Product & Engineering Partnership: An Interview with FloQast
FloQast is on a tear these days.
The accounting close management SaaS firm – and Toba Capital seed, series A, and series B investment – has spent the first half of this year breaking many sales records and releasing tons of important new products and functionality. They’ve grown headcount, expanded leadership, and improved business efficiency across the board.
Of all the areas FloQast has matured and strengthened, the most impressive may be the R&D org (Product & Engineering). R&D process and efficiency is an under-discussed topic in investing circles, which is a shame, because product is truly how startups compete and win over the long run. In the case of FloQast, investment in R&D talent & infrastructure has very clearly led to faster growth, extremely high product satisfaction, higher referral rates, faster sales cycles, stronger ACVs, and world-class renewal rates.
This strength derives from an incredibly strong partnership between Product & Engineering – a relationship that is tense or fraught at many similarly-sized organizations. I’ve been fascinated by the quality of the relationship between Amit Nayar, FloQast’s VP of Engineering, and Rob Feinstein, VP of Product, and how well they’ve gotten their teams to work together.
I decided that it would be fun to learn more about this via an interview that I could subsequently publish and share with others. Enjoy! (and let me know what you think!)
Patrick: “Let's start by covering your backgrounds and how you both ended up at FloQast. What drew you to the company?”
Rob (Product): “I'm not sure there is a typical background for product management, but mine feels atypical anyway. Before starting my career in tech, I spent five years as a newspaper reporter, which turned out to have many more parallels to product management than I imagined. Most of my product management experience was in verticals other than where FloQast plays – mostly SaaS marketing solutions, plus online advertising and recruitment. But the appeal of joining FloQast was much more than just something new. I found it really compelling that there's so much accounting DNA on the FloQast team, so I knew the team would understand our customers' pain points with a trained ear. I knew right away after meeting the team that this was a place I wanted to be.”
Amit (Eng): “I started a long time ago as a software engineer and spent the majority of my early career in SaaS companies, moving up into management and eventually executive roles as time went on. I've worked for many different types of companies, but most of my memorable years have been working for SaaS companies at varied stages of development. The draw to FloQast was easy, it's a great company with a great leadership team and a tremendous opportunity to grow by helping customers with real problems. I've always been more drawn to B2B SaaS, as I feel I can get behind the mission of providing a software and service to a customer to help them with their business needs. It's highly motivating to see our customers use our platform and the positive impacts we make for them.”
Patrick: “From an infrastructure and processes perspective, what were some of the key opportunities for improvement you saw at the beginning of your tenure, and how have you addressed them? With what sorts of results?”
Rob (Product): “I was really fortunate when I joined FloQast that our users already loved the product. The biggest opportunity I saw was to create a strong metrics foundation to assure that we'd make informed choices about what to do next. We started using Pendo to track exactly how the application was being used, and initiated regular Net Promoter Score tracking from inside the app. It's really important to be able to slice NPS scores by user segments to understand where we can be better. That's been a big factor in contributing to steady uptick in our NPS scores - which were pretty high to begin with.”
Amit (Eng): “This was something that Cullen Zandstra, our CTO and co-founder, challenged me with on day one. He was keen to solve the problem of inefficient (too expensive) growth, and he and I spent time identifying better ways to scale Engineering as we grew. When scaling an Engineering department, you have to quickly identify and resolve bottlenecks so that you can grow efficiently. At a minimum you must linearly deliver value to your customers without degrading as your client count increases. We decided to start by building out a highly automated, low-friction DevOps and Continuous Delivery framework within which to work from. This allows our engineers to focus on what really adds value: Building great products for our customers, rather than getting trapped in the commoditized game of delivering software technically as bits and bytes. We have been able to reduce our cycle time to delivery of product enhancements by 84% while at the same time doubling the size of our staff.”
Patrick: “What needs to be in place for an organization to grow headcount without sacrificing efficiency, especially at a very fast-growing company that is looking to serve a demanding and rapidly-expanding customer base?”
Amit (Eng): “A commitment to optimizing processes according to sound DevOps principles. This allows your team members to shift time from deploying software to building it, while freeing up cycles that can be spent on recruitment and team-building. We've been able to achieve this type of growth by deploying highly automated CI/CD processes and technologies. To grow headcount and maintain speed, you must automate as much of your engineering process as possible, and the areas that are most ripe for automation are testing and deployment of software. With test and deployment automation, you are looking at adding compute power to support more personnel rather than more personnel to support more personnel.
“You also should be very in touch with your customer success team and set clear SLAs for responding to customer issues as quickly as possible when they arise. A high service level keeps customers happy, and appreciative customers are more likely to volunteer critical feedback early (instead of churning without warning). Of course, you can't provide quick responses to customer feedback if you haven't fine-tuned your ability to build and deliver software, so we focus much of our time on this. Speed to market is a key competitive advantage we strive for.”
Rob (Product): “Whether it’s on the Product or the Engineering side, you need to get your process down. And you need to build in ways to communicate very well before you start growing too fast. While we don't bog ourselves down with a whole lot of written documentation, we do write things down for clarity. I'm a stickler for product managers creating short presentations to explain the business rationale for a given initiative, so all that's clearly understood by the engineers.
“Regarding what Amit mentioned about continuous integration and delivery processes – figuring out how to complement and support those changes was a major initiative for the Product team. We had to think in terms of smaller batch sizes to make that work. It's a great discipline that helps us build products with even more user feedback. For example, we can feature flag the first few batches of a new initiative, allowing select users to engage with it in Production before we turn it on and market to our entire user base. Not only do we get feedback from actual customers – we get it earlier in the process than ever before. It’s invaluable.”
Patrick: “It seems like one of your strengths has been a very strong Product/Engineering partnership dynamic -- what are some of the key steps for fostering that at a technology company? How does it help?”
Rob (Product): “You have to build trust, and that comes with spending a lot of time together and communicating openly and honestly. A lot of that is helped by clear role definitions: I've always believed that Product is the 'what' and Engineering is the 'how'. But I also think the best interactions are those where, as I put it, you check your business card at the door when you sit down together to solve a problem. By that, I mean that we meet as equals to find solutions. We're not just there to represent our respective departments. That approach has always served me well in having a true partnership orientation between teams.”
Amit (Eng): “Exactly. Trust is everything. But just to think it through for a minute… why do Product & Engineering clash in orgs? In my experience most product & engineering conflict starts at the top when the heads of each organization are competing for political gain and they don’t have mutual respect for what each organization brings to the table. This trickles down to the team members and then you see engineers & product managers arguing more than problem-solving. This political infighting is the great productivity killer. It's totally unnecessary. So as soon as you find like-minded people that realize you're better together than you are separate, it gets super easy. You still have to work at it, because everyone brings a different perspective and skillset to bear, which requires cooperation. But if you can build mutual respect and trust, it a game changer. It’s the only way to delight the customer, which is the ultimate and only goal that matters.”
Patrick: “At the last few board meetings, you've delivered a combined "Product" presentation which covered everything essential to the R&D organization, from infrastructure planning to the product roadmap. In your view, is this the ideal endgame of Prod/Eng partnership, a full co-ownership of the R&D function?”
Amit (Eng): “Yes, we feel that great products are built by a co-owned R&D function. This is how we want to represent it in the boardroom. This also trickles down to our teams because they see that we are truly aligned at the top. This allows them to similarly align and work together to execute on the roadmap. In Engineering parlance we call this "shifting left"; it's never too soon to include Engineering in the ideation process.”
Rob (Product): “Product and Engineering owe the company a continuous cadence of improvement in the product – the right new features and enhancements, delivered rapidly and reliably, with appropriate feedback from users along the way. That can't happen without a true partnership between the two groups.”
Patrick: “What are some of the key metrics you use to track efficiency and productivity in your organizations? Do you consider any of them to currently be 'world-class'?”
Rob (Product): “Our Product team principally looks at engagement metrics and NPS to track how we're doing. Regarding engagement, we use Pendo to target messages inside our application to just those users who haven't yet used a popular feature, to encourage them to try it out. The best features to target for improved engagement are those whose usage is associated with higher NPS, so you can get the greatest number of users adopting the habits of the happiest users. Luckily, our blended NPS scores do qualify as best-in-class for SaaS, and have been this way for several years. But we honestly don’t spend much time congratulating ourselves for this – the goal is always to improve.”
Amit (Eng): “In Engineering we are focused on 2 critical KPIs that we feel best measure efficiency. We track how much time it takes to complete and deliver every software improvement to our customer (cycle time) and we track how frequently we make software changes in our customer-facing production systems (delivery frequency). We want our cycle time low and our delivery frequency high. Studies show that market-leading companies have these same characteristics; it’s the best way for a technology business to be responsive to changing market demands. Our cycle time and delivery frequency metrics are not quite world-class yet, but we are tracking toward world-class. We feel that for a company our size and at our stage, we are doing quite well. Doggedly optimizing these metrics ensures that as we grow, we are doing so efficiently.”
Patrick: “What profile of team member has proven especially productive at FloQast? How is this different from prior teams you've led?”
Amit (Eng): “In Engineering it's simple. Those that succeed truly care about our customers' problems and solving them with their ability to build software. They are smart and get stuff done, work well with others, and are very open to continuously learning and improving. Our field is changing too fast to get stuck in your ways. It greatly helps that we have so many industry experts within FloQast and we have great customers that also provide us feedback to help fine-tune and adapt what we're building and why we're building it.”
Rob (Product): “Because our product helps corporate accounting departments, accountants always have a little extra juice at FloQast. What's so different about FloQast is that we have ex-accountants in every department – including Product and Engineering – and their background helps them understand the problems we're solving with extra perspective. It's unusual in my experience, but a great advantage to FloQast, to have so many people on staff who have lived the problem we're trying to solve.”
Patrick: “Both of you have extensive experience building teams outside of Silicon Valley (LA, Denver, Austin). Do you feel that Los Angeles is a conducive environment for a high-growth SaaS company? What are some of the advantages versus, say, Palo Alto?”
Rob (Product): “Los Angeles is a fantastic market for tech, in spite of the fact that it's not as dense in startups and investment capital as some other regions like Silicon Valley. There's more than enough tech talent in L.A., and the companies generally require themselves to have solid business models rather than banking on building a consumer phenomenon first and figuring out how to monetize later. That tends to keep L.A. companies focused on the fundamentals, and there's no better playbook for fundamentals than the core SaaS metrics. So despite some stereotypes that might lead you to a different conclusion, L.A. companies are pretty grounded and real. I think all that makes it easier to recruit here when you have a good meat-and-potatoes story: A solid market, great leadership, and a strong product - like FloQast. Those are the companies the talent here will gravitate towards.”
Amit (Eng): “The L.A. tech industry has been booming over the past decade, we have a great influx of venture capital to L.A. and we have great colleges and universities in Southern California from which to find talent. Not to mention, L.A. is a great city to live in if cities like Seattle, Austin, San Francisco, Denver, New York, etc. aren't your preference.”
Patrick: “What are your plans for the rest of 2019, and what kind of roles are you looking to fill on your teams?”
Rob (Product): “Our plans are that we're expanding. It's a very exciting time at FloQast because our company is already growing nicely, and appealing to a broader set of customers, so our product must continue to evolve. Our vision is to help corporate accounting teams re-imagine how their monthly close process is done via better tools and communication, and assisted by greater automation, integrations, and artificial intelligence. We're on the lookout for new product managers with or without accounting backgrounds to be part of this journey. We're looking for strong product management experience, a passion for data and solving customer problems, and strong collaborators.”
Amit (Eng): “We are growing in all aspects of Engineering this year. We are hiring Software Engineers, Engineering Managers, QA Engineers, DevOps Engineers and Security Engineers. We have needs across the board and we are looking for product minded, innovative technologists that want to join a team of great engineers building great products. The best way to find our jobs is on our company careers page.”
Patrick: “Thanks for taking the time to do this, guys, and congrats on everything you’ve accomplished so far this year.”
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