How to achieve product market fit?

Oleg

Hi everybody! Welcome to Devico Breakfast Bar! Here we speak with different people involved in the business landscape, share their expertise, delve into the latest tech trends, and explore the ins and outs of IT outsourcing. I'm Oleg Sadikov, and today I'm excited to have Stefan Debois, the CEO and co-founder at Pointerpro, a software platform to create your own online assessment with auto-generated personalized reports. Don't forget to subscribe and hit the notification bell so you don't miss any of the new episodes. Hi, Stefan! Could you start by telling us a bit about your journey, from your early career experience to cofounding Pointerpro?

Stefan

Yeah, sure, Oleg. Thank you for having me, by the way. Yeah, I'm originating from Leuven, Belgium, and I have engineering degree as an educational background. And then afterwards, and that was already some time ago – it was in the late 90s – I joined a consulting firm, Price Waterhouse at that moment, and then it converted into PricewaterhouseCoopers. I stayed in consulting for about 15 years. So, quite a period. During that period, I was mainly involved with enterprise software and larger software packages like SAP, and Oracle, and the likes. And we had large-scale projects to implement those systems in multinational companies, let's say it like that. But after all these years, I wanted to try something new. And as an engineer, I wanted also to make my own products and not only make my own product but also create my own business around it. And as I was my whole life already working on enterprise software, the logical next step would be to make a software product. Yeah. So, that's what I did in 2012. Then we started – back then it was called Survey Anyplace – our tool. It has since rebranded to Pointerpro. But in the beginning, Survey Anyplace, as a name indicates, was like a survey platform, and we wanted to make experience for the respondent – the one who takes the survey – and we wanted to make that experience like superior as what the other tools had. So, we introduced gamification, conversation elements, a nice design also on mobile for those surveys. And that is what we tried to make the difference with versus the other players. In the beginning, it went quite well, but then, after a while, in the survey markets, there were quite some other players and quite some competition. It was not so easy to differentiate. So, growth started to slow down a little bit. We knew that we had to find something else, like a niche, which was more valuable than just surveys. And then, in 2019, we introduced personalized reports. So basically, you have the questionnaire or the survey, and then the result of the survey is used to personalize a report, which is generated for the end user. Think like a cybersecurity questionnaire or assessment, and then you get automatically some advice in a nicely formatted report. That whole process can be automated with our tool. And then also we rebranded to Pointerpro a few years later because we wanted the word 'survey' not to be part anymore of the name because we did so much more than surveys, like assessments with personalized reports, which is a bit different. So, then we rebranded to Pointerpro, and that's where we are now.

Oleg

Nice! I would like to ask you to tell me more about these personalized reports. What does it exactly mean?

Stefan

Yeah, it means that we have the questionnaire, and you can compare that with the traditional survey functionality. So, you can have multiple-choice questions, open text questions, and everything can be branded in your design. And then afterwards, you can also look at the results of the survey. You can look at it on screen, or you can also download it in CSV, and Excel, and so on. All the functionalities are the typical survey tool would have. But at the end of the survey, when in a normal survey tool, you have something like 'Thank you for participating in this survey', then it only starts for us. We have the additional functionality to give an advice report to the respondent, be it via just the download button or via an email that is sent to the respondent that the PDF report is attached to that email.

The rules on which dynamic content is displayed in the reports, depending on what the answers on the questions, which answers were given by the respondent, those rules can be configured in our system. So let's say cybersecurity, as maturity assessment could say, 'Do you have antivirus on your PC already?' or 'Do you have multifactor authentication enabled?' As a simple rule, you could say, 'If the answer on the question if you have antivirus is 'no', then the advice in the report should be 'you have to install antivirus.' I mean, it's a very simple example, but it can also be more difficult. You can calculate scores and then, in different categories, the different subscores, and then, depending on score ranges, you can give different advice. You can display or visualize those scores in nice graphs and everything. So basically, what we do is, before with the surveys, we did data collection, and now with the assessments, we do advice automation. So, we automate advice delivery for companies, mainly for professional services companies.

Oleg

What challenges did you encounter while developing Pointerpro, and how did you overcome them?

Stefan

Yeah, challenges, there were quite some, of course. In the beginning, when we still were in the survey market, the main challenge was to build something meaningful, differentiated, and then which had meaning for our clients rather than for us, of course. So, this product market fit, that was a main challenge. We only found it seven years later when we came with assessments, with personalized reports. The challenge was then, I think, also that we had to find this product market fit. And we tried different things. For example, we tried event surveys, like with the QR code that you can scan QR code from a visitor at an event and then answer some questions, and then it's sent to the CRM automatically. This kind of things. We try different things like that, and then you only see that it's a dead end if you already have invested quite some effort. So, that's a challenge – to quickly see when something doesn't work also and then to go to the next thing because if you try enough things, then you will eventually find a product market fit. That was back then, and now with Pointerpro, now that we have product market fit, we are quite depending on inbound traffic for lead generation and customer acquisition. Now the main challenge is to be more independent of inbounds, be more independent of Google, do also outbound, land, and expand on existing customers, and also make sure that people know us before they need us. Thought leadership, top-of-funnel marketing – this kind of things that's high on the agenda now.

Stefan

How do you do outbound now?

Stefan

Traditionally, we did a lot of inbounds, and still, we want to continue to do that. But we want to have both inbound and outbound because it's the risks if you have both because each channel has advantages and disadvantages. The advantage of outbound is that you can target the customers that you want – your ideal customer – which is less the case with inbound. But the disadvantage is that it is quite difficult to get it working at scale. So, for outbound, we didn't do it yet. We’re only starting. We want to make it hyper-personalized, do a rather small number of messages, which are emails, or LinkedIn, or phone calls, or a mix of those, but highly personalized, and get it to work, and then eventually scale it afterwards. That's the thing that we now have to do, but it's not yet. It's still work in progress.

Oleg

In 2019, before finding this product market fit, you said that you started seeing growth shrinking. What happened exactly after you implemented personalized reports and this assessment approach? How did it reflect the growth?

Stefan

Yeah. The growth went from 10% per year to 40-50% per year.

Oleg

Immediately? Since 2019?

Stefan

Well, not from the moment that we launched the product, but pretty soon afterwards because we already had from an inbound marketing perspective quite good authority profile, meaning that our website attracted a lot of organic traffic. Not all of this traffic are leads, of course. Most of it is just people that are looking for certain information. But having this authority helped us once we switched to assessments, which is a smaller domain. If you compare it with surveys, it's less competitive from a traffic point of view. And Google knows that these are similar topic domains, like assessments and surveys. So, if you switch from survey to assessment, you don't get penalized to let you lose your domain ranking. So, we immediately add also a lot of traffic for assessments, and the product market fit was much better, so that traffic converted much better. That's one thing. And the second thing – we were able to make paid ads, Google Ads, working and profitable with the assessments, which we never succeeded with surveys because, again, like surveys, more expensive keywords, and we had a cheaper product. The combination of that made that Google Ads were not profitable for the surveys, but they were for the assessments.

Oleg

Given your experience across different industries, what common trends have you observed in terms of the use of technology for professional relationship building?

Stefan

I think in the professional services industry, we see that companies are looking for technologies to achieve what we call non-linear growth. So, they want to grow. I've worked 15 years in consulting, and when we wanted to grow the business, we always had to recruit people, recruit more and more people because the business is delivering services in a broad sense, of course. And to deliver those services, you need people, you need consultants. That is a constraint, and that puts a limit on how fast you can go, of course. So, all professional services are looking to use technology, digitization, AI, all of tools to be able to go faster than the headcounts. And we are like piece of the puzzle. People or like consultants can put part of their expertise in our tool and then have the tool do the work. Partially, of course. You still need consultants. So, really giving the transactional advice based on the standardized model that you can define is something that our tool typically can do. We see trends of digitization in consulting, not only the back office, I would say, like the invoicing and the timesheets, and so everything that's mostly already digitized, but also the actual advice delivery, the actual giving advice to clients. That also become more automated now.

Oleg

How do they automate this approach? How do they automate consultants?

Stefan

In general, you will not start to automate all consultants, also the strategic consultants like McKinsey. And so, you will not start to automate, I would say, the top consultants, because that's mostly very customized and requires some deep expertise. But the most transactional consulting is something that you can automate. And if you come back to the cybersecurity example, you would see it as the Olympic minimum in cybersecurity, for example. This is something that you can automate, like a first test, like a cybersecurity scan. 10 questions, or 15 questions, and dimensions that you certainly have to do. You have to do antivirus. You have to do multifactor authentication. You have to do this and this. This is something that you can put in an assessment and say, 'Okay, this is the priority. This is what you have to do.' And you can do this on your own, or with the help of consultants, or ideally on your own with digital guidance from the consulting company. And then you can come back when you need higher-level advice. That means that the lower-level consulting, or lower-level call it transactional advice, is automated by the tool. That's our goal.

Oleg

Being based in Belgium, do you notice any unique challenges or opportunities on the tech industry in your region compared to other parts of the world?

Stefan

Yeah, I think in Belgium, we tend to complain a lot not only about the weather but also about other things. But I think that there are a lot of good things also here, specifically for tech companies. We have a lot of incubators, events. We have also all the companies that have made it, like Showpad, Deliveract, this kind of companies that have become unicorn, and where you can learn from. And also people that have worked at those companies, then they come on the job market, and they can be recruited. All this kind of things. I mean, it's an interesting environment, maybe not the same as in the US, but it's also much cheaper to attract people here. I would say it's a good environment. There's a couple of disadvantages. One of them is the ability to recruit employees from outside Belgium. That is still a quite difficult process. We are now in the recruiting developer from outside Belgium, and it's already started in December, and we are now in April – it's still ongoing. We still have to wait a couple of months, and then it will be approved, hopefully. So, that's something that could improve. In general, the availability of skills, IT resources, few resources for the demand here. So, we have to go to creative solutions like training the people ourselves, or go outside Belgium to get them, and this kind of things.

Oleg

Wait, I didn't understand. You have to wait six months to get a developer on board?

Stefan

Yeah. Well, to get all the paperwork in order to move to Belgium with a work permit.

Oleg

Oh, okay. That was always quite difficult. Could you comment on the challenges associated with the shortage of qualified specialists in the IT sector, particularly in relation to your business?

Stefan

Yeah, where we see the most or the highest shortages is in developers, like full stack developers, who have really meaningful experience in a SaaS company or similar. So, there's simply too few for the demand. And then you have the larger companies, not only software companies, but also banks. The large banks here in Belgium employed thousands and thousands of developers also because they almost become a software company also. And not only the banks, also other type of companies. Anyway, this results in a war on talent that is difficult to win as a small company. So, therefore, we look for solutions. Recruiting outside Belgium is one of these solutions.

Oleg

I know that you have experience with outsourcing, but not tech needs. Why didn't you try outsourcing your developers, for example?

Stefan

Yeah. We are software company. Software is a core of our business. It's not like we sell other things and that the website or the software is just supporting the business. So, we like to have this core expertise in-house. Then, of course, you could outsource part of it, which we have done to a certain extent. For example, for the services, we have a couple of people in Romania, and they do professional service for us. It's not really development product, but it's linked to it. And then for the core products, we would also look outside Belgium, but not to outsource the whole development team, just to find resources. If you cannot find them here, find them outside Belgium and then get them into Belgium via work permit, like we're doing now with that person that I talked about, or have them working remotely for us, but, of course, part of the team. They need to have the same sense of belonging. I really think it's very important. It's not just a number of isolated workers. We go for a long-term commitment, and we want to invest in the sense of belonging and the fact that they are really part of the team.

Oleg

Okay. In which specific industries do you believe companies can gain the most from outsourcing tech needs?

Stefan

Especially important if you have large IT projects with technologies that are pretty known. Also, you know pretty well what you want. For example, during my consulting experience, I also worked for large banks, insurance companies. They have a lot of work around development, sometimes also work, which is maybe not that creative, like rewriting applications that were written in old technology stack and this kind of things. These companies can be benefiting from outsourcing. But maybe also smaller companies. It's not because we don't do it that cannot be beneficial if executed well, of course.

Oleg

How do you determine the criteria for selecting partners when considering outsourcing for your own business?

Stefan

I would ask references to other software companies that I trust. That would be the first thing. And then we would probably do technical tests and assessments, peer programming to determine whether developers have sufficient knowledge. Also, we would like to do interview with our HR person to see whether there's a cultural fit or not and whether they belong to that team. Not everybody maybe wants it as a developer who is working remotely. That's completely fine, but that's not a good fit for our company. We had a lot of developers that we interviewed, we looked up, or came in via LinkedIn or other channels that didn't want to put their camera on when talking on a video call, and stuff like that. That's directly no go. You'll be amazed how many people that are simply not able to have a normal conversation.

Oleg

Why?

Stefan

I don't know, because they want to maybe a bit more separated from the employer, or they think that when they turn the camera on and we see the background, it's personal environment. I don't know. For us, it's important that you have that openness and that also you come from time to time to Belgium to meet with the team face-to-face. All this kind of things are just part of what we consider as normal business, but that's our culture. Apparently, it's not everywhere like that. And it's totally fine if other companies do it in a different way. It's totally fine. We see a lot of developers that are abroad that are maybe a bit reluctant to go all in on that.

Oleg

Are there specific regions or countries that you find particularly promising for tech talent?

Stefan

I think we have good experience with Eastern Europe. Of course, because we've tried it in India and Pakistan, and that's a lot of communication issues, and it's a different mindset, but you cannot generalize, of course.

Oleg

Different culture.

Stefan

Different culture, which makes the one who has to say to the developers what they have to do, like the function analyst or the development manager who is here in Belgium at our company, who has to instruct the developers. The fact that they are cheaper compensated by the fact that this person who is here has to spend more time with them to explain everything five times, to make sure that they have understood, to correct things that they have misunderstood. If they cost a little bit less than what we pay here, then that is overcompensated by the loss of very expensive hours from that person, like that function analyst or the development manager, that has to spend significantly more hours by managing them. That's an idea that we have abandoned. We often now work with people that are culturally closer to us. So, we have Eastern Europe, and also Latin America works better, I think.

Oleg

As we wrap up our conversation, what advice would you give business leaders considering outsourcing as part of their growth strategy?

Stefan

I would say start small with one or a couple of developers. If you have the budget, you can hire two, and then you can compare. And then I would say treat them as part of the team as much as possible. Try not to go for the lowest costs. If you have cost savings, you can invest them in plane tickets to get them to your site, to get to know them, to work together for a couple of weeks, and then send them back. That you have the relationship, you invest in the long-time relationship, and then you take it from there, and then you can go with from there. I think that's the best advice.

Oleg

Stefan, thanks for joining the video podcast. I wish everyone to find their product market fit, never give up like you did when you saw that the growth slows down, and you found that personalized reports and moved to concept with assessment. That was, as we see now, it was the right decision. I think it's always better later than never. I wish everyone to do the same. Thanks for your insights from the industry and for the information you shared. If you enjoy our discussion and want to stay updated on future episodes, don't forget to subscribe and hit the notification bell. That way, you will not miss out on the latest insights and conversations from Devico Breakfast Bar. See you in a week!