CHURN FM
CHURN FM is the podcast for subscription economy pros. Every Wednesday we hear how the world’s fastest growing companies are tackling churn and using retention & engagement to fuel their growth.
CHURN FM
E239 | Closing the Feedback Loop: Cycle's Journey to Boost Customer Retention
Today on the show we have Mehdi Boudoukhane, the CEO & co-founder of Cycle.
In this episode, Mehdi shares his transformative journey from a data scientist in Johannesburg to launching Cycle, a company that seamlessly connects customer feedback with product development to close the feedback loop and enhance retention.
We then delved into how Cycle leverages feedback not just for product prioritization but as a tool to spread empathy across organizations and build trust with users, ultimately fostering a more engaged and loyal customer base.
As usual, I'm excited to hear what you think of this episode, and if you have any feedback, I would love to hear from you. You can email me directly at Andrew@churn.fm. Don't forget to follow us on Twitter.
Mentioned Resources:
Churn FM is sponsored by Vitally, the all-in-one Customer Success Platform.
00:00:00 Mehdi Boudoukhane: I think too often we just pick the standard size pricing, good, better, best, like per seat, like price per seat. But sometimes, value doesn't scale with, seats. It's a question I ask, if you double the number of seats, do you double the value of your product? If the answer is no, the per seat pricing is probably not the right way to price or maybe you need a platform fee. But yeah, I'd really focus on understanding the value that customers benefit from your product.
00:00:38 Andrew Michael: This is Churn.FM, the podcast for subscription economy pros. Each week, we hear how the world's fastest growing companies are tackling churn and using retention to fuel their growth.
00:00:51 VO: How do you build a habit forming product? We crossed over that magic threshold to negative churn. You need to invest in customer success. It always comes down to retention and engagement. Completely bootstrapped, profitable and growing.
00:01:04 Andrew Michael: Strategies, tactics and ideas brought together to help your business thrive in the subscription economy. I'm your host, Andrew Michael, and here's today's episode. Hey, Mehdi, welcome to the show.
00:01:18 Mehdi Boudoukhane: Hey, Andrew. Thanks for having me.
00:01:19 Andrew Michael: It's great to have you. For the listeners, Mehdi is the CEO and co-founder of Cycle, connecting customer feedback to product delivery workflows, so you can close the feedback loop with each release. Mehdi and team have raised over $6 million now to date to bring their vision to life. And my first question for you today, Mehdi is how did you end up in Johannesburg building a company?
00:01:39 Mehdi Boudoukhane: Oh, wow.
00:01:40 Andrew Michael: Taking you back, taking you back.
00:01:42 Mehdi Boudoukhane: Yeah. So that was like, I started my career more like on the technical side as a data scientist and I was working for a startup that was building big data analytic software for telecom companies. And they had many customers across the African continent. And you know, like I was asking the why question a little bit too often. I was annoying everyone and the CEO at some point told me, look, Mehdi, you're asking too many questions. What about you go talk to customers? You're going to be a product manager. It's this new thing.
00:02:14 Mehdi Boudoukhane: And so I ended up becoming a product manager and so involved a lot of customer facing. And so I was traveling a lot. I went to like 20 different African countries. I went to South Sudan, Kenya, Senegal. And one of those countries was South Africa. And we ended up opening an office first in Cape Town. And while I was in Cape Town, I met with some friends there and we decided to create a company together in Johannesburg, which was more like the economical capital city. That's where, like the bigger customers were. So yeah, that's the story.
00:02:47 Andrew Michael: It's strange that you went from Cape Town to Johannesburg because it's normally the other way around with most people, they'll start in Joburg and then they'll realize, okay, like Cape Town is a place to be, but yeah, definitely is the economic hub. It is the economic hub.
00:02:58 Mehdi Boudoukhane: Yeah, exactly. It was because we were going to found a new company. That's where, you know, that's where the big customers were. But I loved both though, you know, like I loved Joburg as much as I loved Cape Town. There was a vibe in Joburg. You don't have, like, the nature and the ocean and the mountain, but people are so cool.
00:03:16 Andrew Michael: Yeah, it is a good place. Obviously I grew up there as well. I spent like the first 18 years of my life in Johannesburg. And yeah, I would go back almost every single year. And now I'm going to slowly stop that because my mother and sister have actually recently just moved over from Johannesburg, but it is a beautiful place. Nice. And fast forward today, like you're with Cycle now, you founded the company a couple of years ago now.
00:03:42 Mehdi Boudoukhane: Yeah, four years ago.
00:03:43 Andrew Michael: Four years ago now, time flies. And maybe you just want to give us a little bit of an overview of what Cycle is, what it does. I think obviously I can see the connection between the dots of the curiosity and constantly wanting to ask customers. But yeah.
00:03:55 Mehdi Boudoukhane: Yeah. So basically Cycle is a platform that lets you build feedback systems. So what do we mean by feedback system? It's basically a way for you as a company to capture feedback from many different places, product feedback, from customer-facing teams, from the support tools, from the CRM, from churn surveys, and even your code recordings and your user interviews. We want it all in one place, one neat collaborative space where basically you can use the feedback to prioritize, to get some insights about your customers. But where we really differentiate ourselves compared to other feedback tools is really our philosophy of feedback.
00:04:40 Mehdi Boudoukhane: So for us, feedback shouldn't be used just as a tool to prioritize, but really as a tool to, one, spread empathy within the organization. So for us, what's crucial is when you do start working on a new feature, you need to have access to a bunch of customer quotes, right? And to have some visceral understanding of what problem you're trying to solve. And we're pretty good at that. And the other one, which is linked to retention, actually, it's for us, feedback should be used as a tool to create trust. And how do you use feedback as a tool to create trust? It's by being obsessed by the feedback loop concept.
00:05:18 Mehdi Boudoukhane: So for us, the goal is not just to capture feedback, but whenever you ship something, you need to be able to get back to all the folks who gave you feedback about what you ship to tell them, hey, thanks, you helped us improve the product. And when you do that, you increase engagement a lot, you increase retention, and also you create a virtuous cycle because now everyone is incentivized to give you even more feedback because when you don't close the loop, you ask people to give you feedback, but they don't get any value. So they end up stopping. And so we're really obsessed about that feedback loop concept.
00:05:51 Andrew Michael: Yeah, I love that. And I think it's not normally an easy thing to do. So like you collect a lot of feedback, often the systems are disconnected then, and then trying to figure out, like who actually gave you feedback about a specific piece of work and then being able to figure out which email system to, able to send them a notification or thanks for. And it's quite difficult. And I think that's actually one of the things that Hotjar actually did in the very early days, which was they recognized all their beta users and actually created a page on the website, which is like the beta founding, like Hotjar founding members or something like that.
00:06:22 Andrew Michael: And then those became like these extreme evangelists and champions because they'd been recognized in, like a really special way where Hotjar dedicated a webpage on their website for them. And it goes into this concept of you saying, it's like building their trust, building their brand and like thanking basically your users for–
00:06:38 Mehdi Boudoukhane: Exactly. And making them feel like they're co-creating the product with you. Right. When someone gave you feedback and you ship something about it and you thank them, they feel like… it's kind of like they created the product with you. Right. I think many companies underestimate the impact of that. Also, like something I didn't say, but one of the reasons I started Cycle with this vision of closing the feedback loop is I used to look at the churn surveys a lot.
00:07:07 Mehdi Boudoukhane: And frequently I was seeing users, like, churn, because they've been waiting for a feature for so long. But what drove me crazy is that the feature, actually shipped, but no one told them. So they churned because they've been waiting for a feature that actually got shipped. And I thought, that's crazy. It should never happen.
00:07:28 Mehdi Boudoukhane: And the other thing I learned that's even more counter-intuitive, some customers, they ask you for a feature or you end up shipping it. You don't tell them, but you ship it and they see it. And they're mad at you because you didn't consider them, you know, like they feel like, Hey, you ship that, like I asked for this, like thanks to me, you shipped it and you don't even thank me. It's crazy. Like weird psychology, but yeah, closing the loop is crucial.
00:07:52 Andrew Michael: And it's something that you never really find out about as well. I think it's one of those concepts we were talking a little bit about earlier before we started discussing what to talk about today, is that a lot of the times like the underlying value that you end up being delivered to users is not something you, typically paying attention to or measuring it in the best possible way.
00:08:10 Andrew Michael: And especially in this case, as you say, like something that could be seen as a positive, like I spent the time to give you the feedback and now actually, wait a minute, like they didn't even recognize me for that. Like you've literally built something I've given you this idea for. And like in your mind, you're thinking, yeah, we've done a great service to our customers because we've built what they asked for. But then just going that little bit of an extra mile can go so much such a long way as well.
00:08:31 Mehdi Boudoukhane: Exactly. And on that, I think it's interesting, but often companies see negative feedback as something negative. You know, like a user gives you negative feedback about the product. But for us, it's a huge positive. If the person takes the time to give you negative feedback, it means they're engaged. It means they want you to help them. And we should embrace that as good news. And they could have just silently churned, but no, they decided to provide you feedback. Yeah, you should value that.
00:09:02 Andrew Michael: Maybe let's double click into that a little bit. And so what is your process then at Cycle like when you receive negative feedback from users? How are you dealing with that and how are you responding?
00:09:14 Mehdi Boudoukhane: Yeah. So the first thing is every piece of feedback we receive, we tell them, Hey, thanks, we understood this is what we understood and we've sent it to our Cycle system. And what does the Cycle system mean? It means we don't promise that we're going to ship something about what you asked. But what we do promise is the day we start working on something related, you'll know. And the day we ship a new feature related to what you told us, you'll know as well and we'll thank you. And that creates, I mean, it creates trust the moment you close your first feedback loop with them.
00:09:54 Mehdi Boudoukhane: So when we onboard a new customer, we… actually we have this metric. We want to capture at least five pieces of feedback, right? So when we’re on board, we ask, hey, like, what could we do better? Or what's important that we don't cover yet? Or, and we try to capture at least five pieces of feedback, because we know that if we have five, most probably one of them in the next month will ship something about it. And we know that when we close the feedback loop on the feedback that we receive, we know that that company, it's not going to charge.
00:10:24 Mehdi Boudoukhane: So that's, there's two parts. You need to be disciplined about asking for the feedback in every customer interaction. Two, whenever you receive feedback, you need to build a trust that they will know the day you ship something about it. And three, you actually need to deliver the day you ship something about it, you need to get back to that.
00:10:45 Andrew Michael: I love that sort of focus as a metric for onboarding experiences, like actually collecting feedback and it's something that you can quantify, measure, like set performance against as a team. It really instills that habit of continuous like feedback and discovery.
00:11:00 Mehdi Boudoukhane: Yeah. You know, like we don't like it, if we onboard a team and they say, Hey, yeah, we love it. No, we don't have any feedback. It's cool. That's a red flag. It's counterintuitive, but if they don't have any negative feedback, it's a red flag.
00:11:13 Andrew Michael: Yeah, I love that. Nice. And one thing we were chatting a little bit about is a learning that you've had now through this process and the way you phrased it when you mentioned to me is that engagement is not always equal to value and people can end up churning when you might see them as highly engaged users, but actually they're not receiving value at the end of the day. So love to hear you share your story with us and the learnings and how you came to this.
00:11:38 Mehdi Boudoukhane: Yeah, yeah, that's a good one. It's a… it's something I learned. The hard way is I used to believe that if a team is active, they're not going to churn because you're like, they're active. And so, if you want to prevent churn, you just look at activity and when you see activity decrease, then it's a bad sign. But what you realize is that activity is not always correlated with value. So I'll give you a concrete example.
00:12:04 Mehdi Boudoukhane: So at Cycle, activity is whenever someone opens a view or creates a feedback or creates a feature. And so we had use cases where a team was active because it was creating feedback on a continuous basis, because there was a feedback form that was populating Cycle. And so feedback was created, but they were not getting any value because, it's not because feedback is created that you get value. If you don't extract insights out of the feedback you receive, if you don't link the feedback to features, you don't get any value.
00:12:38 Mehdi Boudoukhane: And so we had churns like that where teams were active. We were convinced they were going to retain and then the churn came out of nowhere and since then we changed our value metric. So we still track activity. It's good for reporting. It's a Vanity Metrics, mostly to report to investors and show progress. But what we really look at is what customers are actually getting value from Cycle week on week.
00:13:03 Mehdi Boudoukhane: And we can see that some customers are active, but they're not actively getting value. And how do we define value? Are they extracting insights? Because extracting insights is a proactive action that you need to make in Cycle. It's basically linking your feedback to your features. I think it's not even, it’s not good enough yet. I think in the future, we need to move towards, because extracting insights is valuable, but the true value is when you close the feedback loop.
00:13:30 Andrew Michael: Yeah.
00:13:31 Mehdi Boudoukhane: And it's like, how many times per week do you close feedback loops with your customers? I want to move towards that Value Metric eventually because that's really when a Cycle customer actually gets value out of the product.
00:13:44 Andrew Michael: Gets the benefit. And in that sense, is that when like you're giving, sending an update to the user or when something's being shipped in production, like you could see a reality, like a feature where you can connect the two as well and be able to see, okay, when something was actually shipped, that's a win for Cycle and the users and then when something in the notifiers, notification goes out.
00:14:02 Mehdi Boudoukhane: Yeah, it's even more. So you need to know when something gets shipped. So we have this release concept in Cycle, which is interesting. So people start writing their release notes in Cycle. So we know all the features that get shipped when. And then you need, feature by feature, you need to know how many people asked for this. And did we communicate back to them? And we can track that. And so actually, it even becomes like a new metric for product success, which actually I think is like it's a metric that could help customer success as well. But it's really, it's the feedback loop velocity.
00:14:40 Mehdi Boudoukhane: We're working on that case where I'm 100% convinced that you can correlate feedback loop velocity with net revenue retention. And that it could become something you optimize for. If anything, just optimize for the number of feedback loops you close every week, because it means customer-facing teams collaborate with product teams. It means you have a process to capture feedback regularly, so you spread empathy.
00:15:05 Mehdi Boudoukhane: And it also means that you ship, right? Because to close the feedback loop, you need to ship new releases, right? You can't close feedback loops if you don't ship. And so that's an interesting product metric. Instead of counting, you know, like how many story points did you ship or how many tickets? I mean, just count like how many loops did you close?
00:15:23 Andrew Michael: How many loops, yeah, I love that. And it's like directly then related to what users are asking for. You mentioned though, previously or something like if somebody leaves some feedback with you, you're not promising that you're going to do it, but you're going to let them know if and when something happens. And I think this whole idea of prioritizing feedback as well is a little bit of, like, a slippery slope. In some cases, if you just follow feedback blindly, it can send you down the wrong path as well. So I'm keen to hear a little bit about, like how you view feedback at Cycle and how you manage, what gets prioritized versus what doesn't.
00:15:56 Mehdi Boudoukhane: So I have, like a bit of a paradoxical thought, on that, is we're building a feedback tool, but I actually don't believe that you should prioritize based on feedback. I think there's like way too many biases and too many teams hide behind analytical scores, right? Like, yeah, I'll sort by the number of people who ask and I'll wait by the ARR and it's going to tell me what I need to ship. I think feedback is just one prioritization data point among many others, you know, like what's your strategy? What segments are you focused on?
00:16:31 Mehdi Boudoukhane: And so I'd say that you shouldn't prioritize based on feedback. I don't think it's the right way to do it. However, if you do your job well, obviously, every release you ship, you can link it to some of the things that people ask you. And that's... So we want to take the other angle. It's like, don't focus on... Don't ship what people ask. Just ship what you prioritize. Trust your intuition. If you talk to customers often, if you have an articulated product strategy, you will ship what people ask. So just focus on letting them know. Like, ship what you plan to ship and just let your customers know and the future Cycle will start kicking.
00:17:14 Andrew Michael: Yeah. I love that that message comes directly from you, who's somebody who's building a feedback product. That it's, yes, it is just one component.
00:17:24 Mehdi Boudoukhane: Yeah. There's a sentence. I mean, there's a quote I like to say to the team always. It's “There are two kinds of products in this world, products that try to please everyone and products that take a stance.” And I think you should be the product that takes a stance. That's, the problem of listening to feedback too much is, you end up building like Frankenstein complex products that don't have any opinion.
00:17:46 Andrew Michael: Yeah.
00:17:47 Mehdi Boudoukhane: And I don't think those are good products.
00:17:49 Andrew Michael: Good products. Yeah. Talking about Frankenstein products, I think one of the things I've noticed about Cycle is you have great detail in the craft of the product that you build. And I think that's evidence. Like if you visit your website, Cycle.app, there's a lot of attention to detail in the details and this transcends in, as well into the product itself. I think this is obviously intentional, but I'm keen to hear like, what are your thoughts and why?
00:18:16 Mehdi Boudoukhane: Yeah. Thanks. I mean, thank you for noticing, it's a, it's also something that I always say, the devil is in the detail, right? And we need to go the extra mile and think about every detail. And customers, even like it starts from your onboarding flow, like if a user sees the detail you put on like the small animation, you know, they're directly going to think, wow, if they go so deep just for that little animation, it means that they must have thought through the whole product. Yeah, indeed. That's something very important to us. Yeah.
00:18:53 Andrew Michael: And how do you think that's obviously one area you mentioned now, which makes a lot of sense, is if people see those little details, then they think, okay, wow, this company cares about their product or service. Do you think this has had an impact on the trajectory of the startup as well of your business and the likelihood of people maybe to either take it more seriously or to retain on the other end? Because I think, brand itself as well can be a big draw before retention.
00:19:17 Mehdi Boudoukhane: Yeah. I think, you know, like our biggest core value at Cycle is care. You know, we want to care about the people and to care about the craft. And we try to demonstrate care in every aspect of the customer journey. And it starts from the websites, how we communicate on social network or activation flow, how we also, you know what I said about the feedback loop, it's also caring, you know, like every user, whoever, we don't, for us, it's not about like, are you a big customer or a small customer? Are you paying, not paying? If you're a human taking time to give us feedback, we treat you with care.
00:19:57 Mehdi Boudoukhane: And as much as all the other people who give you feedback, you're gonna get the feedback loop because we care about that. And so I think that care philosophy is something that really helped us create a community of passionate customers or like vocal about it, who spread the words. We've had good word of mouth. And it's something... It makes me think of a concept that's important to us as well. It's like, how do we prioritize? Sometimes you have so many things you want to do and people will tend to reduce quality to go faster. And for us, what we say always is we never reduce quality, we reduce scope.
00:20:39 Mehdi Boudoukhane: So the best way to move faster is not to make something with less quality, it's just to make something smaller. And there's always a way to, like reduce scope and get to the essence of what you ship. And I think our customers noticed and it's definitely helped us.
00:20:58 Andrew Michael: Yeah. There's that Steve Jobs quote as well as like, Limit the number of details to perfect or like something on those lines or which falls in line with this philosophy is like really keeping things simple, but then like really focusing on that craft and the experience you deliver the users.
00:21:13 Mehdi Boudoukhane: Always less, but better. It's something like there's always a way that you can like, get a sense of what you want to achieve. Yeah. Simplify and do less.
00:21:21 Andrew Michael: Nice. You mentioned, as well a little bit about the experience and looking at your site now, we chatted a little bit about this before, is that you also made quite a big change in your like use acquisition model and the go-to-market strategy, like moving from a product led approach now to like a start free trial, book a demo. What was the motivation behind that and what was the learning?
00:21:44 Mehdi Boudoukhane: Yeah, that's a good one. It's crazy. You know, like there's this, I'm a… like a product founder at heart, right? I'm a product person and you know, like over the past few years, we've heard so much about PLG and product led growth and, you know, like startup is growth. That's the definition of startup. So what does it mean product-led growth? It means product-led. So you feel like either you're product-led or you're sales-led. And as a product founder, it feels like, okay, I have to be product-led. And I think it leads to some biases that are not good.
00:22:23 Mehdi Boudoukhane: And in our cases, what happened is for me, if we're serious about, product, I had to believe that the product should sell itself. It should be self-serve. It should be like a PLG activation. And so we iterated for a very long time on the self-serve flow. And in the end, to realize that actually, in its current version, Cycle is not a tool that should be sold self-serve for several reasons. The time to value is long. It's a horizontal product. You need to install several sources before you get value.
00:22:58 Mehdi Boudoukhane: Two, it's usually very top-down. There's no half adoption of Cycle. There's no such thing as a single product manager that starts implementing Cycle and getting value. Now, if the CPO doesn't decide, Hey, feedback systems are important. We're going to install Cycle. Then you don't get adoption.
00:23:16 Mehdi Boudoukhane: And the third one is it's a flexible product that needs configuration. And it needs a little bit of assistance in, you know, like when you discover the product for the first time. And so, yeah, through all those learnings, we realized actually self-service is not the right motion. And we've been iterating for a year on the motion that's wrong. And so we switched. So we killed our free plan. So we had the free plan. We killed the free plan. We said there's only like only a paid plan. There's a free trial on the paid plan. And if you want to activate your free trial, you need to book an onboarding call.
00:23:50 Mehdi Boudoukhane: And it worked because now like… so we had obviously, like many calls that were booked. And so we can introduce Cycle in the right way. You know, we can tell them, hey, we'll install the sources together. We'll show you, you know, how to get value in Cycle. We'll configure it with you. Then we'll create a shared Slack channel and we'll communicate. We'll give you a summary of all the feedback you gave us. And it's a much better way for teams to get introduced to Cycle than before. I'm not giving up on self-serve. You know, I have a few ideas on, like some use cases for which self-serve. It's going to be perfect, but right now it wasn't the right motion for us.
00:24:27 Andrew Michael: Yeah. And it makes so much sense as well, talking about the different barriers that you had in terms of the product getting adopted. It's the time to value is a bit longer than most type of products where product led motion, you can almost get the value immediately and those products work extremely well, but those where there's a bit more friction, there's a bit more steps in the process that need to happen.
00:24:47 Andrew Michael: I would also argue as well, like the type of product that you're building is that the type of customer would tend to be a larger company, a larger customer, because the volume of feedback that they need to be collecting only really makes sense when they have quite a bit of feedback and they're trying to figure out when you're an early stage, smaller business, the volume isn't there. So some of these businesses were more inclined to experience like the sales led motion as well.
00:25:11 Mehdi Boudoukhane: You're right. That's also something we took time to learn because we wanted so much to be like Figma, to be like Notion. We were targeting companies that were a little bit too small. When you're like 5-10 people, feedback is not your most important problem that you need to solve. And that's also a realization. You're right. Going slightly a little bit more upmarket, it made us realize as well that the motion wasn't right.
00:25:38 Mehdi Boudoukhane: And you mentioned the word friction. I think it's a good one. What I want to highlight as well is you can increase friction for activation. It's not especially a bad thing because if you have more friction in the activation, it also means more friction to churn, you know, because you, you've put more effort in. And so I don't think we should always optimize for, like reducing the friction as much as possible. Sometimes friction is good.
00:26:04 Andrew Michael: I 100% agree with that. I think that probably listeners will be bored of me talking about this story by now, but one of the ones I loved was Segment Analytics, Eleanor Dorfman we had on the show. And back then, what they would, they were similar to you. They had this sort of product lead approach. You could just get started, sign up, install the script, and then start getting on with your tracking. And what they realized was that was a big mistake because people came to them, because they wanted good, clean data. But if they didn't take the time in the beginning to put together a good tracking plan, they would just end up in the same mess that they got started with.
00:26:34 Andrew Michael: So adding friction, actually taking them, like to force them on a call, like you've done, get them to set up tracking properly from the start was actually a much bigger impact on the business and sort of like a step change for the company. So 100% agree.
00:26:47 Mehdi Boudoukhane: It resonates a lot. I think it's very similar for us. And you know, when I'm on an onboarding call and the person tells me they don't have access to, you know, like the integrations that I need them to set up to get value. I tell them to postpone, you know, I say, okay, we want, we're not going to do the onboarding because you're not ready. You don't have what you need to have to get value.
00:27:08 Andrew Michael: To get it.
00:27:08 Mehdi Boudoukhane: And it's, yeah, it's super helpful.
00:27:10 Andrew Michael: Yeah. And what sort of changes did you make internally then with the team? Obviously you spent a lot of time and money investment into sort of the onboarding experience. How did that change? Like, did you have an internal sales team previously? Like, is this something that you've recently adopted now?
00:27:26 Mehdi Boudoukhane: So the good thing is it's actually complimentary. So all the work we've done on self-serve, it's actually helpful. Even when you do like a sales led, that's what I realized, because when you do a sales led onboarding, you still need the product to activate, right? So all of the hard work we've done on [self serve] is actually helpful. And it's funny, we've never iterated more on our activation flow than since we started doing the onboardings because we receive a lot of feedback, right? We see them struggle or we see what's clear, what's not clear. So it helps us optimize for the first mile better.
00:28:01 Mehdi Boudoukhane: It's also interesting that for the feedback, there's two kinds of feedback. There's feedback from activated, retained, power users. They understand the product already and they typically ask you for more superpowers, more advanced features. And then there's feedback from the people who discovered the product. It's their first mile and they need to understand. And so now we get a lot more of such feedback, like the second kind of feedback, which we didn't have before. You don't see that on full story or on the session recording. You don't understand the intent.
00:28:35 Mehdi Boudoukhane: The other thing as well is that, I wanted to touch upon, on your question is it's not because we moved to sales and activation that we don't do product-led expansion. So we activate sales led, but still in the product, people can purchase add-ons, they can add seats and the pricing scales with the number of seats that they take. And so we still have that product led mindset for the expansion. So the team didn't change much. What changed was like the, my focus as a CEO was like, think less about product and think a little bit more about acquisition and activation.
00:29:16 Mehdi Boudoukhane: And so yeah, it was more like shifting the, sort of, like the focus of the company, but we didn't have to make new hires. It's still, I'd say at our stage, it's still like founder led sales.
00:29:30 Andrew Michael: Yeah.
00:29:30 Mehdi Boudoukhane: We're not yet at a stage where we have, like, enough repeatability to recruit like an SDR or an AE, but hopefully in the next few months we'll get there.
00:29:39 Andrew Michael: We'll get there. Nice. Yeah. And obviously it's very new for you as well. So it's definitely something you need to be doing to be able to understand sort of the volumes, what it takes to close, to be able to hire effectively.
00:29:49 Mehdi Boudoukhane: Exactly. Yeah.
00:29:51 Andrew Michael: Nice.
00:29:51 Mehdi Boudoukhane: You know, it's something, I think it's Brian Balfour who was on the podcast as well, who said that, you know, in product market fit, there's markets and, like maybe we should call it like market product fit. I think it's like many founders are like product founders and they believe and that's something I believe that a product market fit was a product topic. You know, once you have a retention curve that flattens and you have product market fit. And now I learned the hard way that it's, a product is only half of the equation.
00:30:23 Andrew Michael: Yeah.
00:30:24 Mehdi Boudoukhane: And you know, the market side of things, you know, what's your ICP? How do you acquire, you know, in a repeatable way? How do you activate, like sales led, product led? That's as equally important.
00:30:37 Andrew Michael: People can love your product, actively use it, but if they're not willing to pay for it, then you don't really have a business. So it's meaningless.
00:30:43 Mehdi Boudoukhane: You see, yeah, exactly.
00:30:45 Andrew Michael: Yeah. It's interesting as well, like I mentioned to you before the show, this was a similar learning that I came to with the previous company at Avrio was that as like a product and as a market, like product person I consume myself and as a marketer, like I was favored the go-to market motion of like product led. I was like, that's all I know. I've only worked in businesses with product led, but really that was probably one of the biggest catastrophic mistakes is not going sales led for a product.
00:31:08 Andrew Michael: And for the reasons that you mentioned in terms of like the necessities for different integrations, like the market that we were serving, like the time to value, all of that was like a longer horizon and having switched that earlier, not being like pushing myself outside of the comfort zone that probably could have changed the trajectory quite a bit. So this conversation resonates a lot.
00:31:30 Mehdi Boudoukhane: Yeah. Because of that, I think we could have gone one year faster just going outside of my comfort zone and realizing that, okay, product is not the solution to every problem. And sometimes it's not. I feel as well like it's the whole PLG thing that contributes to that. But like product founders, we see sales as, you know, like we demonize, like outbound, like, you know, if your product is good, like, why do you need sales?
00:31:59 Andrew Michael: I've never understood that.
00:31:59 Mehdi Boudoukhane: I think Joe on the podcast, Joe from May said, you know, we all believe that Slack and Atlassian and you know, like those product-led companies that they don't have sales teams, but they have, like huge sales teams, even, like, the most PLG companies have huge sales teams. And I think in the early stages of your company building, you need the learnings of outbound, you need the learnings of selling, like what message resonates, what pain points should you lead with, like what kinds of companies do you need to talk to, what kinds of people within those companies you need to talk to. And unfortunately, if you only do, like inbound and PLG, you really don't get those learnings fast enough, I feel.
00:32:39 Andrew Michael: Yeah. It can definitely be a big catalyst as well for learnings, as you mentioned. There's been, like several companies that have taken the approach, I think. They end up being PLG, but in the beginning, for example, I think Superhuman a good example of this, where they sort of stopped every customer they forced and onboarding on them, like they had to take this course slow and like deliberately for that learning curve at the early days really helped accelerate the product and where it ended up heading as well. So amazing.
00:33:05 Andrew Michael: I see we, coming up on time. So I want to ask a question like, what's one thing you know today about churn and retention that you wish you knew when you got started with your career?
00:33:14 Mehdi Boudoukhane: Hmm. It's a good one. I think I'd go with the like, usage is different than value. Track value, don't track usage. I'll go with that one.
00:33:23 Andrew Michael: And if you were speaking to yourself in the list, like what's one thing that you would tell yourself to look out for when it comes to this?
00:33:30 Mehdi Boudoukhane: I'd ask yourself, and that's actually, I ask other like founder friends, like what's your… What's the value of your product? Like how do people benefit from your product? It's a hard question. Like often people don't really know. And it also took us time to realize what it is. And I think it has other impacts than churn. It's also pricing and packaging. How do you scale your pricing and packaging with value?
00:33:55 Mehdi Boudoukhane: I think too often, we just pick the standard size pricing, good, better, best, like per seat, like price per seat. But sometimes, value doesn't scale with, seats. It's a question I ask, if you double the number of seats, do you double the value of your product? If the answer is no, like the per seat pricing is probably not the right way to price, or maybe you need a platform fee.
00:34:19 Andrew Michael: Yeah.
00:34:19 Mehdi Boudoukhane: But yeah, I'd really focus on, like, understanding the value that customers benefit from your product.
00:34:25 Andrew Michael: For sure. I love the mention of the pricing. That's actually one of the areas I'm considering around starting a new product because I think of exactly this is that like every startup, as soon as they get started, they're like, okay, let's go see what's in the market. Let's see what they do. It's always like a good, better, best model. They charge 59, we'll charge 45 or 49. And like, compete on price, which is probably the worst place you can be from a startup perspective. It really comes down to understanding what the value of your product delivers and then being able to price on those vectors really has a huge, huge impact on the business.
00:34:56 Andrew Michael: And ultimately, you're aligning value with the price that they pay. And I think in terms of being able to deliver an ROI and make a justification, it just becomes very simple to do the math’s in that sense as well.
00:35:07 Mehdi Boudoukhane: 100%. Yeah, it resonates a lot.
00:35:10 Andrew Michael: Nice. Well, Mehdi, it's been absolutely, pleasure chatting to you today. Is there any final thoughts you want to leave the listeners with? Like anything they should be aware of? How can they keep up to speed with your work?
00:35:19 Mehdi Boudoukhane: No, I think we covered, like, many topics. If you're interested in implementing a robust feedback system in your company to increase NRR, just go to Cycle.app. And so now that we have onboardings, I might be the one onboarding you in the product. So yeah, feel free to check us out.
00:35:35 Andrew Michael: Very cool. We'll make sure to leave everything we discussed today in the show notes. So if you want to check it out, it'll be there as well. And yeah, thanks so much for joining. I wish you the best of luck now going forward.
00:35:44 Mehdi Boudoukhane: Awesome. Thanks, Andrew. I really enjoyed it.
00:35:47 Andrew Michael: Cheers. And that's a wrap for the show today with me, Andrew Michael. I really hope you enjoyed it and you were able to pull out something valuable for your business. To keep up to date with Churn.FM and be notified about new episodes, blog posts and more, subscribe to our mailing list by visiting Churn.FM Also don't forget to subscribe to our show on iTunes, Google Play or wherever you listen to your podcasts. If you have any feedback, good or bad, I would love to hear from you. And you can provide your blunt, direct feedback by sending it to Andrew@churn.fm. Lastly, but most importantly, if you enjoyed this episode, please share it and leave a review as it really helps get the word out and grow the community. Thanks again for listening. See you again next week.
