Shubham cofounded Affinity along with his Stanford collegemate (and roommate), Ray Zhou, in ‘15 when they were still students. Since then they have built it into a ‘late eight figures’ ($ m) revenue business in the crowded CRM category. They have a strong foothold in the investor community, or indeed any sector where relationships are the key source of revenue. In our convo, Shubham speaks about Affinity hit product market fit (PMF) and success with a unique referral-led model built around ensuring customer success and delight in 30-45 days of onboarding the customer. They built this into a machine that helped them grow from 10 beta customers to 100 paying customers in six months.. It is a distinct referral-led motion that I haven’t seen anywhere. A core reason for the success was the work that went into making a product (in a traditionally low NPS category) that customers absolutely loved.
In the podcast, Shubham shares his definition of PMF (delivering customer value, measured in time spent or outcomes achieved, in a repeatable manner across a large number of consumers), as well as his advice for founders. In addition Shubham has advice for rising founders – one interesting input is that founders at any stage should seek founders 18m or one funding round ahead of them, as well as the book he recommends for a scientific approach to selling. All in all this was a terrific conversation. Shubham’s incredible clarity of thought and approach, as well as his willingness to openly share what worked for Affinity, comes through. I hope you enjoy this as much as I did.
(Please find below, the transcript of my conversation with Shubham Goel. The transcript has been lightly edited for readability. There will of course be errors; please excuse me for them. The interview was conducted via a zoom call on 30th November 2023.)
Affinity’s origin story
Sajith: Shubham, I attended that wonderful session you took on customer success at Velocity (A Blume founders’ mentoring meetup) about a couple of months back, and that was very interesting. You captured the early history of Affinity and how you worked to get the GTM motion cranking. I would love for you to go through the early history or the story that you said that day, and I would like you to repeat that, but in a much shorter fashion. And in addition to that early story, you could cover the origin story of Affinity, specifically how did you guys pick up the space? So, two Stanford College kids, how did you guys pick up the space, to the early days of Affinity and the early GTM?
Shubham: So, let me start by first sharing what Affinity does, and then I can talk about the origin story a bit. We built what we call a relationship intelligence platform that is geared to help deal makers across a variety of industries where relationships are the true currency of that industry and those organisations. To help those deal makers find, manage, and close their deals more effectively, that’s sort of what we do. And if you were to put us in a category that is, I guess more well-known categories of software, I would say Affinity in some ways is a next-generation CRM product. So, I think there are certain industries in the world where a generic CRM is not such a great fit for those industries, and we have gone and found that need and been able to build a better product than any generic CRM.
So, that on a high level is what Affinity does. Let me talk about how we found this problem and got to it. My co-founder and I were students at Stanford and we were college roommates at the time. We joined this incubator program over three months during one of the summers that we were in college. And the idea was for us to go build something that we thought was exciting. We were both kind of hackers, we liked to code and we liked to work on projects together. We had a very different idea at the time that was not related to Affinity at all, which we gave up halfway through the summer; six weeks in, we were like, this is not happening due to a variety of reasons. And suddenly, I think we had this kind of moment where we were like, okay, now what?
We have six weeks left. What do we do with our time? Do we go pursue something else? How should we think about this? And within a week, I think it was a very humbling experience because, within that seventh week, we realised we didn’t know much about the world. And I think most people in their early twenties probably relate to this if they’re thinking about what problems they can solve for the world. Most of the problems that you solve, that you want to solve are because of your experience and what you experience in the world. And we certainly hadn’t experienced most B2B problems. And so instead of thinking about starting a company, what we decided to do was, look, we kind of know what the engineering path looks like. We were both engineers by training, and so we were like, it seems like we don’t know enough about the world, so why don’t we go spend the next five weeks interviewing anybody who’s not an engineer basically, and learning about what they do for a living, how they do it. Maybe it’ll help us figure out our careers. Frankly, we were a little confused at the time. And so we were like, okay, that’s what we’re going to do. No, I’m not going to start a company.
So, we started with the folks who ran the incubator program, which was a firm called Pear Ventures, which is now one of the leading seed-stage firms in the world. But at the time, they were just getting started. So, we started with them. We started interviewing them, understanding, Hey, what do you do for a living? You obviously invest in companies, how do you go about your day? What does that look like? And we were just harmless college students. We were just trying to learn, maybe we want those jobs in five years from them. So, people were very open to sharing, and whenever we did an interview, we used to ask, Hey, who else, who are your friends? Can you introduce us to them? We are just trying to learn.
So, through this process, we ended up talking to about 50-60 people that in the next five weeks, a lot of them ended up being in finance or philanthropy or real estate, some people in sales. And an interesting thing we ended up learning through was that all of these people were managing relationships for a living. Essentially that’s what they were doing and that was interesting. We were like, wow, people making careers out of just managing these relationships and so we were curious. We went one step further and we started asking them, okay, how do you manage these relationships? Seemed like people’s networks were very important to them. We’re like how do you leverage these networks that you’ve built to drive your business forward? And that’s when I think that the tube light went off for us a little bit because we either heard people saying, Hey, this is an age-old problem. We have tried to use all kinds of products, but nothing’s worked for us and come to my office, we’ll, whiteboard, maybe you guys can help me here, or we heard sort of a second response, which is like, Hey, I don’t want to talk about this it is very stressful, it’s a painful part of my life, and I have no interest in spending any more time on it. And so either way, we were like, this is extremely painful. Seems like people don’t have a good way to think about this, and this is all they do. So, it was very interesting.
And then as we started to have more and more of those conversations, we ended up learning the first thing that CRM was, we did not know what CRM was. This is the first time we college students were learning about this industry. And so a natural reaction was to send people these recommendations of CRMs we found online. They would tell us, Hey, we want to do this better. We’ve tried a couple of products. The main problem is that the data is never there. The onus is on the user to get the data into the system. So, we never do, and that’s why we are not good at managing our relationships. That’s why we are not good at leveraging our networks. So, we would Google like, network management products. And we would find things and we would send it to them and be like, Hey guys, here’s the thing I discovered, maybe it can help you, happy to set it up for you. And many times we would get the response saying, Hey, I have already tried that. It doesn’t work for X, Y, Z reasons. So, through that process, over about 12 weeks, what we realised was everybody in these relationship-driven jobs had the same problem, which was they tried lots of CRM software, nothing had worked, and it was because the data in the CRMs was never there.
And that’s when we thought, okay, well what if the data was there? What if the data was automatically there? You didn’t have to do anything. This is the time when you have this insight that most of the interesting data about people’s relationships already exists by virtue of us communicating with the world. So, I’m emailing you, I’m emailing my friend, I’m texting my friend. We are sending calendar invites. So, most of the data that people want to capture is already there. It’s just that nobody is taking the time to pick that data up and put it into a system. So, we’re like, wait, this is dumb. We can just take that information, and automatically organise it so people don’t have to do this. And so that’s where Affinity was born. The idea is if we can solve the data problem for people and build a platform which can capture these millions of data points about people’s relationships from their communication streams and public information easily, then we can build a much, much better CRM product or frankly, a whole suite of products, which is what we are doing now that are better versions of existing categories.
That’s the founding story. There’s a lot of serendipity. We weren’t looking for it, we weren’t people who knew that we wanted to disrupt this space, it happened very organically.
Sajith: Very interesting. I always ask about the aha moment, the origin story, because I feel like the pick is a very, very critical point. And a lot of picks, good picks have a natural downward slant built into it. They have natural tailwinds or advantages. With bad picks, you struggle uphill. So, good picks have momentum behind them. So it seems the big insight was, hey, CRM for people who don’t want to put data into it, and CRM that comes in built with data; that was the insight.
And so I’m presuming you were at the end of your first year, so was it before or was it at the end of the second year? This project?
Shubham: This is two and a half years into college.
Sajith: Got it. So, what happened then? Did you guys start building this? What happened then? Did you drop out of college?
Shubham: I didn’t. I mean, I was an international student, so they have a bunch of visa regulations that you can’t really leave college easily and still be in the country. So, I didn’t, but my co-founder did. He took a leave of absence from college and I ended up graduating early. So, I graduated the following year. In terms of how it came together, once we understood the problem, the ultimate problem that people were having, which is that the data is never there, we just started figuring out how to solve that problem. We were engineers by training so we realised that all these APIs already exist, that people aren’t leveraging and can be easily leveraged. And we built something super hacky that sort of brought the network of the organisation together, and we took it to the folks who ran the incubator program, and we were like, hey guys, you talked about this being an issue, here’s something we have. Do you want to give it a shot? Maybe it’ll be interesting for you.
And the early prototype was pretty rough, but I think the moment of them being like, oh, wow, I don’t have to enter anything, it’s all here. I meet a founder today and tomorrow I don’t have to go into my CRM and create a contact for the founder and add. I’m like, no, you don’t have to do that, you just keep doing what you’re doing. And I think that sort of was a mind-blowing thing for them. And then we just went back to all the 50 conversations, a couple of other people and said, Hey, do you want to give us some feedback? So, that’s how it got started. It was a very simple prototype, and then one thing led to another, we kept improving the product, working with these early customers, started to get more in the first year, year and a half, and then took off from there.
On monetisation
Sajith: Got it. If I may ask, who was the first person who paid and when did you actually start charging?
Shubham: Yeah. So this is probably an area we made a mistake in. We did not monetise our product for the first year and a half, and so we had 10, probably 12 beta customers which we call them, who were using the product a lot. And so, our whole thing was, let’s just get people to a point where they absolutely cannot live without this. They are spending hours and hours of their day in this thing, and then we’ll see. Hopefully they will pay us; that was sort of the strategy. I think in retrospect, probably not the best strategy, however, at least the first part was really good. So, one of these beta customers, essentially the way it happened was they approached us and they said, look, guys, I need to know how much this thing costs because what I don’t want to hear in six months is that this is a million dollars, after all, I can’t afford to spend a million dollars on this. And now I’m getting so ingrained into this thing that it’s going to be hard for me to move my workflows elsewhere. So, just tell me the price now if it’s too expensive, I’ll move somewhere else now, but I need to know.
So that’s actually how the pricing conversation got started. And I think there’s a sort of common thing in company building folklore, which is, there’s a bunch of vectors you can innovate on. You should generally choose one vector – innovate on that and keep the others the same. So, you can innovate on product, you can innovate on market, you can innovate on pricing. We innovate on the product. And so, when people asked us how much it costs, all we did was we went to Salesforce’s website and we saw how much it costs, and we were like, well, that’s how much the product is. And people were like, okay, great and signed up. So, our pricing, sort of early pricing strategy was very, very simple. Our promise was that we’re going to build you a much better product than the market-leading generic CRM and pay the same amount for it. The first paying customer was a growth equity firm that was based out of Denver, Colorado in the US. So yeah, that’s how it got started. And then over time, we converted all the beta customers to paying customers and started getting more.
Sajith: Oh, interesting. Okay. Just out of curiosity, I’m just making you dig back into 2017. Do you recall the pricing? What was it then?
Shubham: Yeah, it was $125 per user per month, so $1,500 annual per user. And that was literally what Salesforce’s pricing was, they have a bunch of different SKUs. We picked the highest SKU at the time, and we said, that’s just how much it costs.
Sajith: Love it. I love the story.
Shubham: Yeah, pretty straightforward. But I genuinely believe this, I think a lot of founders feel like they have to innovate on every single vector. Oh, I have this product now, and I’m doing price discovery and now I’m doing market discovery and go-to-market discovery. I’m like, generally, startups die of indigestion more than anything else. And so generally you should pick the vector that you want to innovate on and just crush it at that, and then keep all the other vectors relatively unchanged. And that’s where success lives, in my opinion, because most, at least products, a lot of products that get built, especially in SAAS, have market comparables; it’s not like you’re building a new category. Most companies are not building new categories.
Sajith: That’s an interesting one on choosing one vector to innovate. A previous interviewee, Anshuman Bapnaa, also mentioned this, about either focusing on the product or focusing on distribution. He says, don’t try and do both or you’ll struggle.
Yeah, so, I have a broad idea, you’ve given me how it started you’ve told me about the early days, et cetera, and you said that one of the beta customers, one of the 10 beta customers reached out and said, hey, give me visibility into what’s going to cost me, et cetera. So, then you said now you’ve given them a price, and when you started monetising it, did you go back to all the beta customers and say, Hey, this is the price?
Customer-success supported referral-led motion
Shubham: Exactly. We did not go back to the beta customers right away. We ended up just realising that, okay, we are at a point where we can charge for this. And this is sort of what I talked about when I came to do the talk (at Blume’s event for founders). Each of these 10 beta customers were really happy customers. I could go to any of them and ask them, what is the best piece of technology they have used in the last three years, two years, whatever? And I felt so much confidence that Affinity would be the answer. If Affinity is not number one, it’s at least number two, in the categories of things that they have used. And that was really important because what we ended up doing was, we just went to the 10 and we asked them, Hey, who else should benefit from or who else can use this product?
And people were very happy & introduced, and we had built a very, I would say, close relationship with these folks. We were texting them and we knew a lot about them, not just from a professional standpoint, but we kind of knew a bunch of people on their team. And so we would just text them and be like, Hey, who else should I talk to? They were almost on your team trying to help you get to the next customer. And that’s the relationship you want to develop with your early customers. So, frankly, we went from 10 customers to 100 paying customers in 6 months. And the only reason that was possible to do that was because the 10 probably got us the first 50, and then the first 50 got us the next 50 where the motion was very clear to us on how do you get the contract signed, deliver a tonne of value by the 30th day, ask for five referrals, and then close two or three of those to be paying customers. So, that flywheel was sort of how we distributed in the early days.
Sajith: I want to double-click into this. So, I presume that this was about a year and a half you mentioned. So, you started late 2015, and my presumption is that this is early ‘17 or mid-‘17.
Shubham: Exactly.
Sajith: That’s when one of your beta customers comes back and says, Hey, we need to know how much this costs, and then you go and ask your 10 beta customers, give me 2-3 leads or 2-3 referrals, and they give you 2-3 names, and then you work with another 10. You onboard another 10. Okay. At this point, was there a standard price that you went in with? Just talk to me about how the conversion cycle moved, and how the first month played out. Can you talk a little bit about that?
Shubham: Yeah, totally. I think that two things helped. One is people had tried all sorts of things in this category that just hadn’t worked for them. If anything, I would say there are no CRMs out there which have an NPS score of greater than zero. Most people feel it’s a necessary evil, and that’s how they see it. So, what helped was the situation, you have somebody who’s using it, doing an email intro to a prospect and saying, hey, prospect A, I want to introduce you to this company, they have built something insane in this category, and I’m using this product every day. You need to check it out. And it was like a punchy, impactful thing. It wasn’t just a passive thing. So, coming into the conversation, they were already very excited to have the conversation, because frankly, I think people wanted something here that was easy to use and automated.
So, half the battle was already won, going into the conversation in terms of getting started. The other half, which is how do you convince people of the price? We were pretty open with people. People would ask us, how did you come up with the price? And I’m like, I looked at the market-leading CRM’s price, that’s all I did, because it is a CRM product, and if you buy it, then you have to buy it and another 15 add-ons on top to get to the same level of success. So, it’s a steal that I’m giving you, let’s forget the steal part too. I’m just literally giving you dollar for dollar, at the same price. And people were like, yeah, that makes sense. They spent a lot more money on their deployments than $1500 a year. And so, we got some pushback in some situations, but frankly, when they were pushed back instead of discounting – I had a lot of confidence in my ability to get people to succeed – I said, look, you should sign the deal and I’m going to put a 60 or 90-day opt-out in the deal. If I’m not able to deliver value to you in 90 days, we will consider this agreement void, but I’m not going to give you a $60 deal because there are thousands of them already out there, and none of them work for you. So, if you want something to solve your problem, this is how much it costs. It is the same price as what’s available out there. I mean, again, CRMs have a wide price range. There are $10 products out there too. The Pipedrives of the world are $10 a user a month. We are $125, so it’s a 10x difference. But, we were like, okay, well you already tried that & that doesn’t work. And so, if you want something in the price range, you have options, you should go there.
So, that approach worked where people felt the confidence, one from the intro itself and two from our ability to say, we’ll do an opt-out, no worries, we’ll give you your money back or frankly, we won’t even charge you until the 90 days. We won’t send you the invoice, and if it doesn’t work, it’s fine. We don’t want you to be held into some agreement for a product that’s not delivering value. So, that was sort of the conversation. And we didn’t, I would say, really hit big pricing roadblocks until we got to much larger deals where people wanted volume discounts and things like that.
On the ICP (Ideal customer persona)
Sajith: On the ICP, the corporate ICP, I got it, anyone for whom the relationship is a currency, let’s take for example, a fund. Typically, did you have to get introduced to the main GP in the fund or someone like that? Did it work if it was say, someone mid-tier introduces to someone mid-tier. Did it work then? Were there frictions there?
Shubham: It depended on the fund size in terms of employee count. If it was 2/3/4 people, then there are no mid-level people, there are only the senior folks. So, the key is that we identified over a few intros, the pattern was you have to get introduced to whoever is sort of driving the process of managing the pipeline of the firm. Sometimes it is a senior GP, sometimes it’s a mid-level or senior Principal / VP type person, sometimes it’s a really strong Associate, sometimes it’s an ops person. So, it diferred, to be honest, depending on who in a fund, especially who it could be. But that’s the question we learned to ask in the first call, Hey, who manages the deal flow, sort of, pipeline stuff for you? And once we got that name, then convincing that person and bringing them on board was important. And usually, that would be enough to do the internal selling to get us to success. So, that’s how it worked. It was different, I would say, depending on the firm.
Sajith: Yeah. I just want to go on to the motion now. It was one of those interesting referral-led motions, and I haven’t seen too many of them. I love the way you systematised it. Can I just double-click a bit into the process of how you almost leveraged customer success, it was both a referral-led and customer success supported motion, if I may call it that. It’s a very unique motion, so love you to double-click. I don’t think there’s been a motion like it and all was built around intense product love.
Deep-diving into Affinity’s GTM
Shubham: Yes, exactly. I personally feel very passionate about this one because a lot of companies, especially in SAAS, are sort of trying to figure out how to do inbound and outbound and what channels, and inbound content or SEO and this and that. There’s a lot written about these things and for good reason, these things work at some point in the company’s lifecycle. But for us, and most SAAS companies, the market’s getting so crowded now every category has got like 15/20 players. Regardless of what you do, you pick any category, there are at least 10 guys doing something similar. So, in that type of environment, it becomes difficult, we were playing in the CRM category, right? There are a thousand CRMs in the world, it’s probably the most crowded category of software if anything.
This was in 2015, now it’s probably worse. So, when you’re in that situation, the way you win is by declaratively and definitively building the best solution and building a really strong relationship with your customer in not just delivering the value, but also how you work with them as a company. So, those two things become extremely important. So, for us, the motion was very simple, which is the way we grew to about 300-400 customers.
We developed a customer success playbook that we refined working with the first 10 beta customers. We understood what steps had to be taken to get them to success. So, we had a very clear playbook once the contract was signed on day one, what had to happen by day 30 to get them to that point of, Hey, I love this thing. Sometimes it would be day 45, but we had in that rough period, we figured out how to deliver a tonne of value. And then at that point on day 30 or 45, we would simply ask them, hey, who are the five others who should use this product and would want to try it.
We would get probably three to five referrals from each of these folks. And the conversion rates on those referrals were upwards of 50%. So, that’s how we would get the incremental next customer and then repeat, right? So, it’s kind of the hub and spoke model. So, there are a few nice components of this and why this works. People talk about customer obsession and focusing on your customer. No model focuses you more on your customer than this one in the early days because frankly, there is no other growth path. The only growth path is you have to convince your customers so hard that this is the best thing that they’re willing to shout at the top of their lungs, that, hey world, please come this way. We need more people to support this company.
And it’s like a movement that you’re almost building with them. So, it focuses the whole team on delivering so much value to this customer that nothing else matters and that was a key for us in driving success. It solves a lot of problems later down the line for you, which people face when they’re scaling. People struggle with getting high net retention, they start seeing churn. They have a hard time hiring salespeople because salespeople want to sell things that are used by people and not products that get sold but never get used, right? It’s easier to hire marketing people. Marketing people want to market things that there’s a community of case studies for, that they can leverage testimonials and when every customer is willing to give you a testimonial and sit with you and do a video interview, nothing like it.
So, there are a lot of second, third-degree benefits in scaling your company that you get by taking this approach. It probably takes a bit longer than your classic I’m going to outbound to thousands of folks today and get to my first hundred customers. But it pays off in the long run because frankly, when you’re scaling from 1 to 10 to 50 or whatever millions of ARR, the biggest limiting factor to your growth becomes your churn and your ability to drive high net retention. In my opinion, net retention is the most important metric in these businesses. So, if you don’t have good net retention, then if you’re at 20 million of ARR, you might be adding 3 million new ARR every quarter, but you’re also churning 3 million every quarter. Well, guess what? 0% growth. So, it becomes crucial to have that and this model helps you cement that DNA into your company.
Sajith: Well, thank you for this. Just wanted to go into one part and then we’ll segue into a different section. What was the specific value delivered in 30 days? What was the expectation and what did you deliver?
Shubham: It depends on the customer a little bit, but we had a part of the playbook in the first week identifying with the customer what are the top two or three metrics they want to move or what are the top two and three values or why they buy the product and let’s write that down very explicitly. So, it could be, hey, I’m just trying to centralise my deal flow, I want one place where we run our Monday morning meetings and have all our deal flow conversations. Or it could be, hey, we are spending a lot of time entering data into the system. I want to cut that out by 50% or something like that or whatever. There could be some variation of this. And we would say, great, let’s write this down on a piece of paper and we are going to schedule a weekly check-in call and every week we are going to review where we are on that metric.
And it was both a quantitative thing as well as a qualitative thing. We would have some quantitative score and then we would ask the customer, on a scale of 1 to 10, how good are we at this today? If the answer was not a 10, then we would ask, well how do we get it one point up next week? And they would have some feedback and it’s product feedback or something else. And if it was product feedback, then we made sure that by the time, next time we talked to them, which was in a week, that thing was addressed. So, to build that super tight sort of internal product feedback loop. So, that’s the cycle we ran over four or five weeks, and in five weeks people were like oh my God whatever I give them these people come back with that being solved.
The key thing here is to build that framework initially with the customer, you need to put them in a box a little bit, which is, this is why you bought the product. In five weeks, I’m going to convince you that this is delivering value on this particular metric or this set of metrics. If you just generally ask them how things are going and generally have that conversation every week, it’s not very good because they’ll give you lots of random thoughts that may or may not be applicable. So, having that focused set of metrics and conversations on a weekly basis was how we got to that point where in four or five weeks, they would either, and it took longer for sure in the first phase of when we had beta customers, because the product was not as feature rich and there were a lot of use cases missing. But by the time we got to 20/30 customers, literally, in four or five weeks we were able to, because everybody had common requests and stuff, so we were able to address most of them. So yeah, we got to a point where in five or four weeks, we would be able to deliver a 10 on 10 on the top two or three things that they identified, and then we kept continuing. It’s not like we left the cadence there. The five weeks was the time when we would ask for the intros, but the cadence kept continuing for probably three months until they were so excited that they would make unprompted referrals. So, that was one of the motions, yeah.
Shubham’s definition of PMF
Sajith: Got it. Thank you for that. And now I just segue a little bit into the product market fit part, I think GTM and PMF are intrinsically linked. I mean at that time, this was 2015 or ‘17, ‘18, did you specifically say, oh, I have to work towards PMF, was that a well-articulated concept or was it a little more on drive growth and retention and somebody else, an investor then said, oh, you have PMF, we’ll now come in. First this, and then I want your definition of PMF.
Shubham: I would say we certainly did not have any motion of growth or retention at the time. I think these are all sorts of SAAS metrics and things that you learn as you scale your company. At the time, all we wanted was to build something so good, that two things were true: one was people were using this product for many hours a day, not week, not month, a day. So, we wanted to create a daily experience for most of our customers, and two, that they could proudly say that this is the best thing that they’ve used in a long time. That was our motivation and that’s all that matters. And if we can do both those things, then everything else will get figured out. Looking back at it, I think that was a very naive perspective at the time because you don’t know anything else, so you index there. But looking back at it, I think that if I was starting a new company today, I wouldn’t do things that differently. I think that most of those components were right in terms of the early days. It’s sort of the situation of going slow to go fast later.
And so yeah, we were just thinking about that question and product market fit is interesting. You asked me for the definition of product market fit. I’ve struggled with it over the years because it’s a very difficult thing to capture in a meaningful way. Some companies get to 5-10 million revenue and you’re like, maybe this thing doesn’t have product market fit. My definition of product market fit is coming back to the thing that I just mentioned, can you deliver so much value that is measured by either hours spent in a day that the user is using the product or some kind of outcome that is helping them to achieve? And can you do that in a repeatable manner, I would say not a tiny audience, not like 5 customers or 10 customers, maybe 100 customers & that’s my definition.
My definition is not like hey, so many people are coming in that you cannot serve them all properly. I think there are various definitions out there. I think that’s more like a product market sales fit conversation. I think that’s how I think about it because distribution is a whole other part of it, but just a product fitting the market is purely based on whether you can deliver a disproportionate amount of value than the other guy, whoever your competitor is for a significant enough customer set. And if you can do that, then I would say you have product market fit that you can start scaling and figuring out how to get to sales fit. And if you don’t, then you’ve got to keep iterating until you get there.
Shubham’s advice to younger builders
Sajith: When young founders come to you and you may be angel investing or sometimes, they reach out to you and say, Shubham, give me advice, and in your conversations with them, are there specific caveats or thumb rules that you touch upon? Certainly, one part that comes through is to try and create a product that engenders intense customer love, okay? That comes through and you said you’re not going to do it any differently this time, I loved that. Similarly, are there different thumb rules and caveats you say, don’t do this, do this, do that here?
Shubham: Yeah, totally. I think the biggest one is probably definitely this sort of don’t obsess over customer channels of growth and all of that. Focus on making a core group of customers really successful with your product and don’t think about growth until you have that be true. That’s definitely the biggest piece of advice. I think there are a lot of other things that I see as common patterns for failure, I should say that I call out when I see it. One is the indigestion problem that we sort of talked about, people trying to do too many things at the same time. They would be thinking about many different market segments. I want to sell it to small guys, big guys, middle guys, everybody. Or I want to sell to these three industries and I have one from each industry using my product, or something like that.
Or this is, maybe not on the first day, but once you have some kind of motion, people are like, well, I’ve got two sales reps and they’re doing well, and now I want to start a self-serve motion or something like that. And so, these are all examples of indigestion activity. So, my feedback to them is to do as few things as possible and do those few things as well as possible and that’s important. Until you get to $10-15 million of revenue, just don’t have enough fat in the system to go do new things or different things.
Whatever new thing you’re doing, if it is not the number one priority for somebody in your company, whether that’s you or somebody else, it’s not going to happen is my realisation. So, until you have enough people and enough resources in your organisation where you can create that, I would stay away from doing too many things. So, that’s the second thing.
And then the third thing that I’ve seen a lot as well, which is sort of related to the second thing is a lot of indecision or second-guessing their decisions. So, people would be like, hey, I can go after this market or that market. I don’t know what the right answer is, so I’m just going to not answer it for now and go after both, I guess, and see what happens in six months and maybe one pulls me more and then I will focus there.
That’s a classic sort of indecision in my opinion that you’re doing. I think that constantly you have to make decisions with imperfect information in the early days, and you have to be good at doing that, where you just narrow the focus and narrow the playing field as much as possible. So, that’s the other thing that I try to advise founders on; be decisive. You might be wrong, but guess what? If you don’t make the decision, then you’ll certainly not succeed and you will die of dilution of your effort, but at least with low decision fatigue and fast decision-making, you have a chance. So, that’s the third thing that I’ve seen, but frankly, look, every company is a bit different, so there’s a lot of minutiae you have to see, but these are the common things that we struggle with as well at Affinity constantly.
Shubham’s recommended resources
Sajith: Yeah, thank you for that. Just a final question. Are there specific resources that you’ve enjoyed? Could be a YouTube episode or it could be a podcast or it could be a book or articles or any particular person you go to because you started as an engineer, but then you did sales and I would love to hear about that, and is there anything you recommend to your mentees, etc.
Shubham: Yeah, there are a couple of things. One is, in terms of online resources, I think Saastr is probably the best online resource I’ve come across. I started reading Saastr in 2017, and between 2017 and 2020, I felt like I had a virtual companion because everything that Saastr said came true for our business. So, I stopped fighting the advice, I just took it blindly, started taking it blindly in 2018 and 19. So, that was probably the biggest resource, and they have a lot of content on people’s scaling journeys and how they did it and mistakes they made and stuff. I think that’s unbelievable stuff that is free for people to have access to today. I encourage people to read that.
The second thing that I think is helpful is that we kind of got a hang of later on in our journey in 2019 or so is always finding one or two founder CEOs of companies that are 18 months ahead of you in their growth journey, not more than that. It can’t be somebody who’s five years ahead, can’t be somebody who’s like, if Elon Musk came and said, hey, I want to coach you or something, I would say, don’t take Elon Musk as your coach take the person who is 18 months ahead of you to be your coach, because frankly, the challenges in the early days are so specific and so idiosyncratic that the only people who can truly understand that and help you through it are the people who’ve just seen that. And the way you solve the challenges also keeps changing every three to four years, I feel. So today a founder comes to me and says, I want to work through this early stage thing with me. I say this is great, I’m happy to give you advice and help, but frankly, you should talk to somebody who was just in your shoes 18 months ago. So, that’s the other thing I tell people is to try to find those people, and we have certainly had an amazing experience finding them. You kind of recycle that every two years, that list, but that has been very, very helpful because it helps you just short circuit your… it helps you make fewer mistakes. So, that’s another thing that’s not as scalable and free, I guess, but it’s helpful. Very helpful.
Sajith: Got it. This is great. But are there any favorite books or anything that you read you like?
Shubham: Books. There’s The Qualified Sales Leader, a sales book by John McMahon, which is very good. I really enjoyed this book. It taught me, I mean, basically what it does is it teaches you MEDDPICC, which is one of the sales methodologies that is a common practice now, but as an engineer who didn’t know that sales was a science, I read this and I was like, wow, this is pretty scientific. You just have to do this in this step, and you’ll make your way through. So, this is a really good book. There was another about distribution that I read. I forget the name now it was a long time ago. If I think of it, I’ll send it to you, and I forget all these names. There’s a product one too Hooked, I think it’s called.
Sajith: Yeah.
Shubham: It on how to build habit-forming products. Yeah, this one is a very good book. I really enjoyed this. It helped us sort of figure out how to build some common repeatable patterns in the product. So, I think books I’ve found to be less helpful over time, to be frank because so many things are so specific and topical that books are too general to help with that specific thing. And so either it’s talking to a mentor or I think Saastr is very good at this. They have very specific advice for specific situations. Books. I’ve not had a great success with books.
Sajith: Yeah, I think your insight in to talk to founders 18 months ahead of you was very interesting.
Shubham: Oh, this is really important. Yeah.
Sajith: Yeah, thank you for that. I think this is great. It’s 6.45 pm, 45 to 55 minutes is what I was expecting, and of course, I’ll reach out for any further questions. So, I’m going to pause. Is there anything else you’d like to add? If you have a few minutes, that is.
Shubham: No, I don’t think so. I think we’ve covered it all, Sajith. I feel product-market fit, especially, people think it’s more mysterious than it is, is how I would describe it. I think that you can sort of follow the steps that I talked about, or I’m sure there’s another way to do it; this is the one that I’ve found. But if you pick a space and certain customers or prospects that there’s a way to engineer yourself to product market fit, or at least the likelihood is not like 1% or 4% or 3%, whatever the numbers that people say as startup dying rates, I think there’s a 30 – 40% chance you’re able to figure it out. I hope your book can describe the steps for people. I don’t think there’s a lot written about it, sadly, because of the stages, people don’t love interacting with this stage. They love it when things are working, and then it’s more predictable and exciting, but this is also to some degree predictable. So yeah.
Sajith: Thanks Shubham, enjoyed this a lot. Thank you for the time!