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Experts of Experience
#63 Why Customer Experience is Your Best Competitive Advantage
00:49:53
Can a focus on customer experience really drive business success? On this episode, Steve Martocci, the visionary behind SUPCO and Splice, shares why he believes prioritizing user needs leads to groundbreaking innovations and a loyal customer base. Plus, he describes the process to capture attention, build interest, and drive action by truly understanding your users.
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- [00:00]
A
Inspiration goes a long way. Keep your team inspired. Keep them excited and inspired about what their impact is in the world. Don't over build in the beginning. Get enough in the market so that you can start listening.
- [00:15]
B
Feedback can be really helpful in showing you what to prioritize. But it's so important not to lose that intuition and that intuitive sense of people don't know they want this and that might be something that just blows their mind and makes them them want this product even more. But they didn't ask for it. Hello everyone and welcome to Experts of Experience. I'm your host, Lauren Wood. Today I am so excited to have my dear friend Steve Martosi on the show. Steve is a serial entrepreneur with many successful businesses under his belt. GroupMe, a group messaging app that was sold to Skype Blade, the helicopter company you may have heard of. Splice, a royalty free music platform for creators. And now Supper, a companion app for your supplement routine. We are going to dive into creating businesses with the customer in mind and really dive into Steve's genius around business building. And I will say that I have had a front row seat as he's been doing this on his latest venture because his co founder and CEO of Sepco is actually my partner, Nick. So I have definitely gotten to learn a little bit more about Steve's leadership style and how he builds businesses and, and today we are going to dive into all of that. Steve, so great to have you on the show.
- [01:41]
A
I'm excited to be here and I'm also really curious what Nick gets to say behind the scenes on this because you get the unfiltered Steve feedback so you know exactly where to go with your questions.
- [01:51]
B
Perfect. We'll spill the tea for everyone here. So Steve, you've built many successful products across various industries. Social networking, music, production, transportation, now health, tech. And I'm really curious to know how you think of customer experience as a competitive, competitive differentiator for you.
- [02:12]
A
I don't think about it as a differentiator first. I first think about the product that I want to exist. Right. Usually I'm the first user of the product or at least though, you know, want to have something come into existence. I generally don't like to build things that already exist in the world. Like so I don't usually even have something to, to kind of look at as a, as a comp. So for me I think it really just starts as what's the experience that I want. And then I think once you've kind of nailed that, you start thinking about what's the experience for others and the other kind of, you know, different segments of a market.
- [02:46]
B
Yeah. I mean, you being the original user, I can imagine, gives you a major step up because you are, you are building this for yourself. Like, I know with Sepco, for example, both you and Nick are those like extreme supplement nerds where you have spreadsheets on spreadsheets of all the supplements you're taking and the nutrients, and you really were solving a problem for yourself. And so I'm curious to know how you've kind of then translated that into a business. Because it's one thing to say, hey, I have a problem, but it's another thing to go out and actually build the thing.
- [03:22]
A
Yeah. And look, I think in all the business, if you go all the way back to GroupMe, right? GroupMe was made in 24 hours at a hackathon to go to a concert with our friends. And it was just something we needed, you know, and then, you know, the same weekend I was using it for the concert, my co founder was using it for his family, kind of like who was having a baby, you know, delivered and keeping them updated. This was before group text messaging existed. So I think that, like, the real thing is to start with our core problem, start with the thing that Nick and I need, and then really just kind of like start seeing where it falls apart, Right? You give it to a, give it to your mom and she doesn't understand what the word stack is, and you're like, oh, okay, well, maybe we have to tailor that down. Or, you know, you kind of say, I just want to get biohackers right now. Or I'm just gonna focus the initial release on this core market and then think about them educating the world about these things like terminology and stuff as you go. So, you know, in every company it's been a bit different. In Splice's example, I wasn't really the first customer because I am not the kind of hardcore musician. And that was. I had to do a two hour research session with, you know, a music producer to understand their workflow, to validate a hypothesis I had. So, you know, it's a little different every time, but you go with your gut at first and you kind of, you know, even if it's not pretty, it's gotta be functional and then, and then you can kind of, you know, spice it up and adapt from there.
- [04:50]
B
Mm. It's actually interesting, the concept of like, what's the group that you go after? Because I think a lot of businesses struggle with this. It's like, do you go for the super users and the super users only in the beginning or like you said, are you trying to educate people and open it up to a wider net? How do you think about that and how do you make that decision?
- [05:09]
A
Look, I think one of the principles for me that's really important is I like to build tools that are extremely powerful yet extremely easy. Right. Like there's, like, there's something that you can do, especially when you're not just trying to recreate something that exists. You're not just trying to make something 10% better that existed before. You're trying to create a whole new category. And so, you know, that gives you the kind of opportunity to, you know, kind of build these elegant user experiences that can progressively reveal themselves to the newbie. But then when the, when the hardcore user wants to click in and see, oh, you do that, you do that. Oh, okay, you're there. And you know, there's kind of this secret sauce, I would say, of toeing that line. And look, I get a lot of sometimes for people being like, well, what's your target market? Like, why are you just focused on this group? And I'm like, because I actually believe I can build stuff that appeals to the entire sector. And that has happened with Splice particularly. You know, we're such a tool for the brand new music creator and half a top 40 music. And that's hard.
- [06:14]
B
Yeah, I mean you have like Splice as an example. You have both the experts as well as the people who are just exploring music as a hobby. And that's such a, there must be a fine balance there between, you know, speaking to the experts and then speaking to someone who's just learning. How do you approach that as you're building the business and especially the features that you offer? Because that simplicity piece gets really complicated when you're trying to serve multiple different groups.
- [06:42]
A
Yeah, look, I think that it's a great question. Right? And you see that with so, so for Splice and I actually think for, for Sepco, in a lot of ways, if you appeal to the pros, if you appeal to the, the most respected people in the industry, you start to realize that the, the newbies and, and the people getting used to the space, they want to learn from their heroes, particularly in music, and they're kind of willing to jump over hoops to be like, I want to be like that person. Right. It's kind of where like, you know, yes, a lot of people have GarageBand installed and mess around with GarageBand, but you'll actually see people jumping ahead to tools like Logic and Ableton and these more complicated systems because they want to learn what their heroes do. So if you kind of give a way to speak to them and let them do some of the marketing and messaging and you realize like, oh, wait a second, I have the same sounds that that producer is using to make top 40 songs. Like, okay. And you kind of inspire them so that even if there is some learning to do along the way, they realize it's the right learning to do. It's the learning that, like, the absolute best in this industry can also go down this path and it's not going to be a waste of their time.
- [07:53]
B
Yeah. It's kind of like they can see their journey in front of them.
- [07:56]
A
Yeah. You know, we used to say our biggest. We had two things that were our biggest competition, but once we had you, our biggest competition in. In splices, people giving up on themselves. Right. So you just didn't want to let someone get frustrated with the process. And you never want to have someone get stuck along the way. So if you can kind of cater to them and even if they have some learning to do, they just don't feel alone in their journey. It really helps them stick around.
- [08:21]
B
Yeah, it's really interesting, actually, because that's inspiring. Like, when you can see what others are doing, you can see that, oh, this person, in the case of Splice, put out this song and they found that sample on Splice. Like, I can do that too. And with supco, I think you guys have really nailed this in the fact of having influencers share their stacks where you can go and find what people that you're looking up to are taking and what they recommend, and then you can go and do the same thing. So even someone like me, who, despite having lived with Nick for almost five years now, I do not know that much about supplements. I can go and learn and see, oh, here's what an expert is doing. And I can be like that as well. Yeah.
- [09:04]
A
And look, I think that's exactly right. And in music, it was important to have a wide variety of genres and a wide variety of producers at all different levels, you know, just because, you know. Yes, the Sabrina Carpenter's espresso song Song of the Summer was made from three Splice Loops. And that's like super inspiring to some people. They're like, wow, like, I can do that. That's nuts.
- [09:27]
B
Yeah.
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A
But then there's other people who are like, well, no, I'm like a deep underground techno artist doing this and that. And, like, when you realize they can use it too, you're like, oh, I can appeal. And I think in. In Subco, it's similar. Right. Some people are. The supplement space is extremely opinionated. And the opinions range from, like, the hardcore research institutions and doctors to, you know, influencers that are just talking about what they do. So finding a way to help you easily absorb all that, to figure out kind of what path you want to go down, to make your own decisions, that's how we give you agency over your health, and that's how we kind of empower you. So it's a big piece of figuring out how to kind of expose people to a diverse set of opinions and then easily make them be able to make a choice.
- [10:18]
B
Yeah. I think it's actually really special, though, to not just say, here's the opinion you should have, but here's all these different opinions. So then you can decide your own path within that. Cause that gives people so much agency and, oh, I. I have choice in what I believe here or how I do things. And I can see the variation of how others are doing the same.
- [10:37]
A
Yeah. And look, that's. That's the goal. Right. But then to make an experience easy, you could, if you're like, hey, I just trust everything this doctor says, click a button and go, right. You don't need to totally. I'm not gonna get in the way and make you, you know, do all this research you can trust, make the experience simple. But to know that you don't have to take anyone's just word for it, and you can incorporate your own thinking or things that are more specific to your demographics or health conditions. That's super interesting. That really unlocks the ability to make you feel like you've got control of your health.
- [11:15]
B
That's awesome. I want to talk a little bit about the balance between customer feedback and intuition. As you've built businesses, I'm sure you get a lot of feedback from not only users, but teammates, investors. And then there's this, like, innate intuition that you have as a builder, and I'm curious how you navigate that.
- [11:39]
A
Usually for what I do is in the beginning, I have an initial thought of where I think things are. I have. I have my gut based on my experience and what I want to see exist in the world. And it's pretty important for me to, like, get that out, that first version out and then start listening to the feedback. And like, sometimes that might have a little bit of an overbuild in one area or underserved in another area. But like, if I don't get that core hypothesis out, sometimes I sit around being like, well what, but what about, you know, this and what about that? Like, I never got a chance to explore it this way. And so for me, I think usually I try to keep it pretty tight, but keep it kind of driven from the gut. Maybe some user research, but sometimes also in the beginning, I've gotten some user research that has been, set me away from a certain path. Like some of the social features on sepco, we did some initial testing and people weren't that interested in it in the cohort we did. But like now all of a sudden we get a lot of demand and people wanting to see these things. So you have to kind of be careful in some of those early hypotheses. I think it's, I think it's, don't overbuild in the beginning. Get enough in the market so that you can start listening. And then I love to just work down the list until someone says like, oh, it's just too expensive or I didn't have enough money this month. But you got through all the other complaints. That was a big splice thing was like, okay, the backlog for, you know, year one after launch was just like, what, what are they saying? And we just work through. And most of the time the good news is it's aligning with what we were, what our hypothesis was. Like right now in Sepco, a lot of it's around scheduling and people wanting to take things like they're hardcore, right? They're hardcore users who are like, I don't just take something every day, I take something for once a week. And we intentionally knew that that was going to be a limitation. But we said, let's go, let the users ask for it before we overcomplicate the workflow with introducing all these extra variables and taking more time to build it. So that's a great one. That's like, okay, top of the backlog, let's work through it. But then, you know, some things that people might not even know they need or want, like some of our community features that are coming and things that you just kind of have to see it. So it's, it's a, it's a mix, right? It's a fine line and you only have so many resources. Prioritization is always your biggest problem in a startup. And so, so it's a, it's a dance for us.
- [13:57]
B
Yeah, I think feedback can be really helpful in showing you what to prioritize but it's so important not to lose that intuition and that intuitive sense of people don't know they want this and that might be, you know, something that just blows their mind and makes them want this product even more. But they didn't ask for it. And I think we really need to balance that. And I speak to a lot of leaders and I facilitate workshops where we're prioritizing products and this is the conversation that always comes up of like, well, what are we intuiting? And then we need to validate it and listen. But there is always some magic in what we think is right in the beginning as well that needs to be considered.
- [14:43]
A
Yeah. And look, I think that sometimes they also don't get to see where you're going. Right. So you might roll something out and you know, maybe the users are okay with it, but they're not like super happy even. Like. So one of the things we did at Splice with this was we had to make sure we were faster than the file system. Meaning like when you go to listen to a sound, it's gotta load even faster than if you were listening to it on your going through sounds on your local hard drive. And we did that and that was amazing. But some people were still like, oh, well, I want it to just show up in my hard drive view because that's where I'm used to going through things. But if we did that, you'd miss out on these features that we have now where you can find AI based similar sounds and automatically find compatible sounds and all these things. And you have to understand why we kind of hold the line on something for a while because we know what can can come if we change this experience. This stuff always comes up. And look at some point, users love things. We had a bunch of people give feedback in early septco of what they wanted, but they never really quantified it on how much they would be willing to pay for that. If you're like, oh, well, I want everything to be personalized to me. Exactly. Based on my blood work and sent to me and pill packs and done to me like this and you know, all this stuff. Great, awesome. What are you willing to spend for that? And like, you know, it's like, oh, oh, right, right. There's a cost with that.
- [16:02]
B
Totally. Yeah. Hypothetical feedback is very different than real life experience.
- [16:09]
A
Right? Yeah.
- [16:10]
B
And I think hypothetical feedback or, you know, saying what would you want? Is helpful to see. Okay, what's, what's the mindset of the customer? What are they thinking about? But it isn't until you actually show them and, or even if they're a paying customer and they have skin in the game that you're really going to be able to understand how they're responding to something.
- [16:29]
A
Yeah, yeah, I agree.
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B
Have there been any examples where you intuited a feature that didn't end up working out?
- [16:38]
A
Oh, I'm sure there are. There are tons of them. The key to that though, is making sure you find out fast and didn't over invest in them. Right. Like, we had a product come in, Nathan at Subco, and he saw a couple of the features we had built and he's like, guys, like, what, you built this already? You were like, well, we were going to use it for this thing. And like. And we were, we never even used it. Right? So. So it happens all the time. I think the key is to, to learn from every one of them. And you know, it's also, it's an interesting, like even working with, with Nick, right? And working with people who are not necessarily as experienced rolling certain things out. Like your business team wants something for a reason, but you're like, yo, you really got to use it for that. You know, like, are you going. And sometimes there's this back and forth between external requirements that are coming in and the like. All right, but that's another piece of code that we got to maintain. And you know, I've actually really enjoyed my relationship with Nick, watching my. Because, like, you know, at some point, as a product leader and CEO like myself, you know, you don't, you can't do it all yourself. You have to do it with a team. You have to, you know, really grow a team, build a great culture. And sometimes you really want to enable the team to take their ideas, run with them and build great things. And we've just developed this great relationship and Nick has taken the lead on so many things like our trust score that is absolutely loved by the users and he had all the insight to getting that built, which has been great. And then something like I was talking about with the first implementation of lists and maybe some other things, he's like, oh, he learns. And then he hears my opinion about it. And trying to foster an environment where people can test these ideas and your team, you have a system for helping people understand prioritization and the cost that comes with things, and build a healthy product development culture out of it.
- [18:30]
B
I wanted to ask you about building and leading teams, especially in the early days, where you have people coming from all these different expertise and just in seeing the team you've built with Sepco, it's like a world class team. You've brought exceptional people together but they also have different opinions. And how do you create an environment where like you said, people can test and they can learn and you know, maybe there's some healthy friction but you're able to still move forward.
- [19:01]
A
That's the art, right? That's the, that's the secret sauce. And for us what it is is really short feedback loops and a lot of like in collaboration design and by team. And it works right now while we're small. Right. So you know, every six weeks we're getting together for an on site or off site. Like we get together in person and that's when we tackle some of the bigger stuff and that stuff's nice to do in the room together. You have a high amount of empathy kind of when you're together working through like, you know, sometimes I get heated and people have opinions but you kind of like want people to be heard and understood. We do a team wide kind of show and tell every day right now. And so, you know, I've never built the startup completely remote. I usually have. I've done, you know, remote engineering and things like that. But having, having an environment that feels like we're really in it together has been the fast feedback loop process. And look, people have really good ideas and it's sometimes really hard to have to be the one that's like, I hear you, we're going to ship something that kind of sucks a little bit. We're going to get feedback and then we're going to evolve to that next point or I see when we get stuck on something where there's no good answer. Like we could talk in theory for days about like you know, an opinion on something but it really just in that sense feels like we don't have enough data and that's why we should ship something or you know, talk to, talk to a, do an interview or something because we're just circling on, okay, it's your opinion versus my opinion. Like great. Yeah. And I try my best to not have to kind of step in and play any kind of card on like well I'm the CEO or I'm the, you know, or like in my experience like I, there's just so many lines I don't like saying anyone saying on the team and have to kind of justify their, their kind of position.
- [20:45]
B
An AI agent your customers actually enjoy talking to. Salesforce has you covered. Meet AgentForce Service Agent, the AI agent that can resolve Cases in conversational language anytime on any channel. To learn more, visit salesforce.com agentforce now. I've thought it has been really cool to see the cadence at which you meet this every six weeks on site, team gets together and then the daily connection of feedback. I mean, you've been building really quickly because of that. And I initially, I'll be totally honest, when Nick was like, oh, we meet every day, I'm like, really? Like, that feels like kind of a waste of time. Do you really need to do that? Like, yes, it's early stage. Yes, it's a small number of people. But now you're like what, 10 people?
- [21:33]
A
Yeah, about that.
- [21:33]
B
A little more than that. That's like, you know, it's a lot of time, it's an expensive meeting and especially when resources are tight. And I've kind of questioned it. But then I've seen the results of that type of touch point and just the fast iteration that you're able to do as a result. But then how does that scale, like what are you going to do now that you're like, what did you do at Splice for example? Just in terms of bringing people together.
- [21:57]
A
These are all great questions. So I think that when I think about, you know, how does this scale? I really want this to. It may be a move to like departmental show and tells. There's something amazing about these fast feedback loops. And look, people get blocked on stuff and they sometimes rabbit hole for days where if they just talked to another engineer, if they just talk to the product owner about something, if they just talk to the designer about something, they would like unblock and you know, yes, you can kind of talk about it in a quick stand up in the morning, but kind of showing people where they are and kind of where they're stuck. And if you kind of are sensing someone's kind of like not moving at the pace you know they are capable of moving at, we like kind of address it like fast. So, you know, and context gets heavily shared amongst the team. Right. You're, you're in the remote environment, you miss out on the lunch together where you're just like talking about something or going over. There's so much like water cooler conversation that you miss out on that this works for us right now. And I'd love to see it work at scale kind of departmentally where, you know, like if we form into teams that they can meet and do a similar thing where even if the whole company can't do it and like even the last off site we did I think it was more of a timing issue, which was like, right after our launch and we were still all scrambling that, like going right into that was. It might not have been the best timing. I don't know if we got the best use of time out of it. But in person, time in general, I think is so important to building empathy and building great products. You need to have the connection amongst the different people on your team. And so we always just make sure we get that, even if it's not the most productive session.
- [23:38]
B
That in person time goes so far in building trust and allowing you to actually speed up as a result of it. If people have human connections with their peers, you can ask those questions. You can be vulnerable. I'm not really sure how to do this. Or I've been rabbit holing. Can you help me get out of the rabbit hol whole? You know, and if you don't have that connection which remote work has, I think that's been the biggest hit as a result of remote work is that human to human connection that we have with our peers. So finding the time to just be together, even if it's not about work, it helps, is so important.
- [24:12]
A
And then the unscripted lunches and stuff during those things, like, there's something about the meetings that make people feel like they need to perform, stick to a topic. And then just having that kind of unstructured time, too, of like hearing what's on someone's mind where they don't feel like they have to be on stage either, they're just talking to someone.
- [24:30]
B
Yeah, completely. I mean, empathy inside and out is what I always say is so important inside the organization, having empathy for ourselves. And then we can also apply that to our customers, of course, to understand their points of view.
- [24:42]
A
Yeah, and I mean on that front too, like, I'm very much someone who came up in the world of paired programming, which is literally when you're coding, two people are working on the same project together. And it's extremely intimidating at first. People are seeing typos, people are seeing you think through things in real time. But it is deeply, deeply liberating once you've kind of, like, allowed yourself to be that vulnerable with another coworker. And, like, you don't get blocked, you think, things you learn, you absorb so much, moves fast. And so we actually end up doing a lot of, like, live design sessions. You know, like, you kind of need to be okay with being pretty exposed, I would say, at Zebco. And it was very like that. It grouped me and Then you know, Splice got, got bigger and bigger to the point where that got harder to do. And, and I think one of the things I think a lot about at CEPCO as we scale is making sure that the, that kind of culturally is established early enough. I remember this day at, at Splice where I was interviewing like, I don't know, like 2 or 3pm roles at the same time. And it was a day that I realized I kind of like lost something a little culturally because I hadn't codified enough about like how we build software and how we kind of build together was a kind of rapid growth period. And you know, you let the culture get away a little bit.
- [26:03]
B
I mean, I think it's really difficult to do that the bigger you get. But in my opinion, those small groups, like creating your little podcast where you can open up and there's vulnerability and it's. The leader is expressing that and showcasing that, then you can kind of continue it on. But it's really, really difficult to create that level of openness when you're dealing with like 200 people. Yeah.
- [26:27]
A
I mean, at least at scale, being open enough to be honest about metrics, be honest about user feedback, you know, like use the product, things like that, that if you get to disconnect. So there's the whole like disconnect to your internal team and then there's a disconnect from the actual user base right back to customer experience. And like, yes, that, that is I think, a recipe of a fail of disaster for a company on a disconnect. And they're not their heads in the sand on so much either. From a telemetry perspective from just from like, you know, our support channel right now, it's just like everybody sees every piece of feedback that kind of comes in and it's like, yeah, it really helps drive home where we're falling short, where we have more work to do.
- [27:12]
B
Yeah. How do you keep that customer connection though, as you grow? How do you make sure that everyone is really staying in the mindset of the customer and staying connected to the customer's needs.
- [27:23]
A
There's like these really processy ways of doing it, which is like, oh, have a user research team and make sure you're in the field gaining knowledge. And those things are all true, those things are all kind of helpful. But I think there's also, there's a potential like even once a month to just like make half the day or a full day of like. We did this thing at this place called Beat Relay, which was a Simple thing. Musicians, non musicians. Everyone in the company signed up for a team and that team made music together. Right. And beat relay as much as it was just a fun thing. And cool was also a nice forced dog food session of like trying to work on music collaboratively, you know, across location with people.
- [28:09]
B
Can you define dog food for us? Because you guys say this all the time. I had to ask Nick what it was the other day.
- [28:14]
A
It's just using your own product, right? Like particularly like, it's kind of like maybe it comes from like eat your own dog food or make sure, make sure your food tastes good, you know, use your product. It's funny, I realize, I don't know why I think that term is just so common, but maybe it's not. We've had many employees come in and just be like, what, what are you, what are you talking about here? Um, but yeah, so, so using the product I think is one. Create fun experiences for people to use the product. And then also, you know, we, I, we used to have a really good hackathon culture at GroupMe where we would do like, I think it was a quarterly hackathon which was kind of like, just like, what do you want to have exist? You know, And I think that that always yielded really amazing features and insights from people's just personal struggles with our own software.
- [29:03]
B
Yeah, using the product is so, so key and it's definitely difficult if you're in like a SaaS based business and you can't necessarily use the product at least as in depth as your customers are. But I've also at times had teams like actually go and be with the customers.
- [29:19]
A
I was going to say, watching those like customer feedback sessions and you're just like, oh, oh, exactly.
- [29:27]
B
Wow, this is really difficult.
- [29:30]
A
Oh, I know, that sucks. You're like, oh, we haven't worked on that page for so long, you know, like, like yeah, those things are just, those are brutal.
- [29:38]
B
It's brutal, but it's such important information. Another thing that I did when I was running customer experience at Too Good to Go, especially when we had like a big backlog of tickets. And I guess AI is like somewhat solving this, but the, what we did as a result was great. We would do care parties where every single person in the company would, we would have like a two hour block and we would give them a little rundown of here's how you answer tickets, here's all the easy tickets that you can answer. And we would essentially have like a race, like who can answer the most tickets in, in this amount of time and then we had prizes and we would have, like, breaks with, like, fun things that we would do and just like, make it exciting because it can be really draining to do this, to answer tickets, and just the same type of thing over and over and over again. But it does a couple of things. It one creates a deep understanding of what the customer is dealing with, and it also creates deep empathy for what the care team is dealing with. And it really just does wonders for anyone out there who's listening to this. If you don't have your team answering customer support tickets, I highly recommend that you do. Just getting everyone to jump on board for a period of time goes so far in really developing that customer and that employee understanding.
- [30:57]
A
Yeah. And like, look, successful organizations I've been at, you know, have done that. I think it was a guilt group. They did rotations through support. You might have even done a week through support, which was nuts. It was just a lot. And we, we did some of that too. And then, you know what was super annoying that would happen in this is, you know, customer support would be dealing with something all the time that wasn't getting prioritized. But then like, I'd go talk to some musician, some famous musician, and they'd be like, well, so and so doesn't work. And then you'd be like, guys, we gotta fix this. And they'd be like, I know, like, we've been saying this for months, you know, and you're like, ah, crap. So kind of making sure that you listen to your CX people because, you know, just because they're at the front lines, right? They're getting that feedback and, you know, make it. Make sure you have a really easy way to give. I think one of the things that AI potentially is taking away too is, you know, so many of these issues are getting solved with AI, like the actual issues. But where's the feedback coming in? You know, not so much like, oh, I don't know how to do this thing, or this is like. But like, actually the suggestion, like, we are getting the most insane suggestions from our user base right now. Insane in a good way. Insane in a. Like, oh my God, I can't believe you spent the time to write six paragraphs on what we need to do around improving your supplement routine. This is amazing. And so having it. But that only works because at the top of our every page in our app is a feedback button that doesn't ask you a million questions to get it through just lets you dump it in. People do it and that's great. And we answer them.
- [32:36]
B
Yeah. So, yeah, you have to make it easy for people to give you feedback. And feedback is absolute gold, as you are saying. You know, if someone is going to take that time, one that's like, there's so much juice to squeeze out of that message that you can then bring back to your team. And we should make it easy for people to share their thoughts first and foremost.
- [32:59]
A
One of the quick things we would do on that kind of. So we've always done like a weekly town hall, which again, for some people is way too often, but we would do it an hour every Friday. And a section that we used to have in all of them was like, you know, we had Splice rules. Splice sucks. And then Splice, which would be like the highlight support tickets of.
- [33:21]
B
Yeah.
- [33:21]
A
Of the. Of the week. Right. And like, some of them would be, you know, listen to the good stuff too, because the good stuff's inspiring. Right. Then you can totally miss the good stuff. Right. Some of those deep, inspiring stories, like, share them with your team because what you really, really want is an inspired team building a great customer experience. And like, you know, a team that doesn't feel that they just don't put in the effort to go the extra mile. And so inspire your team is like, really, really important. So show the good stuff. Don't hide the bad stuff. You know, like, bring it to the top. And then, you know, and then, you know, for us, there's just a lot of levity. I think, too. We make a lot of jokes as a team. And the splice shrugs. I think we called it would be the support tickets that was just like, I don't know what you're talking about. Like, I don't even think you're using our product right now.
- [34:12]
B
Does anyone understand this? Totally, totally. Well, Totally. Well, I think what you're highlighting is something that I really beat a drum on is that customer experience leaders need to focus on being more influential. And being more. More influential means drawing people in. Like, you want the rest of the team to be interested in what the customers are saying, not just, oh, we're getting this complaint. Fix it. We're getting this complaint. Fix it. We're getting this complaint. Fix it. That's not inspiring. No one wants to act on that. And like you're saying if you go and speak to a musician and they tell you that feedback, then you're like, I'm inspired to make a change where, you know, we got 50 tickets that asked for this feature. Do it like it's not inspiring. And I think that CX leaders are in a difficult position because they are at the intersection of these two parties, but they're also in such a powerful position because they're at the intersection of these two parties, the company and their team and the customer. And through effective communication, we can really inspire change within our organizations. And so I think it's something I know for myself that was a KPI at one point I set for myself, myself, I'm like, I need to be more influential this quarter. That is my focus. I'm making friends with everybody. I am positioning every message that I send as what's in it for them, what's in it for the sales team, what's in it for marketing, what's in it for product to help me fix this issue. And little changes went a really, really long way for me. Getting some projects that I had been complaining about for years to get the green light finally, just by changing how I approached it.
- [35:50]
A
I think that's a great point. And I think that, look, I think I've had a real luxury doing really cool businesses where you can be like, you know, J.J. abrams says he needs this feature, you know, and you're like, oh, wow, we got to build that. You know, it's inspiring. Like I definitely how to do it and some enterprise SaaS companies I'm not exactly sure, but maybe it's, you know, everything you're just saying there, just like, you know, raising that kind of both that empathy bar and just the friendliness of the relationship between both the coworkers and the customers.
- [36:22]
B
So I want to shift gears a little bit and talk about revenue streams because I know at Splice you had a pretty unique approach to what I mean, the business itself, you were enabling people, you are enabling people to purchase royalty free music and use it in their creations. But tell us a little bit about how you structured the subscription model and how you did that in the best interest of your customers.
- [36:46]
A
Yeah. All right, so, you know, there's three different examples on this. First was Splice Studio, first product, which was just a collaboration tool that I made one of my biggest career mistakes on, which was just not charging for it because I thought it wasn't good enough. And you know, honestly, if I had charged for it, I think we would have gotten a stronger signal if people committed to it and I think we would have invested more resources in it because once you do generate revenue, all your focus shifts to generating more revenue. Right. So when Splice Sounds generated revenue, that was like our focus Right. And so that was. So for Splice, our biggest kind of real competition at that point in time was piracy. People just stealing sounds, right? So we had to build a user experience that was kind of good enough to, you know, kind of like what Spotify would do from listening to music, right? Like it now was like, oh, I'd rather do it if it's not on Spotify. I don't know if I'm going to listen to. I might go to torrent site anymore, right? So we had to build a great product. And you know, initially the price point was like 7, 99amonth. And you know, we had to build all these tools to let people put their accounts on hold because musicians would literally go month to month being like, all right, it's Netflix or Splice this month. Right? And so we kind of kept that price low. And then also what we did is we shared revenue, major amounts of our revenue with the content creators. Creators. And so all of a sudden we were a new revenue stream for these people who then wanted to market their content on the platform, which created this like pretty epic flywheel. And that still exists today. I mean, I think if you pulled the numbers now, I think we would have paid over a hundred million dollars to artists for sound. And that was just amazing. And like, you know, some people would look at the model and be like, well, you know, okay, you're used on these top 40 tracks, but the artist isn't making any money off. The sound creator is not making any money off because it's royalty free. But then the answer is like, they would never have used the sound if they had to go cut a percentage deal to use, you know, your drum. So like, so, you know, it really found this sweet spot where everyone can, can win in a scenario. And then we moved over to this other thing called our plugins, our rent to own model for plugins. So the problem again, that was pirating sounds, then there's pirating the software. So like music software, you know, when it goes to like the top piracy pirated apps in the world, it's like, you know, Microsoft Windows, Microsoft Office, Adobe, then the music software, it's like right there. And so, you know, these guys, most of the software wasn't like on SAS yet. And it didn't really even make sense to necessarily be on SAS because it was like not getting updates all the time. It wasn't network connected. So we kind of did this rent to own subscription model. So I went out and I was like, I need to build a business model that Even Reddit can't complain about which, you know, you want to go figure out if someone likes your product, go see what they're saying about you on Reddit. Right?
- [39:44]
B
Yeah, it's a great goal.
- [39:45]
A
Yeah. And so it was like, okay, low monthly fees that are building up to eventually perpetual ownership. You can stop it at any time, you can pick, pause, you can resume. And then even needed the feature of you could pay it all off if you like, didn't want to be like in the Splice ecosystem anymore. And by doing all those things, we got people to pay for music software, which was freaking great. And honestly, Reddit couldn't really, didn't really complain about it. They were like, we were the first purchase for a lot of people in this category of software. And look, that was a lot of both. That was a nice mix of the intuition and the user feedback and. But I remember convincing our first software provider to be on Rent to Own. He was like, yeah, you guys are going to sell like two of these a day max. And you know, that was still would have been good for him, but we were selling hundreds, hundreds. And so again, like, it's got to be that, right? That right mix of not being afraid to kind of like a sweet spot for me too is kind of like moving into an industry. You know, some people in tech are just like, oh, I'm just going to disrupt, disrupt, disruption. And they're like, I'll burn every bridge down along the way. I really like to go in and kind of respect what exists, you know, the music creators, you know, even at Splice, the way we think about AI, we have a very ethical perspective on what we're trying to do with AI there and what I think we're doing in sepco too. Like, there's too many people in supplements who are just like trying to burn down every institution and like, you know, medicine is terrible and like all this stuff, we're like, no, we're going to figure out how to work with kind of everybody and let the good, honest players kind of thrive in our ecosystem. So yeah, I feel like that's been another one that's been interesting is building products in which the brand stands for something and kind of stands as a trusted, as infallible as you can be because you're truly looking out for, you know, everybody in your ecosystem. The brand is just as important as another layer in the, in the customer experience. Because it travels.
- [41:59]
B
Yeah. I mean, and people trust the brand or they don't trust the brand.
- [42:04]
A
If you. We used to have A line that said, oh, I love this one. It was from my buddy John from the Disco Biscuits. He said you can't refund inspiration. Like there's no amount of dollars I'm going to give. Maybe there's an amount of dollars, but there's no amount of dollars that I would have been able to give you. That made sense to refund the fact that I lost, you know, six hours of your work and you might never get it back. You know, you just might never think of that thing again. And so we, we had to be really, really well trusted.
- [42:33]
B
And it sounds like you really had the customer's best interest in mind with the ways that you were charging them. Yeah.
- [42:41]
A
And look, I think that in, in what we're doing in Sepco. Right. So we're totally free right now. But I want to make sure that whatever model comes down the pipeline is that it's never just trying to sell you more. Right. I don't think you're going to build the trusted. I want to be just as excited when you stop taking something that's not working as when you're going to try something new. Right. And like that, that is an alignment that I just feel that kind of value driven care or outcome driven stuff in health care is where, you know, capitalism and health have their friction points. And so, you know, I. Similar to what I think we did in music, I think we really want to do stuff innovative on that front.
- [43:24]
B
Yeah. I mean I have a bone to pick in like for a lot of subscription based models where you get locked into something and you like can't leave or else you like there's a punishment for leaving or pausing. Like I have been a member of ClassPass for a long time and I think this has changed. But I don't know because I'm no longer a customer because I couldn't pause, I would have to throw out all my credits in order to pause. And I was going away for three months and I was like, well, I don't want that. And it took so much for me to. They eventually paused it but I was like blacklisted. I never actually. There was no prompt to renew and I just didn't because I was kind of annoyed and I'm like, that's such a missed opportunity.
- [44:11]
A
Yeah. And look, we built that right? Like because you do, you do lose your splice credits if you cancel. But we made, we were like, we need pause right away and you can continue to pause and pause and pause and pause as much as you want.
- [44:26]
B
Yeah.
- [44:27]
A
And, and that Was that was important. Right. Because I literally when someone says to you they're picking between Netflix and Splice this month, you just do not want to leave them hanging. And totally. And also like I think with these products in the supplement space, like look, because customer acquisition cost is so high and because people do such a poor job of sticking to the things, whether they don't take them right. Or they don't see their results on the timelines they expect, people are thinking about CAC LTV ratios in like months when they really should be thinking about them in years if not decades.
- [44:59]
B
I honestly don't understand why that isn't the case all the time.
- [45:05]
A
I mean it's it and look like business model transformations are hard, right? Even the transition for Adobe to the classic change from upfront software to Adobe Creative Cloud, it's the famous J curve, right. Which is like you're going to lose money for a period of time and people might be pissed but you're going to come out the other side and it's going to be worth the investment. And E Comm company is trying to really understand how to transform their models and maybe even lose a little bit of their margin in the short term in order to play that longer game. It's really hard for them to do. And so for us there's some things we're thinking about to, to help them in that process. And I think similar to what we've done in Splice is to create these kind of everybody wins scenarios which is, you know, it takes us effort to build stuff. It's not easy and we take a lot of that on and sometimes our providers will do better than we do and that's okay because we're playing a really long game ourselves and. Yeah, and then just be customer focused. Right? Customer supplier focused, kind of just looking out for everyone.
- [46:20]
B
Yeah. Well I think that's a great point to end on. We have two last questions that we ask all of our guests. The first is I'd love to hear about a recent experience that you had with a brand that left you impressed. What was it?
- [46:31]
A
All right, I'm going to go into airlines, which I don't know if many people say this to. So1 is jsx which was the first experience for flying for, for Jackson. I have a five month old and we went up to a conference in Napa and just the experience of not having the TSA and we do this in Blade on the east coast and you know, the experience of having these kind of semi private but low cost experiences and then them checking all the bags for the baby, like, free. It was just like, okay, great, this is a good first flight. But that was like a 50 minute flight, right? Short haul type stuff.
- [47:14]
B
Yeah.
- [47:15]
A
Yep. And then the next one was JetBlue, and they have upgraded their planes into this JetBlue Mint Studio seat that's in the front of the plane that like, yo, you can. That thing converts into like a bed that is wide enough that it has, like a little extra bench. It's only the first row seats that Jackson, me and Kelly got to lay down and, like, read books together on the flight. Like, holy cow. Like, that is a great experience. And I think so many people overthink their airline. Like, oh, I need. You know who overthinks his airlines is Nick. You know, he's basically the points guy over there.
- [47:57]
B
Tell me about it. Yes.
- [47:59]
A
And I'm just like, no, let's just fly a jet plan blue. And it's great every time.
- [48:04]
B
Yeah.
- [48:05]
A
Yeah.
- [48:06]
B
Awesome. Well, I actually have never heard of jsx, so good to know.
- [48:10]
A
Look over here.
- [48:12]
B
I'm on the website right now being the blade guy.
- [48:16]
A
Talking about JSX is kind of. Rob, it's time to come to Southern California again. Let's go. That's awesome.
- [48:25]
B
All right, and my last question for you is, what is one piece of advice that every customer experience leader should hear?
- [48:31]
A
Oh, man. I mean, look, we covered a lot of it here. I think the using your own product, I think that. Let's just go back to that, like, keep your team inspired thing, right? Like, I just think that when your team's inspired to build software instead of just crushing the tickets monotonously, that whatever it takes to keep them excited and inspired about what their impact is in the world featuring, like, what the customers are doing with this, telling the story of, like, you know, someone's life, you made better by building a feature. That inspiration goes a long way.
- [49:08]
B
Oh, my God. It goes so far. When we're having a hard day, which is inevitable, that we are all going to go through dark times as we're building businesses, growing businesses, you know, things are not always rosy. But that inspiration that. Why that. How are we impacting other people's lives is really what will carry you through. And I know I've leaned on that many, many times myself. And I think it is really the leader's role to help tell that story and draw those lines, even when it feels like you're in the depths of it all. I really appreciate that. Well, Steve, thank you so, so much. For coming on the show. It's been so awesome to have you. You're my first friend on the pod, so you win.
- [49:53]
A
There's plenty more because we have some amazing people in our network, so let's.
- [49:57]
B
We really do.
- [49:58]
A
Thanks, Laura.
- [49:59]
B
Awesome. We'll have a great day. I'll talk to you soon.