5 Lessons I Learned When I Created My App or SAAS: “Focus on impact first, market validation second, engagement last” with Melissa Sabella and Mitch Russo

Focus on impact first, market validation second, engagement last. So much of the monetisation of tech is through ad revenue that even areas that aren’t dependent on it still operate as if they are. The fundamental metrics used (engagement, time on site, clicks) are all based on the model of advertising even when it’s not relevant. These metrics are tempting because they are easy to measure — the problem is that they mask the more important measure of the impact you are trying to have on someone’s life.

As part of my series about the “5 Lessons I Learned When I Created My App or SAAS”, I had the pleasure of interviewing Melissa Sabella. Melissa is the founder and CEO of The Honeycomb Works, a tech startup on a mission to help people belong and invent at work. Prior to launching The Honeycomb Works, Melissa led innovation teams in global corporates to deliver market leading, profitable new products to organisations around the world. She has successfully led multiple transformation projects, is experienced in sales, and consults on complex product and services solutions for human centred design, learning and behaviour change. Launched in 2016, The Honeycomb Works helps organisations build inclusive and innovative cultures habit by habit, person by person, so that individuals thrive and organisations succeed. Using behavioural science, data analytics and their Honeycomb app they multiply small changes to create a big impact. She is an Italian-American living in London, still trying to follow baseball and be a better global citizen.

Thank you so much for joining us! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I spent most of my career in large global corporates working on innovation projects. I loved the process of getting past the symptoms of a problem to the real underlying need and then coming up with a creative solution to meet that need. What I found was that the biggest challenge was internal — people within the organisation would get excited about a new innovation and expect an overnight success.

But while there is usually an initial buzz, creating a product that is profitable is difficult. It’s easy to spark interest but hard to deliver something that truly has value…that takes time and hard work. Sadly it’s often at that point that internal funding dries up and supporters abandon the project.

I started The Honeycomb Works because our product idea, The Honeycomb, was about to suffer that fate; our division was to be shut down just as it was gaining momentum. At that point in my career I had seen one too many potentially great products die and wasn’t ready to let go of this one. My team asked me what I was thinking and I said, ‘I don’t think I’m done with this yet.’

Their response ‘Good. Us too. What do we do?’ gave me the push I needed to start the business.

What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?

I was brought into a traditional training business on a ‘transformation’ mission. The new MD had a vision to shift learning from the model of people in a room for a couple of days listening to a facilitator to something that was more impact driven and had digital at its core. The question was…what was that something?

To answer that I did what any good product person would do — I talked to people. Our focus was workplace learning so my first question was, why do we do it? What’s the point? I spoke to people in different types of organisations and in every part of those organisations; MDs, CEOs, HR, Learning and Development and, most importantly, the ultimate ‘users’ of that learning — the people who needed to be at the centre of our design.

Their goals were to do a job better, have a better business result, or personally improve. Essentially to have a positive change that would lead to more success and less stress at work. Which led to the next question…is what we are currently doing actually working? Sadly the answer was no.

So I dug into why it wasn’t working and started drawing. I started by breaking down everything what we were teaching into very specific outcomes so people could bite off a small bit, work to improve, then move on to something else. I came up with hexagons because I could map a lot of topics into the smallest amount of space, and show relationships between them without being linear. Work is anything but linear these days.

It ended up looking like a Honeycomb and was supposed to be an internal document but my MD said…’that’s a product.’

As a product person I thought I knew better about what was and wasn’t a product, but I tested my assumption. It turned out people loved it. They asked if they could get a log in…to my diagram.

This was my aha moment — the realisation that people needed a sensemaking tool for all of the information coming at them, and that this Honeycomb visual was drawing them in, inspiring them to action because they could see a tangible, manageable way to improve, step by step.

Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?

I had no idea what I was doing and, since we were a ‘management buyout’ and had things already in flux — we started with a client and a trademark challenge — I had to learn VERY quickly. Advice helps, but ultimately you have to understand it’s your decision and your responsibility. When you own the business, people are counting on you, and there is no one to bail you out.

I don’t quit because I want to fix work. There isn’t a day that goes by that I don’t hear a story about how someone is struggling, either with their job or because of the behaviour of someone they work with — people who care deeply about what they are doing, are paid decently and have mostly good relationships with their coworkers. They should be happy and excited by their job but instead are experiencing high stress levels, misery that kills innovation and creeps into their personal lives.

Personally I’ve worked with absolutely brilliant teams that inspired me every day, but also in environments where trust was lacking — I know the difference this has not only to your workday, but to the rest of your life.

Add to that the extra burden underrepresented groups have to face and work is anything but a meritocracy. Fixing the injustice drives me forward and the close, collaborative relationships we have with people in the organisations working with us to make things better keeps me going.

So, how are things going today? How did your grit and resilience lead to your eventual success?

We’ve just celebrated our three year anniversary and I’m proud to say that we have been profitable, funded by client revenue, from the start. I wouldn’t say it’s the easiest way to do it — our clients are a mix of small businesses and large global corporates so a lot of my time is spent convincing stakeholders, managing contracts and chasing invoices. You have to have faith in your product, your team and your vision because there are many days when things go really quiet. Getting through those times is the toughest part.

One thing that really helped is that early on we decided to support a great charity, Code Your Future. They help refugees and other disadvantaged people learn how to code so they can become junior developers — we support the classes on their non-technical skills using our Honeycomb. When things were quiet, we were still able to do something positive for people and contribute to making tech more diverse.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

The day we launched the business, we had someone get in touch to say they were interested in what we were doing and wanted to hear more. Thrilled, we worked really hard on a deck, decided who was going to say what, and had a long conversation with our potential client. After the meeting, I got a nice email back saying something to the effect of…’It was an interesting conversation, but I have no idea what your product or solution is. What am I supposed to buy?’

We had done a good job of defining the problem and our philosophy, but failed to articulate what we planned to do about it. Our product was too abstract and trying to do too many things — we spent so much time immersed in it that when we tried to explain it to other people we wanted to tell them everything.

We resolved then that one of our core principles would be to make the complex simple. Now we always try to distil what we are doing down to the impact that it will have. We don’t always succeed but we improve all the time. We are, though, great at simplifying for the user — when you log into the Honeycomb the simple visual interface and few things that you can do hides the complex data connections and research that make it all work.

What do you think makes your company stand out? Can you share a story?

I think the difference is that we take a systematic, holistic long term approach to culture change. We aren’t afraid to do the hard work to be sure our technology is built on a solid foundation of evidence and we’ll challenge clients if we think their approach will do more harm than good.

But instead of just tackling the symptoms, we get to the underlying causes. We do the hard work to look at actual research and the specific habits that drive inclusivity and innovation. It’s this checklist of specific actions that make the biggest difference in helping people turn goals that can be intangible and abstract (e.g. be a more supportive manager or improve diversity) into something that people can actually do.

For example, research shows that women often don’t get picked for stretch assignments or get given as much constructive feedback — what you think of as being considerate may actually be an assumption that is holding back someone’s career. So we have a habit: doesn’t make assumptions about who would be interested in a promotion or a stretch assignment. Often people will come to that one and realise that they’ve been underestimating people, and that’s enough for them to change their behaviour. Other behaviours are harder to be aware of, and that’s where we help people get specific feedback.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

First and most important, trust your people to do their jobs. If you have your hands in everything, you’ll constrain your growth and probably make your team miserable.

Second, the brain needs breaks, so take time away from work and you’ll be more effective — this means weekends, parts of the day and also holiday. This will help you build a sustainable business. If you can take a holiday where you completely disconnect, you’ve set up good systems and empowered your team. This is the only way you can focus on the big picture and actually scale a business.

Third, seek out people who will be honest with you, so you can get genuine feedback — and be open to receiving it.

Finally, model the behaviour you want to see — if you don’t want a long hours culture, don’t work long hours. If you want collaboration, share your unfinished work and invite feedback on it.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

Early in my career I was fortunate to be surrounded by quite a few brilliant women in leadership roles and I know that had an impact on how I perceived the possibilities for my own career. One person in particular, Natalie Anderson, the leader of the team I was on in my first strategic role, really shaped how I try to lead and manage.

One thing she said to another manager that really stuck with me was to ‘ask your direct reports questions that you genuinely want to know the answers to’ — this perfectly encapsulates why I looked forward to having her pop drop by my office. I knew that she was never trying to catch me out or check up on me — instead she was going to ask me a meaty question that would give me a chance to think deeply about something and present my perspective. She also let me make the mistakes I needed to make, and long after I left her team, continued to advocate for me.

Thanks to this early influence I try to be sure I show my team how much I trust them, respect their decisions and give them the space to do what they need to do. To this day I still sometimes ask myself…what would Natalie do?

When I had the opportunity to do something with the Honeycomb IP, my first instinct was to find someone to buy it so I could continue my job with the salary and security that came with it. Thankfully I had dinner with another mentor of mine, Bill Hughes, who asked me a question I had no answer for: ‘if you believe in it, why wouldn’t you do it yourself?’

Ok thank you for all that. Now let’s shift to the main focus of this interview. Approximately how many users or subscribers does your app or software currently have? Can you share with our readers three of the main steps you’ve taken to build such a large community?

We’ve purposely kept the team small, avoided investment, limited our client list and focused on measuring the impact on our community of users. That has allowed us to do meaningful research in collaboration with our partner customers without the pressure of selling as many licenses as quickly as possible. Our priority is to ensure everything has a solid evidence base, and that we are measuring both the intended and unintended consequences of the Honeycomb.

We’ve had demand to open up an individual user purchase option so people whose companies haven’t bought it yet can get their own Honeycomb — we think that will help us get to the next plateau (we prefer plateaus to hockey sticks at The Honeycomb Works). Because people using the Honeycomb can ask other people for feedback and the average person asks five people, we see it as a way to multiply our users once we make a few tweaks to the journey for reviewers.

What is your monetization model? How do you monetize your community of users? Have you considered other monetization options? Why did you not use those?

Our model is B2B and we primarily sell subscriptions to our Honeycomb technology.

Based on your experience and success, what are the five most important things one should know before one wants to start an app or a SAAS? Please share a story or an example for each.

1. Focus on impact first, market validation second, engagement last.
So much of the monetisation of tech is through ad revenue that even areas that aren’t dependent on it still operate as if they are. The fundamental metrics used (engagement, time on site, clicks) are all based on the model of advertising even when it’s not relevant. These metrics are tempting because they are easy to measure — the problem is that they mask the more important measure of the impact you are trying to have on someone’s life.

Our app helps people feel like they belong and are free to invent at work while helping the organization create a better culture that leads to achieving their business goals. In addition to tracking whether people are improving their day to day habits, we also do external diagnostics on the culture and map the behaviour change to business metrics to be sure we are having the desired result.

So, if an organisation’s goal is to diversify a product portfolio by empowering everyone in the company to bring new ideas to market, we would measure the improvement in behaviours related to proactivity and innovation while also the number of new products launched.

What is the ultimate ‘job to be done’ of your product? Figure out how to measure whether you’ve been successful in delivering it.

Then you have to test whether people are willing to pay for your solution — it may do exactly what you intend, but if the impact it delivers isn’t valuable enough to pay for, you’ll never be able to support it.

And finally, work on engagement — an experience that delights your users. I’m a big fan of ugly products (at the start anyway) because if people get value out of them, they won’t care about aesthetics. Once you understand how they’ll use it and what is most important to them — which you can only do while they are really and truly using it, you can optimise the experience.

2. Go as slowly as you can.
In the startup world there is a massive amount of pressure to be an ‘overnight success’ or ‘go viral’ but in fact there is tremendous benefit to moving deliberately and staying under the radar. You can be close to your customers and prioritise building features that deliver value to your users while pushing your admin features to the bottom of the backlog. Your tech support, marketing, and sales will be manageable, allowing you to focus where it matters — building understanding and empathy for your users.

3. Your values aren’t your values unless you sacrifice for them.
We talk to a lot of leadership teams about building inclusive cultures and the first question we get asked is, how can we communicate that we care about this so our employees believe us? The truth is that there is no communication strategy that will do that — people will watch your actions and if you always choose revenue or growth over doing the right thing, they’ll rightly see that your values are expendable.

There was an organisation who wanted to work with us to create a more inclusive culture, but when we got to the senior leadership level the perspective was that women needed to ‘be more adaptable and tougher’ to fit in. I said we’d happily support programmes for women to learn universally useful skills if we could also support people in the majority within the organisation to be better inclusivity allies and share evidence of why it’s not the ‘out groups’ that need fixing. We challenged the leadership with evidence, refused to deliver what they asked and didn’t win the business.

4. Consider unintended consequences, protect the most vulnerable and prioritise protecting your users’ privacy and data.
In tech we have this mentality of building something to see if it can be done, and leaving the consequences for someone else to sort out. Because of the speed and impact of technology on people’s lives, everyone in the business has a responsibility not just to ask if they can do something, but if they should do it and to measure the impact of their interventions.

Because we work with organisations to support their employees, we have to be aware of the information we’re gathering and with whom we are sharing it. It can be used against employees, even when that wasn’t the original intention. This can impact job security, progression and the ability to obtain future employment. We do not share any individual employee data with our clients. All the reports and analytics they get from us are anonymised — users have complete control of what they share.

While I support pushing admin/back end features as far down the backlog as possible, we have to prioritise security. Too many startups skimp on this point and apologise later, which is leading to a well-deserved deficit of trust that will severely impact the tech industry’s ability to improve people’s lives.

Put in the necessary technical, process and policy protections, of course, but also make sure you help your employees understand the impact of compromising customer or colleague data. Are you motivating your team to truly care about people’s privacy, or just using a compliance approach?

To be sure you are protecting the most vulnerable, you need to have the perspectives of underrepresented groups baked into your product development which means…

5. Hire outside your network and your comfort zone; prioritise diverse backgrounds and perspectives.
I know it can be hard, especially when starting out, to convince people to join in on something that has no track record and may be no more than a vaguely formed idea. Even later, when you are generating revenue and showing some promise, joining a startup takes a leap of faith so it can be easier to convince your family and old friends to work for you, maybe even for free.

However, it’s really dangerous to tap this group exclusively — you’ll make mistakes that could hurt people who don’t have the same experience of the world that you do — so plan early to build a diverse network and find a way to pay them for their expertise. If you can’t hire, bring people in for projects or consultancy.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

Where to start…

I want businesses to protect their employees, and to take an active approach to making the future of work more rewarding and more fair.

Let’s evolve the world of work so that it takes advantage of technology and scientific progress in understanding the human brain and social ecosystems.

If we don’t actively work towards making it better, we’ll see exploitation, bias/discrimination and misery for people in the workplace.

On inclusivity there is a lot to do. There is agreement that if an organisation is to be fit for the future it has to be inclusive and have diverse perspectives.

But we are seeing a rather shocking lack of progress despite an awful lot of talking. In fact, in some ways it’s getting worse. Here’s what needs to change:

Organisations need to stop thinking there is something to ‘fix’ in the groups that aren’t getting ahead in their organisations. Stop asking people to be superheroes to be a success in your business.

Stop placing the burden on the group that already has an extra load to carry to do their jobs. Instead look at your system, your power structures, and equip the people who have benefited from it to support those who have been hurt by it.

Don’t just focus on gender, or you’ll end up creating something just for white women.

Many business leaders claim to embrace a positive culture, and say their people are really important to them but do more harm than good by implementing trendy new policies without proper testing. While these new ideas sound good, they can often have the opposite of the intended effect and end up hurting culture rather than helping it. Whatever you do, start small, test the impact, learn and grow.

We are seeing the rise of the employee activist, which is wonderful. Everyone in the organisation needs to be concerned about ethics and the implications of what they create and the impact the organisation has on society.

How can our readers follow you on social media?

@msabella

@thcworks

https://www.linkedin.com/in/melissa-sabella/

This was very inspiring. Thank you so much for joining us!

About the author:

Mitch Russo started a software company in his garage, sold it for 8 figures and then went on to work directly with Tony Robbins and Chet Holmes to build a $25M business together. Mitch wrote a book called “The Invisible Organization — How Ingenious CEOs are Creating Thriving, Virtual Companies” and now his 2nd book called Power Tribes — “How Certification Can Explode Your Business.” Mitch helps SaaS company founders scale their own companies using his proprietary system. You can reach Mitch Directly via mitch@mitchrusso.com


5 Lessons I Learned When I Created My App or SAAS: “Focus on impact first, market validation… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.

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