David Cancel - HYPERGROWTH: How the Customer-Driven Model Is Revolutionizing the Way Businesses Build Products, Teams, & Brands

HYPERGROWTH

How the customer-driven model is revolutionizing the way businesses build products, teams, and brands

By: David Cancel, co-founder & CEO of Drift

Foreword by: Hiten Shah, co-founder of KISSmetrics, Quick Sprout, & Crazy Egg

@ 2016 Drift.com , Inc. All rights reserved.

Editor: Dave Gerhardt

Designer: Erik Devaney

No parts of this book may be used or reproduced in any manner without written permission from the copyright owner and publisher, except in the context of reviews.

Foreword

A former competitor reveals his secrets

Back in 2010, David Cancel and I were friends.

Then he pivoted his company and became my direct competitor.

At the time, I was the CEO of KISSmetrics, a web analytics company I founded back in 2008. David, meanwhile, was the CEO at Performable, which specialized in marketing automation software.

When I learned that David was adding web analytics to Performables feature set, and that hed now be competing directly with me and my company KISSmetrics, I was frustrated. But not for the reasons you might think.

Its frustrating to compete against David because he doesnt cut corners. And hell never take the easy way out.

He wont offer a 50% discount to take your customers away. He wont trash you and your product behind your back.

What he will do, is go out and build a better product. And over time, hell serve his customers better than youre serving your customers. His customer-driven approach will always win out in the end.

I learned a number of valuable lessons from watching David operate in the same space for a year, and I continued to learn from him after he sold Performable to HubSpot in mid-2011.

Going into 2011, HubSpots churn rate was getting too high and its growth was decelerating. David came in, restructured the engineering team, and rebuilt the product.

That was not an easy job to do at HubSpots scale, having pulled in $15M+ in 2010.

In 2012, HubSpot rebounded under Davids product leadership. They cut churn in half and more than doubled their LTV:CAC ratio.

From there, as Jason Lemkin observed, they accelerated faster than the average SaaS company to IPO.

At HubSpot, David didnt come in and simply add a new sentence to the company mission statement. He made fundamental changes to the way the team was structured and the way it was operating.

What made it work was Davids rapid execution and his learning behind the scenes that builds up conviction for his decision-making.

When he finds what hes looking for, he doubles down hard and fast on the decision. Once his mind is made up, his business is operating that way, his company is operating that way, and his team is operating that way.

As a result, David has become nothing less than one of the very best product leaders in SaaS, and every SaaS founder can learn something from David about how to build a great product and a great business.

In his new book, David finally takes all of his best lessons and his best frameworks and gathers them all in one place.

As a former competitor, its satisfying to now be able to peek inside of Davids mind and see how his customer- driven model was working behind the scenes.

In addition to telling the story of how David took the customer-driven idea he developed at Performable, scaled it at HubSpot, and is now perfecting it at Drift, this book offers a ton of practical and tactical advice for making your company more customer-driven.

Of course, David is always learning and always iterating as a businessperson. So after youre finished reading, stay tuned: Im sure hell have more wisdom to share soon.

-Hiten Shah

co-founder of KISSmetrics, Quick Sprout, & Crazy Egg

Table of Contents

The Age of Waterfall & Agile Is Over

An Accidental Discovery

Does It Scale?

What It Takes to Achieve HYPERGROWTH

Practical Advice for Becoming Customer-Driven

by Mike Volpe

Introduction

As a college student, I was bored.

Extremely bored.

So I tended to skip all my classes and hang out in the library, where the computers had early versions of the Mosaic browser, and later, the Netscape browser.

Up until this point I had been coding software. Desktop software. Boring software.

I wasnt really feeling it. I didnt love it.

So when I discovered this way to have access to all of this information around the world, and to make connections with people all around the world, I became obsessed. And I started building my first website.

Back in the day, you would put your email address at the bottom of your site. So thats what I did. And eventually, someone sent me a message.

I still remember it to this day:

Hey man, I really like your website. Its really cool.

Then I checked the IP address: the person who had emailed me was in Russia.

While this interaction might not seem like a big deal, it was actually a breakthrough moment for me. Because it was the first time I had ever experienced a customer feedback loop.

And that is what Ive been chasing ever since: that customer feedback loop, and those 1:1 interactions.

While the companies Ive founded over the years including Compete (acquired by WPP), Ghostery (acquired by Evidon), and Performable (acquired by HubSpot) have all been different, theyve all had the same underlying focus:

The connection between businesses and their customers.

I didnt realize it at the time, but Ive been chasing that same pattern for nearly 20 years.

Up until my fourth company (Performable), however, I had been following the same playbook as everybody else. And its a playbook thats largely driven by the ideas and motivations of internal stakeholders.

Whether the underlying methodology is Waterfall, or Agile, the customer is noticeably missing.

At Performable, I shifted the model to make communication with customers a priority.

Under this new model, everything revolves around the customer: from what features get shipped, to how teams are structured, to what words get used on the website.

When Performable was acquired by HubSpot in 2011 and I came in as Chief Product Officer, I had the opportunity to see if my customer-driven approach could work at scale.

Now, at my new company Drift , our mission is to help all companies become more customer-driven.

I believe that in todays world, helping is the new selling and customer experience is the new marketing. Companies that fail to adapt, and that fail to listen to and communicate with their customers, will inevitably lose out.

Centralized planning, Agile, ignoring customers ... sure, those things work for slow-growth companies.

But if youre anything like me, youre not interested in slow growth, youre after HYPERGROWTH.

The customer-driven approach is how you get there.

In this book, I tell the full story of how I developed my customer-driven model and share advice and frameworks for helping you implement it at your organization.

-David Cancel

co-founder & CEO of Drift

Chapter 1

The Age of Waterfall & Agile Is Over

I grew up in the age of Waterfall and Agile, and those methods were great for a certain period of time. But the world has changed.

Think about the way you communicate with your friends, family, and co-workers today versus three to five years ago. I bet a lot of that communication is now happening over messaging. The shift happened so fast you probably didnt even notice it.

The same thing is happening to businesses. They havent noticed the shift yet.

Just look at the numbers: Messaging has exploded , new generations are focused on 1:1 communication by default, and artificial intelligence is finally coming so we can deliver on 1:1 at scale.

Billions of people have already shifted their day-to-day communication. But businesses are stuck in a fields, properties, spreadsheets, and database paradigm. Its a paradigm that has already shifted under our feet.