How To Crack the Onboarding Nut

At Tidemark, we think a lot about control points as a critical part of building an enduring vertical SaaS platform. Control points are great, but building data and workflow gravity within customers often requires big implementation friction and business process change. Cracking the nut of onboarding can solve these challenges, and onboarding greatness leads to higher retention rates, attachment, and LTV. Over two dozen senior VSaaS operators discussed these topics with Anthony Fusco, a legendary operator who was critical in the buildout of customer onboarding journeys at companies like Toast, Dutchie, and SpotOn.

‍

Their conversation was a part of the VSaaS Collective. These are bi-monthly deep-dive sessions for a select cohort of CEOs and functional execs, aiming to highlight industry best practices and build a trusted community among non-competitive peer operators. The goal is to get practical tips into questions like: How do you win the category? How do you expand your offerings and extend through your value chain?

‍

Here are some key takeaways from this VSaaS Collective session on Onboarding with Anthony Fusco:

‍

You have to have both speed and quality.

‍

A common misconception in startups is that speed and quality are tradeoffs. The reality is that they are self-reinforcing. Quality drives speed and speed drives quality. A fast onboarding is a good one.

‍

“I don’t think there is a tradeoff between speed and quality. You have to be fast. Otherwise, your competitors will come in. And you have to have a high level of quality. Otherwise, your competitors will take that customer.”

‍

Understand your backlog.

‍

Too often, growing startups aren’t analytical with potential customers. Anthony thinks this is a mistake. Understanding your backlog can become a feedback loop for sales, onboarding, and product.

‍

“If your percentage of workable deals is 40%, and your percentage of nonworkable is 60%, it’s a feedback loop through the go-to-market cycle to go back and course correct to ensure we’re signing more workable deals. If the muscle within your company is good in your go-to-market platform, it’s an input to your product roadmap.”

‍

This can even lead to an acceleration on the product’s roadmap.

‍

“When I first joined Dutchie, we built our backlog. We noticed that there were a number of locations and ARR in our nonworkable backlog tied to a specific product feature. We already had those deals. We already had the ARR to recognize. And that feature was maybe 12 months out on the product roadmap. If we hadn’t done this process, it would have taken 12 months, and we may have seen some pre-live churn. But we were able to re-prioritize and unlock that portion of our backlog super quickly. And the reality is your sales team is selling the roadmap. The customers, your market, are telling you what’s important. And that is a huge input to your product roadmap.”

‍

Hire for domain expertise.

‍

Many first-time founders default to hiring for logos—people from the “good” companies who have done it before. These people are expensive and may not understand your market in vertical SaaS. Anthony recommends speaking the language of the customer and building a team that knows how to do it.

‍

“I saw the importance of speaking the customer’s language in the moving industry. You have to speak the same language as your customers. That solidifies the onboarding. To build this, I would look for any instance where you could hire from the domain. Using Dutchie as an example: Dispensaries, if you don’t come from the industry, you don’t have a leg up. If you do come from the industry, there’s so much institutional knowledge when you pull somebody from a dispensary and then have them work for the company.”

‍

Hire for grit and creative problem solving over everything else.

‍

Onboarding is never an easy or straightforward task. You want to have someone who can handle problems, whether they have domain expertise or not. Creative problem-solving is a core competency that’s critical to add to your onboarding team. To test for that, Anthony had a favorite question:

‍

“I’ve asked literally the same question on every single interview for the last 10 years, regardless if they’re from the industry or not, which is, ‘Can you provide an example when you’ve been working on a project or something, everything was going according to plan, and then something failed, something blew up, something broke, that required you to come back and fix it and then hit the same objective? Because that experience, regardless of them being from the industry or not, that’s the most important thing for me.”

‍

Multi-product onboarding requires strong people management.

‍

One of the most common questions with onboarding is how to handle onboarding a customer onto a platform with multiple products. How do you start? Do you start with the system of record? Do you onboard them onto every product all at once? Surprisingly, it’s a question of a customer’s org chart as much as it is a question of product capabilities.

‍

“Multiproduct customer journeys are challenging in general. The way to manage that is by building the onboarding journey through that customer’s plans. Because you may sell POS; you may sell some employee functions like payroll; you may sell online ordering. There’s a lot of things that don’t have to happen on day one. And to be frank, if they’re ripping out an old system and putting something new in, the response from that customer is just going to be so over-the-top because they have to learn so many things. So the first thing is understanding who is responsible. There may be multiple different people in the company that are responsible for each implementation, which should happen. You should specialize. You don’t want somebody that’s implementing POS to implement payroll, as an example. It’s two different core competencies. But you also don’t want your customers to have to talk to 30 different people. Because that’s just never going to work either, and it’s going to be a pain point, and they’re going to hate it. It’s about matching your org chart to theirs.”

‍

Conclusion

We hope you enjoyed this brief recap of Anthony Fucso’s inaugural VSaaS Collective session on onboarding. If you would like to be considered for participation in a future live session, please email us at knowledge@tidemarkcap.com.