Holidays are an excellent time for founders to look back and reflect on what has happened to their startup over the past year. Datahut is a startup with limited resources and unlimited dreams. 2020 tested our limits, and Oh boy, what a year it has been!
Covid-19 hit all industries hard, really hard. At Datahut – we work with companies in the travel, real estate industries, etc. Our business requires our customers ( mostly consumer businesses) and their competitors to have a significant number of transactions. The number of transactions in these industries slowed down significantly due to the covid-19 effect.
When a pandemic like covid 19 hits, our ( yours and mine ) customers are under tremendous pressure, CEO’s and CFO’ are trying to cut vendors to save money. If we don’t give our customers fantastic customer support and great value – we will be cut.
Here are some good and bad things that happened to us during this pandemic and our learnings from these events. We hope you might find some of these useful.
Losing customers who are startups
We worked with some startups providing data for their product backend. Our data was a core part of their solution. Their business depended on industries that were severely hit by covid19, and they had to shut down. As startup founders ourselves, it was hard to see a fellow founder shutting down.
We understood their position because we’ve been in their shoes multiple times. Many of them joined new jobs, and when they came across an opportunity where our services are a fit – they made a referral. We didn’t ask for it, but they did, and this was great learning. Some of these companies had tremendous potential. They started at the wrong time- that’s the only way to explain their failure.
Learning 1:
Be with your customer during hard times; they will help you back. Maybe not immediately, but definitely. People will never forget how you made them feel.
Customers who scaled down
Many of our customers scaled down their requirements. Even though we had yearly commitments – we accepted their request. It meant a significant revenue loss for us, but we did it because it was the right thing to do. We don’t have to do it anymore because the industry is recovering and fast.
Some of our customers canceled the contracts when covid hit, and they came back to us when they resumed the operations. We’re forever grateful for trusting us.
Learning 2:
Respond to situations logically and think about long term goals. Short term sacrifices are worth it. People remember how we treated them when they wanted a favor.
Retention is cheaper than acquisition.
Many of our customers had their business at a standstill hence no cashflow. Some of them wanted to cancel the contract. However, when we talked to them, we understood we have multiple ways to solve the problem, starting from scaling down the project to reducing the data refresh frequency and providing an alternative payment option.
If the customer wants to cancel the contract – dig deeper and find the reason. Offer alternatives If it is a cash flow problem. If it is another reason – find solutions. Keep the customer because if you do – you’re leaving space for another competitor to fill it.
Learning 3:
Customer retention is cheaper than customer acquisition – every single time.
New Customers and those who scaled up
E-commerce is one industry where we saw a surge in data requirements during the covid-19 pandemic. We signed up new customers and scaled up for our existing customers. Initially, the e-commerce industry’s revenue helped us balance the revenue loss from losing customers and offering alternative payment options to customers with no cashflow.
Later, when businesses started to open – we’ve seen a surge in the hospitality industry and financial services industry investing more in data. The trend is continuing with insurance and other fields.
Learning 4:
Be prepared for spotting trends and acting on them. Use analytics tools to identify patterns from the business data.
Founders Should be on the frontline.
When we see your customers showing signs of disengagement – get on a call with them. One or more founders get on a call with them to understand what is going on. If there is tension – we diffuse it. If they need help – we have provided it.
I can’t stress it enough – founders should be on the frontline because it brings tremendous face value. Customers know your company cares about them if they see your face on the zoom call.
Learning 5:
During crises, get the founders on customer calls, identify and fix problems early on.
Enterprise Focused Sales
Having large enterprise accounts is a blessing during hard times because they have huge pockets. Our contracts with fortune 500 accounts helped us steer the ship without having a financial crunch. They always pay on time, and having a few big names is always a relief. Heaven -If these deals are multi-year contracts.
We also focused our efforts on growing revenue from existing accounts, and it went well. Fortunately, many e-commerce accounts of ours grew well during the pandemic.
Learning 6 (For B2B startups):
Make sure that at least 50% of your revenue comes from enterprise accounts—sign multi-year deals. Closing enterprise accounts is extremely hard, but once they’re in – they won’t go unless you screw up in some way.
Expanding the startup partner program
We’ve signed up more worthy startups under our startup partner program in 2020, and it helped them get a little bit of flexibility. A few of the startups who were with our program in 2019 raised investments in 2020 and are now growing. We’re proud of them.
Learning 7:
Help out startups who need your help. Some of them will turn into your biggest customers later on.
The New ways of data investments
The traditional pricing and marketing models are affected by the covid pandemic. Companies are now figuring out what their customers want by analyzing user-generated data from different platforms. This creates a unique opportunity for data companies.
We’re working with companies investing in unconventional but brilliant plans for using user-generated data for business growth. This trend is going to grow, and we’ll be there to capture it.
A brand working with us changed their training syllabus after analyzing reviews from online sources. It is having a tremendous impact on their business. How cool is that?
The competition
We’re a bootstrapped and profitable company; many of our competitors are not. Some of them had severe revenue losses. Once covid hit their customer base, some had to shut down the company or scale down operations.
Dear competitors, Thank you for raising the bar every single day and making us put our 100%.for those who had shut down – all the best for your future endeavors. You guys put up a good fight.
The growth
Comparing to 2019, we grew in revenue, team size, etc. in 2020, we are most proud of being more customer-centric when our customers needed us. Relationships matter for long-term business growth, and short-term revenue losses should be accepted as part of the business.
The Step forward
We’re looking forward to an amazing 2021. We are very grateful for the support and trust that so many of our customers and partners have placed in us. We look forward to working together to advance the democratization of web data.
From everyone on the Datahut team, thank you!