Product Fruits: They hit $2M ARR on PPC alone, and rebuilding around AI broke the playbook

Renata: Foreign m. Welcome to Revealing SaaS Marketing, a podcast by Digital Hunch. I'm Renata, a growth expert and co founder of a marketing agency for SaaS products. In each episode, uh, we uncover one story. What worked, what not, and what still keeps founders awake at night. Today I'm talking with Karel Papik, co founder of Product Fruits, a digital adoption platform. Karel's company has rebuilt their product around AI, has rebuilt their marketing playbook three times. They got to 2 million IRR with Chess PPC and after that, PLG and paid acquisitions stopped working. So how do you rebuild your product and marketing when you can't outspend your competitors? Karel, welcome to our podcast. Today we're going to discuss Product Fruits, your path in building the great product, also your marketing. Because I'm really interested in how, uh, you are one of the rare cases who made ppc work in B2B SaaS. Uh, listen to your SaaS clients club episode with Omer and I'm not going to ask you all the questions again. And you said on LinkedIn that uh, it actually was your first podcast, is that true?

Karel Papik: That's correct. It was my first podcast about three weeks ago. So this is new territory for me and I feel extremely m uncomfortable, um, doing it.

Renata: Yeah, I think for what it was, you absolutely landed your first episode and now you already have experience. So I think this one will be much easier when you rebuild the product around AI. What was the first thing about your marketing that you realized had to change?

Karel Papik: I think we are selling about four years now. We have 1300 companies like paying clients and we met, I think two friction points on this way. The first one is quite common when you are reaching approximately 2 million arrows. Would like to see like bigger accounts coming, right? Doing some, I would say founder sales. Right. Founders are selling and then you do the first hire and hopefully then chief of sales and so on. And we try to avoid this trajectory because I think it's quite risky when at the start you are trying to sell, you have no guarantee you are able to scale up later with the sales department because it's very different process actually. And I knew, I know quite a few companies which hit this roadblock. They were selling good and they were selling personally like founders to founders and other companies. But they were not able to get the momentum and they implemented marketing and they tried to have some Legion machine and everything. It's a different game. So that's the first thing which we avoided. And we also, we were in kind of hurry because we raised 400 million and we had approximately 10, 12 months to show some numbers and do another round right then significant one. So if you want to do it, you can't really on SEO because SEO takes some time to warm up, right? To warm. And then maybe, or maybe not, you will see some sales. So that's why we bet on PPCs also. We bet on PPCS because it was easier in regards to manpower. You just need one guy or 20% of his time to be dedicated to PPCs. So PVC is a great way how to start and get the ball rolling. And then we met another friction point when we kind of redesigned the product to be AI product. Now we are product experience platform. I would say we overgrown the DAP category and that was also a friction point which also affected the marketing. So I think these two bumps on the round were significant.

Renata: I understand that you had a success with ppc, but you also had competitors who are better founded. So they are huge companies with a lot of resources. How have you approached this? How do you compete with your well founded competitors especially on competitive markets?

Karel Papik: It's the million dollar question. For us it really means million dollars question. You have to make some decisions. So our decision was for example not to do SEO because we saw that our competitors, they are employing 30 people doing the contract. So we couldn't afford it. So we had to do something different. And uh, if you don't mind me asking if you would be looking for some product, right? Let's say in Google and you are searching it and you will end up landing on some block explaining potential solution for your problem and they are recommending their product because you are on their block. Right. What do you do?

Renata: That depends. For me personally, if the article was very helpful, I understand 100% that it's something that I need. I can sign up for a trial. But if it was too selling, too pushy, I won't do it.

Karel Papik: And you would do what? Instead of this, I would go and

Renata: try find some solutions.

Karel Papik: Exactly, exactly. So you will read the article and either you will be super thrilled, okay, I will sign up and I will try it. Or you are unsure. Especially if you are able to pay, I don't know, 1,000 bucks monthly, then you are looking for competitors and you will find us. So we will let other people to educate the market and then we are harvesting them. That's what we did at the start.

Renata: At some point it stopped working. Right.

Karel Papik: Because ppc, they had some ceiling. Only certain number of people are um, looking. But it worked quite well at the start. Especially for some small agile companies you

Renata: had a breaking point after you decided to rebuild your product and make it an AI product like AI solution.

Karel Papik: I would maybe just briefly describe what we are doing so the listeners will have some context. Right. I will try not to be salesy. It's a kind of interface between any user or customer and any application. So you will end up in some application, you are unsure what to do and if that application is utilizing product fruits in kind of independent layer, you can't distinguish what's the product fruits and what's their applications. And we are helping this adoption, onboarding, tech support, churn prevention and everything. So for example you will end up there and uh, our AI will ask you Renata, what's the solution you are looking for? How big is your team? Did you try some competitors and so on. So discovery. Based on this we are tailoring onboarding and experience. We will show you the right part of the application. So you will then during the using of the application you can ask AI about any questions. And we are pointing on the screen explaining video feedback and so on. And then last part, we are collecting all this information and sending them to the product team for the feedback. And what we did was in the old world we mostly sold these step by step tours. Do this and do that. I hate this. And it's still the big bestseller I have to say. But I don't like it. It's like in school and teacher taught you you have to do this and then you have to do that because we know better.

Renata: Actually I hate it too.

Karel Papik: Like I don't like it and because I believe that we as users of application want to own our adoption of the tool, our onboarding. It's my onboarding. I don't give a fuck like what you are recommending me. It's my journey. I am now in a shop, I'm looking around what I might want and. And in the right moment the good shopkeeper will someone and ask me don't you need some assistance? But he will not drag me. You should buy the milk. You still don't have the milk. Everybody's buying milk. Let's know how it works.

Renata: Yeah, it's a good comparison.

Karel Papik: We are able to do this thanks to AI. So that's why we are able the product about a year ago and we decided okay, forget it. We will not continue this product as it was even if when was selling very well. Because we want to build the product which we've always wanted to use.

Renata: How your marketing changed after that?

Karel Papik: We had to Change the PPC or the search volume for AI onboarding. AI adoption is really tiny, so you really can't use it. So we are selling AI, but our region is mostly not for AI. Okay, that's a bummer. So typically our customers are coming to us, they are asking or expressing their needs, but then we have to explain them what do we have and they are ending up buying something different than they thought maybe originally. So that was the one thing the PPCs were not that optimal for it because people are still searching for the old world. I know that we are all obsessed with AI because we re linked in. That's the poison, right? So we believe everything is AI and we are actually.

Renata: Yes, yeah, we are in the bubble.

Karel Papik: The second problem was that with AI, our products, it's complex. PLG stopped working so we changed it more to sales driven. At the start was PLG driven and marketing driven. Now we have sales department which is more robust with implementation engineers which are helping the companies to implement product fruits. And when we rebuild the sales department, it was like CSM department because everything was inbound and they were just reacting, not really being proactive. And in one time I was really obsessed with LinkedIn. I said everybody's doing LinkedIn. All this video, we have to do it, we have to do it. I was pushing like crazy and I told our salespeople they have to do it or m they leave. And they left. I don't know what's right, move or not. If you are in sales and you tell me I have 63 connections on LinkedIn and I think you are doing something wrong. Not the salespeople I need really. And so they didn't want to do it. Our sales guys, we have new people now and they are much more, I would say active and also posting on LinkedIn with us. But I calmed down with the LinkedIn. I don't think it's a um, relevant legion. Anyway, we are doing it just because other companies are doing it.

Renata: Yeah, it's love and hate relationship. I saw your post, a sarcastic post about LinkedIn that actually. Yeah, you don't like it. But anyway you post on it.

Karel Papik: But it was funny. Was it?

Renata: Yeah, yeah.

Karel Papik: I will just describe it for the listeners. I made some video in Surah, just I don't know, for fun. It's LinkedIn. It's a marketplace where everybody is selling, yelling and nobody is buying. We are just trying to sell.

Renata: You posted on LinkedIn five months ago that you are hiring an ABM manager and you said that you have a new Team, how does it work right now?

Karel Papik: But I made a note here that I want that you want to ask me about abm. So my answer is it didn't work at all.

Renata: Yeah, this is what I wanted to hear because sometimes people come and they say okay, we will launch ABM and yeah, it will give us all the money in the world. And it's interesting. What exactly did work? Maybe something did work, but what?

Karel Papik: Absolutely nothing worked because we were not able to find the person which we would believe able to do it. Of course a lot of agencies offered some work, but so far we never really had the luck with agencies. With some really tiny exceptions.

Renata: So I'm from an agency, but yeah, I understand your point.

Karel Papik: Agencies are best because they are able to see out of the picture, out of the box sometimes. And now Renata, I believe we have for the product Experience platform the best product on the planet. That's it. The most advanced, it's working. But our marketing, it's very simple. Just one guy working on it and he had to do all this stuff, landing pages and web and everything. So we are not really sophisticated in lead gen or anything. So for ABM we didn't crack it.

Renata: Do you have some example that in the last year what was the most expensive mistake you've made?

Karel Papik: With marketing we are typically not doing expensive mistakes, we are doing just mistakes. Si selling never ever fired anybody for doing any mistake. We need people which are active, which are willing to take risk and which are not afraid to fail and try something different. So whenever somebody is asking me, I will try to do some LinkedIn lead gen. I don't know if it will work. We can have endless conversation about it, but until we will really try it, we will never know. Right.

Renata: Okay. So just testing I would say not mistakes.

Karel Papik: For example, where I was quite sure it will bring something was the affiliate program we started. Affiliate program. We did everything. We have some platform well, uh, known and it brought pure zero, like nothing whatsoever. Which is crazy and I didn't expect it. We have very loyal customers.

Renata: Mhm.

Karel Papik: And they like us. Uh, from the marketing perspective, we focus quite a lot on our current base now because of the AI, because they are using our, I would say analog product fruits, step by step tours, hints and it works. And we know that they can benefit a lot from the new product Fruits, from the Elvin, from the discoveries, outcomes, flows because it works and they are buying it, they are trying it and um, they are converting for the AI solution and paying more. Okay.

Renata: Yeah, that's interesting to dig in actually. But okay, let's zoom out a little bit. I have the question because yeah, you mentioned that you have 1300 customers and uh, you actually have data uh, about what comes after acquisitions. A lot of founders and companies, they think that okay, if we switch PPC or some marketing initiative we'll have clients but after they get clients on their website they just don't convert. Do you have any insights on what comes after the sign up and what most of the founders don't understand about this importance of onboarding?

Karel Papik: Okay, so one thing is the quality of lead gen. You don't need just leads, you need quality leads. Even for us it means that we are losing definitely more than 50% of leads in the first day. They just open the application, they disappear. I also don't understand it because they mostly they clicked on some link, they read some article landing page, they open the product fruits and in 90 seconds they disappear. I don't get it but this is how it is. But the remaining one, they are starting to do something. Maybe not immediately but sooner or later. But in general I think a lot of product people or founders you want, they are focused on lead gen and then lead gen should end at the product signing up for the product and then somehow they presume that this is it, we done it, they are inside and then they are losing 90% of opportunities because they don't care about users, customers in the application. If you have something complex or innovative or both, you need really good onboarding and adoption. And onboarding for us is just a fragment of our but we are taking care about the user in the whole journey. The ah, product itself must be great, the legion must be solid. And then you have to explain how to use the product, how the user will benefit from the product.

Renata: Yeah, that's usually my personal pain as a marketer even though I understand that we can get great leads. Sometimes the product is so complex that you just need to explain it. And you mentioned that at some point your products started to be very complex and you decided to change this PLG model to more sales LED model. And I have a question here. What is the moment when you understand that your product is complex?

Karel Papik: We didn't see it, we just saw the decline of the conversion because we have a free trial and we saw the decline and it was like okay, so maybe something new on the market, maybe some new competitor, somebody's cheaper or what the heck is going on. And when we investigated this and it didn't really trick us at the start, we tried to investigate these moments and it really quite a lot correlate with the complexity of the new product. When we added more tools, big tool, big part of application was rebuilt to be more complex and we saw the decline in adoption. And the second thing which is super significant for us, uh that we are finally able to utilize our AI. So we have the Elven and when you are in the application you don't know how to publish the announcement. So you will ask the Elven, how should I publish the new announcement? And our Elven will explain you this and you will say I don't understand it. And he will explain it in different way. You will ask for the free time. I don't get it. And you are not feel like you. It's not embarrassing to ask for the fifth time. And he's able even to talk to you with voice and point on the screen and everything. So it's very helpful. So also thanks to our AI, our adoption tools, we see increase in the adoption of our platform.

Renata: You also mentioned that you have implementation engineers. Tell me about it. How have you come up with this area and how do they work?

Karel Papik: We used to have some sales department and then CSM department and CSM department they took care about customers. They tried to upsell them and um, make sure they renew. But I didn't see big value for the customer really. It was just sales say push, hey, don't you want to buy this or that? So we disband this department at all and we don't have any CSM anymore. And instead of this we hired new people and they are implementation managers and they are great. It's Rob and Adam and they have big experience with product fruits. They were on different positions and they are super helpful. So you are talking to sales and salespeople are sales guy. They are talking to you and they are helping you to explain your use case, what you are looking for. And if the use case is complex and you are unsure how to really start to implement it, we are redirecting you to our implementation engineers which are not just talking to you on general level.

Renata: Mhm.

Karel Papik: But they are really able to get the ball rolling.

Renata: Actually I know from experience with different companies that this role is really crucial. I think this is a very great thing that a lot of companies miss that you need not only sales but also people who can uh, help you with onboarding Works great.

Karel Papik: Also our customers are not afraid to talk to these people because they are not trying to push them. Some to sell themselves think they are just really helping. And also we have pretty good customer support department. We are using Alvin AI for answering questions. So I think almost close to 90% of our technical question is answered by our AI. Also it's not that cheap because our system is quite sophisticated. So it's also more expensive. But it gives you really great results. And because of that our customer support people can take care about more complex things. And we have Aimee and Maggie and Aaron and other people there and Jeff and these people are really heart and soul of the company. So we have great reviews especially about the tech support which is funny because we are using AI, uh, tech support tool our and still we are using people. I believe in these times you want to see the synergy between AI.

Renata: Yeah, that actually was my next question. Because you are an AI company and you use AI in your product and in your own processes. But what do you think is important to keep human?

Karel Papik: One day AI will take everything from us. Right? That's. I don't know. It's hard not to see it.

Renata: Mhm.

Karel Papik: I will be long time gone and maybe my children will be gone as well. But this time will come they will steal our jobs and purpose and meaning. But uh, now we are benefiting from AI. This narrative that AI will replace all the jobs. I don't believe in it because it's when I am in my office and working on something and trying to utilize different AIs and people in product fruits. Most of them are doing it much better than I do. But still I'm trying my best. And when I'm utilizing AI well in figma and GPT and cloth and everything, I have great feeling when I go home and I feel my output was great, I was smarter, I was faster. I have great feeling. But I wouldn't have that good feeling if the AI would do everything for me. I was just sitting and watching, I

Renata: would, yeah, like you know, like an operator of AI.

Karel Papik: You will get the most. If you will get brains and AI on the same page working on something together, the results will be the best. You don't want AI to be roaming around and doing something for you without any control. And I don't believe it will be like this in next five years. But a lot of companies are afraid, oh we will not be here in five years because everything will be done by this agent. We have to buy some agent platform which will do something and please buy us uh, some agent platform for controlling some agents. We don't have any agents but we need this platform. Everybody is buying it. We want to be agent company. It's ah, just it's just chaos. Everybody is afraid about the future and they are afraid they won't be relevant. Um, but they still don't know how the future will look. Like they don't even guess.

Renata: But how was it when you decided to rebuild your product and to implement AI? Because I suppose you were also afraid that in next couple of years your product is going to be obsolete. So what have you felt?

Karel Papik: Yeah, we were shitting in our panties. Really? Yeah, we were afraid. We were really scared. And we were sitting with Slaadja and it was times of depression. Okay. So now we are selling this step by step, tours, hands and everything is rigid.

Renata: Mhm.

Karel Papik: And with AI you can do it in different way. And there are some new people which will come and take everything from us because they will do it with AI. And it took us one week. And I remember every single day from these dark times. And after one week we are just sitting, I see it like, like today in this small kitchen. And Laja said so okay, it. We will do it as we really always wanted. We have bunch of ideas how to do it. And this AI, MIT graduates, they know nothing about the adoption, about the onboarding. They don't have the expertise. They are just playing with LLM. They don't have the core. We have it. Years of experience. I'm also, I'm from video games so I know a lot about adoption. So we decided we will just close the eyes and we will start to dream about the platform which we always wanted to have. And then we did it.

Renata: Yeah. But uh, what would you recommend? Because I am sure that there are a lot of founders right now who has their products and they are great but they don't implement AI. What would you say to them right now knowing all that?

Karel Papik: You know, it's actually tough question. I know founders which are doing something very meaningful, not just for society and planet, but it's economically viable, it's a good idea. And they are not utilizing AI because it's not needed. It's not needed. Right. It's like when you are trying to sell to the company all these LinkedIn people. We will implement AI in your company. Nobody needs AI in the company. First of all they need processes, they need standard process wrecking and that's it. AI is just the spice. It will not solve anything. And it's the same for the product. So if you are building product which is not AI, you will not get any investment. Nobody will touch you. Because all these VCs, they know nothing about everything. They are investing only in the things they read about on Crunchbase, that's it. And I don't blame them because I don't know if. And I had an opportunity to read a lot of pitches and decks and mostly I had no idea if I would invest. I don't know what is it? And I don't understand the market. Nobody does. So they are just betting. That's why they are saying they are betting on the founder because they can't understand the product and they can't understand the market because they can't analyze it. Maybe they can understand it, but they can't analyze it because nobody can. So they are betting on the personality. So if you have a product which is without AI, keep bootstrapping. Don't ask about the investment because you won't get it. And I think you can be pretty successful, of course, anyway, that gives hope.

Renata: Not every company wants to get investment. And I also have a question because I heard on the podcast with Omar that you said something very controversial for me that, uh, don't always listen to your client. And I'm asking you because in almost every episode we're talking with different people and they say that, okay, understand your clients. This is the most important part. And you said the uh, other thing that maybe it's not wise to always listen to your clients. Can you explain this?

Karel Papik: We understand our clients and we understand their needs better than they do. We are talking to our customers quite a lot actually.

Renata: Okay, so you do, that's great.

Karel Papik: Our product guy, Martin, he's on the call, I think every single day with a client. Every single day, sometimes two. So significant part of his time is dedicated to talks to the customers and about 99% of this time is dedicated to feedback for some product in early access or just some prototype idea. So we are prototyping something and then we are discussing it with the clients and then we are tuning it based on the client's feedback and needs quite a lot or completely rebuild it. Then we are sending it to the early access and offering via newsletter and in uh, product communication done through the product fruits to openly access. And companies try it and tell us what they think. But if you want to bring something really new on the market with AI now or Visao, I think you want to just be in a bathroom or on a toilet for one hour and just dream about it, think about it, maybe have some talks with one guy like founder to founder or founder to marketing guy. So these discussions, they can uh, born some really interesting cool ideas which you will try and then you are Talking to the people. But how customers can know what they might get. They are super smart people. We are selling to the companies and all of them are super smart people. But it's not their game. They know about how to build the shapes, how to do the car dealership, how the stock exchange works and stuff like this. They don't know how the onboarding work. Do you? No.

Renata: A little bit.

Karel Papik: No, of course.

Renata: Yeah, I understand. So you mean that if you want to make something innovative, you need to dream about it first.

Karel Papik: That's our way how to do it. Because if, of course I'm using some simplifications, but if you will talk to your current customers, they just want some small upgrades here and there. Uh, we need more permission here. We m need notification there and they do. And we are listening and we are adding it to the backlog and deploying it. But the overall conversation, they don't know what they can get, what the technology can create. And we have a feeling for this because we live it.

Renata: That's true. Okay, uh, let's close with my favorite question. So, uh, if SaaS founder listening is sitting where you were sitting like one year ago, 18 months ago, and they have problems. So PPC doesn't work. AI competitors show up, um, and they don't have a lot of funding. What is one thing that we would recommend to them doing right now?

Karel Papik: Every situation is different, but I would probably recommend them, um, try some pivot instead of some slow dying. Try to fail quickly. And if you have some resources, if you have some remaining energy and you have an idea, this is the time to do it. Because these days the big advantage is you can create something new quite fast. So instead of slow dying, trying to improving feed the horse which is already dead, you just don't want to see it. Because if you are not doing well, you can't get funding and everything. Maybe your product sucks. Maybe because if it wouldn't, you would get the funding.

Renata: We can get funding or it's without AI.

Karel Papik: Yeah, we can get funding because we are a bit profitable and everything. We are not struggling with Runway. And so now VCs uh, are calling us and we can have some discussion. And it's just because we build it. Of course we build it with the big help of our investors. That's a sure thing. We tried to bootstrap, by the way, and it didn't work. We did didn't break through. We needed the investment. So thanks God we got it. But in every given moment you have to show the VCs the investors. You have something that will be relevant in future and can be big and if you don't have it, probably you don't have it.

Renata: Yeah, I love this advice because yeah, fail quickly is better than dying slowly. I agree. I wanted to ask you where people can connect with you.

Karel Papik: We have website. They can send me email but under LinkedIn of course I'm reading every single day. Of course I'm replying to every single message I will get.

Renata: Yeah, that's great. Thank you very much.

Karel Papik: So thank you very much for inviting me. And um, that's it. So thank you.

Renata: Thank you for listening to rebuilding SaaS marketing. If this episode gave you a spark or an idea, share it with the founder at the same stage of growth. Listen to our podcast on, um, YouTube, Spotify, Castbox or wherever you listen to your podcasts. Join us as we keep redefining how SaaS marketing works in the age of AI.