The following profile of Kit founder Michael Perry was written by Rachel Balik after interviewing Perry during Lean Startup Week 2016 in San Francisco. This interview is just a taste of the kind of case studies you’ll be learning from at our eighth annual flagship conference, Lean Startup Week, happening Oct. 30 to Nov. 5. Our spring sale closes May 31 at midnight PT. Grab your pass now to take advantage of the discount.
Today, Michael Perry is a success story and a model for aspiring entrepreneurs. His company Kit, a virtual, digital marketing assistant for small business owners, was acquired by Shopify in April 2016. He now runs it within the larger company, with greater scale and reach. But not too long before that, he was broke, had already shuttered two previous endeavors, and was scrambling to keep Kit afloat with minimal funding.
Turn Setbacks into Opportunities
Having had experience with both failure and success, Perry is extremely clear on the principles and practices that help or hurt a company off the ground. Rather than be discouraged by setbacks that would have most of us running for a 9-to-5 gig, Perry was determined to learn from his mistakes and try again. “Failure is painful and embarrassing,” he says. “So you better make it a good learning lesson.”
One of his key lessons was on the importance of taking responsibility for all types of setbacks, even when it would be easier and maybe even justifiable to blame someone or something else, when in reality, the issue is probably in the product that needs to be addressed. ‘“When you’re not having success, you find every reason to explain why [that’s happening],” says Perry. For example, it’s not uncommon for startups to feel hindered by lack of human resources or investors.
Although the cushion of VC money in the bank typically makes life (a lot) easier, Perry says that in a way, it turned out to be a competitive advantage for Kit. It forced him to “ruthlessly prioritize” when it came to developing the product. Kit grew with only one engineer and one customer service rep, which meant the team had to be skilled at deciding where to invest their time and energy.
Learn to Work Smarter
When it came to making product decisions, the team applied a 9:1 rule, ensuring that any feature they built would impact not one customer, but nine. They also steered away from features that solved an immediate problem in favor of ones that supported long-term business goals. In other words, “are we patching holes or are we building a bigger boat?” Finally, they focused on two outcomes: simplicity and serving the customer.
Kit’s mission was to make it easy and inexpensive for small business owners to do digital marketing, even without any marketing experience. In talking to his customers, he realized that while they desperately needed help with marketing and online advertising, hiring an employee do the job was out of their budget and learning to do it themselves was an impossible time drain. Kit began as a web application that tried to streamline the process of things like Facebook ads and email marketing campaigns.
Kit’s success depended entirely on making the user experience as frictionless as possible. As busy small business owners, Kit’s customers have limited time and resources — and they’re usually not digital marketing experts. Essentially, Kit needed to make the customer feel as though they truly had an experienced marketing expert on their team. The mobile app made it easier for them, but it wasn’t quite fast enough. “The one thing we wish as humans is to get more time back,” says Perry. He needed to find a way to give his customers back more of the time they desperately needed.
Validated Learning vs Vanity Metrics
Then, one day, Perry realized there was something his customers could do without any learning curve: send a text message. That realization fueled Kit’s most important product shift — from a mobile interface to SMS. Rather than use a mobile app to set up digital campaigns, they could simply have a text message conversation about it — with a chat bot. The conversational interface made it possible for them to execute something new, like Facebook advertising, in a way that was familiar. “We took a complex thing that people couldn’t understand and reduced the process down to one or two text messages.”
At the time, mobile was the hot space to be in, but since texting was a better user experience for his customers, he took the risk. “I always do what’s best for my business,” he says. “Not what’s best for people’s opinions.” That said, he remembers distinctly sitting in his living room, using the product the first time, and knowing that they’d truly done something special.
The risk paid off, and Kit turned out to be the perfect complement to Shopify, an eCommerce platform that enables small business owners to sell online. With the help of Kit’s digital marketing assistant, Shopify’s customers could do a better job of promoting their online stores and become even more successful. Kit was built to integrate with Shopify, so joining forces was almost an obvious next step.
Although some founders might view an acquisition as a time to finally sit back and relax, Perry remained committed to one of his most important values: urgency. In fact, he is adamant that the number one thing that can kill a company is moving too slowly.
Today, he maintains all the principles that made Kit a success within the Shopify organization. The two companies have culturally impacted each other, but most importantly, they are aligned when it comes offering Kit’s services to as many small business owners as possible. Acquisition is the goal for most startups, but for Perry, it wasn’t just about personal success, it was about delivering on the promise to users and the mission of the company. “When people shake my hand and say you’ve helped my business, that beats any dollar I’ve ever made.”