Zero to 100 users

Descriptive transcript

Emma: He probably doesn't need an introduction, I don't think... following along with the journey of UTS Startups and our community. So Sam, you studied Faculty of Arts and Social Science, is that right?

Sam: Yes, I did a Bachelor of Communications majoring in public communication, which is basically advertising.

Emma: I always love these extra stories where they didn't study something very "businessy" or "entrepreneurshippy" and then they've gone on to be a really successful entrepreneur. And it was 2018 that you joined UTS Startups…

Sam: Was it? I thought it was a little bit earlier than that?

Emma: It only launched in, did it? No... So Clipboard was one of the first startups actually to join UTS Startups?

Sam: Yeah.

Emma: Did you have much experience before that in entrepreneurship?

Sam: So I'd started two startups before that, neither of which got anywhere, but definitely taught me a lot. So when I was in first year of uni, me and a friend created a—well, I got obsessed with the idea of virtual reality, and I was really interested in e-commerce as well. So I came up with the idea of building a virtual reality shopping mall, blending the best parts of online shopping and in-person; the online is obviously the convenience and the in-person is the experience. I thought, well, with VR what we can do now is create the best of both worlds. I stayed up with a mate for like three months straight, building this online rainforest shopping centre. I taught myself how to use Unity and code it. Then you put the headset on and walk around the shopping centre, this rainforest, and the t-shirts are in the wind—there was wind. There were Nikes on this ladder between the rainforest platforms, you could pick them up and try clothes on. I thought it was the coolest thing ever. My friend was at USYD. Unfortunately, we got knocked back and the guys there said, "Oh, clearly you two don't know anything about shopping."

Emma: Ouch! Zing.

Sam: Yeah, so that was kind of devastating at that time. And then after that, another friend of mine was telling me about AI and how far image recognition had come, so I decided to use this API that I found for image recognition. Basically Shazam for products, and it would allow me to take a photo of somebody—like, "Oh Emma, great jacket"—and take a photo and it would...

Emma: You could Shazam this UTS t-shirt…

Sam: Exactly! And then I'd be able to buy the UTS Startups t-shirt, and see all the places where I could buy it online for the cheapest price using that. And again, it was a really cool idea and everyone patted me on the back and said, "Cool idea, that would be really—that's a really good idea." But nobody would ever use it. Everybody would download it once and then not use it again.

Emma: So the first two startups lacked users?

Sam: Yeah, they were both—I was just obsessed with doing things that I thought were really cool, and I was basically going to a solution and then engineering what I thought was a problem to fit that solution. We started with the solution first and in both cases that didn't work.

Emma: Write that down, folks! Write that down. How did you get from user-less, really fun startups that you loved in the retail space, to education, co-curricular, for Clipboard?

Sam: Yeah, so I think the first thing I'd say about Clipboard is it solves a genuine problem, and that's why we've got to where we are now. Unlike my previous two startup ideas, Clipboard genuinely solves a big need to a customer who has money as well, so that always helps. We both did a lot of extracurricular activities during school, all kinds of different activities that we loved and learned a lot of life lessons from. When we finished school we became basketball coaches at our old high school, and we were literally working in the field during uni as casual jobs, coaching these basketball teams. From that experience, having gone from actually experiencing it as students to then experiencing it as staff members, we saw hours and hours being lost each week to administrative work that was just unnecessary, and that was time being taken away from the actual students and teaching them the life lessons.

Emma: And how did you actually find that those problems existed?

Sam: So we were just working there. We saw it firsthand. We personally had to mark the roll on team sheets or pieces of paper that were printed out and would get wet in the rain, and would invariably have to input them into an Excel spreadsheet. We saw how people would overstate hours in their timesheet and cost the school tens of thousands of dollars every year. We saw firsthand how dissatisfied the parents were when they weren't told where their game was on Saturday and they drove halfway across Sydney in the rain only to find out that the game had been cancelled.

Emma: That's really interesting. How did you then go about validating that the problem not only existed for a future customer, but that it's something they'd want to pay money to solve?

Sam: 100%, and I think that was sort of the hardest initial transition. So when we first started out, Ed was studying computer science, so he did most of the coding. At the start I was pretty useless and I couldn't code, and I remember us catching up one day—Ed had a thousand dot points on his list and I probably had three. At that time we weren't selling or anything so I just said, "Okay, I gotta learn how to code," so I just spent the next year teaching myself how to code so I could help out. That first year was just really product development—we realised we've got something, now we've got to build a product and present it to the school. We presented wireframes to our manager of basketball. She went, "Yeah!" The first version of that product, over probably three months or so. We didn't really know what we were doing so we were just kind of figuring it out as we went.

Emma: Write that down as well, because what we see a lot, both in the wider ecosystem and students that come to some UTS Startups events, is that they think they need to have this baseline level of knowledge and experience before they can start. You've just said that you had no idea what you were doing and you figured it out as you went.

Sam: Yeah, we just figured it out. I think especially with web development and software—any discipline really, but software is an easy one—everything's available online and you can teach yourself. Like, I did communications and dropped maths in year 11, and I taught myself how to build an app that's now used by 27 schools.

Emma: Love that.

Sam: So yeah, you can definitely learn as you go. But it definitely helped having Ed—he taught himself more tangible web development skills, but he had a good computer science base to fall back on and had a rigorous way of thinking that's really helped us.

Emma: Lourdes, I'm just getting a bit of a notification that our WiFi is on a bit of struggle street today, so jump in and let me know if there are any issues, and we'll see if we can maybe switch to another connection. But, so you said 27 schools?

Sam: It's actually 26. We have 26 in...

Emma: Reaching out to the first, was it non-paying first two?

Sam: Yeah, so it was our old school, Knox Grammar School, that was the first school. So Knox, we got it in with the basketball program, they then trialled it for a while—we were still working as coaches. I think the biggest thing that helped us starting off was we were actually the users of our own product for about six to nine months. We worked three times a week at the school after they implemented Clipboard on a trial. We, Ed and I, were working as staff members at the school, three times a week, using our own product. When things didn't work I would experience it firsthand, I would personally feel the pain of how annoying it was that you couldn't record a score automatically, and things like that that we would come across doing our job, and we would hear feedback from the other staff members as well. Got it into Knox, initially into the basketball program on a trial, then a few other sports were like, "Hey, that looks pretty cool, can we give it a go?" They just started trialling it. It was still pretty under the radar at the school, it wasn't like an official software platform, it was more just, we were staff members and they were just trialling it. At a certain point we got enough interest from different activity managers that it got escalated to the head of IT, the head of Finance, and the head of Sport. They sat down and basically said, "All right, look, we want to properly roll this out. We want to trial it first. If the trial goes well, we'll then pay you," and they gave us a long list of requirements that they needed to see in the product, like how it would integrate with other systems at the school, how the payroll side of things would work. That was a really complex area that we had to figure out, because we manage all the casual time sheeting for the school's payroll. So we had to work through those requirements. Staff at the school got it in, did some training sessions, they used it for the rest of that year. So Knox probably would have got about 12 months for free, maybe a bit less. At the end of that period, Knox then agreed to sign up, and I think they paid us 20 grand in the first year. So that was our first customer, when Knox came on board.

Emma: Can I ask, how did you go about—so this is a somewhat typical go-to-market strategy, to get some people on board, either for a free trial or something similar, and as a paid customer, and then utilise that as a use case for future client outreach. How did you utilise Knox as the use case to your advantage for future prospecting for sales?

Sam: Yeah, well Knox was the backbone of the company. If we hadn't got it into that school we wouldn't have been able to get any other schools. I think in our case we were really lucky because the school did take a chance on us—they liked us and they gave us a go. I'm not sure other schools would have done the same, having no credibility. I think we would have got an initial product into another school but it would have been a lot harder and the bar would have been a lot higher, we would have had to do a lot more first. So that really helped. We then got some feedback. We're lucky to have a great mentor in Daniel Petri from Airtree, and he kind of sat down and said, "You just got to get users. You guys are uni students, you don't need money, you've just got to get users and build some traction."

Emma: Short-term pain for long-term gain.

Sam: Yeah, exactly. So based on his advice in that first—well, I guess it was second year—we then used the Knox case study to go around to similar schools around Sydney and say, "Hey, look, Knox Grammar School is using it—why aren't you?" And managed to get six schools. We literally just gave it to them for free. We knew at that point... is that still causing lag?

Emma: I've moved my phone away so we'll see if that...

Sam: How's the line, is that all right?

Emma: Cool? I'm hoping that's a thumbs up.

Lourdes: Maybe just keep going while it's...

Emma: We'll just all cross our fingers for the WiFi. Sorry, so keep going. You mentioned you went around to other schools, got six trials signed up. When you say "went around", without giving away too many of your secrets, did you cold call, cold email, send physical things, knock on doors? How did you actually "go around" to schools?

Sam: Yeah, it was pretty inefficient what we did, initially. I'm trying to think how we got most of the leads. It was mainly just introductions from people who knew someone. If I had my time again I'd probably do it a little differently, but even then we didn't have much credibility so we really had to just do whatever we could to get an intro. Generally the way it would work is I would have a friend who coached at Cranbrook or whatever school it was, and he would, as a junior coach, email the head of sport who was his boss and say, "Hey, introducing you to Sam who's got this thing that's working at Knox. I thought it'd be worth you having a chat." I actually got to the point where I paid people—we paid people like $100 for a successful introduction to a school.

Emma: That's another great sales tactic. Referrals and affiliates!

Sam: We got randoms at Sydney Uni who coached and they would just introduce us.

Emma: So, for the people that weren't in your immediate network to then sort of intro you to the right person, the decision maker, how did you then go about building those relationships for the subsequent sales, not just that first?

Sam: Yeah, so that first year was literally just getting uni students and sports coaches who worked at schools, oftentimes paying them and posting on a Facebook group like, "Hey, if you introduce us to your boss we'll pay you $100 if we sign them up as a customer." And then we got tons of emails. So we got a lot of introductions from that. And then after that, we just talked to the school.

Emma: And what's, if you can share, what's the typical annual package/subscription?

Sam: In that second year we literally went to—I think we signed up Pymble Ladies' College, Kincoppal Rose Bay, I can't even remember now—it was like six schools that started using it and just tried it for free. We weren't in a position at that point to actually charge money for the product because it just wasn't developed enough, we didn't have enough credibility, it was still super basic. So we just used that 12 months as a period to say, "Hey, we know this solves a problem for you, it's not perfect. We'll work really closely to get all your feedback, so we'll give it to you for free if you do us a favour of giving us the feedback and working with us for 12 months." And because there was no budget, the sports people didn't have to go to the IT or the business manager and get approval, they just used it, and then would give us the feedback. And then after 12 months of them using it, 100% of them paid.

Emma: This is seriously great advice for everyone out there that is thinking... To what you think is the perfect product offering. Look at Sam; got into six or seven schools before—he just said the product wasn't very good. So double whammy, you're getting your customer to use your product so you can improve the product tenfold, more, whatever. Product market fit, you're nailing that, absolutely nailing that, you're building your prospecting list and your customer base, and then hopefully after the end of the trial you're actually making... what more could you want?

Sam: [Laughter] Sleep.

Emma: And have you, so does this freemium model still exist now?

Sam: Yeah, so we tried freemium last year, we brought out a free tier, thinking that we could onboard schools for free without them needing to get approval from the bosses. Get it embedded—kind of like that Slack model—and then upsell the business and IT department. But it was just a logistical nightmare to manage. We had a really small part-time team last year, we hadn't raised much capital, so a lot of our time was just focused chasing up the junior sports administrator at some school who'd signed up but wasn't properly using it, but we needed them to use it in order to get them to convert, and then invariably they would churn. So for us at that point, even last year, with a still undeveloped onboarding and just a customer success operation that wasn't very fine-tuned, we couldn't do free tier because it was too labour intensive for us. So now we've moved away—some feedback we got during Startmate was just to cut the free tier, and if you want it you pay, we don't do trials. We know we're worthy, we know we're going to help you, so just pay.

Emma: I love it—over the years you've just changed. And I asked a similar question to Lana in the talk... you and your team study the data to make pragmatic decisions, versus follow your gut to make decisions about what next?

Sam: Yeah, interesting question. So in terms of product development perspective, we're very much focused now on shifting from output-driven development to outcome-driven development. So basically we used to measure success by saying we've shipped a new feature. Now, success is, what was the outcome of that feature? What was the engagement like? Is it working? So obviously the data is super critical. You try to use data as much as you can in running a company to make good decisions, but I think at the scale of a startup, oftentimes the data pool's really small. So we haven't had the luxury to look at our marketing website and go, "How could we optimise for demo bookings?" because you know, every month or something. So you do need a large data set to look at that.

Emma: Fair enough. I will throw quickly to a question from Kimberly: how do you manage privacy issues with students or children?

Sam: Yeah, great question. So obviously in the school sector and education sector, privacy is one of the most important considerations. We've traditionally not had students and parents on our platform, so when we started out we didn't have very sensitive information and data that we were collecting. So schools were satisfied with the pretty stringent data security processes that we had in place, and we have strong documentation around that, because obviously it's really critical in the school sector. We're now starting to bring students and parents into the equation, but I think from an engineering perspective we have pretty strong security. All the data is backed up daily, we have to ensure everything's encrypted. We would like to, when we have the resources, undergo ISO 27001 Compliance, which just gives us a nice tick of approval, so when the IT teams are looking at Clipboard, they can immediately go, "Yep, tick, I don't even need to read the security handbook." But what we have in place now satisfies most of the bigger schools that we work with.

Emma: Love it. Makes me feel very comfortable if I had kids in school.

Sam: Yeah! [Laughter]

Emma: We've only got one or two minutes left with the incredible Sam Clarke, so go for it Hanisa, what's your question?

Hanisa: My question was, in the early days, like with my startup, I'm sort of torn between growing my user base or developing and working on my product. What was your focus based on, of the two?

Sam: Right. I don't think you can separate them. Every founder would probably echo a similar line, which is that of course you need to work really closely with your users in the early days and gather their feedback. For us—and Hanisa, I know that Clipboard's a very different business to your app—but for us, we worked really closely with one school, and that was enough for us because we could work really closely with them, get all the feedback, have lots of meetings. I would say with a networked startup like yourself, that's a different equation that you would have to try to understand—how many users, how big does my network have to be in order to learn as much as we can, in order to continue to improve the product and drive the viral loop? I don't know what that is but I'm sure if you talk to others you'll find out.

Emma: So really tailoring your sales strategy to your market, your needs?

Sam: Yeah, I think the biggest thing to understand is just being really clear with who you're focused on. For us, a really useful exercise this year has been to clearly define what our ideal customer profile is, and that's not something we did initially. We used to think that whoever asked for our product, we'd sell it to—whether it's a large independent school, a mid-tier independent school, international school in Abu Dhabi, a sports club, whatever, we'd sell it to you. But what we've learned, sometimes the hard way, is that a major key to success in any startup is being razor-focused on your definition of your ideal customer profile—your ICP. So for us right now, we're still a pretty small startup, so we've defined our ICP as schools with fees over $20,000 a year that run big extracurricular programs and have compulsory sport. If you're not that, and you come in as a lead to our website to book a demo, I'm just going to say, "Look, unfortunately at this point I don't think it's right that we work together. I would recommend looking at these other services."

Emma: That must take a lot, a lot of discipline to not just say yes to every customer.

Sam: Yeah, because once you say yes to everyone you massively dilute your offering. You can either be great for a real subset of a customer and grow globally. Even if it's still a really small market, you just want to start a fire, you need that initial kindling really burning, and then you can add on top of it. You need customers who absolutely love you, and you're razor-focused on solving their specific problems. Because if you try to solve everyone's problem, you don't really solve anyone's problem very well.

Emma: What a perfect, perfect piece of advice to end on. It really is a lightning talk—digital or actual round of applause for Sam Clarke from Clipboard. Thank you so much! Thanks for coming, Sam.