Today, VC firms are keeping mental health in mind. Plus, SaaS master Hiten Shah gets humble with us. And we wrap with your guide to the software ecosystem.
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Dropping a bomb on one billion
Today we are throwing it right back to one of our very favorite pieces by a multi-Founder: Hiten Shah.
For context, Hiten has had a huge impact on several companies in the SaaS space—think FYI, Product Habits, KISSmetrics, Crazy Egg. But being this successful has its obstacles. And he, like us, is not immune to mistakes.
My very favorite piece by him is called “My Billion Dollar Mistake.”
It’s a piece that may be tough to read for some in the C-suite/founder realm, but it’s also one I think is super important to heed. Because it largely revolves around humility.
In it, Hiten outlines his dedicated attempts at product, and how—when he finally felt he nailed it with his SaaS offering KISSmetrics—he dropped (what he calls) a “Hiten bomb” and blew it all up.
“We had a billion dollar opportunity sitting right in front of us. Without a shred of doubt, I believe we could have turned KISSmetrics into a billion dollar startup. It was ours to lose.
And, “That’s exactly what we did,” he says. “We lost it."
Hiten blames what he calls “Hiten Bombs”—which were something that happened sometimes daily. These “bombs” would entail some new big idea, some pivoting direction, a brilliant thing he came up with. Something the team absolutely had to do right this second (a new feature, a competitor-inspired creation, you name it).
And although he did not realize it at the time, to his team the barrage of random ideas seemed like they were coming completely out of left field—and ultimately, they never moved the needle.
His team started referencing Hiten Bombs openly, and eventually his Head of Product wrote an internal memo to the whole company where he described exactly what a Hiten Bomb was and how it was impacting the team.
And that’s what it took for Hiten to change: Months and months of frustrated team members, countless wasted hours working on things that didn’t matter, competitors getting ahead, and customers leaving as a result. He knew this wasn’t what great leadership is. Great leaders are consistent, they help provide a direction, and get the team focused on doing what’s best for the business, at all times.
KISSmetrics competitors ultimately won out, and although Hiten says he lost what he calls a billion-dollar opportunity, he’s learned inherently to nail it moving forward. He’s all the better for that failure, and that’s exactly why he’s sharing it with you.
And Hiten’s wrap-up statement is even better than the story itself. (Check it all out here.) A big part of his takeaway: Hiten says he’s learned that the key to driving growth in product is to create product processes that produce repeatable wins. Not one win, not two wins. But wins that can take you through months, years, even decades.
The winning-product process is based on continuous innovation. It’s based on focus and planning, and continuous unbiased research and goal-focused development. Building product the right way takes work up front, but if you put in the work, you’ll be rewarded each and every time you sit down and look at your metrics.
(Stick around for a bit more with Hiten later in this episode.)
The VC firms keeping mental health at top of mind
We’ve talked about founder mental health on the show several times before, fully aware that this phenomenon is not spoken of enough, but is ever-apparent.
So we’re relieved to see the crew at Crunchbase (and venture capitalists) bringing it to light.
One story we’re particularly digging is that of Sarah Gaines, Founder of the Y Society, a Boston-based platform for women professionals. She ended the Y Society back in December, to become a life coach for entrepreneurs as a side gig.
“I want to help mission-based entrepreneurs find more joy, more time and more clarity so they can show up for themselves."
But does Sarah think people like her or other mindfulness professionals will ever be part of a suite of services across more VC firms?
“For VCs it’s such a fast paced, ‘you need to get shit done’ environment and that is the opposite of meditation and mindfulness. It’s going to be a VC-by-VC basis, and needs someone in the company who is really passionate about it becoming a benefit.”
And we encourage you to become passionate about it. Here's a link to the full story, so you can check out all the tales of mastering that mindfulness in the professional space.
Your guide to the software ecosystem
Now, let’s get back to the basics.
"What is the difference between a tool and a platform? And are platforms and ecosystems the same thing?"
In it, he breaks down the difference between products, tools, platforms, and ecosystems. To start, tools and platforms are both software products, with tools being the simpler of the two. If you were to put these in order of technical and conceptual complexity, they would go:
Product (tool –> platform) –> ecosystem
He then gives examples and further definitions for each, which you can check out for yourself.
But why does it all matter, you ask?
The average mid-sized business uses over 150 different software products, according to Blissfully’s 2019 Annual SaaS Trends Report. It’s just no longer possible to build a single SaaS solution that can handle all the evolving needs of a modern company, says Jonathan.
“Most software companies have figured this out, which is why smart companies are thinking beyond single products or platforms. The future of SaaS is all about building integrated ecosystems that deliver more valuable, efficient, connected user experiences.”
Recurring Rhetoric: predatory pricing
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