Why do serial entrepreneurs keep jumping back in? What things might you learn the third, fourth, or fifth time around?To find out, Extra Crunch Managing Editor Eric Eldon spoke to Drift CEO and founder David Cancel at TechCrunch Disrupt San Francisco.
Cancel has spent more than 20 years founding SaaS companies, with exits including Compete (acquired by TNS), Lookery (Acknowledge), Ghostery (Evidon), and Performable (Hubspot.)In their thirty-minute conversation, they cover everything from finding your first customers, to what hes seen change over the last two decades in the industry, to why hes willing to cut a check to employees who want to leave.
Rather watch them talk for yourself? Weve embedded a video of their chat at the end of this article.To find what people really want, ask for money any money.One thing Cancel says hes learned over the years: when youre just getting started, you need to charge for your product right off the bat because you never know how someone really feels about a product until you ask for money.If youre creating a paid-for product, you have to start charging from day one, he says.He outlines an experiment he calls the dollar test, where if someone seems interested in a product before its even available, hell promise them lifetime access if theyll hand over whatevers in their pocket be it a dollar, ten, twenty, whatever.What it teaches the entrepreneur is that most of the people who will tell you that they love this thing will not give you a dollar, actionable information that can save time, money and stress.
The dollar test shortcuts things; most people will end up spending so much time coming back to you because you keep telling [them] you love it, because youre a nice person and you dont want to hurt [their] feelings.Cancel also uses this approach after a product launches, using it to gauge which new feature requests customers find most important.Theyd say I love your product, but it doesnt do X, Y, or Z.
My company is special, we need X, Y, or Z feature.'Lets say they were paying us $5,000 a month.
Id say, its only going to be $20 more a month, then were going to build it for you and youll be the first ones to have it.'What would happen, almost every single time, is there would be this awkward pause.
Theyd say I have to go talk to my manager, I need to go talk to someone, Ill get right back to you,' he said, adding Almost every single time that person continued to be a customer and never asked for that feature again.When its free to ask for anything, says David, people will just keep asking.Letting people go isnt always a bad thingIf someone asks David for a recommendation on an engineer, hes willing to recommend his own employees.His reasoning is twofold; on one side, it means he knows his teams are made up of people who want to be there; on the other, it means employees know hes looking out for them.I want people on the team who want to be on the team.
If people ask me, hey, do you know a really great engineer who does X, Y, Z?' I say Eric does, and Erics on my team.
Im like, you should talk to him.
And if Eric wants to go, he should go, because we only want people who actually [want] to be there.
Then that person knows that Im looking out for the best interests of them, for them and even if they go, we may end up working together again later.Similarly, if an employee says they want to leave and start their own company, David says hes often the first to write a check:We would attract, in the early days, people who wanted to learn how to start their own company.
One of the things I would say, and I still say to everyone: Look, if you come on board, and work with us for some days, if you want to leave at any point and start a company, myself and my co-founder Elias will be the first checks in whatever you want to start, no questions asked.And so we have done that for companies in Boston, companies in San Francisco, companies all over the place.
And we continue to do that.For finding customers and employees, he turns to LinkedInThanks to recruiter spam and work anniversary notifications, LinkedIn tends to be the butt of a lot of jokes but Cancel says, used right, its still quite valuable.We built a lot of marketing within LinkedIn, which I think is a place that I would advise people to go spend time on now.
You can find your buyers, you can find the people that you recruit.