VO: Get ready for your semi-regular dose of random ideas from the guys at Codelation. We like to talk about big ideas companies that are winning, and those that aren't along with current events in our crazy world of software startups. So come along with Erick and Josh, who challenge you to think big, start small and turn your ideas into something on this episode of, from idea to done.
Josh: Hey everyone, I'm Josh
Erick: And I'm Erick. And this week I say, idea is advice for SAS entrepreneurs. And so we have a special guest Sujan Patel. Um, Sujan, can you just tell us a little bit about yourself to start off?
Sujan Patel: Yeah. So thank you for having me, first of all, very excited to chat with you guys of like, and share some lessons. I learned the hard way. Um, I right now run a company called ramp ventures, ramp ventures owns and operates about, um, eight SAS companies. Um, we kind of had 11 in our portfolio, so we, we either build and grow or, or buy, um, sub million ARR companies. And, you know, we try to 10 X them, I say, try because we've probably succeeded at or are succeeding and probably 60 or 70% of them. Uh, and so, yeah, I mean, I've just learned a lot of things, the hard way in, in building SAS, my background's in digital marketing SEO specifically, um, kind of started in the internet space in, I want to say 2000, 2001 with an e-commerce site that failed miserably. Uh, but I was able to get some traffic and kind of learn about digital marketing. Got, you know, that's really what I started my passion.
Josh: Awesome. Yeah. It's a, I think outside looking in for all those, you know, early stage companies, that's all I have to do is build the thing and then ramp it and we're off to the races. Right. And that's, that's really the case. Yeah.
Sujan Patel: If you know, what you don't see is that the like probably, you know, 10 years of nobody in the market not being there. Right. Meaning like, you know, post COVID everyone's used to buying groceries online, you just deliver it it's normal. Right. 10 years ago, you probably would have been way too early for that.
Josh: Yeah, absolutely. And you know, one of the things we really like to focus on is, is who's the target market and what's the problem you're solving. And, uh, I watched a video of yours, um, on your YouTube channel to where you talk about being customer obsessed. Can you dive into that a little bit? I think that's really interesting because it really highlights that you need a strong target market really need to understand who the customer is and what the problem ultimately is that you're trying to solve.
Sujan Patel: Yeah, absolutely. So, um, I think this is the biggest thing. Uh, people, SAS, founders, and entrepreneurs make a mistake on is not spending enough time, understanding your customer, understanding the problem and kind of understanding the value of the various problems you can solve for your customers. Right? So you're a customer, you know, for example, at Mailshake our customers are salespeople, sales teams, right. Um, there's a serious, like there's hundreds of things they ask for, uh, over the years you've asked for all sorts of features, reports, you know, feedback on like, this does this and that does the other, you know, wish this did that, whatever this button here, whatever. Right. So there's a lot of things, but if I wouldn't go built everything, I would need an army of developers and a lifetime. Right. But I don't have that. I've got budgets. I've, I've got we're bootstrapped.
Sujan Patel: So we've got a limited amount of money and, uh, we have to make the most use of our budget and, and staff, right. Or what we work on. So I need to work on like the five most important things, the 10 most important things for the year. Right. Not even like the month, like the year. Um, and so I'm talking to your customers ultimately helps you focus on the right things. Right? And like, there's a whole lot of like lot of details in between talking to your customers and figuring out what to build, but ultimately you can get there many, many different ways, but if you keep a pulse with your customers and understand what they really want and they value, I think, as a founders of SAP, you know, if you've made it to building a SAS company, you could probably navigate around what to build. Right. So that it's less, less prescriptive of like what to do when you get the feedback and more that you should keep getting feedback and keep a pulse on that.
Josh: Absolutely. It's, it's, it's critical to talk to your audience, you know, whether you've got a product or not just keep that conversation going. I love that.
Sujan Patel: Absolutely. And the other part of this is like, you're going to, you're going to build stuff that just people don't want. Like, you're, like I say, you have the 10 things you need to build, or the five things in a year and four or five of them are just going to be wrong. It's okay. Like, it's gonna, it's gonna, you're gonna fail at this part. I've done this many, many times. And, and you know, even the most successful companies in the world, Adobe, Microsoft, apple, they fail all the time. And so I think that's part of it. So like, don't get bogged down on the failure. Um, just keep the momentum and eventually, you know, rinse and repeat to success. Absolutely.
Erick: I think that's a good part of like kind of even the sales process is being okay with, with failing and being excited to try and, and your processes actually, that's more of your sales and that's actually your recruiting tool too, like sales and recruiting to me are basically the same. So Hey, we make all of these SAS products. We're a team that does that. And I love our process and we do things different. That's what I say to customers and potential employees as I'm kind of in the hybrid, we're a smaller company. So I have this weird sales recruiting mode. And that's what I kind of back on is like, it's the same message. It's just, do you want to work with us or do you want to work for us? And so can you give us any like recruiting advice for being in our space?
Sujan Patel: Yeah. So big thing here, again, learned this a lot, really the hard way. Um, but just make sure you hire people for where, what stage of the company you're at and also people who have just done that before. Right? So, um, my rule of thumb for like managers and above, so manager, director, kind of an executive or even a co-founder I want people, I want to work with people. Who've done it twice over like twice. So if I'm a million dollars ARR company and I want to get to 10 or a hundred hundreds too far, like you don't need to hire for the a hundred. If you're at one, let's go hire for that, the one to 10 or one to 20. Right. You need somebody who's done that part a couple of times over. So maybe, maybe you don't get somebody at one, you get them at a half a million that they've done this before 2 million, 3 million that's close enough.
Sujan Patel: Right. But get somebody who's done it a couple of times over, um, I at least twice for like a management level person, at least once for a, um, an individual contributor. And I say this because, uh, it is so easy to get lost in the, um, in the noise. Right? Like good idea, bad idea, sound great until you prove them wrong. Right. Um, or they don't work and you waste time. So, um, usually people who have done it twice over know that one of those two times where they, they got lucky and the second time they wouldn't have made that same mistake. And so they've kind of just cause one, one time you can get lucky. And just when you be, you could be at the right company the right time, the right market, whatever. Right. Um, whereas if you did that again, it wouldn't work the exact same way, uh, for an individual contributor. You just want them to kind of get rid of those bad ideas. Like you want them to test the craziness outside of your ecosystem outside of you. It like, again, like why not have them learn the bad things before they come over or the good things. Right. Um, if, if they sold before or whatnot. So yeah, I, I would suggest like hiring people who have done it once before.
Josh: Absolutely. I think that the strategy is completely different. I mean, if you're, if you're selling, you know, consulting services, like what we do versus, um, trying to scale a, you know, B2C or B2B SAS platform, those are different skillsets and, you know, it's different marketing and sales activities that you need to be doing. Um, I'll go back to the video that you had, um, had posted, and you talked about, you know, having a CFO that has SAS experience, I think that's really sounded by use as to have somebody that's, that's done the task before and they know what success and failure looks like. Um, I also think that it's, you know, from, from my seat as the owner, your seat, as the, the owner, it's, it's good to know what, what should work and what doesn't work. You know, you've done it before he kinda got your hands dirty and you, you, you know, the tactical pieces. So if somebody's coming in and pitching something, you know, completely off in left field, you're, you're able to catch that quickly.
Sujan Patel: Yeah, absolutely. So one of the biggest, I think, benefits of a CFO or, um, or even a part-time CFO or someone who's kind of been there done that is, uh, there's a lot of ways to kind of interpret your books, um, having kind of, um, everything kind of on a business and operational level organized and done for you so that you don't have to think about that. Like as assess founder. Yeah. Or entrepreneur, like most people are not excited. Like, yeah, I'm going to go work at my P and L like no one ever jumps up in the morning, unless you're a CFO. And if you're there, if you're a tech, you know, if you're a financial savvy CFO or like founder, cool, like go do that. But for the rest of us, go hire somebody so that you have that done for you. And you don't have to think about it so easy to make mistakes, um, in a business level at a, at a business level, operational level on a marketing level, just because you don't understand the full numbers.
Sujan Patel: Right. And so I that's one of the big it's, it's really weird to say that like having a part-time CFO or even having my business partner is really savvy with the numbers. So having a, uh, having the numbers on the P and L done for you, having projections, having a budget, and like when COVID hit, we've got three different scenarios that we can operate our company to like a low impact, medium impact. Holy crap. The world's on fire, like preserve, like don't die mode. Right. Um, and, and we knew what we could, what we needed to operate to, to survive. Now, I could've come up with those numbers eventually. And it would've taken me a lot of brain power, but this happened in maybe a week eight companies. We went from like crap. Something happened in the market that we can control. And we had three different plans operating for, for eight different companies within a week.
Sujan Patel: And fairly like maybe my CFO, my business partner. And I talk like for four hours in a week. Right. So, um, the difference between that, and then having to go scramble and do stuff, is that, what do you sacrifice when you have to do all that stuff? Right. Um, so it, it's one of those things that like my, my buddy, Dan Martell says this all the time, uh, of, uh, scaling SAS. He does a lot of SAS coaching. Um, he's like, you want to buy back your time, right? And this isn't a great example of buying back your time as a founder, as you pay for people who are really sharp, like early days of the SAS, you do the sales, right. Founders usually do sales, but eventually when you get something working, you hire salespeople who can do a better job at it. That's like what their roles are.
Sujan Patel: That's what they're good at. It's the same thing for a CFO, except the difference is that it's not a revenue generating function. It is a revenue preservation. Let's put it that way, as well as a business savvy, uh, helping you drive the business direction without, um, without having to go in the weeds and everything. Uh, and I'll tell you one really quick example of how a CFO saved us a lot of money. So I'm a marketing guy. I run all things growth at, at our companies. And I got a lot of ideas. I've got a lot of bad ideas too. And, and so, um, sometimes I'm like, Hey, you know, Bob and, and our CFO, like, Hey, can we, I have an idea it's good with a fundamental channel, change our sign up flow, or like, this is going to happen. Or I've got this, I need like two developers to work on this.
Sujan Patel: And like, DFO is, how much is it gonna cost? How much time is it going to take away? Um, what if you did nothing? And he just kind of walked me through scenarios and he forces me and I see him on a napkin. I remember this because he was having Starbucks. He took a Starbucks napkin, literally a small little map with a pen, and it's just us writing on it. He's like, that's not going to work out. And so, like what he was doing was the math on how much traffic he's like, well, you said they convert at 1%. Pretty much. He did the math to like the marketing funnel to get to the revenue. And then he's like, how much is how many customers can you expect? And, and he pretty much invalidated my idea that was going to cost us like 20 K a month in development resources. And it was going to generate maybe three or $4,000. I forgot the idea. I, I buried it deep inside, but know it was a very simple discussion on a napkin that he was just able to say, that's stupid. Um, and, and that's, what's, it's going to save you, is, is the, it's the bumpers when you're bowling.
Josh: Yeah, absolutely. I think it's easy, you know, as a founder that if you're not, if you're not that numbers person are not good with finances and something like COVID hits all of a sudden, you're in a scarcity mindset and you pull back and that may not be the right time for you to do it. So definitely lean into your strengths and get somebody else on board that can help you kind of weather those, those bumps in the road.
Sujan Patel: Absolutely. And it's pretty cheap. So, um, if you just go on, you know, probably even Upwork or just Google, fractional, CMO, CFO, there are plenty of really savvy people. Um, and just again that for SAS, uh, I'll tell you, we pay like 500 bucks an hour for our folks. Um, but we only use them like three to five hours a month. So like, it sounds expensive on an hourly rate, but like two or three grand and you got everything done. It's definitely
Erick: Well, and like being in the marketer too, I do think about those numbers, but I get more excited about marketing than the real news, some something sometimes. And so I kind of, I liked in, in the video that I watched of you, you kind of talked about how your experience is your marketing. And so we'll kind of jump into some marketing, like what, what's some advice you have to market your actual experience. Like if someone has a great experience with your company and working with your team, that's obviously your next target is their peers. What are some, what's some advice you have to market to that,
Sujan Patel: To, to market, to your peers, um, or just
Erick: The peers of someone who had a good experience, a great experience your team.
Sujan Patel: Yeah. So one of, one of the things that I've learned over the years is the word of mouth, the, the vitality of your customer, one customer you bring in, if they have a great experience can actually generate more customers from that one customer through not through like upsells or upgrades or more revenue from that customer. I'm saying them bringing in more customers and we've found it to the point where like all of our companies are our customer customer driven, where they're driving the direction of the company for the most part. And that's coming from the biggest channel of growth comes from word of mouth. Um, it's a hard channel to earn, and it takes numbers to work. But what I mean by this is, um, when you get one customer and you give them your minimize, the time to value to the, to the minimal level, there's no exact time for a number here it's different for everybody, but you give them a great experience.
Sujan Patel: And there's a great interview by Brian. One of the founders of, um, of Airbnb, I forgot his last name, um, called the 10 star experience. And so read often podcasts, go check that out, um, tends to experiments experience, um, but give somebody a amazing experience. Um, and what that will do if you ask for nothing, um, they're going to spread the word because they found an awesome tool. They found an awesome thing. They had a good experience. Um, and, and so how do you generate that? Um, think about zigging with someone else's Agni. So we at Mailshake a concrete example, is we, one of the, when we're building this thing, my partner was developing. I was, I went and did customer interviews and competitor research. And I found the biggest thing is the complaint about a competitors was that it's too complicated to set up and too hard to use.
Sujan Patel: And so we literally did the exact opposite of that. Like, what do we need to not show, what do we not need to do, um, to make sure that when somebody signs up and goes and use the product that they can, their time to value is as short as possible. And they don't, they say the exact, exact opposite of that. So it was all onboarding. It was all showing the right things and not showing a lot of things. We made it very simple to use. And that generated a flow, a workflow of you go into Mailshake, we're an email tool. And what we do is just say, Hey, go in, add your email, watch this video. And you get some best practices, start sending your emails go. And our competitor's tools where like you go in, you had some like tool tips around, you have to connect it.
Sujan Patel: You have to go to the settings, connect an email, go here, set up your signature, go there and, you know, watch this or connect your CRM. And it was all these things, but, um, we just did the exact opposite of that. And without asking customers to give us new business, they did and how we measure that. And I bet everyone here is like, well, what do you, how do you know this is going to work? How do you go, this is happening for my business. Ask a very simple question at the sign up form. How did you hear about us? Um, you just copy what we do at Mailshake just go attempt to sign up at Mailshake. Um, and you look at the signup form. It asks you, how would you hear about us? And if you enter a friend or colleague, it'll ask you for that person's name.
Sujan Patel: And so every month we get somewhere between 200 to 300 people entering a name in that form. Um, and what we do is we thank them and we find it's just a name. Sometimes it's John, who can't find John there's too many of them, but if we find the person's name, we thank them. And then we do this every month and it's a simple email or LinkedIn message or Facebook message. And what actually has that has done is those people, these are advocates really, they've proven themselves to be advocates because they've generated customers, those people, uh, we thank them on social media and, or email or whatever I can get ahold of them with. Right. And that has generated them driving more business, just a simple gratitude. Like I don't even offer anything sometimes. Like if I get in the conversation, I asked for a feedback or a product stuff, or maybe even give them a t-shirt or something like that.
Sujan Patel: But like that whole thing is generated massive word about for us. And I want to define quote unquote, what massive means. So everyone's familiar with the Dropbox, Hotmail, like word of mouth, like coefficient. Oh, like set with, you know, like Dropbox invite people and you get, you know, more space Hotmails set with Hotmail. Okay. I'm not talking about those levels of code, like Bible coefficient that does not exist anymore. Um, well you have to invent it. Uh, maybe, uh, I think very few companies can do that. Uh, I'm talking about when one customer generates maybe 0.1 customers or, you know, uh, one customer is at 1.1, 1.2, 1.3. So, um, I would say that the 1.1 to 1.3 is probably an accurate range you could aim for in the B2B world on the B2C world, like the Hotmails and the Dropbox is maybe you can get a little bit more with like referral software and whatnot. Um, but, um, but yeah, I mean, that's how we measure it at Mailshake and our companies. And, um, and we found that the more stuff we do to make our customers happier, reduce the time to value and, um, reduce friction in the first kind of five minutes of the product, um, that we found that number just keeps going up. And remember here, I didn't actually say adding more features doing any more marketing. I just said, stop making it difficult for people, reduce the difficulty for people.
Josh: Yeah. Reduce, reduce the friction I'm looking at Mailshake right now. And it's, you know, knowing that target market and knowing that problem, that you're solving allows you to go find more people like the testimonial from Phil on your homepage. It's like go find more people that are Phils, tell the same story and easier to get those people in the door. And I just, I love it. And, um, you know, I, I wanted to give an opportunity to, for, you know, how can people find you, you know, what's what, what would you like to promote in our, our, our audience and, you know, kind of what do you, what do you got going on?
Sujan Patel: Yeah. So best place to find me and kind of where I share all my stuff is Sujanpatel.com. Um, if you sign up for my newsletter there, um, I usually share like a video or, um, or blog posts every week, mostly on lessons I've learned the hard way, uh, the fun way I call it, what I'm up to is really just, uh, you know, growing Mailshake, um, you know, we're are a, we're a fun, you know, bootstrap company competing with funded companies that have a hundred million dollars in their bank accounts right now, probably 10 to 15 times as the staff, as us. And so, um, and you know, they're probably 20 X the size of us as in terms of revenue. So, um, yeah, I, I think really, uh, check that out. If you're a sales or marketing person you're doing outreach. Um, and, uh, and again, like what I would recommend, if you're a SAS founders, take a look at what we're doing and just steal parts of it, like go, go copy people that you think would make things work and then modify from there.
Josh: Awesome. I absolutely love it. I appreciate your time coming on the podcast, Susan. Um, and absolutely go check out, uh, uh, your videos check out Mailshake if you're a salesperson. Um, absolutely. Thank you very much for your time today.
Sujan Patel: Thanks for having me. It's been a pleasure.
Erick: It's easy to soak up, you know, a bunch of information and never use any of it. And so I thought we'd just kind of recap and here's some of the big takeaways after that I had after talking with Sujin. And so my first one is to be customer obsessed, and that's an interesting thing to say, but it's improbable to master. So keep getting feedback is something that we, we really don't do a great job at. And learning from your work is incredibly important now.
Josh: Yeah. I th you know, we've done a lot of, uh, podcast episodes on like customer's problems, target market. And I think this kind of loops back into it. If you're customer obsessed, you really need to know the customer and the problem, he talks about the value of solving the problem as well. And, you know, if that problem isn't severe enough or high enough value, no, one's going to care. He talks about, you know, look at the year, not the month, not the quarter with the year and focus on what's the top or five, five or 10 things that we really need to, to solve that are highest value. And I, I like that because it keeps you focused on, on the high value items.
Erick: And when you focus on that, that's what you bring to other companies. And that's where you're really going to, you know, succeed the most. Yeah. The other interesting things I learned from a recruiting standpoint is to make sure you hire people who have done specifically what you're looking to do twice before. Usually people have done something twice. They have to be smart to do something twice. You can get lucky once. And I've never heard that before.
Josh: Yeah. I like it. I, I flashed back to, you know, building anything around the house and like the first one I do is terrible. And the second one sucks a little less, you know, um, it's definitely need to be able to hire someone that's done it before. Otherwise you're the one training the person and teaching them what successes. I think this is extremely important in the software space, the software as a service space, you can relate, you know, Eric, you can relate that selling technology is vastly different than other sales jobs you've had in your, your life.
Erick: It's wildly different. And I thank you for dealing with my learning curve.
Josh: You are welcome. Yeah. You know, it, it's something that he highlighted is talked about, like an outsourced CFO that has SAS experience. That's extremely valuable. You know, just the, the SAS product is a different mindset than other types of companies. So it's really good to focus in on that, that, uh, CFO with, you know, general business experience versus the SAS is, is, is different. I think it's good to highlight that,
Erick: Uh, one of the biggest things I've learned now a couple of years into this industry, as it is just different, you have to treat it a little different and it's, it's awesome to talk from our peers that have done it. And, and one of the other pieces that I really liked about this was the phrase, the virality of happy customers. And I think this 10 star customer experience like this is all stuff that I really think we should maybe dig into on a different show, but it was interesting to hear the simple power like thank yous can have on, on your actual customers.
Josh: Yeah, absolutely. It's, uh, it's always easier to keep a happy customer that has to find a new one. So thank you all for listening. We're hoping you want to start up that could use our advice and random thoughts if so, send them over to Codelation.com to hear the next podcast.
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