#222 Validating Your SaaS Startup Idea: Donatas Jonikas on the Power of the Double Sprint Method

0:00:01 - Mehmet
Hello and welcome back to a new episode of the CTO show Today. I'm very pleased to join me from Lithuania and Donatas Jonikas, thank you very much for joining me. The way I like to do it, I keep it for my guests to introduce themselves and what they do, so the floor is yours. 

0:00:16 - Donatas
Oh, thank you, Mehmet. It's really great pleasure and great honor to be here. I'm actually a startup marketing advisor At least, this was the way I was introducing myself. Actually, I've written the book. I published the book that became one of the top five selling books on Amazon, start Revolution Curve. It stayed in charts in top five charts for almost four months and the fun fact that even California State University used this book as the course book for MBA students teaching new subject technology and startups. 

Eventually, after publishing that book, I decided, well, why not to create the course? So I created the course and published it on Udemy so that it's accessible to as more as possible startup founders. I don't recall, so it gets right now. About 16 or 17,000 entrepreneurs enrolled in the course and globalvirusorg ranked this course as the number four best program in the world for startups in 2022. So that's who I am, and now actually, I'm mostly focused on working with SaaS startups and online platform startups. I created the double sprint method to help early stage SaaS and platform founders to validate their idea and to get customers even before writing a single line of code. For some people it might sound like a controversial thing, but actually this is what we do on a daily basis, and that's probably why I ended up here being with Mehmet on this podcast 100%. 

0:01:45 - Mehmet
This is why I wanted you, Donatas, to share a little bit of your wisdom, I would say. But something I like to ask out of curiosity so what interested you in the world of startups? Like coming from, you had a PhD in economics, right. So what attracted you to the startup world? 

0:02:09 - Donatas
Okay, as like discussing the fact of the PhD, I was never very deep into economics, it was not in my blood, but marketing was in my blood. I hold masters in marketing and there was just a chance to study a PhD in economics. I just took it and, okay, that's cool. But I'm using a PhD knowledge of economics in marketing. I try to measure everything and everywhere, and sometimes people say, well, you are getting obsessed with metrics and analyzing everything, but why I went into startups, it was because three hour traditional business clients who tried to build something innovative, something crazy, told me that the more idea is innovative, the more ideas crazy. 

You guys and especially you don't know this deliver as the most possible value, because if you want to build another one restaurant or another one construction company, you look harder. They did five restaurants in their row and successful. You go to them and you will do that. But if you want to create something that was never done before, what the heck you should do? Where should you look for? So you need to recreate everything from scratch and this is why the nowadays you are very, very helpful and useful for us, and I'm in marketing for almost 20 years and at that time I didn't even consider that these innovative companies were called startups. This was like the initial touch point. Okay, so I want to dive deeper into these innovative, strange and traditional, unorthodox businesses. So let's dive deeper into that. And that's how I ended up in the startup world. But the fun fact I was not very successful at the very beginning with startups. Actually, I tried to create my own startup At that time. I didn't call it a startup, it was like medical tourism platform. 

Like how to attract potential medical tourists to our country, how to serve them, how to sell medical services to foreigners. That sounds kind of cool. We got some kind of idea validation, but eventually it flopped and that was like the key fact that made me to go very, very deep into startups how to validate the idea, how marketing actually works with startups and I noticed that well, even if you have 10 years of experience in marketing with traditional businesses, it doesn't mean a lot when you're working with startups, because it's a totally different game, like volleyball and basketball Everyone is using the ball, but the ball is different, rules are different and gosh, so what game are you playing? So that's when I decided to go dive deeper into startups and, yeah, that's what got me interested in that. It's very strange and there is no pre-built solutions Great, so let's start from something you mentioned during your introduction. 

0:04:52 - Mehmet
So let's start with. Should we start with the book or should we start with the double sprint? Which one would make more sense? 

0:05:03 - Donatas
It probably depends on who your target audience is. Who are most? Who are those listeners of your podcast? If they are like startup founders in general, well, we can speak about the book. But if you are more in tech and like software and platforms, online tools, maybe double sprint method would be more interesting for them. 

0:05:22 - Mehmet
Let's start, because I have a mixed audience. So let's start with the book. At least you know what, let's say the motive behind it and the main highlight that you can tell us about it. 

0:05:38 - Donatas
Okay. The main motive was it's more than 1000 startup experience collected in the book, so why to learn from your own mistakes when it's very expensive? 

Yeah, you can learn a lot from your own mistakes, but you can learn from somebody's else mistakes and achievements. So why not? To do that? And in order to write the book, I did the research. I surveyed 1447 startups and more than 1000 of them were viable startups and so called scalable startups. It means like true startups, not like a lifestyle lifestyle startups, but true startups that can be named for an exit. 

Why I have published this book? Why I try to get this much of experience from other startup founders? Because, first of all, I tried to validate the idea of the book in front of the audience. I wasn't invited to give a speech for startups. It was about maybe two, 300 startups. They were preparing for pitch competition the next day, so I provided them some training and at the end they showed well this and much more things you could get in the book. I showed them the 3D mock-up of the book. I showed them the table of contents of the book and few people of the audience they even asked okay, where can we buy? Can we order it already? Okay, this is cool. This is like the validation of the idea that this book is needed. The concept is needed. That's cool. Later on, I even measured how many there were downloads of these templates, because after the end of my lecture I shared the link and said well, if you want to get this book and you can also get all these templates that we talked together, go and download it. And they saw that more than 25% who were in the room they actually made some downloads from that. 

But the key insight from there was that there was one guy sitting somewhere at the back of the audience, this kind of like super trooper, pessimistic person. Why should we believe in Yale? There are a lot of books on startups, there are a lot of theories on startups. So how do you build a startup? What kind of startup you build? And all that kind of negativity going on, going on. At that time I was gosh, this person is negative. So, come on, I'm like a PhD candidate and whatever, so I will write a really credible book and etc. But then I got myself well, this is probably my ego speaking and okay, after the lecture we had a coffee break and they met this person with a cup of coffee and said, okay, so tell me what exactly do you want from me? 

to make this book a no-brainer for you? Why, this should be like a must read book for you. He then made some excuses. Okay, I didn't want to offend you, that's totally fine. Okay, but I'm very skeptical. He actually tried to build two or three startups. He burned out and he don't believe all those fake promises. And at that time I said okay, if I build you like the exact startup that you're building right now, it would be like a good book for you. Yeah, but you understand that it's impossible, Because if I build a startup that you are willing to build, come on, this is nonsense at all. So what should I do? I don't know, I don't know. So I got a little bit kind of like an angry at that moment and they said okay, what if I would give you an experience of 1000 startups in that book, If I would pack it in? Would it be valuable for you or not? So he said, yeah, at least few of these startups would resonate with my situation, with my challenges, and that. 

Yeah, yeah, yeah, okay, cool, that sounds good. So that time I was driving from that event to my home more than 300 kilometers and thinking, oh gosh, what have I done Now? I need to find 1000 startups. I knew maybe 10 startups at maximum, so where should I find 990 additional startups? But that's how the journey of the research for the book started. So that's it, and I was digging deeper with those startups. 

If you failed, so why did you fail? What was the reason? You know what was your mindset, what were techniques you used and etc. And if you succeeded, what tools, methods you used and what would you use repeatedly if you're building, you know another one startup and which of these methods you wouldn't use. So I collected the set of tools, put them in five stages of startup evolution curve. If you are like in the first stage and just in analysis stage, you don't need even to go outside the building and talk to customers. You need just get like secondary data and just to make some assumptions whether it makes sense or not to pursue that direction and so on. And there are other stages, other methods, but 35 lessons packed into that book for startup founders. 

0:10:09 - Mehmet
That's very cool. Now let's come to the double sprint method, which is, I understood. It's also like the cornerstone, for you know your advising award. Can you explain it when you know, also to us on a high level, and tell us what it involves? 

0:10:25 - Donatas
Yeah, if, in a nutshell, Most developers know working in sprints Even UX designers and startups yeah, we need to work in sprints and I suggest working in double sprints. So what the hell does it mean Two times more work or what I say? That we are standing on two feet, not just on one foot, and we need to take two sides of the double sprint method. The first side is obviously developing the product. You need to do the UX, wire, framing, all that kind of stuff, that actual product exists, that you can sell it. But, on the other hand, you need to develop the business, you need to develop the customer. You need to go outside and find that customer who is willing actually to pay, or at least to commit paying you once the solution is available. So it means that simultaneously, you are developing the products step by step on one side and building the waiting list of customers on the other side. And while you are building the waiting list of customers, you can build your early adopters program. You can build your customer's advisory board of five to 10 customers who will advise you how to develop the product, and you can turn to them and say hey, guys, there are 10 features that we are like, willing to build, and we hear from the market that these features are essential, but we won't release them until the end of the year or whatever it is. 

So which of those features top three would be the best pick? And you don't make the decision. You ask your customers and, okay, would you pay for these three features instead of waiting for a year? That's how you do it, and each circle, each side of the double sprint method has 10 steps and you need to do all of these steps one by one, and eventually you will come back, come down from initial idea of you want to build to a market, proven product specification. At that time you will have the waiting list of potential customers and maybe some commitment in terms of money, time or reputation from customers, and you will have the tax specification so that you could handle it to developers and say, hey, this is what I want to build and how much it will cost me. When can you do it? And that's it. And once it's done, you only have the list of customers who are waiting for that product. That's what the double sprint is in a nutshell. 

0:12:47 - Mehmet
So basically it's part of the validation right Donates. 

0:12:50 - Donatas
Yep, yep, exactly. It's validation and improvement of the product on the go. It's not just like I have amazing idea, now let's get and check it. Oops, it's wrong. No, why it's wrong? How to make it? How to make it a no-brainer for the audience? You improve it, you get back to the product and what I do? I never start working with a customer until we do the double sprint audit, like we take this diagram and diagnose the situation and I pinpoint where are, like, critical areas based on my experience, based on that method where I would focus on. And only after that we can jump in and start diagnosing what needs to be done to fix the situation, to move on forward. And what I very, very often see that product development is far, far away. But customer development, in the best case, founders have done some discovery interviews, some initial idea validation, but their product development has already gone too far from that initial idea validation and they didn't touch the base with customers, if they are building the right thing and if customers are willing to commit monetary obligations to that. 

0:14:04 - Mehmet
Right, right Now, let me be a little bit like the friend you just described a while ago, like the skeptical guy, and I'm asking this because I know like some of the you know audience might have this. You know because I hear it a lot. Hey, I don't want to mention exactly why I'm building, because I'm bringing something completely new to the market, right? So we hear this from some founders. You know part of my world also as well. I like to try to help these founders in other things. So, how this applies and I would say, should they really have this mentality, oh, like I'm bringing some innovation. I cannot even now show it to them, like what you tell you know. Yeah, I see the point. 

0:14:54 - Donatas
Sashfo. Yeah, for me it's like a good sign because I meet less and less people who think in that way. Previously, I met a lot of people who were thinking no, I'm genius, I'm Albert Einstein, I've invented something that wow, this is amazing. But my question is if this idea is so unique, how do you know that the market needs it? Just think about that. If no one else has built it before, what proof do you have that it needs to be in the market, that people are ready, willing and able to pay money for that? So it's either one of two either you are genius like Albert Einstein and you created something innovative. That's cool. I don't neglect this is possible. Yeah, that's cool, but 99.9% we are not Albert Einstein's and the case is that maybe markets simply doesn't need that. 

For us, it seems like really valuable thing and I had like personal experience with one founder coming to me when he has already invested more than 240,000 euros in building the platform for B2B customers, like a marketplace, like a platform based on his personal experience. He actually sold 50% of the shares that he owned in the traditional business in the construction industry and he invested almost all of that amount into building that startup without any idea. Validation because he was so cautious. No, no, no, I don't wanna tell anyone until it's ready, but when it's ready it will be amazing. And he built only based on his own assumptions, on his own experience, even though he had more than 20 years of experience in that niche. But he failed miserably. So out of that 240,000 euros spent, he didn't get even a single euro back. He got maybe 160 registered users, but not paying customers. 

0:16:49 - Mehmet
Right right Now. How this aligned Donatas with the concept is not new, but I mean, this aligns this methodology of what's called building in public right. So now we are seeing more people, more entrepreneurs and sometimes even solopreneurs. They do building in public and I follow them and I see, like these guys, sometimes it's a one man show and they are getting really cool feedback from the community, whether they're followers on social media or whatever. So does it align with that concept of building in public a little bit? 

0:17:31 - Donatas
What I suggest and what we do in the double sprint method. We actually address both of these sides. Yeah, I have something innovative I don't wanna give away to my competitors. Sometimes it's actually a good thing that founder is aware of specific competitors in the market. So if I give away this idea, other competitors they have deeper pockets in the market. They are looking for competitive edge and I have this edge in my mind. 

I've been in the industry, I know that kind of stuff and they can copy me, implement in their own solution and everybody in the market will think that they were those genius who created that stuff, that improvement. I'm not afraid that command somebody will steal my idea. But I know two or three players in the market who actually can benefit from that. And in this case, yep, it makes sense not to showcase everything in front, like I wouldn't be like 100% transparent of what we are building. 

So what we do in the double sprint method is that we are approaching customers and asking about the problem so what do you want to solve and what the result you want to get? We are talking about what, but not how. Publicly we are we revealing what we are building, but not how we are building, how we are different, how we are efficient, how we are Competitively stronger than anyone in the market. So you can publicly show yeah, this is like our public roadmap, but this is our private roadmap, where you build all these kind of like Things that will give you unfair competitive advantage. And if you don't have unfair competitive advantage and the only advantage is that nobody else knows your idea, you are already in the trouble right. 

Because any time you will find the guy, the company who has deeper pockets and they simply copy you. That's that's it. And another thing what we do in the double sprint is that we try To build early adopters program, which means that we show to our early adopters the way more than publicly. So publicly we can cringe just the landing page, that a. If you are like our ICP ideal customer profile, have this specific Problem and you're looking for some kind of like the solution or result, and roll, have a call with us and it's that's it. What they know about what we are building. If we are like in kind of stealth mode, but when we talk with potential early adopters, we can measure the temperature of their involvement and we can use some kind of like a due diligence. If this is our direct competitor, okay, sorry, we're not interested. If it's not direct competitor, cool, we can accept you. 

Now early adopters program, you have to pay something to get access to the program, to get early access to the tool, to test it, to co-create with us and etc. So maybe this could be a paid pilot and what it means that we call like like five to ten customers If we are talking in B2B, like businesses, who have much more information than anyone in public could Understand about what we are building, and this is where we get that specific feedback. What's in it? If everybody in the market knows what you are building, will you get feedback from them? Mostly, you will get feedback from critics and Dire kickers, but if you have early adopters who have their skin in the game, already invested their time and money, they will want to that you will build that damn good solution for them because they already invested money and they want to get really great solution for that and they will give you like that feedback that is Implementable and helps you building better product. 

0:20:53 - Mehmet
Right. So the next question would be where I can find these early adopters. 

0:21:00 - Donatas
Oh, nice, nice, this is nice. So there are a few different channels, but first of all you need to think about what. What will you offer for them? That's the tricky thing, because you can find like the place, the space where they hang around, but what you're gonna do, like if they are on reddit, on Facebook group, on LinkedIn group, hey, buy my stuff or enroll in my program. That doesn't work anymore Because there are too many like kind of like spammers or like I'm building this, building that, building that. That doesn't work. So the first step is to find where they actually hang around. That's the right question, and this is like different from case to case. 

The second question, which I would even put in the first place what's in it for them? How would you get their attention? And this question we could even split into two or, you know, minor questions. Like the one would be like what's your big marketing idea? What's like the catchy headline, but not like the bold statement that is unbelievable. No, this is the big idea, the game changer, which is usually based on some macro trends happening in the industry, and you showcase that. Well, this is the window of Opportunity based on these micro trends, and you are building the tool that will allow you to, to use that opportunity of window. And now the call to action Jump in and get it. And this is the second part of the question. So what will you get if you jump in? Okay, you will get on the call with me. So what's in it for you? You will sign up on the waiting list, okay, so what's in it for you? What's there? 

So, for instance, one startup founder on our Double split 90-day bootcamp is building them the two for managing OCRs, objective key results methodology, so for earlier doctors, he offers one-on-one sessions and this is a tremendous value. 

So if you are a scale up and you're trying to grow from the team of five people to 50 people, from 100k to one million ARR, this is totally different leaks of where I'm playing the game. And this founder introduces not just the tool but first of all he has the coaching session. Okay, what are your goals, how, how quickly are you predicting your growth, and etc. He helps them to set up these holes. He gives them like 30 days access to the tool to track, to measure everything and if he sees that it's a good fit, he offers them an early adopters program. Either it's like a fixed fee or a monthly fee depends on the stage when you're joining, but this is a very clear value for them. And this founder is really tough guy because he managed to get from X employees to Y employees, from, you know, 100 K to few million. And If you want to do the same, to do the same, why not to talk with this guy Right now? 

0:23:50 - Mehmet
Something also you mentioned at the beginning. Now it's all about Part of the validation. You mentioned about researching customers and you said you know you can do this without going out of the room like this. This phrase Code my attention and I want you to also explain a little bit more Yep, yep, yep. 

0:24:11 - Donatas
You won't get 100% validation or of the idea without going outside the building Of the idea without going outside the room and talking to people. But you can get 100% Rejection of your idea without going outside the room. That's pretty obvious. Like you use definitely secondary data now with current tools, with AI tools that can help you to boost your search speed, it's you know how to say that politely. You know you would be a laser person if you wouldn't do the initial analysis before talking to anyone. So when you go outside the building and try to talk to potential customers, you already have have to do your homework before doing that actually, so that you know Well, it makes sense. Now I need just to put the dots on I and that's it. 

So, for instance, one example was like Startup was pitching an idea for the jury and to get some kind of like funding and the price and etc. And this is innovative. This is crazy. We talked to customers. They say they would pay, they would buy how many customers? They have none, but they will buy once we build it. Where did I hear that story? And one of the jury members took his iPhone, I believe, and he simply searched and he found like five or six sellers on Ali Baba showing that kind of innovative stuff and he said, oh, this is a new thing for us. The founder even didn't knew that the same product is already available and mass produced in China. So why? Why are you going to talk to, to talk to people without doing that secondary data research? If you have done that, like, this is like the first step of validation. Cool, it makes sense. 

Then you do the competitor research. If there is, like, if there is the demand in the market, that's great, but what's the supply? And can you find the niche? Can you find the difference? You have your hypothesis on the niche. This is how we're gonna be different. This is who we're gonna serve and this is what kind of value we're gonna provide for them. Now let's go and talk to those people who we desire to serve and tell them about the value that we intend to create, and you get their feedback, don't others. This is bullshit. We don't need that. Okay, I got it. I will talk to few other people if they tell me the same thing. 

Sorry, my conclusions were wrong, but if I get the confirmation, okay, these kind of people I see ideal customer profile. They, they are ready to get this value from me for, well, this specific, like payment, price or whatever it is. But again, if we are talking about price, saying is not the same as paying. Interviews won't validate your pricing. So the least thing what we do during discovery interviews is we ask them what would be the most fair way to charge for this. So you see, you have this problem. We have the solution. We have no clue, like how to charge for it, how much it will cost or whatever it is. So, mehmet, what would be the most fairest way to charge for it? And we simply wait for from the customer customers Okay, based on you know how much it costs me right now. Based on what would I get? Okay, cool, we are getting to some numbers and to even specific pricing models based on it's like usage, based on value delivered, based on time, on whatever. 

0:27:29 - Mehmet
Right so? So don't ask like. All this is part, you know, of validation and the ultimate goal Is to reach what we call the product market fit right? So you mentioned a couple of examples, but you know in your experience that, because you know you work with a lot of startups and you studied a lot of startups, maybe I will be, I know like. The answer is that some of the mistakes may be still happen now, but what are the most common ones, that you you see them keep repeating it, and how they can avoid them. 

0:28:04 - Donatas
Building two robust product without validation in monetary form, like they Got initial validation. Yeah, this is good, this is great. And they try to build super trooper product, you know, polished version of the product, without having a clue if somebody will pay for that. They believe that they will pay, but most likely it's not gonna happen. In most of the cases it's. It doesn't happen. 

The next thing is that you build two Features that are nice to have and you need to ask customers Well, we have the list of 10 features. You need to pick on three or five, whatever. So which, which one of those you will pick? We need to prioritize these things. Another, another issue is that they think okay, if I build the product, if it, if the value is really great, it will be very easy to get customers. You are only partly right. Your product must be Valuable enough for customers to get interested. 

But now we as users, as customers, we are getting so many messages all over the place, so that your message needs to be sharp, it needs to be specific and what we train you need to build kind of like a big marketing idea that it's different from the market that you interrupt part in. But if you believe that you will build the product and then send mass emails announcing ta-da, now, go on, buy my stuff, it's gonna work. Or we think that, okay, we will publish on Facebook or on LinkedIn and everybody will enroll, or we will call DM on LinkedIn decision-makers, ceos of companies, and they will purchase our solution. It ain't gonna happen. Maybe one or two, but it will be like exception from the rule, not the rule itself. So you need to have your channels, you need to have your message in it and what I also usually see that founders skip that step that you need. It's very advisable it's not that it's a must, but it's very advisable to have customer advisory board, because if you have customer advisory board, everything else you know comes a lot easier, because you can consult with customer advisory board. Okay, when do you hang around guys? Could you refer me three or five other businesses who might benefit from that solution? Okay, cool, could I get your testimonial? What did you find most valuable about our software or platform? Cool? What was the moment when you made that decision? This is the thing that will change our game, or whatever it is. You get all of that from your early adopters, program members, and then you can translate that into the market, into your marketing message, and get even more customers. So this is another one mistake that you don't build customer advisory board. 

Another mistake is, like on the other side, very controversial like they try too hard selling initially and then they say, well, it doesn't work, you just built the MVP or just made the sketch or wireframe. Go and try to sell. Well, we will build this amazing cybersecurity solution and we will conquer the IBM, whatever kind of that stuff. We will be much better. Now, pay us 100K for that solution. Nobody pays us. You know this approach doesn't work and it's not good. That's not the way it works actually. 

First of all, you do these discovery interviews. Okay, you are our ideal customer and we are creating you this kind of value. Does it make sense? Yeah, it makes sense. Okay, what would be the first way to charge for that? Okay, cool, what we need to add on it? So it's a new brainer? Okay, cool. Would you be willing to test it out, to try it out and give us feedback once we have like a wireframe or like a clickable mockup or whatever? Okay, yeah, and you go with. 

Like you increase the temperature of the customer until a certain level when you say, well, we have our early adopters program, would you like to join it? And here are exclusive conditions for that. Instead of, you know, paying X amount per year, you can get like a lifetime license for a lump sum money, or maybe a discounted annual plan for as many years as you want, or whatever other conditions. We can also include number of development hours so that we can adjust, customize the solution to your business needs. We can add additional training, additional, you know, bonuses. So it's an old brainer. And then we do the pre-sale. It's not the way. 

Just, I created the mockup, I tried to book like sales call with the founder, with the CEO of the company that they see for the first time, and try to sell him. And then I say, well, it doesn't work. No, we built the relationship, we measure temperature and when it's like hot enough, we sell. Well, would it make sense for you to join the program? That's that side. And another one on challenge. And the problem is that most founders aren't aware that market is segmented in these like early adopters, innovators and laggards, and they believe, oh, there are thousands of companies who have potential customers, but, to be frank, on average it's only about 2.5% are innovators. And so what does it mean? It means that you will have to make like 20 meetings to get one customer, one innovator, adopted into your offer. So the mistake is they try to approach 10 customers, potential customers, who are not early adopters at all, who are like very traditional, like Stone Age companies. Oh, they didn't get interested in our solution. You know, pre-sale doesn't work. That's not how it should be done. 

0:33:26 - Mehmet
Yeah, that's that really resonates a lot, because you know some people, they think you know, when they prepare, especially for their pitch decks, they do the time and they forget to do the other ones the same. So they look at the time and let's say the time is I'm just throwing a number like it's 10 billion, 10 billion dollars Actually, if they, if they just take the time to do the other two the same and the song. So because at the end of the day, I think the it reaches the summit will be around like maybe two or 3% from the time. 

0:34:01 - Donatas
Yeah, something like that. 

0:34:03 - Mehmet
Yeah. So if they talk about the song, let's say, and they say, okay, we're going to address these and we're going to take 10% of this one. It makes sense. But yeah, I see also the same thing. People are very ambitious, especially new, first time founders. They are so excited, which I can, you know, I can understand. Like you know, if you ask me 20 years back, you know I used to have ideas that didn't start any startup. But yeah, I would say, yeah, hey, I'm doing this thing that no one else saw. So, to your point, like, you mentioned something which also I think it's interesting because you talked about having a parallel development between, from software perspective, coding and blah, blah blah, and something related to the customers building the customers, building the customers, and I'm sure here and you come from a marketing background so how they should prioritize the marketing and how they should, I would say, customize the messaging also as well, while doing this double split, because it's part of the double split. 

0:35:13 - Donatas
Yeah, that's a broad question, but I try to answer it so in the way I can answer it. So the main thing is not just to focus on tiny details of your product how it's going to look like at the very end but trying to focus on the value that you will create. It's not about how you will create that value for customer, but what problem you will solve for the customer and what value you will deliver. This is the very first step in marketing that you go and do and you do on secondary analysis. Well, it makes sense. Nobody does in the market and they believe that we could do. Now I go to people and talk with them and if they say, yeah, this is amazing, keep me in the loop, let me know. Cool, you already started not only marketing but already your sales process, because these people are waiting for your message. 

And the whole marketing message has to be crafted, not about the product, not about the features, not about the functionality, but about the value that you deliver, even in B2B and I would even say especially in B2B, because in B2B we have less emotions and more rational. Ok, I pay you 10K a year, so what do I get? Can I get 20K OK, but that's not a tremendous value. It's just 2X. So when we build software and when we try to sell it to someone else, I always ask what's your 10X result? If you want to charge 10K, so we have to create value for 100K. This is what we try to seek to achieve. If we hit only 50K result for the customer, it's still five times more than the customer invested and probably feel that it's much easier to sell five times higher value than we are asking to charge for it. That's when we start our marketing. 

Another thing is crucial discovery interviews, where you try to deeper into specific wording of your customers. How do they talk about that specific problem? What words do they use, what keywords, what's their main challenge? And that's why I don't count just on secondary data. I always want to go and speak with customers, potential customers. 

Once I get their message, then I go and test it by different channels. We use, let's say, social media, facebook or LinkedIn. We use paid ads. We test three to five different marketing messages, but these messages are built based on what I've heard from people how they define the problem, how they define the result that they want to get and they throw at the audience. Put some cash for LinkedIn and see what are numbers and based on that we can talk Cool. Now our customer acquisition costs on average are this much. We will keep our customer, let's say, for three months, four a year, for whatever it is, and we charge this much. So our customer life-term value is this much. Cool If we are profitable. If we are not profitable, we can't go at scale because we are just going to burn our money. So we need to find the minimal profitable channel to sell our first product and only then we should think about OK, how to scale, how to add more gas into that burning fire. 

0:38:23 - Mehmet
Right. And one thing, if you allow me, don't let us to add also and this applies not only from the marketing, maybe even when they try to pitch to investors. So they need because I love reading books about startups and this is why I'm interviewing you also and one thing that always comes up is the customer journey, like. Describe the customer journey Like you're taking him or her from this point right, he or she is here and now you are taking them to there and describing this. And I'm just reading this book by Tony Fadal, the build. It's amazing. He describes this customer journey thing and he compares himself when he was younger and he just wanted to build shiny hardware products and then he started to understand the concept of customer journey and the guy came up with the iPod, the iPhone and then the Nest. So I advise everyone to go and read this book. It's a very, very nice book. Now, speaking about funding and investment a little bit here, johnatas, how do you advise startups to approach investor conversations, especially if they are in the early stages? 

0:39:39 - Donatas
No, the best investor is your customer. Like I had like the double sprint audit last week with one potential customer and I hope that he will enroll in our program and when we discussed with him I asked OK, why not go to your potential customers and offer them becoming your investor? Because I don't want to give away any specific details because it still might be kind of like a confidential. But the key idea was that, well, you can become like an earlier doctor of that platform so you could get some benefits for your own business. But if you become an investor of that platform, you would earn even from your competitor's profit, because you are serving your competitors as well. So for you it doesn't mean much If the customer comes to your business or to your competitor's business. You earn some cash out of that If you become an investor in that tool that serves the market. But the rule of thumb is that I don't advise going to investors until you have traction, because, well, it will be based just on ideas and the whole fund-raining process will be built just based on emotions and personal connection. 

But imagine the situation when you come to investors and say that we have five customers who already paid us at least 1K each or 10K each. 

Well, it depends on the solution, on what we are trying to build, and we have the waiting list of this number of potential customers willing in that solution and now we are looking for X amount to build this MVP to ship it out. We don't need more, we need just this amount to ship it out. And once we ship it out, we are very confident that out of 120 customers on the waiting list, at least 20 or 15 will take the offer and we can even return your investment back. So literally I show you that I don't need your investment so much because I could sell fund from customer development. This is the ideal case scenario, what we are looking for, because if you can't get to that stage that customers are willing to wait for your product, to give you some kind of commitment, it gives me a strong doubt if I'm building the right thing and, as you mentioned, customer journey, if you showed how the customer journey will look like with your product. 

It has to be so much different so that customer says, ok, take my money like a deposit. Maybe it's like a refundable deposit, maybe not refundable deposit, but I want to stay in the loop and know when the product is ready for testing. That's what we want to have before going talking to any investors. And you actually can achieve that without any major investment. Today's tools like no code, low code, wire framing approach with software and platform solution, this is doable. Come on, this happens every day. 

0:42:31 - Mehmet
And I can tell that I'm doing it also myself without paying large amounts. I don't have to pay hundreds of thousands of dollars to OK. I have a technical background. If I want to code, maybe I can learn easily. But yeah, I have a couple of ideas and the way I'm doing it I don't have to pay 100K. So I'm just using low code, no code tools, and I'm just throwing in front of some friends and people who I know and say OK to do the validation and it was going very smoothly and the beauty of these things you can change also very fast. So you're a fan, donatas, I believe this is my feeling. You're a fan of bootstrapping a business unless you are onto something big and really you need big funds. And then you go to gather these big amounts and bring these big checks. 

0:43:22 - Donatas
Yeah, exactly, you need to put yourself on the right trajectory, and fundraising and investment from investors is not extra fuel that speed up your process. Put yourself on the right track in the very beginning. Investors won't do that for you because most investors are portfolio investors. They invest in 10, 20 startups and if one or two of them shoots to this guy, that's a good result for them. They get their money back, but they don't care about the rest 19 or 18 startups and what are chances that way you will end up. So you need to put yourself on the right track and use the investment as the fuel, as the catalyst for scaling up. 

0:44:02 - Mehmet
Right. So how you know this is like maybe again a generic question, but because you are in the heart of the startup world outside the Rattles, because I'm sure that you deal with a lot of them on daily basis so what are the trends that you are seeing and how you know what kind of maybe new generation SaaS we might be seeing in the near future, because I know that you focus more on SaaS businesses. 

0:44:33 - Donatas
Yeah, it's a very general question, but what I see that quite many founders are trying to capitalize on new opportunities with AI and connections automations to avoid, like coding every single line of code on themselves. No, let's try to assemble multiple tools into one thing, deliver that value and after that we can create something, maybe out from scratch, that will have unique code and etc. So I see very, very many founders trying to look how to optimize the delivery process of the product, not necessarily testing it in the market in the first place, but it's not the old school approach, like, okay, I'm coding from the beginning. So what we're going to see in the future? It will be like more software, more platforms that will be built on low code, no code and with AI generated codes. That's definitely. We will see more integrations via webhooks, apis, so that, like your solution if it's just a standalone solution which speaks to none of other solutions in the market, now it becomes obsolete you need to integrate your solution with other softwares, with other platforms in the market and how you're going to do that. This might be your competitive advantage again, and I see businesses thinking about how to do that. 

Another trend what I see is like could be called a piggyback strategy when you try to build the solution on somebody's else audience already and introduce it. Like, for instance, you're using this tool which has millions of users all over the world and maybe this tool has its own internal marketplace or app store or whatever it is. You build a specific app for solving specific problems, fine tuning something, and you can capitalize really nice on that and the main idea of it, the main goal, is not necessary to build a self-sustainable and scalable business, but successful exit. You created this tool which is based, like like microsize, on one or two features. By the way, microsize, I believe, people like solving one or two specific issues and that's it, and they don't need to raise huge amounts of capital for that and they are built really fast and you can exit really quickly after that, successfully profitably doing that. So these are like general trends that I notice on a daily basis when I talk to founders. 

0:47:07 - Mehmet
Yeah, on that last one, I always but warn people who come to me with ideas fine, but put this part of your risk strategy because I like risk. I work in in cyber security domain and data privacy and all this, so risk is always something on top of my mind. I say make sure, when you build on top of another platform, that this platform will not be holding your destiny or you have a plan B when this platform decides to do something. And we saw recently a lot of examples when now ex previously Twitter they changed their API, for example. It happened with Reddit as well. 

It happened many times and you know like you are under the mercy of, you know this platform. And if one day actually you know the Apple store story, you know back, I think 2011-2012, and they decided they would reject some of the apps built on these no code, no code, no code tools and it goes, you know, some people to go out of business. So always, you know what I advise keep this risk. Okay, maybe you're gonna make some money, but think about the future. 

0:48:19 - Donatas
So this is something you know it shouldn't be your retirement plan at least? 

0:48:26 - Mehmet
exactly. So have the plan B, and as to do not make it your retirement plan. Um, as we come to an end, I tried to cover as much as possible, but is there anything specific that you wish that I have asked what you want to to talk about. 

0:48:46 - Donatas
I don't have any specific questions. I am the person who answers specific questions from founders, because every set, every platform, is at least slightly different. They have slightly different challenges. Yeah, they have general topics, like key 5 hypothesis that needs to be validated that's cool. But when they try to do that, they come to more specific challenges. At least, what would I suggest? 

If someone is interested in the double sprint method, they can go for the double sprint methodcom and check the video. It's about half an hour length, like 30 minutes explaining the whole method absolutely free of charge. That's, that's it, and you can download the PDF of that of that like double sprint method diagram, and you could diagnose the situation. Maybe you can diagnose the situation on your own, like to check each of these steps. Have you done this, this, this or did you miss this or that specific question? That's that's it. See, and if you would like to connect for more detailed feedback, you could join Facebook group again absolutely free of charge founders launching SaaS on Facebook and we can communicate there. I also share daily tips there and if you have any questions, you can post your questions in founders launching SaaS Facebook group and we could answer these questions there that's great. 

0:50:03 - Mehmet
Thank you very much, donates. I will make sure that I will put these links in the episode description. Thank you very much, donates. Like a lot of advice, a lot of information and a lot of knowledge shared by you today. So I really appreciate that and, as you mentioned, like if someone want to connect, so I will put all these links so you can go and. 

And still, I think the Udemy course still there right, so they can yeah, yeah, yeah, yeah yeah yeah, so you can also go check the the course of donates on Udemy as well and, as usual, this is the way I end my episode. 

Guys, keep the feedbacks coming. I love feedbacks because I see this, this podcast, as a startup, so keep the feedback coming. You know, tell me what you are liking, what you are not liking, anything, any special topic you want me to focus more on and although, like everyone is happy now with the mix that we have. So I'm really glad to see your feedback and if you are interested to be also guest, don't be shy, bleach out if you have a story to share, if you are a startup founder yourself and you want to share something with us, so we can discuss this also as well. This is a way where you can share with the audience and you know, as I say, always hope that I'm adding some value to you and if you're liking my work, I really appreciate it. Thank you very much for that and we will meet again in a episode very soon. Thank you, bye, bye. 

Transcribed by https://podium.page