How to Scale Up When Youโre Stuck Between Early and Growth | Postscript, Alex Beller
In this episode, we sit down with Alex Beller, co-founder of Postscript, an SMS marketing platform. His key insight: ๐ "The riches are in the niches" โ focusing on a core product and user creates excellence that customers recognize.
Watch on YouTube โTranscript
- 00:00every time your company doubles in
- 00:02headcount size it breaks especially
- 00:05within the tech and the startup
- 00:07landscape we're all attracted to Big
- 00:11names and big dollar signs and big
- 00:13markets but focusing on a core product
- 00:16and a core user in a core use case I
- 00:19believe that that breeds excellence in a
- 00:21product the riches are in the niches and
- 00:24that's a difficult thing to do it
- 00:26requires a lot of discipline and this is
- 00:27a secret that I would recommend to
- 00:28everyone I'm Alex Beller one of the
- 00:31co-founders of postcript postcript is an
- 00:34SMS marketing platform for e-commerce
- 00:36businesses and the idea from the start
- 00:37was SMS marketing for Brands built on
- 00:40top of Shopify make a really easy really
- 00:42powerful solution that lets people
- 00:44retarget transact converse with their
- 00:47customers over text message postcript
- 00:49found product Market fit very early
- 00:52customers wanted to send text messages
- 00:55to their and subscribers to their
- 00:57Shoppers and as long as it generates
- 00:59clear Roi they're going to want to send
- 01:01more and around this time we decided to
- 01:03apply to Y combinator and we did that
- 01:05for many reasons uh we were kind of
- 01:07Outsiders we were based in LA in Arizona
- 01:10we weren't very connected to the tech
- 01:11scene and I went into our application
- 01:14after we filed it every few days and I
- 01:16would update it with our new Revenue
- 01:18number so that when they logged into our
- 01:20application to review it they would see
- 01:22on this date this was their revenue on
- 01:23this date the revenue was higher on this
- 01:24day the revenue was higher and this was
- 01:26like our second or third month and that
- 01:28was the time when our Revenue each week
- 01:29was was going from like $200 a month to$
- 01:32800 to 2,000 to 3,000 I believe that the
- 01:35reason that we got in to YC was because
- 01:38they saw this growth trajectory and all
- 01:40that growth was coming from word of
- 01:41mouth and it was coming from the Shopify
- 01:43App Store it was all inbound to us we
- 01:45were in the right time at the right
- 01:47place with the right product that
- 01:48generated value for our users and by the
- 01:51time we left YC combinator we were past
- 01:53a million in annual revenue
- 01:55approximately 6 to 7 months after we
- 01:57launched we've raised several rounds of
- 01:59funding since then then through series C
- 02:01we bought a company called fondue and we
- 02:04are now about 270 or 280 people spread
- 02:07out across the
- 02:11US you know we were talking about
- 02:13different startup ideas me and Adam our
- 02:14third partner Colin they started
- 02:16building what became postcript our early
- 02:19customers were amazing they're very
- 02:22funny they were small e-commerce
- 02:25entrepreneurs so a couple of things
- 02:27worked for us really well in early days
- 02:30we did something that in hindsight we
- 02:32like hadn't put much thought into but
- 02:34ended up being a really good idea and
- 02:35this is a secret that I would recommend
- 02:36to everyone we put a live chat widget on
- 02:41our website and inside the postcript
- 02:43application and we set it up so that
- 02:45whenever anyone chatted in whenever any
- 02:47User submitted a chat it would call all
- 02:50three of our cell phones NE and Adam
- 02:52calling it would ring us and we would
- 02:54immediately stop whatever we were doing
- 02:56and we would like to we would drop it
- 02:58and we would go log in Andy try to help
- 03:00that person we would answer their
- 03:01questions we would take feedback from
- 03:03them we would help them use the product
- 03:04whatever that turned out to be an
- 03:08incredible secret that accelerated us so
- 03:10much and there's a bunch of reasons why
- 03:12first we learned so much from these
- 03:14early customers I mean they were giving
- 03:15us feedback on holes in our product and
- 03:18and what we needed to build next and
- 03:20pricing they're giving us feedback on
- 03:22everything and so then we could just
- 03:23build exactly what they were asking for
- 03:25and they'd be happier but the other
- 03:26thing that came out of it is people were
- 03:28getting great amazing Hands-On support
- 03:30from the founders and we would be super
- 03:32open that we were the founders of this
- 03:34tiny little business and people really
- 03:37like that and so they started to tell
- 03:39their friends or other people they knew
- 03:41about the post trip product they started
- 03:44leaving us good reviews on the Shopify
- 03:47App Store that then had our application
- 03:49listing rank even higher there and so us
- 03:52just talking to our customers as much as
- 03:54possible and being super available I
- 03:56mean we would wake up in the middle of
- 03:58the night when our cell phone rang to
- 03:59help customers we would leave leave the
- 04:01ringer on and that created a lot of our
- 04:04ground swell that led to our early
- 04:06growth and so our first 100 users a lot
- 04:08of it came from being hyper available
- 04:10from being public but listening to our
- 04:13customers talking to them and just
- 04:14providing completely over-the-top
- 04:17support it's actually a lot of what Paul
- 04:19Graham talks about when he says do
- 04:20things that don't scale you know now
- 04:22posted his 18,000 customers I cannot do
- 04:25the chat support for all of them anymore
- 04:28but doing that for so long we spent
- 04:30months and months and months we were the
- 04:32only ones who did support for postcript
- 04:33and we did it all the time live that we
- 04:36learned so much the product advance so
- 04:38much and and we got to spread a lot of
- 04:40Word of Mouth came from that
- 04:43too so uh we launched really with an MVP
- 04:47that directly grew into postcript we've
- 04:50enhanced it and we've expanded it but we
- 04:52never pivoted it was SMS marketing for
- 04:54e-commerce on Shopify and that's still
- 04:56what it is today in early days of
- 04:58postcript we had had Brands come to us
- 05:01big brands that heard about us that
- 05:03weren't on Shopify and they wanted to
- 05:06give us a lot of money to send text
- 05:08messages right so they're an e-commerce
- 05:10brand that's SAR sweet spot they want to
- 05:12use postcript for exactly what everyone
- 05:14else uses it for but they had a
- 05:17different underlying technology they
- 05:18weren't on Shopify they were using a
- 05:19different
- 05:22platform I'm the revenue leader of the
- 05:24company that's a hard thing to say no to
- 05:26right that's hard to walk away from a
- 05:28huge prominent brand who wants to pay us
- 05:30a lot of money and be our friend and do
- 05:31a case study with us but we decided to
- 05:35pass on that and we said you know what
- 05:37we'll we'll see you later on down the
- 05:38road but right now we're focused on this
- 05:39one thing and that's a difficult thing
- 05:42to do it requires a lot of discipline
- 05:44but it would have taken us off track it
- 05:47would have led to distraction we would
- 05:48have been building in many different
- 05:50directions then with limited resources
- 05:52and it would have been a mistake because
- 05:54of that Focus so much of our value has
- 05:56been created and so yes we've considered
- 05:59expansion many times we've considered
- 06:00expanding markets we've considered
- 06:02expanding use cases outside of SMS but
- 06:05what we keep coming back to is that
- 06:07there remains more opportunity in this
- 06:09core space and no one has really solved
- 06:12it yet we think we're doing an excellent
- 06:14job but there's still so much more to BU
- 06:16build and so much more value to deliver
- 06:18to these customers we want to do that
- 06:19first we like to be the one that goes
- 06:21deeper I think there's many traps and
- 06:23many mistakes that all of us fall into
- 06:26in the early days myself and and US
- 06:28included but focus is one that is
- 06:33underrated especially within the tech
- 06:35and the startup landscape we're all
- 06:36attracted to Big names and big dollar
- 06:39signs and big markets but focusing on a
- 06:43core product and a core user in a core
- 06:46use case to start not forever but to
- 06:48start I believe that that breeds
- 06:51excellence in a product the riches are
- 06:53in the niches I I really believe and
- 06:55that's paid off for us where we've been
- 06:57so laser focused on E Commerce marketers
- 07:00that use Shopify and delivering them an
- 07:02amazing SMS experience and that's really
- 07:04paid off for us and I think that anyone
- 07:05who uses postcript or works with the
- 07:07postcript team experiences that craft
- 07:10because they can tell that there's so
- 07:11much expertise there what makes great
- 07:14CEOs and great leaders is the ability to
- 07:17look at your resourcing look at your
- 07:19organization look at the all the
- 07:21opportunities in front of you and
- 07:23sequence things properly so that as much
- 07:25lines up as possible
- 07:29so there's a common framing that I hear
- 07:31from a lot of other late stage Founders
- 07:33or investors that I believe is true
- 07:35which is that every time your company
- 07:37doubles in headcount size it breaks and
- 07:41I've really seen that to be the case you
- 07:43know when it's 10 people everyone's
- 07:46connected to everyone and it's all
- 07:47automatic and then suddenly it's 25
- 07:49people and you need management layers of
- 07:51some kind and then it's 50 and it's a
- 07:53completely different company and 100 and
- 07:55200 they're totally different companies
- 07:56and they require different styles of
- 07:58communication and man agement and they
- 08:00require a lot of different things from
- 08:01their Founders when you advance to the
- 08:03growth stage the people challeng is
- 08:05really set in your organization becomes
- 08:08so much more about how you can direct
- 08:11the resources at your disposal instead
- 08:14of how can you as a Craftsman or a
- 08:16practitioner build product or work with
- 08:19customers and those are very different
- 08:21skill sets when I think about some of
- 08:23the biggest lessons or tips that I could
- 08:26give entrepreneurs thinking about
- 08:28scaling uh what comes to mind more than
- 08:31anything else is values when we started
- 08:35the business we didn't create a set of
- 08:37values and the reason for this was
- 08:39because we'd all worked in companies
- 08:41before that you know had values but
- 08:45maybe they weren't that important or you
- 08:47know they just they hung on the wall but
- 08:49no one really knew them or was connected
- 08:50to them and so we just thought it was
- 08:53Superfluous but Tim Brady who was one of
- 08:56our partners at y combinator when we
- 08:58were about to hire our first team member
- 08:59he said to us create a couple values
- 09:02it'll help you anchor the culture in
- 09:03something and that's what we did the
- 09:05three of us sat down and we banged our
- 09:07head against the wall and we got the
- 09:08Whiteboard out and we created a set of
- 09:11values that value set has been core to
- 09:15the culture that has been built a
- 09:16postcript for now almost 7 years the key
- 09:20tip that I would give people is not just
- 09:22to create a set of values but to make
- 09:24sure it has a great acronym this is
- 09:27actually the hack because what's more
- 09:29important than what the values are it's
- 09:33that everyone knows them like the
- 09:34specific things I'm sure everyone can
- 09:36pick inspirational good values but
- 09:38what's more important is just that
- 09:41everyone can remember them and that they
- 09:44uh reflect how you believe work should
- 09:47occur so to get specific the values at
- 09:51postcript the acronym for them is Fe Fe
- 09:55it's kind of a funny word it's f a c h
- 09:58it's Fearless
- 10:01Excellence animal customer first
- 10:04humility every time a new person joins
- 10:06postcript they go through a training
- 10:08with me where I walk them through all of
- 10:10our values what Fe stands for the story
- 10:13behind each one how we believe it should
- 10:15show up at work and then people get
- 10:17recognized for living these values and
- 10:19it comes up in their annual reviews and
- 10:21we have a slack Channel going where
- 10:22people get shouted out for living within
- 10:24these values and that has really helped
- 10:26guide our culture and keep us all
- 10:28together as we've grown remotely but I
- 10:31believe that the values that are going
- 10:32to be relevant to an organization are
- 10:34going to change over time they're not
- 10:36always the same I'll give you an example
- 10:38the e in Fe of our company's values
- 10:41today it stands for excellence it didn't
- 10:44always stand for that it used to stand
- 10:45for 8020 8020 meaning we wanted people
- 10:49to be operating from an 8020 mindset we
- 10:51didn't want folks to focus on Perfection
- 10:53we wanted to be moving really quickly we
- 10:55wanted to be doing whatever we could to
- 10:57capture as much value as we can with 20%
- 10:59of the effort and then move on to the
- 11:00next thing and that was great that
- 11:02helped us move quickly and that helped
- 11:03us inform how we built product and that
- 11:06helped us inform how we built process
- 11:08and that was an amazing early stage
- 11:10value I mean I would recommend it to
- 11:11many folks but after a while we realized
- 11:15we were running into issues because of
- 11:16it we were well past 100 people and we
- 11:19needed more robust processes and systems
- 11:21we needed our product to be sturdier and
- 11:23more stable right and less about just
- 11:25shipping everything that's new and
- 11:26making sure what we had was really
- 11:28robust as we were serving bigger and
- 11:29bigger customers and at that point we
- 11:31went in and we changed the value from
- 11:338020 which starts with an E to
- 11:36Excellence which also starts with an E
- 11:38and that way the acronym for our value
- 11:41stayed the same but we got to change the
- 11:43DNA of the company and we haven't done
- 11:45that many times it's probably happened
- 11:47three times but each time it's been
- 11:48really valuable and it's kind of a weird
- 11:51quirky little learned secret but I would
- 11:53really recommend other entrepreneurs as
- 11:55they as they're scaling think about
- 11:57doing something similar be comfortable
- 11:59going back and changing your company
- 12:00values sometimes it's incumbent on a
- 12:03Founder to reset something and to make
- 12:05it clear that you know I'm hearing all
- 12:07this feedback but actually I disagree
- 12:09and we're going in this direction here
- 12:10and values are a great way to do
- 12:14it about what's going on with AI today
- 12:16with generative Ai and when I think
- 12:18about what's going on uh what's been
- 12:20going on for a long time with predictive
- 12:21machine learning what I see is a future
- 12:25where on to many marketing goes away and
- 12:27where it becomes highly personalized and
- 12:31in the SMS space highly conversational
- 12:34since the beginning of the e-commerce
- 12:37use case marketing has been generally
- 12:40one way it's I'm an e-commerce marketer
- 12:43I am pushing out a notification to my
- 12:44audience to try to get them to go by
- 12:47that works it's fine but that's not how
- 12:50we actually use messaging we all text
- 12:53one another back and forth in
- 12:55conversations and at postcript we've
- 12:57always believed that there is an
- 12:58enormous opportunity for Brands to see
- 13:00even higher performance and for
- 13:02consumers to be even happier if the
- 13:04interactions are conversational between
- 13:06them first more of a push marketing
- 13:08Approach at postcript we've been
- 13:10invested in this for a while we built
- 13:12and launched a product called SMS sales
- 13:15it is the only part of our company that
- 13:16is in person and we have a huge office
- 13:20in Phoenix Arizona that is filled with
- 13:23e-commerce salespeople who work on
- 13:25behalf of our Brands to sell and drive
- 13:28more trans actions over the SMS channel
- 13:31it's kind of old school it's like if you
- 13:33walk into a retail store and someone
- 13:35helps you shop or buy or answers your
- 13:37questions it's like that for e-commerce
- 13:39and we've been doing this for several
- 13:40years and we built up an enormous amount
- 13:42of expertise in it and many of our
- 13:44largest customers many huge brands are
- 13:46using it to drive more sales and to keep
- 13:48their customers happy and we are so
- 13:51excited at the opportunity of bringing
- 13:53that to further scale with new
- 13:56advancements in Ai and the data sets
- 13:58that we've been building and the
- 13:59conversational training that we've been
- 14:01doing over the last several years uh we
- 14:03believe puts us in a unique position to
- 14:04capitalize on that Trend Ai and
- 14:07predictive machine learning together are
- 14:08not only going to unlock the
- 14:10personalization I was just talking about
- 14:11but they're also going to allow for a
- 14:13much more conversational marketing
- 14:15experience that phrase conversational
- 14:17Commerce has been like floating in The
- 14:19Ether forever and no one's really done
- 14:20it and I believe now it's actually going
- 14:22to happen