Case study: Butter’s continuous product discovery
How the delightful online workshop platform ‘crossed the chasm’ by staying focused on the problem not the solution.
“People ask for a feature, but that's not actually what they want,” says Jakob Knutzen, co-founder and CEO of Butter. “They're asking you to solve a particular problem. You need to understand the problem that people really need solving.”
Back in the lockdown of 2020, Butter set out to solve the problem of running remote workshops and training sessions and created the most delightful video conferencing and collaboration tool out there. As their audio emoji says, “it’s smooth. Like Butterrrrr.”
Jakob has taken the time to share their journey with me and how he and his team recently confronted the root cause of stalling growth and identified how to ‘cross the chasm’ from their passionate initial users to a bigger audience by solving the same problem in a new way.
It’s a great example of how to keep doing product discovery well. Let’s dive in.
Churning ideas
Jakob, along with co-founders Chris Holm-Hansen (Product & Design) and Adam Wan (Technology), began working together when they created a platform to showcase short form content for gamers. After realising that they were solving a problem for creators, but not gamers, they were back to exploring new ideas.
Then Covid happened. As experienced remote collaborators, they immediately decided that they wanted to help others grappling with this new way of working. They began running training sessions and workshops with newly online teams to share their best practices and, at the same time, explore the potential problem space.
“That was where the ‘ah-ha!’ hit us,” Jakob grins. “Oh man, doing these workshops... even though both myself and Chris had a lot of experience running workshops, it was very, very difficult to deliver them online versus doing them in person.”
He explains, “we were using Zoom together with Miro and Mentimeter. It was this big blur of a lot of different tools to create the level of interactivity that we wanted to deliver a successful workshop. We thought, okay, there must be a better way...”
That painful experience was the initial spark for what became Butter.
Product discovery: prototyping and user research
The team took a two pronged approach. Adam and Chris started experimenting with designs and what could technically be achieved. Meanwhile, Jakob along with Cheska Teresa, who joined them as Chief Growth Officer, went deep into understanding potential users and their pain points.
“The first version of Butter was a companion app to Zoom,” says Jakob, describing their initial prototypes. “The concept of an Agenda was one of the first pieces. That was how you structured stuff. Then the hands up cue... But Zoom didn't really allow us to do all the things we wanted.”
Adam and Chris explored further and discovered that it was reasonably straight-forward to use third-party libraries to get started with video. “So we put video on top of this companion app, and suddenly we had a fully fledged video conferencing tool. We started layering on stuff from there,” says Jakob.
Whilst this was happening, Jakob and Cheska were speaking to potential customers. They approached everyone in their network running workshops and sent cold outreach messages on LinkedIn. “In the first six months, we spoke to 400-500 people that were doing something that could be construed as a workshop,” he remembers.
“Everything from strategy consultants, agency, people facilitating leadership sessions, training sessions... It was literally across the globe, because everyone was in COVID lockdown, and a lot of people were very open to talking about this.”
They got an amazing response rate and discovered that many people were facing the same pain points and finding it difficult to run a good online workshop. The response rate itself was a validation that they had hit on a real pain point.
The two streams of discovery work came together and they started to build the things that they had heard created the most pain for users.
“The biggest pain points were juggling so many different tools, sending out links and having to open a lot of tabs. That led to us creating the Toolbox feature,” he recalls.
“And then there were breakouts. Zoom was the only tool that had breakout rooms back then and it was very rudimentary. So we focused on creating a great experience there too.” Butter’s breakout feature is still one of the best out there, enabling facilitators to discreetly observe participants and deliver activities into rooms.
They also discovered that integrating other tools like Miro was surprisingly successful. “The integration was so smooth that we suddenly got a lot of people who were using Miro for workshops, using our tool alongside.”
As the platform developed, they started doing their research interviews within the tool. This allowed them to get immediate feedback on things they were developing.
They started to get lots of feature requests. The flipside of finding a problem that so many people were experiencing was that it created a lot of noise.
“We had an open platform that you could just sign in and use from almost from day one,” he explains. “We got so much feedback from users using Butter for everything: everyday meetings, town halls, just stuff we weren't building Butter for. And they had a lot of opinions about what we should build.”
He says that it’s tough not to listen to these users. “They're very vocal. Plus, you can have a recency bias towards what you just heard. That's been a problem and the reasons we’ve had some scope creep. Non-Ideal Customers pulling us in directions that didn't make sense for us.”
Evolving their Ideal Customer
So who is their Ideal Customers Profile (ICP) and how did they identify them?
“To begin with, we thought our ICP was independent facilitators,” he says. “But we discovered three issues with them. Firstly, they are extremely price sensitive. Their business is also very up and down. So they sign up for some months of the year and then sign off for another couple. You should see our December and July revenues! Those are brutal months.”
“Finally, there's just very limited expansion potential within independent facilitators. Once you get them, our most expensive plan at the moment is $29 a month. That's not a lot of money for a single user that might be quite vocal.”
Butter still serves a large number of independent facilitators today and they provided an important initial group to help them build their product. But they now don’t consider them to be their core target audience.
“We now focus on small to mid-sized professional service organisations,” he says. “They have a lot of the same needs as independent facilitators. These are agencies, consultancies, training organisations and small educational institutions.”
He describes the ICP as: “Organisations that are delivering workshops or training. They have between 20 and 200 employees, so there's a high enough frequency of usage and they don't pause use. They have expansion potential and want to add more seats, which makes the SaaS model work. They're not as price sensitive. And, importantly, unlike large organizations, they make purchase decisions quickly.”
He notes that whilst the big consultancies and universities would benefit from Butter - and they have individual academics using the product - they are not organisations that they go after due to the challenges of their procurement processes. They also have Learning and Development teams in organisations like Netflix and Dreamworks using the product, but again the problem is they don’t need many seats.
Focusing on Product-Led Growth
I ask how they compete in a market that is increasingly commoditised with tools like Zoom, Google Meet and Microsoft Teams. He says it’s about focusing on the people that experience the pain of running workshops with other tools and delivering them amazing value.
“We've focused on a product-led growth model,” he explains. “For example, in an agency, it's consultants who do the workshops and discover Butter first. Then they start using it, and through them, we get in touch with the budget holders or the decision makers. The same for training organisations. It's the individual instructors that discover it, see the value, and then introduce us to the Director of Learning.”
Doubling down on the pain point, not the solution
Despite their successes with product-led growth driven by delighting instructors and facilitators, they still faced the challenge of these facilitators encountering friction running sessions with big organisations wedded to the big enterprise platforms.
“We needed to find a model that would allow us to operate together with the other video conferencing ‘super fighters’ that would allow us to continue to grow,” he explains.
Their approach has again been to focus on solving the problem and being flexible about the solution. This has led them to develop a new product, alongside their core Butter Video platform: Butter Scenes.
“We asked ourselves, how would we have solved the problem - too many tools, a lack of focus, a lack of interactivity - back then if we had the knowledge that we have today? What would we do if we had to totally redesign everything?”
This framing unlocked their thinking.
“We've always focused on the agenda: a semi-linear, structured format that you're able to design with tools from the toolbox. We also know from speaking to people using canvas tools like Miro, the complexity is onboarding participants. So we thought, let’s try something different. Let’s create a slide format that has the power of a Miro canvas but is not overwhelming for participants. And can be used within other video conferencing tools.”
He says that recognising they needed to embrace a new direction to continue to expand their audience was tough. “We had to admit that we couldn't go as far with the current product as we thought we would be able to. We had to rethink and we redirect most of our resources to Scenes from that moment onwards.”
That conversation was in May. By July they had built the first prototype and started to invite people to try it. They launched the product in November. Initially, it was a separate product alongside their core tool, but they are already integrating Scenes back into Butter Video.
“We’re realising the power of Scenes together with Butter. We’ve been able to integrate it as a tool and that has reinvigorated Butter as a platform. But we wanted to make sure that Scenes as a separate product worked first. We don’t yet know if one day Scenes will eclipse Butter in terms of use or as a revenue driver.”
This means that they can continue to develop new features in Scenes, whilst retaining the native features for users that want the additional benefits of the integrated video platform.
Does this new direction impact who their ideal customer is? “I don't think so,” he says. “We’re just solving the same problem for the same people in a way that works better for some of their participants.”
The hard reality of ‘crossing the chasm’
Given that the need to step back, reframe and change approach in order to grow beyond your initial audience is a common problem but so hard to do, what advice does he have for others who need to ‘cross the chasm’?
“Everything boils down to growth,” he says. “If you don't have growth, you end up navel gazing and spending time on the wrong stuff. We didn't have enough growth. And the fundamental issue was that we were simply too dependent on video conferencing being such a core part of the way that we solved the problem. Video conferencing is commoditised and has security considerations. With our small team of 10 people, we ended up spending a lot of engineering time on video conferencing instead of delivering the real value around collaboration.”
Essentially, it meant going back to the original problem they set out to solve and reframing how they were solving it. But he says that this acceptance was hard. “To be very honest, I wish we'd come to this realisation two years ago. But the sunk cost fallacy is super real, right? People have such an attachment to what they've already built that shifting gears is difficult. It's incredibly difficult.”
He pauses. “But people also think that the impact of shifting gears is much higher than this. We could always return to building Butter Video, even if Scenes didn't work out, right? We kept it running and maintained it. And because it is already a rich tool, people didn’t really notice that we spent five months exploring the next stage. And now we’ve realised that the combination of the two tools makes sense and unlocks new opportunities.”
What would he say to others in a similar situation? “Just be honest to yourself,” he says with feeling and then smiles. “But that’s always easier said than done, right?”
Reflections on EdTech
I ask about his wider reflections on the learning sector, given his perspective. He thinks the biggest challenge is the speed of adoption for new technology in public educational institutions and their willingness to explore and adopt new tools.
“It’s not the educators,” he says. “It’s that the procurement and approval processes in large institutions are so long they simply aren’t happening. You look at the tools they use and they aren’t attractive.”
“It’s not just the adoption cycles that are slow, it's the experimentation cycles too. There are a few brave instructors/teachers/professors - the people that are actually doing the teaching - picking up new tools and trying to push them. But many of them are paying personally or getting grants to do it - it’s not led by the institution.”
He worries that this inertia will ultimately leave public institutions behind more nimble private enterprises. “It might even create a two tiered system where public or slow moving organizations are left behind. And private institutions and independent instructors that can choose their own tooling can improve teaching way more than those large organisations can.”
Just the beginning
So what’s next for Butter? “We're only at the precipice of how we learn and how we collaborate remotely,” Jakob reckons. “The current tools are still so rudimentary and still so closely related to concepts that have been here for decades. I really want to push this and see what we can do. Move towards a digitally native experience, instead of simply trying to mirror real life.”
This passion comes from a deep-seated conviction about the positive impact of remote work. “I believe that the more international and borderless collaboration and learning there is, the more of an understanding world you will create.”
Summary
We reflect back on the conversation to draw out the learnings.
Do a lot of product discovery. Customer interviews to really understand the needs and prototyping to understand what is possible.
Reduce the noise by developing a clear understanding of your Ideal Customer and the dynamics you need to create a viable business. Be equally clear who aren’t.
Keep focusing on the user needs and pain points. Don’t get too attached to your current way of solving it, avoid the sunk cost fallacy. Be honest with yourself!
Recognise when you need to do something different. At some point, you need to see how to grow beyond your core audience. Identify the root cause of the problem and where you provide value. For Butter this was realising that it isn’t video conferencing.
Don’t be afraid to try something new. You can always come back to your original product. It’s easier than you might think.
“Just be honest,” Jakob says with heart-felt conviction. “Do a lot of customer discovery. Do it before you build a product. Maybe do it in parallel, but be very careful. You're not looking for just validation that you're building the right thing. You need to come in with a totally open mind and listen,” he says.
“And then on top of that, the process should never stop. That was the realization for us. Building Scenes might have come earlier if we'd been more honest with ourselves throughout the journey. It gets harder to be honest yourself, the more you build. But you must do it, because otherwise you end up painting yourself into a corner.”
Explore Butter and Butter Scenes for yourself. Jakob would love to hear your feedback - if you’re his Ideal Customer!
Disclosure: I use Butter to run my courses, coaching and workshop sessions. I think it’s hands down the best workshop tool out there.
If you’re looking for support on product discovery and knowing when you need to make a change, check out my new coaching programme The Product-Market Fit Method for transformative learning.