Lemax, a successful Software-as-a-Service company from Croatia, has been offering digital solutions for tour operators and travel agencies for more than 10 years. In the industry that is finally switching to full-on digitalization, they want to strive to lead the change. After several internal discussions, talks with clients, and understanding market trends and how pandemic will influence them, it became clear that they need to evolve their monolithic product into a platform with a number of carefully redesigned products, each one solving one specific and precisely defined part of their customers’ business process. Željko Bak, VP of Products from Lemax explains:
This is a huge undertaking and a big bet, but we truly believe this program will help us to not just stay competitive but get ahead in the forefront of the industry and deliver value to tour operators as nobody else did so far. Our future is a platform that will solve the problems of the tourism industry on a huge scale. I say future, although we have been building it since the beginning of this year.
Building a product that will make an impact on the whole industry is not a small feat. Especially when you are an industry veteran. It is easy to get lost in your own conceptions of what is right for the clients when you have been in the game for several years. However, that is also the case with companies that are just starting and are basically in love with their solution so they don’t make enough iterations nor proper client testing before launching.
Too much confidence when you haven’t received or implemented clients’ feedback can break the best ideas and all you are left with are lacking solutions that have no market value. To help other fellow tech companies, Željko shared with us how they approached the validation of their products and what kind of mindset is essential to implement what they’ve learned.
Negative feedback is a
good great feedback
Even though the project of (re)validating their product-market fit started way before, in summer 2020 Lemax finished some crucial project deliveries that allowed them to focus on the product-market fit activities. Since then they’ve been setting up the ground for the change.
However, strategizing took some time and it will be an ongoing process for them, Željko adds. It involves discussions throughout all departments in the company. Lemax has enormous knowledge about the tourism industry, but until recently it was locked in a few long-time employees’ minds, he explains:
We needed to extract this knowledge and utilize it for strategic purposes. As we were creating new foundations for our future scaling, we knew nothing should be dismissed as less important.
In the same time, as Željko mentioned in the previous article, they needed to recognize what is no longer working and unlearn some old behaviors.
Since we started this undertaking it became clear that we will all need to learn new skills, spend more and more time outside of known space – out of our comfort zones.
But first and foremost, that meant getting more direct, unfiltered feedback from their clients – with the focus on those who aren’t completely satisfied.
It can be hard getting negative feedback, but that is the most useful kind of feedback that exists – it is direct and the product person can act on it and use it to improve the product and themselves.
Always check on your long-standing assumptions
To learn from that feedback, it is important to understand the satisfaction levels of your clients, as they can vary significantly with their size, not just with their profile.
For example, two customers of different sizes, but from the same segment, would show different levels of satisfaction with our product! This informed us where we were good and where we were excellent, and what parts of our product we needed to improve to be able to confidently market and support it.
For this purpose, they developed a grading system that pointed to the difference between what they have and what their clients expect.
It is pretty crazy how much insight we got from this months’ long exercise and how this helped us market the products more confidently, manage all aspects of customer relationships and also inform us to decide about priorities on our product roadmap.
But this was not a straightforward process, Željko claims. Many times they needed to backtrack their steps and start from the beginning. Each time talking with their clients to verify and validate some long-standing assumptions.
“Retiring parts of a product will free resources in all parts of the company”
And, you will surely get negative feedback, and you should welcome it.
If you do proper product validation you will detect features that you thought were great but your clients think are rubbish.
When they did analytics and customer validation of their products, Lemax also found out that some parts of the product are not used at all or are rarely used. But they greatly benefited from this “negative” feedback as it helped them to focus on the parts that matter the most.
If you’ve been on the B2B SaaS market for a long time, like Lemax, product validation will help you identify the parts of the product bringing low or no value to your customers, and you can decide to retire them. This can have big benefits because retiring parts of a product will free resources in all parts of the company, allowing them to focus on more valuable things.
So don’t feel too attached to your solutions, they need to evolve. Here Željko mentioned Google as a good example, as they invest in many innovations, but retire the project if they estimate it is not scalable for any reason. Check out web page Killed by Google and you will find out hundreds of retired products.
Ask yourself why they did it and should you do a similar exercise as well, he proposes.
Don’t wait for the final product, test now!
If you decide to do the exercise, no matter what stage of development you are at – don’t wait. You are probably aware that for B2B enterprise SaaS it takes a longer time to validate products on the market as feedback loops take longer to establish. Željko advises using prototyping or manual work to speed up the process, as they are trying to do at Lemax.
He offers an example of a farm startup that wanted to offer data analytics to farmers to help them plan their tending of the crops and pesticides.
They realized that building software and developing drones to collect data is time-consuming and expensive so instead they did it manually with a single drone, processed data manually, and showed them to their prospects – in order to validate their product. They managed to do this over one week time, achieving the same result – validating their product without significant losses of resources beforehand.
Design your organization to constantly anticipate and improve
As we already discussed, Lemax is currently breaking down their single product into a portfolio of smaller products, each one delivering rounded value to their clients in a way that’s simpler and faster. The most important thing in that process is managing improvement of functionalities and user experience for their existing customers, while at the same time building new products.
In some parallel universe, it would be much easier to start from scratch, but it was not an option for us as we could not disregard our current base of clients. I can also imagine that a lot of companies that were startups 5-10 years ago will find themselves in a similar predicament. The best way to approach this is to design your organization to constantly anticipate and improve products in every way possible, along with the changing trends of the served market.
This is an idealistic approach, Željko also thinks, but he believes it can come to fruition with strong management sponsorship and a clear relation between product investment and value for the clients and market.
Be a product expert that will pursue innovation for business and – users
In the end, Željko adds, it is important to remember that every product is a journey and what took you here will never take you there.
Every stage of product development is very similar to the lifecycle of a company and asks for innovative approaches. That’s why creating a safe environment in teams is important because it will create room for people to try and experiment and not be afraid of failing.
To be a great product person that can carry on the necessary changes you need to be curious, committed to your goals, understand and practice ownership, but the hardest one is to find peace with being uncomfortable, Željko emphasizes:
That means jumping on a call with a client to take a verbal beating on how bad some parts of your product are, and not taking it personally – but using it to improve. It means valuing negative feedback more so than positive, and then acting on it. You will know you are a pro when you start enjoying this 🙂
Besides, in SaaS business every interaction with clients matters and you will be judged and evaluated by that – constantly. Product is not just what you put on the market, but everything the client gets from you, he points out vividly. And the only thing that will help you deliever an excellent client experience is perseverance and continuous improvement of your product(s), learning from your mistakes and improving along the way, trying to overcome failures as fast as possible. But don’t forget to celebrate your successes, Željko concludes.