Your product data can tell you all you need to know: why now is the time to listen to it.

Photo by UX Indonesia on Unsplash

With the exception of the relatively small group of companies who have seen growth accelerate dramatically, most startups will be grappling with some version of ‘what do I do now?’. Even as economies begin to open up, we are a long way from knowing what our new reality will be in any meaningful way.

According to research by Startup Genome, the struggle is real. More than 41% of startups report that they have three months or less of cash runway left. Most companies have taken steps to reduce expenses due to the pandemic and are actively managing cash to extend that runway. In the last few weeks, you undoubtedly have seen your sales opportunities taking longer to convert. Or your pipeline filling up more slowly than it used to (or in some cases, maybe not at all). 74% of startups saw their revenues decline since the beginning of the crisis, with 16% of startups seeing over an 80% decline!

So, what now? In addition to the scenario planning and cost cutting that you’ve likely already done, I would suggest now is your opportunity to focus all your energy on true product market fit, and on your current customers. As difficult as it may feel, this situation has accelerated learning for tech companies specifically around whether their product is truly seen as a ‘must-have’. Why not use this time to figure out how you can make it so? New bookings are going to be slow anyway, so dedicating time toward the “expand” part of everyone’s favorite “Land and Expand” GTM motion makes good sense.

When I was at Pinterest, one year our company goal was “Make the Basics Great.” For us, that meant focusing on what our users wanted, what made them love the product and ultimately become evangelists for the company. More specifically, it meant driving product value each time one of our users landed at Pinterest and educating them towards finding that value. Product was in our DNA and we continuously tried to understand our user cohorts and “a-ha” metrics which ultimately led us to (somewhat) predictable user signups, engagement, and exponential growth. Although Pinterest is a consumer company, the same fundamentals can be applied in a B2B context.

Here are a few B2b companies that I think are doing it right when it comes to product market fit:

• Range: Meetings are essential for collaboration, deep discussion or decision making, and even more so during this pandemic. But studies show that bad meetings can eat up as much as 31 hours of wasted time every month. This leaves little time to get real work done and leads not just productivity losses, but also breakdowns in team dynamics and engagement. Range has tackled the challenge of making teams more productive by moving status updates from meetings to asynchronous, efficient check-ins. They keep teams more in-sync and connected with culture-building features, and help teams reclaim hours of time back so they can focus on work that matters.
• Figma: Designers have many tools to choose from, and Figma wasn’t the first to invent the market. But the team noticed designers were spending a lot of time doing low value, redundant work. They had to use a variety of different tools since no one tool did everything they needed, and each time they got design feedback, they had to iterate afterward instead of making changes in real time. Figma hones in on these specific problems and solves them by making the tool web-based for better collaboration, and more comprehensive so teams can do more there together. Designers love it because it has shortened the loop between designing and prototyping. This means designers and engineers can get to better product design faster than ever, especially as design becomes an even more critical component of driving product value. They have also built a fanatic user community.
• Crunchbase: Research has shown that companies are staying private longer, causing a greater need for research to track, and potentially prospect private companies. For anyone targeting a specific market segment, Crunchbase has become an invaluable sales tool. Crunchbase is also an essential source for information about companies and their founders and funders. It provides a snapshot of all the key data that I, as an investor, need in one place, almost like having a dossier or system of record. I can find, track and receive alerts about companies on my list, key team members, funding history, recent news, and more, so that I can find companies I’m interested in and then be always prepared before any meeting. Disclosure: OMERS is an investor in Crunchbase.

Reviewing product market fit

Take this time to focus on building product market fit and to create value for your current customers. The customers who helped you get to this point are also the customers who can help you unlock even more value in your business. Engage with them. Ask them what they love and what they need that you don’t already provide. Ensure your focus is on making them successful.

These conversations may lead you to the silver bullet set of features that have made your product a “must have” in their daily lives and workflow. This is the time to go back to the basics and focus on what works or is working and adapt this to the new world. And it provides an opportunity to eliminate what’s not working. You can effectively grow your business from your existing book of business by reducing churn, hopefully growing your existing relationships, and using this time as a period of extended user research for the future. Here are some questions that can help guide you through this process:

1. What are my use cases? Verify that your product is still solving your core problem set and solve the future (potentially altered) problem set
2. Who are my user personas? Prioritize who you want to delight and verify they are still in your ideal customer profile. You can’t please everyone.
3. Do you know what your customers are doing? Explore your metrics, ideally cohorted, and find the best customer actions that lead to product stickiness. See where they are getting tripped up. More importantly, remove that friction.
   
   At Pinterest, we iterated on when a potential user should be forced to sign up. Through analyzing our data, ultimately we decided that our best user was one where they understood Pinterest’s value before even signing up. So we delayed that signup wall until a user did a set of core actions.
4. What happens post-COVID? Adapt and build towards the future. The world is different now. Your current product might not be what the future wants and needs now. Make sure your assumptions match the new behaviors you are seeing. If you don’t take time to look, you’ll never know!

This is the perfect opportunity to go back to the basics, focus on the customer, prepare for the future state, and then hopefully accelerate out of this COVID environment when normalcy returns. Your product is what you got you to this point and your product is what will get you out of this.