The last several years have seen companies like Hubspot, Mailchimp, Shopify and others go from products built primarily for SMBs to evolved models designed to tackle the enterprise.
For companies that go down this route, a primary challenge is to quickly position themselves as credible and robust enough to scale to meet the needs of much larger organizations–and then getting enterprises to buy into it. They also have to develop the fortitude to deal with miles of red tape, significantly longer sales cycles, and usually, a new set of competitors.
On the flip side are companies that were built specifically to cater to enterprises. These companies are masters at getting through procurement, know how to navigate layers of stakeholders, and are used to sales cycles that last six-months to a year just to get into trial.
For these companies, working with a single enterprise might be the monetary equivalent of working with 100 SMBs. But the shorter sales cycles, direct relationships with decision makers, and opportunity to scale their client base without having to scale their customer success teams is an appealing proposition.
After years working primarily with industry leaders like Swiss Re and Farmers Insurance, research technology company Feedback Loop recently set out to expand its offering to SMBs.
Its core value proposition–bringing the voice of the consumer into critical business decisions through nearly real-time customer feedback–remains unchanged. But its self-service platform, go-to-market approach and updated pricing model are another story.
I spoke with Feedback Loop’s CEO Rob Holland about why the company started with enterprise, and why it’s now additionally working with SMBs.
Grit Daily: Enterprise is hard to crack — why did you start there?
Rob Holland: There was an obvious gap Feedback Loop could fill within the enterprise. Product and business teams needed data, but internal research departments were too overwhelmed to help them get it. And even the ones that did often took months to get answers that teams needed now.
Because they didn’t have direct or regular access to consumers, teams would end up making product decisions in a vacuum.
This lack of testing and inability to confirm market fit is one of the reasons why we see 85% of new products fail.
Product and business teams in enterprise companies understand the importance of consumer feedback, but as non-researchers, they don’t have the tools to access it directly. So, with these companies there’s already an identified need for easily accessible and quick consumer feedback. We offer the solution for it.
Grit Daily: How were you able to break into enterprise as a newcomer to the space back in 2015?
Rob Holland: When we started, no one else was offering this kind of ‘test before you invest’ solution. And anyone that had a semi-related offering was going to research teams. We were instead spending the majority of our time focused on business users.
Innovation teams, especially early on, were our way into these larger companies. These teams were hyper-focused on introducing new products and technologies to organizations, to solve customers’ problems. They wanted to disrupt the status quo — but needed to know the lay of the land before they did so.
For example, 100-year-old Farmers Insurance created its first startup Toggle to build entirely new insurance products for Gen-Z and millennial audiences. The Toggle team set out to out-innovate newcomers by figuring out what consumers actually wanted. Ahead of the launch, Toggle worked with Feedback Loop to speak with more than 54,000 consumers. This consumer insight would come to directly inform critical aspects of the new product.
The internal innovation teams we worked with quickly became champions of the Feedback Loop platform. They shared wider within their organizations, and we then expanded into other departments and teams over time.
Grit Daily: A lot of companies start with SMBs and then expand later to Enterprise. Why are you working “backwards,” for lack of a better word?
Rob Holland: If we can help Fortune 500 companies bring consumer feedback to business decisions, then we can do the same for smaller companies. The reverse isn’t always true.
A majority of SMBs don’t have dedicated research teams, so they need us even more than the larger companies. These businesses are investing a lot of resources into innovation. They can’t afford to launch products that aren’t successful in the market or make harmful business decisions. But they still end up ‘flying blind’ because the traditional research solutions to them are too slow, complex, and expensive to support real-time decision making.
Our platform is helping them to innovate quickly and cost effectively, with minimal behavior change.
Grit Daily: You have been in a unique position as one of a few in the enterprise space. Now you’re going against a number of different players in the SMB space (e.g. Survey Monkey, etc.) What are you going to do differently that SMBs should pay attention to?
Rob Holland: One of the biggest pain points for teams is quickly gathering a target audience to survey. While there are easy-to-use survey tools out there, they don’t provide access to high-quality audiences on-demand. This is critical for producing fast, reliable results. Teams need to quickly access the right audiences, based on demographic and behavioral criteria, to get accurate answers.
Feedback Loop’s solution generates fast, easy and reliable consumer feedback by automating and streamlining the research process, from guardrails in place to make sure surveys are optimized for learning to results that are automatically quality-checked within the platform. We’re making it easy and fast for business teams to get the reliable results they need. They’ll never again be in the situation where they must launch a product without speaking to consumers first.
We see Feedback Loop customers in four critical areas of the product development process: Early-Stage Discovery; Concept Testing; Comparing Options and Message Testing.
Grit Daily: What’s your elevator pitch to potential SMB clients? How does it differ from enterprise pitch?
Rob Holland: In the SMB market, we’re seeing that companies are aware that they have a problem. They’re just not always sure how to go about solving it. So our pitch is equal parts focusing on our value proposition and educating them:
Our research platform is designed specifically to test ideas with target consumers and validate market fit before making big investments in product development. The technology automates critical research processes so that teams can test product concepts and messaging with target consumers in less than three days. As a result, teams not only understand consumers’ opinions, they also understand the why behind that feedback so they can adapt quickly.
All of this is true for enterprise users too. Before we even get to this conversation, we have to navigate their existing research practices and often get them to rethink the way they’ve always done things. The potential for these teams is massive, but the process is a lot longer.
Grit Daily: Feedback Loop raised $14 million earlier this year. Did your move into SMBs play a part in investors’ decision to put money into the company?
Rob Holland: There will come a time when there’s no longer a middleman between brands and consumers. When this happens, we plan to be one of the things that directly unites them.
Our investors bought into this vision. They also understand the strength of the market, the scale of the market opportunity, and our ability to increase our own market share through our new approach.
They also invested in our track record. We’re not an early startup figuring out how to prove ourselves. We’ve spent the last six years working with established industry leaders and accelerating our own business in the process.