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What Comes Next: Perspective From a Serial FounderDavid Cancel Converted 2016
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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
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my podcast
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Why did I start working on Drift?
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Unfinished business.
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There's been a common thread through all of the companies that I've started …
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But it’s taken a long time — and lots of hindsight — to understand what that thread was:
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The connection between businesses and customers.
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I can trace this thread all the way back to my college days.
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As a student, I was bored. Extremely bored.
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So I'd skip all my classes and hang out in the library, where they had …
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The library computers had early versions of the Mosaic browser, and later, the Netscape browser.
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So I started to use the early internet through those browsers and I became obsessed.
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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.
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Then I discovered this way to have access to all of this information around the world, and to make connections with people.
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So I built a website. And back in the day, you would put your email address at the bottom of your site.
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Someone emailed me. And still, to this day, I remember this email:
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Hey man, I really like your website. It’s really cool.
“
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Then I checked the ISP: the person who had emailed me was in Russia.
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This was a breakthrough moment.
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It was the first time I experienced a customer feedback loop.
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1) I created something
4) they sent me a message 2) someone used it
3) they had a reaction
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And that is what I’ve been chasing ever since …
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The customer feedback loop — 1:1 communication with customers.
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I didn’t realize it at the time, but I’ve been chasing the same pattern for five companies.
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But up until my fourth company, Performable, I was following the same playbook as everyone else.
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It’s a playbook that’s largely driven by the ideas of the people within the company.
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Whether it was Waterfall, or Agile or some other product methodology, the customer was always missing.
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I hate using the Agile methodology for software now.
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Because the customer isn’t included in the process.
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Meanwhile, Kickstarter & Indiegogo have started letting companies create products out in the open with the customer.
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And customers now regularly pay for products long before those products even exist.
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(Source: Fortune)
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Customers find value in being part of a community, and being part of that journey of creating the product.
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At Performable, I shifted the model to put communication with customers at the center.
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And we started to build a methodology around having product and engineering communicate 1:1 with customers.
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Customer Communication: The Old Way
Customer Support PM Engineer
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Customer Communication: The New Way
Customer Engineer
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Then, in 2011, Performable was acquired by HubSpot, and I went on to lead product there as CPO.
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This was my chance to see if a customer-driven approach could work at scale.
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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).
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When I first got to HubSpot, I made the decision that engineering teams would each consist of 3 people.
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The Three-Person Team
Engineer Tech Lead Engineer
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And each team would own a complete, customer-facing product.
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We paired up each of these teams with a PM, who would work across multiple three-person teams.
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Then for each PM we had a dedicated designer and a dedicated product marketing manager.
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Designer PM PMM
Engineer Tech Lead Engineer Engineer Tech Lead Engineer
The Customer-Driven Product Team
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This structure allowed the people closest to the problem to come up with the solutions and test them with the actual customer.
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And it produced the results that we thought it would produce.
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After implementing the new structure, our product team had the highest employee NPS score of any team in the company.
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The customer-driven approach wasn’t just better for customers, it was better for everyone.
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Now, at Drift, we’re building a way for every company in the world to be customer-driven.
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With the rise of messaging software, billions of people are learning new patterns around 1:1 communication.
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At Drift, we’re building a messaging app that allows customers to communicate with companies using these new patterns.
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But it isn’t just our product. It’s the way we work and our philosophy behind building companies and building products.
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Example: Burndown
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Example: The Spotlight Framework
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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 …
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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.
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No longer is the customer an afterthought. No more “Oh, OK, how do we sell this thing now that we’ve built it?”
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Thinking Beyond Today’s Competition
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One of the things that I’ve learned throughout my career is to really focus on the customer, the market, and the team.
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Those are the three legs of the stool: the customer, the market, and the team.
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Know what’s not part of that stool?
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The competition.
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I have this unorthodox view where I like markets that have a fair number of competitors in them.
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Because that means there really is a market.
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There are competitors now, but I expect that every major software company that sort of touches our world will get in eventually.
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So the goal is to be the leader in this market by the time that those players come in.
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We saw first-hand the market shifting more and more toward messaging and more and more toward this connection with the customer.
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The competition today doesn’t matter. We’re not fighting for the small market that some number of competitors might have today.
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What we’re trying to do is fight for that big, billions-of-users type of market.
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We’re striving for HYPERGROWTH, and we’re using a customer-driven approach to do it.
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Here are three things you can start doing right now to be more customer-driven:
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1. Get rid of roadmaps.
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Roadmaps serve salespeople and other people internally. They don’t serve the customer.
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2. Just ship it.
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Get products into your customers’ hands early. Let them help you shape the product’s direction.
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3. Talk to customers daily.
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Your customers are closer to your product than anyone else. Listen to them. Talk to them. Show them that you’re paying attention.
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(P.S. If you’re having trouble communicating with customers 1:1 at scale, visit Drift.com)