Ep. 8: Customer Referral Programs and Beyond with Will Fraser
SaaS Marketing Insights, Episode 8: Will Fraser, SaaSquatch
A early lesson in platform dependency forced a fledgling startup to pivot from social media promotions to customer referral software platform in just five days. Co-founder and CEO Will Fraser reveals the next evolution for SaaSquatch: how to automate marketing throughout the customer lifecycle.
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Episode 8 Transcript
Paul: On today’s show I have an interview with Will Fraser, Co-founder and CEO of SaaSquatch, hope you enjoy it.
Today I’m pleased to have Will Fraser from SaaSquatch, he’s the company CEO. Very pleased for you to be here Will, tell me a bit more about SaaSquatch?
Will: Yeah so SaaSquatch, it’s kind of a unique platform, we help customers or customer marketers really grow their lifetime value so unlike traditional platforms that might focus on opens and clicks, we actually focus on dollars.
Paul: Great so how did that get started, how did you get started in SaaS?
Will: Yeah, so I got started in SaaS the pretty traditionally way, I started working on weapon systems.
Paul: Haha, yeah?
Will: No, so I was working as a consulting engineer and 2008 happened and the economic downturn kind of got rid of that so I did the responsible thing, I packed up my bags and I went to Europe.
Took all the money I had and just thought we’d travel, no but while I was actually traveling a buddy of mine gave me a phone call and we’d always know that we were going to start a company, we just didn’t know when, we thought it was gonna be much later. He gave me a phone call and said ‘hey, there’s these investors that are trying to partner with the University of Victoria, they want to launch a entrepreneurial engineering program, we need another person to join the team though so will you come home?’.
Paul: So you’ve spent all your money by then?
Will: I had no money and officially it was a master’s degree program and school had started already when he phoned me so I bought myself a box of Stroopwafels, the Candy waffles when I was in Amsterdam, I put those under my arm I got on a plane, I came back to Victoria, I bribed everyone with waffles and miraculously they allowed me to enroll a few weeks late.
Paul: Wow! So did you form this business straight out of university, straight off the course?
Will: Yeah so we actually founded another company first, a company called YouPick which was a SaaS business as well and It was working in the social media promotion space so sweepstakes, giveaways, things like that on Facebook. We learned a really important lesson and it’s called platform dependency. So we had built our product, the entire product was built based on how Facebook worked but Facebook obviously had no obligation to us to work the same way.
So one day I came into work and I took a look at one of our customers programs they were running and realized it didn’t work. Facebook had removed the required functionality and we were done, so yeah that’s how fast it goes.
Paul: Shit, thats a valuable lesson to learn.
Will: Yeah now we could have fought through it, we could have found some other things but in all honesty we’d kind of seen the market there had swollen up, two companies, one Wildfire, one Buddy Media had both sold for I believe something like $400 and $200 Million dollars.
Then we kind of thought if this sort of thing is already happening there wasn’t much point in continuing to fight that fight. Through we had really discovered the core nugget of what SaaSquatch is based on now, which is that marketers didn’t want to run sweepstakes and giveaways it was just all they could run.
Sorry, it’s not that they don’t want to but it’s not where they wanted to end and we found time and time again, markers were struggling to prove the ROI, to prove the value of these programs. So we said okay how do we connect those those last dots if you will and at this time we had really just seen the emergence of billing systems as a service so like Stripe and Recurly and Braintree, these guys were starting to come to the forefront. So for the first time we had a standard billing layer that we could integrate with so we said this sounds like the solution, we integrated with the billing layer, we integrated with companies apps and then we actually brought out a customer referral program that would allow marketer to create and run a referral program without needing to do a whole bunch of custom development. Also, actually be able to show that they were growing their revenue.
Paul: So how long did it take from forming the company and obviously you mentioned YouPick before and the collapse of due to Facebook or whatever, how long did it take for you to get up and running with your referral program offer?
Will: Yeah so we gave ourselves five days, I’m not lying, we gave ourselves five days to come up with the idea, do all the prep work we possibly could and sell it.
Paul: You crazy bastards.
Will: Yeah, no we called it the blue sky week those of us that were still in it after YouPick we got in a boardroom, we’d still paid rent for the month we were good, we had that covered. We got in a boardroom and we had an honest conversation with each other saying we don’t want to just start new we want to pivot. We want to take what we’ve learned and how do we go with that and we learned a few things, one was that really we wanted to work with companies that had technical resources. We knew the problem was getting easier to solve but we knew it wasn’t plug-and-play yet.
Paul: Yeah, so you need devs on their side?
Will: We need some devs, some web development at least, we knew that, it would seem very implicit to marketers that word of mouth had value so we wanted people that believed that so that actually drew us to SaaS directly because there’d been some strong examples with companies like Dropbox. This is actually probably before its referral program was really big but whatever. But there have been big successes and people believed in it. Then the third one was, we wanted someone that could see the revenue so in YouPick we’d worked with groups like, we promoted like Quentin Tarantino film: Django Unchained.
Paul: Oh I didn’t know that.
Will: Yeah it was great, it was a fun experience but no one knew how to put value on a trailer view, we were sitting in a situation where our goal was so fuzzy, was it worth $100 or was it worth a million dollars and no one could tell.
Paul: A million obviously.
Will: Well of course, no but we went ahead and did this kind of brainstorming try to take his ideas and then we literally gave ourselves three days to go sell it and so we picked up the phone and we sent emails. One of our team members actually started on a live chat with a company and over two hours managed to slowly get moved up the chain until they were live chatting with
Paul: No way.
Will: Yeah, about a hundred person company like we did whatever we could do and we got a few customers in those five days and decided that it was probably worth it and then we had to deliver it.
Paul: So that was your viability, your validation?
Will: Yeah so It was five days and then three months later, we were live with our first site, it was rather MVP. Analytics came in the form of a spreadsheet every Friday, well technically it was a database dump that we formatted, there was a login, there was a kind of main portal if you will that had one button which scarily was ‘authorize Stripe’. So the only button you could do was give us full access to your Stripe account.
So yeah we had some brave first customers.
Paul: Wow, so how long ago was this?
Will: it’s was about three years ago I guess.
Paul: You’ve come a long way in a short space of time.
Will: It’s been good, it’s funny cuz you don’t think back about it in the moment, you’re always just advancing one step in front of the other but yeah, now we look back, we’re serving the fortune 500, we’re globally dealing with support, with sales, with growth.
Paul: So to sort of go into a bit more detail, what sort of type of companies does your products and services suit now?
Will: Yes, so what’s interesting, we sell B2B right as a lot of enterprise SaaS does nowadays but we sell to companies that really sell closer to B2C.
Paul: So it’s B2B to B2C?
Will: Right exactly, so it’s like, it’s as messy as it can be. We’re looking for companies that are high-volume, that are transactional, that have frequent purchases what we look for as well, so we’re looking for
sites where you’re gonna buy 3 to 100 times a year. You’re not gonna talk to a salesperson right.
These kind of things, so think, it might be as expensive as a flight then it might be as cheap as a video
subscription service but it’s all about that consumer transactional and volume services.
Paul: So do they have to be kind of digital based businesses?
Will: So they don’t need to be digital based but they need to have a strong digital presence so you know, we really still work through the ideas of those digital channels, be that email or messaging or a website or a mobile app, we still look at that as our key interface point.
Now with that said, the SaaSquatch platform is a platform that has a very robust API, there’s many ways you can build on us and it’s actually probably one of my greatest joys is when I see a customer has actually built on top of us in a way we never imagined.
So early on we had this really clear idea that we were a referral platform and that we didn’t really think about all that other initial value that we brought to the table. Until we found someone was using us, they were not using the referrals at all, they were using us as a reward Bank so we were literally a third party database that has basically an anatomically locking, multi currency banking system that became available to them and the only reason we found that out is they sent in a support ticket where they had chained together like 14 calls and they were just looking for the last call to make it all work. We were like ‘we
could make a single call that does that for you’ what you’re doing is insane.
So yeah it’s really cool when you see that and that’s how we really start to understand that there’s so much more than just word of mouth, obviously word of mouth is really important but that marketers today are kind of getting locked out of the products and services they support.
So where you might support a mobile app, unfortunately a lot of marketers get left really with the landing page, maybe a sign-up email, if you’re lucky they let you send some notifications but you probably have to negotiate a lot with product about that. Their job is becoming more and more about increasing lifetime value versus just getting signups and so they’ve been locked out.
They’ve no control over 80% of the customer journey that actually drives that revenue and so as we’ve seen that now we realized the same thing that made us a really powerful referral platform, that ability for us to let a marketer create a campaign that interacts with the customer, tracks the user product and ultimately adjusts their bill. Now that same power is really powerful for acquisition, activation, revenue retention and yes referrals and so it’s kind of cool that it’s our customers that showed us that. They’re the one who’s built
on the platform and showed us exactly what we needed.
Paul: So you started off thinking that you your product did one thing and you found out because of you’re customers that it actually did XYZ?
Will: Right and we didn’t even have to build anything to find that, they literally are the ingenious ones, they saw enough value that they thought okay I’ll go through this kind of rough little patch here and we’ll make it work and now ultimately we’ve gone ahead and made that hack a lot easier for them to do those other kind of programs they want to run.
Paul: That sounds fantastic and in such a short space of time to have come so far in your sort of development of the business so it sounds like you started off as just like the referral type business and now you’re spreading throughout the customer lifecycle?
Will: Correct, correct and if you can think about it, in some ways the referral was the perfect Trojan horse, it gave us all the reasons we needed to get into the system and then give the marketers a great reason to go to their product teams, to say hey we need to install Sasquatch to run this referral program and now we’re there we can help them with so much more.
Paul: Fantastic, so on this journey in SaaS, if you had to highlight one marketing insight that you had along the way and you must have had many. What would be a standout thing for you? Obviously listen to your customers.
Will: Yeah of course but as in any product, you have to listen to your customers but I think one of the interesting things about SaaS in that we’ve been building it up for a little while. SaaS started out as a cheaper version to on-prem software, you know we thought in terms of tens of dollars for your pricing, you know was it 20 bucks, 50 bucks, 90 dollars? Whatever it is but obviously we’ve seen the enterprise really aggressively start to adopt SaaS and was still recognizing that SaaS is nowhere near the majority of software sold.
What we realized is actually the enterprise customer is often really the customer you’re building for, where you can go from selling to a thousand customers to all of a sudden, you’re selling to one customer for the same amount of money. It’s very interesting, early on we were publishing some content, doing the kind
of content marketing strategy and we got a phone call from one of the divisions over at Google and they asked us to bid on an RFP and at this point we thought we were building a startup tool, we thought we were building something that was was gonna help teams of three.
The first phone call I think there was something like 13 people from Google on it. We didn’t have 13 people in the company let’s be clear.
So we quickly learned that actually the problem we were solving was substantially more valuable the bigger the company and so the midsize companies and the the large companies have problems that need to be solved and they actually are scared to pay you $50 normally. You know that idea of no commitment, are you really gonna pick the phone up when I phone you for the second time in a week, can you afford to
take my question. Versus saying this is gonna make us millions or save us millions so we’re willing to put a reasonable price tag on that.
I think people’s attitudes to SaaS has changed, even in enterprise, it used to be that enterprise didn’t want to touch it, it’s on-prem or nothing but now people kind of accept that they can’t do everything, they can’t
develop everything themselves in-house.
Paul: They can but it’s at huge expense and the timelines are horrendous as well.
Will: Well I think the timelines are often what actually drives it more than anything because they just
know the speed at which their competitors are moving, take a look at something like the retail game right now. You know guys like Jet and Amazon have really shaken that space up and if you’re a retailer up there
looking at how do you catch up it’s not by starting from scratch and building it yourself. I mean one thing that has happened though all the data breaches that have occurred, we’re now seeing substantially more onerous security requirements on SaaS companies.
Paul: Yeah and we got GDPR coming in.
Will: Exactly, so where we were able to stand up our first program in 3 months, that’s actually gonna start becoming much harder you know, you have to start going through your Soc 2 compliances and start being aware.
Paul: It’s good though, its a high barrier to entry, as an incumbent.
Will: Yeah, good if you’re in, don’t get me wrong but it is changing the game a little bit again where all of a sudden it’s those who can afford to go through those security screenings and to do a security audits it’s at least $50,000 but it’s also your time, when you’re an early stage startup you know that’s the one thing you really don’t have.
Paul: That’s great, I just wanted to ask you a final question about personal growth insights, so how do you sharpen your mental saw is the way that I think of it. Everybody has their own habits and routines, it’s very easy to just become mired in the day-to-day, how do you stay fresh Will?
Will: Yeah how do I stay fresh, I feel like we should have a soap commercial right here, no it’s a good question of course, it’s a challenge that I think a lot of people work in the day-to-day of a company trying to grow as fast as possible you get stuck with. My solution may not be great but what I typically do is I find that days-off are really good days where I kind of still I come in, I’m very close to the office but I come in and I actually basically on paper I have a frank conversation with myself. So on paper I literally and it sounds funny but basically I list what are the things you’re doing that you shouldn’t be doing, what are the things you aren’t doing that you need to do.
Paul: Like a self review?
Will: It’s basically a self review so when everyone else is getting the day off I’m having my performance review right but my boss is a real jerk. It’s a 360 review, we review all sides myself.
Paul: Multiple personalities.
Will: Exactly but that’s literally the the best thing I have and then what I’ll do is kind of between those times is I’ll come in at least a couple times a week and I’ll make sure that I read through that document again. So I sit there and I realize like, this is the thing we said we weren’t gunna do.
So that’s one of the things that’s really good for me, there’s normal things about you know you got to be keeping up on your reading, you’ve got to be going out to talks and events and just keeping fresh, it’s very easy to think you’re growing fast enough right now. Yeah but the thing is when you’re trying to grow 10% every month it’s a lot easier twelve months ago so the same tools probably are not gonna get you through it today but it’s easy to think you kind of got it figured but no. The big thing for me is just those frank
conversations with myself and I do it in writing because I like the written artifact I can go back and look at.
Paul: You record it like a log then?
Will: Yeah, 100% like a log they kind of all come in sequence.
Paul: On paper though, not in the cloud?
Will: Well they’re actually in the cloud on the electronic paper, but yeah just I find that the act of writing it down, reading it and reviewing it does a whole lot.
Paul: Thats a great tip, I’ve not heard that one before.
Thanks alot Will, that’s really great to hear about the history of SaaSquatch and where you guys are going on your SaaS journey and for the insights into your personal growth.
I hope you enjoyed my conversation with Will. For more info on SaaSquatch please visit www.saasquatch.com