Better Product Weekly: Prioritizing Product Improvements Over Growth with Eric Prugh

Episode Transcription

Christian Beck:

Another week down in shelter at home land.

Anna Eaglin:

That's right.

Christian Beck:

That sounds like a new show. There's a show, Homeland. Now there's like Shelter at Homeland, which is about like espionage inside our homes.

Anna Eaglin:

Oh, I would like that.

Christian Beck:

My situation is really squirrel related. We have a lot of tomfoolery happening with squirrels. So I think Shelter at Homeland would be about how we're sheltering ourselves from the squirrel invasion that's happening. So in the product world, there's probably other things we're talking about. Our last episode with Ryan Chan was fantastic. So I'm pretty excited this week to have one of the friends of the podcast, Eric Prugh join us later. But before we bring Eric on, I want to talk about that article that you shared earlier this morning, Anna, about Microsoft's earnings.

Anna Eaglin:

Yeah. I mean, it was really interesting. Microsoft, their earnings actually beat expectations despite what's going on with coronavirus. And the quote that I really liked was from the CEO Satya Nadella, where he said, "We've seen two years worth of digital transformation in two months." I mean, that's fascinating and interesting I think for anyone who kind of is working in product right now. That's something to really keep an eye on, understanding that a lot of the products that we work on, especially in the B2B world are apps that support digital transformation. And so knowing that that is staying consistent and in some ways accelerating for people, I mean, it's an interesting trend to watch.

Eric Prugh:

Yeah. It's kind of funny because when we talked about this article, I was like, "I don't want to talk about Microsoft's gargantuan earnings." But you're right, what's most important about it is why are their earnings high? It's because they're sort of a leading indicator of this digital transformation. They do a lot of the server side stuff for these companies. And so if that's happening, you know the next thing to follow is a lot of these companies that had maybe lagged behind on digital transformation or maybe lagged behind in the adoption of digital tools are now going to start doing it a lot.

Eric Prugh:

And we've been saying it for the last month at least at Innovatemap, but you never know if we're just being optimistic because that's the business we're in. So this was good to see some validation that it does seem like it's about to happen. But I really like how you connected it to product because I think it has even ramifications for Eric Prugh's company PactSafe, who we're about to have on the show. So it might be worth talking to him and seeing what he's saying and how they're adapting their business to take advantage of this trend.

Anna Eaglin:

So Eric, awesome to see you. Thanks for joining us. Just to start, I mean, for our listeners who didn't hear your original episode, could you just tell us a little bit about PactSafe and what PactSafe does?

Eric Prugh:

So PactSafe helps legal technical sales teams eliminate a lot of the menial unnecessary effort and back and forth that's currently devoted to contracts within their business.

Anna Eaglin:

PactSafe seems really well positioned to help people, especially people who've had to suddenly go digital, the people who maybe weren't expecting to. So I'm really curious, what has the last month, last five to six weeks looked like at PactSafe?

Eric Prugh:

Yeah, I mean, it's definitely been interesting. There's a lot of things that have changed overall. Growth has just kind of shifted on our priority list. We have five top priorities that we think about over the course of the year. And really not a ton has changed outside of the fact that now we're really focusing on moving as fast as we can, really adding a laser focus to prioritization and fast execution being our primary metrics that we're looking at on a weekly basis. And we've moved growth really to the bottom and focused a ton on our customers and really making sure that we're building the things that are helping them and making them more effective and efficient in their business.

Eric Prugh:

We're changing lot of our go-to-market strategy. I mean, overall, we have a very horizontal product. We can serve anybody. And as you mentioned, Anna, a lot of people are kind of being forced to go digital or to improve a lot of their digital processes. And so our primary markets, which are technology type companies or tech enabled companies are generally okay, but there's also a lot of kind of new emerging businesses that are looking to scale during this time. I think about all sorts of healthcare technology companies and stuff like that that we're looking at as a market that we can serve really well that we haven't looked at traditionally.

Eric Prugh:

We've done a lot of things to try to help companies as well, free kind of services and trials of products that are well suited for this environment. We released a COVID-19 contact-less contract and policy kit that people can use for free to just kind of help rapidly onboard people or do employees screenings, or we offered some templates that were put together by a big law firm, Taft, that can help people to craft legal policies and stuff.

Eric Prugh:

And then roadmap stuff, the core objectives are the same, but like I said, we're really focusing heavily on retention. Kind of a quick summary of what's happened.

Anna Eaglin:

When you say you're deprioritizing growth, what do you mean by growth?

Eric Prugh:

When I say deprioritize, I think really it's what comes first when you're working day-to-day? What are we really thinking about from a metrics perspective? We revised some of our forecasts and growth targets, meaning net new customers that we're trying to bring on and stuff like that. We've kept the whole team. There's still heads down from a sales perspective and trying to get people on board, but ultimately it's not the primary driver that we're focused on at the moment. Really we're just trying to ensure we can maintain the business as usual, meaning the people that we have, serve the customers that we need to serve, and just prioritize other things that will help really sustain the business during this time.

Eric Prugh:

And whether our market's really being affected or not, it's still a little early to tell. I mean, we had our biggest quarter ever in Q1, so we're optimistic for our business specifically, but ultimately everybody has been affected, and we're just trying to manage through it as best we can without reducing our workforce or having people have to cut salaries and stuff like that, which we're hugely grateful for that we're able to support that at this time.

Christian Beck:

How do you balance the sort of you're deprioritizing net new clients, but how are you balancing it with what you said earlier about going after new markets? Is that active or are you just starting to research and figure out what you might have to offer?

Eric Prugh:

So we spent about a week putting together the contact-less contract and policy kit. And in doing that, we kind of researched a lot on what the use cases were for people that are in need during this time. And out of that came looking at and doing a lot of research into what types of businesses are thriving and growing and might need help scaling their efforts in a very short period of time?

Eric Prugh:

I mean, Door Dash for example, was trying to onboard 300,000 new drivers during this time. They're onboarding tons of new restaurants. And so we worked closely with them to help in that process and help scale those efforts. So there are businesses that are doing kind of counter cyclically well, if that makes sense. And so we're looking at how we can potentially help those people.

Eric Prugh:

And our sales team and kind of go-to-market team is working to launch campaigns that kind of activate new personas, new customer segments that it might make sense. And so, we have two or three kind of primary segments that we go after in the market. We're just kind of swapping out one of them, one of our primary segments, with somebody who might be doing a little bit better in this particular time.

Christian Beck:

I don't know if you've experienced this, but we've talked to some people even on this show that are serving markets that the demand for what they're doing has gone up. So you mentioned Door Dash. And I think that the typical outsider perspective would be like, "Oh, they got to be doing great. Everybody wants it." But I also feel like there's got to be the part of even serving. So even Door Dash I'm sure is slammed, in a good way, but also in a tough way. Does that have effect on how you are able to serve them? I mean, are you having to change what you're doing from the customer support perspective or anything like that to be able to support them at the pace they need?

Eric Prugh:

Yeah. I mean, we've definitely felt some pain there where there are certain customers that they're asking more of us right now. And I think that's a very tough challenge to migrate through. And so when I talk about really focusing on retention and retention of our customer base, that's two fold, right? That's building tools for our CS team who's being leaned on more because the product's being used more. There are new processes that people want to use for the product to scale their own operations. We need to build tools that serve our customers' success and support team.

Eric Prugh:

And then there's also basic user experience type things that are going to make people's lives easier as they're using PactSafe now. And when you think about longterm roadmap and vision, a lot of this stuff, a lot of stuff had kind of gone ignored or hadn't been addressed in a long time because we are focused on growth. So we're focused on delivering features that are going to increase the size of the market or help us get big new logos or whatever. So that's kind of a two part shift. But I mean, we have a small CS team serving a lot of customers right now, so we're also trying to make their lives easier as best we can.

Anna Eaglin:

It sounds like what you're saying is kind of this prioritizing retention and prioritizing current current customers, the way it's cascaded to your roadmap is you are prioritizing, like you said, more of those usability issues, more, it sounds like internal tools to help customer success, support customers more. It does sound like it is actually having an effect on what your team is actively building right now.

Eric Prugh:

It is. It is, yeah. And I would say, we have a lot of customer projects going on that have been driven by growth and scale of our customers. And we've had a few new big folks come on board that we're having to ensure that we serve during this time with utmost priority. So I think it may have happened anyways. It's hard to tell. You know how roadmaps kind of blow up from time to time, but overall our core objectives are the same. It's just, you always kind of look at are these features, are these capabilities, are these solutions going to serve growth markets or retention markets for us? And so that's kind of what we've done to... We just said, "Let's put growth below retention at this point or weigh it a little bit less so that we can make sure we keep the customers that we have during this time." That's by far the most important thing in any SaaS business or digital business.

Christian Beck:

Do you have a sense for what you'll be looking for to know when you might start shifting your priorities back to more of a growth mode?

Eric Prugh:

That's a good question. I think we're actually actively monitoring pipeline. We've got a tracker that's kind of any opportunity that has been adversely affected due to COVID-19, we're logging and kind of characterizing, and just trying to assess of our active pipeline what's being affected? How much are we being affected? So that we can go back and revise forecast if we have to.

Eric Prugh:

But the reality is until we really see pipeline move to close during this time, and really obviously we made it to the end of the quarter, but a lot of deals were already in motion at that point. So it was great. A lot of people's deals died on the vine, so we're grateful that we were able to still hit the Q1 number.

Eric Prugh:

But we still don't know with 100% certainty that we're going to be unaffected or maybe even thrive during this time. And once we do, I think we'll be able to... Really, what's going to drive our focus back to growth is if we're able to start hiring again because we had a bunch of engineering roles open that we kind of froze until we got through wait and see mode. And if we're able to open the hiring gates and bring those folks on, then we'll definitely look at how we deploy them once we're kind of on the other side of this.

Eric Prugh:

And I know the other side of this for us is going to be a little bit sooner than most, I think, because we're just trying to assess. Our gut instinct right now is that, hey, people are going digital, people are going to redeploy the capital that they can't spend elsewhere to digital transformation or digital optimization if you will. But we don't really know that yet because it's a little too early. But a lot of people are just trying to weather the storm for the next six to 12 months, whereas for us, hopefully we'll be able to know a little bit sooner.

Anna Eaglin:

Well, anything that you've seen that makes you feel optimistic or kind of like a good trend or something good that's going to come for you to PactSafe in the next like six months to a year?

Eric Prugh:

Well, I think overall, the kind of sentiment behind remote work, functioning in that kind of environment, doing things online, you've seen a lot of industries have to adapt incredibly quickly. And some are doing actually a pretty good job, some are not, and trying to figure it out as quickly as they can. But what I am encouraged about is just that the people that are working are making it work and consuming tons of information, looking at tons of new ways to do things that they hadn't considered before, and really adjusting to this environment as best they can.

Eric Prugh:

I've been kind of pleasantly surprised with how people have accepted the new environment. And I think it's added a human touch to the work environment too, which I think is great, and hopefully will have a positive impact on the work we do when we actually get back to a more normal environment. We're already starting to talk about what the transition back looks like for us personally, which is always interesting because I've always been fearful of hiring a remote employee or managing someone that doesn't work onsite. But now, we had to figure it out, and I feel like we're in a good spot.

Eric Prugh:

I think with that, overall any digital business or SaaS business that is helping companies do more in a digital first way are going to be pretty optimistic about where things can go from here.

Christian Beck:

I would definitely agree. I'm very biased too. We're all very biased.

Anna Eaglin:

Yeah.

Christian Beck:

And our listeners are biased, so hopefully everybody heard that and just felt really great about the business overall.

Eric Prugh:

Right.

Christian Beck:

Well, Eric, thanks a lot for joining us on the show and talking to us a little bit about what you're doing. And it's been great having you on a second time.

Christian Beck:

I think it's good to hear from somebody who's working for a startup that's in growth mode, but is healthy. They have good revenue. They had had a great Q1. But as he mentioned, I think for a lot of companies that may have squeaked in there in January and February don't really think that they can repeat that success. But it does put you in a good position that it seems to allow Eric's team to kind of focus their energies on supporting their existing customers, which I think is great.

Anna Eaglin:

It's interesting because it feels like they're taking a bit of a conservative approach to the economy and what's happening. They have actually changed their roadmap, and that's something we haven't been hearing from people. Most people have been kind of thinking about their messaging, thinking about their positioning. They're talking a little bit different, but they're not necessarily doing anything different. And it sounds like Eric said, all this stuff, all these UX fixes, it sounds like supporting customer success. It's not like this stuff has always been in the realm of things they wanted to do, but because they were in growth mode, they hadn't gotten to it, but now they're kind of bringing it forward. And I think that's also a really interesting trend to see that someone who's... That this is actually affecting their roadmap.

Christian Beck:

Yeah. And like you mentioned, deprioritizing growth, which I don't know that everybody listening to the show is in a position where they can do that. Some you do have to let some people go and trim operating costs, unfortunately. But for those that can find ways to, if they've got enough revenue to maintain, then you shift your roadmap from growth-oriented features and product roadmaps to really just taking care of the ones that you have.

Christian Beck:

And he even mentioned something that Ryan Chan did last week about sort of segmenting out their customer profiles differently than Ryan, but Eric mentioned that they're looking at the ones that are doing well and dealing with them differently. And well, in this case, people could see that the air quotes, he was talking about these ones that are surging in their own demand. So Door Dash, it's not just doing well, like, "Oh, we're rich and everything's going great." It's like, they are actually inundated themselves, and that requires them to need PactSafe more for these online transaction.

Christian Beck:

So I think similar to Ryan Chan last week with UpKeep, he's also talking about really focusing on customers based on different profile and just maybe deprioritizing going to get new ones right now.

Anna Eaglin:

Yeah. And maybe that's a trend we'll see along, like Eric said, some of these more horizontal solutions that have a more balanced portfolio when it comes to different industries. That they're able to kind of see the opportunity with like the Door Dashes and maybe healthcare markets. I think people who are getting slammed and need more of what they're offering versus people who need less.

Christian Beck:

There's questions I wish I could have asked him that I don't know if he would be able to answer, but being a venture backed company, how do they handle those conversations with their investors? Because investors want you to grow, but I imagine a lot are using different tactics at this point. So I think, I'm sure they've gone back and talked to the board about this. But I'm very curious how those conversations go.

Christian Beck:

We asked him, "When do you know? What are you looking for when you know things might be able to dial back?" Because at some point, you'll have to go back to growth. And I know it's hard for a lot of people to see now, but it's almost like all of us having to... We just had remote office guidelines we all had to implement, and now we're about to start working on returning to office guidelines. It's almost like that with product. It's like, at some point you're going to have like what is a return to growth mode look like? When do you start seeing that maybe the market's changing? So that'll be an interesting thing to watch for the next couple of months as well.

Christian Beck:

Hopefully we don't look back on this episode and be like, "Oh, that's funny. Remember when Christian thought it was going to be better in two months?" But I do. I think it'll get better

Anna Eaglin:

Hope springs eternal. One other point that I want to make, that again, this occurred to me when you tied what Eric said back to Ryan Chan. I think this emphasis customer retention, I think is also an emphasis on stability. Because just like you said, it's like, yes, having Door Dash come on, having all these new customers come on, it's great. It's great for business. It's great to have new deals. But it's like there is a big stability issue. I mean, it's so critical right now that these systems are not failing and are not going down. And I think that is probably another piece of it, usability fixes and probably infrastructure fixes at guiding a roadmap.

Christian Beck:

Well, even on a personal note, it's sort of like, I think about all the house cleaning projects that I've done that I've put off. And it's like, "Well, I'm here, so let's actually deal with that broken cabinet or getting my kids' playroom finally cleaned up." It's almost like that with products. It's like, "Well, we're here. We're not building new features." And now they're having to focus so much on customer support. It's almost like they're even probably getting more attuned to the issues they may have sort of been like, "Oh, we'll get to that later. We've got to grow, grow, grow." Now it's like, "Well, we're not growing, so we're just going to take care of all this."

Christian Beck:

So to your point of stability, it's not just in downtime. If you've got the resources, there's a lot of value in just taking this opportunity to get your product in order. All of those, that tech and UX debt you accrued, get it ready because if and when the market returns, you'll be all the better for it.

Anna Eaglin:

Well, we hope that this talking with Eric, hearing what he had to say, hope it gave you, offered a different perspective, maybe something that you've been hearing from us, you've been hearing from others. But times are tough, and I think people are experimenting, and we love learning from what others are doing, and we love hearing from you.

Christian Beck:

What should they do? If people have ideas or questions, what should they do?

Anna Eaglin:

That's a good question. If maybe you have an idea or a question, you could visit betterproduct.community. You could sign up. You could start learning. You could start connecting with other product people who want to learn more. And also we love to hear from people. Do you have questions? Do you have thoughts? Is there a topic that you want to hear us ask questions about? I mean, we would love to hear what's on people's minds. And you can reach out to us podcasts@innovatemap.com. You can talk to Christian and I on LinkedIn.

Christian Beck:

She's active. If you message Anna, she'll reply.

Anna Eaglin:

I will.

Christian Beck:

All right. Well, this has been a lot of fun. We'll speak to you all next week. So I'm Christian.

Anna Eaglin:

And I'm Anna. And this has been another episode of Better Product Weekly.

Christian Beck:

Weekly.

Anna Eaglin:

Weekly.