Mykola (“Myk”) Konrad is SVP, Head of Product at iconectiv, a provider of Cloud-based SaaS data platforms. He is an expert at finding new opportunities to monetize products even when the market is stagnant. In a previous product leadership role at Allvue Systems, Myk generated more than $10 million in bookings per year by tailoring alternative investment solutions to untapped customer segments.
In our conversation, Myk shares his framework for thinking about product-market fit, especially when venturing into uncharted territory, and offers some tips for gaining the stakeholder and customer buy-in required to get a new growth strategy off the ground.
There are certain paths. You have to find the right products and you have to be in the right market, ideally. But it’s a combination of what you’re doing on the product side and how you’re looking at the segments you’re going after. It takes a little bit of skill, as well as luck, to get this to work correctly.
Here’s a loose framework of how to think about growth in companies that are past the startup stage. You have the same product, and you can keep selling it to the same customer segment; this is “business as usual.” You have the same product and you sell it into new customer segments, coming up with a new product that you can sell into the same customer segments you’re selling into today. Or, you can be disruptive by introducing new products into new segments.
At Allvue, we continued selling the same products into the same segments, but we followed normal product roadmap process and made them better.
What I mean by that is, typically, when you’re in a SaaS business, if you’re selling the same product to the same segment, your leverage for growth is going to be reducing churn. So, you’ve got to figure out: what features reduce churn so that those customers in the same segment aren’t leaving? There will always be a few new product features that those same-segment people need in order to keep purchasing from you.
Let’s use private equity as an example. There’s a flow to how PE firms do their investing. Most private equity funds start off with fundraising. Each PE firm has its own methodology when they open up these funds. Then, they go out and raise money to fund the fund. Once they do that, then they start looking for investing potential. Once they make the investment, they make the capital call to actually fund the investment.
Allvue participated in one portion of that process, which is post-funding or post-purchase accounting. If you understand the flow and the customer’s journey as they go through their business that opens up areas of product growth — selling into a new segment.
We launched an investor portal to provide a 24/7 communication chanel for the PE fund. If you’re an investor and you think you want to invest in a fund, there’s a lot of documentation around what the fund is, the legalities around it, getting access to all that, and then being able to sign it. We did some of the workflow of signing up to be an investor with this particular PE company, all within this investor portal.
And then on the backend, after the investment has actually happened, it’s important for the customer to see how they are doing and who invested into the fund. For example, the customer cares how the fund is doing, but more importantly, they want to know how their money is doing in that fund.
We moved into both sides of that. That was an excellent example where we sold into the same segment, but we put together a new product for it. That was based on knowledge of the customer journey and needs.
Yes — we moved into family offices. It’s the same fund accounting software, more or less, but we added in the go to market motion to sell to family offices with some added features.
Family offices, similar to private equity and venture capital, do invest in businesses, but they invest in a lot of other things also. They have a lot of money, and they’re looking to invest it somewhere. So, they need the same accounting systems. However, in the case of family offices, they do need some specific positioning, marketing, and potentially a few new features.
There are a few. One that I’ve been using recently is called design thinking. It’s a relatively well-known process. Most of these processes do involve actually really getting to know your customers, really understanding a day in the life of your customer. What are they trying to do and why are they trying to do it that way?
The best way to do that in the shortest amount of time is to actually go spend time with the customer onsite. Design thinking takes the methodology to run those meetings and then comes back and unpacks what that persona wants to do. It’s important to have those meetings with the people you’re targeting.
In the case of Allvue, those are accountants. So, we wanted to get the chief accounting officer, finance officer, and a few accountants in the room. We showed them what our product does, and then tried to understand their process and where the gaps might be.
The best way to test your hypothesis that the product will fit the segment is to do a demo. Show your product, and then have the conversation: where would it not work for you? What do you do differently?
To get to that level of intimacy with somebody, you have to spend some serious time because they have to really understand what the product does. If you’re selling the same product into a new segment, you start with a demo and then you go deeper. You have to spend hours and, typically, you have to do it on site so you actually have their attention.
The hard part there is to actually get a customer who wants to do that. Because they’re not a customer of yours; you’re trying to go into a new segment. What’s in it for them to help you? That’s a lot of time for them to give.
And that’s where financial incentives come in. Or, you could offer the opportunity to be part of a beta program and use the product early and/or for free. There are programs you can put in place to try to help drive participation.
If you’re selling the same product into the same segment, and you’re just adding new features to it, that’s going to be a normal roadmap. That’s not anything big. If you want to take the same product and move it into a new segment, that’ll require some investment, but nothing earth-shattering.
If you’re selling a new product to the same segment — like we did at Allvue — that tends to require a lot more investment, because the new product really starts to need a lot more R&D, UX/UI, and documentation.
In our case, the incremental investment we were making in that product wasn’t huge. But even with that, I had to get the buy-in of the CEO. But for new products being sold into the same segments, that’s where you typically have to get buy-in from the CFO. You probably have to get marketing bought in at that point as well. To introduce a new product into a new market, you need board-level approval, typically.
Assuming you’re selling the same product into a new segment, I’d suggest taking a marketing person, a sales person, and a finance person along for the ride — have them help in the prep meeting, put together the business case, the go-to-market, the value proposition, and have those other departments with you as you’re prepping. Because if they believe in it, typically, it scales.
If you can get sales bought in — and, to some extent, marketing — then it’ll happen, because sales will say, “Yes, I can sell this into this segment.” Marketing will say, “Yes, of course we can put together a website that can target that persona.” If you can get them bought in, you can get everyone working toward the goal.
To me, being a product guy, the real measure of success is revenue. Are you hitting and booking? And probably before revenue, especially in the cloud space, you’re going to be looking at booking first.
But if I’m going into a new segment with the same product, what I’m going to be looking for initially is, are users from that segment engaging? Are they logging in X times a day, depending what products you are looking at?
In the case of Allvue, we’d built this new portal, and we wanted to make sure users were in this new portal a couple times a day. Are users using it? Do they see that there’s value in it? There are a lot of products that let you track what features they’re using.
Secondly, how quickly were we able to go from that first lead coming in to an actual booking? In this case, we were taking the same product into a new segment. Is it resonating? Is the demo resonating? How quickly can we convert? Is there excitement in the market? Is there some sort of pipeline growth happening for this particular product in this segment?
There’s a product-centric way of doing it and a segment-centric way of doing it. So, the product centric way is: for my specific product, what other companies out there have software and capabilities similar to ours?
Another way of doing it is looking at a segmented market. We are a SaaS company selling into a PE firm. How many other SaaS companies are there selling into PE firms, and what is it that they’re selling them? You’re not going to get as in-depth about how their features stack up against our features, but it’s really good to understand who else is in that ecosystem.
So then you start building up a view of who else is adjacent to you going into those same companies. On a day-to-day basis, you’re going to want to know the direct competitors, which are the companies selling exactly what you’re selling. But there are times when you’re going to want to know all the adjacent products and value propositions that are selling into that particular segment that you’re selling into.
I think the easiest one that tends to resonate with a PE company or an investor is same-product-into-new-segment. And again, I use the word same product, but there are always going to be tweaks to it. It’s never exactly the same product as the user will be different. When you go into new segments, there’s always some new requirements. Something small is always going to have to change.
However, on the positive side, you aren’t putting together new architecture and moving it to a new cloud platform, or putting something together from scratch. You are adding something. Maybe you’re putting in some sort of new authentication protocol or a new data point for your new persona. That typically has the highest return for the lowest investment. So, same-product-into-new-segment is always the lowest-hanging fruit.
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