has better onboarding than what came before is enough to create a category leading player.
Trying to predict churn usually only works well when it’s done in a tailored way for a specific company.
One technique is to use segmentation to identify customer types who are more prone to churn due to weaker PMF for that segment (or some other characteristic of that segment). For example we know our PMF is weaker for subscription box companies than it is for SaaS companies, so we know going into those relationships that there’s a higher risk we lose them, even if we don’t see any specific user behavior that would indicate they are thinking about cancelling.
The biggest red flags of course are when people stop using your product in some important way, e.g. for us it might be that they stop logging in, or remove their data from their account - but at this point things are usually too late to turn around. Predicting churn before you see one of those serious alarms is very tough. The best technique we’ve found is to do quarterly account check-ins, as these calls often surface issues that haven’t yet bubbled up into any sort of action.
One thing we notice is that people tend to go quiet before they churn, it’s often not the ones who are screaming at you and threatening to churn, they just want you to solve whatever issue they have. The ones who have already decided to leave don’t bother talking to you.
It’s also the case that the customers that don’t respond to your NPS surveys have a higher churn rate than the ones who give you a low score on the NPS survey.
I’ve always found that the English speaking markets of North America, UK, Australia, etc. + the Nordic countries are the easiest markets for selling SaaS into, at least in the early days. There’s a solid culture of trying out new online products, signing up for stuff and buying with a credit card.
Countries like France, Germany, Spain, etc. are all great markets, though the more you can localise the experience in terms of the language (product, sales, support, etc) the better you will do.
With regards to Asia, it’s all quite different, for example I don’t believe any foreign SaaS company has really had significant success in China. Japan is a great market, but you need to play a long game and make the up-front investment to build the local team and market on the ground (Korea is similar, but as Japan is larger most foreign companies focus there first). Both Salesforce and Zendesk have had a lot of success and built solid businesses in Japan, but it’s something that requires consistent effort over several years before things start to get really rolling.
I personally found that that India, Hong Kong, Singapore + the large markets of SE Asia (Malaysia, Thailand, Philippines, Indonesia, Vietnam) together make for the easiest entry point into Asia. As the way of doing business in those countries is culturally not too different to the West and English is widely spoken among executives at businesses likely to be buying a SaaS solution.
Hi Nick! Thanks so much for offering to do this AMA!
I hadn’t checked in with ChartMogul for a while, and it’s great to hear your story and to see how well things are going.
I am fascinated by the topic of category creation – I have a couple of questions for someone who is out there doing it:
At what point did you decide to transition from being “in” a category to “creating” a category? I always got the impression you existed within the broader category of “subscription analytics” until now.
Do you have any internal definitions / measures of how you can confidently say you have succeeded in creating a category? And if so, it would be fascinating if you can share them.
Finally – what have been the toughest challenges so far in creating a new category?
Thanks so much in advance, and sorry for being cheeky by asking multiple questions in one message!
Dear Nick, big fan. What will be the advise you will give to teams who are currently working remotely due to Covid-19, we have seen based remotely we are at times having communication fatigue. Also collaboration suffers due to this, as we are used to working closely in offices at whiteboards ? Any suggestion, strategy, mental models & tools to facilitate this remote culture.
I think for very junior folk looking for their first job the remote setup is hard, there is so much learning that can happen by spending 1-2 years in an office environment surrounded co-workers, eating lunch with co-workers, etc. without going through that experience there would certainly be a part of professional development missing. I think the most important thing to helping your people develop and grow is to have really great leaders. Great leaders are passionate, inspiring, highly competent, engaging and empathetic, and they lead by example. So the best thing I can do is to try and attract (or promote from within) leaders who have these characteristics.
In terms of 1-on-1s I think once every two weeks is about right once an employee is fully ramped.
There is a great book Play Bigger which talks about category creation (probably you’ve read it too). Aside from just launching and seeing what works and what doesn’t (which is the most important thing to do)…I think it can be helpful to map out what your category is about, what other categories it presses up against, etc. this can help inform your product roadmap. For us we’ve defined our product category as a Subscription Data Platform…before coming up with this name we thought a lot about where ChartMogul sits, what it integrates with (and what it should integrate with in the future), what pieces are there and what’s missing and this helped us get a clear sense for what we’re building and the benefits it will bring to our current and future customers.
Our approach to Content is to think about it as a product that has the same aim as our software product: To help subscription businesses grow and thrive. It’s just the content happens to be something we do for free. It’s designed to provide as much value as possible to our industry and our customers as is possible. If we do that right then it will elevate our brand and awareness of our core product.
We don’t work too hard to try and measure the impact of our content strategy, we’d still do it even if we thought it didn’t pay for itself, as we enjoy putting out interesting content, but I’m fairly certain it does deliver ROI.
How big is the team and how is it structured.
Our content team consists of one person, Ilia, he’s awesome. But we also have guest writers and other ChartMogul team members contributing.
And the weekly roundup. How does that tie into your content strategy.
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A pleasant surprise to see you here. Thanks for doing this AMA! Really looking forward to hearing about lessons from the ChartMogul journey!
nice to connect with you here and thanks for your question.