SaaS marketers are not usually engaged in the day-to-day engineering work. I’m no exception.
A few days ago I asked Sam Levan, our CEO, “what exactly are we doing with Segment?” I had visited Segment’s landing page but didn’t really get the value – it reminded me of the “middleware” concept IT departments have been talking about for years. Sam I talked about Segment and I finally understand it.
Since other CMOs might have similar questions I decided to write up our conversation as an interview. Hope it helps you!
Me: Pretend I’m a CFO, CSO, CMO, or CEO and not involved in day-to-day product development. What value does Segment provide to our business?
Sam: Engineering is the scarcest resource we have. Segment makes our developers more efficient and allows us to deliver value faster. Saves us time and money.
Me: Ok. That’s simple enough. How?
Sam: Like every business we need a set of third-party tools like email marketing, sales, help desk, and analytics to name a few. Sending our data to each service individually takes a lot of time to setup and support. By sending our data to Segment we can re-distribute it to ANY of these services almost instantly.
Segment maps data between our database and these applications.
Me: Can you give me an example?
Sam: Sure. Suppose you want to test out a new tool like Mixpanel.
Without Segment you have to ask the engineering team to integrate with Mixpanel’s API. This starts with a scoping meeting … which leads to a priority discussion … which leads to acceptance testing … and updates when we change our product … or they change their API.
As the CEO I don’t want our developers to have to spend time on this type of work – we need to be improving our product and delivering value for customers, not messing around with APIs.
With Segment you just flip a switch and you can start testing Mixpanel. It usually isn’t quite that simple but much, much easier than the alternative.
Me: Ok, I get it. So what is the downside of using Segment?
Sam: Well obviously Segment isn’t free, so I guess if you only need 1 or 2 tools it may not be worthwhile.
But to be perfectly honest we would probably use Segment even if we only used 1 tool in their platform. All they do is APIs and data mapping and they do it better than anyone.
Me: I’ve used Zapier before to automate rules and share data between apps like Wufoo and MailChimp. How is this different from Segment?
Sam: We don’t use Zapier and I’m not as familiar with their product. But my understanding is that Zapier is more popular with small and non-tech businesses and makes it easy to map fields between products like email, forms, file-sharing, etc.
It seems to be more geared towards solving a specific data-sharing problem between specific applications. Using your example, sharing the data you have on Wufoo with your MailChimp account.
This is very different from exposing all of our internal business data to be shared across different applications.
Me: Ok. Switching gears a bit … MadKudu is also an Integration partner with Segment. What is the value for us of this partnership?
Sam: A no-brainer. Segment makes it easier for potential customers to try MadKudu and send us their data.
Me: I guess that seems obvious … but doesn’t this also mean that MadKudu’s customers could quickly switch to a competitor? Isn’t this how companies like Microsoft became dominant? By building proprietary interfaces and locking-in customers?
Sam: It doesn’t really work that way anymore. Every SaaS company like MadKudu needs to constantly re-sell its value every billing cycle – otherwise customers cancel. I don’t know a single SaaS founder who thinks she can lock-in customers.
Even if that were the case we also benefit from lower support costs by being on Segment since it reduces the costs of supporting our own API.
Me: Ok. Now just to add to the confusion … Segment is also a MadKudu customer?
Sam: That’s right. We use data science to help Segment’s sales team identify their most promising leads and turn them into customers.
Me: Good grief now I know why I find our status meetings so confusing. Let me see if I get this straight:
MadKudu is a Segment customer.
MadKudu is also a Segment Integration partner.
Segment is a MadKudu customer.
How the heck do you guys keep track of all of this?
Sam: (laughs) Yeah, it makes for some confusing conversations. Usually it is obvious from context.
Me: Ok, final topic. You were a data scientist for years before starting MadKudu and have consulted for hundreds of companies. Can you explain the value of Segment’s new data Warehouses solution?
Sam: Data warehouses have been around for decades but have struggled to live up to their promise. One major reason is that getting all business data into one place is a huge PITA.
Moving the data and building APIs is part of the problem – basically the same challenge we discussed earlier about building and maintaining multiple APIs. An additional challenge is understanding what each field means and mapping it to the same logical entity in another application.
This is why a lot of “data science” projects have traditionally struggled to get off the ground – it just takes too much effort to get everything setup and organized in the data warehouse.
Me: Ok, I’ve been a part of projects like this. I can recall months of meetings with analysts and business owners building data dictionaries, mapping fields. It basically sucked.
Sam: Exactly. This is the power and promise of Segment’s data Warehouse. It allows an analyst to quickly run cross-application SQL queries to get answers to critical business questions.
Of course you still have to know what the fields and data means – it just helps overcome a main impediment from getting these type of projects started.
Me: Thanks Sam, I think I get it. Suppose another SaaS company CXO is thinking about using Segment – how can he or she contact you?
Sam: Just email me at firstname.lastname@example.org. I’ll be happy to jump on a call.