Scaling a Devtools startup 🚀
Developer tools have not been as hot as they should have been over the past few years. The general impression has been that it has been difficult to clock revenue or the chances of making an exit are lower. Typically, devtools was a difficult sector to scale because developers often don’t want to pay too much for tools. The general impression is that engineers would rather build something themselves than buy a tool that someone else has developed. And most tools are open source and it is difficult to monetise them.
It is safe to say that over time the positions have evolved. In fact, there are now dedicated devtool VCs. There are some interesting deals that have happened over the past few months in this sector.
It is now important to look at how entrepreneurs can build on their ideas, especially when it comes to devtools and scale. Scaling a startup is hard. We’ve been talking about scaling when you’re a PLG company and why founders should be the first salesperson in a company. Scaling a devtool startup while operating from outside the US is harder still. But companies have managed to find a way to do it. The path they forge can become the blueprint for founders who are just starting their journey. So, to make sense of this complex world of devtools we spoke to two people. John Kim, the founder of Sendbird who has been part of interesting companies such as Smile Mom and Paprika Labs. John has not only built and sold a company, Paprika Labs, but did it while living and working outside the US. We also spoke to Rajoshi Ghosh, who is the co-founder of Hasura. Her journey is unique. She started Hasura as an agency and then pivoted to a product company, with devtools at its heart.
Let’s walk through their lived experiences to help others understand the intricacies of scaling a company.
“Understand there is a lot of complexity involved in doing this business”- John Kim.
Imagining your business and sales 💸
- Both John and Rajoshi believe that the first step for founders is to admit that building a devtools business is difficult and has a lot of complexity built into it.
- The first thing, John says, for founders to do is to be hyper focussed on their product. Be clear on ‘Who’ are you bulding for, ‘What’ problem are you solving and ‘How’ will your potential customers discover you.
- Understand what you’re trying to build.
- It won’t be a finished product.
- Early adopters will be ok with a product that isn’t close to PMF.
- These early customers will fill in the blanks.
- Talk to these early customers to gather feedback. He believes in talking to three to five customers every day.
- Whatever time you spend outside building your product or talking to your customers is a waste of time.
- Rajoshi says when you just start building, you have an internal roadmap, and constant conversations with customers will guide you on what comes next.
- In the initial days, John recommends focusing on content, documentation and SEO to gather the early interest.
- Founders will need to do sales, irrespective of it being PLG or a sales-led motion. No one else will be able to understand the complexity of your business except you.
- But even then, Rajoshi says, your product will need something to cut through the noise.
“Think about how you scrutinize other tools and make sure you respect the audience enough to give them that as well” – Rajoshi Ghosh.
Building community 🛠
- Community helps cut through the noise, Rajoshi says. The discussion forums indicate what your customers are liking and what features you need to improve upon.
- While she was building Hasura, she realised that founders can use Reddit, Github, and Twitter as leading indicators of adoption.
- It is not just feedback from the customers but also the community, which helps in the evolution towards PMF.
- You’re a developer. Think about how you scrutinize other tools and make sure you respect the audience enough to give them that as well. Be technical and direct.
- John believes that these platforms are watering holes for developers and they will find something interesting if it is around.
- Both believe in using Hacker News to get the buzz going about the product
Understanding PMF 💡
- Buzz is one of the first indicators that you’re close to PMF.
- Both Rajoshi and John say that these platforms and your servers will tell you when what you’ve created is working.
- It is not just the buzz that’s an indicator. Rajoshi says you need to analyse if the tool you’ve built is being used in real-world situations. Generating that 10x value.
- It doesn’t matter if it is a small startup or a Fortune 500 company. Are the companies using your tool for mission-critical applications? That is the metric.
- Rajoshi says in her experience, enterprises started reaching out to her to ask her for access to her product before it was formally launched.
- But it is easy to fall prey to relying just on this buzz. Ultimately, revenue is the true metric for PMF.