86 products left, but today Retool
Hi friend 👋,
When I first started sharing the tools I identified for you, I had no intention of talking about unicorns. This one, though, is unique. I recently stated that I would discuss WebSummit. There were numerous sessions that wowed me. However, the one with Retool's CEO David Hsu in particular stuck with me. The moderator was from Sequoia, and it seemed like a fireside conversation. So my expectation from that event was to gain some information from a VC perspective. But it was all about what I learnt from David.
Nowadays, PLG is quite popular. Growing in a single client with the help of the product, acquiring new clients without having any sales cost is incredible. The secret is to isolate the network effect feature that will drive product adoption, and embed it deep within the product's DNA. Products aimed at corporate customers, such as Slack, Monday, and Notion, can be extremely successful. Your product has a low barrier to entry, so virtually anyone can begin using it right immediately. However, if you have a tool that requires integration, such as recommendation engines or any type of SDK, and your ticket size is large enough that you must go through the entire procurement process in the target lead, David believes PLG is too risky. When you only have a few data points, it's difficult to figure out what went wrong. So, as a small startup, Retool relied heavily on outbound emailing.
For those who are unfamiliar with the outbound process, it is a little more complicated than you might think. It's not just about sending initial emails to potential leads, but also about creating sequences and including ABM touches. Because there are hundreds of details, most company founders and executives are not advised to perform outbound marketing. Because the most difficult part begins after the first email. The company's first founders opted for the more challenging path. They were able to verify their messaging by outbound email. In order to learn how potential leads viewed the issue, they tried out a variety of positioning messages. The problem was revealed when Rappi's CTO responded to a request for a meeting within a day. They adjusted the product design based on the feedback they received. They are now one of the most deservingly followed companies in the B2B space.
Today, Retool is our product.
Retool is a platform for creating fully functional web apps with very little coding. All you have to do is link your databases and APIs. The rest is up to your imagination and needs. You can create apps in minutes by dragging and dropping. The primary use case is for internal apps, and consider how difficult it is to construct any internal app when your resources are limited. As a product manager, I always feel bad when we have something in our planning that is exclusive for internal usage. As a result, most internal tools are unsightly, difficult to adapt, and difficult to upgrade. Retool drastically alters this.
They were able to secure $45 million from Sequoia, the Collison brothers, and other prominent investors in July 2022, just before the recession hype began, at a valuation of $3.2 billion. Absolutely fantastic.
We had been living with the the internal application development problem for years, and every white-collars had that problem. It was right in front of us. David and his team brilliantly solved the problem, and in 4-5 years, they constructed this unicorn. So, when you feel like there's nothing substantial left to solve, start checking right next to you, your everyday routines, the moments you feel uneasy, the times you feel off. Perhaps there is a problem just waiting for you to tackle it.
We’ll talk again tomorrow.