Build a must have product or die
There is no middle ground
It is April 2023, and we just reached $101K in ARR at Workstream.io. At the time, our journey to this milestone felt both fast and slow.
Fast to $100K: we had only signed our first contract in December 2022, going from nothing to six digits in revenue within five months, with customers paying an average of $20K each. Sophisticated data leaders at mid-sized companies were buying our vision and parting with real dollars. These were all customers I personally developed and closed; I had just recruited some amazing sales talent, and our pipeline was growing. We felt on our way to $1M in the next year.
Slow to $100K: we had spent 2 ½ years building our product before that, a phase that included one major pivot. We had obsessively worked for years to build Workstream into a must-have workflow solution for data teams. We had built “Zendesk for data.” Our solution was innovative, seamlessly integrated with the modern data stack; it was meticulously designed with a beautiful interface and elegant Chrome extension.
The build felt long to me – far longer than I intended when my co-founder Chris and I started – and arduous. While we had collaborated closely with the design partners that we converted into our first paying clients, maintaining design partnerships often felt like a leaky sieve that I struggled to replenish.
Lingering paranoia gnawed at me as summer approached. Despite the recent dollars, had we built just a nice-to-have?
A Nice-to-Have Will Kill You
You probably already know that the unfortunate answer was yes, the Workstream.io product was nice-to-have.
Data teams thought it was cool; they loved its potential and were bought into the vision and the whys behind it; they were happy to talk about it and try it out. But it wasn't a critical solution that they had to have tomorrow and would move heaven and earth to buy.
And the proof of that is in what happened between April and October of 2023:
After hitting $101K, we did not close another deal. We did not convert any of the many opportunities in our pipeline, and we couldn’t create new ones. Prospects began to no-show meetings, or would join with the preface that “they were not considering any new software at this time.”
And importantly, while our small group of paying customers deployed the solution, it was never widely and consistently adopted by their users.
I can tell you with confidence that I am a world-class business operator. We did a lot of smart things at the company to build our brand, create meaningful customer relationships, and build a sophisticated early sales and marketing operation.
But business sophistication is not recession-proof. No level of sales and marketing hustle can make up for a product that customers do not see as a priority. No tech you build, no matter how cool it is, will overcome the headwinds of it failing to meet a critical need for customers all day long, every day.
Build a must-have product, or die.
A Must-Have Is 10X Better
That we built a product that was nice-to-have is one of the hardest things for me to admit. It just hurts. The emotional part of me is disappointed and judgmental that we ended up there after all our time, energy, and sweat.
But the calculating part of me says it is more proof that a true must-have product requires a 10X, step change improvement over whatever came before. Near the end of Workstream, one of our really engaged customers gave me feedback in the form of two equations:
The value of Workstream.io ≥ the hassle of adopting a new system
I need value >>>>> hassle
To explain since you have not seen a product demo: our solution gave data teams a streamlined way to field requests (i.e., service desk) and enable end users on data (i.e., a help center with support articles).
Among our main differentiators was an elegant design and a product that integrated dynamically into all the tools data teams already used. Workstream.io made support work faster for a data team, and it was a better way to offer training for end users.
But in the end, Workstream.io was at best only 2-3x faster and better than the alternatives (using JIRA service desk, or an intranet). We did not yet use AI to answer support requests so data people did not have to, or automatically build documentation for them.
This 10X requirement drives the high failure rate of software companies. 10X better is the bar, and we just never met it.
A Must-Have Solves Your Customer’s #1 Problem
People only have the capacity to solve one really big problem at a time.
Contrary to popular opinion, humans are notoriously bad at multitasking. Anyone who claims otherwise is either lying or simply thinks that doing multiple things badly counts. So when folks take on new projects at work, or decide to buy new things, they do so one at a time – even when on a shopping spree.
If this sounds wrong to you, ask yourself if you have ever bought separate items in two stores simultaneously. You haven’t. Your rebuttal may be that you can delegate responsibility for one purchase to someone else. But the reality is that a shopping list will always form when your desire for purchases outstrips your capacity to make those purchases in any given moment.
In an enterprise sales context, this dynamic almost always plays out, and budget holders only will focus on a single large project at a time.
So why am I droning on about this?
Because even if your customer has an unlimited budget, you are always fighting for your place in line. The vendor that is selling what the customer wants most will always get their deal done first.
Today, no company has an unlimited budget. And as we went to market in late 2022 and 2023, the world drastically changed. Data budgets went from flush to firm, and teams went from hiring to firing. In this world, the only solutions purchased were the ones that solved customers’ top problems. And data warehouses, data pipelining, business intelligence, transformation and quality were all ahead of us in line.
When you solve a #1 problem, you will never wait outside in the cold.
If You Are Wondering, You Don’t Have It
If you are paranoid about how critical your solution is, like me you might obsess about numbers.
How many daily active users do we have? How many monthlies? Is our DAU/MAU 20%, or higher? Should we consider that a good indicator of product stickiness?
Pondering the must-have question, at one point I dragooned Emery Wells, the Founder and CEO of Frame.io, to meet with me. (Frame is a collaboration tool for video production that I often analogized to Workstream.io; it was an NYC tech success story during its fast rise and exit to Adobe for $1.2B).
I asked Emery how he knew he had product-market fit, and his response was something simple like: I tracked sales. I was the customer, and so I knew that we had product-market fit at launch.
My point is not that you need to be the customer, or that metrics are useless. My point is that your gut probably knows the answer to the must-have question already, and the market will make it very obvious when you launch. Take these two examples:
#1: Emery from Frame told me that they got to material MRR (like $80K, but don’t quote me) within 6-9 months of their initial launch. Customers started using “frame” as a verb. It was clear and obvious.
#2: In the final 120 days of Workstream.io, we knew that we were dead with our “Zendesk” product – so we pivoted one last time and launched a new concept: “Pagerduty for Data.” Within 60 days of launch, we had onboarded more than 50 free clients and felt real momentum. Wiser to the game, I asked our users to rate the product in a survey. 0, not valuable; 5, a must-have; 3, a nice-to-have. The answer, after less than 2 months, was a 4.
It was clear and obvious that we were onto it (what happened next is another post).
Leave No Doubt
Nice-to-have products are not ones upon which you can build businesses.
To build something lasting, your product must be 10X better than anything else; it must be something that your customer cannot live without, and will fight to have.
And if you are a founder who is in doubt, I will remind you with love to remember that it should already be glaringly obvious. If it is not, you are just wasting your own precious time.