The story of Screenful and the lessons learned after 4 years of running a SaaS startup
Our startup, Screenful, just turned four. We’ve taken our baby steps and learned from our mistakes. It’s been quite a thrill to live it through with all the ups and downs. All work and no play makes entrepreneur a dull boy so I decided to take a vacation with the family in the tropics to recharge (see the header image). That gave me an opportunity to sit back and reflect on things that happened during the journey. This is the story of Screenful from inception to the first pilots, and to ultimately finding the product market fit.
I had been working on data analytics for quite a few years already and one thing I noticed was that the while there were plenty of good tools for data storage and the analysis step, I couldn’t really find a good tool that would allow me to create nice visualisations easily. I found that most business dashboards looked horrible and did not do a good job of turning data into information that the viewer could act on.
That’s when I came up with the idea of a dashboard product. It didn’t come to me as a sudden eureka moment but was more like a result of an extended thought process. Initially, I was thinking of a more traditional business intelligence tool but one that would excel in the presentation of data. The problem was that even though I could imagine how such a tool could be built, I couldn’t figure out how it could be done within any meaningful time frame. You know, business intelligence tools are quite complex. It felt overwhelming and I didn’t know where to start.
Then I came up with an idea of a simple dashboard that would be laser focused on serving one group of people, software development teams. I had seen how many companies had displays set up in their offices showing some aspect of their process, like the status of their builds or a Trello board displaying their tasks. Some had custom built dashboards that pulled data from the APIs of their tools. They looked mostly awful but served a purpose. The information was visible all the time without user having to log into a tool. I loved the idea and that’s when Screenful was born.
I wanted a name for the company that would be descriptive of what we’re doing. After scrapping several candidates I came up with Screenful, which wasn’t taken by any existing product. I looked up its dictionary definition and it was:
The amount of information visible at one time on a display screen
Hey, that’s exactly what this company is all about! The .com domain was not available so we settled to .me initially. At a later stage, after getting an investment, we purchased the .com from it’s owner.
Validating the idea
Getting a SaaS startup off the ground is not easy and it takes time. People have expectations about the quality of a SaaS product, which is based on their usage of other products, and that means you can’t go in with a half-baked product. You need to invest a lot in product development and marketing before you start seeing any significant revenue. Since your billing is recurring, you don’t get paid upfront and you need to be able to provide constant value to your customers or they will leave. We were lucky enough to get investors on board early on who believed in our vision. The truth is, you need some other source of income while you’re getting your SaaS product into a shape where it can cover your running costs.
We shaped the first concepts of our product in Protomo Helsinki, a sort of pre-accelerator program that provides a desk at a shared room with other wanna-be-entrepreneurs. It wasn’t fancy or anything but at least we had a place to work together. We were given a goal of creating a rough prototype of the product and showing it to at least 10 potential customers during the 6 months period that the program lasted.
The first versions of our product were just a bunch of powerpoint mockups that we presented as if it were a real working product. If a specific screen in our mockups did not receive positive feedback we just scrapped it. Thus, we were able to learn what our customers wanted without having to spend a lot of development resources (which we didn’t have).
We finished the first version of the product with a handful of pilot customers onboard. We aimed at international market from the beginning so we knew that we should make it easy to try and buy our product through our website in a self-service manner. That required quite an effort initially, but soon we noticed that signups started pouring in and some of them even converted to paying customers. Nice, could that be scaled?
We were showcased in a website that introduce new beta products and we got our first 20 or so signups from several different countries. Unluckily it happened at the time when I was having my first proper holiday since starting the company. I was offline and pretty much unreachable at the moment. We didn’t have automated on-boarding process or anything like that. As a result, our first eager users got their response more than week after their signup (manually sent by me after I got back to home) “Thanks a lot for signing up to Screenful…”. Needless to say we never heard back from most of them.
The funny thing is that once I contacted them again after couple of months, one of them replied, and as a result, we got our first US customer. That was a big thing for us at the time and it also helped with our initial fundraising.
After we finished our time at Protomo, we were accepted to the NewCo Helsinki accelerator program. It’s a non-profit accelerator funded by the city of Helsinki that doesn’t take any equity. They provide a shared working space and you are also assigned a mentor who provides assistance in various aspects of your business.
By that time we already had our current team in place. We’re a power team of three, Tuomas and Gevorg being the other two core members (and we’ve had several other people contributing along the way including Harri, Iikka, Matias, Miska, Henrik, Jason, Bob, and Martin).
We had all the essential skills in place and we were ready to hit the pedal.
We all have background in software development. Having a strong technical skills in the founding team is a great thing to have in a tech startup but it also meant that weren’t that strong in the sales side. We could certainly pick up a phone and book meetings if we wanted to. But techies tend to be busy with the tech stuff so sales was always a secondary thing to us. But as any sales person would confirm, selling is a full time job. At least if you want to actually close deals.
So we had to make a choice. Either we should add a dedicated sales person to our team, or we should make it really easy to purchase our product online in a self-service manner. We chose the latter. After some significant R&D effort we finally launched our product on March 2015 on Product Hunt. It was a success and we landed at fifth position for the day with about 150 signups. I have blogged about our experiences of launching our product previously.
Another boost came when we submitted our Trello Power-Up to their marketplace and they featured us in their blog post. During the following two weeks we got about 1500 companies signing up to our free trial.
These types of platform integrations can be a great way to tap into potential audience!
Encouraged by these early successes we decided to focus on building the best product we could and getting it distributed via various online channels. Finding the right channels is of course not trivial, and often requires a significant R&D effort as you need to integrate with those platforms first and get through their acceptance process. But once you’re there, you’ll get a steady flow of qualified leads for free.
More users means more support work. While it’s always good to connect with the users of your product, we noticed that we had less and less time for working on the product as we were doing an increasing amount of customer support. Some of it were repetitive manual tasks related to setting up accounts and managing them. We started to automate as many of those processes as possible. We wrote online guides and added things like FAQs and video tutorials to our website. That helped a lot and now the time we spend with customers has less to do with how to get the basic stuff working and more on how our product can actually help them in their daily work.
After we graduated from NewCo Helsinki, we were once again without an office. Luckily, our investors were kind enough to offer a desk in their office so that we can collaborate and exchange ideas more frequently. Later we applied an in-house startup position in Flux, a startup community funded by Microsoft. We were accepted and can now use their fabulous shared workspace. It’s great as we get to meet a lot of people. Working only with your co-founders can start to feel a bit isolated over time so sharing an office is a good idea.
Here are some key takeaways we collected along the way.
Know the problem you’re solving
We have a background in managing software projects so we have experienced the challenges firsthand. Our product is something we would have wanted to have for ourselves in those situations. So we’re a classic “scratch your own itch” type of case. That doesn’t mean you don’t have to talk to the users of your product. The best way to test your idea is to get your product to the hands of potential customers and see how they actually use it.
Find your niche
As a startup entering the market, you should look for problems that are not properly addressed by the existing products in the market. Sure, you’ll always have competition but in some domains there are more established players that you have hard time competing with. That’s the red ocean you want to avoid. At least initially.
We decided to focus on a niche area in the wider analytics landscape. There’s no shortage of good analytics tools for sales and marketing. However, the software production side is still largely a black box. There’s a lack of transparency in the process and more often than not, the management has no clue whether their production processes such as coding or design are working efficiently.
There’s also no shortage of task management tools in the market. Some of them have decent, but not great, analytics capabilities built-in. Some of them, like Trello, have none at all. We thought that if we focus solely on the analytics part of task management, we could excel over any of the existing solutions in the market. That was our niche.
Choose a business model that fits your company DNA
We knew from the beginning that we’re not sales guys. What we’re good at is product design. There’s no way we could have excelled in direct sales. So rather than being a company with average product and average sales & marketing, we decided to focus on building an excellent product, and use distribution channels and resellers to get the product to the hands of our customers. Since our product is an add-on to other products, it was natural to partner with the companies that our product integrated to. It turned out that they were more than happy to help us get visibility for our add-on. After all, if we can provide value to their customers, it’s a win-win situation.
It is possible to sell globally from day one
Location matters but less than you might think. You don’t have to have a local office in the countries you’re selling your product. Companies are used to purchasing products online and as long as the product meets their needs, they don’t really care where it’s made.
Our first pilot customers were Finnish companies but since then we’ve got customers from over 30 different countries. We haven’t met any of them face to face. A typical customer finds us online, signs up to the free trial and if they like the product, they purchase it with a credit card. Our sales process is limited to occasional emails or Skype calls if anything.
In our customer base, the number of US companies exceeds the number of Finnish companies by a factor of ten. What does that tell us? We certainly could have done a better job in getting visibility locally but also that in some other countries companies are perhaps more eager to try out new products.
Pick your game and double down on what works
The most crucial resource of any startup is money. You only have a certain runway to get your head above the water. That means you need to focus on activities that have worked in the past and quickly abandon those that haven’t. You can’t execute multiple different strategies effectively at once. For us that means that we focus 100% on building the best possible experience for the users that signup for the free trial. Our customers pay us if they like our product. Simple as that. I’m not saying this approach works for anyone but for us it has worked better than the other alternatives we tried.
Equally important is to decide what you don’t do as that allows you to spend more time on things you find most valuable. The things we don’t do include unnecessary internal meetings, attending pitching competitions or chasing VCs. We try to meet our local customers face to face every now and then but we don’t do any outbound sales like cold calling or cold emailing. At least for now. Be ruthless in your prioritisation.
Building a startup is a great fun and full of surprises. Each startup is unique in the sense that what works for one company is unlikely to work for another. There’s no playbook for turning your startup into a success. You’ll have to figure it out yourself.
Written by Sami Linnanvuo
Sami is the founder & CEO of Screenful, the company that turns data into visual stories. You can follow him on twitter @sl1nna.