Lessons Learned: Developing Your Product And Pricing

    Editorial note: This post is a guest post written by Ossi Marko, a lawyer who jumped ships and founded Signom, a company working with electronic signatures. Full disclosure as well – Signom is a current advertiser at ArcticStartup, but this post was in no way paid for.

    I’ve heard and read a lot of comments about startups being afraid to launch their products. Or to put it another way, having a lot of problems determining when the product is good enough for launch. We usually tend to think that the product needs to be somewhat spectacular from the very beginning. Otherwise someone big comes and steals it and we don’t have a competitive edge OR we make fools of ourselves and hang our heads in shame.

    Many people have also encouraged startups to launch a product that is (only) very good and to develop it with customers – to outstanding. I must say that reading these comments I first thought “Yeah, what else is new?”. Now I must say that these are wise words. However, the thing that really counts is execution.

    You need to specify the launch version of the product months (or even years) prior to the launch and actually stick with the specs. “But my customer just said that they will only buy our solution if we can provide this very simple additional feature at launch.” Stick with the specs. There is no such thing as a ”very simple additional feature” if you want to produce it professionally. When developing the launch version throw all the additional features to the development roadmap and make it the next release, version 1.1 (or whatever you call it).

    Product development does not end with the launch of the product. Yes, I’m serious: It does not! It begins. When you have users testing your service on a free trial or even paying customers, that’s where the real source of crucial information is and you need to tap that source. What we did was that we sent (with another great SaaS service: Digium Enterprise) a set of customer questions related to usability, pricing etc. to each free trial user to find out what’s good and what’s bad (no: what needs to be developed) in our service. One missing thing in our product that was commented on – which by the way was already in our roadmap and to be released in the next release – was a feature that allows users to create contracts or other documents for others to sign.

    Did I mention that Signom provides a solution for electronically signing documents? Well, we do. And in our launch version it was only possible to sign documents yourself and send the document to the other parties for a counter signature. We had piloting customers in the law sector, but lawyers usually do not sign documents themselves as they make the contracts ready for their clients to handle the signatures in the end with their clients. This feature is also useful in larger organizations where usually someone else than the actual signing executive makes the documents ready for signature. So there was a demand for a feature that allows users not to sign, but send the documents for others to sign. And we made one. So now we can proudly say that we have listened to our customers and developed our product accordingly (please don’t tell anyone that we already had the feature planned).

    Another thing was pricing. There are over 300 000 companies in Finland, of which around 280 000 are smaller companies with a turnover of under 2M euros. A very large proportion of these companies have 1- 3 signature-requiring transactions a month. So what we learned was that our smallest license (offering 20 signatures a month) was too large for smaller companies. We then released a “mini” license that allows our smaller customers to sign their documents during a longer period of time, in this case six months. This new pricing model was also very well accepted in our free trial pool and most of them are now our loyal customers. And so the story continues.

    Editorial addition: I’ve had the privilige of following Signom and its development through our client relationship and it astonishes me how well and easy it is for people with a little patience and undertanding to work through different ways of customer development to further improve their products. Ossi Marko left OMLegal only half a year ago or so to work on Signom and already they’re very well on the money track. My thinking is that most of it is actually thanks to methodologies like customer developement. You should also check out our post on Customer Developement being combined with Business Model Generation.