Shifting from Fundraising to Getting Profitable and Scaling Up during COVID-19

We talked to Alexander Zlatkov, cofounder and CEO at SessionStack on how to understand, analyze and optimize customers’ digital experience and here is what he said about it.

First of all, how are you and your family doing in these COVID-19 times? 

Alexander Zlatkov: We adapted to the new norms quite quickly. I personally went through COVID-19 lightly but had close ones that went through it with major complications. I’m very thankful that everyone close to me who had COVID-19 has fully recovered.

Tell us about you, your career, how you founded SessionStack.

Alexander Zlatkov: I started programming in High School, going to national and international Olympiads in informatics, where I was mostly involved with solving algorithmic problems.

I was also very fascinated with software engineering and was building small products for my friends and me to use. 

My professional career started as a software engineer at Telerik, where I built tools for other developers. A quite meaningful amount of time for every engineer in our team was allocated to dealing with customer support, especially when the support tickets were highly technical and the support people were not able to deal with them.

This was my first exposure to customer service, and I saw how inefficient this communication can be. For example, when a customer reported a problem, that something related to our product is not working, they were not providing us with the information which was needed to help them. So we had to follow-up with them many times, gather more and more information, schedule remote desktop sessions, etc., in order to fully understand what is happening and actually help them. This was the first time I realized that understanding the customer should be much easier, but I didn’t think of it as a business opportunity, but rather just a painful problem.

After Telerik, I joined a small startup as a founding engineer where I recognized the same challenge related to properly understanding the feedback and frustration of customers, which was a primary cause for them to abandon or not fully adopt our product. 

This was the point I started thinking about this problem as a potential business opportunity – how could companies easily understand their customers, what they do, and what problems they are facing.

A friend of mine called Lachezar, who afterward became a cofounder of SessionStack, and worked at VMWare at that time. I asked him whether VMWare was using some particular product in order to better understand their customers and the problems they are facing. It turned out that VMWare was scouting for such a solution for a few months, and unable to find a match, they had invested in building an in-house solution. This was a pretty good indicator for us that there is an unsolved problem in that space, so we moved forward with talking with more companies about this.

This is how Lachezar and I started validating the need for what would later become SessionStack – a platform that allows companies to easily understand, analyze, and optimize the digital experience of their customers. 

How does SessionStack innovate? 

Alexander Zlatkov: In the initial days of SessionStack, a huge part of the market was highly uneducated about such technologies. Seeing how users are adapting the product to their needs, what they love, like or dislike was pretty crucial. Also, we’re users of SessionStack ourselves, which really puts us in the shoes of our customers.

Watching closely, the dynamics of the market has been very important. Before COVID-19, we were going to industry-specific events and directly observing these dynamics.

We’re also lucky to have industry leaders and innovators as customers. Talking with them and learning about the future of their markets, team and customer dynamics gives us a great opportunity to envision how SessionStack can tackle these problems.

Last but not least, SessionStack partners and is integrated with leading platforms such as Intercom, Zendesk, Sentry, Freshdesk, and a few others. Since we share customers with all of them, it has been an amazing source of ideas and inspiration.

How the coronavirus pandemic affects your business, and how are you coping?

Alexander Zlatkov: We are fortunate that the pandemic has had more positive effects on SessionStack than negative ones.

Digital transformation has accelerated dramatically, and the need for solutions that improve the Digital Experience of users has increased as well.

Industries that were offline, like Education, are digitalized, which means that there are new industries that need Digital Experience Management solutions.

The pandemic was also a catalyst for the digitalization of industries, where the process had already started, such as Healthcare. Companies that are working on Telemedicine or Mental Health are now growing and are getting more funding. We have seen quite a significant growth on that front. 

E-commerce has been growing significantly also since offline shopping is much less available and exposes people to greater risk.

Of course, we have seen some decline in industries such as Travel and Hospitality, but they are a pretty small portion of our customer base.

Did you have to make difficult choices, and what are the lessons learned?

Alexander Zlatkov: The pandemic caught us in the process of fundraising. We had commitments for half of our round.

As there was so much uncertainty, we saw that investors wanted to see how the situation is going to impact our market. 

We were also still quite uncertain about what was going to happen, so we took the risky decision to quit our fundraising and focus the team’s energy on going profitable. We optimized all of our spending, servers/infrastructure, etc.

Prior to the pandemic, SessionStack was mainly focused on customer support teams. As the pandemic kicked in and saw a huge increase in the demand for Digital Experience Management platforms, we changed our positioning a bit to accommodate this.

We also started building features that can provide more value not only to customer support teams but also product managers, UX people, and developers and spread more horizontally into organizations.

We also reworked our pricing to be more suitable for SMEs. A few months after these changes, we’re ending the year as a profitable startup, with growing resources on our hands that allow us to expand our team at the beginning of 2021.

The pandemic definitely helped us make difficult decisions, which led to very exciting results.

How do you deal with stress and anxiety?

Alexander Zlatkov: On a team level: 

Since the first wave of the pandemic, our whole team is working remotely. In order to keep our team spirit, we started doing daily video calls, where we can see our faces and emotions so that people felt some human contact.

After a few months, we started going to our office once a week to meet in person, have lunch together, play some foosball and other games after work. This, of course, is not mandatory, but only for the people who feel the need to do it.

On a personal level: 

I meditate daily to keep my mind pure and less auto-reactive to external circumstances.

I also exercise a few times a week and try to eat as healthy as I can to keep my body in shape and energetic.

Who are your competitors? And how do you plan to stay in the game?

Alexander Zlatkov: Our competitors are also startups based in North America.

An important differentiator than our competitors is that SessionStack can be used in the cloud or as an on-premises solution. The on-premises solution can be deployed on the servers of our customers. This makes us a great fit for highly regulated organizations such as governments, insurance companies, healthcare, etc.

Since our main competitor doesn’t provide this, we have been able to get some pretty amazing customers in the US from these industries.

Also, since we’re based in the EU, we are better positioned to be a vendor for companies here due to GDPR and some other factors.

And last but not least, we are far ahead in terms of features in some specific industries and use-cases.

Your final thoughts?

Alexander Zlatkov: I don’t think that we should hope to go back to the old way of living. I think that we should learn from the many flaws that have been exposed in our societies, governments, and organizations due to the pandemic. Everybody should roll up their sleeves and, according to their talents and means, work towards fixing these flaws and creating a better and more sustainable future.   

Your website?

https://www.sessionstack.com/