Happy Turkey Day! 🦃
Hope you all have taken some time off and gotten a bit of rest.
Journey is XO's 11th acquisition. Let's take a look at what has been accomplished so far in the past two weeks.
The past two weeks represent what a good transition feels like and I think it's important to document the things that have gone right so far.
As a reminder, Journey.io is a product for sales teams to help buyers through a sales process. It's a fairly horizontal tool but this is the primary use case that has close to product market fit. There are also tons of people that use it for fundraising and other things. The product is somewhere in between a deal room and a sales deck but allows for real personalization at scale. When used correctly, prospects feel taken care of and next steps are crystal clear to both parties.
- The previous founders still respond very quickly
This is helpful in a variety of ways. Transitions involve a ton of failed credit card charges and passwords. Despite your best effort there's likely one or two services / tools that the founders forget about or we forget about. Having that kind of tight response time makes all of these a non-issue. It's a simple one but is just one of the many qualitative differences between a great handoff and a troublesome one
- Customer Responsiveness
I can't think of another product where we announced the acquisition and had so many parties interested in speaking with us. Danny has been talking to 5 ish customers a day since we sent the announcement. Most are just great customers who love the product and want to meet the new team. Others want to chat through our plans for the product. All of it is an indicator of just how important this product is to customers.
Email open rates were not something we previously tracked as a diligence item but is a contender to be added to our list. An engaged email list is an amazing tool for us as the new owners to understand the wants and needs of our new customer base.
A great initial 2 weeks have the same growth rate as the several months prior to the acquisition. Journey.io is up almost 4% this month so far. This is a great indicator that the assets we bought and our assumptions on future growth were (at least initially) correct. This lets us work on a plan for the future versus fighting fires from day one.
An update from Danny on talking to customers and getting more granularity on the various verticals we could start to focus on for Journey. It's a slightly horizontal product that has many potential use cases but the best ones for the business by retention so far are the use cases around sales (as opposed to fund raising for example).
What I think Danny is highlighting is the importance of listening after a new acquisition. We come in with a lot of ideas and perhaps assumptions that are always good to test before acting on.
Improving Our Diligence Process
It's not clear exactly how we could use this hindsight bias to improve our diligence process but here are a few ideas:
- Gather data on previous email sends and response rates
- See how easy it is for the founders to arrange meetings with the top 3-5 customers
- Dial in on why growth was happening on at least a monthly basis including experiments, anything paid, or other notable events (press, blog post, video release, etc)