Rahul is the founder and CEO of Superhuman where he and his team are building the fastest email experience in the world. Before Superhuman, Rahul founded Rapportive, which was acquired by LinkedIn in 2014. We’re bringing you an NFX Keynote podcast that gives you a deep dive into Rahul Vohra’s mind. His strategic thinking on product-market fit is verging on legendary, and in this episode, Rahul shares his biggest learnings about customer onboarding, why products should be designed like games, and the frameworks he wants every founder to know about pricing and positioning. www.superhuman.com
Christen O'Brien (00:05):
This is Christen O'Brien and you're listening to the NFX podcast. This is a special keynote episode in which we feature one leading founder giving a solo talk on actionable lessons for building iconic companies. Today we have Rahul Vohra, founder and CEO of Superhuman introduced by NFX partner, Pete Flint.
Pete Flint (00:24):
Hi everyone. This is Pete Flint. Before I built Trulia, I spent a lot of time learning from other founders. And one of my favorite things at NFX is getting the chance to talk with great ones like Rahul Vohra. Rahul is the founder and CEO of Superhuman, where he and his team are building in the fastest email experience in the world. Before Superhuman, Rahul founded Reportive, which was acquired by LinkedIn in 2014. And he's also a fellow Brit who lives here in Silicon Valley. So today, instead of the usual back and forth podcast conversation, we're bringing you a deep dive into Rahul Vohra's mind. His strategic thinking on product market fit is verging on legendary. And in this episode, Rahul shares his biggest learnings about customer onboarding, why products should be designed like games and the frameworks he wants every founder to know about pricing and positioning. So let's jump in.
Christen O'Brien (01:19):
When you launch your startup, it's counterintuitive to throttle customer acquisition, but Rahul believes the traditional launch is flawed. In reality, he says, it's about delivering on your brand promise here. He shares the four distinct phases of onboarding he thinks all founders should know.
Rahul Vohra (01:35):
Well, I've seen a lot of companies, especially in our space, which I would broadly define as productivity that get this wrong. I no longer believe in the traditional launch. Let's say you've built a new email client or a new task manager or a new calendar app. The surface area for these products is absolutely massive, bigger than almost any domain you could think of. And what that means is that you also get a massive surface area for bugs, as well as massive variability in how users want to use the product. Now, most companies would have launched our app and because of the demand for these products is so high, they would quickly get tens of thousands of users. That's not the hard part. But guess what? These users will find thousands of bugs and those companies quickly become overwhelmed. They're not able to fix the issues fast enough.
Rahul Vohra (02:29):
And so those users become disappointed, churn out to the products and then tell everybody about their experience. That's the very definition of a net detractor. So in my experience, it's significantly better to do what we do, which is onboard customers at a measured, but increasing pace every week, that way you have the bandwidth to fix any issues that folks find. And then you can focus on making your customers exceptionally happy. All of that said there are three circumstances where I think it does make sense to consider a traditional launch. And that's when you need one of the three C's, capital, candidates, or customers. If you need one or more of those, then maybe you should consider a traditional launch in order to be top of mind for a period of time. For founders considering onboarding, I would do it in four discrete phases.
Rahul Vohra (03:24):
In phase one, the founder takes the lead. In this phase, one of the founders, the product founder, which has also ideally the CEO, should do the on-boarding themselves. The goal of this phase is to test whether the company is even ready to start doing on-boarding. The assumption is that of all the people in the company, the product founders should be able to do them best. After all they hold the most integrated view and they should have a wide range of skills across sales, active listening, and user experience design. And so for Superhuman, I did the first several hundred on-boarding myself. And in this phase, I would not be concerned with how long the on-boarding take. In fact, I would often take up to two hours. And each onboarding had about six parts. So first, I would start by giving a demo of Superhuman and sharing all the things that make it magical and delightful. Second, I would then remind the person that it is a paid product. And I would then quickly measure price sensitivity using a methodology known as the Van Westendorp test.
Rahul Vohra (04:30):
And for those that don't know about it, it's one of the quickest and easiest ways to figure out pricing. Third, I would then ask the person how they do their email. And I would take a note of all the Superhuman features I would want to show them. Fourth, I would then show them how to get through that email in Superhuman, but twice as fast as they were doing before. And fifth I would then insist that they do that email with me for about half an hour. Now this part is crucial because every single time I would find five to 10 bugs and I would take these bugs back to the team and insist that we fix them for next week. Imagine if we did not fix the bugs, next week those exact same issues would be reported and we as a company would not learn anything new. But if we did fix the bugs, the next week we would be able to learn about the next set of issues.
Rahul Vohra (05:25):
And then finally, I always love to give the person a gift to thank them for their time. I'd often leave a bottle of whiskey or a special wine or something else thoughtful and personalized. So during phase one, you should be collecting data on how these users are doing, what is their engagement, what is their attention. Their product's market fit score, their MPS, their virality. We found that for all these metrics, we were beating industry benchmarks to the point that we were category leading and I up to five or six on-boarding like this per week. And if after you've done about 200 on-boarding, you have great metrics, then you know that onboarding could work for your company and you're ready to move to phase two.
Rahul Vohra (06:11):
Well, in phase two, another senior member of the team who is not a founder should take the lead. The primary goal of this phase is to show that somebody other than the founder can do on-boarding and still produce great metrics. In our case, I asked our head of growth to do the on-boarding. And this phase also has a secondary goal, which is to iterate the onboarding experience towards something that could scale. In our case, we were able to get the on-boarding from two hours down to one hour and crucially without impacting any of the metrics, they all remained category leading. Our head of growth, ramped to 20 on-boarding like this per week. If after you've done another 200 on-boarding, you still have great metrics, then you know that onboarding works for your company, even when it is not you doing them. And then you're ready to move to phase three.
Rahul Vohra (07:06):
So in phase three, you build a full stack growth team. Full-stack here means that everyone on the growth team does a little bit of everything, demand generation lead qualification, customer support. And, of course, on-boarding, the primary goal of this phase is to show that somebody other than a senior member of the team can do on-boarding and still produce great metrics. This phase has further secondary goals. Number one, to further evolve the onboarding experience towards something that can scale. And number two, to also create the training plans for the next phase. We hire three growth generalists in this phase, they got the on-boarding from one hour to 45 minutes. Once again, without impacting any of the metrics. Now in this phase, I would expect the growth generalists to each be doing around 20 on-boarding per week alongside all of the other responsibilities that they have. If, after a few months, you still have great metrics, then you know the onboarding works for your company even when it is done by new employees at some scale.
Rahul Vohra (08:15):
You're then ready to move to phase four. And it's in phase four when you build a team of onboarding specialists. Now this is a role that specializes in doing incredible on-boarding. And once these folks are trained and ramped, they should be able to do on-boarding better than anybody in the previous phases, including the founder. The primary goal of this phase is to scale revenue whilst maintaining everything that makes the experience delightful and magical. And during this phase, we got on-boarding from 45 minutes to 30 minutes, once again, without impacting any of the metrics. It's super important to run a comprehensive training program for each new onboarding specialist because they are now the front line of the company. And you want to ensure that the customer experience remains incredible. At Superhuman, our training program is about eight weeks and once fully ramped, each onboarding specialist is able to do 35 to 45 on-boarding per week.
Rahul Vohra (09:18):
When founders get to this phase, they often ask me what the ideal background for an onboarding specialist is. And most founders assume that they should look for a sales background and this can certainly work very well. But what we found is that other backgrounds can work very well to noticeably teaching and hospitality. So I would encourage founders to look more widely and to build a diverse team.
Christen O'Brien (09:46):
Building a radically different user experience requires you to have a deep understanding of what makes people delighted about products. And there's few who understand this better than game designers. Rahul started his career in games and outlines the game design principles behind Superhuman.
Rahul Vohra (10:02):
So we have the same product philosophy driven largely by game design for our internal tools as we do for the software that we sell. And so for folks who know about and who you superhuman they'll know that the entire experience on desktop is aggressively keyboard, shortcut driven and on mobile, it's driven by one handed, single thumb swipe gestures. And the reason that we do that is that's a big part of how you get through your inbox twice as fast. Now, if we're capable, as we are of helping our customers move twice as fast, then surely we can help everyone in the company move twice as fast. And so we do build tooling that way. We have any number, for example, of internal Chrome browser extensions that help our customer [inaudible 00:10:56] move fast. We have ETL tools that move data around, centralize it and aggregate it.
Rahul Vohra (11:03):
We have reporting tools that keep the company transparent and keep everybody informed. And all of this is done to help the company move twice as fast. Because, as you know, at the end of the day, all things being equal, speed is the most important thing, not just for our customers, but also for how fast the company moves. Well, I think that this generation of product builders is very talented, probably the most talented that has ever existed. And that folks should always lean into their own strengths, whatever those may be. But there is one systemic weakness that I have noticed across Silicon Valley and more broadly technology. In general, we as product builders have been trained to think about what users want or what need and on the face of it, that sounds very reasonable, but there is another way to build software. And that is to instead obsess over how users feel.
Rahul Vohra (12:05):
Today, our business software feels like work. We have to check our emails, submit expense reports, enter data in our CRM. But what if we could make software feel less like work and more like play with game design? We can. So at Superhuman, we build software like it is a game. And that has been core to why people fall in love with it. But most software companies don't do this. Most software companies worry about what users want or need, but nobody needs a game to exist. There are no requirements. When you make a game, you don't worry about what users want or need, you obsess of how they feel. And when your product is a game, people don't just use it. They play it. They find it fun. They tell their friends, they fall in love with it. Game design turns out to be an altogether different kind of product development. And one that I think is especially powerful during a recession.
Rahul Vohra (13:07):
As a kid, I learned how to code just so I could make games. And before I was a founder, most folks don't know this. I actually worked professionally as a game designer. And as a founder, I've since then gone deep into the principles. And as it turns out, there is no unifying theory of game design. To create games, like you said, we have to draw upon the art and science of things like psychology. But also mathematics, storytelling, interaction design, and at Superhuman. We've identified five key factors to consider, and they are goals, emotions, toys, control, and flow. And across these, we further identified many principles of game design. One example principle would be make fun toys and then combine them into games. And to flesh that out a little bit, a question I like to ask is this. Are toys the same as games? They do seem different. You see, we play with toys, but we play games, a ball as a toy, but football is a game.
Rahul Vohra (14:18):
And as it turns out, the best games are built with toys. Why? Because then they are fun on multiple levels, the level of the toy and also of the game itself. And to make this real in Superhuman, a favorite toy is the time auto completer, which you use to snooze emails. You type whatever you want. It can be gibberish. And it does its best to understand you. For example, 2D becomes two days, 3H becomes three hours, 1MO becomes one month and the time to complete it is fun because it indulges playful exploration. What can it do? When does it break? How does it work? And it's not long in on-boarding before people start asking themselves questions like, "HM, I wonder what happens if I keep typing 10?" Well, it turns out that's October the 10th at 10:10 PM. Or how about a sequence of twos? Well, that's February the 2nd, 2022 at 2:00 PM."
Rahul Vohra (15:20):
And then I see people start trying more complex inputs like, in a fortnight and a day. And it's not long before our users find pleasant surprises. For example, timezone math happens without you ever thinking about it. You can type in 8:00 AM in Tokyo. And that turns out to be 8:00 PM Eastern time. And then most people are delighted to find out that if you really want, you can snooze emails until never, i.e., You can literally type in the word never. And then that email will never come back. And so I'd say to our listeners consider all the features of your own product. Do they indulge playful, exploration? Are they fun even without a goal? And do they create moments of pleasant surprise? If so, congratulations, because you have a toy and you're on the way to building a great game.
Christen O'Brien (16:16):
One of the unusual things about Superhuman is that in the crowded and utilitarian field of email, it positions itself as a premium product. Here, Rahul shares his methodology for positioning, which he says is a gateway for pricing.
Rahul Vohra (16:30):
Well, we started with an article by Ariel Jackson and very coincidentally Ariel was the first product marketing manager on Gmail at Google, so the perfect person for us to be working with. And she wrote this article that's on First Round Review called Positioning Your Startup is Vital, Here's How to Nail It. And she advises using a formula like the following and it's a bit of a Madlibs game. For your target customer who has a need or opportunity, your product is in a category. And it has a key benefits, which unlike competitors gives a certain primary differentiation. And she gives the example in her article of Harley Davidson. She says the only motorcycle manufacturer that makes big, loud motorcycles for macho guys and macho wannabes, mostly in the United States, who want to join a gang of cowboys in an era of decreasing personal freedom.
Rahul Vohra (17:39):
Now, we thought about this hard for Superhuman. We met up with Ariel and we did further reading in particular, the book Positioning the Battle for your Mind was helpful. And we started to ask ourselves questions. Are we the Ford of email? No, not really. Are we the Mercedes of email or the BMW? Maybe, but not quite. Are we the Tesla of email? Now we're getting there, but it's not quite right. And in 2015, we came up with the following positioning. For founders, CEOs, and managers of high growth technology companies who feel like their work is mostly email, Superhuman is the fastest email experience ever made. It's what Gmail could be if it were made today instead of 12 years ago. And unlike Gmail, superhuman is meticulously crafted so that everything happens in a hundred milliseconds or less. And you'll notice that positioning is extremely tight and it's best to start off that way and then expand it over time. And once you read that, it becomes clear that superhuman is a premium tool for a premium market.
Christen O'Brien (18:54):
Pricing is one of the most important and least understood aspects in the startup world. Here, Rahul shares his methodology for pricing influenced by our friend Madhavan Ramanuham book, Monetizing Innovation.
Rahul Vohra (19:06):
Before you figure out pricing, you must first figure out your positioning. And as we just concluded, Superhuman as a premium tool for a premium markets, and what follows is a relatively easy way to get a pretty accurate answer of what would make for a decent price. Now in the book, he covers lots of ways to develop pricing. We use one of the easiest methods, which is the Van Westendorp price sensitivity meter. So in late 2015, we asked North of a hundred of our earliest users the following questions. Number one, at what price would you consider Superhuman to be so expensive that you would not consider buying it? Number two, at what price would you consider Superhuman to be priced so low that you would feel the quality could not be very good. Number three, at what price would you consider Superhuman to be starting to get expensive so that is not out of the question, but you would have to give some thoughts to buying it. And number four, what price would you consider Superhuman to be a bargain, a great buy for the money?
Rahul Vohra (20:11):
Now, if you have a premium position, the question that supports that is the third question, which is when does it feel expensive, but you'd still buy it anyway? One can imagine that Tesla did that with the Model S. And for us, the median answer to that third question actually turned out to be $29 per month, and then a few conversations with some pricing experts later and we rounded up to $30 per month because when you end a price in the number nine, that doesn't signal quality, that actually signals value, and we're all about signaling quality. So, that's how we picked our price.
Rahul Vohra (20:54):
But for most Silicon Valley companies, they're not actually positioning like a premium tool or a premium piece of software. They're mostly positioning as value for money. And that's because most Silicon Valley companies are trying to expand their user base as rapidly as possible, leaving pricing optimization until later. And so most Silicon Valley companies would optimize around the median answer to the fourth question, which is at what price would you consider this product to be a bargain or a great buy for the money?
Rahul Vohra (21:30):
So that's how I would advise folks figure out a first answer to that price. But once you've done that, it is important to do a quick gut check on market sizing. For example, with that price, can you grow into a billion dollar valuation? Now, let's assume at that point, valuation is 10 times your run rate. So your run rate would have to be a hundred million dollars for Superhuman. That would be 300,000 subscribers at $30 per month. And that's conservatively assuming no other ways to increase revenue per user, for example, without building new products or going further up markets. And we asked ourselves, do we think that we can get to hundreds of thousands of subscribers? We answered emphatically, yes. And so we went ahead with that price.
Christen O'Brien (22:22):
That was Rahul Vohra, founder, and CEO of Superhuman on the frameworks behind his company's onboarding product development, positioning and pricing. I am a user of Superhuman and it's changed the way I work for the better. You can learn more at superhuman.com and remember to subscribe to the NFX podcast for more lessons and insights from top founders. Thanks for listening.