As part of our ongoing Kiwi Founders Series, we are chatting to successful New Zealand founders who are ‘doing it’, as we learn what has and hasn’t worked for them as they’ve built successful international businesses. This post is adapted from a crowdcast with Alliv Samson, COO & CoFounder of Kami.
What started as a last-minute entry to the Velocity startup program at The University of Auckland has turned into Kami, an online document viewer and annotation tool with more than 2 million registered users, with backing from Sam Altman (President of Y Combinator) and Scott Nolan (Partner at Founders Fund).
Pivoting your product:
Kami was originally Notable PDF, a Powerpoint annotation tool aimed at tertiary students. The team has since pivoted twice and now focuses on the North American K-12 education market. Rebranding and refocusing has seen the company take on massive growth – “Notable had 5,000 users within 1-1.5 years, now we get 5,000 new users in a day with the same effort.” The first pivot was to focus on the American market, which they did in 2014. As of early 2016 they’ve focused all there marketing, growth, engineering and development on the K-12 education market.
Pivoting was a hard decision to make – the team were afraid to let go and move on. Now they have a company ethos that focuses on asking “Is the product working? How do we fix the customer’s problems? How do we take our product and put it ahead of the game?”
Niche markets & content marketing:
Before focusing on the K-12 education market, Kami had a very broad audience – teachers, lawyers, doctors, working professionals and tertiary students all loved using the product. Different users engaged with brand and its content marketing differently – lawyers and professionals were heavy users of LinkedIn and also were avid newsletter readers. The Kami blog and twitter account is what teachers prefer to engage with. Facebook is much less effective than Twitter.
Working with a niche market also lets you focus on going to industry conferences. While the team originally thought conferences were a waste of time, they’ve since found it as a massive growth driver. Not only is there massive “face to face” value where you learn about customer concerns, but there are also a number of workshops. Alliv tries to get in touch with as many workshop instructors as possible 1-2 months before the conference to talk to them about the product. From an engineering point of view, focusing on the education market requires less advanced features than a product targeting lawyers or doctors.
With no advertising budget, Kami focus 100% of their marketing on content that helps teachers in their day-to-day lives, which is a massive driver of referrals.
Moving to the US / the benefits of staying in NZ
With a US focus from day one of their pivot away from Notable PDF, the long-term plan for Kami is to move to America, however they are currently based in Auckland. One of the key benefits to staying in New Zealand but traveling to the USA frequently lets you collect ‘on the ground’ information, but also stops you from being distracted by all the shiny things in Silicon Valley. Moving to America is a very disruptive process that would drastically increase their burn rate. By staying in New Zealand, and flying out as necessary works for the current stage of the business. That said there are consequences, with the team aiming to be as close to NY time as possible in order to properly support their East Coast customers. A typical day for Alliv has her waking up and starting at 4am, with the first webinar scheduled for 6am. In lieu of moving to America, the team are considering moving to Vancouver or Toronto as a way of minimizing the disruption of moving to the US (visas are significantly easier) while Silicon Valley is only a short flight away.
Top tier Silicon Valley investors while still in NZ?
One of the most interesting parts to the Kami story is their heavyweight investors with Sam Altman (President of Y Combinator) and Scott Nolan (Partner at Founders Fund) sitting on their advisory board already. Alliv explains that initially the team wanted to get into Y Combinator and had unsuccessfully pitched to the program in the past. In late 2014 they learnt that Sam Altman and Scott Nolan would be in Auckland for an event. With a goal to get detailed feedback from Sam that would help them with their next YC pitch, the team hustled their way into the event and secured a 15 minute one on one chat. During that short chat, the team spent that time showing the product off, their growth and vision for the future. They managed to get valuable feedback that left them planning on applying for the next YC batch. While they weren’t pitching Sam for investment, but were in the process of closing their seed round. Around the same time Jordan (their CTO) was on a holiday in San Francisco, when Scott asked if they could meet to talk more about potential investment. Again, the team was not expecting investment, but two weeks later, while at a conference in Florida, they received a call from Nolan asking if he could get in on the seed round.
Notable PDF (their original product), had a lot of problems when they pivoted to Kami. They responded to every complaint that was sent their way, asking why they installed the product, asking why they needed that specific feature – “everyone in the company needs to know what our users are thinking.”
This ethos has continued as Kami has started monetising, initially asking users what they would pay to upgrade to a “premium” plan. Users paid anything from $2-$100 for a license. Now they have a range of plans for teachers and professionals, with education prices depending on district size and types of users. While a lot of founders run from education, there is budget available, provided you can find the right person and determine the size of their budget.
One of my favourite stories from Alliv is a button that doesn’t do anything that is live in the product. When you push it, it asks you to email support. What is fascinating about this feature and way of building a lean product is that their customers would email them and ask why the button wasn’t working, Alliv and the team would then pounce on support and engage in a feedback loop which essentially involved asking these customers why they were using the button and what they would need it for. To me this was a genius way of getting customer feedback by having deliberate things that are broken to engage with your users in a two way process.
The New Zealand Customer Vs. The US Customer
Kami have many lessons about the differences in customers and how they use the product depending on where they are from. Alliv mentions that New Zealand customers would stop using the product or use it and not give feedback, where as US customers were always giving feedback and would always ask for things. When you are building out your product roadmap and future features this makes it much easier to plan for the future and build a product that people actually want to use and will pay for. This was one of those small insights that is an exponential opportunity for startups targeting the US market, invite that feedback and figure out ways to attract it.
By focusing on growth over a perfect product Kami have built a product that is ubiquitous in the lives of millions around the world. By optimizing for what customers actually want rather they have been able to scale to with a small four person team. Finding and focusing on one specific niche stops them from having to add complex features that benefit a small subset of users, and also allows them to focus their marketing efforts.
Supplementing an Auckland HQ with frequent visits to the US market keeps the company in close contact with their customers while also avoiding the shiny objects of the valley and the disruption and cost of moving to America.
Catch the recap here: