Assembly: Going from Nice to Have to Must Have SaaS Product
Jonathan Fields is the co-founder and CEO of Assembly, an employee engagement platform modernizing company intranets.
In 2013, Jonathan got a job at ZipRecruiter, and over several years he watched it grow from 15 to 1,500 employees. He noticed the company invested heavily in culture and wondered if technology could help other companies with fewer resources do the same.
So in 2016, he and three co-founders decided to do something about it.
But they weren't ready to quit their jobs just yet. So they bootstrapped and worked on their company at night and on weekends for over three years.
They initially launched with a simple peer recognition and rewards product.
But finding the first customer (let alone their first 10 customers) turned out to be extremely difficult, e.g., they didn't know what an Ideal Customer Profile (ICP) was back then, so they wrongly assumed anyone could be a potential customer.
Eventually, through a lot of persistence, finding people to talk to through their network, and learning from mistakes, they finally got a customer.
Today Assembly is a multi-million dollar ARR business, serving over 4,000 customers, and has raised $14.5 million.
In this episode, you'll learn:
- Why the founders decided to build their business at night and on weekends for several years while working full-time jobs.
- How the team struggled to land their first 10 customers, and the important lessons Jonathan learned from that experience.
- The challenges when your buyers are not the primary users of the product and often have different needs compared to the users who determine the success of your product.
- The growth strategies they used to go from struggling to land their first customer to scaling to over 4,000 customers.
- How the founders repositioned Assembly from being seen as a “nice to have” to a “must have” solution in their buyer's minds.
I hope you enjoy it.
TranscriptClick to view transcript
This is a machine-generated transcript.[00:00:00] Omer: Jonathan, welcome to the show. [00:00:02] Jonathan: Yeah, thanks for having me here. [00:00:03] Omer: Do you have a favorite quote, something that inspires or motivates you that you can share with us? [00:00:08] Omer: I do. [00:00:09] Jonathan: The true purpose of life is to plant trees under whose shade you do not expect to sit. I've been loving this quote for years and [00:00:18] Omer: I I love that. [00:00:19] Omer: I, I think I heard something like that. Recently, it's like, I don't know, it's a little bit deep to go into, right? It's kind of, it's one of those very thoughtful quotes. [00:00:30] Jonathan: Yeah. If you wanna, you know, a little bit less of a abstract one for entrepreneurs out there. If your dreams don't scare you, you're not dreaming big enough. [00:00:37] Jonathan: I feel like that's a little bit, uh, softer here. So [00:00:40] Omer: I like it. I like it. All right. Tell us about assembly. What does the product do? Who's it for and what's the main problem you're helping to solve? [00:00:49] Jonathan: Assembly is an employee experience platform. There's been a big evolution starting from ground zero to where we are today, where we started as an employee recognition platform, moved [00:01:00] more into a cultural suite, and now we are becoming an employee intranet. [00:01:05] Jonathan: And so the problem it solves is actually threefold. Finding information is a critical piece at every organization. If you spend time, you know, looking for information, you're just ineffective at your job. Pushing information, getting the right information from the executive team, from your management, from leadership out to every employee is also critical. [00:01:23] Jonathan: If you're not seeing important information coming out, once again, you're not as efficient as you could be, and then engaging your employee base, creating meaningful interactions, retention, morale, when you combine all three of those, if you have a retentive employee, an engaged employee, a productive employee, obviously that affects the bottom line in a positive manner. [00:01:45] Omer: Give us a sense of the size of the business where you, in terms of revenue, number of customers, size of team. [00:01:52] Jonathan: Yeah. Assembly's doing millions of dollars in revenue a year. We're at 35 employees. Uh, we have north of 4,000 customers on the [00:02:00] platform. I. Those are companies. They're mostly domestic inside of the US but we're pretty strong in Canada, Australia, uk. [00:02:09] Jonathan: But of course we do have a lot of companies like Germany and France and South America. We do have a pretty broad range of locational base of, uh, companies using our platform. [00:02:19] Omer: Great. And, and you've raised about 14 and a half million. That's right. Great. So let's, uh, let's talk about where the idea came from. [00:02:27] Jonathan: So I joined a company very early called ZipRecruiter. And before that I was an investment banker. And I was, I don't wanna say I was miserable, you know, you make good money, but I don't think people were like, genuinely. I'm like, I'm so happy being an investment banker. Like, I don't know if anyone's ever, you know, if you take the money out of it, you're not enjoying life. [00:02:45] Jonathan: It's just the real truth. And when I joined a company called ZipRecruiter, This is the early days. There were about 15 employees. When I joined, you know, I wrote it to 1500 employees in I P O, but at the beginning it was the biggest dichotomy I've ever seen. There was kombucha on tap and healthy food [00:03:00] snacks and nap pos. [00:03:00] Jonathan: Like, what is a nap like for the tech folks out there, this makes like, they're like, oh, whatever. You know, it's NAP pod. It was crazy when I first saw it. It just didn't make sense. But the thing that they did extremely well, other than the benefits and the perks of being in an office in a great location, there was career progression. [00:03:17] Jonathan: People had a voice. There was a, a tremendous push for culture, and I became obsessed. I became obsessed with B two B SaaS, and I became obsessed with culture and I wanted to take that, those cultural elements and put it behind technology. So many companies just don't have the resources to build out an unbelievable and productive culture. [00:03:36] Jonathan: Everyone wants it, but they're not intentional about it. So I wanted to make it easy, and that's where the idea came from. [00:03:42] Omer: Okay, great. So you got an idea. It sounds like a pretty. Pretty big vision. Uh, and I think the, the thing that often people struggle with, or founders or entrepreneurs struggle with is, what's the next action? [00:03:55] Omer: What do I do? So what did you do? [00:03:58] Jonathan: Uh, you're, you're exactly right. [00:04:00] I mean, taking the first step is the hardest thing. Almost everyone says like, I have this amazing idea. I've heard it a million times. You've heard it a million times. Everyone has. Take the first step. You know what's the hardest part of building a house is laying down the first brick, I guess. [00:04:11] Jonathan: Right? It's like get started. That's, that's the hardest part. It's just the fear of failure prevents you from doing something in the first place. But it was an interesting journey because I was at ZipRecruiter and they were on an I P O path. My co-founders were honey, and Honey was in a process to get bought. [00:04:29] Jonathan: And so all of us have great jobs, so it's like what is, what is risk, right? For the people who leverage their house and put a second mortgage on their house and do all these crazy things, my, I'm mind blown, like, you're unbelievable. I couldn't take that kind of risk. I love risk, but I like calculated risk. [00:04:43] Jonathan: And so what we did as an organization, we started to build nights and weekends. So even though we wanted to build performance and productivity and engagement all in one platform, that could be surfaced anywhere, we had to start simple. So we ended up building this nights and [00:05:00] weekends while working full-time jobs. [00:05:01] Jonathan: Instead of building this comprehensive engagement suite all at once, we actually started very verticalized with a recognition and rewards platform, which allowed coworkers to recognize peer-to-peer, top down, bottoms up well automate the recognition of birthdays and work anniversary and sitting behind all this is a massive reward catalog. [00:05:20] Jonathan: Thousands of gift cards, charity rewards, company branded swag, cultural rewards. And so we launched with just that simple product and that was enough to get off the ground to get activity on the platform and to get our first round of capital injected into the company. Okay. Right. [00:05:35] Omer: So there was four of you, four founding, four founders, correct. [00:05:40] Omer: Rounders. And you were all working part-time. Like evenings, weekends. [00:05:47] Jonathan: Oh yeah. Part-time on our own platform. That's correct. [00:05:49] Omer: What kind of validation did you do? So you've got the vision, you figure out what, what kind of product you wanna build initially, but [00:06:00] did you validate it? Did you just start building? [00:06:04] Omer: Did you go and talk to customers? What was, what gave you confidence that you were building the right thing? [00:06:09] Jonathan: All of the above. And there were other players. So the grand. Ecosystem of culture that we wanted to build. There wasn't anyone really doing it the way we did, but we couldn't do it nights and weekends. [00:06:21] Jonathan: But in the recognition and rewards catalog or category, there was a lot of players, like the market was already there, so the validation had already happened. We can already see there's a playbook, there's key terms, there's organic traffic. If you check the, like, uh, you know, the, the volume on Google, like how many people are searching for this thing, it was pretty robust. [00:06:39] Jonathan: So we knew the market was there. And so we ended up building this recognition and rewards platform, you know, nights and weekends, and getting that first customer was extremely challenging. There's a market that means there's players out there, there's winners and there's losers. And obviously if you're shopping for a tool, you're gonna go with the best tool that [00:07:00] you find. [00:07:01] Jonathan: So how do you compete against companies that have been around this space for years that have all the feature sets to get that first customer was one of the more difficult things we had to do. It's like convincing someone to take a risk. You know, you can't fully say, Hey, you're our first customer, but to get them in the door, that then gives you validation. [00:07:19] Jonathan: You can see the usage metrics. You can quickly optimize the right things, and there's a fear with a lot of product folks to wait until it's perfect to launch it. But if you wait until it's perfect, you might launch the wrong thing and then you don't get feedback in enough time. And time is always working against us in the startup world. [00:07:36] Jonathan: So we got it out to the market. We got our first customer in. We leveraged that first customer to the second customer and the third customer. And no customer has ever been as hard as that first customer. But it's been, you know, been a wild experience since that first one. [00:07:49] Omer: Yeah. I think often when founders are at the early stages, they, they think that getting a hundred customers or a thousand customers is really hard and it's [00:08:00] not easy. [00:08:00] Omer: But there's something about the first customer, the first 10 customers, which is so difficult and in many ways it's, it can be so disheartening because you're thinking. If it, it takes this much work to get one customer, my first customer, how am I ever gonna get to a hundred or a thousand, right? If I have to keep doing this. [00:08:25] Omer: But thankfully, it does get a little bit easier because you start to figure things out. As you said, you can build on the momentum from one customer. To the next, but how long did it take you to get that first customer and just give us some examples of the types of challenges or obstacles you were facing. [00:08:46] Omer: I. Trying to close this first [00:08:48] Jonathan: deal. Yeah. So I wish I knew what I do. You know, you know what you know when you know it. So I didn't know what an I C P was, for example. So I was just like, any customer should be right for this product. Are we [00:09:00] enterprise? Are we SS m B? Are we mid-market? Didn't even think about that. [00:09:02] Jonathan: Or industry verticals. Are you sitting behind a desk? Are you mobile? Like these are considerations that. In all honesty, I was ill prepared for, so I'm an LA based entrepreneur, live out here, have been in the tech world in LA for a while. So I really used my network to get those first couple customers and leverage the interactions and honestly brand reputation of myself to push out these first couple customers. [00:09:27] Jonathan: And they took a risk, right? They, they utilized our platform and it was buggy like it, you know. The site may go down. There were issues. It didn't function as properly. The like intuition might've been there on some of the product experiences, so, but you learn really fast by launching it out into the world. [00:09:46] Jonathan: You can always wait, but I think that was a great thing. I think the rapid feedback and the iteration we're always asking for feedback. The feedback we got once we made those critical changes and understood what is the most important thing to our customers. We [00:10:00] then leveraged it, built it, advertised on it, and then getting that, you know, I would say that those first 10, in all honesty, a little bit of luck involved in the first 10 because it wasn't scalable. [00:10:09] Jonathan: It was like a relationship I networked or I really pushed hard enough, or I discounted heavily enough to get into this. You know, we really discounted in the early days, but once we started to understand what the critical pieces of the business are, then we were able to leverage that into a model that is actually scalable. [00:10:25] Jonathan: And repeatable. Okay. [00:10:26] Omer: So that first customer, did you charge them right away or did you approach it more like, I want you to use the product, give us feedback and then if you like it, we're gonna start charging you what was, what was at play here? How did, how did you. Start getting money out of these customers. [00:10:48] Jonathan: Yeah. I did actually charge for the very first customer we had, which is a bold move now that I think about it. 'cause feedback is really the the most important thing. But feedback when someone's utilizing something for free means they don't [00:11:00] have the same level of commitment that you do. If they're paying for it, they're gonna be upset if something's wrong. [00:11:05] Jonathan: If it's free, they're like, oh, you know, they just might not have the same intent that you do. So I think it is pretty critical to get someone to give you feedback in a way that is scalable, freed feedback is definitely not the same as paid feedback, which is what we've learned every time we gave something away for free. [00:11:22] Jonathan: They're like, well, it's free, you know, it's, the value of it is different. So we did put money behind that first. You know, actually we even charge a pretty good rate for our first customer. I think we discounted like the second, third, and fourth. But um, yeah, every one of those first customers were paid. In which case the feedback was true and sometimes harsh. [00:11:40] Omer: Yeah. Now, one of the challenges with the first, I guess 10 customers or so, is you go out and you start looking for prospects, and you are gonna come across a bunch of responses. You're gonna get people [00:12:00] who will tell you they already use a product and they don't need anything else. You're gonna get people who tell you. [00:12:07] Omer: They don't need a product. They don't use a product, and they don't need a product. It's like life is good, or whatever they're doing is fine. You're gonna get people who are gonna tell you to get lost and never contact them again. It's very rare that you're gonna come across somebody who's gonna say, yes, this is exactly the problem I've been looking for. [00:12:24] Omer: I'm so glad that you sent me this email or called me. What was your general experience? Were you finding that you had to, this was more about most people weren't using anything and they needed convincing that they needed this type of solution, or were they already using some kind of product and the ones that seemed more open to it weren't happy with, you know, how that product was working? [00:12:50] Jonathan: Yeah, so where we are today, we're in the communications category, which is more of a must have, but when you're thinking about just recognition, rewards, And recognition rewards pre pandemic. [00:13:00] So pre the great resignation, pre crazy turnover, pre crazy ideas of what workplace life should be. The notion of a recognition and reward program was not nearly as. [00:13:13] Jonathan: Popular as it is today. I mean, today it's like on top of everyone's mind, it's like, what are we gonna do for retention? How are we gonna keep employees happy? How are we gonna keep them connected across a hybrid workforce that wasn't the same? So you're absolutely right. You know, we didn't go up to companies and they're like, oh my gosh, this is exactly what I needed. [00:13:28] Jonathan: You're solving all my problems, you know, said by no one ever. So it really had to do with, you know, creating value, explaining the reasons, the r o I, explaining the validation of also creating a program that also self sustains. A lot of HR tools in the category that we sit requires consistent management, but once you turn assembly on the automation, the emails, the notifications, the prompts, the behavioral changes, it actually happens organically. [00:13:53] Jonathan: There's not really any management necessary in terms of participation across your entire organization [00:14:00] on this recognition and rewards product. So it really self-sustained by itself. And that was a, a key, like a key piece of what made us successful because the validation from those customers, we then leverage it to other customers. [00:14:11] Jonathan: And the concept of FOMO is unbelievable. In any ca, I don't care what you're building. If other people that you know and like and respect are doing something, it's gonna be way easier to convince you if you've heard of it happening at a similar company or a competitor or a friend's company. So that referral base, the case studies that we created, you know, the power behind that was unbelievable. [00:14:34] Jonathan: So [00:14:34] Omer: you started off with this recognition and rewards. Uh, product. And then at what point, at one point you, you implemented this web form, right? That you were telling me about. When did that happen? Why did you do this? And what happened when With customers, when you listen [00:14:55] Jonathan: to customers now, everyone says they want something and actions are often [00:15:00] very different. [00:15:01] Jonathan: Like people will say something different than they actually do. The only thing that was consistent in customer feedback was that everyone wanted something different, right? It's like, I want something like that that I can tell you. Everyone wants something else. And ebbs and flows of what people want. [00:15:17] Jonathan: Sometimes it's like point solutions. Sometimes it's, I want everything all at once, and everybody wanted something different, and so, There were so many companies into the spaces to which we wanted to go. If we wanted to go into productivity. There's key players. There's Asana, there's click up, there's Notion, there's Airtable. [00:15:32] Jonathan: If you want to go into performance management, there was Lattice and 15 five and small improvement and surveys. There's, you know, type form and SurveyMonkey. And Qualtrics, you know, a massive player in the, I mean, there's so many people in each individual category. How do you catch up to any one of them? [00:15:49] Jonathan: Well, there's a whole new breed of technology that came out called No-Code. In which case we didn't have conviction, like everyone said something different. So do we build one-on-ones next? Do we build an announcement tool? [00:16:00] Do we build surveys? Do we build a daily standup tool that hyper focuses on that one thing? [00:16:06] Jonathan: Well, we couldn't get conviction on anything else. So, uh, Josh Purvis, who's our, our C p O and co-founder, had this idea to take a form. Like a normal form, like a survey form, but a form manipulated in a different way can do a thousand different things, can do a million different things. The permutations, each new form block you add can create all these different use cases and so a form when it goes out, when people respond to it, if the form comes back into a social feed, you really have a lot of potential. [00:16:35] Jonathan: So instead of building one thing at a time and going deep into any one category, what we ended up doing is taking recognition, which was our core product at the time, breaking it down to its core components, which was a form. Who do you wanna recognize? Do you wanna give them points? What do they do? Tie it to a core value that is literally answering fields in a form. [00:16:55] Jonathan: So we took that form and said, you can do all these things. So we built out hundreds [00:17:00] of culture templates with this form and we said, let the, let the companies tell us what they want by giving them all these options. And some of the options can range from surveys, could be anonymous surveys, an anonymous suggestion box. [00:17:11] Jonathan: It could be one-on-ones. And we can not only create forms, but we can automate the cadence to which people are notified to respond to the forms. So you can send them to departments or locations or individuals. So one-on-ones started to be really popular. People started using us for company announcements, ugly sweater contests during the holidays 'cause we have a reward system where you can submit the responses, vote on it, and then reward people. [00:17:34] Jonathan: The use cases were wild and what we found is each use case, another company turns on if you turn on another use case and another use case, a normal HR experience when you use a product, is you get a high adoption rate and then it declines over time. That is pretty common. It's like, I can't imagine anyone's ever said, I can't wait to do my annual review. [00:17:54] Jonathan: You know, said by no one ever. But with Assembly, when we turned on recognition, when they turned on [00:18:00] surveys, when they turned on social channel, like a pet's channel where people can upload photos of their pets or dogs or when, you know, whatever it might be, the more features we added, what we ended up seeing was doubling of participation and often tripling of participation every 12 months. [00:18:14] Jonathan: So people kept coming back to the platform more and more. So that when you wanted them to give recognition, they were doing it with higher frequency. When you wanted them to answer a survey, they were already in the platform. 'cause their social elements lived there, their friends were in it. You know, Instagram, I think the magic number was like, get seven of your friends to, or Facebook get seven of your friends to join and then you're hooked forever. [00:18:32] Jonathan: It's the same thing with our workflows. The more workflows you turn on, the more reasons there are to engage, the more collaboration and community you have. And so that was our path to getting massive adoption. From a user perspective. Yeah, I [00:18:46] Omer: think that's smart. Like building templates for forms has gotta be a lot easier than building deep features in a whole bunch of areas. [00:18:57] Omer: And so were you building templates for everything or were you [00:19:00] building kind of like a no code form that they could customize and use however they wanted and you weren't being too rigid about the use cases? [00:19:10] Jonathan: Both. So we have the ability to create a customized form however you want. We have a bunch of different blocks and all the different permutations of the blocks literally give you millions of options. [00:19:20] Jonathan: But we do have templates and most people ended up adopting the templates. 'cause what we ended up seeing is when someone adopted something new, if we saw a couple people do this thing, they're like, oh, creative. We ended up just templatizing it and adding it to our template library. That's how most of our templates came to be like we see people do it and so we just templatized it. [00:19:36] Jonathan: That's very [00:19:37] Omer: interesting. Let's talk a little bit about sales. One of the challenges that I think with a product like assembly, and we were chatting about this a a little earlier, is this whole, the whole dynamics of like a buyer versus a user. You wanna obviously focus on the buyer when you're selling the [00:20:00] product because they're the decision maker. [00:20:02] Omer: They've got the budget and they've, they've got their own set of goals in terms of what they want to get out of the product. But those goals may not, and quite often, don't align with the goals of the people who are using the product. And the problem is that you, you know, you might be able to sell. [00:20:25] Omer: Assembly to HR folks. But if you're not also thinking about how to create usage and engagement with employees who actually want to go in there, I mean, you can't force them, I mean, to to use this thing. But if they're not using it, then at the end of the day, it's gonna be like, well, it doesn't really work. [00:20:43] Omer: So you've got this situation here where you've got to figure out how you can drive engagement, how you can make it easier, more incentives for the employees. But none of those things are that important to the buyer. Who is prob, well, maybe it [00:21:00] is, but you know, they, they maybe have other priorities as well. [00:21:02] Omer: So what was your experience there and how did you overcome that, the, those sorts of challenges? [00:21:10] Jonathan: Love this question, and we can go super deep into this one, but my advice to the entrepreneurs out there thinking and ideating on their business, if you can align the buyer and the user as close as possible, you really reduce the levels of friction. [00:21:24] Jonathan: If they're totally detached, a buyer might want something different, as you said, eloquently than the user itself. Which is why like consumer products, you're the buyer and the user. So it's like, I want this thing, I'm gonna buy it. And it's like you don't have to convince a separate person to do the thing, it's you. [00:21:36] Jonathan: You're doing it. So the closer you can align that, and there's a lot of, even in the B two B SaaS world, there's a lot of platforms and tools that do that. In which case the purchasing intent, the decision making power is much faster. 'cause the buyer is the user. It affects that person directly. We sell 'em to hr, and that is difficult. [00:21:53] Jonathan: You know, who is your HR buyer? It might be an office admin who's climbed the rinks, who has this [00:22:00] idea and this notion of what engagement platforms should be. But then there's the user, which is dynamically detached. There's a huge dichotomy between a buyer and a user. So if you just listened to an admin, They might say, I want these beautiful charts and graphs. [00:22:16] Jonathan: I want this crazy reporting. I want this functionality and that functionality and this automation and that. And the truth is some of that is absolutely valuable and would make a the world of difference. But a lot of it, we look at the data, it doesn't make sense. It's like it, you can build out the most beautiful reporting in the world, but if people don't use it, what's the difference? [00:22:35] Jonathan: And so you have to actually blend when the buyer is different than the user. What do the users want and how do you bring value to the user? And how do you keep the admin happy? How do you keep the buyer of this platform engaged enough so that they can renew, that? They'll tell their friends that, they'll be like, I'm gonna get promoted because I, I drove this, you know, I crushed this out of the park. [00:22:56] Jonathan: How do you make them so good at implementing the tool that they get poached to the next company? You know, [00:23:00] those are the kind of tools that make you feel amazing in an organization. So, Blending those two is really difficult and it's something we've struggled with. There's a push and pull between, I'm sure this is not unique to assembly, but between product and sales. [00:23:13] Jonathan: Sales, you know, if you listen to the buyer, it's like, this is what I need. Reporting, reporting, reporting, and you know, product focus. Like look at the analytics of what the people are doing. Let's double down on those features and let's make it even easier and simpler and add more features to make this more automated for an employee. [00:23:28] Jonathan: It's a, it's a really tough conundrum to be in and you have to navigate those waters. [00:23:33] Omer: So gi, gimme one example of what you did for the admin, the buyer, to make them feel like a hero from, for choosing and buying assembly. I hate [00:23:47] Jonathan: to say this the way that I'm about to say this, but by not listening to the buyer, we made them a hero. [00:23:54] Jonathan: There's a whole new breed of, of HR. A Chief People officer. The title of people is [00:24:00] something relatively new. It just used to be hr, HR Manager, chief Human Resource Officer. And now this people title is coming out and after, you know, COVID on, the emphasis on it has been great. It's been vast. And so how do you make them look like a hero? [00:24:16] Jonathan: You launch a product that employees would love, that if you ask, if you took this away, would you be upset? And if people said yes, then it's like, okay, this is a win for my organization. And so by listening to the user, by understanding the data and interviewing the actual end user of the product more so than the admin, you know, we were able to build features where our utilization and productivity inside the platform would double or triple in terms of participation over a year period where most HR tools are declining in participation dramatically. [00:24:47] Jonathan: But once again, you still have to keep them happy. You do have to build some forms of reporting. You have to give it, make it, you know, presentable so they can showcase the results to the c E O and the, you know, whatever titles are out there that they [00:25:00] need to showcase the results to. So you do need to blend it, but I would say the best thing we did was listen to the user. [00:25:05] Omer: Got it. Okay. So let's talk about growth. So you are currently north of 4,000 customers. I know for the first few years. Uh, the four of you were doing this mostly evenings and weekends, and at some point you shifted to going full-time on the business. What has helped you drive growth? I, I know one of the things that you had told me about was, you know, you started off with blogs and content marketing and, and trying to build ss e o That's obviously not gonna get you, you're not gonna start doing that today and get a customer next week. [00:25:46] Omer: Right. It's just a reality of, of some of those, uh, types of things. But what, what did you do? Why did you choose to use that as, as kind of like the, the, [00:26:00] the channel that you were gonna invest early [00:26:02] Jonathan: on? Yeah. So first and foremost, one of our advisors, and I'm lucky to have met this person. Created a multi-touch attribution marketing company that just understood where leads come from better than most, just the sophistication buying that was incredible. [00:26:15] Jonathan: So we made 'em an advisor of the company early and one of the easiest things to do, there's no secret sauce to it, we just started advertising Google AdWords, right? So s e m, you know, we started buying ads against the keywords that matched our product value, most specifically. And it started to work. It did turn on, and then our sales motion got better. [00:26:33] Jonathan: Uh, we had a free reg funnel where you can sign up, kind of lay, you know, play around. We would contact you as a salesperson or you just book a demo and we just showcase the value of the product up front. And that started to work. So we started increasing the spend per month and our L T V to CAC was actually pretty incredible. [00:26:49] Jonathan: You know, we were a very low churn product really, if any, for a long time. Churn whatsoever. So, you know, we started advertising more and more on s e m spending more against that, but we realized we need to [00:27:00] invest in some longer term plays as our business was starting to scale. So as you mentioned, we started investing into blogs and like other types of ss e o, where our content can live forever, so people can keep referencing the same thing over and over again. [00:27:12] Jonathan: And at the end of the article it might be a reference assembly. So a lot of organic traffic started to come to our site as we developed an opinion on the spaces that we operate in. There's a couple other categories, right? It's like you need to be, you can't have over reliance on one thing. So we started with ss e m, then we moved into blogs, and then we moved into affiliate marketing. [00:27:31] Jonathan: And that was actually a pretty big unlock for us in terms of lead generation. I listened to this amazing podcast where, uh, the c e o of a mattress company said all of the leads were going to their competitors because the competitor like Sealy, or Certo was number one on this list. And they're like, what in the hell? [00:27:49] Jonathan: And finally got the understanding that those lists are actually paid. And so instead of, you know, bidding back and forth, which is a race to the bottom, it's like your margins just [00:28:00] compress greatly when everyone's bidding up and up and up. And it's like a, you can't really bid up against the massive player. [00:28:06] Jonathan: So they made a crazy play and they actually just bought the list. And they put themselves as number one, and that was the greatest piece of growth that they did. I was like, oh my gosh, this is genius. So [00:28:14] Omer: what do you mean they bought the [00:28:15] Jonathan: list? They literally bought the, they bought the list. The top 10? Yeah, the listicle, the like, Hey, here's the top 10 companies. [00:28:22] Jonathan: They owned it, they owned it, and then they advertised themself. Unbelievable. So I was like, this is, this is genius. Like there's so many cool marketing hacks out there and I, you know, we didn't really have the budget to buy, buy a list or anything like that, but, um, you know, we looked at. Top 10 engagement platforms, top 10 recognition platforms. [00:28:39] Jonathan: Like you search those and everyone thinks they're organic, but they're not. Everyone's paying for the list. It's like a full C p C, you know, you're paying per bid, you're paying per click, you're paying per demo, like whatever you wanna structure it. But like the cost is there for the companies. And so it's generally the bigger players. [00:28:53] Jonathan: But being listed on that front page in a competitive lens where people are looking at, you [00:29:00] know, two to five companies when they evaluate tools like this, just being on that list. Especially having a feature set that is differentiated. You know, you're getting a lot of eyeballs and that was a major unlock as being a part of one of those listicles or one of those top tens, and we end up, we're now on a bunch of those top tens. [00:29:15] Jonathan: But that was a big unlock for us as an organization as well. [00:29:19] Omer: First of all, I didn't realize it was that prevalent. I mean, I know that. Like, I never trust things like best hosting, web hosting or WordPress hosting because, you know, [00:29:30] Jonathan: no, of course. Like what are the best vitamins for you? What's the best daily multi vitt for, uh, you know, a man in your age range? [00:29:36] Jonathan: You know, it's like, is that list, uh, the best, you know? No, of course not. It's whoever's paying the most for that list, so, you know. Take some advice with a grain of salt. [00:29:46] Omer: Firstly, how did you figure this out? Was it from like listening to that guy talking about the mattresses and you went, aha, this is happening all over the place? [00:29:54] Omer: Yeah, literally just like that. And I guess finding these [00:30:00] websites isn't that hard because you're just Google best whatever engagement platform or whatever, and you're finding these lists. What was your experience when you reach out to these different sites? And was there a lot of negotiation? Was it more than you were comfortable spending? [00:30:25] Omer: Like what was the general experience when you said, we're gonna do this, and you started reaching out? [00:30:30] Jonathan: I. Yeah, I mean, we're willing to spend aggressively if the r o I is there, right? And it's pretty simple, the math, it's like, we'll spend X, there are cost to service our business, which as a pure software company, the gross margin is really high. [00:30:45] Jonathan: But then there's the, the marketing cost to get there, the sales person who's getting there, and then the customer service person who, or the account manager to service the account going forward. But our accounts don't really churn. So it's like, you gotta think about the L T V to CAC when you're looking at this model. [00:30:59] Jonathan: And if the [00:31:00] L T V to CAC is, let's say three to one, five to one, 10 to one like Wix, the, you know, you're talking about website builders. I remember looking at Wix as like a 11 to one L T V to CAC of every dollar. They're getting $11 back. I mean, it's just like a ridiculous business model, you know? [00:31:15] Jonathan: Especially if you can self-serve, mean, it's crazy. So, I think what are you willing to spend is actually the wrong question in a nutshell, but you need to look what are you willing to spend against an L T V that is generated from the ACVs and the size of the deals and everything that goes into the cost to service that deal. [00:31:31] Jonathan: So you just need to be a little bit sophisticated going into what you're willing to do, understanding what your revenue generation looks like per per deal. [00:31:39] Omer: Yeah. Yeah. I mean, that's a good point, right? It's like it, it's very relative. If someone tells you. You know, $50,000 to include you on a blog post. [00:31:52] Omer: That sounds ridiculous, but if you've got like a super high L T V and you know that's gonna convert [00:32:00] well, maybe it's a bargain, right? It's, it's, it's very relative. Yeah. I mean, [00:32:04] Jonathan: if you have a $50,000 a c v, not even l t V, let's say you got $50,000 a c v on average per customer, and you think that advertising on that list could even get you two customers or three customers. [00:32:16] Jonathan: If they don't churn. So you're spending 50,000, you might make 150,000 in that first year off of that one blog or that one article, and then there's an L T V. Let's say you have a four year L T V on discounted, you're looking at a massive L T V to CAC on that. So you're exactly right. It's 50,000 expensive. [00:32:33] Jonathan: It just, it totally depends. Yeah. That's fascinating. [00:32:38] Omer: Did you do anything else with you? You talked about S E M. That was PR primarily, I think AD Edwards. Was there anything else that you did? And I guess, I mean the problem with AdWords again is what it costs these days to bid and to win, you know, the right kind of [00:33:00] placement. [00:33:00] Omer: And I guess it goes back to the same argument, right? Well, it costs a lot, but if, if the economics of it work. You're good. If you're selling a, you know, $25 a month product, you're gonna have a very hard time making money. With AdWords. [00:33:18] Jonathan: Yeah, so there are a couple other avenues. So we're always doing AdWords. [00:33:21] Jonathan: I don't think we'll ever stop doing AdWords. I don't think we'll ever stop doing affiliate marketing. The SS e o strategy is obviously starting to bear fruit, but it took, took a year, it took two years to even like see the first inklings of success. So that is one play that you need to start understanding that it takes time to build up an organic presence, but two other channels that were critically important to us. [00:33:39] Jonathan: And you know, if you looked up top. 10 sources, like look up on chat, G B T or Bard, you're gonna get some of these same things. It's not magic or you know, it's not crazy what we did, but we started getting listed in a bunch of different marketplaces, so where people were organically looking for deals like what we offer or partnerships, like what we offer. [00:33:56] Jonathan: We started sitting in a lot of these H R I S marketplaces, like U K [00:34:00] G and A D P and Bamboo hr, and those started to bring us a lot of traffic. Organically as well. Just by having those integrations and having those partnerships, making it easy for us to partner with the tools that they're already using. [00:34:12] Jonathan: That was a pretty big unlock for us. And the other thing which happened over time, and this is what's really starting to get the snowball effect going of our business, the referrals. Referrals are incredible. Referrals convert at a ridiculously high rate. So if a HR. Our chief people officer from an organization is like, this product was a game changer. [00:34:33] Jonathan: Would you mind talking to my friend at this other company? The chances we convert that company, it's gotta be like 90% plus. I mean, the, the, the, the, the conversion rate is unbelievable. And so, you know, we were just saying thank you for them, but now we're like rewarding them, you know, even if we gave them a thousand dollars for, as a referral bonus just for sending over a customer. [00:34:52] Jonathan: It's amazing. It's like one of our cheapest forms of marketing. So we're thrilled. To be in the place now where we're starting to get referrals every single week constantly. [00:35:00] So, uh, it's a great place to be in. But of course, just like the partnerships, the s e o, the referrals, like those take time. But if you wanna get going pretty quickly, AdWords really is a great place to start. [00:35:11] Omer: Yeah. I, I wanna talk about the, the partnerships in a minute. Just a couple of questions on the, the referrals. How long have you been, when did you get started doing referrals and. What was the right combination or offer that, that you felt what worked the best? And I asked that because with referrals there are a bunch of different, you know, dynamics at play first in terms of, you know, what, what, how are you gonna, you know, do the referrals, you gonna provide people with their own kind of links and stuff, and all the kind of the, you know, the logistics of that. [00:35:53] Omer: But, Also sometimes your best customers, the ones who really love your product. [00:36:00] Don't really need financial incentives to go and tell other people about it. Right? And, and sometime some people actually feel icky thinking, oh, I'm, I'm gonna tell somebody about it and I'm making money and I should disclose that 'cause that doesn't feel right. [00:36:13] Omer: And other people are more comfortable recommending the product if the person they're telling is also gonna get some kind of discount that they wouldn't normally get by going to the website or some special offer. So there's these different permutations and dynamics at play here. What was your experience there and, and what were some of the challenges you had to overcome to get a referral system working? [00:36:34] Omer: Well, [00:36:34] Jonathan: you know, it happened organically, so I would say we just put gasoline on the fire that already existed. And to your point, I don't actually know if the monetization makes a difference. I'm sure people want to get a little bonus for themselves, but we've been getting referrals from almost day one. If people like a product, they will tell their friends and that's what we, that's what's been happening, so we're just appreciative. [00:36:55] Jonathan: And we were ex, you know, but it's been going on almost since the day we launched. We've been getting [00:37:00] referrals from one company to another company. And only recently did we, it just as a, as a gesture of appreciation. Do we want to start giving a kickback, not kick, kickback is probably the wrong word. We wanted to give a little bonus for like, you know, for recommending appreciation. [00:37:13] Jonathan: Thoughtful. Yeah. We wanted to give appreciation for, you know, thinking about us in that lens. Being proud enough of our platform to share it with someone else. Also on [00:37:21] Omer: the partnerships. Just explain that a little bit more in terms of how you got that working as a growth channel. So presumably you're just going out and you're looking at what types of, you know, HR related products or workforce management solutions, like the UK G example that you mentioned these customers using. [00:37:45] Omer: And then what were you doing? You're building an integration with those, those products and then, Like getting listed in their marketplaces or whatever. What was the, what was the mechanism for driving organic growth once the integration was in [00:37:59] Jonathan: place? [00:38:00] Yeah, so I guess you have to go back before that. So to get the integration, it's not the easiest thing in the world. [00:38:05] Jonathan: They don't wanna partner with you until you have a certain number of mutual customers. But to get mutual customers, you need the partnership with 'em. So you get this stuck in this like virtuous loop, this conundrum of like, what do I do? How do I do it? So ironically, You know, once you get enough customers, even if they don't have the integration built, like we saw who their H R I S provider was. [00:38:24] Jonathan: So a D P owns a huge majority of the marketplace, so that seemed like a no-brainer to do that. And we got a bunch of a d p customers up first, so that was one of the first integrations we actually built. And then Bamboo HR kept coming up and U K G kept coming up and like the list goes on and Paycom and Paycor and Paylocity and like all, you know, there's a, there's a thousand of 'em out there. [00:38:43] Jonathan: But each one that came up, we started to build out the integrations. Then we realized we need the entire landscape, we need all of the ecosystem. But we could not, like I went to a D P first and they're like, you need a need a hundred, or, I don't know what the number was, but you needed a ton of mutual customers. [00:38:56] Jonathan: And same thing with Bamboo hr. And only once we had all those mutual customers did they want to [00:39:00] accept us into the marketplace. So it is one of those things that you can't just get off the bat. You have to earn it. And to earn it, you have to build a product that people want to use regardless of the limitations of not having the integrations. [00:39:11] Jonathan: But once we have the integrations, and once we have the mutual customers, then they. They opened us, you know, they give us a hug, like, welcome to, uh, welcome to the club, join this. And it's been, it's been super fruitful because people want to partner with tools that play well in ecosystem that they're already playing in. [00:39:26] Jonathan: Anything you reduce friction with is better. [00:39:29] Omer: Yeah, that's a good point. I mean, these, these H R I S solutions that they're not, They're not sitting there with like, oh, here are our public APIs. Whoever wants to go and build an integration, go, go at it, and you know you're all good, right? You have to, you have to build a, a real partnership before they're gonna, you know, give you the keys to do anything with, with their products. [00:39:52] Omer: It's an important distinction to make. Okay. One, one more thing I wanna talk about is like the competition, [00:40:00] right? The, this is a space, and you alluded to this. Earlier, earlier where you, you can move in one direction. You say, we add this one feature, and suddenly there's a whole swath of competitors that you are potentially competing with that weren't relevant yesterday. [00:40:20] Omer: And so it's a pretty crowded space. Number one, like how much time and effort do you put into. Following competitors. And secondly, where do you feel the differentiator is and, and what are you striving towards to make sure that in the customer's eyes there there's a clear value prop, clear differentiator for using assembly versus, you know, some other products that might do similar [00:40:53] Jonathan: things. [00:40:54] Jonathan: That's been one of the bigger challenges of our business. Kind of said a little bit differently, but. When you heard the [00:41:00] evolution, we started as a recognition orders product. Then we added a form builder, a no-code form builder that could do a thousand different things. So we ended up competing with like SurveyMonkey for surveys and all these, uh, performance management because we could do one-on-ones. [00:41:12] Jonathan: 'cause theoretically a form could be a review. Now we're competing against Lattice and 15 five and small improvements and all these companies that like are purpose built. And then on the other side, there's a million recognition awards companies that we're going up against as well. So we have all this stiff competition to these categories, and now we're a very horizontalized, horizontal platform that does so many different things. [00:41:35] Jonathan: And we're good at a lot of things. Are we the best at certain categories? Historically? No. And it's interesting though. You know, when we think about the competition, we were losing to certain categories, but we often won because of our horizontal nature and the ability to consolidate your toolkit and be like, get rid of SurveyMonkey, get rid of Lattice. [00:41:53] Jonathan: Get rid of X and X and Y. Like save $20 per head in terms of SaaS budget. But how do we [00:42:00] become excellent? How do we become the winner? And to win, you really need to be the best. Or you need to have such crazy dis, like Microsoft for example, they like is Slack better than teams? You know, that's a debate we can have at a different time. [00:42:14] Jonathan: But what Microsoft did was absolutely genius. They created Teams, which was obviously the Slack competitor, and it's bundled in the suite. And if you look at the chart, slack was going vertical, but Microsoft teams came out of nowhere and then went, I mean literally like if you thought Slack was vertical, Microsoft teams lit. [00:42:31] Jonathan: I mean, Went straight up. I think it was like a 90 degree angle. It was one of the craziest charts I've ever seen, if you've looked at that. And so as we built this horizontal platform, we do a lot of different things. We have a lot of different competitors. It's funny because all these different competitors, you know, they play in their own ecosystem. [00:42:51] Jonathan: But when you consolidate all of our tools and how people were using it, announcements, recognition surveys, feedback forms, and people are [00:43:00] like, Hey, you're kind of like our intranet. Which was such an interesting thing. 'cause I was like, intranets suck. They're like, Internet's so old. Like it's a bunch of blue links that nobody goes to. [00:43:09] Jonathan: It's like a, a site with pretty images that go really stale and someone has to manage it, but no one cares about it. I was like, why, you know, why are you calling an intranet? So I, I did a lot of research into what is an intranet, what are the key features? And it comes down into the three pieces that we described to you at the beginning of this call. [00:43:26] Jonathan: It's like pushing of information. Finding of information and engaging your audience. Now we crushed the engagement piece. We are, the usage on our platform is wild. It looks like a productivity tool, but we're in hr. We're in the HR category, so we've crushed engagement. But engagement sits in this tertiary, that's nice to have. [00:43:47] Jonathan: Bucket. In terms of hr, there's like a tool stack, first order priorities, payroll benefits. It's like you cannot function without that. Just point blank. The second category is like communication, productivity. It's [00:44:00] like you have to share information. People have to be informed of what we're doing at the organization. [00:44:04] Jonathan: That is a must have or at least much higher in the order stack compared to an engagement product. And especially when interest rates skyrocket and people start to think about their budget. What are you cutting? Thankfully we had such high U. Yeah, you cut the nice to have. Thankfully we had a lot of usage. [00:44:19] Jonathan: So, you know, we didn't really face that much turn as an organization and we kept ramping and growing pretty dynamically through the downturn or the looming downturn. I, you know, I don't even know where we are in this. Everyone's saying we're in a red recession, we're not in a recession, but we kept building these features that actually made us an internet and put us in this nice, in this must have category. [00:44:40] Jonathan: And the two features we were really missing were announcements, which we already had, but it was once again, A decent announcement tool. We needed announcement, analytics and insights. We needed recurring notifications. We needed the distribution to Microsoft Teams and Slack and, uh, other different, you know, your mobile phone or screens. [00:44:57] Jonathan: If you're in a manufacturing organization, we need to push announcements [00:45:00] everywhere. We need to make sure people saw it and remind the people that didn't. That's what makes you an amazing, like information pusher, but then finding information. Now this is a part that. I feel like we're getting lucky because of being at the right place at the right time. [00:45:14] Jonathan: There are companies that have been building AI and finding of information for years. They've invested 50 million, a hundred million dollars with unbelievable engineers in the ability to understand context and to give you an answer, well, a few months ago, chat, G P t Open AI kind of commoditized artificial intelligence. [00:45:36] Jonathan: And so what people spent $50 million or a hundred million dollars building. We've been building these tool connectors so we can integrate into SharePoint and Dropbox and Google Drive and share drive and all the places you store data, and we have connectors into your ticketing systems and task management tools. [00:45:51] Jonathan: We have tons of connectors. We've been building integrations for years. What we couldn't do pre ai, pre the emphasis pre becoming an [00:46:00] intranet is to understand the context of what that thing was and give you an answer. But now because we connect to those tools, if you ask assembly, what is my time off policy, not only can we deliver that policy in the P D F format or Word Doc or wherever you're storing it, but we can actually say to you, you can write it out just like chat, T B T does. [00:46:22] Jonathan: You have January 19th off, you have February 22nd off, you have July 4th off. You have, and we are a flexible policy and, you know, a flexible vacation policy at this organization. It'll give you the answer. It's amazing what you can do. So now we're going super deep into these categories. [00:46:38] Omer: Yeah, I, I think it's, it's a really exciting time and I think that, Uh, being able to tap into some of these large language models and these new AI technologies, really, I mean, really there's no excuse for not using them and, and figuring out how you can improve significantly improve the user experience. [00:46:56] Omer: I think the, the example you just gave is, is great because, [00:47:00] Typically on an intranet, you'd search for that and even the search wouldn't work. You'd get a whole bunch of, you know, completely irrelevant results and you'd be like looking through all the different, you know, links to eventually find something that was relevant to what you were looking for. [00:47:13] Omer: So thank you for making intranet's cool again, let's sucky. All right, we should wrap up. Uh, let's get onto the lightning round. I've got, uh, seven quick fire questions for you. Just try to answer 'em as quickly as you can. Are you ready? I'm ready. What's one of the best pieces of business advice you've ever [00:47:28] Jonathan: received? [00:47:29] Jonathan: Use DocuSign. If you send over a wet signature, people will sign it faster than if you send it over manually. What [00:47:35] Omer: book would you recommend to our audience and why? [00:47:37] Jonathan: How To Win Friends and Influence People by Dale Carnegie is an amazing, it's more of an EQ versus an IQ book, but read it once a year. [00:47:45] Jonathan: Incredible. [00:47:46] Omer: What's one attribute or characteristic in your mind of a successful [00:47:50] Jonathan: founder? There are very different characteristics of what make founders successful. There's your unbelievable visionary. But there's also the founder that I aspire to be, which is more of the social founder. [00:48:00] To resonate with people, to understand their needs, to understand their pain points, and to resonate on a human level. [00:48:04] Jonathan: That is a, your EQ element is what I really aspire to accomplish as a founder. Love that. [00:48:11] Omer: What's your favorite personal productivity tool or habit? [00:48:14] Jonathan: Something that automates anything that automates what I would do normally. So there's a lot of it. And honestly, I use Assembly for practically everything. I use it for. [00:48:22] Jonathan: All sorts of automation feedback. So I would have to say my own tool, but I'm also [00:48:26] Omer: biased. I'm like you any, anytime I do anything repetitive, it's like I, I'll waste five hours just figuring out how to automate it, even though it was like a five second task. It's just this obsession. Um, what's a new or crazy business idea you'd love to pursue if you had the extra [00:48:40] Jonathan: time? [00:48:41] Jonathan: If I had unlimited resources and I was, had unlimited time. There is no doubt in my mind I would go after a real estate agent. I find that a real estate agent who makes two point a half percent on selling a house [00:49:00] to be. I just don't understand why. Maybe at the really high end levels or at the really low end levels, if you don't have any context of what buying a home, what the process should look like. [00:49:10] Jonathan: But with artificial intelligence, I can't imagine why you can't facilitate a mutual agreement, all the documentation to get this over the line. And there should be a better process that isn't so sketchy of like home inspections. There should be more standardized methodologies to get that done. Someone is going to do it. [00:49:27] Jonathan: I can't, like, you know, Redfin took a stab at getting rid of a real estate agent, but someone's gonna do it and it's gonna be a massive disruption. They've skirted all this change for so long and I don't see it being disrupted yet. It is going to happen in our lifetime and I'm excited. I would love to be the one to do it, but, It's gonna be a massive [00:49:48] Omer: undertaking. [00:49:49] Omer: What's an interesting or fun fact about you that most people don't know? [00:49:53] Jonathan: I think I'm the world's best burrito roller. I. I can pack a ridiculous amount of food [00:50:00] inside of a burrito and roll it tight. It's like a, it's the sad gift that no one's ever wanted. So there you, [00:50:05] Omer: uh, may maybe, maybe you can get a, a side, a part-time job training people. [00:50:10] Omer: I got a burrito from Chipotle the other day, and the way the person was rolling this up, I knew this was gonna just fall apart as soon as I opened it, and it did. So you should have been there. It's like, and finally, uh, what's one of your most important passions outside of your [00:50:24] Jonathan: work? Family and friends. Uh, it is just not even a question. [00:50:27] Jonathan: It's like, what is, what's the purpose of life? If you don't have a great social network there, there is none. So I have a beautiful wife. She's amazing. She's the best person in the world, amazing family, amazing friends. That that's all that matters. [00:50:39] Omer: Nice. Great. Thank you so much, Jonathan, for, uh, sharing. Your story and some of the, the lessons that you've learned along the way. [00:50:48] Omer: Building assembly, if people want to check out assembly, they can go to join assembly.com and if people wanna get in touch with you, what's the best way for them to do that? [00:50:58] Jonathan: Yeah, feel free to email me [00:51:00] directly. It's Jonathan j on a t h n, at join assembly.com. Would love to hear feedback or chat on anyone who has questions. [00:51:07] Omer: Thanks man. Appreciate you making the time and uh, I wish you and the team the best of success. [00:51:12] Jonathan: Yeah, thanks for hosting me here. Appreciate [00:51:13] Omer: you. My pleasure. Cheers.
- How to Win Friends and Influence People by Dale Carnegie