Ran Margaliot is the CTO and Co-founder of Commun.it. He is an active member of the Israeli startup community and the leading CTO in-residence of The Hive- which is a top accelerator in Israel.
Ran is also a mentor at Google launchpad.
This article is an edited excerpt of Ran Margaliot’s conversation with Team Alore. (Link to unabridged webinar recording at the end)
Ran’s story in his own words:
Ran Margaliot: I am a technical person and did programming from an early age so I was always keen on finding problems and ways to resolve them. So I was working with all sorts of startups. In fact, Sharel, my co-founder is a very talented product guy and we both had the same desire to find solutions to problems. So along the way, we decided to make something of our own and find a problem which is big enough and interesting enough for us to find a solution to it. So we decided to do commun.it. I’m a strong believer of the fact that to be able to work in a startup or have your own startup you should fall in love with the problem and not the solution. You should always look for the problem and nurture the skills to find the solution for them.
About forging a team with Sharel Omer, CEO and Co-founder at Commun.it:
Ran Margaliot: Any startup is all about the people and the team. I really think what makes startup winners is the way all the founders come together. We are presently two founders but we had another in the past, who later, left the startup. The main way to function with partners is to be able to communicate well and see the best value that each of us brings to the table.
In our case, personally, I’m a developer. Sharel is a talented product and marketing person. Our third co-founder was a gifted business guy. In that sense, we tried to complete the picture. We didn’t actively search for one another. We were friends with a good rapport who wanted to do something together. However, I was to choose who is my ideal partner, I think I would try to close my eyes and try to visualize the opposite of me because I think as founders, it’s really important for us to balance each other and bring out different perspectives.
About how Commun.it happened:
Ran Margaliot: We started with finding a problem that was big enough and for which we needed to find a solution. So we brainstormed about a lot of issues and we finally came up with the problem of finding jobs and how can people connect to the right kind of people to get good jobs. We started to look for the target audience that suffers the most from this problem. We started with just a simple tool that the blogger needs to put on his website to help him be in touch with his community. After it was designed we gave it to a few beta testers.
Soon people wanted to know about the people that connected them. That’s when we realized that people are looking for data about history. So we started pivoting to what later on became kind of our social media dashboard. Basically, we tried to focus on the problem, find the target audience who suffered from the problem and gave them a better platform. After about a year into this process, we were resolving issues at the back end- getting all the data and connecting with engagement history and working on how to build meaningful relationships on Social Media. The main idea is to listen to your customers and tweak your solution as per their requirements.
About the first sale:
Ran Margaliot: Regarding sales, there are two types of sales- online sales and direct sales. For us personally, the first sale took a while. It was not because our users weren’t ready or because the value of the product wasn’t conveyed enough but it because as founders we were not confident enough to charge the users. We had a lot of debate about this between us in the founding team and if it is the right stage to start monetizing the business etc. So our first sale was about five months later.
If you ask me about doing things differently, yes, for sure. I would monetize much sooner as I feel a B2B startup should monetize faster. It is the best way to measure value. Your sales are not just an income source, but it’s also your way to measure the value that you give the users. So I think it’s important to charge as soon as possible. The worst possibility would be that the users won’t pay.
About monetizing the product:
Ran Margaliot: We tried to measure everything and were keen on Beta testing. We also experimented with the business models. We have tiers with discount and without discount, routes with the money back and without money back. I think that’s the way to go through it, wherein you measure everything and you need to experiment with that. So there is no golden path for this.
About being process driven:
Ran Margaliot: The most important thing is to be aligned to KPIs and find out what main metrics is the business running on. There are two main KPIs that we follow at Commun.it – the number of users that are registered daily and the number of people who actually pay daily. So first, you need to have the entire team from the developers through the designers, the sales team to the product guys know what the company is measured on. For instance, we have a big screen that displays those numbers every day and there is a daily email showing that this is the first point of entry into the process from where everything is derived.
We are monetization driven and we measure it with the Minimum Viable product (MVP) of the feature. If it happens that we’re not sure about the MVP of a particular feature, we’ll ask users to pay for it even if it is in beta. If we see users paying for it, it means that we can invest more resources in it. However, first, we need to measure if users are actually paying for them. You also need to build the MVP, the minimum viable product of the feature that you aim to add and then measure the interaction of the users on how much are they paying for that.
About mentoring newcomers:
Ran Margaliot: On one hand, I mentor in several programs, usually early stage startups but I feel that not everybody should become an entrepreneur at such an early stage. I think there’s some sort of a system about working in the company, understanding the mechanics, and preparing yourself towards the point till you become an entrepreneur.
Once you feel that you have enough skills there are lots of programs or accelerators and hubs that you can learn from a lot of entrepreneurs like to help other young entrepreneurs and getting them into the world. However, I think first you need to have enough experience at the core function of the company whether you’re a technical guy or a product person. You do need to bring an initial value to the table and also see how the companies work.
About the best way to develop a synergy between the product and marketing teams:
Ran Margaliot: It starts with the KPIs. After everyone is aligned it is important to know how to measure them. We all need to know how we are measured as a company. For example in our company, we have a TV in the main hall of the company showing the most interesting KPIs. Every week an email goes out internally discussing the progress of the KPI. We also do company-wide weekly stand-ups where everyone speaks about what they are working on at present and how can it affect the KPIs. At commun.it, we believe in the magic of KPIs.
As a team, we work on finding out the key KPIs and make sure that this is the language we are talking and thinking about. We show it on TV with daily and on emails weekly to ensure that everybody is aligned on measuring it properly.
About getting the first hundred customers:
Ran Margaliot: The first thing that one needs to know is not to fear the sell. You should bring value to customers and then start monetizing. So start with charging a minimum amount that is enough for users to feel like they’re getting value. Also, do experimenting with different plans in different models. There is not a set fit for a startup. It keeps changing in a different pricing model or a specific sales cycle, which works at the specific time of the company and it can change all the time. So you need to keep experimenting and keep measuring data.
About the business trajectory cycle:
Ran Margaliot: When we started we also had a less optimistic scenario where you fall a bit and then you rise up again. This is the case, especially in social media. Social Networks are changing our product. You can see all the action that’s going around with Facebook and Twitter, and even the changing of privacy that affects our product and our ability to give value to the users. So it’s important to be connected to your users and to the data and try to find the curve before it begins to show up. You need to see the shift and make changes in anticipation.
For instance, you say that since an increasing number of users are asking for a particular feature, you need to measure it, fill it in and observe the user actions. Always try to be ahead of the curve. Sometimes it works and sometimes not. It also depends on how fast your team can move.
About building teams:
Ran Margaliot: Culture is an oft talked about term in a startup. For us, I don’t think we understood the cultural part of the company in the beginning, especially being a bootstrapped startup. We didn’t have the funds, to compete and create a culture that competes with other great companies around us. I think our company culture was formed by struggling together and building the reality together. Today, it is important how we grow the team, the kind of qualities we need while hiring a new team member but since we’re a bootstrapped startup we cannot invest in the employee as much as Google or Facebook would. However, we can offer them a more substantial part of the company since we are a small company. So our company got formed along the way and now we’re trying to find out the people who are relevant to us in order to succeed.
About hiring the first employee and changes seen in the hiring process over time:
Ran Margaliot: When we started our second startup we were hard on cash. We wanted to hire our first employee but did not know the right way of getting the best. We were advised that when we interview candidates, we must also give them assignments to work on at home. If a person takes the time and works on an assignment in his/her own time, it’s already the first step of validating the person. We followed this procedure for every position in the company from the HR to the designer, developer, and product person. This was in addition to the standard interviews.
About the importance of having a tech-based person in the founding team:
Ran Margaliot: It is quite tough to find a technical co-founder as there may not be many such people who would waive off their huge salary and start working in a startup. The good news though, is that technology has become much simpler over the years, and it’s now much easier to form a startup. For instance, if you are startup is web-based or an app, it is easier to create it. Thus, you needn’t have a techie co-founder. It’s more important to have a partner who you can connect with, someone you know from before. I met my co-founder Sharel Omer at a startup where we worked together and we went on to keep in touch from there. Other than that you can meet like-minded people at meet-ups, co-founding spaces and their events etc. However, at the end of it you need to be a great sales guy so that you can convert your idea into value.
About building a great team and company restructuring:
Ran Margaliot: Today, technology is simplified and it is easier for developers to become full stack developers. I want developers to be able to touch every essence of our product. Everybody must be connected to the users and to the KPI. So in our company, we tried to get people who are versatile and see the big picture because we can handle the technical skill, we can help them grow together. We tried to get people who are at an early stage of their career but are extremely passionate about their work. Even if they are unable to resolve an issue it is alright but they should have the passion to learn.
About KPIs to monitor and focus on:
Ran Margaliot: At Commun.it we try to measure KPIs continuously. We have three company level KPIs:
- Number of users who are registered
- Number of upgrades which are people actually pay each day
- The number of downgrades these are the high-level KPIs beneath that.
We have about 20 KPIs, which are more department related. For example, in the development team, we have KPIs of the server response time. In the marketing team, the KPIs are how many males are saying what the bounce rate was. We measure user engagement with new features. However, these are more department specific.
About handling outages:
Ran Margaliot: This has been a bane for us. We are a beta bootstrapped company with a small team that managed a good product and a very big user base. So we wanted to focus on giving value to our users. We are not dealing with the most stable system but we trying to maintain our focus. The development team mainly focuses on offering value to their users. We are also trying to build a strong sense of community amongst our users and our users are passionate about the product. We believe in talking and engaging with them.
So if there are issues and it takes longer than expected to fix if you need to communicate it to the users. Sometimes you are limited with resources and especially as a technical co-founder I wouldn’t put all my efforts on building the strongest system and the most reliable system, I would have a system that would break down every once in a while. Still, I would want my developers and product people to focus on the features that bring value.
About Commun.it engaging with agency owners and ways in which agency owners can use the product:
Ran Margaliot: At Commun.it we work a lot with agencies. There are lots of agencies who manage social media account for brands, for medium-sized business, celebrities, and more. We help manage their Twitter accounts. We have some special offers for them along with discounts. So if there’s an agency in the crowd, they should definitely reach out to us and mention that they came from your blog. Then, we can even probably get them significant discounts. Our system is built for managing multiple profiles and sub-communities on Twitter so there are a lot of agencies who are using Commun.it to handle multiple clients.
This was Episode 4 of Alore’s 20 Episode series – “How to get your first 100 paying customers”
You can watch the unabridged webinar with Ran and Team Alore here.
You can reach Ran Margaliot here