38 - Progress, Problems, Plans - F17
It’s been three weeks since the last progress, problems, plans (PPP) post (not the usual two due to the Jubilee bank holidays last week in the UK). They’ve been a hugely important three weeks as we pivot our strategy for Mayday. Here’s the latest progress, problems, plans (PPP) post. It covers progress and problems from building Mayday over the last three weeks. And plans for the coming two.
Goals For the Last Two Weeks
These were the goals set in the previous PPP post:
Get our first paying customer - not met. See below
Be on track for our Xerocon (20 July) product development roadmap - met
Our Pivot
What do I mean by pivoting our strategy? In The Lean Startup, Eric Ries sets out three levels of a startup’s direction:
Vision
Strategy
Product
The product changes constantly through a process of iterative development. The vision rarely changes. Entrepreneurs are committed to seeing the startup through to that destination. The strategy may, from time to time, need to change as better routes to achieving that vision become clear.
At Mayday, our mission to emancipate expert knowledge hasn’t changed. We have iteratively built Mayday Recharger, a product that automates intercompany recharges for businesses that have multiple related entities in their group and need to recharge costs and revenues between them. We have been marketing and selling that product to startups and SMEs who use Xero as their accounting system.
From conversations with initial users and demo calls, we’ve concluded that intercompany recharges are a feature for this target market, rather than a product category in itself. There is absolutely a need that Mayday Recharger can solve brilliantly. But at this level of the market, it’s not going to be a big enough need to move most people to act, set up and pay for a product dedicated to addressing that need alone. We enumerated three choices for where we go now:
Move to the front end of transfer pricing advice to go with the back end of intercompany recharge automation that we’ve already built;
Move upmarket to larger businesses, where intercompany recharges will be a standalone product category;
Zoom out from intercompany recharges to the broader pain points around month end for our current target market of startups and SMEs.
We emphatically landed on the latter choice. We see a clear and exciting opportunity to build brilliant product to solve the pain that exists between accurate bookkeeping and month-end ready management information. Intercompany recharges are one element of that. Interdepartmental recharges within the same entity are another. Then cost (accruals and prepayments) and revenue (accrued and deferred revenue) journals are a hugely exciting opportunity to deliver value. Along with bad debt provisions, loan interest accruals, tax provisions and other elements of closing off month end that we’re not conscious of yet. For artwork for our stand at Xerocon in London next month, we landed on the message to articulate this near term mission: “Let’s mend month end”.
In the immediate term, there’s no change to our product development roadmap. We need to complete the intercompany recharge feature. We’ll then judge the best place to go next in terms of month end pain points.
Progress
We got invaluable user research to inform key enhancements we’re making to Mayday Recharger over the coming months: breaking out salary information so that different individuals can be recharged in different ways, one click posting your recharges back into Xero (vs CSV uploading), custom fields for you to use to apportion costs or revenues in recharging (e.g. floor space or team headcount) and overhauling our onboarding experience. Now to build it!
We’ve made good progress on our preparations for Xerocon London in July. We’ve also registered to exhibit at Xerocon Sydney in September. We’ll go out to Australia for two weeks to make the most of the fixed costs of flights and exhibiting. Australia is Xero’s largest market. We’re hugely excited about the Let’s Mend Month End category opportunity. So want to seize this opportunity to lay foundations in the Australian market early;
We’ve started working with Grace part-time. We did an initial test project with her suggesting some website improvements, which she did a brilliant job on. We’ll be working together on a range of commercial and marketing tasks. Grace is currently traveling in Mexico post university. Plan is that Grace would join as our first Commercial team member once we’re in a position to hire for a full time role.
Problems
None. Feel we’ve done a solid job of hearing what the market was telling us and excited about the choice we’ve made about the opportunity to pursue.
Plans
The revised goals for 20 July are:
We’ve got feature-market fit for intercompany recharges so that we are able to move onto what’s next in our Let’s Mend Month End near term vision;
Have raised at least £150-250k of funding;
Have hired our first two team members with that funding;
Have a group of target users that we are regularly observing and learning from for our customer archetype;
Have set our initial company values.
We’re not targeting customer numbers right now for Mayday Recharger. It’s a feature of a broader product for the market we’re targeting. The most important thing for us is to get to product-market fit for that broader product. Targeting customers for the feature could skew our focus in how we allocate product development capacity. That said, I anticipate we’ll pick up some customers for the intercompany recharge feature alone in the coming months. It just won’t be our core focus and therefore not something we actively target.
Goals for the next two weeks are:
Start fundraising. Get investment deck finalised along with target list of investors;
Be on track for our Xerocon (20 July) product development roadmap;
Be on track for our preparation for both Xerocon UK and our Australian trip;
Outbound reach out to at least 100 targets for Mayday Recharger for intercompany recharges.
Thanks for reading and stay tuned for the next Progress, Problems, Plans post!