This is Kristin O'Brien, and you're listening to the podcast. This is a special keynote episode in which we feature 1 leading founder giving a solo talk on actionable lessons for building iconic companies. Today, we have Raul Morgan, founder and CEO of Superhuman, introduced by FX partner, Pete Flint. Hi, everyone. This is Pete Flint. Before I Beller Trulia, I spent a lot of time learning from other founders.
One of my favorite things that NSX has gained a chance to talk with great ones like Raul Morgan. Raul is the founder and CEO of Superhuman, where he and his team are building the email experience in the world. Before Superhuman, Rehaut found it reported, which was acquired by Linkedin in 2014. He's also a fellow Brett who lives here in Silicon Valley. So today, instead of the usual back and forth podcast conversation, we're bringing you a deep dive into Hallbora's mind.
His strategic thinking on Product Morgan fit is verging on legendary. And in this episode, Raul shares his biggest learnings about customer onboarding, why products should be designed like James, and the frameworks he wants every founder to know about pricing and positioning. So let's jump in. When you launch your startup, it's counterintuitive to throttle customer acquisition, but Raul believes the traditional launch is flawed. In reality, he says, It's about delivering on your brand promise.
Here he shares the 4 distinct phases of onboarding he thinks all founders should know. Well, I've seen a lot of companies, especially in our space, which I would broadly define as productivity, that get this wrong. I no longer believe in the traditional launch. Let's say you've built a new email client or a new task manager or a new calendar app, the surface area for these products is absolutely massive, bigger than almost any domain you could think of.
And what that means is that you also get a massive surface area for bugs as well as massive variability in how users want to use the product. Now most companies would have launched their app. And because the demand for these products is so high, they would quickly get tens of thousands of users. That's not the hard part. But guess what? These users will find thousands of bugs, and those companies quickly become overwhelmed. They're not able to fix the issues fast enough.
And so those users become disappointed, churn out of the product, and then tell everybody about their experience. That's the very definition of a net detractor. So in my experience, it's significantly better to do what we do, which is onboard customers at a measured but increasing pace every week. That way you have the bandwidth to fix any issues that folks find, and then you can focus on making your customers exceptionally happy.
Pete of that said, there are 3 circumstances where I think it does make sense to consider a traditional launch, and that's when you need one of the 3 Cs, capital, candidates, or customers. If you need 1 or more of those, then maybe you should consider a traditional launch in order to be top of mind for a period of time. For founders considering onboarding, I would do it in 4 discrete phases. In phase 1, the founder takes the lead.
In this phase, 1 of the founders, the product's founder, which is also ideally the CEO, should do the onboardings themselves. The goal of this phase is to test whether the company is even ready to start doing onboardings. The assumption is that of all the people in the company, the product founder should be able to do them best. After all, they hold the most integrated view, and they should have a wide range of skills across sales, active listening, and user experience design.
And so for superhuman, I did the first several 100 on boardings myself. And in this phase, I would not be concerned with how long the onboardings take. In fact, I would often take up to 2 hours and each onboarding had about 6 parts. So first, I would start by giving a demo of superhuman and sharing all the things that make it magical and delightful.
2nd, I would then remind the person that it is a paid product, and I would then quickly measure price sensitivity using a methodology known as the WANVestindorp test. And for those that don't know about it, it's one of the quickest and easiest ways to figure out pricing. 3rd, I would then ask the person how they do their email, and I would take a note of all the superhuman features I would want to show them.
4th, I Beller then show them how to get through that email in super human, but twice as fast as they were doing before and 5th, I would then insist that they do their email with me for about half an hour. Now this part is crucial because every single time I would find 5 to 10 bugs, and I would take these bugs back to the team and insist that we fix them for next week.
Imagine if we did not fix the bugs next week, those exact same issues would be reported, and we, as a company, would not learn anything new. But if we did fix the books, then next week, we would be able to learn about the next set of issues. And then finally, I always love to give the person a gift to thank them for their time. I'd often leave a bottle of whiskey or a special wine, or something else thoughtful and personalized.
So during phase 1, you should be collecting data on how these users are doing. What is their engagement? What is their attention, their products Morgan fit score, their MPS, their virality? We found that for all these metrics, we were beating industry benchmarks to the point that we were category leading. And I ramped to 5 or 6 on boardings like this per week. And if after you've done about 200 onboardings, you have great metrics, then you know that onboarding could work for your company.
And you're ready to move to phase 2. Well, in phase 2, another senior member of the team who is not a founder should take the lead. The primary goal of this phase is to show that somebody other than the founder can do on boardings and still produce great metrics. In our case, I asked our head of growth. To do the onboardings.
And this phase also has a secondary goal, which is to iterate the onboarding experience towards something that could scale In our case, we were able to get the onboardings from 2 hours down to 1 hour and, crucially, without impacting any of the metrics. They all remained category leading. Our head of growth ramped to 20 on boardings like this per week.
If after you've done another 200 onboardings, you still have great metrics, then you know that onboarding works for your company even when it is not you doing them. And then you're ready to move to phase 3. So in phase 3, you build a full stack growth team. Fullstack here means that everyone on the growth team does a little bit of everything. Demand generation, lead qualification, customer support, and of course, onboardings.
The primary goal of this phase is to show that somebody other than a senior member of the team can do onboardings and still produce great metrics. This phase has further secondary goals. Number 1 to further evolve onboarding experience towards something that can scale. And number 2, to also create the training plans for the next phase. We hired 3 growth generalists in this phase. They got the onboardings from 1 hour to 45 minutes. Once again, without impacting any of the metrics.
Now in this phase, I would expect the growth generalists to each be doing around 20 onboardings per week. Alongside all of the other responsibilities that they have. If after a few months, you still have great metrics then you know that onboarding works for your company even when it is done by new employees at some scale. You're then ready to move to phase 4, and it's in phase 4 when you build a team of onboarding specialists. Now this is a role that specializes in doing incredible onboardings.
And once these folks are trained and ramped, they should be able to do onboardings better than anybody in the previous phases, including the founder. The primary goal of this phase is to scale revenue whilst maintaining everything that makes the experience delightful and magical. And during this phase, we got on boardings from 45 minutes to 30 minutes once again without impacting any of the metrics.
It's super important to run a comprehensive training program for each new onboarding specialist because they are now the Flint line of the company. And you want to ensure that the customer experience remains incredible. At Superhuman, our training program is about 8 weeks. And once fully ramped, each onboarding specialist is able to do 35 to 45 onboardings per week. When founders get to this phase, they often ask me what the ideal background for an onboarding specialist is.
And most founders assume that they should look for a sales background, and this can certainly work very well. But what we found is that other backgrounds can work very well too, notably teaching and hospitality. So I would encourage founders to look more widely and to build the diverse team. Building a radically different user experience requires you to have a deep understanding of what makes people delighted about products. And there's few who understand this better than game designers.
Raul started his career in games and outlines the game design principles behind superhuman. So we have the same product philosophy driven largely by game design. For our internal tools as we do for the software that we sell. And so for folks who know about and who use superhuman, they'll know that the entire experience on desktop is aggressively keyboard shortcut driven. And on mobile, it's driven by 1 handed single thumb swipe gestures.
And the reason that we do that is that's a big part of how you get through your inbox twice as fast. Now if we're capable as we are of helping our customers move twice as fast, then surely we can help Everyone in the company move twice as fast. And so we do build tooling that way. We have any number, for example, of internal Chrome browser extensions that help our customer delight team move fast. We have ETL tools that move data around, centralize it, and aggregate it.
We have reporting tools that keep the company transparent and keep everybody informed. And all of this is done to help the company move twice as fast. Because as you know, at the end of the day, all things being equal Pete is the most important thing, not just for our customers, but also for how fast a company moves.
Well, I think that this generation of products builders is very talented, probably the most talented that has ever existed, and that folks should always lean into their own strengths, whatever those may be. But there is one systemic weakness that I have noticed across Silicon Valley and more broadly technology. In general, we, as products builders, have been trained to think about what users want or what users need. And on the face of it, that sounds very reasonable.
But there is another way to build software. And that is to instead obsess over how users feel. Today, our business software feels like work. We have to check our email, submit expense reports, enter data in our CRM. But what if we could make software feel less like work and more like play. With game design, we can. So at Superhuman, we build software like it as a James, and that has been core to why people fall in love with it. But most software companies don't do this.
Most software companies worry about what users want or need, but nobody needs a game to exist. There are no requirements. When you make a game, you don't worry about what users want or need. You obsess over how they feel. And when your product is a game, people don't just use it. They play it. They find it fun. They tell their friends. They fall in love with it.
James design turns out to be an altogether different kind of product development, and one that I think is especially powerful during a recession. As a kid, I learned how to coach just so I could make games. And before I was a founder, most folks don't know this, I actually worked professionally as a game designer. And as a founder, I've since then gone deep into the principles. And as it turns out, there is no unifying theory of game design.
To create games like you said, we have to draw upon the art and science of things like psychology, but also mathematics, storytelling, interaction design, And that's superhuman. We've identified 5 key factors to consider, and they are goals, emotions, toys, control, and flow. And across these, we further identified many principles of game design. One example principle would be make fun toys and then combine them into games.
And to flesh that out a little bit, a question I like to ask is this, are toys the same as games? They do seem different. You Pete, we play with toys, but we play games. A bowl is a toy, but football is a game. And as it turns out, the best games are built with toys. Why? Because then they are fun on multiple levels. The level of the toy, and also of the game itself. And to make this real, in Superhuman, a favorite toy is the time auto completer. Which you use to snooze emails.
You type whatever you want. It can be gibberish, and it does its best to understand you. For example, 2 d becomes 2 days, 3 h becomes 3 hours, 1 m o becomes 1 month, and the time auto completer is fun Because it indulges playful exploration, what can it do when does it break? How does it work? And it's not long in onboardings, before people start asking themselves questions like, I wonder what happens if I keep typing 10. Beller, it turns out that's October 10th at 10:10 Pete.
Or how about a sequence of twos? Well, that's February 2 2022 at 2 Pete. And then I see people start trying more complex Pete, like, in a fortnight and a day, and it's not long before our users find pleasant surprises. For example, time zone math happens without you ever thinking about it. You can type in 8 AM in Tokyo, and that turns out to be 8 Pete Eastern time.
And then most people are delighted to find out that if you really want, you can snooze emails until Beller, I. E. You can literally type in the word never and then the email will never come back. And so I'd say to our listeners, consider all the features of your own product. Do they indulge playful exploration? Are they fun even without a goal? And do they create moments of pleasant surprise. If so, congratulations, because you have a toy and you're on the way to building a great game.
One of the unusual things about superhuman is that in the crowded and utilitarian field of email, it positions itself as a premium product. Pete Raul shares his methodology for positioning, which he says is a gateway for pricing. Well, we started with an article by Ariel Jackson. And very coincidentally, Ariel was the first product marketing manager on Gmail at Google. So the perfect person for us to be working with.
And she wrote this article that's on first round review called positioning your startup as vital Here's how to nail it. And she advises using a formula like the following, and it's a bit of a Mad Lib's James. For your target customer who has a need or opportunity, your product is in a category and it has a key benefit which unlike competitors gives a certain primary differentiation. And she gives the example in her article of Harley Davidson.
She says, the only motorcycle manufacturer that makes big, loud motorcycles. For macho guys and macho wannabes, mostly in the United States, who want to join a gang of cowboys in an era of decreasing personal freedom. Now we thought about this hard for superhuman. We mess up with Ariel, and we did further reading, in particular, the book positioning the battle for your mind was very helpful. Then we started to ask ourselves questions. Are we the forward of email? No, not really.
Are we the Mercedes of Email or the BMW? Maybe, but not quite. Are we the Tesla of Email? Now, we're getting there, but it's not quite right. And in 2015, we came up with the following positioning. For founders, CEOs, and managers of high growth technology companies who feel like their work is mostly email. Superhuman is the fastest email experience ever made. It's what Gmail could be if it were made today instead of 12 years ago.
And unlike Gmail, superhuman is meticulously crafted so that everything happens in a 100 milliseconds or less. And you'll notice that positioning is extremely tight, and it's best to start off that way and then expand it over time. And once you read that, it becomes clear that Superhuman is a premium tool for a premium market. Pricing is one of the most important and least understood aspects in the startup world.
Pete, Raul shares his methodology for pricing influenced by our friend, Madivan, revenue, John's book, monetizing innovation. Before you figure out pricing, you must first figure out your positioning. And as we just concluded, superhuman premium tool for a premium market. And what follows is a relatively easy way to get a pretty accurate answer of what would make for a decent price. Now in the book, he covers lots of ways to develop pricing.
We used one of the easiest methods, which is the Van Westendorp price sensitivity meter. So in late 2015, we asked north of a 100 of our earliest users the following questions. Number 1, at what price would you consider superhuman to be so expensive that you would not consider buying it? Number 2, And what price would you consider superhuman to be priced so low that you would feel the quality could not be very good?
Number 3, At what price would you consider Superhuman to be starting to get expensive? So that it is not out of the question, but you would have to give some thought to buying it and number Morgan what price would you consider superhuman to be a bargain? A great buy for the money. Now if you have a premium position, the question that supports that is the 3rd question, which is when does it feel expensive, but you'd still buy it anyway.
One can imagine that Tesla did that with the model s. And for us, the median answer to that third question actually turned out to be $29 per month. And then a few conversations with some pricing experts later, and we rounded up to $30 per month. Because when you end a price, in the number 9, that doesn't signal quality that actually signals value, and we're all about signal in quality. So that's how we picked our price.
But for most Silicon Valley companies, they're not actually positioning like a premium tool or a premium piece of software. They're mostly positioning as value for money. And that's because most Silicon Valley companies are trying to expands their user base as rapidly as possible, leaving pricing optimization till later.
And so most Silicon Valley Companies would optimize around the median answer to the 4th question, which is at what price would you consider this product to be a bargain or a great buy for the money? So that's how I advise folks figure out a first answer to their price. But once you've done that, it is important to do a quick got to check on market sizing. For example, with that price, can you grow into a $1,000,000,000 valuation?
Now let's assume at that Flint, valuation is 10 times your run Pete, so your run rate would have to be a $100,000,000 for super human, that would be 300,000 subscribers at $30 per month. And that's conservatively assuming no other way increase revenue per user, for example, without building new products or going further at markets. And we asked ourselves Do we think that we can get to 100 of 1000 of subscribers? We answered emphatically yes. And so we went ahead with that price.
That was Raul Morgan, founder, and CEO of Superhuman on the frameworks behind his company's onboarding, product development, positioning, and pricing. I am a user of superhuman, and it's changed the way I work for the better. You can learn atsuperhuman.com, and remember to subscribe to the NFX podcast for more lessons and insights from top founders. Thanks for listening.