Editor’s note: Founded in 2012 and San Francisco-based, Bluenose is an intelligent customer success platform that enables SaaS businesses to proactively manage and engage their customers. In this interview, CEO and co-founder Don MacLennan discusses trends in customer success solutions and also shares advice for startups.
How did your company originate? What inspired you to launch the company and what was the original vision/hope?
Don MacLennan: Prior to Bluenose, I held leadership roles in several subscription-based businesses. I was SVP of product management for AVG and, before that, I led product management for a portfolio of products at RSA, the security division of EMC. At these roles, I developed a deep understanding of the importance of usage measurement and its healthy effect on customer relationship management. I started Bluenose with the desire to help other vendors build great products and delight their customers.
Other than the churn factor, what situations/trends in late 2014-2015 are changing the way SaaS companies need to address customer success?
Don MacLennan: Thanks to advances in big data technology, customer success can now be quantifiable. Therefore, customer retention, customer growth rates, lifetime value and key adoption metrics are just as valuable as the new customer growth rate for a SaaS company.
Since these statistics can now be measured, SaaS companies will begin to focus more on developing lifetime customers. This means giving their customers a “health score,” predicting risk and addressing it before it’s too late, developing a seamless onboarding system and keeping an eye out for upsell opportunities.
How does your company change the software industry vendor landscape/ecosystem?
Don MacLennan: Previously, the subscription economy lacked the framework required to minimize churn and maximize long-term customer value. For companies to not just survive but thrive, they must find a better way to manage customer relationships. Bluenose solves this gap by providing proactive customer management for SaaS companies through trusted intelligent analytics, which combine advanced data science and real-world customer insight for 360-degree customer understanding.
Please describe one of your company’s lessons learned and where it occurred in the timeline of your product development.
Don MacLennan: We learned a lot by entering the market with a very young product and having some success and failure along the way. Today, we know the ideal customer profile: a company that must have our product in order to assess customer health and drive engagement. We also know the type of company for which this might be less of an imperative, especially when they already have a high degree of customer intimacy.
Did your company change direction at some point during product development? If so, please describe what led up to the change.
Don MacLennan: We learned that customers wanted first to solve process problems with analytics – in other words, which of their customers need their attention and how to automate the tasks of doing so. This was slightly different than our original premise that our customers wanted to discover the drivers of churn across their customer portfolio and solve that first.
Have your investors and advisors helped you avoid pitfalls?
Don MacLennan: All the time. We’re fortunate to have two very successful investors from two leading funds. They challenge us to be better every day.
How did you determine the right pricing for your product?
Don MacLennan: Our pricing strategy is determined by a thorough analysis of the current market and customer feedback. We understand that every SaaS company has different needs and we offer different packages to accommodate for that.
What challenges have you encountered that you didn’t anticipate?
Don MacLennan: Recruiting is hard. We all know that. Sustaining employee engagement, especially as the company goes through growing pains, is an ongoing challenge. It’s something I’ve had to work on more than I expected.
What challenges have you encountered in recruiting/hiring/retaining the right talent?
Don MacLennan: The market for top-notch talent is very competitive, especially in Silicon Valley. Salaries, commissions and benefits must be aligned with what other employers are offering. Retaining talent has to do with the good company morale and, of course, the product itself. I believe if our employees are passionate about what we do, about analytics and insights that lead to great products, then retention should not be a problem.
What are some of the things that took longer than you anticipated in getting your product to market?
Don MacLennan: We’re solving a really hard problem. There has never been packaged software that holds a complete customer-360 profile. When you make this type of data available for the first time to a customer-facing actor in sales of customer success, their imagination lights up over the many ways they can use this data.
Please describe a tradeoff you had to make in your time-to-market race and how you decided what to do.
Don MacLennan: We held off staffing our sales team until our product was more mature. We also built the demand-gen functions before sales as well.
If you could change something about the software industry, what would it be?
Don MacLennan: We’re still living in a world of challenges pertaining to data and integration. So much business value can be created by smashing data together. But it is still hard. Standards and simplification of data and integration could help. But we’re not holding our breath.
From your observation, what is the most challenging aspect of innovation, and how have you overcome that challenge at your company?
Don MacLennan: There are lots of interesting technologies available on which to build our product. Part of the challenge is which ones to use and projecting the needs of your business into the future such that you pick technologies that can have long useful lives in your product stack.
What do the next 12 months hold for your company?
Don MacLennan: We recently unveiled that our advanced analytics system has the fastest time to value in the customer success industry. Our platform is producing results for clients in a record average of 49 days compared to an average of more than five months for our competitors.
In the next 12 months, in addition to developing new products, we plan on improving our time-to-value number even more by perfecting our onboarding methodology – an integration of strategy and big data. Getting to value quickly is a key component of customer success and the success of Bluenose.
In addition, we will be adding more SaaS clients to our growing roster (we recently added Betterworks and PaySimple).
Don MacLennan is the CEO and co-founder of Bluenose, the intelligent customer success platform. Don is passionate about analytics and insights that lead to great products. He has held leadership roles in several subscription-based businesses, where he came to understand the importance of customer engagement and loyalty. He started Bluenose with the desire to help other vendors build great products and delight their customers.
Kathleen Goolsby is managing editor of SandHill.com.