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Listening to Potential Customers With Shifthub's Jeremy Potvin

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Listening to Potential Customers with Shifthub's Jeremy Potvin

Most entrepreneurs are like writers, in that they adhere to the same adage: "Go with what you know." Sometimes, you can have exposure and experience with a vertical, and still not have a complete picture of how it works, and if you're building a product to ease tasks for that market, you could be done before you begin.

In an early stage of his company, Shifthub, Jeremy Potvin found himself in this situation, and he managed to make swift changes due to customer (and potential customer) feedback.

I recently spoke with Jeremy about the changes Shifthub has experienced.

Karen: You've had business success before in an established industry. What made you make the leap to a tech-based startup?

Jeremy: Shifthub is a result of the frustrations I experienced while running my clothing stores. The idea was then validated by many of my peers in the industry and through my brother and many of his friends who own and run restaurants. We were all experiencing the same frustrations. So, after I sold the stores, I immediately began looking for a team to help me build and launch Shifthub.

It helped that I've always had a strong interest in technology. Throughout my career in the apparel industry I was always an early adopter. For example, my clothing agency was the only one in Canada to have a website that allowed consumers to find retailers they could buy my brands from. This got me so much Google juice in the early days of search that I used to rank higher than Paul Frank Industries did for their own brand.

Making the leap to tech was something I always wanted to do. I was 39 at the time and realized that I didn't want to continue doing the same thing for the next 20 years that I had just done for the last 20 years. For me, a natural born risk taker, this was a logical decision.

Karen: Did you have any fear moving into the tech world without being a developer yourself?

Jeremy: Yes. I knew I could talk the talk but that wasn't going to get an app built. My first partner was friends with Mike McDermitt of FreshBooks and we got him on the phone one day. He gave us our first piece of great advice: find a developer you like and make him a partner. While that was great advice, it took me two years and cycling through a few different partners to find the right fit.

Since then I have learned an enormous amount. I have a much stronger understanding of the development process. Along with my role as CEO I also act as product manager. This has proven to be a great decision for the company.

Karen: What was the basic value proposition of Shifthub when you started the company?

Jeremy: We were so tunnel visioned on scheduling. We thought that was going to take us to a billion dollar company. We could barely get traction with the first and second versions of our product that came from this thinking. It wasn't until we started properly measuring our cost of acquisition (CAC) and monitoring our conversions from trial to paid that we figured out there was something terribly wrong. After about a month or so of intensive focus groups with customers and potential customers, we realized what our product should be. We made the decision to throw away the entire code base and start over for the third time. That was one of the toughest decisions I have ever had to make. I was terrified.

Karen: As you moved into the selling phase (getting companies to sign up) what was your sales cycle like?

Jeremy: It was brutal. It was humiliating. There was a ton of rejection. But, if you've ever sold anything, you will know that this is normal in the early stages. Our first two products were not good and extremely hard to sell, so the results were bad. The good news is when you have a subpar product, you quickly figure out how to get good at selling it.

We have several automated strategies that are producing great results - one exclusive to Shifthub that we may spin off into its own company one day. Our price point is low, so we have to have the best automated sales strategies. We look to sales processes like those at Square or Shopify for inspiration (they are the best at acquiring small merchants). There is no way we could afford a Salesforce.com type salesforce - the money just isn't there to support it. We have the best inbound strategy in our space. I am very proud of our marketing team; we accomplish a lot with very small budgets.

As the founder, I still like to get out and sell face-to-face. I get so much value from customer feedback that easily translates into new features for the product. Most likely, we will never have a traditional salesforce.

Karen: What feedback did you get from customers that caused you to change your approach at Shifthub?

Jeremy: People just couldn't figure out what to do. The second version of our product was especially confusing. We had to have a video on every page just to make sure people didn't get frustrated and leave. It wasn't intuitive at all. Our conversion from trial to paid was no where near what we wanted.

Karen: How long did it take for you to pivot Shifthub's focus?

Jeremy: This took the better part of four months. I had a few VC meetings in the valley back in March. I came home with some tough questions to answer. I went to my co-founders and shared with them what we needed to do. One founder shared this vision and one did not. He left the company shortly after that. The remaining co-founder, Craig Morantz, and I looked at each other and realized we had to move fast. It was life or death at this point. It started with the focus groups, then two new development partners, and ended four months later with our current version. We are very happy with it and so are our customers.

Karen: What advice did you get along the way that you've put into action?

Jeremy: One of the founders at Checkout51 gave me the best advice I have ever received in my life. If any one of your readers wants the full story they can call me and I will tell them the story -- it changed my life and how I approach business problems. The simple version is: we had to manually prove our business model before we wrote a single line of code. I listened, we manually proved it, and then we rebuilt. It worked. I will never solve a problem or launch another company again for the rest of my life without following these steps.

Other than that, the other piece of great advice I received was from Andy Yang, and I say it every day: move fast. Simple and terrifyingly to the point. If you don't move fast in this industry you can make some expensive mistakes; it can end you.

Karen: What advice do you think wasn't helpful?

Jeremy: Strictly focusing on Demo Day for so long during Extreme Startups was a mistake. Weeks of prep and freaking out took my focus off the business, finances, raising capital, and personnel problems that were creeping up. Demo Days do not have the value that I was made to believe.

Karen: What was the biggest surprise that you got building your company?

Jeremy: How ruthless I was going to have to be and how easily I adapted to it.

Karen: What was the best piece of advice you could offer new entrepreneurs?

Jeremy: Find as many people as possible that are smarter than you and listen to them. Do exactly what they say. A very successful entrepreneur offered some advice to us at the beginning of the year: buy the book Inbound Marketing. He said "read chapter one, then do it. Read chapter two, then do it. Read chapter three, then do it. Everyone asks me this and I'm certain no one does it". So, we did it. It worked. Listen to smart people and do what they say.

Reach out and ask for help, but remember to offer help. You'll never know how valuable your own experiences are to other entrepreneurs until you start sharing them.

Karen: What's next for Shifthub?

Jeremy: The first thing is to sell the hell out of this product! With the new version launched we are ramping up sales and marketing in a big way. It's time to dominate the market. The second thing is finish raising and close our financing round. No pressure! :)