Shorter Lead Times and Feedback Loops Mean Better Customer Development

For the last couple of years we’ve been heads down at GiveGab on building out awesome volunteer focused features.  When we first formed the company, we had all of the fun challenges that a startup has – building a team, figuring out your target market, figuring out your vision and mission, how to price the product, etc.  Mixed in with this was customer development and trying to figure out what to actually build into the product based what we felt the value would be to provide to them, that they’d be willing to pay for.

At first, we focused on building out the volunteer management features – from the perspective of nonprofits, but realizing the propensity for nonprofits to purchase volunteer management software and the amount that they might actually spend on it, we quickly shifted focus toward a different segment of the market where budgets were bigger and user acquisition could come in larger numbers.  That was universities… where service learning and civic engagement programs were on the uptrend.

We had a more captive audience with larger potential deals and larger amounts of users coming onto the platform, so we went after that and these potential customers were more than willing to share their requirements with us and for the most part, we did a decent job building out what they wanted.  The problem there was that the lead times were really long and it took a long time to see a purchase happen, with real use.  Our feedback loop on usage from paying customers was somewhere from 6 mos to 1 year… which is really hard to truly iterate on a product when the feedback loop is that long.

Next we started to see some interest from businesses who were hot on corporate social responsibility, and volunteering played well into that.  We had a few deals surface that seem to want to close overnight and by that I mean a month, which was the shortest sales cycle we had seen and they seemed to have a budget and be willing to onboard all of their employees – so it seemed like a similar strategy to universities, but shorter sales cycles and our product overlap between universities and businesses was about 75%.  So we jumped on it and started to build out product for businesses.

Somewhere in there, we also started to build out features for the consumer side of things – aka the volunteers.  This required a completely different discipline hinged mostly on growth hacking techniques.  This approach required a shift in mindset of our company and didn’t quite gel with our roadmap for organization driven features from universities and businesses.

Overall, it was very segmented in how we gathered the requirements – we were so focused on gaining a customer here and there, and mixing in consumer oriented needs, that how we brought requirements in and prioritized them was less than optimal.  I made many a bad decision during this time trying to figure out a process to synthesize this feedback into a process that we could funnel to the product team, which waited in anticipation with a great agile development process in place.  Product feature prioritization was done internally based on feedback we would receive dealing with each customer one on one and by the time it got to the product team, it was filtered and direct interaction with the customer was lost.  I think the structures and processes we put in place were symptomatic of a combination of challenges – not having a hot market that was willing to pay for volunteer management software and long feedback loops on the product from customers where it was hard to make small iterative product decisions.

We were thrashing and having a hard time focusing on doing one thing really well.  This is startup 101… we would have discussions about this and ask ourselves it we weren’t focusing enough on one thing, but we still fell into the trap.  It’s hard to face that reality when you are in the midst of the excitement and everything feels like an opportunity… creative minds generate creative business models and solutions for market segments and it takes a lot of discipline to put most to the side to focus on one thing.

Over time, we built up a decent product base that probably achieved a 60/40 feature fit with the market.  But, about 6 months ago, we finally turned our attention toward fundraising features – something we always wanted to add to our platform.  This time, we focused back on nonprofits.  While volunteering and fundraising go hand in hand and complement each other, often an organization’s priorities lie in fundraising since money is the lifeblood of nonprofits being able to advance in their mission.  The amount of money that a nonprofit raises has a direct impact on the bottom line of the organization and how much they can accomplish either through capital improvements or through resourcing efforts.

We noticed that because of this prioritization an organization is willing to take some more risk and try out new services, particularly in the fundraising space where switching costs are lower and modern advances in social media and the web present excellent opportunities for greater effectiveness.  Because of this, lead times on closing a deal and the customer feedback loop, are much shorter.  Often a week or two; some deals, are able to be closed within the first meeting.  And because fundraising campaigns have a short window of operation, we can prep, launch, and perform a retroactive within a month.

Additionally, as we started to build out the fundraising features, we decided to take a slightly different approach by setting up a product advisory committee. We invited a number of different local nonprofits who were very excited to be working closely with a startup, to build out what would hopefully become their dream solution.  As we composed this group, we looked for potential customers who wanted to be fully engaged in the process, showing up week in and week out to provide us feedback, but doing so in a manner that not only brought their expertise to the table, but also a willingness to think outside of the box and synthesize older proven fundraising practices with next generation techniques that lend themselves to an online platform.

Depending on the topic at hand, we will cycle in different folks based on what features we are building out and where their expertise lies, but again, as these people collaborate with us, they are extremely engaged and provide great ideas and value.  This has been key to our success to date with these new fundraising features.  These discussions not only include sales and executives, but our product staff as well, all working side by side, generating ideas, and coming up with smart solutions.

What our customers continue to tell us about our product, which is a key differentiator in the marketplace, is that not only is our fundraising feature set beautiful, simple, and effective, but that we don’t stop there and we have engagement beyond that monetary ask – particularly through our volunteer aspects.  This is extremely powerful and forward thinking and what sets us apart.

In the end, we ask ourselves if we had started with fundraising, would we be in a better spot?  I’m not sure… maybe we could have avoided some challenges along the way; however, I’m not sure we would have ever come back to volunteering and therefore may never have had as complete of a platform that we do now.

One thing is for sure, we learned from our past experiences and specifically how to improve our customer development practices.  Our approach to create a product advisory board has paid off in dividends not only by allowing our product to flourish, but has also been advantageous in our business development efforts.  When your customers are referring others to you not only because they love your product, but also because they take pride in the fact they helped to architect the functionality, your ability to acquire customers becomes much easier and your focus becomes sharpened.  Coupling this with finding some way to achieve customer feedback loops that are as short as possible, is crucial for any startup to ensure they are creating a product of serious value.

Somewhere in there, we also started to build out features for the consumer side of things – aka the volunteers.  This required a completely different discipline hinged mostly on growth hacking techniques.  This approach required a shift in mindset of our company and didn’t quite gel with our roadmap for organization driven features from universities and businesses.

Overall, it was very segmented in how we gathered the requirements – we were so focused on gaining a customer here and there, and mixing in consumer oriented needs, that how we brought requirements in and prioritized them was less than optimal.  I made many a bad decision during this time trying to figure out a process to synthesize this feedback into a process that we could funnel to the product team, which waited in anticipation with a great agile development process in place.  Product feature prioritization was done internally based on feedback we would receive dealing with each customer one on one and by the time it got to the product team, it was filtered and direct interaction with the customer was lost.  I think the structures and processes we put in place were symptomatic of a combination of challenges – not having a hot market that was willing to pay for volunteer management software and long feedback loops on the product from customers where it was hard to make small iterative product decisions.

We were thrashing and having a hard time focusing on doing one thing really well.  This is startup 101… we would have discussions about this and ask ourselves it we weren’t focusing enough on one thing, but we still fell into the trap.  It’s hard to face that reality when you are in the midst of the excitement and everything feels like an opportunity… creative minds generate creative business models and solutions for market segments and it takes a lot of discipline to put most to the side to focus on one thing.

Over time, we built up a decent product base that probably achieved a 60/40 feature fit with the market.  But, about 6 months ago, we finally turned our attention toward fundraising features – something we always wanted to add to our platform.  This time, we focused back on nonprofits.  While volunteering and fundraising go hand in hand and complement each other, often an organization’s priorities lie in fundraising since money is the lifeblood of nonprofits being able to advance in their mission.  The amount of money that a nonprofit raises has a direct impact on the bottom line of the organization and how much they can accomplish either through capital improvements or through resourcing efforts.

We noticed that because of this prioritization an organization is willing to take some more risk and try out new services, particularly in the fundraising space where switching costs are lower and modern advances in social media and the web present excellent opportunities for greater effectiveness.  Because of this, lead times on closing a deal and the customer feedback loop, are much shorter.  Often a week or two; some deals, are able to be closed within the first meeting.  And because fundraising campaigns have a short window of operation, we can prep, launch, and perform a retroactive within a month.

Additionally, as we started to build out the fundraising features, we decided to take a slightly different approach by setting up a product advisory committee. We invited a number of different local nonprofits who were very excited to be working closely with a startup, to build out what would hopefully become their dream solution.  As we composed this group, we looked for potential customers who wanted to be fully engaged in the process, showing up week in and week out to provide us feedback, but doing so in a manner that not only brought their expertise to the table, but also a willingness to think outside of the box and synthesize older proven fundraising practices with next generation techniques that lend themselves to an online platform.

Depending on the topic at hand, we will cycle in different folks based on what features we are building out and where their expertise lies, but again, as these people collaborate with us, they are extremely engaged and provide great ideas and value.  This has been key to our success to date with these new fundraising features.  These discussions not only include sales and executives, but our product staff as well, all working side by side, generating ideas, and coming up with smart solutions.

What our customers continue to tell us about our product, which is a key differentiator in the marketplace, is that not only is our fundraising feature set beautiful, simple, and effective, but that we don’t stop there and we have engagement beyond that monetary ask – particularly through our volunteer aspects.  This is extremely powerful and forward thinking and what sets us apart.

In the end, we ask ourselves if we had started with fundraising, would we be in a better spot?  I’m not sure… maybe we could have avoided some challenges along the way; however, I’m not sure we would have ever come back to volunteering and therefore may never have had as complete of a platform that we do now.

One thing is for sure, we learned from our past experiences and specifically how to improve our customer development practices.  Our approach to create a product advisory board has paid off in dividends not only by allowing our product to flourish, but has also been advantageous in our business development efforts.  When your customers are referring others to you not only because they love your product, but also because they take pride in the fact they helped to architect the functionality, your ability to acquire customers becomes much easier and your focus becomes sharpened.  Coupling this with finding some way to achieve customer feedback loops that are as short as possible, is crucial for any startup to ensure they are creating a product of serious value.