what comes next: perspective from a serial founder

What Comes Next: Perspective From a Serial FounderDavid Cancel Converted 2016

About David Cancel

• 5x Founder / 2x CEO

• CEO/Co-Founder, Drift

• Chief Product Officer, HubSpot IPO: HUBS

• CEO/Co-Founder, Performable acquired by HubSpot

• Owner/Founder, Ghostery acquired by Evidon

• CTO/Co-Founder, Compete acquired by WPP

• Investor/Advisor/Director to Various Companies and VC Funds

my podcast

Why did I start working on Drift?

Unfinished business.

There's been a common thread through all of the companies that I've started …

But it’s taken a long time — and lots of hindsight — to understand what that thread was:

The connection between businesses and customers.

I can trace this thread all the way back to my college days.

As a student, I was bored. Extremely bored.

So I'd skip all my classes and hang out in the library, where they had …

The library computers had early versions of the Mosaic browser, and later, the Netscape browser.

So I started to use the early internet through those browsers and I became obsessed.

I had been coding software up until this point — desktop software, boring software — but I wasn’t really feeling it. I didn’t love it.

Then I discovered this way to have access to all of this information around the world, and to make connections with people.

So I built a website. And back in the day, you would put your email address at the bottom of your site.

Someone emailed me. And still, to this day, I remember this email:

Hey man, I really like your website. It’s really cool.

“

Then I checked the ISP: the person who had emailed me was in Russia.

This was a breakthrough moment.

It was the first time I experienced a customer feedback loop.

1) I created something

4) they sent me a message 2) someone used it

3) they had a reaction

And that is what I’ve been chasing ever since …

The customer feedback loop — 1:1 communication with customers.

I didn’t realize it at the time, but I’ve been chasing the same pattern for five companies.

But up until my fourth company, Performable, I was following the same playbook as everyone else.

It’s a playbook that’s largely driven by the ideas of the people within the company.

Whether it was Waterfall, or Agile or some other product methodology, the customer was always missing.

I hate using the Agile methodology for software now.

Because the customer isn’t included in the process.

Meanwhile, Kickstarter & Indiegogo have started letting companies create products out in the open with the customer.

And customers now regularly pay for products long before those products even exist.

(Source: Fortune)

Customers find value in being part of a community, and being part of that journey of creating the product.

At Performable, I shifted the model to put communication with customers at the center.

And we started to build a methodology around having product and engineering communicate 1:1 with customers.

Customer Communication: The Old Way

Customer Support PM Engineer

Customer Communication: The New Way

Customer Engineer

Then, in 2011, Performable was acquired by HubSpot, and I went on to lead product there as CPO.

This was my chance to see if a customer-driven approach could work at scale.

I built that team from about 50 people to around 200 by the time I left (which was a few weeks before we went public).

When I first got to HubSpot, I made the decision that engineering teams would each consist of 3 people.

The Three-Person Team

Engineer Tech Lead Engineer

And each team would own a complete, customer-facing product.

We paired up each of these teams with a PM, who would work across multiple three-person teams.

Then for each PM we had a dedicated designer and a dedicated product marketing manager.

Designer PM PMM

Engineer Tech Lead Engineer Engineer Tech Lead Engineer

The Customer-Driven Product Team

This structure allowed the people closest to the problem to come up with the solutions and test them with the actual customer.

And it produced the results that we thought it would produce.

After implementing the new structure, our product team had the highest employee NPS score of any team in the company.

The customer-driven approach wasn’t just better for customers, it was better for everyone.

Now, at Drift, we’re building a way for every company in the world to be customer-driven.

With the rise of messaging software, billions of people are learning new patterns around 1:1 communication.

At Drift, we’re building a messaging app that allows customers to communicate with companies using these new patterns.

But it isn’t just our product. It’s the way we work and our philosophy behind building companies and building products.

Example: Burndown

Example: The Spotlight Framework

Spotlight Framework

Product Marketing PositioningUser Experience

What happens when …

How do I …

I tried to …

Can you/I …

How do you compare to …

How are you different than …

Why should I use you for/to …

I’m probably not your target customer …

I’m sure I’m wrong but I thought …

Ultimately, every company needs to shift to be able to have the customer at the center, and to be able to build products and services that serve those customers.

No longer is the customer an afterthought. No more “Oh, OK, how do we sell this thing now that we’ve built it?”

Thinking Beyond Today’s Competition

One of the things that I’ve learned throughout my career is to really focus on the customer, the market, and the team.

Those are the three legs of the stool: the customer, the market, and the team.

Know what’s not part of that stool?

The competition.

I have this unorthodox view where I like markets that have a fair number of competitors in them.

Because that means there really is a market.

There are competitors now, but I expect that every major software company that sort of touches our world will get in eventually.

So the goal is to be the leader in this market by the time that those players come in.

We saw first-hand the market shifting more and more toward messaging and more and more toward this connection with the customer.

The competition today doesn’t matter. We’re not fighting for the small market that some number of competitors might have today.

What we’re trying to do is fight for that big, billions-of-users type of market.

We’re striving for HYPERGROWTH, and we’re using a customer-driven approach to do it.

Here are three things you can start doing right now to be more customer-driven:

1. Get rid of roadmaps.

Roadmaps serve salespeople and other people internally. They don’t serve the customer.

2. Just ship it.

Get products into your customers’ hands early. Let them help you shape the product’s direction.

3. Talk to customers daily.

Your customers are closer to your product than anyone else. Listen to them. Talk to them. Show them that you’re paying attention.

(P.S. If you’re having trouble communicating with customers 1:1 at scale, visit Drift.com)

Check out what I’m up to at Drift.com