In our 34th episode, Gil talks category creation with two B2B leaders from the software review and customer marketing categories.
Panelists for this episode include:
- Vinay Bhagat, CEO of TrustRadius and leader behind the software review site category
- Jeff Ernst, CEO of SlapFive and leader behind the customer marketing software category
You’ll walk away from this episode with an understanding of fundraising, customer feedback, and educational content.
Takeaway 1. Raising more capital doesn’t always speed up category creation
There’s a common misconception in the startup world that the amount of capital you raise equals the speed of growth. The thinking is that if you raise more money, you grow faster. While that might be true in some cases, raising another round isn’t always a guarantee that you’ll create your category more quickly. It could sometimes do more harm than good, especially if you’re in a new market.
The key to fundraising is to have a good understanding of your unit economics. Look at your CAC ratios and combine that with your ability to scale your pipeline. If the investments you would make offer a good return, you would be making a good decision by raising another round of capital. It would also be best to consider what you’re trying to achieve from a product roadmap perspective.
Raising more money won’t make the market catch up to your vision any faster, but it can help speed up your product development once you’ve identified that the market is ready for what you have to offer. If you’re a founder, your personal goals are also a factor in fundraising. How fast do you want to exit? If it’s sooner than later and you have signs of product-market fit, raising more money could speed up your category creation efforts.
Takeaway 2. Balance product vision with customer feedback
The number one trait that separates every successful entrepreneur is the ability to create a vision and stick with it until it becomes a reality. That’s easier said than done, of course. A great idea alone won’t make your company any money. You also need to balance that vision with real-world customer feedback. That feedback is often the bridge between your vision for the future and today’s reality.
Start by tracking metrics such as the NPS and CSAT. They’ll give you a better understanding of what your customers think at different stages of their product experience. Beyond that, you should also get qualitative feedback from your customers to know what they want and expect from your product. This is where things can get a bit challenging.
Customers don’t always know what they want. And all the feedback that you might get from them isn’t always worth prioritizing, if at all. So how do you determine which customer feedback to implement and which ones to ignore? The key is to look at them through the context of your vision and long-term goals. If their input aligns or enhances that vision, it’s worth prioritizing and putting it into action.
Takeaway 3. Educate customers to reinforce your value pillars
Today’s customers will do a lot of research before ever talking to your sales team. That’s why you absolutely can’t omit customer education from your category creation strategy as a startup. There’s no better way of getting noticed by your target market than through great educational content. And this doesn’t just mean a bunch of generic blog posts and whitepapers that no one reads.
The most successful types of educational content are those that directly apply to the jobs-to-be-done of your target market. What pain are they trying to solve? What do they care about when evaluating different vendors? You need to constantly put yourself in your customer’s shoes to answer these questions. Once you find an answer, create content based on those answers.
Part of customer education is also building a community. Your customers and target market can get solutions to their problems directly from their peers through your community. When people feel like they’re part of something great, they’ll want to help others succeed. And if you build a great product, it’s not unlikely that they’ll also want to recommend it to everyone.
For more insights on customer education, product vision, and raising money, listen to this episode of B2B category creators.
Jeff explains why entrepreneurs are born, not made.