Hey everyone! Today I share the mic with Aaron Fulkerson, co-founder and CEO of MindTouch, which provides customer self-service software that makes your customer smarter, happier, and more successful.
Tune in to hear Aaron share what MindTouch is, how it increases average customer engagement for big brands from 40 seconds to 12 minutes, how MindTouch started as an open-source project in 2006 and evolved into a cloud-based business in 2012 with over 300 customers today.
Download podcast transcript [PDF] here: How MindTouch Completely Revamped the Customer Self-Service Industry TRANSCRIPT
Time-Stamped Show Notes:
- 01:11 – Aaron and Steve co-founded MindTouch, which started as an open-source project.
- 01:31 – As CEO, Aaron’s day involves strategy and vision, but he is still actively involved in sales.
- 01:51 – MindTouch helps people get support without having to call a customer support center.
- 02:33 – It’s an elegant solution for combining content types and creates a great customer self-service experience.
- 02:57 – An example is the Cisco Meraki documentation for a VPN. MindTouch gives answers and uses machine learning to identify other useful content.
- 03:36 – By driving engagement, average time on site has increased from 40 seconds to 12 minutes because users are finding useful information.
- 04:14 – Companies already have the content, but the way they deliver it needs to be customer first.
- 05:01 – Delivering effective content in a micro moment.
- 05:44 – They also drive 80% of organic search traffic in the product’s category.
- 07:18 – The software is cloud based and the pricing is value based on the amount of usage.
- 08:48 – MindTouch is seamlessly integrated in the brand.
- 09:39 – There is a touch point feature that layers the content across the customer’s journey. The well-structured content is injected throughout the website and self-service support journey.
- 10:56 – Value-based pricing is based on metrics and engagement.
- 11:32 – The way to set up value-based pricing is to take a guess and then adjust and find the engagement metrics the business values.
- 13:17 – Engagement, touch points, and usage are what the pricing metrics are based on.
- 14:13 – MindTouch started out as an open source project in 2006. The cloud based system was released in 2012 and they now have over 300 customers.
- 17:54 – If you stay at something long enough with a positive attitude and focus on value you will win.
- 19:56 – How distribution of open-source was completely disrupted by the distribution of cloud software.
- 20:49 – Customer referral rates are 96% and most customers come to them by referral.
- 21:44 – Having a marketing engine would be great.
- 22:09 – What makes self-service so important is if you have a subscription based business model, you need to provide continued value to the client. MindTouch helps customers achieve value from their purchase.
- 23:32 – Businesses that sell through distribution channels are at risk because they don’t have a direct connection with their customers.
Resources From This Interview:
- MindTouch Customer Stories
- Aaron on Twitter
- Cisco Meraki Documentation Example
- Product Help Whirlpool Example
- Must-read books:
- The Gene: An Intimate History by Siddhartha Mukherjee
- Sapiens: A Brief History of Humankind by
- The Master Switch: The Rise and Fall of Information Empires by Tim Wu
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Disclaimer: As with any digital marketing campaign, your individual results may vary.
Full Transcript of The Episode
So you immediately get an answer, not only do you get an answer but MindTouch with machine learning identifies other potential chunks of content because we atomize the content and the micro-content would drive engagement. So, what our customers see is they go from those crappy FAQs or knowledge bases that has an average time on site of 40 seconds because it sucks to all of the sudden like Marocky or Whirlpool is one of our customers or Winnington or Excenture. Their time on site goes from 40 seconds to 12 minutes.
Why? They're finding information that's useful. It's driving engagement. So the thing is the company's always have this content it's a bi-product of doing business. They have to produce user manuals. They have to produce the knowledge base. They have to produce training materials. But the way that they've delivered those to the market is completely ineffective for customer self-service. And it's because they've only focused on their internal work groups rather than the customer. So it's really thinking customer first, how do you deliver a content experience that's customer first. And that's what we do.
Eric Siu: Interesting. Cool. So it sounds like the main value add is you make it very digestible and simplified for people to understand and to solve their own problems versus just have a wall of text from all of these, which is basically what other people do, right?
Aaron Fulkerson: Or files, right? Like, oh you have a pdf file, pinch and zoom on your mobile device and it's ridiculous right?
Eric Siu: Yeah.
Aaron Fulkerson: So that's precisely correct and we think about it, I mean, Google calls it micro-moments, that's how we think about it is we take the content we atomize it so it can be delivered in a micro-moment and then it's so effective it drives a lot of self-service so it takes this, um, this content that was used ineffectively for customers to be able to understand how to use the product they purchased or service that they purchased. And now like I just showed you with Marocky, you could do the same for things related to washers and dryers and mixers because there are customers as well. You can see our content show up in the top search result for companies when people are searching for not even their brand but for products in their category.
Like I just showed you VPN configuration or set up client VPN would be another one of Rocky. I'm thinking on Marocky because I was just talking to the general manager last week and we drive 80% of their organic search traffic. And it's all buyers. It's mostly buyers that who are researching to make a purchase in that category. It's the same thing for KitchenAid, [inaudible 00:05:52], Maytag, Whirlpool who use this as well is this is 60%, on average, people in the research stage making a decision to make a purchase on a considered purchase and we're driving all this organic search and they're able to session them, start tracking them, drive them to a purchasing outcome. And by the way it helps your customer self-service. So very focused customer self-service but it has an impact on revenue generation.
Eric Siu: Interesting, yeah. I'm totally seeing that now. So those of you probably heard me clicking around, I was actually looking at the results. So, yeah, Aaron was right, I mean, they do have the ranked zero the featured snippet for that very specific query and that does drive business results because people are searching for it and they learn about Marocky, they can get re targeted or sales can reach out to them afterwards so I actually wasn't even thinking about the implications around that.
Aaron Fulkerson: Retargeting!
Eric Siu: Yep. Yep.
Aaron Fulkerson: Exactly. So when you come in through like a generic search term, you just got sessioned and now you're getting re-targeted. And it could be based on, of course it's based on, it could be as specific as the piece of micro-content you consumed too. It's not like generic products, it would be specific to the fact that you were looking at stuff related to a research stage of a KitchenAid mixer.
Eric Siu: Yeah. Okay. So I mean for you guys, so contract values are ACVs are what, $40k to $700k plus. I mean, how are you guys charging for this. Is it on a monthly basis, is it, how does it work?
Aaron Fulkerson: So we are a cloud-based software and, I mean people look at this by the way and I should really call out this is a software product. But we have tools to ingest content and we also have an authoring suite that guides the authors but most of our large companies, they've got a ton of content we just ingest. So it depends on the amount of usage. So it's really value-based pricing. So we customers that are $750,000 annual contracts and then we have gross stage software companies that are $45,000 annual contracts. So it's really value based, based on the amount of usage they're driving. And then our customers most of the software unicorns are MindTouch customers Sprinkler, Domo, Docker, Zora, they're all MindTouch customers. And this has been a really significant growth hack for them is it improves the renewal rates but it also drives net new, helps them control their brand.
Eric Siu: This is so crazy.
Aaron Fulkerson: The nice thing is like Whirlpool, we closed them as a customer and then Electrolux gets disrupted, so they're now a customer. And then Fisher Paycol which is a luxury consumer life goods brand, they get disrupted, they're now a customer. We haven't even gone out to them.
Eric Siu: Interesting. Okay so if I'm looking at, if I go back to Marocky right now, where does it say, where can people actually find out about you because I'm assuming this is a subdomain you guys are hosting it? Like if I go to this, how do they find out about you?
Aaron Fulkerson: Well what they'll do is some business analyst on their end goes, "What the heck are they using for all of their self-service," and they look at the source and they see MindTouch but you can see, it's good you point that out. It's seamlessly integrated into their brand. Go to producthelp.whirlpool.com, producthelp.whirlpool.com. And you can swap Whirlpool for Maytag, Amana, KitchenAid if you like but just start with Whirlpool and that's MindTouch. It's totally seamless integrated into the web presence.
Eric Siu: Interesting. So you guys are customizing it for them too.
Aaron Fulkerson: Yeah, I mean, most of our customers have a partner that does the customization. Somebody internally who does the customization. In some cases we might do the customization, but it's just like HTML CSS stuff. The way the product works is it makes it really easy to seamlessly integrate. The other thing I should point ... I don't know how nerdy we should get, I mean should I get geeky?
Eric Siu: We can get in the weeds, I mean people on this-
Aaron Fulkerson: Okay.
Eric Siu: They like getting in the weeds.
Aaron Fulkerson: So the other thing that since the content's all been atomized and it's semantically structured, what we have is a touch points feature that allows you to layer this content across the customer journey so we have this whole maturity model that we've co-developed with MacKenzie and Accenture both who are customers, Accenture's a partner and what it looks at is first thing you do is you unify your content, next thing you do is you capture your content creation workflows and then the next thing you do is you extend across the customer journey. So you take, once the content's been well structured, now you put it on your dot com in discreet places around the customer touch points. Your CRM system, your call center, your ticketing, your community, your e-commerce. So we have a configurator that spits out a little snippet of code that's a touch point widget that can take context from the page and then inject into the page the right information to help people move alone a purchase or move along a renewal or move along a self-service support.
But it's all very specific to customer support content training materials. We're not interested in being an end-to-end web content management system. Adobe can do that, Sitecore can do that. That's fine. Their general purpose we're very focused on custom self-service.
Eric Siu: Okay and I wanted to touch on one point. When you talked about value-based pricing, is it just based on number of documents or number of visitors? How do you define value?
Aaron Fulkerson: Yeah, it's right, it's all about engagement metrics. So how much engagement are you driving is what's driving it. So there's a direct value associated with the people who are accessing the content. And that's what drives their license.
Eric Siu: Okay. So I mean I think each company maybe, gaging metrics they're looking at different ones and I'm assuming you might be doing it on a case by case basis, correct me if I'm wrong, but when you started out doing value-based pricing, I'm sure people are wondering, how do you go about setting up value-based pricing? What are some steps to go about it the correct way because that's not something usually what people do a lot of.
Aaron Fulkerson: You take a guess. You're gonna get it wrong and then you adjust. And it's very cookie cutter how we do it but the other thing we think about if somebody were going, hey I want to do value-based pricing, accelerate the deal flow, it also, there's a whole lot of great reasons to do value-based pricing but the way that we thought about it was we thought about it in terms of "Okay our principal buyer starting out was a head of support, or a head of product or a head of customer success," so what are the engagement metrics that they value? And then you go, "Okay well these are what they value." And then as we started seeing the impact that we had on businesses' ability to drive marketing outcomes, well that's a different set up engagement metrics or the next one is this drives a lot of sales acceleration because, especially if you have a technical product like I said, why are most of the software unicorns MindTouch customers, because they have technical products and they need an always-on 24/7 sales engineer that helps them establish credibility and makes it scalable for the technical close. So what are those engagement metrics?
So it really boils down for us to something very simple and it's the requests. And the request delivered by channel.
Eric Siu: Got it. Okay. I'm trying to understand this a little more so maybe I work better with examples. So lets say I'm a sass company and you know, on my site I'm getting, you know, maybe my main things I care about are number of leads, I'm willing to pay a certain lead is worth a certain amount of dollars to me and my conversion rate is 1% or something like that. Do you measure it based on traffic and then you multiply those numbers, is it some kind of equation based on the type of business?
Aaron Fulkerson: Well the way that, it's even simpler than that, I mean we've got it boiled down to a science where it's like what touch points do you need, that determines which purchaser we're engaging, is it touch points for the dot com, the community, the commerce experience. And then we price based on the touch points which allow us to integrate into a particular engagement channel. And then the other thing we price based on is just pure usage.
Eric Siu: Okay.
Aaron Fulkerson: So the more usage you drive, the higher the license. So when we have like the world's largest travel conglomerate Tooey, it's a European brand, most American's don't know but they're massive they do 52 billion euros year, largest travel conglomerate on the planet.
Eric Siu: Wow.
Aaron Fulkerson: They're a customer of ours and you know they drive a lot usage, or if it's a growth stage software company like Radius, they're not driving as much usage. So just think touch points and usage is how we do it. It makes it simple for us.
Eric Siu: Yeah that makes it way easier. Great. So I'm sure people are wondering now, how do you guys grow? How did you acquire, let's say your first you have 300 customers right now right?
Aaron Fulkerson: Yeah it's over 300 I'm not, its been a while since I looked so, we started off originally as a open source project that we shift way back in 2006 and Steve and I wanted to solve this problem of self-service but the original idea was for academic researcher because we did research at Microsoft around high performance computing and distributed systems. That's what we used to call IOT distributed systems. Internet of things, right? That's where we started and we had this pain around how do we get our research to matriculate out to the product teams at Microsoft and we knew nobody's gonna open up a Microsoft Word file and read it and we know that nobody's gonna use a Sharepoint site that we set up. It's not effective for self-service.
So we set out to solve this problem and we did and it became this wildly popular open source project and I say wildly popular, I'm not exaggerating, it was in the top 5 open source projects on the planet. This was back when, before GetHub, it was SourceForge and it was 360,000 projects ranked and every project is up there except for like Linux and we were number 4 most popular. Thousands of downloads a day.
Eric Siu: Hmm.
Aaron Fulkerson: That totally took us by surprise and we said, "Well, shit, let's sell a license or a support subscription." So we started doing that in 2008, 2009 and then we decided that this business is too hard to scale on premise open source, we have a lot of competition around IT guys installing us internally. We realized that's not market we wanted to go into. So we just said, "Hey, let's jettison all of this open source stuff, go 100% cloud, focus 100% on this self-service use case."
Thank god we did. We launched the cloud version in 2011 and then it was really just off to the races. But uh we'd taken that open source and developed nearly tens of millions of deployments. We still, we haven't shift code on the open source since January of 2010 and every week we've got people coming in saying, "Hey can we get an upgrade to this open source?" It's like, "Man that thing's 7 years old. No."
But I mean, the damn thing was bulletproof and that's part of the problem with the open source model is you want to have this like planned obsolescence where things break and the damn thing was bulletproof, you'll still see reviews about MindTouch wiki is what we ... Decki Wiki or Wiki, what we called it back then and it doesn't even look like the new product but you'll find reviews and it's like, "This thing runs like a refrigerator." You know, you can't break it. And anyway, 2011 we released our cloud and we'd already had PayPal, Exact Target, Intuit, Mozilla, a whole bunch of companies or foundations like Mozilla using MindTouch for self-service so we used them as kind of banner customers to drive closes and prove that we can deliver real value and I think that answers your question. In a long-winded manner.
Eric Siu: No, no, no. That's really good. And I think there's some nuggets in there. So it sounds like, you know, you started out with in 2008 a completely, or not completely different product but you have the open-source product and then it sounds like it was kind of like a pivot?
Aaron Fulkerson: Oh man I don't know if it was a pivot, it was damn restart.
Eric Siu: Okay. So what are ... I feel like there's some stories in there.
Aaron Fulkerson: That would be too kind.
Eric Siu: Okay. Well, I mean, I want to dig into that. How did that feel? What are some lessons you learned from that? I want to hear I think some stories would be awesome.
Aaron Fulkerson: Oh man there's so many different interviews about me talking about that online already. Here's what I normally say about this, so this is my standard one, is if you stay at something long enough, keep a positive attitude, and just be pathologically optimistic and continue to focus on delivering generative value for your customer, you're gonna win. It's gonna sort itself out. But that was a tough period going from this growth curve where we had this massive distribution and a very, very teeny tiny minuscule crotchet of a percent of people converting over to paid customers to all of the sudden a total restart where the massive distribution was for people in IT that had no desire to buy a cloud product. And it took like burn the boats on the beach just real confidence in our direction to stay the course and I'm glad we did. If we hadn't we wouldn't be in business today. We really wouldn't.
Eric Siu: How did you know it was the right time to make the jump. Because you have that thing that's growing, you know, for a guy like me it's like, "Wow this things growing we're gonna try to make revenue work no matter what." But you guys had the courage to move in a different direction.
Aaron Fulkerson: Oh it was more than ... Our first year selling the open source we did a million dollars and, but we bootstrapped this business, you know, we took our first round of funding we announced that at the beginning of last year. So that was our first round of funding ever. And we bootstrapped the whole thing. So yeah the first year we did a million, the second year we more than doubled and then the third year, I don't think we quite doubled the third year but we were changing directions is why.
Eric Siu: Right.
Aaron Fulkerson: What gave us the confidence for, well, first of all, Steve, my co-founder, credit to him he's like I'm absolutely not shipping on premise software anymore it slows our pace of innovation-
Eric Siu: Mm-hmm (affirmative).
Aaron Fulkerson: It's too laborious to package and QA for 6 different distributions of operating systems and flavors and it's just way too laborious. So I mean, I didn't have much choice 'cause he pressed the issue and thank god he did. But the thing that I will say is that it was clear that the distribution networks of open source as this kind of free model was completely disrupted by the distribution economics of cloud software because while, yes you can give a free version out that you can then use as a feeder to your paid customers. The reality is that being able to fill out a form fill is a lot less lift than having to set up a whole environment and servers and shit like that.
So it was the idea that the open source as a model for disruptive distribution economics had a business application level, nobody's ever done it successfully. At an infrastructure level there's many examples of people having done it successfully.
Eric Siu: Great. You know I'm really curious, I mean, you know, 300 customers right now, you guys sound like you're doing really well. I mean, how do you guys go about acquiring customers today. What's working really well for you?
Aaron Fulkerson: Well, I mean I wish I had some like silver bullet. I mean, the reality is, and this is actually a point of frustration for me as a CEO is that, its a point of pride and frustration. Our customer renewal rates by customer count is 96% and it has been since 2012. Also, what this means is that most of our customers are coming to us by referral, so we haven't like created this engine that's driving inbound demand or marketing wizardry. It's mostly just because we kicked ass for our clients they recommend us or their competitors noticed that they're getting their ass handed to them because of us so they come inbound. And, I mean, it's wonderful and it's definitely a point of pride around the product and everything but I would like to have this marketing engine just cranking and helping people understand just how easy it is to deliver an effective self-service experience and how valuable and strategically important that is to your company.
Eric Siu: Interesting. Okay. Cool. So it sounds like a lot of it's referral, sounds like you've got a strong sales team as well but the marketing engine hasn't been created quite yet.
Aaron Fulkerson: Yeah we've got a terrible marketing leader, its me.
So you know the thing that makes self-service so strategically important, and aside from the obvious stuff which everybody hates calling in support or chatting with support or filing a ticket. Everybody hates that. It's nonsense. But here's the major macro-trends. Number one, subscription based business models. If you have a subscription based business model customer renewal is critical, it's paramount. If you don't have a subscription based business model in the next 5 years, you're not going to be in business in 10. So look at GE look at, it doesn't matter if you're in heavy manufacturing, if you're in services. People are all moving to a subscription based business model. It forces the vendor to provide continued value to the client. So why does MindTouch get lift from subscription based business model? Because we help customers to achieve the value, to realize the value of the products they purchased so they can on board more swiftly, they can find the information to achieve the business outcomes they intended for making the purchase or maybe it's not business outcomes, maybe it's your washer and dryer right?
And then we provide customer analytics that helps the customer success team move to be more effective in renewal and upsell. So that is a major business trend that is disrupting all businesses and is giving MindTouch lift, subscription based business models.
I'll give you one more. There's others but I'll give you one more. Just for the sake of time. Businesses that sell through distribution channels are at risk of going out of business because they don't have a direct connection with their customers. Now what I mean here is that let's say ... Well, you kind of have to rewind. Think about when we used to buy products, before the industrial revolution. We would go down to the craftsmen, we'd talk to the craftsmen, they'd make us a beautiful product, they'd get it to us, we'd leave. Next time we'd have such a relationship with that craftsmen we'd go back and we'd buy from them again because they knew us and we felt a sense of connection there.
Now with the advent of the industrial revolution we scaled up production in order to push that supply out to the market distribution networks were set up. So the model T, you can have whatever color you want as long as it's black. Right?
Eric Siu: Mm-hmm (affirmative).
Aaron Fulkerson: As they scaled up manufacturing, the distribution networked allowed them to scale out to the market but cut the company off from understanding the customer. They stopped being customer focused. Everything started getting manufactured in China. Right? Everything was generic. Now let's look at what's happened over the last ten years with Apple, with Tesla, they're owning their distribution channels.
Eric Siu: Right.
Aaron Fulkerson: With Amazon. Notice what amazon's doing. Amazon's sitting on a pile of data and as soon as the economics make sense to introduce a competing Amazon basics product into their marketplace, they do. And all of the vendors that are selling packing cubes or suitcases or perhaps soon washers and dryers, they're in trouble because we have a connection with Amazon. Amazon knows us, we know Amazon, we have affinity for the brand.
The widget is less important, it's the Amazon logo we care about.
Eric Siu: Hmmm.
Aaron Fulkerson: So companies with distribution networks have to find creative ways to connect directly with their customers to build profiles around their customers. To become customer focused and we provide a very effective, low cost, easy way to overnight set up a direct connection both with the customers and the buyers.
Eric Siu: Awesome. I mean, do you have any case studies sitting online where it's like, okay, you know, so and so company invests $700k but they get like a $7 million return? Is there anything out there like that?
Aaron Fulkerson: Sure. There's a bunch of case studies up at MindTouch.com, you know, there's ones in high tech like Sisco or software like Zora and, or even consumer right goods like Whirlpool. The key studies, they're up there. But there's also what I would encourage people to look at is, there's webinars with customers on our website. I would encourage to go look at those, encourage you to look at those. And then there's also video testimonials. Like there's great videos of Tooey, the travel conglomerate, or Conga, the software company that does sales enablement tools or Avalar that does sales tax software, or Whirlpool. There's great videos that are these little vignettes that are 3 to 5 minutes long that it's the customer talking about the impact on their business.
Eric Siu: Awesome. Great. Yeah everyone should definitely go check it out because I think the implications behind this are pretty big and I just have one more question before we hop off. What's one must read book that you'd recommend to everyone?
Aaron Fulkerson: Oh, man. I always get that question. This changes often because I read quite a bit. What's one that I've read in the last year that really stood out. Well, every year I have a list of about 80 people, 70, 80 people that are on my book club and I give them a gift of two books that I provide hand-written notes in thanking them for stuff that they've done over the years.
Eric Siu: Huh.
Aaron Fulkerson: To help me professionally. And last year the two books I did was The Gene by Sidhartha Mukherjee, which was fascinating. It's the history of the gene. And Legacy which is about the All Blacks. So it's not always business books. The year before was Sapiens which is the history of our species, absolutely fascinating book. And I think there's actually things in that book that's applicable to business and organizations though. And then the other one was Master Switch, the Rise and Fall of Information Empires. So those are my last two book clubs that I gave out. Anyway, that's good enough because I don't want to pull up in my app and look, but there you go.
Eric Siu: No that's super helpful because we'll drop these into the show minutes as well but it shows kind of the book that you read aren't necessarily business books per say but they give you so much perspective to do business in the world, right. So I think that's great. So, Aaron, this is fantastic, what's the best way for people to find you online?
Aaron Fulkerson: Oh I guess Twitter is probably easy, ROEBOT, I'm Aaron Roe is my middle name, Fulkerson, so it's ROEBOT, Roebot on Twitter.
Eric Siu: Great. Aaron, thanks so much for doing this.
Aaron Fulkerson: Hey thank you! Thank you!
Speaker 1: Thanks for listening to this episode of Growth Everywhere. If you loved what you heard, be sure to head back to Growtheverywhere.com for today's show notes and a ton of additional resources. But before you go, hit the subscribe button to avoid missing out on next week's value packed interview. Enjoy the rest of your week and remember to take action and continue growing.