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Blog

Noom, Helping Us Keep Our New Year's Resolutions

James Robinson

At RRE, we identify and invest in entrepreneurs mining  significant opportunities and focusing on constructing long-standing businesses. After exploring the health and fitness space through the years, , we are thrilled to announce our investment in and partnership with Noom, alongside Translink Capital, Recruit Group Japan, Qualcomm Ventures and Harbor Pacific Capital.

I first met Saeju, co-founder of Noom, at one of those entrepreneur-VC lunches where poor, mindless eating decisions are the norm. I was immediately struck by his passion and ambition to address one of the most severe health problems facing our world today:  Obesity. His conviction, combined with my acknowledgment that little innovation targets the substantial number of people categorized as "plus-sized", encouraged further discussions with the team. Artem's depth of product knowledge alongside Adam's wealth of marketing expertise wonderfully complimented Saeju's heavy sales skills and almost evangelistic orientation.

The Noom team has made inroads with millions of users worldwide with their research-driven, mobile-first approach to better wellness, integrating not only proven behavioral science and physiological intelligence with  rapid consumer feedback. Noom's vision is to establish an accessible, holistic brand in sustainable weight loss and healthful living with strategies that demonstrate tangible results.  

Noom's product suite includes Noom Weight, Noom Walk, and Cardio Trainer. Noom Weight, the company's flagship product, includes food journaling, educational "bite-sized" content, and a virtual support network of other users selected to motivate one another -- a nod to Weight Watcher's group meetings. A testament to its traction, the app is the #1 top grossing in the Health & Fitness category in the Google Play store. Noom's users, the majority female and under the age of 30, represent a highly sought-after demographic for many marketers. Noom has also seen significant adoption overseas as it localizes its applications in countries such as Japan, South Korea, Germany.

We're excited to help fuel Noom's growth, and encourage you to think twice about that second cupcake.

Find Noom on iOS or Android.

The Most Important SaaS Metric Nobody Talks About: Time-to-Value (‘TtV’)

RRE

In a world where applications are delivered via cloud and distributed across billions of Internet-connected end-points, we’ve seen barriers to entry, adoption and innovation compress by an order of magnitude or two, if not crushed altogether. Compound this by advances in application and data portability and the implication for technology vendors competing in this global, all-you-can-eat software buffet is that customers’ switching costs are rapidly approaching zero. In this environment it’s all about the best product, with the fastest time-to-value and near zero TCO. And it’s this second point – time-to-value (TtV) – that I want to dig in on a bit because it tends to be the one glossed over most often.

I’ll start with an anecdote …

A portfolio company of ours delivers a SaaS platform that competes with legacy, on-prem offerings from large infrastructure software vendors. In its early days the company had fallen into the enterprise sales trap: spending weeks, if not months, with individual customers doing bespoke integration and support work. About a year in when we finally decided to open up the beta to everyone, sign-ups shot up, but activity in new accounts was effectively nil. What was going on?

Simply, customers didn’t know what to do with the software once in their hands. Spending months with large accounts did inform some fundamental product choices, but at the cost of self-service. Our product was feature-bloated, on-boarding flow was clunky and the integration API was neglected and poorly documented.

In a move that, I believe, ultimately saved the company, we decided to create a dedicated on-boarding automation team within product. Sure enough, in the months that followed, usage spiked and the company was off to the races.

The takeaway was that highest priority should be given to building software that just works, and that means focusing relentlessly on reducing or eliminating altogether the time investment to fully deploy your solution in production. Ideally, you want customers to derive full value from your offering in mere minutes, if not seconds. To do so, treat on-boarding as a wholesale product within your offering and devote engineering resources to it. Find religion about optimizing TtV!

Below is by no means a complete list, but instead a few lessons that I’ve taken away from my experience with our portfolio that many SaaS companies should internalize in their product and go-to-market strategies to help optimize TtV:

Simplicity wins…be feature-complete, not feature-rich: This is a fairly obvious but subtle point that often evades even the most talented product teams: the defining characteristic of a simple (read: good) product is not the abundance of features but rather the relevance of those features to its users. This stands in stark contrast to the old paradigm of CIO-inspired products that were over-engineered and feature-bloated. The challenge in the new paradigm is what might be relevant to one customer may be entirely worthless to another. The solution is focus, either in product or in market.

The always-better option in my mind is to narrow your product focus. Do one thing incredibly well. Tackle the single, most acute – but universal – pain point and ingrain yourself in your customers’ workflow…then expand horizontally. Value needs to be delivered from day one, but features can be revealed over time. Ultimately, it’s about understanding your unique unit of valueand exploiting that with your customers. Slackis the single best company embodiment of the focus/simplicity paradigm. Others take note.

Hack the onboarding flow:  It doesn’t matter how beautiful or utilitarian your product is if no one ever gets around to using it. Developers are a fickle bunch with seemingly infinite alternatives to your offering of paid tools, open source projects and self-built hacks. You generally have one chance with them, and that chance lasts about 20 minutes (based on conversations with some of the least ADHD-ridden devs I know).

On-boarding should emphasize and reinforce the value prop that drove the user to your product in the first place. Sign-up should be frictionless and deployment should be self-service to the point where the customer is up and running in minutes and, most importantly, getting value from your product a few moments right after. Avoid the empty room problem at all costs – even if the data or insight you provide early on has less direct customer value, it’s better than a customer looking at a blank screen.

Suggestion: read New Relic’s early blogposts. The company was fanatical about delivering value to devs from their APM solution within 5 minutes of signing up.

Documentation, Documentation, Documentation: There’s nothing sexy or glamorous about documentation, but great docs can be a source of competitive differentiation. Look no further than Stripe, whose documentation is the stuff of legends (and a big reason why the company has grown as quickly as it has). Great documentation shows devs you care and it’s increasingly becoming table stakes, particularly if your product is technical or has an upfront integration burden. Given that, take the time to document from day 1 and don’t neglect those docs as your product offering expands.

An obvious corollary to the documentation point is around API cleanliness. Your API is a not adjunct to your product, it is an extension of the core; treat it as such.

Content, Content, Content:Embrace content – it’s your opportunity to connect with users. Content doesn’t just mean static blog posts, but includes webinars, tutorials, analyst publications and reference architectures. Leverage content to showcase the integrations, use cases and features of your product. Digital Ocean does this masterfully. Just go check out theirblog.

Finally, make sure to quanitfy. Set a goal for TtV and benchmark against it. TtV’s vary widely across product segments and end-markets but study your comps and make sure you’re at least beating the pants off them.

An optimized TtV has positive ramifications throughout the organization ranging from freeing up support engineers to work on product to enabling a tightening of sales and marketing spend up and down the funnel. Ultimately, a short TtV drives all those other metrics folks seem to care so much about like MRR, LTV, CAC, Churn, etc.

Introducing Accion Systems: Revolutionary Propulsion for Satellites

Will Porteous

We are excited to announce our investment in Accion Systems this morning alongside a syndicate of some of our favorite co-investors. This is our 2nd investment in a New Space company after we led the Series A round for Spire last spring.

Accion is commercializing a new ion-based propulsion system for spacecraft. We were introduced to co-founder and CEO, Natalya Brikner by our friends at Undercurrent, who share our passion for new space technologies.

Electric propulsion is the next big thing in small satellites. In order for cubesat constellations to achieve their maximum useful life, operators need to be able to manipulate the spacecraft beyond what is possible with simple reaction wheels. Propulsion systems that use combustible fuels are not allowed on the ride shares that cubesats depend on, so a new type of propulsion system is needed. There is also a lot of discussion in the industry about regulatory standards that would require a deorbit mechanism on cubesats (in part to deal with the space junk problem). The Accion Systems products are a logical solution.

The core technology has been under development at MIT for 10 years. It produces a tiny unit of thrust, about the size of a penny. While I am not a physicist, my layman’s understanding is that these engines convert a cheap, non-volatile plasma into streams of ions that can impart thrust. The Gen 1 products are sufficient to move a 3Kg Cubesat and extend its useful life. The Gen 2 systems should be able to impart considerably more thrust and will be useful for larger satellites. The systems are already being manufactured reliably and they have had hundreds of hours of ground tests. With nearly 1,000 cubesats being launched every year and considerable demand for propulsion for both large and small satellites, we think Accion has a terrific addressable market opportunity.

As much as we love the technology here, it was the team’s pragmatism about the company building process and their strong commercial instincts that really persuaded us. Natalya and her co-founder, Louis Perna, have given a lot of thought to how to build a strong, high performance culture that can last for the long term.

We are delighted to welcome Natalya, Louis, and the team at Accion Systems to the RRE portfolio and we look forward to working with them in the years ahead.

OnDeck, a Lender to Small Businesses, Raises $230 Million in I.P.O.

RRE

Today, RRE Ventures portfolio company, OnDeck, completed their initial public offering on the NYSE. It is the largest venture backed tech IPO by market cap in NYC history. 

Congratulations to Noah Breslow and the entire OnDeck team. We’re incredibly proud of them!


Launched in 2007, OnDeck is the technology powered Main Street lender that has fundamentally changed how small businesses access capital.
OnDeck’s innovative technology platform leverages electronic information including online banking and merchant processing data to identify the creditworthiness of small businesses in minutes, while traditional lenders typically take days or even weeks.
To date, OnDeck has deployed more than $1.5 billion in capital to tens of thousands of businesses across 700 different industries. The company was recently named #11 on Forbes’ 100 Most Promising Companies in America list and was listed on the Inc. 500/5000 for a third year in a row.