I talked with B2B SaaS founder Jeff Cole about what he & his co-founder are doing better the second go around. Their first startup was not a flop — the product was acquired and Jeff enjoyed his time at VP-level in the parent company.
But still he was drawn to start on a new product again — he just loves the 0-1 & knew he wanted a crack at it again with more experience. Here’s an outline of what he’s doing better this time.
Any entrepreneur trying to build a business, there's so much you want to do, right?
Context: We’re discussing a B2B healthtech software product built for the US dental care industry — watch the full interview with Jeff Cole here.
1. Problem Validation
Understanding the problems broadly
We started by speaking with several dental practices, but also several dental consultants. A dental consultant works with a handful of dental offices, helps them with metrics and management, etc.
Through working with one of these dental consultants, we actually built our first version just for them to offer their customers. And we sort of uncovered these problem areas, specifically on the revenue side.
We said, wow, we know the full end to end revenue cycle management — through some innovation, software and integrating with their practice management system in a really deep and novel way, we really think we can, you know, solve and automate a lot of this end to end.
Finding a narrow solution
But when you're starting out, you don't have the resources to do it. So we said, let's really dig into a couple of the pain points that we think we could solve.
Make it easier to make money
If I'm the owner of a business and I'm looking at my numbers and I've performed $200,000 worth of dental work in the last year that I haven't been paid on, that's a problem.
And so we realized that a big reason for that wasn't because patients were truly trying to skip out on their bill. It was that the way that they were being presented their bill, the way they were being notified, the requests were just painful.Solving this outstanding billing problem is our wedge because it has an immediate impact on the bottom line.
2. Focus
Don’t get distracted
First time entrepreneurs read different things or have an idea of what a startup is going to be like and probably focus on too many things.
I'd say I think focus is really the big thing. It's hard to build a company — invent a new product, distribute that product. In our first startup, we were trying to almost do too many different things that didn't really matter at that stage:
- Oh, we should go to this networking event, or we need to do this startup meetup. No, you don't.
- Oh, in our early office, we need to have — this is how startup offices look like… Doesn't matter, none of that matters.
Talk to your potential customer
Figure out how to solve their problems, be as close to the customer as possible.
This time around we were much more focused on the things that move the needle at a given stage. Those areas obviously change, now that we’ve grown the team, we do more company culture and events and that stuff.
But when it's two people sitting on a desk next to each other and building something, all we should be doing is talking to our customers, iterating on the product, listening to the feedback.
More metrics driven
Being very thoughtful about what those specific KPIs are. Not just from the business side, but also from demonstrating product value.
If we are working with, let's say five early customers, how do we know if the product is being successful? So working closely with early customers up front to predefine success.
What’s success of the product look like — that can be measurable and understandable?
Why are two customers having different experiences? Is it:
- A product issue?
- Is it an onboarding issue?
- Is it an ease of use issue?
And then just doing that again and again and again and then the product becomes better a lot faster.
3. Co-founder Communication
Processing conflicts
Being co-founders is like a marriage or any significant other — you need to learn how to work through conflict. So the first time around we'd scream at each other. We'd be hard on each other. We’d get pissed off at each other.
I think over time you just realize — we both share the same values, both share the same goals. It's mostly communication issues, right?
Especially early on when you're making decisions — it's not just, Hey, build this feature.
It's, Hey, we talked to this customer. This is how I'm thinking about it. What do you think? Yep. This makes sense to reprioritize part of our roadmap, for example.
Outcome oriented
We started saying this phrase that is now one of our company values — desired outcomes. Each meeting or conversation starts with: Okay, what's the desired outcome? Now let's talk about how to get there.
Cause it's so easy when there's a million different things going on to get lost. Dumb example:
I think we should change XYZ of this feature. Well, he could be thinking about it and giving ideas because he thinks it should be to improve the UX.
And I'm suggesting it because our largest customer made a special feature request. So he's looking at me like, what you're telling me is not maybe the best UX…
So being very clear on — why are we going to make this change? The desired outcome is because this large customer needs it to change XYZ so they can accomplish some internal goal. Then great, we're all aligned on that. Now let's figure out how to achieve that.
Having that desired outcome focus has been really helpful in terms of just defining the communication. As soon as we started doing that, we work really well together solving it.
But a lot of it's just time working together. We’re much better business partners now than we were a year ago and especially five years ago because you figure out each other's preferences and nuances.
4. Leveraging referrals and customer success
Early wins
Early on we were reaching and taking dentists to lunch, talking to consultants — more non-scalable type things. That really helped get a few of our early customers.
Our first customer was a dental office nearby — I went down there, did in- office training, all of that type of stuff.
Then really leveraging the success of the product to say, Hey, do you know any other dental folks?
For our early customers, we really want to deliver such a great experience and get a case study. So then for the next customer, it gets easier.
That's been an important flywheel — we were able to get reference-able names, we're able to show real success, show real results.
Establishing trust
I think the hardest part of a new company — especially when you're dealing with patient billing, you're dealing with very sensitive data, you're dealing with very sensitive operations, you're dealing with one of the more important pieces of a business, you're dealing with the money.
So being able to get over the hump of demonstrating value and having referenceable customers and having that real trust into the product — that was a big thing for us.
I'd say the big hurdle is when you can be talking to another similar customer and instead of Let Me Tell You Every Feature — let me walk you through how we solved this exact problem you have for another customer who looks just like you, who you recognize in the space.
Hope you enjoyed these lessons from Jeff — for more first-hand founder stories, check out our interview show Ship it and Sip it 🤝
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