How we validated Pipefy’s opportunity

Back at my previous company, I often felt frustrated because I couldn’t manage the company the way I wanted. As I’ve pointed out before, there were some situations when the team didn’t follow the right workflow, forgot tasks assigned to them in emails or made easily avoidable mistakes using controls based on manual forms and management spreadsheets.

The pain behind the creation of Pipefy:

If that weren’t enough, we couldn’t establish a standard of execution: every team member had his or her own way of managing their parts of the work and, considering no one pointed out what they were doing wrong, they continued making the same mistakes, over and over again.

These problems gradually caused so much inefficiency, information loss and rework that I came to realize: we were doing things wrong!

The information we had in that company was fragile (everyone could access the spreadsheets and modify them), obsolete (more than one person updated a spreadsheet at the same time, invalidating the previous alterations) or duplicated. Mostly, whenever we needed a specific piece of information it was hard to find, unreliable or both.

At the end of 2013, I sold that previous company and started to consider all those problems I had and started to imagine: what if I could create a product that helped people manage their processes, was easy to use, intuitive and accessible at an affordable cost?

How did we validate Pipefy’s initial idea:

Back then, I felt the opportunity arise and realised I’d found my new company’s idea. I’ve been working directly with management and turnarounds for years up until the moment I felt that specific entrepreneur pain.

But how could I make sure I was right? How could I know whether my idea was a hit or a miss before actually making it come true? This time, I realised I couldn’t afford to make any mistake . . . and I’ll let you know why.

At that previous company, we raised a lot of money right from the start and I ended up losing control over the company way too early.

Now, with Pipefy, I decided I should wait a while longer before considering venture funding. I realized I could (and should) fund the company on my own, with my resources.

The opportunity was too good to pass: SaaS, B2B, working with something I had experience (and knowledge) on. I could’t let it slip, ever since I’ve been in our prospect customer’s shoes, I decided to go on with it.

Since I was running on my own lean and limited resources I had to work fast and build a product that fit those customer’s needs right from the start. Just like a silver bullet, I only had one shot to succeed or fail.

So, in order to validate the idea and reduce risks, I interviewed more than 40 potential clients with these common characteristics: they were all managers or owners of small to midsize businesses, leading teams with more than 5 and less than 100 employees, with stable operations running for at least for 1 year.

With that knowledge and the interviewees profile, I started to explore:

• Do they all experience the same pain?
• How much has this problem costed their businesses?
• Did any of them decide not to solve this problem because they didn’t consider it urgent enough?
• If they have tried solving it before, how did they do it? Which tools have them used?
• Show them Pipefy’s prototype and ask for insights and feedback.
• Most critical: Would they buy the product Pipefy would offer? How much would they be willing to pay?

Then I validated a few other hypothesis too, such as:

• Business Process Management System (BPM) was too expensive and complex to adopt.
• Small and midsized business ERPs only solve vertical problems (accounting, invoices, cash flow, and “the everyday problems that every company has”).
• Many companies’ operations processes run without any standards and relied mostly on email threads, manual forms and spreadsheets. All those external controls didn’t integrate with their ERPs.
• Management software is complicated to set up – most companies affirmed that they always needed to ask for consultants or “the IT guy”‘s help.
• Project/task management software, such as Asana and Trello, didn’t offer the features they needed to solve the process management problem.

What I discovered while I validated my hypothesis:

Yes! There was an enormous market out there with a huge unresolved pain. All those businesses had the same issues I had before!

Having to deal with broken, hard to find information led them to a lot of rework, delays, execution standards weren’t enforced nor followed, depending on fragile spreadsheets, having unclear reports. There were many different protagonists—but the script was always the same.

I ended up discovering that all options available were either too expensive and hard to adopt or didn’t fit their needs. They had all tried to solve those problems using management systems (custom ERPs and BPMs) to replace their forms and spreadsheets.

Those management systems, however, implied high license costs as well as thousands of dollars spent on IT consultants to customize and implement the solutions.

They also tried using simple project management tools, such as Trello and Asana. Those are great tools but they were created for managing projects and simple tasks, not for managing companies’ routines and processes.

These platforms didn’t offer any process templates or workflow charts and reports to help keep everything organized and under control.

All things considered, those entrepreneurs and managed saw themselves forced to use inefficient controls just like I had, mainly because they were using solutions that were not built to solve their problems.

Some of them (the ones with a little more technical expertise) even found ways to make do with the software alternative I had also used in the past: JIRA.

JIRA’s interface wasn’t user friendly and the application itself was insanely complex, hard to use, slow—but it offered a workflow engine that was just powerful enough to deal with processes’ needs. Using it was like using a combat tank to take a girl out on date. ?

I decided I should give Pipefy a shot…

I took a leap of faith and…I pre-sold Pipefy to 17 of those 40 companies I’ve contacted. And I didn’t even have a working prototype.

Conclusion:

The targeted users feedback strategy was brilliant! I can honestly affirm that two out of three parts of our value proposal were built based on those user’s considerations.

Features such as customized fields and the organization dashboard launchpad came to be because we found common needs for them, identified during the validation process.

Just like Eric Ries always says:

Talk to people, talk to people, don’t hide yourself under your product or business plan.

This isn’t a new concept: Kiichiro Toyoda, the creator of the Lean Manufacturing method, voiced out this same mantra over 50 years ago to his managers at Toyota: “Go to the Gemba!” which translates roughly into something like: “To solve a problem, always go to where things happen, in the field”!