[03:29] Hey, Brian, welcome to the show.
- Hey, Trent. Thanks for having me. Excited to chat with you today.
[03:35] Yeah, absolutely. On behalf of my audience, we’re keen to have you here. For the folks in the audience who maybe don’t yet know who you are and what you do. Let’s start there. What’s your company do?
- Yeah, so I’ve worked for a company called Dozuki. And we really are a content management system for primarily focused on manufacturers, but we have customers in other industries as well. But similar to what you do with your SOP software, we’ve got a lot of companies that need to train their employees, they need to document processes and make it easy for them to learn. And so we’re replacing Word and PowerPoint and all these kinds of not-purpose-built tools that these companies are using.
[04:19] Okay, and when was the company founded?
- We’re actually a spinout of another company called iFixit.
[07:29] Okay, and employees. Number of employees now?
- We’re currently right around 55 employees.
[04:37] 55, okay. And you are bootstrapped to this point via the spinout, and now I think you said you’re raising money or something to that effect.
- Yeah. So we were founded in 2011. And for, you know, the first, really, the first, you know, 7 or 8 years of the company, we were part of iFixit. Just a division of iFixit. And then last year we officially spun out of iFixit and became a separate company after we took on a partnership and investment with 3M, which is one of our larger customers.
[05:14] Oh, nice. So was that the reason for the spinout? Because 3M wanted to become an investor? Or how did that happen?
- We were planning, we were in the process of doing it anyways, and that just kind of accelerated. It made us do it a little sooner than we were planning.
[05:29] Okay, and why did you decide to spin it out?
- You know, iFixit has got a mission. You know, they’re the world’s largest online repair manual. Google, ifixit.com, you can see they pretty much have repair guides for anything that you might want to fix—it could be a computer or a laptop or phone. And their mission is really about making repairability.
[05:55] It’s really important.
- And that’s really their mission. So our missions were different. You know, we’re focused on how we help manufacturers train better and have better tools for their employees, and iFixit’s mission is completely different. You know, they’re really about saving the planet is the way I would describe it.
[06:19] Okay, so you mentioned there earlier that your software is kind of similar to my software, Flowster, and so what I’m interested to understand is. I know you have traction with manufacturers. Flowster could be used by anyone in almost any industry, but we’re choosing from a marketing perspective to focus on the e-commerce niche. Does the same thing apply with your software? Are there all these other industries that really could get a lot of value from it, and you just simply chose to focus on manufacturing? Because, you know, it’s not a good idea to try and be everything to everyone? Is that the case? And if that’s true, why did you pick manufacturing?
- Yeah, this is a great question, a great topic because you see what’s happening in SaaS right now where there’s just so many solutions out there. And you can kind of be this generic solution to everybody, or you could be this really purpose-built solution for a very, you know, select segment of an industry. And so we, for a long time, we were kind of this generic solution, and it was hard to develop the product when you’re trying to develop to meet everybody’s needs, you know, you’re…I heard a great phrase the other day. I’m blanking on it, but. you know, “you’re not as valuable.” Your company’s not your tools; it’s not as valuable. Your products are not as valuable when it’s generic. When it’s purpose-built, it becomes a tool that these companies can’t live without. So there’s that from the product perspective.
And then, from the marketing perspective, it’s really hard to market, you know, a generic tool. You know, I think that’s the other part is, you know, everyone’s challenges and problems that they’re trying to solve are different depending on the industry. And if you try to market with very generic, you know, value propositions and challenges and things like that you’re gonna, you know, have a really hard time. There’s companies that do it really well, I think, you know, someone like Atlassian. You know, they’re one of the companies I look up to. They do that extremely well; they’ve been able to go after everybody. But they’ve, again, they’ve got more of a generic tool.
[08:20] So, was there a reason that you—like, why did you start off in manufacturing? Was there…did you guys do a market analysis? Did you have existing relationships? Like, how did that happen?
- We actually didn’t start in manufacturing. We actually started because iFixit, it’s really a CMS is the way I would describe it. You know, it gives you a way to create content, manage it. It was kind of like a public facing CMS where it’s a website on the internet. Anybody can go there; they can use it, they can create content. Because that’s where we started, initially, we were trying to sell to companies for product support and customer service. So if you needed to, let’s say you bought a bike from one of the bike manufacturers and you need to, you know, replace the chain. The idea that we had was, well, that bike manufacturer could create content in our CMS, make it available to their customers, and it’s a much better experience than doing it the correct way they do, which is, you know, these ugly PDFs that aren’t very helpful.
We did that for a few years and figured out that there just wasn’t a lot of demand there for that type of product from companies. They didn’t want to invest in making their documentation better. And so we actually had a few manufacturing companies that had reached out to us and had shown interest in the product. And we partnered early on with Tesla, this was back in 2013, right when they were getting the Model S production line going. And they became one of our early partners, and really for two years, we worked closely with them, and that was kind of the point at which, “Okay, We’re going to focus on manufacturing now.” Because we had done so much with Tesla, we saw there was a big market opportunity there with these manufacturers using tools like PowerPoint, Excel. A lot of paper.
[10:12] How did you get on Tesla’s radar screen?
- You know, sometimes, companies have, you know, the term “unfair advantage.” You know, you got a competitive advantage—ours, early on, was iFixit. If you go today, I think iFixit is ranked as the world’s—it’s somewhere around like 3000 most trafficked websites in the world. So they have a lot of people coming and looking at that content on that site, and they experienced the software on iFixit. And these people tend to be engineers. You know, we’re talking about repairing electronic devices and things like that. A lot of engineers go there. So that’s how a lot of our early customers found us. It was through iFixit. We actually used iFixit as a way to send people to Dozuki so we would have some marketing, some ads on there that, you know, “This content was built using Dozuki.” So it was like a clever way for us to take advantage of, you know, our already large user base with iFixit.
[11:13] So once the relationship with Tesla started to play out or form, sure, that’s a great one account, but it doesn’t necessarily mean that “Hey, we should go all-in on manufacturing.” What happened between, you know, building some momentum with Tesla, and then deciding, “Oh, well, we should go all-in on manufacturing.” Was there some analysis? Was there market research? Like, how did you guys make that decision?
- Yeah, it was really a combination of, yes, some market research that we were doing, you know, just looking at the trends in manufacturing where it was headed. You know, and then the other part of it was, we were really being—I’d say—pulled in that direction. We kept getting customers or companies coming to us and saying, even though we weren’t marketing to them, “Hey, this is really interesting. We’d love to use this internally.” And that pool was, I’d say, so strong that it became really clear for us, you know, also, you know the fact that most of these manufacturers were still using a lot of paper-based systems, that there was a big opportunity there for us.
[12:28] Okay. So once you decided that, “Okay, manufacturing is going to be the market that we want to really go deep into,” you mentioned companies were coming to you. Was that sufficient enough to cause the growth to happen? Or did you actually have to spool up marketing and sales to go after companies?
- Yeah, we, again, I think at the beginning, the pool in having iFixit as a great public example, where all these people were being able to see the software and use, that created a lot of opportunities for us early on, but we also did scale up our marketing and sales team. But we did it much slower than, you know, a traditional like VC-backed company would. You know, for the first, really the first 7 years of the company, we were a pretty small company. You know, we never had more than, you know, 20 employees for the first 7 years. For a long time, we were right around 10 employees. So we were pretty lean.
[13:28] Okay. And that’s obviously changing now.
- Yeah. Now, we went from 22 employees at the beginning of 2019 to 55 employees today.
[13:39] Okay. And that is a result of the investment by 3M?
- That and just the growth of sales. We’ve had some pretty good growth in the last couple of years. But, yeah, it’s a combination of both certainly.
[13:53] Okay, so let’s talk about the growth in sales. So what made that happen? Were there certain marketing campaigns that were really effective at generating leads for you? Or how are you getting these new sales opportunities?
- Yeah, I think one of the things that we have that I think we do really well is content marketing. Our VP of Marketing, her name is Leslie Bloom, she does a great job at focusing the marketing team. When she came into the company, the strategy was “Let’s develop a lot of content,” so we can have that content. It’s going to have, you know, a long tail of benefits for us. But it was that strong focus at the very beginning, that it started to pay off over the years. And it’s really helped us build up a brand to the point where, you know, we get a lot of people who subscribe to our blog, who really aren’t interested in our software, but they’re interested in our content. So I’d say our strong focus on content marketing has really helped us, you know, drive a lot of the growth that we’ve had over the last few years.
And then I would say, the other part of that is also, you know, there’s also this virality, I guess, of the software, I would say. To where, you know, people use it, and they tell their other colleagues about it in other departments or other divisions or at other companies. And we’ve been able to grow a lot through referrals and things like that as well.
[15:26] Okay. Do you think that, so, has content marketing been the largest source of new leads?
- Absolutely, yeah. Yeah, we’ve had.
[15:35] Like what percentage of new leads do you think come from your content?
- Well, we do also do SEM as well. So you know, it’s a good mix, but you know, we’re getting somewhere around probably over 50% organic.
[15:49] Okay. In terms of figuring out what to write about, is that something you can speak to?
- That’s, you know, that’s really outside of my area of expertise at this point. But our team spins you know, manufacturers in an interesting industry because of what’s going on in it right now. A lot of people think, you know, manufacturing in the US is contracting—it’s actually been expanding since the recession of 2008. But there’s not enough people going into it, so there’s a shortage of workers, actually. And there’s these workers that they are able to bring in that don’t have the skills necessary to operate a lot of this equipment. So there’s this real big need for training. So that’s been a lot of our focus on the content side. It’s, you know, just writing about the current challenges and the way some of these companies are solving those challenges.
[16:45] And how are you amplifying that content? Are you just going from an SEO perspective and hoping that it’s going to be found? Or is there aggressive paid ads spent behind the content to get it out there?
- There’s both, yes. So SEO and then, you know, we have an email subscriber base—a really large subscriber base but then also SEM. Were upwards of 50,000 subscribers.
[17:12] And did all that come just from organic growth of your list due to the content you’re producing?
[17:18] Fantastic. Okay. So with respect to content marketing and email marketing and SEM, which we’ve all lightly touched on, is there any—and I realized that you probably aren’t the one that runs those within the organization, but I’m sure you’re involved in discussions—is there anything there that you can shed light on in terms of any really big mistakes you made early on or a particular type of campaign that is really been working very well for you?
- Yeah, well, we’ve made plenty of mistakes. I’ll try to think of one, but I would say something that’s worked really well and has been kind of creative is a lot of these employees that these companies are looking for, we call it “Work Construction Recipe Templates” that go Google Search SOP template. And so one of the creative things our marketing team did was, they actually created SOP templates in Excel. But they made them, you know, they’re useful, but then obviously, they branded them with Dozuki, and there’s little calls to action in those SOP templates. And so we’re, when people are searching for those, we’re bidding on those keywords, obviously, so that people can click on that ad, download the template, and now they’re introduced to Dozuki, as well as getting something helpful and useful for them.
And then the idea is, hopefully, over time, they realize that template’s not so great and Dozuki’s got a better tool for them.
[18:53] Interesting. We haven’t actually considered that approach, so maybe we should be. So what you’re saying is while in your software, much like Flowster, you have a far superior SOP template for the purposes of capturing the search traffic and satisfying the search demand. You’re saying, “Hey, here’s this free Excel template” because everybody has Excel. They don’t have to create an account with your software. They don’t have to, like, it’s really, really low friction for them to get the SOP template. But then within that template, you’re saying, “Well, actually, we have a whole lot better experience for this particular SOP template. If you just want to go over into our software and login and create an account and, you know, download the other templates.” That, did I understand that correctly?
- Exactly. It creates an entry point for us to begin having a conversation with those people.
[19:44] Very interesting. Because in Excel, like I think, I’m thinking about our software, our SOP templates are very, very visual. They’re very, very specific. So in your Excel templates, you’d have to be somewhat generic, more of like a pretty simple checklist, would that be right?
- The templates that these manufacturers use are, oftentimes, you know, image, image, you know, lines of text, lines of text—they are very basic for the most part.
[20:14] Okay. So again, if I was to come and download one of these Excel templates, what am I going to see when I put it up?
- You’re going to see a nicely formatted Excel template with—that makes it really clear for how to use it. So ‘Add your image here,’ ‘Add your text here.’ And it’s basically just giving them, you know, these folks, a starting point, that’s a few steps ahead from them, you know, having to create it all on their own.
[20:39] Okay. I’ll have to get you to send me one of those because I’m now deeply curious about this particular strategy.
- Yeah, it’s been really interesting because, you know, these people are all searching for a better way or a template, something that would make it easier. So we said, “Hey, we’ll just give that to them for free. But then again, it’s just a great way for us to start that conversation with them as well.”
[20:58] Yeah. And then so in your call to action, in the template, it basically says, “Hey, we have a better version or a better experience, if you want to come and get it in our software.” Is that more or less the call to action?
- Yeah, pretty much. And you know, the idea isn’t that we’re trying to like get them out of the template into Dozuki right away. It’s, now we’ve, you know, we’ve got their email. Now, we can add them to our subscriber list; now, we can start marketing to them. And over time, hopefully, we can begin to have a relationship with them.
[21:28] And what does pricing on Dozuki look like when they first make that transition? Let’s assume it’s just a single user, and they want to sign up and get the better version of the template they gotta pay.
- Yeah. We don’t do any single user plans. But at the most basic level, our pricing starts at $200 a month.
[21:47] Okay. Interesting. Because I’m asking these questions because this is actually a conversation we’re having internally with our managing team right now as well. So highly relevant for the host, hopefully, also relevant for the audience.
- Yep. Pricing is a tough one. I think that’s one, you know, we’re often talking about, you know, “Are we charging enough?” You know, “Are there certain areas where maybe we could charge less to trigger more growth?” because we’re a user-based pricing model. So that’s one of the challenges we run into. It’s finding that balance.
[22:24] How many users does somebody get for $200 a month?
[22:29] Okay. And your customers, how many employees—like what size companies are these?
- It really ranges. I mean, we sell anywhere from, you know, these small manufacturers that are somewhere around 10 employees, all the way up to the big large companies, like 3M that are, you know, 90,000-person organizations. Most companies, they’re not going to deploy this throughout the entire company, they’re going to deploy it in their production area. So however many production employees they have, that’s typically how we see it being deployed.
[23:04] So in a larger account, do you find that the sales cycle gets a lot longer? Or is it because, you know, even though, “Hey, I’m in 3M, and there’s only going to be like four of us who are using this thing, or 10 of us,” or whatever. In that, and your price points low enough that you don’t have to go through the RFP, RFQ, or whatever. However, the hell 3M buy stuff, you can kind of avoid all that and just get in there relatively quickly?
- For some companies, that does work out really well, actually, this, we call like a “bottoms-up approach.” Or we can get in with, you know, a group of people who really understand how the software is going to benefit the company, and they start to use it. And then from there, we can expand up, but I’d say a lot of the, you know, midsize to enterprise-size companies, they’ve all got IT policies that prevent their employees from going out and just getting any software they want. And that’s been actually a shift in the last couple of years we’ve really seen is IT is becoming more strict on, you know, evaluating software solutions for security risks and things like that. Whereas, you know, more than a few years ago, that wasn’t the case, and there was a lot of people who just came in and put a credit card down.
[24:21] Alright, we haven’t talked about partnerships at all. How have they played a role in the evolution and growth of your company?
- Partnerships have been really a mixed bag of results for us, and I say that not because I don’t think they would work well for us. It’s just, we’ve tried to do some partnerships, and we haven’t dedicated the resources to them needed to be successful. It also can become a little bit of a distraction as what we found. So our current philosophy is unless we’re willing to go all-in on a partnership and provide all the support that they need to be successful, that we’re just not going to do them. But there are some good partnerships out there that we’re currently working on that are more technology-focused where we’re partnering with other software companies that have a gap in their solution that our platform fills so they can actually fold that into their solution. It’s kind of like a white label type of offering. So that’s one of the things that we’re working on right now, but partnership…
[25:29] So are we.
- Yeah. It’s like a white label type of offering that, yeah. There’s a lot of opportunity there. I’ve seen a lot of companies that, you know, during this COVID crisis scene, a lot of companies do that to be able to react quickly. They want to get a telehealth solution or something like that, built into their platform, things like that. I’ve been hearing a lot of stories about that and just allows them to react a lot quicker.
[25:54] So maybe this will be of some use to you. I mean, the way I look at it is, so I, and here’s how this came about for us, and like I said, maybe this will be of use for you, or maybe it won’t be. I signed up for some SEO Software, I don’t know, 3, 4, or 5 months ago. And much like many software companies, their onboarding experience was to send me emails to links to articles and videos, to show me how to use their software. And in particular, they relied a lot on videos. And while the videos are very well done and highly informative, the challenge, of course, is like, so one of the features that you would use SEO Software for is keyword research, which is a highly repetitive process.
So they give me this 10-minute training video. I watched it passively. And at the end of the video, I can’t remember every single detail of the 10-minute video. Like, it’s just too many pieces of information for me to remember. So I thought to myself, “Well, I’m going to use this tool for keyword research, but eventually, I’m going to delegate it to somebody else on my team.” So I used our Flowster software to take the video and basically unpack it into a checklist, a procedure that now someone else, including myself, could follow methodically to go and perform this repetitive task of keyword research. And so what, as a result of that experience, it occurred to me that well, you know, all these software companies or many of the software companies in e-commerce are onboarding their new users in the same way. And if the user isn’t immediately getting significant benefit from the software, they’re likely to churn out, which then means all the marketing dollars that were spent to acquire them end up being wasted.
And so that’s what we’re…that’s where we’re kind of where we’re going at with our white label program saying, “Hey, you know, we can give you an instance of Flowster, and instead of just onboarding your new customers, which is videos, why not create checklists and SOPs for them so that, unlike me, where I had to invest an hour doing it myself, like why would you make a customer do that? It’s more of a painful experience.” So with what you’ve tried and conversations you’ve had, did any of what I just said sound familiar or resonate? Or is that stuff you’ve never tried before?
- Not quite the same way. I think what we’re seeing on the tech partnership side is companies that their customers are asking, “Hey, do you have a solution for SOPs and work instructions?” And they’re, these tech companies are saying, “Well, no, we don’t. You could upload a PDF,” which is not the same as a purpose-built tool like Dozuki. And so they’re looking to fill that gap because their customers are asking for it. So it’s slightly different, but that’s, yeah, that’s been the primary way we’ve been, you know, generating these partnership discussions right now.
[28:53] Okay. And, but no significant winds just yet?
- Not yet. The companies we’re talking with are fairly large, you know, public companies.
[29:04] It takes a long time.
[29:07] Yeah, I know. Okay. Let’s talk about your sales team. At what point, so you capture a lead from content, they download one of your Excel spreadsheets, so now they’re a marketing qualified lead. At what point does your sales team proactively reach out to these new leads that are in the marketing funnel and try and get them to do whatever it is they try and get them to do? I’m assuming it’s probably a demo or something like that.
- Yeah. Our strategy is a little bit different. I think there’s a lot of companies doing like lead scoring. We know that certain pieces of content tend to correlate with a more qualified lead. So like that SOP checklist or SOP template, if someone were to download that, to us, that’s a good indicator, “Hey, that’s probably a good person for sales to talk to you sooner than later.” So that would score up to an MQL. But for a lot of our other contents, it’s a lot of, you know, there’s white papers, blog content, things like that. Those people, they don’t score up to an MQL right away, they have to take other actions before they score them to an MQL.
But once they do score up to an MQL, that’s the point at which our SDRs or sales development reps will start reaching out to them. You know, trying to be helpful is one of the ways that we go about it. “Hey, I noticed you downloaded this piece of content looks. Looks like you’re interested in ISO compliance. You know, do you have any questions? I can help out with.” So we try to take a more helpful approach versus “Hey, can we get you in a demo?” right away. That does come, but a little bit later on, after hopefully, we’ve built up some goodwill.
[30:44] And are those outreaches done primarily via email? Or are they picking up the phone as well?
- Email and phone. So we use a tool for sales engagement called outreach.io. Probably a lot of people are familiar with it, but that allows us to structure the cadence and then also what is actually being sent and communicated to these prospects. So our SDRs can just go in in the morning and go through their task, and they don’t have to think about “Who do I need to follow up with next?” The system is telling them who to follow up with.
[31:17] Okay. So I haven’t used outreach.io personally. I would assume that it is fairly similar to something like PipeDrive, where there’s basically a CRM, there’s a sales pipeline, and reporting. Or is it different than that?
- It’s different. This is, I guess, a newer category of product in the last, you know, 5 years or so. There’s another company called SalesLoft that produces a really good sales engagement tool as well. But it’s really meant for all of your engagement with your prospects, and it’s less about tracking opportunities and what stage they’re at, what’s the potential deal size and things like that. It’s more about “Hey, I need to have a conversation with Trent.” You know, “What are the things that I’m going to say to him? What’s the cadence that I’m going to reach out to him with?” You know, “How am I going to call him every day, every other day? We’re going to send an email, you know, twice a week.” But that’s really what those tools allow us to do. And then also from a sales management side, we can actually look at, “Okay, what’s our answer rate for this particular segment of leads? What’s the open rate for this sequence, for this step in the sequence so we can get real granular?” And it allows us to improve, kind of tweak what we’re doing, and improve at a real granular level versus just saying, “Hey, we need to write better emails,” or “We need to make more calls.”
[32:42] Yeah. So when you capture a lead, are they going, is outreach.io also your autoresponder that’s doing the email follow up series or is there a different app for that?
- Well, we when we bring in a lead, if it doesn’t score, they all go through HubSpot. And I think like most companies today, we have so many applications that are all connected now. So it goes into HubSpot. If it scores into MQL, it goes into our CRM, which is Zoho CRM. And then from there, it syncs with Outreach. It makes its way in the Outreach.
[33:15] Got it. Okay. So lots of either hand-coded integrations or you’re making use of Zapier?
- We used to use—we still do use Zapier—but we found another tool that just happens to integrate with the products that we use called PieSync. It’s actually a HubSpot product now but a really big fan of PieSync.
[33:35] I’ve heard of that one. So P-I-E, Sync—S-Y-N-C.
- Yeah, yeah. It’s about as easy as it gets to set up these integrations.
[33:46] I will definitely have to check that out. Alright. We’re doing for time here, doing okay. So in terms of pricing, we kind of hinted at it earlier that, you know, pricing is, can be a very confusing topic, which no doubt it can. How did you come up with, “Hey, we should charge 200 bucks as our entry-level to get on the platform?”
- That’s a good question. I think for us it’s been, over time, we’ve kind of seen, you know, what can the market bear, I guess, is one way that we’ve thought about it is, you know, when we put it at this price point, how many deals are we closing at this price point? How many deals are we close at this price point? Who would buy at this price point? Like what, who, you know, like our small package, we call it our “Basic Plan.” It’s $200 a month. That’s really designed for a small company; that’s not designed for a big enterprise. So that price point is, you know, for that level, it’s something that they can jump into right away. It’s not a big investment. But then on the top side, we have an enterprise plan that starts at $600 a month for 10 users. That’s got all the enterprise features like IP whitelisting and things like that, that those big companies really need. So we really thought about who are these plans designed for? And then, based on our experience selling to this industry, where should we price them at? Where are we going to have the most success for selling these plans?
- And then I think the last thing I would mention here, too, is, you know, we want our software, we want companies to get in and not be too concerned about the price upfront. Because we are a per-user model so the larger the company, the more users you have, the more expensive it gets. And so we try to keep our base packages low at a lower price. That way, these big companies or small companies can get in and not be intimidated or slowed down by the pricing.
[35:46] And is there a free trial period? Or do they have to sign up from day one?
- We do, we’re trying some things out with the COVID crisis. One of the things we’ve done is, we knew that we’re gonna have a hard time selling and closing deals during this period. And so we actually, within three weeks of the crisis started, we started to offer a free trial. And we hadn’t done that in probably, I think, six years. And we’ve always kind of avoided free trials because you get a lot of people who sign up, kick the tires for a day and then never come back. And you kind of lose your opportunity with that person in a lot of ways. And so we tried it during the COVID crisis. It’s been interesting. We’ve had better results than we did in the past; it’s just that we still have a lot of tire kickers just coming in checking the product out. But we are trying to find ways to use the trial period, further up our funnel, almost as a way to generate leads. So just like the SOP template. Similar to that.
[36:46] Yep. Okay. So if someone signs up for that five user account for 200 bucks a month and they want to add user six, what do they got to pay? How much more to pay?
- It depends on the type of license. It’d be either $10 or $25 a month depending on what type of user role they’re going to buy,
[37:03] Okay. So you don’t make them by users in bundles. They can just merely add number 6, number 7, number 8, number 9, but 5’s the minimum to kind of get them up and going.
- Yeah. Yeah, they could come in and, you know, if they’re on paying by credit card, they can add or disable users and scale up, scale down as they wish, which is, I think, some of the flexibility with our billing that our customers really appreciate.
[37:28] Yep. But they’re not going to scale down below 200 a month. I mean, that’s…
- No, that’s the bottom floor. Yeah.
[37:33] Okay. Let’s talk about customer onboarding, customer success. Obviously, very, very important so that the marketing dollars aren’t going to waste from people churning out. So someone gets far enough down into your funnel that they decide, “Okay, I’m going to give you my 200 bucks. I’m going to sign up for this thing.” What happens after that?
- Yeah. So it depends on the size of the company. So we segment by company size, and that really lets us know, “Okay, if I’m working with a 10 person company, the opportunity for growth there is probably pretty limited.” So with those companies, we use what we call a “tech touch classification.” So we say, “Hey, we’re going to engage with them through technology, automated emails, things like that. If they need support, they can email us and get help from our support team.” But as we move up the company size segments, you know, we get towards more like an enterprise, that’s when we dedicate a customer success manager to that account because we say, “Hey, that’s definitely going to be worth it to spend the time on this account. It could grow into something.”
But in terms of onboarding, by the time we’ve turned them into a customer, they’ve gone through a pilot, a 30-day pilot, and it’s a very structured pilot. One of the things that I think we do that, you know, I know a lot of other companies do this as well, but we have a very structured pilot in place because most of these manufacturers, the people we work with, have never bought software before. We also find that the decision-makers, the people who control the budget, they don’t quite understand the challenges or the problems that these folks that work on the plant floor, shop floor, are experiencing. And so when you say, “Hey, we’d like to purchase this software,” you know, they go to their decision-maker and say, “Hey, we like to purchase a software. It’s going to help us write work instructions and SOPs.” A lot of times, they’ll come back and say, “Well, we have SharePoint, Microsoft Word. What’s wrong with that?” and they don’t quite understand the difference there, you know, with a purpose-built tool like Dozuki. And so the pilot is an opportunity for us to have a really structured experience for the people who are using the software but then also for us to bring in those decision-makers and get in to see the difference, as well as get them to see the value and understand that the problems and challenges that they’re there folks are actually trying to solve with Dozuki.
[39:59] And the pilot happens before they agree to pay the $200 a month. Is that right?
- That’s right. Yeah, they commit to a, we charge $99 for the pilot. We don’t charge the $99 to make money. We charge that as it’s kind of a barrier to entry—you got to go through your purchasing department, oftentimes, to get approval for $99 PO, which, that work, is way more than the $99 that they’re spending. But that indicates that as that they’re committed to this.
[40:28] And so what happened? Walk me through the pile. Let’s say I’ve just given you my 99 bucks, what’s going to happen?
- You and I would meet, and we would develop a pilot plan. So familiar with a Gantt chart? We have a Gantt chart template that we use, and we outline what are we trying to accomplish during the pilot, everything from “Hey, we’re going to create 10 SOPs.” We’re going to test them out on one production line. We’re going to get Tom and Mary to help us create some of these SOPs. We’re going to introduce the tool to IT. We’re going to bring in, you know, these four decision-makers. So it outlines all the stuff that needs to be done during the pilot. And then we get commitment and agreement from our, we call it our “Champion,” the person who’s, you know, spearheading the project. We get commitment from them to the pilot plan, and then we initiate, we start the pilot, we do some training with their team, and then every week for four weeks, we’re checking in and referring back to that Gantt chart to see, “Okay, did we make the progress we said we’re gonna make? If not, what happened? You know, how are we going to readjust?” And then we’re also able to introduce new features and functionality of the software. You know, “Well, let’s get more depth. You wanted to get into capturing some data while you’re out on the production floor. Let’s talk about our data capture functionality.” So it’s able to be really a structured pilot. And again, the goal here is, you know, by the time they get to that in the pilot, we’re not even asking for the sale, they’re saying, “Hey, we’re ready to go.”
[42:02] So your pilot is kind of your trial for your software?
- It is. It’s a very structured trial. You know, trial, I always think you’re trying that out; you’re just giving it a go. And pilot is, you know, we put some structure to it.
[42:16] Yeah, yeah, absolutely, really. It’s a completely different thing. But it’s, you know, it’s still a test drive.
[42:25] But it’s a test drive with, hey, I would imagine your conversion rate from pilot to paid users is really, really high.
- It is. Last quarter, well, Q4, it was 75%.
[42:37] Yeah. So when people don’t convert, what’s usually the reason why?
- Well, when people don’t convert, top reasons are no decision. They can’t get, we couldn’t get all the stakeholders and decision-makers on board. Maybe this is one of the one of the, I guess, frustrating challenges with manufacturing is just not having WiFi out on the plant floor. Sometimes it’s a challenge, and a reason why people don’t move forward or they don’t have the hardware. So those are a few reasons. But, oftentimes, it really comes down to we didn’t get the right people on board, we weren’t able to get a certain stakeholder to agree that this project is worth the focus.
[43:25] Yeah. Okay. That makes a lot of sense. You don’t have the right decision-makers, you don’t get the right decisions.
[43:34] Alright. How about churn for your app? Is churn pretty low?
- Yeah, local churn. And then it’s, you know, we’ve got over 500 clients, so low return very low for us. Even during this, you know, crisis, we’ve been surprised by our numbers. You know, we were expecting a lot more churn, you know, especially working with a lot of smaller manufacturers. You know, we felt like they were going to tighten up their wallets a little bit, but it’s actually turned out that, you know, they actually need Dozuki more than ever now because they’ve got short staff, they’re short-staffed, they don’t have experienced people in, and they’re relying on having this documentation, these SOPs available. So that new people or someone, maybe this one guy, didn’t operate this machine previously, but now, he’s been asked to, he can refer to the instructions in Dozuki for how to do that. So that’s been kind of a surprise for us as this has actually accelerated. A lot of the companies we work with, it’s accelerated their adoption of the tool. They’re documenting sanitation processes, things like that in Dozuki as well.
[44:46] So speaking of processes, with respect to your internal processes, like content marketing, for example, publishing a blog post is a highly repeatable process. Do you use your own software to document that process so that it can be executed consistently? Or do you have a different way of doing that?
- Absolutely, we are, what it was, the term “dogfooding.” We’re big believers in using our own product. So if on the sales side, you know, I mean, it’s the sales team, every single sales process is documented. You know, before we ever launched a new process, we’re going to document it. So simple things like, “How to use this,” you know, Outreach. “How to use Outreach?” “How do you process an inbound lead?” A step-by-step tutorial with screenshots and instructions. And one of the cool things about Dozuki that we recently added is you can now create courses, which is a training curriculum. So you could say, “Well, you’re a sales rep, you need to know how to do these ten processes. I can assign that course to you in Dozuki,” and then that employee gets notified, they have to go through and complete that training. And I get notified as their manager if they don’t complete it on time, they’re overdue. So it’s a great way to build some accountability into this kind of on-your-own type of training.
[46:00] Yeah, absolutely. Brian, I want to thank you very much. Before we wrap, I guess the last question I always like to ask is if you were interviewing yourself, is there anything, is there any question that you would ask you that we have not yet addressed?
- That’s a tough one. Gosh, you’re putting me on the spot here.
[46:30] If you don’t have anything, that’s fine.
- Yeah, you know, I’d say maybe, you know, one of the things that I’m really interested in is, you know, just where software is headed, SaaS is headed. You know, we’re kind of breaking into the, I don’t know, you call it SaaS 2.0, we’re headed towards 3.0 now. And I think one of the interesting things is just how much of a niche focus that we’re starting to see with software applications. And I think that’s one of the exciting things about SaaS is, I mean, I saw a company that’s doing PRP software for waste management companies. Like it’s just getting hyper-focused, and that’s an area that I’m really interested to see where things go there.