Letter: Listen to your customer

December 10, 2013

From: Magazine

I was delighted to see that the Fall 2013 edition featured the sales-focused articles "Attention entrepreneurs: Sell or die." I read with particular interest, having founded ProOnGo LLC, a company that specializes in simplifying expense reports for small businesses and that launched through the Edward L. Kaplan, '71, New Venture Challenge. 

In my experience, "sell or die" is not far from the truth. Forgoing the opportunity to invest scarce resources in sales, and instead focusing on R&D or operations, presumes that the entrepreneur knows what a certain customer needs and is willing to pay for. Couple that with a hasty effort to scale up in anticipation of perceived demand, and you have a recipe for consuming a great deal of capital with uncertain results.

At ProOnGo, when developing our primary product, ProOnGo Expense, we once invested in an extensive, customizable system for annotating receipt images, simply believing the market would value this. Fewer than a dozen clients routinely use that benefit today. Had we followed the four-step process outlined by Waverly Deutsch and Craig Wortmann in the article, we would have course-corrected our concept no later than step two, which would have led to substantial R&D savings. 

Increasingly aware of our imperfect institution, we evolved. We now allocate our resources based on conversations with prospective customers, seeking a conditional commitment of, "If you add the following capability, I'll sign up." Although it is more satisfying when a prospect signs up outright, my suspicion and experience is that an early-stage business is far more likely to get conditional sign-ups, which enable the business to make a conscious and informed ROI estimate. 

Under the advice of Wortmann and Deutsch (both are advisors to my company), we eventually refined our sales process. Market feedback drove us to iteratively but persistently invest in ever-improving QuickBooks compatibility, which eventually became our most widely adopted offering, and a noted benefit when ProOnGo was acquired in October.

Philip Leslie, '09
Founder, ProOnGo