In the following exchange, Dragonboat’s founder and CEO, Becky Flint, places a deep-seated sense of expertise — having honed hers for a couple of decades — as a precondition to product-market fit in most B2B settings.
She also discusses the vantage of joining PayPal in the early 2000s, the long, scrupulous road to starting up, and the multi-dimensional work of product prioritization.
— Solving the same problem across a career (and how PayPal was among the first SaaS firms)
— The 3 pre-PMF questions you ought to ask
— Why being customer-driven isn’t enough
Solving the same problem across a career (and how PayPal was among the first SaaS firms)
I often joke that I’ve been building Dragonboat (an outcome-focussed product portfolio management platform) my whole career. That’s 20 years! And I’ve found myself in SaaS for just as long.
When people draw up a timeline for SaaS, they usually go back a decade or so. It’s actually been around way longer. Salesforce disrupting Oracle is often cited as a lone example among many other early entrants. I worked at one too. PayPal.
You’ve likely never thought of them as a SaaS business. Yet they always were. If you were a merchant, selling something through PayPal, you had to have a merchant account. A place to manage all transactions.
And whether you had a subscription for accessing that merchant account or you paid based on usage, you were paying for a SaaS application.
At PayPal, I led the product operations team that focused on international expansion, which took us from 5 countries to more than 200. Later on, I headed Product Ops at startups such as BigCommerce (an ecommerce platform) and Feedzai (a fraud prevention SaaS).
And, in some ways, I built a solution that could be called Dragonboat’s first predecessor back at PayPal. All while I was setting up product portfolio management as a practice.
Even in the early days, there were so many different products to manage. Credit. Payments. Expansion was its own beast. How could we prioritize across different business and product initiatives? How could we deal with trade-offs?
So we ended up putting together an internal tool with the help of many spreadsheets. Because we couldn’t find a suitable external solution.
As it happened, in the roles that followed, I went from company to company solving the exact same problem. And people would often say to me, “you’ve built all these spreadsheets, can we please have no spreadsheets?”
That got me thinking in a certain direction. I wasn’t looking to start something, and just wanted to fix this messy product management challenge. Then I also wondered, if I was to ever start a startup, it would concern the very same problem statement.
The 3 pre-PMF questions you ought to ask
Melissa Perri (who is an accomplished product expert, an author, an advisor to Dragonboat, plus a dear friend) and I often talk about the idea of expertise in B2B SaaS. The fact that most founders tend to know a problem really, really well.
That informs how I’ve thought about product-market fit or rather what should ideally precede it. If you’re an early-stage B2B founder, you should be seeking out answers for the following 3 questions:
First, are you dealing with a big enough problem that people are willing to pay for, in all the necessary ways? Yes, it isn’t just about the actual cost. Sometimes it isn’t the cost at all.
If someone agrees to buy, they’re committing to changing something. So you have to ask whether they’re willing to take the trouble to learn a new tool and help others adopt it? That currency of time and effort is as important to validate.
Then, secondly, going back to my point about expertise. You have to learn: How many users are likely to become experts like you? Because at the end of the day it’s these folks who’d be the best users of your product and those who’d champion it within orgs.
So how do you estimate this? It’d be related to a macro trend. Zuora used the trend of subscription business to estimate recurring billing management. Atlassian capitalized on agile engineering. Gainsight is about customer success. And Dragonboat focuses on product leadership. So find out which role would grow over time and target that as a proxy.
People talk a lot about TAM, but this is what matters. As you’re not really selling to companies, you’re instead selling to individuals and disciplines that have the potential to grow in the future.
The third question is how would you build a product that’ll best enable users to become experts at solving the problem?
Across my roles at different SaaS companies, I was being paid for solving this problem where people didn’t even know that it was a solvable problem, so that was certainly the first signal.
In 2016, I took a break to see what I wanted to pursue next, I picked up some consulting work. And I found that going from company to company of varying sizes, they all had the same problem and were also willing to put in the effort to institute a whole new product practice.
So, after another full-time role at Feedzai where I built the product org from the ground up working closely with founders, I decided to take the plunge. So you can see why Feedzai founders and the BigCommerce founders became early Dragonboat backers. :))
When I left Feedzai and finally began developing a beta product, I continued being a consultant while the engineers coded and we ended up getting paid for both the WIP product and my services.
That was as strong an indicator of a fit as we could’ve gotten.
Why being customer-driven isn’t enough
Companies, big and small, face this issue. PayPal had it when they were a couple of hundred people and when they had tens of thousands.
No matter how many customers you have, when you ask them what they need/want, they’d set you off in different directions. Even if you have a single customer, there can be a conflict between what they need and what you want to build.
I think it’s lazy and dangerous to only create based on customer feedback.
When someone says, “I’m going to prioritize a customer ahead of us,” they’re often doing it at severe product and business costs.
Think about it. In B2B SaaS, in particular, the product never reaches its vision in the first year. You aren’t quite there in 5 years, sometimes even 10 years.
How will you guide customers through this journey that’ll eventually get them to an amazing destination they never thought was possible? And earn enough to scale a whole team that can make that vision a reality?
Thus your product roadmap needs to have multiple dimensions.
Customers are the first, but not the only dimension.
You have to understand the jobs customers are hiring your product for and ensure that the product delivers on them. Ask: What are those jobs?
Then, not all these jobs are of equal importance to them. They’d only pay for a few critical ones. So identify those and address them uniquely enough in a manner that they’d stay with you. Find out: What makes you different?
Further, on the business side: what kinds of problems should you be focusing on right now in order to grow new business or not to lose existing customers or to do both at the same time?
Aside from timelines and resources, these are the main angles to consider.
Most founders find it hard to operate in this multi-dimensional way. I see this play out every day among our customers, but also as a startup mentor at Techstars.
This is also a challenge that Dragonboat helps with. We offer teams a way to deconstruct all the axes they can build along and then prioritize better.
For instance, if all existing customers seem happy, but a large majority of the new ones have been churning within the first 3 months, then that’s the thing worth solving for. Not the shiny object that a competitor just released.
How can you assist customers in doing that critical early job well and align it with the product’s direction? And how not to lose this priority in translation when going through engineering, marketing, or customer success?
Prioritization is a lot more complicated than we think.
Prioritization is actually a trade-off — you don’t do something so that you can do something. You have to take a bigger frame, i.e. allocation. How much are you willing to allocate to different problems/goals and only then you can prioritize within each smaller bucket. At PayPal, we called it the “Rock, Pebble, and Sand” approach. You can read more about it here.
To aid your thinking, here are a couple of additional resources on this subject:
- Most founders have a hard time breaking things down and they think they need roadmapping but what they really need is portfolio management — that is, to balance a variety of competing needs and goals and features and roadmaps. This is for them
- When a startup starts to have multiple engineers or even multiple teams, they will need to have a workflow to orchestrate teams and achieve outcomes as they evolve and grow. This is for them.
Related reading from the Relay archives:
— Summit’s founder, Matt Wensing, on when to switch on the customer-led mode
— Pulley’s founder, Yin Wu, on how (and why) to build for a “non-obviously large” market
— Eduflow’s co-founder, David Kofoed Wind, on pivoting despite PMF