Optimizely CTO Pete Koomen on the Consumerization of SaaS

Videos, Product Management, PM Confessions

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In our final video installment, Wizeline Product Director Matt Pasienski gets the insights straight from Optimizely co-founder Pete Koomen on the various factors that contribute to Optimizely’s success, including:

  • 3 things that differentiate Optimizely from its competitors
  • Consumerization and why it’s important to build a product that customers like to use
  • Why the future of Optimizely is focused on personalization
  • The democratization of software to develop powerful tools that anyone can use

Pete also talks about his best moment as an entrepreneur and why it’s important to build a product with your customers in mind.

If you haven't watched them, be sure to check out Parts 1 and 2 as well:

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Wizeline's Matt Pasienski interviews Optimizely CTO Pete Koomen

Full transcript:

Peet Koomen: What that meant was building software that was useable but it also meant educating the broader marketing community about the importance of A/B testing and the importance of making data driven decisions. That was something we grew up with, so to speak, at Google but that wasn't commonly done outside of some of the bigger software houses. That, I think, has changed and I think a lot of that is because of our efforts.

Matt Pasienski: I absolutely think that's the case. You guys are really the dominant ... When you say A/B testing, Optimizely is the first thing you think. How have you achieved that kind of differentiation and that position where you are able to remain ahead of the game and grow still with something as clear as A/B ... I think A/B testing is a clear path word. How have you guys been able to just consolidate the market behind you?

Peet Koomen: (laughs)

Matt Pasienski: It's okay to say you were lucky.

Peet Koomen: (laughs) That's a great question. I'd like to think it's some combination of customer obsessiveness, a lot of hard work, and some dumb luck, to be perfectly honest. I think we were in the right place in the right time. We focused really, really hard on building a product people would actually like to use, which is, I think, not something our competitors had done. That's how we got a foothold, and ever since we've just been trying to build what people want. That's helped us. That's guided us.

Matt Pasienski: Do you think that the competitors, or people, were not taking into account the idea of consumerization, that it's not a CIO or C-level exec who's going to be making the decision. It's the person on the ground who's in responsible for a web page or an application who's now buying Optimizely and then growing it to the rest of their team?

Peet Koomen: I think that was a C change, absolutely, that our competitors didn't see coming. This whole idea that rather than running a long sale cycle with a high level executive who's never going to actually touch the product after the form is signed is antiquated. More often than not now, it's the practitioner who makes the decision. That trend was opportune for us because, as practitioners ourselves, we design the software with our users in mind.

Matt Pasienski: Yeah. I think that's pretty clear. What are the big things ... Now I'm going to attack you as a CTO of a market leader, what are the big things that you see coming around the corner for Optimizely and where are you going to take the market now that you are in such a position?

Peet Koomen: Sure. We really think that for marketers, the future is personalization. If you think of A/B testing as the way to find the average best experience for a large group of your audience, the next step after that is to use what you know about each individual visitor on your site or each individual user of your app to create the best possible experience for them individually. That's what we're focusing on as a platform, building tools to give our marketers that power.

Matt Pasienski: I think that's really interesting that there are these two, I think ... not opposites but they're opposed, which is the big data, "We're going to measure the average of any quantity," and then there's the personalization where you say, "I'm going to throw out the average and go straight after that person in that moment. Balancing the two, I think, absolutely is the future. There are days where you want to go in and talk to an individual customer, and then there's the days where you just want to say, "Which way are we headed as a company?"

Peet Koomen: That's insightful, and I think that one of the themes that we've used in building software is to take some capability that we see at the most sophisticated businesses out there, you know, the Googles, the Amazons, the Facebooks, and we try to democratize it. We try to build these capabilities into software that really anybody could pick up and start using. That's where I see the next thing. I see companies that have been extremely successful using these vast amounts of data to pick out small individual trends and to create tailor experiences. Most marketers don't have that ability right now.

Matt Pasienski: What are the other tools that your team uses to surround Optimizely? What do you think are the tools that play best from sending campaigns and things like that?

Peet Koomen: That's a great question. As a startup, we've always had limited resources and our strategy has been to build a best of breed solution and to integrate with other best of breed solutions, rather than trying to build everything that a marketer might use. We integrate with a lot of other tools. We've always done that.

Some integrations that I'm excited about recently are integrations with partners like Tealium or Demandbase, where these are DMPs, in a sense, where they collect information about your audience, about your visitors. You can use Optimizely now to target specific experiences to those groups of people. You might target an experience to people who are visiting your site from Microsoft, for example, if you're [inaudible 00:05:00] player, or you might target people who have taken some actions on your website, who have purchased before. It's really, really easy to do with these integrations.

Matt Pasienski: That's fantastic. One last question.  It's always really interesting ... I think the majority of people who might be watching this have not gotten to where they want to get with their product. That's the obvious, most common state of a product manager and so it's always really interesting to hear about when was the moment that you knew, "Okay, this is just clicking." Was it a week or was it a month or was it a year where you just said, "I see it happening." What were the signs that you found popping up more and more as you realized you were being success- ... you were achieving this success?

Peet Koomen: We spent about a year working with no salaries on two companies that ultimately didn't go anywhere. That was one of the more difficult years I've ever been through. As any entrepreneur knows, it's extremely difficult to fail, especially when you feel you have a lot of expectations on your shoulders.

When we started working on Optimizely, we had sort of ourselves reached this point where we were so self-skeptical that we just weren't going to work on it unless we could find somebody to pay for it. We weren't going to write a line of code unless we could earn money on it.

My co-founder, Dan, called two agencies he'd worked with on the Obama campaign and both were willing to pay us $1000 a month for software that we hadn't written yet. That was a moment that I'll never forget in the sense that we found a need. We found something that people really, really want and that doesn't exist. There were many other moments raising money, making great hires, building an amazing team that all have felt incredible but that moment stands alone as an entrepreneur. I hope that I start many companies in my lifetime and it's that moment that I will strive for always.

Matt Pasienski: All right. Connecting with the customer is the most important aspect. Thank you so much, Pete. I couldn't have asked for better answers. Thank you very much for inviting us over. Awesome.

Posted by on Saturday, May 9, 2015.

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Dec 12, 2017

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