How Customer Development Has Shaped Routable
With Omri Mor, Co-founder and CEO
Posted August 31, 2020
With Omri Mor, Co-founder and CEO
Posted August 31, 2020
Routable in devoted to simplifying and automating B2B transactions. Similar to what Venmo does for individuals, Routable does for businesses. They were part of Y Combinator's Summer 2017 batch. Currently, their engineering-heavy team of 21 people is distributed, with small offices in San Francisco and Seattle.
Omri Mor is the co-founder and CEO at Routable. I chatted with him to understand how Routable looks to involves customers in every step of their process, and how customer development has shaped the story of Routable so far.
My co-founder and I both built what we now sell in house at separate companies. So we both had that experience of going from zero to multi-thousand payments per month and to multi-thousand vendors. I built an e-commerce marketplace where we had to automate the payouts to sellers on our marketplace; and my co-founder Tom had to automate payments to drivers and to restaurants at Eat24. We realized that we had both gone through this journey of having general business payments routed through an external accounts payable vendor, and then moving on to integrations with QuickBooks. At scale, we had to switch our payment processors and migrate from QuickBooks to NetSuite.
We both realized that we built about 80% of the same internal tooling, but just at different companies. So we spent nine months doing customer development, and we interviewed about 300 potential customers, prior to building the platform. We realized that there were two options: if you needed to scale beyond 500 B2B payments a month, you're either hiring humans to help with this, or you're building this type of system in house. And neither option seemed cost effective or smart. Because hiring an engineer at Uber to build a custom integration to NetSuite seems dumb.
It was mostly through our customer development process. If you think about it, when you do customer development, you're doing a lot of validation, and you're identifying pains. So we already had some 400 contacts and that we could go to once we had a live product. But after that, it was a lot of referrals—our first couple hundred customers came from these referrals, like Y Combinator companies referring other Y Combinator companies, accounting firms that we worked with, etc.
We started with a few contacts we knew—like three or four. And then at the end of each of those conversations, we would ask them to introduce us to three other people. We flew around the United States and just talked to people. Literally, each one of our days was filled in with conversations. And we would we keep a spreadsheet with all of our notes: last time we spoke to them, what our next steps, etc.—we built a mini-CRM.
We didn't go to them and just ask if they wanted to try this. We asked them, "Do you have this problem?" Or, "Tell us about your process." And then once we built a really good relationship with them, we asked them for design feedback and development feedback. And then we would show them our MVP.
We started with a few contacts we knew—like three or four. And then at the end of each of those conversations, we would ask them to introduce us to three other people. We flew around the United States and just talked to people. Literally, each one of our days was filled in with conversations. And we would we keep a spreadsheet with all of our notes: last time we spoke to them, what our next steps, etc.—we built a mini-CRM. As I mentioned, we spoke with over 300 people before we wrote a single line of code. This really helped us identify where we were resonating and where we were not. And that helped us develop our own conviction.
Most of our feedback comes through Intercom and e-mails. We will obviously also routinely set up customer calls to go deeper on a subject.
Besides myself, our product management, support, and success teams speak with customers.
Because we routinely talk to customers, we typically say things like, "Hey Jay, do you mind if we follow up with you with questions about x, y, and z?" And, "Are there any parts of the app that you're really excited about?"
When we hear responses like, "Yes, I love QuickBooks integrations," we'll track all of this. The next time we have a question about QuickBooks, we will send out an email saying, "Hey Jay, can I get your feedback?" That part is really important. And I think that we do that really well because it keeps us engaged with our customers and allows us to prevent shipping bad things.
To answer your question about what our team does well: we do a lot of customer interviews—we send surveys for most of our features prior to working on the design. We'll create a mock up, but prior to actually working on the finalized design, we will actually send a survey and get a clear understanding of what we need to do to set up our customers for success: sometimes it is to clarify language, sometimes it is to clarify buttons and placement, etc.
At the end of the day, these surveys are meant for us to say: "Hey, we are thinking about this, can you validate it?" So we will build out a survey to really understand their current process today, what they're looking to improve, and then we'll give them a few ideas and iterations about what we're thinking about. We're trying to understand whether we're approaching it the right way.
For what it's worth, we tagged all of our users in Intercom with different fields. So for some people, we will ask them about our accounting integrations, other people we will ask them about our payment methods. Other people we will ask them about general usability, etc.
Omri, thank you for talking with Userstand. It was great to learn more about Routable and how your team involves customers in every step of your product development process.
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