Skok: Great software often has low engagement but high business value
David Skok · 1137 David Skok Matrix Partners on Hubspot Pricing Axis, Category Leaders, $100b Softbank Fund · Sep 4, 2018 · at 6:35
Matrix Partners venture capitalist David Skok discusses SaaS onboarding metrics with Nathan Latka, arguing founders should prioritize business outcomes over raw user engagement.
0:00 / 0:15exact quote · 15.8s
720p mp4 · rendered on demand · StarZero watermark
“So don't focus in on engagement and usage because in all honesty, some of the very best products I've seen actually have very low engagement because you simply do a sign up for them and they simply just start working. And if they have great business benefits and low engagement, that's the very best kind of product.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from David Skok
Skok: Annual logo churn above 20% signals missing product-market fit
“Any logo churn number that's greater than 20% per annum is worrying, and it's evidence that you don't have good product market fit in one of your customer segments.”
Skok: Namely leads mid-market HR tech while ADP is an easy target
“And to my mind, namely is the leader in that particular segment that we think is an important segment. And then if you look at the space that they're running, which is the 50 to, actually it's 20 to 2000 employees is the size range that they work in. There's r…”
Skok: High retention requires doing work for less capable customers
“Some of them are not going to be actually great at competencies of using the product itself. And if that's the case and you really want to care about getting high retention rates, recognize that you're probably going to have to do some of that for them and wit…”
Skok: Per-seat pricing works for sales software but fails for marketing tools
“And in the marketing area, that's not a great proxy, particularly in small companies, because There aren't really lots of people needed in marketing to make the product work well, and there typically isn't a large organization, not like sales, for example, whe…”
Skok: SaaS startups at $5M ARR should use no more than 2-3 pricing axes
“So I think when you're at five million in ARR, you probably want to have two pricing axes, possibly three, but not, not more than that. And you want your pricing to be simple because the customer, it should be easy for them to buy and easy for them to understa…”
Skok: Early startups should use professional services to discover product fit
“And in particular, in the really early days of a startup, I actually really like having services that are deeply engaged with one or two customers because That's how you really learn whether the product's actually going to work or not work and what are the iss…”