Veronika Riederle - Founder & CEO, Demodesk
Demodesk was founded in 2017 by Veronika Riederle and Alex Popp. Demodesk offers the first intelligent meeting platform for remote sales and success teams. Today more than 150 customers across Europe and the US use Demodesk to close deals and have better customer conversations. In 2020, the Y Combinator alumnus announced its $8 million Series A funding round.
On early sales:
Our first customers were mainly startups from our network, like participants in the startup accelerators we participated in. They supported us a lot by giving us feedback on our product when it wasn’t at the stage that anyone would’ve paid anything for it yet. I think that’s often the case for startups: you sell to your network. It’s all about who knows whom, personal introductions.
At the time, we went to the largest SaaS trade fairs, SaaStr in San Francisco, and SaaStock in Europe. I bounced from booth to booth and tried to sell our product, get feedback, practice my pitch, find out what catches their attention and what doesn’t. In retrospect, I was completely naive. I would’ve never bought the product that I tried to sell to them! But I learned so much just from seeing how they react: how do I talk to them? What do they want? What do they need? I think a bit of founder naiveté, or self-confidence, is absolutely necessary in this stage.
I believe it’s essential to start with the low-hanging fruits. Talk to the Early Adopters before you go up-market.
Don’t consider yourself too good to do anything that helps you sign the deal. Go out and talk to the customers, dive deep into the processes on the customer side, understand their pain points. We were really persistent on this and it really helped us to get where we are now.
On market segmentation / ICP:
Our ideal customer is a company with 50 to 500 employees who sells B2B SaaS and is located in Europe or North America. We prefer companies who use Salesforce and G Suite, but we also work with companies using PipeDrive, Hubspot, and Office 365. Ideally, they’re growing and hiring increasing numbers of salespeople who they need to bring up to speed fast.
On quantifying pain:
On average, Demodesk helps to cut ramp-up time for a B2B sales rep by half, from 6 to 3 months. This means that new sales reps achieve their quota three months earlier. You can easily quantify the value this represents for the customer.
Let’s say your demo is 30 minutes. We split them in 4 segments:
Intro (5 min). Your initial goal is to connect with the customer, build trust. Maybe you can check their Twitter, or the last thing they posted on LinkedIn, to find any common interests.
Set the stage (5 min). Then you clarify the expectations for the demo, make sure you understood the problems from the previous discovery call correctly. Give your customer the chance to say, “You got problems A and B right, but C is actually not a big deal. On the other hand, I’d like to improve D.” Based on this, share your agenda: what are we doing today?
Solution mapping (15 min). Now you move into the demo and show the customer how you solve their pain points.
Next steps (5 min). In the end, reserve enough time to clarify the next steps. When will you speak again? What needs to happen until then on both sides? If this meeting already is the closing meeting, ask about open issues: “What hinders you from closing tomorrow?” That’s how you get the next call, or hopefully just sign the deal.
Initially, we just wanted to prove that we could charge customers for our product at all. We asked our users: “What is it worth to you? Pay whatever you can afford.” This way, we won our first 10, 20 paying customers. This revenue had more of a symbolic quality, which was fine, because our product was still far from done. But it was enough to be accepted into Y Combinator, and raise external funding subsequently.
Our discounts expire after a year. Then the customers can either re-negotiate a new discount or cancel the contract. But the default is that the contract renews automatically for another year at the regular price, without the discount.
On strategic sales analytics:
We’re still at a stage where we focus a lot on product-related customer success KPIs in order to improve our value proposition. Like, how many demos do customers do with our product? What’s the quality score the customers assign to every meeting? We also ask for the overall NPS regularly to get a general picture of customer happiness. For our larger customers, we call them personally and ask if they have everything they need. All of this helps us achieve “negative MRR churn”, an indicator that is very important to our investors.
We don’t keep customers who want to go. I think we would do ourselves a disservice if we made them stay just because the contract says the cancellation date for the new year contract passed two weeks ago.
Currently, our negotiation mode is to start with the list price and prepare to give certain discounts, depending on what objections the customer raises and how important the specific company is to us. For example, you get a discount if you pay for a yearly contract in advance. Or we drop the setup fee as an argument in the negotiations. But overall, customer value and gaining references is our top priority right now. We’re just starting to look at unit economics, keeping CAC under a third of CLV, and so on.