I'm Nick Franklin, Founder and CEO of ChartMogul. AMA!

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.

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Hi Ed :slight_smile: nice to see you, and for the question.

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.

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Hi Patricia, thanks for your question :slight_smile:

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.

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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!

James

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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.

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Thanks for your question Ravi :slight_smile:

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.

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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.

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Thanks for your questions Vengat!

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.

It has the same mission, to try and be helpful.

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Hi Krish :slight_smile: long time, hope to meetup in person again sometime soon!

So we originally thought the number of active subscribers was the best value metric for us, but a couple of years ago we switched to MRR-based pricing, where we charge 0.25% of MRR (unless you are on a custom enterprise plan). The main reason for that change was that we were getting a lot of B2C companies using our product with very high subscriber volumes and low revenues. So our pricing model sort of broke and we ended up discounting too many deals. On the flipside some B2B customers had huge revenues but very few customers and were on our lowest pricing tier of $35 (or whatever it was at the time).

So shifting to MRR-based pricing allowed us to eliminate discounting from our operations which has made managing our business just so much more pleasant. It also better aligns our pricing with our mission which is to help subscription businesses grow their revenue, so if we’re successful in helping them do that we also get to benefit from that upside (used right, ChartMogul should help inform decisions that result in inflections well in excess of 0.25% of incremental MRR).

The introduction of a free plan was in direct response to our integration partners like Stripe, Recurly and Chargebee (of course :slight_smile: ) introducing (sometimes lightweight) subscription analytics into their billing offerings. When a company has under $10K in MRR then every penny counts and paying for advanced analytics probably doesn’t make a tonne of sense over using something that’s free and workable with low volumes of data. So our free plan (which is free until a company has over $10K in MRR) is to encourage startups to start using ChartMogul right from day one before they even have their first customer, for us this is a really exciting time and we never want to stop working with startups at their earliest days.

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Hi Shruti, thanks for your questions :slight_smile:

So our two direct competitors have both built out features for doing email dunning, and we have long resisted adding this (despite many customers and prospects asking for it) as well as other features and add-ons we felt aren’t really in our sweet spot. We want to be the best in the world at subscription analytics and reporting, so we’ve gone really deep there, building out a lot of functionality that’s very specific to our domain that no one else has done before.

With regards dunning specifically, we actually partner there with an awesome company called Churn Buster who are really the best at dunning and that partnership approach works well where we can present a combined solution to a prospect consisting of the two best solutions for their respective domains.

I think if you don’t go really deep on solving one problem better than anyone else then you can end up covering a broader range of use cases, but your product can start to look like a Swiss army knife and as your customers scale they end up needing to move to more powerful domain-specific solutions. Having said that, to me Intercom feels a bit like a Swiss army knife for startups and they’re doing fabulously well (and we’re a customer).

What is the biggest lesson you have learnt from your competitors?

So our two closest competitors are both very good at marketing and evangelizing their companies, and I think it’s something we need to get better at. Our approach has too often been to let the product do the talking, but you miss out on a lot by just doing that. I should to do more AMAs :wink:

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Hi Anushree, thanks for your questions :slight_smile:

The people part of company building is the hardest and most important part. Most other problems can be solved if you have the right people are on the bus (and the wrong people not on the bus, which is just as important though not a particularly fun topic).

I think if you have people who are excited about working together, and working on the product/problem you are trying to solve then failures don’t really matter too much in the big picture, there are good weeks and bad weeks in startup life but I think everyone understands that.

As CEO the most important thing is to hire and promote the right people and to set a clear vision. I’m still learning that :slight_smile:

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?

Content is amazing, if you truly nail a piece of content then it can get you noticed, and get you leads. The news media are the masters at this, their articles, opinion pieces, etc. get thousands of shares, we should learn from them. Having an opinion makes people interested in what you have to say, that’s partly why the Basecamp guys are so interesting, they put out a constant stream of their opinions (sometimes even publishing books of them).

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Hi James and thanks for your questions :slight_smile:

Subscription analytics is a category of product, and one that we lead in. However, over the years we realized that what we’re building is something that fundamentally works by ingesting subscription/revenue data from different primary data sources, cleaning and normalising that data, and then we generate subscription metrics and other revenue reports off of that. Now from that those datasets you can do Subscription Analytics, but you could also send those metrics into an external data warehouse perhaps, or into Segment to be used elsewhere in the organisation. At that point the use case is not for doing subscription analytics but for using ChartMogul as part of the data stack of a company.

It was this thought process that led us to articulate this category vision for a Subscription Data Platform, which is what ChartMogul has become. One of the things a subscription data platform enables is subscription analytics, and we certainly do that too, but the product category we’re creating is a subscription data platform which has a broader set of use cases.

  • 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.

I think we were part of a group of companies who created the subscription analytics category. I think it took a few years before that became clearly a category. We’re not there yet with Subscription Data Platform, we only launched that in March. I think when we start hearing others talking about their need for a subscription data platform, without necessarily talking about needing ChartMogul, then we will have been successful, it will likely take a couple years.

  • Finally – what have been the toughest challenges so far in creating a new category?

I think the hardest part is keeping up the momentum, you have to remember to do it, to keep pushing, to continually publish content and thought leadership pieces, PR, etc. Zuora are probably the masters of this in the subscription space.

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Hi Aballabh, thanks for your question :slight_smile:

So we’ve been remote for about 1.5 years, but certainly the past 4 months or so has been the hardest, one way to solve for isolating impact of remote is to go with the team to conferences, or have off-sites, and that’s all gone away this year which has made it tough, but I’m hopeful that will return next year.

We’ve found tools like Notion invaluable for knowledge sharing and collaboration. I think timezones are the hardest thing to solve for with a remote model, making sure teams who need to work closely together aren’t too far apart in terms of timezone is important.

One thing we did last week which really helped was having our first ever hackathon, we split into 9 teams of 4 people who rarely work together and had 24 hours to build something new and each team had to present it using Loom and that worked great and I think got everyone energized working together.

We recently hired someone as Global Team Assistant, and part of that role is to look for ways at promoting collaboration and team bonding across the company.

Not a straight answer more than a string of thoughts but hope it helps :slight_smile:

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Hey @Nick,

Thank you so much for taking the time out to answer all the questions with such openness. There are a lot of solid takeaways in there! :slight_smile:

I am absolutely in awe of your approach to content, churn, and category creation. There’s so much nuance to your responses that I’m sure all of us will be able to take away some very actionable lessons. Also, I really loved the Swiss-knife analogy, it was so succinct yet profound. :sunflower:

Thank you, again, for sharing your hard-won lessons and insights. Hope to have you join us for another session very soon!

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Also, a big thanks to @ncameron, @edla, @pthaine, @raviramani, @Vengat, @Anushree, @wingman4sales, @jamesgill, and @aballabh for joining in today and asking some amazing questions.

We’ll see you around for the next AMA very soon. Stay tuned for more details! :zap:

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Thanks so much Nick, this is great to hear – best of luck with the continued progress and growth!

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Thank you so much Nick, good to read these! All the best :slight_smile:

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Wonderful advice. Great point on having great leaders below you as well.

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Thanks for sharing this, Nick.

Thinking of early employees and the leadership team as co-founders makes so much sense, given how closely and deeply we work with them. And I agree, making time for oneself as a founder is — far more than we realize — one of the most critical decisions we can tend to. Without it, we risk straining (mostly unknowingly) all the other decisions that need our attention. Thanks for your time Nick!

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Thank you so much for your thorough and informative reply, Nick!!
It will be super helpful for us going forward.

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