In this post of "My First 1000 Users", we will cover the story of Sendspark and how it got over 10000 users by focusing on user expansion.
The content of this case study is taken from the podcast episode I recorded with Bethany Stachenfeld, the co-founder of Sendspark.
Let's dive in.
How did Bethany get the idea of starting Sendspark? How did she build its MVP and test her assumptions?
Bethany started by solving her own problem. She and her co-founder Brandon Escalante worked at a different tech startup where Bethany was the head of marketing and Brandon was the head of product design.
At that startup, they were trying to connect to new customers through emails to showcase their product's features.
But Bethany soon realized all her emails sounded very generic.
She discussed this issue with Brandon, and they both decided to think of ways to separate themselves from their competitors.
After discussion, they both settled on using video to engage their prospects as video-enabled them to show their product in action, the team, and the company's leaders.
They decided to develop video ideas to send to their potential customers but soon realized that their video outreach method wasn't optimized for their marketing funnel.
The videos lacked the following features:
- Specific integrations with their funnel
- Data on who is watching
- The videos also lacked branding
Bethany realized if they need such features for their video outreach, other tech startups may need them too.
Hence she, along with Brandon, started Sendspark to solve these issues.
There were a lot of video platforms available online, but Bethany wanted to create a sales video platform.
She created an MVP that focused on the personalization of video.
The early version of Sendspark allowed users to record and upload face cam videos with the option to brand and customize the video thumbnail.
The MVP was received well by the users. They saw a 300% increase in engagement and revenue using personalized videos.
Then see if other people are facing the same problems.
Don't aim for perfection when starting. Build an MVP and let the audience's feedback guide your product's journey.
How did Bethany find and motivate early adopters of Sendspark to try the product?
Bethany did not charge the early adopters of Sendspark as the product wasn't ready, and they did not have a payment process in place.
Bethany and Brandon approached people in their network and tried to convince them to test the product.
They also sent personalized videos using Sendspark to potential users to educate them about the product and how it could help them increase their email engagement.
This approach helped them nail down the right users for their product.
Bethany had an assumption that Sendspark would be an ideal product for marketers. But since most of their early adopters ended up being salespeople, they realized they should pivot their product and build for salespeople.
They wouldn't have figured this out if they didn't approach people one-on-one.
Sendspark tested its product with around 200 people at different stages, and with each stage, the product started evolving based on people's feedback. Over time, they refined the product to look cleaner and easy to use.
How did Bethany scale Sendspark from 200 to 1000 users?
As the company grew, Sendspark's team moved to more scalable customer acquisition approaches.
Early on, they were doing many things that weren't scalable, but this approach helped them find the right people for their product. The team also wanted to make sure they were solving a real problem before scaling the product.
Bethany introduced a billing portal in Sendspark to check if people were willing to pay for the product.
Another thing that worked in Sendspark's favor was that even though the company had a lot of product improvements to make, the team started investing in content marketing early on.
Bethany knew content takes time to build and rank. So she wanted to set a baseline of inbound traffic coming in so that when she was ready to spend more money and time in marketing, she wasn't starting from zero.
Some of the articles posted on the Sendspark website took off and started getting the company a lot of traffic.
The Sendspark team also started adding more virality to the product.
Since Sendspark is all about sharing and connecting, they include Sendspark's branding in all videos on their free plans.
This adds a lot of demand gen onto the product.
They also did partnerships with platforms like Appsumo and other companies in the sales communication space.
Ask yourself, is my product a real solution to a burning problem?
What kind of partnership did Sendspark have with other companies in the sales communication space?
The partnerships vary from partner to partner.
The most basic form of the partnership included webinars and classes for the audience of Sendspark and the other partners.
The basic idea was to let users know that Sendspark was a video personalization platform that can be used along with communication platforms like Hubspot, Constant Contact, and Coachbox to send out personalized video messages.
Such partnerships enabled Sendspark and its partners to market to each other's customer bases.
Create mutually benefitting situations and think about the value you can provide to your strategic partners.
Always be on the lookout for collaborative opportunities.
How did Bethany build partnerships with companies like Hubspot?
To establish a partnership with smaller players, Sendspark offers to do all the work from their end, including everything from marketing to content creation.
Partnerships are easier to establish with more prominent companies as they always have someone in charge of partnerships in their marketing team.
Bethany advises every founder not to get discouraged if they fail to build many partnerships at the beginning of their product journey.
When Bethany started reaching out to potential companies for partnerships, she got 2-3 replies out of every 100 emails.
She still started with those two to three companies and, over time, built customer stories and success case studies which made the whole process of building partnerships a lot easier.
The journey from 1000 to 10,000 customers
When starting, Sendspark did not have funnels in place.
But as the company has grown, they have a proper funnel responsible for customer acquisition and revenue expansion.
For expanding beyond 1000 customers, Bethany optimized this funnel by reading data to reduce friction for new customers. The company also hired people to improve specific parts of the funnel-like customer success etc.
Sendspark's main strategy is to get people started on the free plan, get them successful, and help them win customers.
Such users will upgrade to bigger plans and get more people from their companies to sign up for Sendspark.
Sendspark now focuses on content to bring in as many single users as possible.
Bethany also provides personalized suggestions and help for the highest quality users that fit their ideal user persona based on the user metric.
Bethany emphasizes having the right data in place, whether for user acquisition or user expansion.
Bethany realized early on that most of Sendspark's revenue comes from user expansion. Hence she doubled down on improving their user expansion rate, and it has paid well for the company.
Also invest in content marketing as soon as possible, as it essential for long term growth of our product.
Usually, freemium model products require a lot of resources to nurture and handle their free users. How is Sendspark running its freemium model?
According to Bethany, the freemium model works great for a specific type of company.
For Sendspark, it makes sense to run a freemium model because their free users are a huge driver of new customers.
This can be attributed to the positive results Sendspark gets for the free users and that the free plan is Sendspark branded.
In turn, people on the free plan help Sendspark spread the word about their product.
Another issue with running with a freemium model is the customer support required by the users.
Sendspark's team has built a slack community of users to mitigate the time spent on customer support.
This way, the users can post their queries on Slack and help each other with issues.
Since the company has focussed on building a community around Sendspark, the topics discussed in the group are usually around videos for customer engagement, workflow exchanges, and reading and optimizing data.
Those free users will eventually become paid customers once they see positive results. Value never goes waste.
Why did Sendspark use Slack for building its community instead of Facebook groups?
The idea behind having Sendspark's community in Slack was that people already live on Slack during their work hours, so it's easier to switch between different workspaces on Slack.
How does Sendspark maintain high-quality content inside its community?
One of the main goals for the Sendspark community was to encourage user-generated content.
It would become another tedious responsibility if Sendspark's team had to keep driving content.
Recently, the team came up with a campaign called "show your spark" to encourage users to share their Sendspark videos and vote on videos posted by other users. The person with the most votes was also given $500.
The Sendspark's slack community includes around 375 people, and the users are encouraged to share videos and queries to get feedback from other people.
The link to the slack group is included in the footer of all of Sendspark's monthly emails.
What is the one piece of advice Bethany would like to give to all founders starting in the SaaS space?
Bethany advises every founder to focus on retention first.
It may sound counterproductive as most founders feel they should focus on growth first.
But focusing on retention yielded exponential results for Sendspark. They concentrated on their current customers and made sure they were successful.
The process may seem slow, but once your product can generate great results for users and your funnel does not lose people during the journey, you can start focusing on growth and traffic channels.
If Bethany started Sendspark tomorrow, what would she do differently?
Bethany believes the founder should build solutions for a target audience.
However, when she started with Sendspark, they had to test different audiences to find their use case.
So don't build products first and then figure out where it sticks.
Instead, focus on customers and your product's primary use case. Concentrating on customer communication can make the process of product development faster.
What is the one book Bethany read recently that greatly impacted her?
One book that had the most impact on Bethany recently was Founder-led Sales.
People are often intimidated by sales, as they do not understand the true meaning behind it. This book helped Bethany understand sales and her customers' needs better.
The Bottom Line
Find solutions to your own problems. Bethany started by solving her issue of low email engagement and ended up creating a great video sales product.
Content comes first. Bethany invested in content marketing even before her product was ready for launch because she knew content takes time to create but has lasting effects in terms of inbound growth.
Be result-oriented. Bethany was obsessed with the success of her product's users, which is one of the main factors of Sendspark's explosive growth. Sendspark gets people results.
Each week, we'll be sending you a new case study like this. No BS. No Fluff. Only actionable insights on how to grow a B2B SaaS from successful examples.