The customer obsession moat | John Gleeson

[John] (0:00 - 0:31)

Hey, so we've got a problem here. We invested in this company. It was doing really good.

We thought it was great. They've got a massive churn problem. We think they made a mishire in customer success.

Can you jump on a call with the founder and just show them what great looks like? Just show them what you know about customer success. I think we got to replace the person they have in seat.

And so I'd get on the call with the CEO and I'd start to talk to them and I'd ask some questions about what they're doing in customer success. And I was like, I don't think they have the wrong person in seat. This person seems to be just fine.

They had a product market set problem.

[Dillon] (0:40 - 0:50)

What's up lifers and welcome to the Daily Standup with Lifetime Value where we're giving you fresh new customer success ideas every single day. I got my man JP with us. JP, do you want to say hi?

[JP] (0:51 - 0:53)

I can never be a Jets fan.

[Dillon] (0:57 - 1:03)

Hopefully by the time this records, they will have done even more disastrous things to that organization.

[Rob] (1:03 - 1:03)

Oh, they will.

[Dillon] (1:04 - 1:18)

And we have Rob with us. Rob, can you say hi, please? Aloha lifers.

Oh, I'm surprised you're laughing and not crying, Rob. And we have John with us. John, can you say hi, please?

[John] (1:18 - 1:19)

Hey, how's it going, everybody?

[Dillon] (1:21 - 1:21)

Very good.

[John] (1:22 - 1:25)

That's kind of like a hi. Hey, how's it going? Yeah, it's fine.

[Dillon] (1:25 - 1:26)

It's colloquial.

[John] (1:26 - 1:27)

Yeah.

[Dillon] (1:27 - 1:32)

And I'm your host. My name is Dillon Young. John, thank you so much for being here.

Can you please introduce yourself?

[John] (1:33 - 1:56)

Yeah. All right. So my name is John Gleeson.

I'm the founder and general partner at SuccessVP, lifelong startup person, found my way into customer success because of startups. And now I run a venture capital fund where we invest in founders who will run through walls to just know their customers better than their competition. That's me.

[Dillon] (1:57 - 2:13)

I was not expecting you to describe your founders that way, but I think that's going to lead into your topic. So John, you know what we do here? We ask one simple question of every single guest, and that is what is on your mind when it comes to customer success?

So can you please tell us what that is for you?

[John] (2:13 - 2:21)

Yeah. So for me, I'm going to talk about what I call founder-led customer success. So that's the topic of the day.

[Dillon] (2:22 - 2:26)

And that means they run through walls for the success of their customers. Is that right?

[John] (2:27 - 3:07)

Yeah, that's exactly it. My core thesis is that in this world where AI is making it possible to build technology at a faster pace than ever before, your competitive mode isn't as technical as it once was. Actually, the competitive node is like, can you learn about your customers at a faster pace of your, or at a faster pace than your competitors so that you can figure out their pain points, deliver value faster than them?

Software is evolving very, very quickly. And so the founders that know their customers at a deeper level are the ones that inevitably are going to win and do win.

[Dillon] (3:08 - 3:20)

And you believe that that is an inherently success as in customer success motion? Because I think you could make an argument that's a product motion, or do you not really see a difference between those two?

[John] (3:21 - 6:27)

Yeah, so I don't really see a huge difference between the two, actually. So if you think about it, it's like, okay, you know, if you've studied like how to build, you know, a startup at the earliest stages, you know, you're finding product market fit, right? When you're finding product market fit, you know, what are you doing, right?

First year, you're assessing, hey, is there, you know, anything even here, then you go out in the world and you start to do customer discovery, you might have, you know, the smallest MVP of your product, the minimal viable product, right? So you get that in the hands of potential customers, what are you measuring? How are you figuring out that you have customer success?

Number one, you're looking at customer satisfaction. Are they satisfied with it? Number two, are they willing to pay for this?

But like, you know, multiple times, and are they willing to introduce their friends to it as well? Right? Is it like solving a pain point for them?

Did it deliver the value, right? So that's what you're trying to do when you're trying to find product market fit. Well, we're customer success professionals, like what were we doing?

Or what was I doing every day when I was leading a 200 person customer success organization supporting 130,000 customers? Well, I got my paycheck, because we had great retention rates. All right, so customers stuck around, what was I measuring?

I was looking at things like NPS, I was looking at customer satisfaction, I was looking for expansion. Do they like us enough that they're going to trust us with more of their business? So I think it's like one in the same.

It's like customer success and finding product market fit are like this like tag team combo. And I think like, you know, the real epiphany for me on that was like, I was early, early stages at a company, I was the first time pre product market fit. So I went through this whole curve.

And you know, after a couple years and success, success of that company, I left because I was like really seeking out like I wanted to experience hyper growth. So I another company, that company like really popped, it really grew quite fast. But in joining that company, I was like, all right, I think I'm like finally done with this like finding product market fit thing.

And the reality of it is, is like you never stop finding product market fit. It's like we come to market one thing, our competitors would catch up. And then there was like refinding product market fit, right?

Language market fit in that we would launch new products, we'd go into new markets, so that motion never ended. So I actually found myself like even while leading, you know, a huge organization where I was responsible for $300 million worth of recurring revenue, my team and I, like drawing the lean canvas, the lean startup canvas, when I'm on site, we serve the trucking industry, I don't come from the trucking industry, right, I had to learn everything I could about them. And I would be like drawing the lean canvas, like, who are their channel partners?

How do they make money, like all of this stuff to learn about those customers and learn, you know, how our product was interacting with like what they were trying to do to make ends meet. So anyways, long winded way to say the same thing.

[Dillon] (6:27 - 6:45)

Rob, why don't you jump in and tell us what you I've got a ton of thoughts, but I don't want to monopolize the time I want. And I wonder, I'm so this is so good, John, if I have the same thoughts as the either of the two of you, Rob and JP. So Rob, you go first.

We will see.

[Rob] (6:45 - 8:34)

John, I really love the last point you brought up in particular about how finding product market fit. It's illusory. You never quite get there.

When I was at Qualia, there were three times where we famously declared that we had product market fit across the entire U.S. You actually like planted a flag? Oh, yeah. No, we had standing ovation, round of applause, celebration, whatever, three times all wrong.

It was our mission accomplished banner that just. That's a shame. Yeah, and it's so funny.

And so I've seen other situations, too, particularly when I think of founders. Like, you know, I founded my own company and so I'm thinking about this as I scale too. But I think about some experiences I've had, like there was one founder I worked with, CTO, not a CEO.

And it was funny because he couldn't remember why he built what he did in the admin screen. There were different buttons that said the same thing, escalate. And one, he was like, yeah, you can click that.

It doesn't do anything. And the other one, he's like, oh, no, don't don't don't click that one. That one, that would be really bad.

I was like, who do we build this for? And he's like, I don't remember. But but on the positive side, I also work with other founders, like, for example, I'm thinking of a founder that Dillon and I have worked with, for example, who are like very focused on knowing the voice of the customer at all times and doing that in a scalable way.

And so they build out really interesting, compelling programming. Like John actually, a friend of mine and John's, a mutual friend, Emanuel Scala, so like she's built out some really cool programming like when she was at Toast around voice of the customer programs that include everything from like customer advisory boards to sentiment analysis to various other programs that customer journey mapping and various other programming that can keep the founder connected to their customer as they scale. It's really difficult, but possible.

[John] (8:35 - 9:54)

Really difficult, but like necessary. Right. I'll tell you like a crazy story on that is like in the on the comedown from I don't know, let's call it the covid.

Everybody was buying Amazon and everybody was buying point solutions. And the comedown from that, all my friends and mentors started to call me and they're like, hey, so we've got a problem here. We invest in this company.

It was doing really good. We thought it was great. They've got a massive churn problem.

We think they made a mishire in customer success. Like, can you jump on a call with the founder and just like show them what great looks like, like just show them what you know about customer success. Like, I think we got to like replace the person they have in seat.

And so I get on the call with the CEO and I'd start to talk to them and I'd ask some questions about what they're doing in customer success. And I was like, I think they have the wrong person in seat. This person seems to be just fine.

They had a product market fit problem. They had lost touch. They, you know, you hire people, a lot of salespeople, it gets noisier.

You hire more people, more people, more problems. They find other things to work on in the business. And in process, they lose touch with their customers and they didn't know what to build.

They didn't know how they interacted with the market. The market was shifting quickly. They were falling out of product market fit before their very eyes.

And that was like, it's even more painful than having the wrong CS leader in seat.

-: 10:39

I will say this before I give it to JP is I so often see the wins. Of a company in terms of like NRR, let's say that that's the what we're going by, not attributed to CS, where I believe they are integral in pushing that forward. When there's a really good product, they have the ability to sort of like scale that growth really quickly if you have a good CS team.

Whereas I don't know that the best CS team can protect you from churn when your product is no good. And I think they always get the onus is on CS to stop churn, but they often are not given any credit. And I'm being hyperbolic, of course, when it comes to what they can do for NRR.

Anyway, JP, go ahead.

[JP] (: 10:40

John, I'm really curious about what is it that you see in a founder or CEO or leader of a company where they may have a great customer, like their customer success function turns out great versus maybe founders where they don't have as good of a customer success department at their company?

[John] (: 11:02

Yeah, well, I feel like you're always like you're always like a product of your experiences. Right. And so at Motive, like our CEO, this guy, Shoaib Makhani, he's a good friend of mine to this day.

He pushed me as like the CS leader harder than anyone to know the customer, like was like every Monday senior leadership meeting, like I felt like I had to come and it wasn't like enough to share my churn number or churn reasons. It's like I need to be able to go a thousand miles deep when somebody churns and I needed to really get on my front foot to like if I was going to make an ask of the product team, I felt like I needed to do like my diligence on that ask as if I was like a product mind. So I was very like when I was very careful to like open my mouth unless I like had done like very, very good research.

But to like that push, I think like that's like I think that's the key to success as a customer success leader. I think sometimes like we just focus all our energy on like the churn prevention tactics and like building the mousetrap. And we forget like at the center of it, it's like, no, no, no.

We're like we're aspiring to be a chief customer officer here. It's called chief customer officer. It means like you got to know more about your customers than anybody else in the whole business.

So that's like number one. And so like I'm looking, though, in founders and the founders that I work with, the ones that get me like really excited. I'm trying to find like that bend towards the customer that I saw in Shuaib.

I spent time recently with the founder, CEO or former founder, CEO of Instacart. And like the story there was like customer obsession. Like you've talked about like, you know, in COVID when they like really were like keeping the lights on for a lot of people, that was like how they were getting food, like that customer obsession.

So when I'm talking to like founders that like the earliest instance of company building when it's like, you know, two folks, they've just quit their job at some great company and they're like, man, we can make a dent in the universe if we just start the software company. I want to hear from them like how much customer discovery they've done. I want to hear, you know, hey, we did a hundred customer discovery calls.

Here's what we know. And I want to see an evolution like, you know, some of the deals that I participate in, like I don't get a chance to like go along with like they're moving quickly. Right.

I'm not a lead investor. I'm, you know, participating. So I have to kind of move at the speed of the deal.

But let's say I get like two or three, you know, talks with that customer. I want to see even their like evolution. I want to see like, oh, and we just learned this about the customer in this week and this fits into our mental model of our ICP and like just like this, like insane focus.

And it's got to start with the customer. I think on the flip of that, founders that kind of turn me off are the ones who are like, well, I came from the industry and I know this better than anybody else. And, you know, like I think that's a way to find success, building it for yourself.

You see a lot of like dev tools and things like that that do find success that way. But I think in like vertical software, things that like meet the real world, like I like to invest in, it's it's about customer obsession. And I just it screams through when you talk to them.

[Dillon] (: 14:17

John, we're well over time, but I do just have one last question to ask. I'm like blowing up your morning here. That's fine.

I somebody mentioned this recently and it's a great heuristic, but I wonder from your perspective how well it applies through a company's evolution. They said when you're looking for a job, it was through the lens of looking for a job ask the senior leadership, whoever you have a chance to speak with. When's the last time they got on the phone with or even better went in person and met with a customer?

Do you believe that's a good proxy for leadership's interest in the customer or is it fair for them to, quote unquote, farm that out to somebody else to give them the sentiment of the customer?

[John] (: 15:04

Well, OK, so I think like every company, it's going to be a little contextual and it depends on like what they're building. Are they building a consumer app or are they building, you know, the next Facebook or are they building the next Salesforce? You know, OK, so I invest in a lot of B2B companies.

You got to be on the front lines, even if you're the CEO with your customers. Like, you know, even at incredible scale, I think the CEO is still playing a role in some of the biggest enterprise deals that you get. Like, you know, look, Benioff, man, I'm not betting against Salesforce.

No way. He is still in the weeds with some of their biggest customers. How do you think he knows how to like paint this never ending vision?

Their vision is always kind of on point with the trend of the day. Right. You go through, you know, things like, you know, social in the workplace, Slack.

You go through things like Einstein. You go things, you know, their agent force now. So I don't know.

I think the great founders, like the best founders in the world, find a way to have capacity to be on the front lines with their customers. And I think that's where their enduring, like just value creation comes from. It's not built in a vacuum.

And and like, yeah, even like the nuance of it, it's like, you know, we're selling multi-tenant software, but like the rubber meets the road. Like there's, you know, you got to know like how you interact and how you bump up against the needs, the desires, the wants of your customers. So I don't know.

I think there's there's no way to do that by proxy or by secondhand information. You've got to really feel it.

[Dillon] (: 16:43

I would agree. It's easy for me to say that.

[John] (: 16:45

Yeah, those are the founders you want to work for. Like, like I think this is success in a career in customer success. If you're working for a company where the founder truly cares about the customer, they're probably going to care about customer success.

If they care about customer success, probably like your job is going to be harder because they actually care about you. But if they're going to push you hard and you're not going to like that, but if you do well, you're probably going to have a job for a long time.

[Dillon] (: 17:18

John, that's our time. Thank you so much for for calling in from beautiful Hawaii early in the day. A pleasure to have you and and your perspective on the show.

But we do have to say goodbye for now. Please come by back in the future. We'd love to hear more.

[John] (: 17:33

Yeah, shoot me, shoot me an email. I'm game. Whatever you want.

Let's go.

[Dillon] (: 17:38

Cool. Sounds good.

[John] (: 17:41

All right. Thanks, everyone.

[VO] (: 17:47

You've been listening to The Daily Standup by Lifetime Value. Please note that the views expressed in these conversations are attributed only to those individuals on this recording and do not necessarily reflect the views and opinions of their respective employers. For all inquiries, please reach out via email to Dillon at LifetimeValueMedia.com.

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