My chat with Ishita Arora, Founder of Dayslice

Ishita was a PM at Dropbox and later joined Fleetsmith (now owned by Apple) as the first product hire. She founded Dayslice end of 2020. Here’s the funding news. Here’s her lead investor Upfront’s announcement. After spending some time playing around on the website, I decided to chat with her about building for SMBs, cultural shifts she paying attention to, product challenges from not having a well defined persona, what she’s building, some clever under-explored product whitespaces, marketplaces versus platforms, product management frameworks and more. 

Sar : “SMB space is special. Frustrating, exciting all at once” is what you told me when we first connected. That resonates with me. I worked with SMBs in my previous jobs. They are hardest to acquire and make money on. They are also hard to ignore since they are more than half the economy, employ more than half the working population and play a vital role in local communities. Can you talk more about what you meant?

Ishita : Absolutely. Exciting because there are a lot of cultural shifts currently in-flight that will increasingly make this segment even more important over the next decade, frustrating because early acquisition can absolutely be a grind and there are many different potential acquisition channels (a blessing and a curse), and special because this buyer sits at an interesting intersection of consumer and B2B SaaS. On the one hand, their behaviors often mirror consumers more than traditional B2B SaaS buyers (i.e. learning about a new product on Tiktok.) On the other hand, they are in the market for products that embody traditional B2B SaaS attributes like the automation of critical business workflows. Because our target audience is often a one-person business, VCs have often asked if I consider ourselves as “consumer” or “B2B SaaS” company, and my response is usually, “B2B but where that second B is frequently a really tiny B–often a business of one or two.”

Sar : Can you speak more to the cultural shifts you’re referencing? 

Ishita : Two major ones stand out. First, workforce trends are resulting in further fragmentation within SMBs. Service providers are increasingly going solo which is resulting in a proliferation of truly small businesses. Many of these folks aren’t coming from big companies but are leaving mid-sized businesses instead. So the distribution of differently sized businesses within SMBs is shifting. I’ll give you an example from our user base. We have a nutritionist using Dayslice who used to be a part of a larger group (a couple dozen nutritionists) and now has spun up her independent business with her own personal brand on social media as a nutritionist. I also think SaaS is playing a role in enabling people to make these breakaway decisions from larger groups because the ecosystem of products can solve some of the “jobs to be done” that were historically done by other teammates in larger groups. 

Second, how these small businesses are acquiring their own customers is also radically evolving. Increasingly, they’re realizing that investment in social (whether it’s Facebook groups–which is a rich ecosystem of these businesses–or Tiktok which is a bit more greenfield) is an efficient way to find their customers and build loyalty amongst them. Historically, this wasn’t always the case. Moreover, you can see this reflected in the older wave of businesses that were trying to serve this segment. Fun fact–Invoice2Go doesn’t have a Tiktok page. HoneyBook’s Tiktok has less than 3,000 likes which is basically the equivalent of a brand new page. I think it’s going to be more important than ever to be in the same places where your customers are embarking on finding their customers. 

Sar : The SMB category often has a definition problem. Everything from an ecommerce brand to early stage venture startups to freelancers to your local pizzeria are often bundled together. There’s an entire landscape of startups that went after a combination of those categories and ran into a ceiling by trying to craft products for not so overlapping customer personas. All of them do tend to have similar pain points like finding new customers, talking to existing customers, making more money, accepting payments, doing some accounting, filing taxes, sending out invoices, paying vendors etc. But, the optimal user interfaces, product complexity, software integrations, biz model they need often varies quite a bit. Before we talk about what you are building, can you talk about what you learned from your research on these personas and how you navigated the so-called idea maze ? I'm especially interested in what lessons or heuristics you might have to unlearn or intentionally avoid after having worked as a product leader at device management platform Fleetsmith and getting acquired by Apple.

Ishita : I definitely agree with you on the lack of focus front. I think the biggest death sentence for companies building for SMBs is not being crisp enough in your definition of your ideal customer persona. You ultimately end up building a product which isn’t opinionated enough and isn’t deeply loved by any one segment. 

On that note, I didn’t actually start with the initial premise of building a product for SMBs. Since around 2015, I’ve been obsessed with this idea of the unbundling of the firm and what it would look like for employees to become free agents–and not contractors in the traditional sense, but aligning compensation and equity around outcomes rather than traditional workdays. Initially, I started out by exploring this, but, ultimately felt like we were at the very, very beginning of this starting to take place and felt like there were bigger blocks than just not good enough software to this worldview materializing. However, while exploring ideas around this concept, I happened to stumble upon a one-person business selling their product consulting services through their Calendly link. I ended up investigating whether other people were doing similar stuff and unearthed an entire swath of folks selling their mostly 1:1 paid services through super rudimentary tools that were just cobbled together. That ultimately led to nearly 150 customer discovery conversations over the next few months, and then the insights unearthed in those conversations led to the first version of Dayslice.

At Fleetsmith, our users were extremely opinionated about what they wanted (once again, both a blessing and a curse) because they were technical IT and security professionals with strong opinions. In stark contrast, our target segment in Dayslice often hasn’t fully embraced technology to power their business. This meant that I usually have to structure user research sessions differently at Dayslice versus what I did at Fleetsmith. At Fleetsmith, it was about getting folks to leave behind some of their super strong preconceived notions of what Fleetsmith should be while at Dayslice, we often have to encourage folks to dream and expect a bit more from the products they use.

Sar : Yeah, I repeatedly found it’s not just about selling the virtues of your software, but also about selling virtues of using any software in how they do their business. They do have strong opinions but they tend to be about going about their days without needing any technology! 

Let’s talk about Dayslice. What do you guys do today and where do you want to be in the future? You seem to have honed in on a very specific persona with a very intentionally crafted product marketing pitch. The focus on storefronts reminds me of link-in-bio startups. Which, by the way, I don’t think is a great idea. Their offerings seem too shallow and talk about platform risk! 

Ishita : We enable services businesses to launch and grow by powering scheduling, payments, and broader customer management. When you dig into each of these categories, there’s a lot of nuance and depth around needs which translates into productized workflows. For example, on the pricing and packaging front, we enable services businesses to provide packs of sessions rather than one-off scheduling and payments. This results in higher purchases per customer. On the product side, we make it easy for the service provider and their customer to schedule and manage sessions, keep track of how many sessions are remaining and then upsell once the pack is over. I don’t see link-in-bio companies as our competitors even though some of our customers will literally put their Dayslice link in their social bio (and others will slot us into a classic link-in-bio tool.) The key difference: we’re productizing the workflows in the backend of each of these categories in a very robust way. In contrast, link-in-bio companies tend to simply routers to different sites. 

Sar : If I were to start a math tutoring business today, there’s all sorts of tools available these days to be able to run the business without writing any code. I can use a website builder, peer to peer money transfer app, a scheduling app, social networks, invoicing software and a few other things to serve my basic needs. I probably have to pay a recurring fee for some of these things but many of them are free.  You package all these disparate tools together in a very easy-to-use experience to launch a service business online. There’s no shortage of all sorts of opinionated products that enable this in some shape or form. I have always wondered why more companies don’t experiment around helping customers with revenue maximization through dynamic pricing. I believe you have some ideas on that front. Can you talk about what you plan on doing to help your customers price discriminate?

Ishita : There are a lot of ideas we have on this front but the prioritization and development of them is obviously going to be driven by customer needs. That being said, there was a surprising insight I unearthed in customer interviews that I want to share. I had initially assumed that the most compelling idea on this front would be a version of surge pricing for open slots which helps maximize revenue when a service provider is generally in high demand. For house cleaners, this is probably during the day when folks are away from their homes. For services like coaching, it’s often in the evening or on weekends when people aren’t at their 9-to-5 jobs. However, in user research, the version of dynamic pricing that excited users the most was being able to easily offer a sliding scale for payments so they could sell a portion of their services to folks who were lower income–people who may not otherwise be able to afford them.

I think this speaks to a cultural difference where I was coming from the perspective of someone working in tech whose headspace is in the “revenue maximization” world while a lot of the folks I spoke with are building intentional communities and audiences around their services and are eager to give back to these groups. Of course, that strategy is also clever in its own right because it likely builds long term loyalty and encourages word-of-mouth referrals. 

Sar : What verticals are you seeing early traction in so far? What do you think about that? 

Ishita : We’ve defined our target audience tightly by attributes–they tend to sell services, generally 1:1 services with customers who are often repeat customers. Although these attributes can span many niches, their product needs are both shared but highly specific to workflows. Some of the areas where we’ve seen early traction so far are tutors, music teachers, and health services (nutritionists, reiki, coaching.) 

Sar : Service businesses live and die by referrals in trusted networks. Reviews have been productized quite well by marketplaces in everything from food ordering to alternative accommodations. But, the industry you are targeting could use more productization around testimonials. How are you guys tackling this?

Ishita : Today, if you’re selling your services with an independent stack (rather than through a marketplace), you generally need to manage the end-to-end testimonials process manually. This means that you need to remember to ask for testimonials, follow up with your client, sometimes give an incentive to encourage testimonials (like a discount on the next service booked), and then update your site to display the testimonial. If you’re really going above and beyond, you might also create some social content to display recent testimonials you’ve just received. With Dayslice, we automate that entire workflow so the only thing you have to decide is whether you want to display a given testimonial or not (and that’s through a simple toggle–not having to design and build a new Testimonials page with whatever no-code website builder you’re using.) Moreover, we make the experience delightful for the guest as well–we’ve built an easy way to give “emoji compliments” to service providers so you can “gift” them social proof even if you don’t want to go through the process of writing a full-fledged testimonial. This is just one of the many examples of workflows where we’re bringing workflow automation to make it easier for service providers to build out full-fledged, successful businesses. 

Sar : Alright let’s talk about the business model. You have a free version (that can be used forever) and a paid version (at 15 bucks a month). Can you explain your thinking around the pricing and the feature sets in each version? What can users comfortably do by staying on the free version (there is no time constraint) and what are the triggers for upgrading to the paid version?

Ishita : We wanted a free version of the product that people could use and get end-to-end value (i.e. list a service, get paid for it.) A lot of SMBs are price sensitive and really need to see the value of something working over time before they’ll choose to pay for it. Surprisingly, we’ve seen free users convert to paid two or three months into their free account experience. I think traditional SaaS philosophy often says that if they don’t convert in the first 14 or 28 days, you’ve likely lost them, and that’s just not what we’ve seen at Dayslice. That being said, the more you use the free plan, the more the potential value of converting to pro compounds in the background. 

For example, going back to the example of our automated testimonials and emoji compliments–every single business using Dayslice automatically racks up testimonials as their services are sold and their customers are nudged to write positive reviews. However, only Dayslice users on the paid plan can display this content publicly. Once you start to see a bunch of really nice things people have said about you, you naturally want to share them with the world and future customers so that’s a moment where you’re a lot more likely to pull out your credit card and upgrade to Pro. And that’s just one example–we’ve basically designed every feature with contextual nudging of conversation. So I’d say we definitely rely on product-led growth, but it goes way beyond free trials (which I also find to be a hilarious rebrand!)

Sar : I have a pet peeve with operating system style platforms counterposition themselves against marketplaces with a take rate marketing message that goes “We charge 0% rate take while marketplaces charge 20-30% take rate!”. While technically true, this misrepresents what marketplaces do! Marketplaces charge for the incremental demand they bring! You have a similar messaging on your website. I totally get why you do it! I think it actually hurts the platform in the long term by setting the wrong expectation for your customers. They might think they will get everything they do from marketplaces while saving money! Which is totally false! What do you think? 

Related to that, you said one of your differentiators is doing integrations with marketplaces to help with customer acquisition. You have done a lot of thinking around helping siphon off repeat customers of your customers off of marketplaces so that they can have direct relationships and make more money. This is hard because of a combination of inertia and the best marketplaces building more tools to avoid churn. Can you expand your thinking here and walk us through some ideas you have? You have an interesting framework around helping your customers capture users in the 50th to 90th percentile on a marketplace 

Ishita : Oh totally–we’re not a marketplace, and we’re very clear about that. On our landing page, we emphasize how Dayslice is a product you can use alongside being on a marketplace to maximize your income from repeat customers. So the thing that helps us is that this behavior is already happening today: lots of service providers who have repeat relationships with customers (and these are the folks who we’re targeting) tend to take people off of marketplaces after a few transactions. However, they don’t have other products to “fall back on” in terms of managing the operational flows that historically marketplaces were taking care of. So we’ve found that when we share how to use Dayslice alongside a specific marketplace, people tend to “get it” and understand the value of keeping an extra 15-40% of income in their pocket. That being said, over time, we’ve iterated on targeting a very specific subset of folks of these marketplaces: people who fall between the 50% and 90% percentile of activity on the marketplace. People in the bottom 50% are generally just doing a casual gig here or there so they aren’t a great fit for Dayslice because they don’t tend to have a repeat customer base. The marketplace take-rate also stings a lot less when you’re not making significant income overall from it. Meanwhile, people who are the very high-end of use (especially the top 3%), tend to uniquely and disproportionately benefit from their marketplace ranking so they’re harder to peel away. But when we target folks in between these groups, we tend to get a lot of “aha!” moments and excitement around Dayslice. 

Sar : Also, you mentioned a lot of VCs you spoke to talked about just tacking on a marketplace once your product takes off. You are principally against it. Can you share why and talk about the transitions between SaaS tools and marketplaces?

Ishita : Ha, well, I try not to be deeply attached to any one belief so I won’t say “never ever”... but, it’s something I’m deeply skeptical of. It’s hard enough to build a really successful, multi-billion dollar SaaS business, that I think your chance of doing it well is way higher if that’s what you focus on single-mindedly. 

As compelling as it may sound, on the surface-level, to “tack on” a marketplace–the reality of it is that it’s not a trivial thing to do. Once you’re positioning yourself as a place that offers discoverability, you need to bifurcate your business model (to capture the value you’re providing by driving leads), and then to justify actually doing that, you probably want to be driving a significant number of leads to users. Now, suddenly, you’re in the position of attracting a totally different user segment (a group with which you probably have less brand-awareness with and may live on different channels) so now you’re spinning up a new GTM strategy. So I just feel like the more you peel back how to actually execute on this, the more you realize you’re basically building two companies in parallel… and for 99% of companies, it really doesn’t make sense to do that. 

Sar : Right now, the product feels very simple and easy to use. Over time, products inevitably add complexity by shipping new features. What are your thoughts on balancing simplicity and complexity? You want to not overwhelm new users just starting out but also want to serve more needs of existing users. There’s this idea of progressive discovery where you only show contextually relevant advanced features to the relevant subset of users throughout the product experience. I know you guys are still early in your journey but I'm asking this more from a product management lens! 

Ishita : I’ve thought about this a lot over my career because at Fleetsmith, we ran into this challenge constantly. The incumbent in the space was known for infinite configuration while one of our differentiating features was ease-of-use and better UX. Naturally, as we moved upmarket, we sometimes felt tension on this front. That being said, I don’t think it’s an impossible problem to navigate. First, there’s a distinction between building a product versus building a toolkit. A comprehensive toolkit usually has a bunch of disparate components, but the value of it is that with some combination of them, you can solve almost any problem for anyone. 

Think about Home Depot as a toolkit when it comes to home construction–you can build a million different homes with the individual tools at your disposal. That being said, most people don’t actually want the toolkit. They just want to buy a house that has already been built for them. And, sure, they’ll want some customization–like they’ll put some frames up of family pictures and might paint a wall–but mostly they don’t care about having control over every little decision that goes into their house. You need to know whether you’re building “toolkit” software or “product” software because it will trickle down into seemingly small product decisions but make a big impact on the overall product experience. 

For example, when you’re shipping a dashboard for your users, is it a blank dashboard where they can build out their own graphs or are you making most of the decisions for your users (obviously, based on what you know about them and what they care about) and just allowing them to do minor operations like sorting? Both Fleetsmith and Dayslice are in the latter category.

Second, your idea of progressively/selective discovery is spot on, and there are a couple of ways that we tactically do that. The most basic way is collecting information from users during onboarding to understand the maturity of their business and where they get their existing customers from. A more interesting way is using what we know about them based on product use to contextually recommend features. For example, going back to the surge pricing feature, if we built it, we’d be positioning it to users differently if they generally had a lot of available slots on a given week (i.e. recoup some income for unbooked slots) versus if they were consistently booked every week. And if a user had low traffic in general on their page, we might not show it at all. 

Lastly, clever pricing and packaging is a great way to actually take advantage of this dynamic (assuming you have a great product design talent that can hide and expose features thoughtfully.) Packaging lower-priced, simpler-featured plans obviously captures more of your user segment, but having more advanced bundles of features alongside those plans makes an implicit promise to your customers that you’ll be there for them even as their needs evolve and diversify.

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