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Turning a Simple Slack Plugin into a Growing B2B SaaS Startup – with Darren Chait [243]

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Turning a Simple Slack Plugin into a Growing B2B SaaS Startup

Darren Chait is the co-founder and COO of Hugo, a SaaS product that provides connected meeting notes for teams.

Darren used to work as a corporate lawyer in Australia. He became frustrated with how inefficient meetings were and had an idea for improving things.

He partnered up with a close friend, and they built a mobile app that helped people prepare for meetings. It seemed like a great idea. And it didn't take the founders long to get a couple of thousand users.

But they found it hard to monetize the product, and sales were slow.

Hugo Founders - Darren Chait and Josh Lowy

Hugo Founders – Darren Chait and Josh Lowy

At the same time, their team was struggling with internal communication. Someone had the idea to build a simple Slack plugin that reminded everyone to share notes after every meeting.

It was a simple solution, but within weeks they saw huge benefits and better team communication. So they kept improving their tool and adding new features.

One day, during a customer meeting, Darren was using the tool to share notes with his team. His customer was intrigued and asked if their company could also try out the software.

That's when the founders started to realize that their internal tool was far more valuable than the mobile app they were trying to sell.

So they pivoted and focused instead on selling their tool. It was a simple idea but still hard for people to understand. The founders struggled with their messaging.

When you're creating a new product category, people aren't looking for your product. And sometimes they don't even realize they have the problem that you're solving.

There are some great lessons in this interview about figuring out your value prop and messaging, how the most straightforward solutions are often the best business opportunities and using product-led growth to drive user adoption and revenue.

I hope you enjoy it.

Transcript

Read Full Transcript

Omer Khan [0:09]
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. In this episode, I talked to Darren Chait, the co-founder and CEO of Hugo, a SaaS product that provides connected meeting notes for teams. Darren used to work as a corporate lawyer in Australia. He became frustrated with how inefficient meetings were, and had an idea for improving things. He eventually partnered up with a close friend and they built a mobile app that helped people prepare for meetings. It seemed like a great idea and it didn't take the founders long to get a couple of thousand users. But they found it hard to monetize the product and sales was slow. At the same time, their team was also struggling with internal communication. And someone had the idea to build a simple slack plugin that reminded everyone to share notes after every meeting. It was a really simple solution. But within weeks, they saw huge benefits and better team communication. So they kept improving their tool and adding new features. One day during a customer meeting, Darren was using the tool to share notes with his team. And his customer became intrigued and asked if their company could also try out the tool. That's when the founders started to realize that their internal tool was far more valuable than the mobile app that they were trying to sell. And so they pivoted and focused instead on selling their tool. It was a simple idea, but really hard for people to understand. The founders really struggled with their messaging. When you're creating a new product category, people aren't looking for your product and sometimes they don't even realize they have the problem that your product solves.

Omer Khan [1:59]
So there's some really great lessons in this interview about figuring out your value prop and messaging, how the simplest solutions are often the best business opportunities and using product lead growth to drive user adoption and revenue. So I hope you enjoy it real quick before we get started, firstly, don't forget to grab a free copy of the SaaS toolkit, which will tell you about the 21 essential tools that every SaaS business needs, you can download your copy by going to theSaaSpodcast.com. Secondly, I'm really excited to be launching a new private podcast very soon. This will be for members only, and you'll be able to get access to extended interviews behind the scenes footage, masterclasses, recordings of group coaching calls and useful tactics and lessons to help you grow your SaaS business. The private podcast will only be available to members of my SaaS Club Plus community. If that sounds like something you'd like to get access to. Then join us at SaaSClubPlus.com. Okay, let's get on with the interview. Darren, welcome to the show.

Darren Chait [3:05]
Thanks very much for having me.

Omer Khan [3:06]
So what gets you out of bed every day? What drives you to work on your business?

Darren Chait [3:09]
Yeah, good question. I think what's really cool about working in SaaS software, in general, is being able to the one to many value, the fact that I can go to work, I can spend a few hours creating go to sleep, and people get value out of that work. I think that comes from the fact that I worked as a lawyer and professional services before where people only get value when I'm sitting at my desk. So I love that concept. There's something that excites me about that every day.

Omer Khan [3:34]
So for people who aren't familiar with the product, can you tell us? What does the product do? Who's it for? And what's the big problem that you're helping to solve?

Darren Chait [3:46]
Yeah, totally. So she was connected meeting notes, software, so centralized, searchable, actionable meeting agendas and notes for teams. And if you think about where we're at in 2020, the average company is using 128 different SaaS tools, we're now working in a different way where teams are distributed remote, where on different time zones on different domains, even many in many cases, the one thing that's bringing us all together, and the way we work is meetings. That's where decisions are made. That's where we have discussions. That's where we have debate, where we keep in sync, but nothing's changed about the way we made. And our view is that meetings and meeting notes, which is really the way we capture all that great knowledge, is the next interface for teamwork. So by centralizing the whole company's meeting notes in one place, by connecting it to all the tools they're using. And by giving everyone access all organized by your calendar, we're able to make meetings, this force for aligning teams. So we do that all through Hugo. It's a web app and sooner mobile app for connecting meeting agendas and notes for companies.

Omer Khan [4:48]
Okay, perfect. So give us one example for somebody who just heard that and said, Okay, well, I could probably do that with Google Docs or Evernote or whatever. And I mentioned those because on your homepage you actually say how is Hugo different from those products? So give us one example of a sort of a use case that somebody might, how somebody might use Hugo, that they couldn't necessarily do with some of those other tools.

Darren Chait [5:15]
Sure, sure. So she goes based on your calendar. So I get a notification from Hugo saying, I have a meeting coming up with with Sara, in a few minutes, I can set an agenda, I can do that collaboratively with my other team members, and I can send it out to other people outside my company. I then take my notes during my meeting. And as I'm taking my notes, she goes storing those notes but organized by the contacts and companies that you're meeting. So now Hugo can say, hey, someone else in your team met Sarah last week. Here's what they discuss, here are the actions here's where they're at. I can run queries, I can search by the company by the type of meeting, all based on my calendar data. And the other area where it's very different is as I'm writing my notes, I can turn any part of those notes any insight into tickets tasks update, so that may be sharing the insight via Slack someone else in the company, it may be synching with Salesforce. So if they're a customer that's up to date, I could be reporting about engineering in JIRA opening a support ticket in Zendesk. All right, from my meeting notes. So what you're doing anyway, whether it be on paper or on a Google Doc is now connected to your calendar, organize for the whole team and connected to all your tools. So everyone's in the know, and all the other tools are in sync.

Omer Khan [6:24]
Okay, that was great. I think that really, for me, kind of made the differentiation piece of of Hugo much clearer. So good. Okay, so let's sort of start the story. And, and, you know, I always start by trying to figure out, like, you know, how you came up with the idea for, for this business? And you sort of, you know, in your own words, I think you sort of started out solving the problem in a in a completely different way, initially, So, tell us about like, how that sort of that started and where that idea originally came from?

Darren Chait [6:58]
Certainly, yeah, so a bit of a I get the typical story around personal pain point and pivot along the way. But I mentioned earlier my background, I'm Australian, although based in San Francisco now and I worked as a corporate lawyer for a few years, I was working for a big law firm in meetings the entire day. And meetings for me, as I alluded to earlier, made no sense. Like there was so much changing about how it worked. But meetings would just remain the same. They were still unproductive, they're still expensive, people still hated them. And I was really frustrated, obviously, about that, looking at that opportunity. And a close friend of mine who was working in product in San Francisco, who was doing a lot of business development in his role and had to share the same insights. He would would sort of debrief at the end of day and complain and sort of, you know, scratch our heads why nothing had changed. So we started Hugo trying to solve that and we actually went about solving it with a mobile app that helped you with meeting preparation. We thought if only people were more prepared when they walked into the meeting, the meeting would be a lot more effective and we got it wrong, we were in an interesting space where we were building our tool for work made for consumers. So from a business model standpoint, that's a pretty scary spot to be in where you're trying to create business value, but only to the individuals. So the willingness to pay by the companies is low. And there's no sort of inbuilt virality or team dynamics to that, because it's used by individuals only. And ultimately, people was trying to use the app in such a different way. They were more interested in what was happening during and after the meeting, which didn't quite make sense to us at the time. The interesting lesson there, I mean, then there's a whole obviously so many lessons there. But we, as a team, we were trying to make sense of what we were hearing why we weren't growing like crazy, why we couldn't figure out monetization. And Josh, my co founder, and I spent a lot of our week out of the office, talking to customers researching, getting advice, and we'd come back to the team and try and share what we knew and debrief and turn the insights into actions in our various tools, but they'll still be disconnect. The teams didn't didn't get it, they hadn't heard it. It was sort of what we said they just had to, I guess accept as gospel and, and and in many cases couldn't quite appreciate the insight that we'd heard firsthand. So someone on the team actually had the idea to build a Slack bot that would ping US based on calendar data and say, Hey, you just finished that meeting what happens? And you just reply via Slack and say, here's the takeaways, you know, verbatim or roar and the way you take notes, and it would share it depending on the key words with other channels. And literally overnight, the business transformed. It was like we're taking the whole company to every meeting, because everyone in the business had access to the roar, insight we were hearing, and then all the great ideas just started coming through from the team, you know, come back our member and design and say, hey, what if we did this, you know, in engineering was saying I know this a Marketing Challenge, but I saw you having a problem with positioning. I thought I've seen this great product that does it this way. And it was like we were working as one team for the first time.

Omer Khan [9:57]
Okay, so when you started this mobile app, how much time did you spend talking to customers? Before you built that?

Darren Chait [10:05]
A fair amount? It's a good question. But we were asking the wrong questions, I think is the way is the way you know, I recall where we knew it's important to understand things from the customer's perspective. But understanding market, like the depth of pain, and market opportunity and willingness to pay is really a new skill that you need to develop that we definitely didn't have at that point. You know, so talking to customers, it's very easy to fall into a trap of like, you know, reinforcement bias and, and just hearing what you want to hear and worrying about the superficial rather than asking the tough questions like, what would you do if this didn't exist? What do you do today? What is your workaround look like? How much would you pay to solve this problem? Those sorts of things, and that's something we want to really learn later on.

Omer Khan [10:50]
So what type of questions were you asking back then?

Darren Chait [10:53]
Back then it was very much about is this a problem? Yes. Okay. Sure. Great. Would you like it as solved in this way, yeah, that would be fantastic. Would you use it? Yeah, I think so how would you use it? And then he would get very much into the interaction and UX and things like that, which at that point isn't what's important. I think the real questions go to observing workarounds and willingness to adopt workarounds, what they would do if it didn't exist. And those sorts of you know, more fundamental questions, understanding whether you're solving a real problem, or you know, a typical vitamin best painkiller thing.

Omer Khan [11:27]
Yeah, I was talking to found a few days ago and I was saying that, you know, there's a big difference. You can sort of ask a customer if they have a problem, but there's a big difference between somebody you know, if the problem is a superficial scratch, on your, you know, somewhere on your skin, which is going to kind of heal in a few days versus, you know, a bleeding neck problem, which is kind of causing all kinds of problems and you need a solution right now. So, sort of being able to differentiate what type of problem they have. is super cool. And then also, what are they actually doing about it? Because if they're not spending a lot of time, effort or money, trying to put some sort of workaround or solution in place, so And again, that's, that's a red flag that probably not a good problem to go and spend your time-solving.

Darren Chait [12:16]
Exactly and and customers won't answer that for you it you got to read between the lines of observed behaviors, because everything's a problem. When my Uber takes six minutes instead of three minutes. That's a problem. I'm frustrated. Would I pay more money to have it in three minutes? No. Would I do I care that much to keep me up at night? Do I think about it? No. But if you said to me, is that a problem? I'd say yes. And you know, something interesting. You reminded me obviously, there's a great framework that Sean Ellis made famous, I think, but now more recently, Rahul vora the founder of superhumans been talking a lot about to sort of replace Net Promoter Score, which asks users how disappointed they would be if your products no longer existed. And then it goes on to say what would you do and we use that extensively To measure sort of product-market fit, where we want obviously, a large portion, you know, of Hugo users to be devastated ultimately are incredibly disappointed. They couldn't use Hugo anymore. But what's telling is the next question, what would you do? If they can just go back to that Google Doc to that workaround? If they could just do nothing? If they can go back to their notebook, we've got a problem. We want to hear things like, well, I'll have to go and build a zap that copies this and have a team meeting to share this information and have an extra Slack channel and buy three more tools. And you know, that says it all for us as to the value of part we're building.

Omer Khan [13:32]
Yeah. And that's a question that I think many of us are often afraid to ask because we might not like the answer. If they come back and they say, I chief you didn't do this, I just do this and life would be okay.

Darren Chait [13:45]
Yeah, no, I totally agree.

Omer Khan [13:47]
Okay, so the mobile app, I mean, you've got some traction, right? So you you got several thousand

Darren Chait [13:55]
That's right

Omer Khan [13:56]
Users kind of using these products. And then when you when you sort of came up with this idea of this, would somebody in the team came up with the idea of the Slack plugin? Was that to replace the mobile app? Or was that sort of, Hey, we should try this internally and that might be a kind of a cool thing. Like I'm trying to figure out, like, Where did that fit?

Darren Chait [14:15]
Sure, yeah, that was actually a solution for ourselves. So we were having a lot of team problems, too. We, you know, we'd hired a great team. And we were out there trying to solve this essentially product-market fit problem. But the disconnect that formed between Josh myself and the rest of the team was getting worse and more significant. So we thought we just needed to improve the way we worked as a team. So we built we built that slack integration. The next step was, once you know, literally, after a week, when everyone's so excited about being on the same page, all these new ideas are coming up, we realized that we needed to capture the actions of these meetings and the decisions we're making. So we built a Trello integration, where we could turn any part of those notes in slack into a Trello card. And we obviously one thing led to another and 20 integrations later No, that's where we are. But it was it was a solution for ourselves. And I remember actually was sitting with a customer, and I was doing something on Slack. And he asked me a bit something about Slack. And I showed him what I was doing, where I was sharing my meeting notes with the rest of the company. And he thought it was genius. And he asked if we could use it. So we let them install the app. And the same thing happened like three times in a day. And we and we started to think, hang on. And you know, pulling on that thread, we realized that the opportunity for meetings for us was much more of a workflow opportunity, which we'd solve for ourselves as a team. And the impact we were having was, which has transformed our business. So surely, it could be a value to others. And that kicked off, you know, going a lot deeper on research, you know, not making the same mistakes we made early on again, and and then building out you go into what it is today, until we essentially shut down the mobile app where preparation in the sense of briefing and things that I did before weren't even relevant to the problem we're solving.

Omer Khan [15:57]
So you were building this internal tool. is sort of this Slack plugin to help you guys do a better job with meetings and communication. While at the same time he was selling a different solution as his mobile app to other customers, how long did that go on before you sort of had the aha moment that this is actually the wrong product? This is the thing we should be actually selling

Darren Chait [16:22]
Literally weeks because he was not long at all. We that the feeling like the the same customers eyes light up and the feeling you can tell when you're solving a real problem. Felt like nothing would fail before the painkiller spider man thinks even just experiencing ourselves seeing the impact on our company, we realize what a real product that solves a real company problem felt like we knew very, very quickly that if we can just pull on that thread we're onto something. didn't make it easy. We had a large team we needed to preserve runway we ended up having to scale a team down dramatically. So we could go heads down and back into development mode to sort of product ties what was just a Slack plug in at that point. And then obviously, we'll talk about distribution and growth in a second. But figuring out all of that net, we really had to sort of go underground a little bit, again with some early users. But we knew very, very quickly that that was the way to go.

Omer Khan [17:14]
Okay, so I know you guys don't disclose revenue publicly. But, you know, we can share with the audience that you have thousands of active users. So let's talk a little bit about growth. What have you guys been doing in terms of marketing and growth? That's, that's worked well for you.

Darren Chait [17:33]
Yeah, sure. So I guess I'm just on the revenue point. Something we've learned in 2020 feel like an interesting trend is that it's nowadays now be harder to get a user so or a lead or a company to adopt a new tool, particularly one that involves habit-changing process than it is to part with money. So often, you'll go and put your credit card in for a $20 a month thing forget about it, not use it. Eventually, remember, maybe cancel your account, that means a lot less than when we look at behavior of a user using a product every day, investing a ton of data, I've been core part of the workflow. So that's why for us, we're more focused on daily active users and daily activity than we are revenue. And that's why, you know, the revenue metric isn't doesn't tell the story as well.

Omer Khan [18:22]
And and also from sort of a pricing perspective. You're only charging, like larger teams, like you only charge teams that are like over 40 people. So right, exactly, otherwise, the product is free.

Darren Chait [18:35]
That's right. So we're just so focused on that on that habit creation that those daily active users, you know, offering value and changing the way teams work together, deferring the monetization for the larger companies. And that's something no doubt will change over time. But we saw them at odds with each other as far as focus and our goals initially.

Omer Khan [18:53]
So let's talk about sort of growth and so

Darren Chait [18:57]
Yeah, sure. So we're a self-serve company, we don't have a sales team, you sign up for Hugo on our website, your team and you can get started right away. And that for us means that the growth channels that we need to use need to obviously feed to self serve, we'd only be getting your generating list of leads and have sales development reps reaching out to you. It also needs to make sense they need to be digital, typically with clear CTAs. And the ability to get you to a website or a piece of content that then lets you sign up for Hugo. So talking about content. For us that's being content marketing is probably one of the most key things we do the overwhelming majority of signups are come from organic search and coming across that content. And content as well in 2020, I think is really interesting, because it's obviously no longer differentiated. It's now table stakes. So we've had to work hard on really differentiating there to make that effective for us. But that's definitely sort of number one there on the growth channels, producing great content written and video every week, every month, that that sort of stays out there. In the world, and that drives interested people to what we do and why we do it.

Omer Khan [20:04]
So yeah, I mean, let's talk a little bit about the content marketing. And you know, yes, there's a lot of content out there everyone or a lot of sass companies are spending time investing in content marketing. How are you guys try to differentiate the content that you create.

Darren Chait [20:26]
Yeah. So I think there's a few elements to it. One, we're in a very content-rich space, we're talking about the way teams meet the way teams we're the future of work. We power a lot of remote teams, it's very content-rich, and people want that, you know, it's very easy to, to add to the conversation there. And there's a huge audience, I will want to be better at work. We all want to work better in our team. We're very interested in how to build great remote teams. So we've got that advantage just because of the space we're in. If I'm obviously in a very niche, or niche space, it's a different story. So that's one Secondly, we've been trying to be very sort of genuine and real about content. I think to be completely honest, as a company in our culture, we're very sort of skeptical, a lot of the real marketing lead content out there, the listicles and 10 ways through this and the click Beatty stuff. We've been very open about our story as a company, for example. So one thing we did was we released a book late last year called 10X Culture. And that book came from a Google Doc that we were keeping internally of great things that we'd learned and done and tested ourselves around building a great team. And some of that relates to meeting culture. But it also goes to hiring and how we make decisions and everything else we do. And we released that because we genuinely wanted other people to be able to share in what we've learned and what was working for us at a very practical level. That's done very, very well from a content standpoint, because it's genuine value to our readers. Sorry, to hotel audience, I should say. So that's the general approach.

Omer Khan [21:58]
How do you distribute that how Did you get it out there?

Darren Chait [22:00]
Yeah. So it's funny you asked that because I think the next key growth channel for us is a lot of our content distribution, which is partnerships. So Hugo integrates with 20 different products, we have very deep relationships with a number of them. Companies like Atlassian, Zoom, Slack, and the like. If you read a book, you'll see the foreword at the front is written by Eric Yuan, the CEO of zoom, as quotes on the back from executives at Atlassian. We tell our story with them a lot. There's a lot of overlap, our products integrate, and we rely on their great brands and audience for telling our story. So that that helped sort of ignite the spark, if you like for the for the book. And then as soon as you have people reading it, and it out there, you end up with that sort of slightly snowballing referral effect, which got us to, so that you know, the readers that we've had we've had today, and we've actually distributed that both in print on Amazon and online via our website and you know, as an Ebook in the relevant marketplaces

Omer Khan [22:57]
And in terms of the partnerships, you know, obviously, it's important for you to integrate with these different products because it makes Hugo better. What else have you done to develop that partnership beyond the integration?

Darren Chait [23:15]
Yeah, I think it's a partnership in general back to its like the most fundamental thing is, is looking for mutual value? Yes. You know, ultimately, no, no, no company is going to invest time and money on a relationship unless they get value out of it. And we've been lucky to just find relevant opportunities where we can offer value back to the company and back no value to us, whether that's just alignment on value proposition, or, you know, with Zoom, we were the first integration in the marketplace. They were looking for other companies in the meeting tech space that could build so to show off the value of Zoom integrations and apps in Zoom, we put our hand up we did that they were very excited about that. And there's a lot of mutual value there and talking about the future of meetings and how technology powers meetings. Atlassian's very, very different. They're very strong in the team. space. And then they tell that they produce a lot of great content and real thought leaders on how great teams work. That's something that we'd written about in this book. And that's something that we're very interested in too. So it's finding those unique opportunities with each relationship where there's mutual value, where we have a common audience story to tell challenge, and we can sort of unite and share resources in achieving that.

Omer Khan [24:23]
So if someone is listening to this and thinking about partnerships as as a potential way to grow, what advice would you give them in terms of like, reaching out, developing a partnership? How long did it take you guys from? You know, is this a thing that can be done in a couple of weeks? Is this something that sort of happens over months and years as you develop relationships like what what's been your experience?

Darren Chait [24:52]
I think it's about looking internally to see what unique value you bring and can offer. So ultimately, there's many companies like us surround the air, as far as in the B2B SaaS space in San Francisco, dealing with software that has teams etc. So we need to look at ourselves and say, well, what's unique? What's interesting? What do we have to market essentially, then you finding the matches. It's like any other sales development process saying, hey, well, these companies actually this great, great overlap here or this great opportunity here, then approaching them. And what we found typically is that in many cases, it's a lot easier than you thought, like all these big tech companies, in particular, have partnerships teams that have business development teams, they want to hear from companies like us doing innovative things in their space. And in many cases, if we can offer value to them, they're very quick to say, Sure, that sounds great, let's do it. And they're not as resource-constrained and they can, they can absolutely help us, you know, build something together or execute on one of these ideas. That creates mutual value. I've got to say definitely working with the companies, they're always going to move slower than you. That's just the nature of the process and sign off and red tape and that can be a challenge. You definitely don't want to be you know, put all your eggs in one basket where you're waiting many months to kick off some campaign or some idea. So I think that's definitely the risker. And you know, we sort of saw sort of weeks, two months or so days, two weeks, which is how we like to work. But it's absolutely paid off for us because it made sense. But I don't think partnerships are and I'm talking marketing, not channel partnerships, but only partnerships are this like one size fits all channel where you sort of say, well, are we doing content marketing? Are we doing paid ads? Are we doing podcasting? Are we doing partnerships? It's not just a channel, it's more, are we doing that thing with Atlassian? Where we have that same message around the future of teams, and we can contribute content on that blog. That's how we think about it. So yeah, hopefully that's helpful.

Omer Khan [26:40]
Yeah, yeah, that's good stuff. The other way that you guys have grown is through the product itself. So tell us a little bit about like, what you've learned from that. And actually, what is the sort of the product lead growth here?

Darren Chait [26:56]
inz. So interestingly, that was one of the big mistakes or challenge or sort of drawbacks of where we started with a an individual user-base mobile app used at work, there were no inherently viral features or no benefit to involving your team. So that was something that we really wanted to get right as we had another swing at it. What that means for us today is if we acquire you as a user, you know, you come out of that meeting, you just embarrass yourself with a customer, you've got all these great ideas and feedback that you want to share with the product team, but no one ever listens. You want to run better internal meetings, because you find that to say too much the week you've gone, you've gone on search for something you've come across, you go like this critical list does it you sign up your board, you write your first set your first agenda and know we've got you as a user at that point. And you're somewhat you know, through the onboarding and activation flow, we give you a good reason to share that with the rest of your team. Again, if you want to, you know, share those insights with another department or even just sharing it to slack so all the people in the company know what's happening in your meetings. We now have the opportunity to market to everyone else, no company at very commonly will see someone else seeing your meeting. In Slack and saying, oh, wow, cool, I can now have access to all these valuable customer insights, I can now see the decisions that the marketing team are making, I can now be across the retrospective, you know, the sprint retro run by the engineering team and the key issues happening every week, I want more I want in and then a lot of the join your team request invites, you'll have a reason to invite them. So the use of Hugo because we're centralizing team knowledge naturally requires more and more detail. So that's inherently sort of internally viral. As a company. We're now obviously thinking a lot about externally viral, you and I are meeting right now. It's in our calendar. I'm taking some notes from our conversation. If you really and you know, when we follow up next week, it'd be really great for you to get value out if you go as well. And that's sort of the next step for us something we're thinking a lot about the moment.

Omer Khan [28:46]
Yeah, I'm not you're no way in terms of your ideal customer. But one of the things that I could see something like this helping me is, you know, we have this conversation and I'll have a bunch of thoughts in terms of, you know, what's the story here? How should I best write and record an introduction? What are the key points to cover in the show notes when we publish. And I find if I don't make those notes, immediately at the end of the interview, it becomes much harder, because I might do this in a couple of weeks. And then a lot of that is those ideas are sort of gone. And then I have to go back and listen to the entire recording again, which is not really a great use of my time to sort of figure all that stuff or remind myself of the conversation. So even something as simple as just, you know, an email saying, hey, you just finished this meeting. What are some key takeaways or notes? I think, exactly, I'll be really helpful.

Darren Chait [29:43]
That's right. And then that's sort of the most basic thing we do at the core, reinforcing a well known or well-accepted behavior and taking notes, but through a workflow, because you know, the value of that it's just the work. There's no workflow for you that's driving you to perform that great, you know, habit. That's different. knows about.

Omer Khan [30:00]
So when you talk about this built-in virality, if there's one person in an organization that's using Hugo, they create some notes and they want to share it with other people in their company. Is that fairly low friction? Like, do people need to create a Hugo account to sort of see those notes? Or is there sort of like, you know, that can easily get sent out via Slack? And if people want to do more like sign up for an account, there's a way to how does that actually work?

Darren Chait [30:30]
Exactly. So we use integrations heavily, even just email but Slack very heavily to allow you to share those notes out so there's not much friction. And that by the way, could just be like a JIRA ticket to engineering or an update in your CRM to expose the value of Hugo to allow you to share and then we make it very easy for them to sort of level up to become a user. So they can also set agendas and and write notes and be part of that workflow for their own meetings. And even just signing up to Hugo is very, very easy because it's that one click you log in your, Google suite, office 365 account, and few seconds you're up and running. you've joined the team. We have all your calendar data from from logging in that way. So definitely low friction and then leveling up as well. It's a pretty simple task.

Omer Khan [31:13]
And then how does that work? Every time you share notes from Hugo, you just have some sort of signature or link that people can click to sign up for an account or something like that.

Darren Chait [31:23]
Yeah, there's a link exactly. So yeah, whether it's slack or email, or in the ticket or task, if you're using integration for the actions, there's a link back to Chico. And if you don't have a Hugo account, we will make it very easy for you to create one and join the team.

Omer Khan [31:37]
Got it? Okay. I want to make sure we, we spent a little bit of time talking about positioning and value proposition. This is an area that a lot of SaaS companies struggle with, and you had your own challenges here. So I kind of want to spend a little bit of time just tell the audience a little bit about like the challenges you face around positioning value proposition. etc. And then how did you go about solving that?

Darren Chait [32:07]
Sure. So this is definitely up there with mistake or unknown, number one or two or three, definitely one of the biggest lessons we've learned. And, you know, there's a lot of rhetoric out there about built and they will come and all of that is complete, in my view. Anyway, it's completely debunked. Now, it's not it's not the case at all. Maybe that was true once upon a time I question it. But in 2020, with the number of tools and products out there, definitely not the case. And even when we think it's the case, you know, the Slack and whatever of the world, it wasn't the case of the beginning, that's for sure. If you came in pitch Slack to me, when I was using WhatsApp to chat, I would have said why don't you chat at work? Email works fine, right? So…

Omer Khan [32:45]
So I was just gonna say before you get into that, like, even if you don't have your, your positioning or your value proposition, right, even if they do come, they're not really gonna understand how your product helps, right. So it's like it's so important


And and my such small tweaks that you know, to us are in the trenches seems insignificant changes everything. You know, we want to record Hugo originally meeting collaboration software and everyone sort of comparing us to Zoom and Google Hangouts and BlueJeans in the like. And your one word makes all the difference there. So definitely the way we learned that was we, you know, you have to continue the story from the beginning. So we've now stopped building Hugo, we've got some early loyal beta users who have come along for the ride with us. They're getting great value out of it. We're thinking this is awesome. We believe these users are representative of the rest of the world. Let's get out there. And as we start exposing Hugo, even when we got traffic and people to look at it, they didn't get it. They didn't convert. They didn't understand. But it didn't make sense to us because we knew it was so valuable for those businesses, what can they get about it? And the way we positioned the product and the words we used to describe it, the way we compare it to other tools, the way we describe features is everything. That's how that literally Changing one word here. And one word they're changing image there changes everyone's perception. And you can see huge changes in the way he was adopted the way it's understood, literally in a week, as soon as you start prioritizing that. So that for us, I wish we did earlier. And related to that is distribution. You know, I think there's a building beautiful products that solve real problems is core to what we do. But without distribution, it's a waste of time. And we were very much a product-first company. And again, we ended up with this great product that solves a problem where and without thinking through how we're going to get into the hands of users, it's again, the company's worth nothing. And that was something we only really started thinking about probably quite late. Whereas we could have really been focused on that. Right from the beginning, you see lots of companies who are building lists and building attention around what they're doing before they've even written a line of code.

Omer Khan [34:48]
So when you talk about sort of positioning, or what did you say you sort of calling yourself meeting collaboration software?

Darren Chait [34:55]
Yeah, that's right.

Omer Khan [34:57]
And that's interesting because it's Yeah, that's clear to you guys. It's like, yeah, we help you collaborate with meetings, but in the mind of your customers, it's like you've been compared to a completely different category of products. And so like on the homepage, now you just say, connected meeting notes. And that I think it's like, I really like that. I mean, in three words, you've done a really good job to articulate what this product is or how people should think about it. But when it comes to like, like value proposition, and like, helping people to understand, look, this is who we're for, this is the problem that we're helping you to solve. Before we started recording, you said, one of the challenges you had was you were talking to potential customers who didn't even know that they had a problem. So how did you go about educating them that they had this problem and then You know, understanding like how Hugo could help solve that problem?

Darren Chait [36:04]
Yeah, sure. I think that's the positioning challenge exactly that. And even after that many in many, you know, there's many examples of that it was about slack before the market wasn't looking for work-based chat, slack had to go and create the problem that needed synchronous real-time communication in the workplace, to be able to then solve it. So I think that's a very common problem, especially for category creators. The way we did that was we reverse-engineered it. Once we figured it out. We went to users and said, Hey, forget all the stuff we've told you along the way. Talk to me about why you should go. What does it do for you? What's the value of really creates being completely honest, and then challenging it? Well, why can't we use this? What would happen if no one else use that and China and then you know, finding those trends to reverse engineer the reasons users signed up for Hugo the reasons they use Hugo and the value they get out of Hugo? So that's one and then starting to experiment with fresh audience, we use usertesting.com and even for some smaller tasks, We were using Mechanical Turk, where we're going to give you a few different versions of a page and would ask you questions about it would ask you to speak out loud and explain what comes to mind and how you think about things and what questions you've got. And that allows us very rapidly to iterate with different versions of, of messaging until something seems to work. And then we stick.

Omer Khan [37:18]
How long did it take you to get to a point where you felt that you had messaging that was kind of effective, I guess there's always room to improve the messaging and you can keep kind of working and getting better at it. But like, how long did it take you to get your point where you felt like yeah, it's starting to click?

Darren Chait [37:38]
But literally, probably two months from when we knew as a priority when we realized that was part of the one of the key issues. So when we said, well, we've just like smashed through that next ceiling and you know, that next threshold, people get it now, it happened very quickly. Another great test, by the way, for us anecdotally was we do a fair few conferences a year, so you're pitching Hugo rapidly for two, three days, 100 times and people's responses to questions they ask is a very good indicator for the value prop and and how you position so that for us the next the very next conference we went to it was like 90% comprehensions that have like 40% or 20% comprehension. So we knew very quickly but it happened it's quick It was a, you know, two months sprint, if you like of, of taking what we know, do as much research as we can experimenting and then shipping something and to your point we you know, we've done it again a couple of times since and I plan on doing it again next month. It's definitely something we need to keep keep keep tweaking because it's the front door for what we do.

Omer Khan [38:37]
So I just had one more question about the the pricing model. So if you've got a team of less than 40 people, it's free to use Hugo, if it's more than 40 people It starts at $399 a month. I was talking to a founder last week who had said you know, we sort of came up with this freemium business model. And we said, well, okay, well, if you know, we have these sort of B2B customers who are certain size, we won't charge them. And then, you know, the hope is, as they grow, you know, they're going to sort of naturally move into these paid plans. And you know, we're going to be able to have a natural way for them to do that. We're going to increase the value of our customers, blah, blah, blah, etc. And then he said, Well, actually, we realized that a lot of these people don't actually grow and they kind of sit in the free plan forever. And so we had to rethink how we were going to optimize that. And so how do you guys think about that, because, like, I could easily see like, thousands of people using Hugo, you know, with teams of like, less than 10 people and maybe never growing to 40, size of 40 or more, and, you know, maybe you're okay with sort of having that and kind of building this You know, huge base of free users who sort of never actually will become paying customers. But how are you thinking about that?

Darren Chait [40:06]
Yeah. So for us based on the stage we're at, we're very focused on the daily active users. And those things first are rather than revenue optimization. And that's why you're right, the pricing model isn't optimized. If you live there with this property, there is no money left on the table with a team of 30 gets great value out. If you go there, then sure they don't have hiring plans. And at this stage, they'd have to pay. But I think ultimately, it comes down to finding the levers. So team seat count by team size is one level and it's an easy, obvious one. But we have teams of 10 that have saved 3000 notes, they completely run on Hugo, we've transformed their culture, they're total poster children for us, they would happily pay hundreds of dollars a month and, you know, finding other levers open team. Seat count would allow us to do that. Similarly, you've got teams that have really complex integration requirements or have really crazy security. enterprise, you know, support requirements. So there's plenty of opportunity to find different levers to to capture willingness to pay, even if see count is near. We've just kept it simple for the moment because we're so focused on that engagement. You know, and then that's definitely something we'll come back to in the coming months.

Omer Khan [41:17]
Yeah. So it's good way to think about it.Okay, we should wrap up. So it's time for the lightning round. You ready for that?

Darren Chait [41:27]
Awesome. Yeah, let's do it.

Omer Khan [41:29]
Alright, so I've got seven questions asked you just try to answer them as quickly as you can. What's the best piece of business advice you've ever received?

Darren Chait [41:37]
Who, if it's easy, someone else would have done it.

Omer Khan [41:40]
What book would you recommend to our audience and why

Darren Chait [41:43]
“Team of Teams”, it's a book by General Stanley McChrystal, about building credible teams through the lens of the later in the year in the US military on the war on terror of 911. Some really incredible lessons there about running really high functioning teams, which is impact a lot of the way we run Hugo today.

Omer Khan [42:01]
What's one attribute or characteristic in your mind of a successful founder?

Darren Chait [42:06]
Grit. For sure. It's all in that word grit.

Omer Khan [42:08]
What's your favorite personal productivity tool or habit?

Darren Chait [42:12]
Hugo, obviously, aside from Hugo, decision journal? So if you have a look at Farnam Street blog, by Shane Parrish, you record decisions, you've made the context, the rationale, the expected outcome, the date for the assessment, it lets you be a really great decision-maker, by being able to look at your mental state when you made that decision, what you thought would happen and then the gap between what you thought would happen and what happened definitely made me a better a better operator, but a decision-maker better strategist, with the day to day decisions I make running a business.

Omer Khan [42:43]
I've never come across that idea before. That sounds really interesting. Let me…

Darren Chait [42:48]
Check it out in their blog. Yeah,

Omer Khan [42:50]
yeah. I mean, just even from the simple perspective of the number of times, I've worked with teams or clients, and we've made a mistake. And then some months later, you can't even remember why you made that decision.

Darren Chait [43:05]
Exactly. Exactly.

Omer Khan [43:07]
That's, that's really interesting. Okay, cool. What's new or crazy business idea you'd love to pursue if you had the extra time?

Darren Chait [43:13]
I think it's interesting time with the changing nature of the workforce. So using contractors and people, global indigo, obviously, the globalization of workforce and distributed tech talent and things like that, it's really hard still to work with people overseas. From a billing and compliance standpoint, I'd love to build something new to make it really easy to find the best talent, pay them and work with them wherever they are, whatever domain name they're on, treat them like teammates. So haven't quite fully formed, what that would look like but I'd really love someone to build something there in the way you know, other festivals have done it.

Omer Khan [43:45]
What's an interesting or fun fact about you that most people don't know

Darren Chait [43:49]
I first business was a mobile DJ business. Started in high school all the way through to sort of overlapping with when I started my full time professional career, DJ that thousands of words and bar mitzvahs and parties to learn to learn the first couple of things about building and running a small business.

Omer Khan [44:06]
How long ago was that?

Darren Chait [44:08]
First started that in 2001? Through probably 2013-12.

Darren Chait [44:14]
So we use Did you still have like turntables or like CD turntables?

Darren Chait [44:20]
Yeah. And now I You see, they don't you don't do that. It's all flash storage. But back then it was yesterday, turntables going up by music, burn them onto CD, and then they get scratched every few weeks. You got to return them. But yeah, we did thousands and thousands of events. So learn to bunch,

Omer Khan [44:36]
That's fun. And finally, what's one of your most important passions outside of your work?

Darren Chait [44:39]
Definitely travel. Everyone loves that as a hobby. And it's a sort of cop-out answer. But for us that's been growing up in Australia. It's a very sort of small place. Not not physically, of course, but in a small community with neons of knowing everyone around us being exposed to the rest of the world was something that only really understood in the last few years having lived in the US. Meeting people are very different. And that's something that keeps me another thing getting out of bed in the morning and keeps me passionate about what we do. So my wife and I take as much time and as much spare money as we can find to explore and travel. And I'm really, really passionate about it.

Omer Khan [45:16]
Awesome. So if people want to learn more about Hugo or sign up for a free account, and start using it to to capture your own notes, so you can go to hugo.team. And if people want to get in touch with you, what's the best way for them to do that?

Darren Chait [45:35]
I'm LinkedIn. I'm a fan of LinkedIn. Search me Darren Chait co-founder of Hugo on LinkedIn and drop me a message. So at least we know who we're talking to. And I would absolutely be in touch and reply. I would love to continue the conversation.

Omer Khan [45:47]
Great. We'll include a link to your LinkedIn profile in the show notes as well.

Darren Chait [45:52]
That'd be great.

Omer Khan [45:53]
Awesome. Well, thanks for joining me Darren and sharing your story and your insights and wishes. In the team, all the rest of success.

Darren Chait [46:02]
Thank you. Likewise, that was lots of fun.

Omer Khan [46:04]
Cheers. All right, thanks for listening. I really hope you enjoyed the interview. You can get to the show notes as usual by going to theSaaSpodcast.com where you'll find the summary of this episode and a link to all the resources we discussed. If you enjoyed this episode, then please subscribe to the podcast. And if you're in a good mood, consider leaving a rating and review to show your support for the show. Thanks for listening. Until next time, take care and stay safe.

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The Show Notes

Omer Khan

Hi, I'm Omer, the founder of SaaS Club and host of The SaaS Podcast. I help early stage founders and entrepreneurs to build, launch and grow successful SaaS businesses. Join me on this journey.