Charley Moore, CEO of Rocket Lawyer, discusses the differences in testing, scaling and determining product-market fit when you have 25,000, 50,000 and 100,000 customers, plus what that means for experimentation and upsetting your customers.
Over the next three days, DataFox will summarize the SaaStr 2016 panels. If you miss the tactical theater or strategy stage, are networking on the ground, or didn’t get a chance to attend this great conference, we’ve got you covered.
Special thanks to Jason Lemkin of SaaStr for putting on this conference and giving us the chance to publish these summaries.
In a nutshell:
- At 25,000 users, you should experiment early and often - but know that customers will be upset when you break things.
- At 50,000, you have a target painted on your back, so watch out for lawsuits or other threats.
- At 100,000, you should be profitable (or at least have a good excuse).
At 25,000 users
Moore learned early on to experiment quickly and often. Among his experiments was pricing: offering a free and freemium trial to lawyers helped make the product more accessible, got more customer data, and kept the company aligned with its mission of helping ordinary people get a lawyer.
But experimentation is easier when you don’t have that many customers. When you’re at 25,000 paid users, they’ll notice when you change things - and if you break something, they’ll get mad. You don’t have the freedom to rapidly test that you did when your user base was small.
At 50,000 users
When you’ve hit the 50,000 paid user mark, you’d better start watching your back: you’re big enough to attract attention, but not so big as to deter a threat. Rocket Lawyer was hit with a competitor lawsuit, for example – they eventually overcame it, by fighting back.
But when you’re growing that rapidly, you have a big opportunity.
“Scale can hide your dumb ideas, so keep screwing up!”
Keep experimenting. Love your mistakes (Moore’s been trying to sell life insurance, but hasn’t had any success yet) and double down on the things that work. Use your growth to test new ideas.
At 100,000 users
If you still aren’t profitable, you should ask yourself why. At the six-figure mark, you’re still growing, but profitability should be top-of-mind in a way that it might not have been earlier. Also, think of ways to acquire new customers before your current market is tapped out.
Rocket Lawyer completely replaced its old UI, an arduous process that entailed a new commitment to service architecture and an API-driven product. That almost ended in disaster when dogmatism reared its head in among some engineers. He learned that the company needed to hire more collaborative team members who wanted what was best for the company. Now, the company hires not just for technical competence, but also for social and cultural fit.