📈 A new product & an upward graph
In October 2018 my Co-Founder Gillian & I came up with the idea for Cherry. We moved to San Francisco to go through Y Combinator in early 2019 and raised a $700k+ angel round which we used to build & launch our V1. Our product solved the engagement problem with employee perks/benefits (historically a 7% engagement rate was ~90% on Cherry). Now, after an unsuccessful attempt to raise a Seed round we’re closing down & sharing our learnings.
This article is part 4 in a 5 part series.
Throughout the beginning of 2019, larger, better-funded competitors started appearing on our radar, giving us all the more reason to hustle on growth & claim the space. With our raise behind us, we were 100% focused on speedy product iterations and sales. Despite our efforts, growth would be unimpressive the following 2 months & made us all the angstier to move on from our MVP (Slackbot gift marketplace) to build Cherry V1 (corporate card for personalized benefits).
As the only engineer on our team, I wasn’t sure I’d be able to maintain the MVP and build our V1…and towards the end I almost couldn’t. In anticipation of our new product release, Gillian had started selling the idea of our corporate card to potential customers before it was built. I scrambled to get it ready in time for the sales she was closing.
For about a month we were in a hellish limbo between iterations with customers on both, dramatically different platforms. It was time to take another bet — do we continue to hold on to our original customers for the sake of user metrics & revenue, or do we fully commit to our product vision at the cost of all the progress we’d made to date? We decided to put all our chips on the dream & sunset our MVP.
MVP — Slackbot gift marketplace, launched 2/19:
V1 — Corporate card for personalized benefits, launched 8/19:
Looking back, I wish we’d made this move sooner. Our bet paid off & set a new tone for our business. We decided to stop seeking advice & approval. Instead, we started making the unintuitive, uncomfortable decisions necessary to best position Cherry for success. We trusted our insights more — we had been operating long enough to start noticing patterns & had developed unique expertise in the industry. Taking our learnings that had gone wrong in the MVP we approached V1 more tactfully in the following areas:
Sales
Instead of furiously trying to close as many customers as quickly as possible we were focused on sustainable growth from customers who were a match for Cherry. We sold to larger organizations that had a true need for our solution, instead of working to convince smaller, quicker moving teams that they had a problem we could solve.
We listened to why our customers chose us over competition and started to weave that information back into our sales pitches. We used our SF location to our advantage — visiting customers in person where possible (for sales pitches, lunch & learns, customer feedback sessions). Additionally, we paid close attention to sales conversations to hone our website copy & strengthen our messaging.
Growth Hacking
Instead of relying on outbound email campaigns, we planned a cost-effective growth hacking strategy. We launched a Perk Generator tool and created awesome free content (Cherry Branded Slack Icon Set & future of work blog posts). We ramped up our social presence & secured an article in Forbes.
Product Development
Instead of focusing on customers who were using Cherry as their first perk program, we started listening to customers who had real pain around managing personalized benefits. We did this by partnering with the larger customers we wanted & knew would benefit from our product the most. We discussed with them in advance what features were essential & what were nice to haves to guide our roadmap. We contracted with an engineer (a past co-worker & friend) who helped changed our team dynamic & allowed us to move all the quicker.
We redesigned our website to feel fresh & light — creating a delightful “consumer” experience for our HR product (a space that is traditionally clunky). Taking feedback from our customers, we worked to simplify the UX for upcoming iterations.
All of the above led to 57% MoM growth over 6 months. Our product solved the low engagement problem with perks (historically 7%, with Cherry was 88%). Our customer reviews were glowing. We had a beautifully redesigned Cherry 1.1 waiting in the wings + a well-thought-out roadmap that would get us to $1M in ARR by the end of the calendar year. We thought there would never be a better time to raise.
➡️ Next: Fundraising During COVID
