Omer (00:11.840)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan, and this is the show where I interview proven founders and industry experts who share their stories, strategies, and insights to help you build, launch, and grow your SaaS business.
This is part two of the interview with Pulkit Agrawal of Chameleon.
In this episode, we talk about growth.
We explore how Pulkit and his co founder hustled to go from zero to their first 100 customers.
There are some good lessons here on how to acquire early stage customers when you don't have a scalable sales and marketing system in place.
Welcome back.
Guest (00:58.230)
Thank you.
Omer (00:59.430)
All right, so last time we talked about how you had come up with the idea for Chameleon, what you did to go and validate the idea, how you started building the product initially, and then how you found an angel investor who eventually helped you to raise the $1.9 million funding that I think happened late last year.
Guest (01:32.550)
Make it sound so easy.
Yeah, that's about right.
Omer (01:35.510)
Yeah, I'm sure it wasn't.
Okay, so let's spend some time talking about growth.
And I know you guys are still fairly early stage.
You.
You have less than, you know, 100 customers.
But I want to talk about the journey that you've taken to get from the first customer to 10 customers and then sort of growing from that and what some of the lessons you've learned along the way.
So let's start by.
Let's start to sort of think about going back to the first 10 customers.
What's the.
What was the process that you guys went through?
Guest (02:25.240)
So a lot of hustle.
Basically.
We started with our network and creating a list of companies that we would love to work with or companies that we had some connection with.
We were a B2B product, so that's who we were targeting.
And.
And then there was a lot of, well, can we do informational interviews and a lot of just research.
And it was both that helped us do customer development, but it also helped us identify any people that might be willing to give this a shot and get a sense of whether they had this pain and were willing to act on it today.
And one of the things that we learned fairly early on was that there is no point selling until somebody kind of has the pain and needs the solution.
So we focused on doing kind of research, interviews, and people were much more willing to give us time to meet for a coffee if we said, hey, look, we're looking, we're a new startup, or we're trying to figure out A solution in this space.
We would love to get your input and insights into how you do this and can you advise us and help us.
And people were much more willing to meet because of that.
And meeting face to face.
One of the benefits of being in San Francisco, where the customers are meeting face to face, really builds that relationship, which allows you to follow up a few times and email for other things and ask for an intro and do all of those things, which I think it's harder to get if you've just got an email relationship or something.
Omer (03:54.660)
This is what you were doing before you had the product launched or after?
Guest (04:00.740)
Well, if you.
Last time I talked about that, we built the product over time while we were working with companies that said that they had the pain.
This was pre funding.
We were doing customer development, trying to find companies that had this problem and finding people that could, we could work with.
So that's kind of what got us to the funding stage where we had a prototype which was working, which was live with some customers.
And we did a lot of customer development research back then.
Omer (04:29.920)
Who built the product?
Guest (04:32.000)
Predominantly my co founder and cto.
I look after, you know, we both looked at the problem and how the solution, what the solution would look like.
And so.
But he did a lot of the.
We did all the building and then after we raised money, what we decided, we said, well, look, we're early enough that we could probably restart this and if we now that we have some resources and we can get some design input, what would this product look like if we were to start again?
So actually, you know, pretty much straight after we closed our round, we got connected to a great designer who's been helping us and we said, okay.
We ran a design sprint.
We said, okay, look, this is everything that we understand about the problem and how customers might use the solution.
What would this look like if we were to start from a blank piece of paper and we redesigned the product and it's almost basically had to rewrite it all.
Complete shift.
But that was good because it was early enough for us to make that decision, which was a little painful because you had to neglect the legacy product and the legacy customers.
But it meant that we weren't constrained by the design choices we'd made when we weren't funded.
We didn't have the resource, we didn't have as much knowledge and understanding.
Omer (05:50.510)
What were you doing to acquire your early customers?
So you talked about having these coffee meetings.
What else were you doing to find them?
Were you just kind of picking up the phone and cold Calling, doing, sending emails.
Guest (06:09.320)
So the early customers, yes, a lot of it was kind of outbound.
We just like send emails or ask for intros to find people who'd be willing to engage us.
We put up a landing page really early on and that as passively got email addresses and then we maybe get back, reach out to them and if it seemed like a legitimate company and do a bone chat and ask about their pain point.
And because we had essentially a closed beta that we were then running at the end of last year.
And so there was enough kind of footfall on the website or through there's like a podcast I did or a blog article or something.
So there was some because we only needed a few customers to really come on into the private beta and start trying the product.
And then one of the things that we did do was put everyone in a slack group.
So all of our early customers and our early users, we put in a slack group because we wanted really good access to them and wanted them to have good access to us.
So that allowed us to have a kind of conversational relationship that we could ping them at any point or they would be comfortable pinging us if something didn't work or something they had some feedback.
And so we tried to bridge that gap and how we could be close to them, at least in the early days.
And it's not great now.
We don't use it as much now because we need tracking and we need tickets and all that kind of stuff.
But early days, that stuff doesn't matter.
So it was very easy and we had a different slack group for each customer so that we had all of our team was on it so everyone could see all the feedback that we were getting, etc.
So that's a little tip for early stage companies.
Omer (07:45.490)
So you mentioned earlier that you were trying to find companies that were ready to focus on onboarding.
What was the.
For the companies that weren't interested that turned you down, what was the most common objection that you would hear from these potential customers?
Guest (08:13.800)
Good question.
I think it was predominantly that this is either not a priority for us or.
Or that it's just they would go cold or they wouldn't respond.
And that was an indication that this wasn't a priority for them.
So we learned a few things about why people said no.
One of those, that, yeah, this is not the right time, there's not enough resources, no one has time to think about this.
The other thing that we heard was that, oh, you know, good design doesn't need education or, you know, Good onboarding is about an intuitive product, which is something that I working to rebut and explain that that's not actually the case.
So there is some people, there's a philosophy that thinks you just have to create an intuitive product, whatever that means, and that will solve activation.
But anyway, that's not something that we wanted to necessarily argue then I think it's something that people will come around from, realize that actually product education is critical.
So that was another argument.
And the third argument was that sometimes people wanted to do this in house.
They wanted to build it with their own technology, with their own engineers.
Now that happens either if you're really big, if you're a Facebook or Pinterest and you don't really use third party solutions, you build everything in house.
Or I saw that this happened a little bit more in companies that were either very kind of cash poor and time rich or if they were a little bit kind of less progressive in their thinking around using third party services.
It's slight tangential.
Tangent here is that because I spent some time in London as well and I engaged with the startup scene in London, one of the differences was that companies there were a little bit more hesitant about just going with another startup, just making a punt on using a tool that someone's just developed.
They wanted a lot more established companies and established products and credibility, whereas companies on the west coast were a lot more willing to give new startups a chance.
So that was some stuff that we learned about.
Okay, well these are the types of companies maybe we should focus on and these people that are giving us these responses are not the ones that we should focus on.
Omer (10:25.520)
Yeah, I mean, those are interesting insights because when you start to break it down, you can say there are big companies that want to build their own solution in house and so they might not be the ideal customers for this.
Then you have smaller startups who could definitely use something like this.
But for a lot of early stage startups, there's a tendency to want to build everything yourself.
Not with everybody, but I've seen that quite a lot.
Right.
So we want to do this.
Sure.
We'll just build it into the product.
We want to have some affiliate system.
We will just build that into the product.
And then as you kind of get further down the road, you realize you weren't really saving money by doing all that stuff yourself.
And you would have probably been better off focusing on whatever your core competency was and using a third party product that specialized in a certain area to help complement what you were doing.
Guest (11:37.190)
Yeah, hallelujah.
Yes, exactly.
That's the penny drops at some point for startups that are going to succeed that actually SaaS solutions are great.
They're way cheaper than building this stuff in house.
I know Bare Metrics has a great calculator that allows you to calculate the real cost of building this in house versus using a SaaS solution for it.
You can look it up.
It's called the buy versus buy build versus buy calculator.
But essentially a SaaS solution for something.
It's going to be a monthly subscription.
They're focused on this, they're going to build way more functionality and way more sophistication than you ever would in house.
Plus they have the advantages of learning from across companies.
So one of the benefits of for example using Chameleon is, well, we understand how onboarding is being built across customers and the data from across customers and we can use that in our platform to help everyone improve theirs because you know, we can give them tips and we can see what works and what doesn't work, which you just don't have access to if you build it in house.
So I think there's definitely strong reasons to use SaaS solutions if there is something that exists for the problem that you have.
But I understand if you're, if you're pre revenue, pre raising an investment, you don't have money, then you're forced to build stuff.
The other time that people are, I sometimes forced to end up building stuff in house if it's a very strong engineering culture and engineers are very confident and they want to bite off all these challenges and build their stuff.
So where there isn't a strong product leadership then what happens is often those teams will end up building everything in house.
Omer (13:17.630)
Yeah, I wasn't aware of that Bare Metrics calculator so I'll include a link in the show notes to that.
And Josh Pickford, the founder of Bare Metrics was actually a guest on the show way back on episode 48, which is you can get to by going to conversionaid.com 48.
But actually your kind of story in the situation about finding the right customers reminded me about another guest that I had on the show which was Scott Klein back in episode 86 and 87.
So again you can just go to ConversionAid.com 86 or 87 to get to those.
And Scott is the co founder of Status Page and it's a YC backed startup and the idea is basically that instead you use them as a third party hosted status page for your app or your website.
So if you're having outages or performance issues or problems, then customers can just go to this page and kind of get an update on what's going on with your product.
And I remember him, him having a similar thing where he was kind of, they were going out and talking to customers and trying to get them on board.
A lot of people were saying it's not a priority.
Right.
We, yeah, we know we need to do it.
We just don't have the people who can do it, or we want to build this ourselves in house.
And I think the one I remember is that I, I, Scott mentioned about somebody actually sending him an angry email saying, how dare you even charge me for this?
Guest (14:55.310)
Right.
Omer (14:55.630)
I can build this page myself.
Why would I pay you to do this for me?
And I think they were going through sort of a similar evolution in terms of trying to figure out who the right customer is for them.
And when we spoke, I mean, back then they were doing over a million dollars in revenue.
So, you know, they, I guess they found a, a way through that.
One thing I was curious about was there's a lot of focus on onboarding when we look at the Chameleon site, but I don't see a lot of talk about reducing customer churn.
Surely that's going to be one of the biggest benefits of using a product like Chameleon, right?
Guest (15:43.690)
Yeah.
And I think maybe it was the last episode I mentioned that there are lots of use cases.
But what we have made a conscious decision about is narrowing down into one use case in our marketing, because I think people are familiar with the challenge of onboarding, and I think if we can resonate in that niche market, that's going to drive us to get a stronger foothold and have more customers that are more committed to it.
And then once you're being used and customers are seeing value, they naturally are able to think about other places that can be used and other teams in their company that could benefit.
But what we didn't want to do is dilute our messaging and not be clear who we're going after and what the use case is.
So, especially because we're young and early, we have to be super tight in our messaging, and onboarding is what we've picked.
I think part of that is also because when you're able to increase revenue for a company or, or drive, you know, customers for them, then it often has a clearer and stronger budget than if you were to reduce Churn or if you were to reduce support requests, et cetera.
So I think that's why we've made a conscious decision to go after that as our kind of our messaging.
Omer (17:00.380)
What have you done on the kind of the competitor side is.
Guest (17:05.980)
Is.
Omer (17:06.300)
I. I'm not familiar with this market, but are there a lot of competitors out there?
Guest (17:13.800)
So when we first came up with the idea and we were doing a problem validation and solution validation, I think there was maybe one incumbent that they'd been around for three or four years, seemed to be doing okay.
Not real obvious success.
But then over the last year and a half, we have definitely seen a mushrooming of tools and services that range from being a jQuery library.
And I think, I guess that was the precursor to the tools that we're building.
But it's, you know, a library that an engineer implements which is really simple, which provides you kind of some out of the box functionality around tooltips, but it still requires you writing code and it still requires you changing that code every time you want to make an update, all the way to kind of a more full, fully integrated solution like ours.
And so there was a gradient of types of tools and there's.
People have realized that, oh, this is a problem, the market is ready or getting ready for a solution, we can do something.
And I think because it's such an early market, it's not always evident what the real differentiators are and will be.
And I think it'll just take a little bit of time for people to really, for the, for the great products to really break through and show their value and people to kind of rally around those.
So we do have a bunch of competitors, I guess.
But actually what we know is for most companies, for most of the market, they're not using anything.
So our biggest competitor is actually, hey, we don't have time for onboarding or we've built something last year and that's still what we're using and it's not very good or we don't do anything.
So that's the main competition.
We're not necessarily competing with lots of other tools.
Omer (19:10.450)
How much time do you guys think about competition or look at what competitors are doing?
Guest (19:16.369)
I think it's something that we definitely sought advice from our investors and others on and how much we should pay attention to it.
We kind of, you know, for example, we have an fairly inactive channel in slack around competitors in the space.
Like, has someone made an announcement?
Have you come across something?
Have you spoken to a customer that's giving you some feedback on what's good or what's not?
We're out here to learn.
So if we can learn from our competitors as well as our customers and what is effective and what works, then that's what we want to do.
It's not so much about worrying how they're doing and whether we're winning or they're winning or how far ahead or behind they are or we are.
That's not so healthy, not so helpful.
But we are always looking to learn.
And if those that are ahead of us are able to teach us something, we'll definitely lap that up.
So, yeah, we're always on the lookout for what customers want and where there are others that have solved their needs, then we look at them.
Omer (20:17.770)
That wraps up part two of this interview.
