Case Study: Kanary CEO Rachel Vrabec's Willingness To Start Small And Stay Focused Helps Her Move Closer To Product-Market Fit

For pre-seed startups, the ability to focus on solving small, but critical subproblems is the difference between achieving PMF or not.

Nov 22, 2021

Author’s Note: I know I’ve been gone for a while.

Read this note here to learn why: A Short Update On F2F.

This will be the only Case Study for now, as I will be going on a hiatus till December 6th, when a new one will be published and F2F will be back on its regular schedule . Hope everyone has a wonderful Thanksgiving (for those who celebrate!)!

Introduction:

Kanary protects your digital privacy and security. It takes the hassle and uncertainty out of staying safe online by monitoring for risks, removing personal information from sites, and looking out for loved ones who may be less digitally savvy. The company was founded in 2019 in Chicago, IL. Before launching Kanary, Rachel Vrabec spent a year launching various software projects focused on personal data and returning control and privacy to individuals online. Prior, she was a solution architect at a data science startup and IBM.

Executive Summary:

Problem: Keeping Members Engaged To Use Kanary

Kanary’s success as a product ironically creates its greatest challenge; the product works so well users think that they don’t need to worry about their privacy going forward, leading to churn in the usage of the product. How can Vrabec and her team keep users coming back to Kanary, given that security is a constant concern?
Market: People Need To Proactively Scrub The Web Of Their Leaked Personal Information

The interesting factor about Kanary’s problem that they work to solve is that privacy is an ongoing issue for all Internet users. It’s incredibly difficult to be aware of all these times your data is breached - by the time you find out, it’s too late, thus there are a plethora of web surfers who need a proactive, user-friendly solution to secure their personal information.
Solution: Small Teams Have To Start Simple And Build Fast

Kanary’s main bottleneck in building their product faster is the small size of their team. The way that they get the most out of the small team is to create a list of simple, but critical priority features to build for their users over time.
Team: Handling Disagreements About Feature Priority

Building consensus on what to build first for users is not easy at all. Vrabec had to create opportunities for discussion as a team to get everyone’s buy-in towards what direction the startup needed to head in for its users.
Fundraising: Founder-Market Fit Is Critical For Pre-Seed Startups
Vrabec said it best: “Raising a pre-seed is mostly about vision, team, and some traction. Investors want to know you are going to do everything in your power to do what you say you’ll do. When you explain all the things you want to do with their money, does the investor believe you?”
Takeaway: Starting Small, Staying Focused
Focusing on the small, but important problems you can solve today helps move you along the path fastest to PMF.

Case Study: Kanary

Problem: Keeping Members Engaged To Use Kanary

Tell me about a problem or set of problems that you’ve had to solve on your journey to product-market fit.

We’ve struggled with keeping members engaged. If we do a good job and remove people’s information from everywhere we’ve found it online; there’s a chance a member thinks, “Well, my information isn’t exposed anymore, so thanks, I’m done!” Unfortunately, this isn’t true because new information pops up all the time that might impact your privacy, security, and safety.

We’ve begun to solve this problem by building a scanning system that grows its coverage of the internet very quickly. This means we can show our members that we are removing them from sites and also expanding to new sites they’d also want their information removed from.

We’ve also solved this problem by being generous with the number of people members can add to their accounts. Instead of having 2x or 3x the price for a family plan, we allow people to add their loved ones at no additional charge.

This gives us more to cover and more for a member to engage with as they think about protecting their information.

Why were these problems so critical to solve? What was it like personally struggling to overcome these challenges to achieving PMF?

Since we’re a subscription business in the nascent market of personal privacy, churn is the biggest risk to our business. We need to create an ongoing resource for people to turn to when they have questions, want to be proactive, or when something goes wrong.

Personally, this challenge has required a lot of creativity, ingenuity, and generosity. We’ve spent a lot of time doing unscalable things like reaching out to members and researching problems people ask us about. It’s been helpful to look outside the privacy & security space to other digital experiences people love for inspiration.

Market: People Need To Proactively Scrub The Web Of Their Leaked Personal Information

Let’s get deeper into the pain point or points you were trying to solve. Imagine I’m a customer thinking about using your product or service. How do you go about understanding my pain and creating a solution to address it?

The pain point we’re solving is someone’s personal information (address, phone, email, family info) is exposed on a site and they need it removed for their privacy and safety.

This is the type of problem that can always have a better and faster solution. So it’s important for us to start small, iterate, then measure to see how we’re doing and where we can improve.

We’ve been hypothesis-driven from day 1. We start by refining an idea and story about a pain point, then share it with people and see if and why it resonates. We did this in 2019 when we launched our landing page. Now we’re doing this as we iterate on new features. We typically launch something small, get a reaction, then throw it away, or continue to iterate.

It’s become increasingly important for us to measure our success: how many sites are we scanning, how many removals have we done, how long does it take to remove information?

These internal metrics help us stay motivated to find more information and remove it more quickly.

Assuming you’ve managed to address the pain points I face as a customer, what additional information did you discover in your journey to PMF that there’s a large market in need of a solution to the existing problem?

We’ve discovered that there are a set of problems related to personal privacy and security that are clustered together in peoples’ minds.

We’ve yet to launch features beyond the core pain point of deleting info from unwanted sites, but in interviews and conversations, people voice worries about scammers, spam robocalls, emails, and junk mail. Many people talk about loved ones who’ve been targeted and how difficult it was to recover.

These stories give us ideas for where we could go in the future beyond what we do today.

How did you narrow your scope of what portion of the market you wanted to tackle first? Who did you decide would be your first beachhead customers and why?

We started from a problem we’d heard a lot of friends and family talk about; how can I just get websites and companies to delete my information? We very much started bottoms up, not top-down.

We decided to focus on individuals because we didn’t feel there was a good solution out there. We also wanted to tackle a hard problem that had a big impact on what we built first. Removing sensitive information like a home address can have a big impact on someone’s safety and peace of mind.

Solution: Small Teams Have To Start Simple And Build Fast

How did you build your solution to maximize its relevance with the customer and ensure product-market fit? If you haven't found PMF yet, what have you learned? What are the blockers for getting to PMF?

We started with a simple list of sites and recommendations. We were focused on growing this based on what we thought was the highest risk. We’ve now learned that people want to share their experiences and concerns. It’s important to have a system that responds to those requests and offers personalized responses.

We don’t have product-market fit. We need to get better at being in the right place at the right time when people are looking for a solution to their privacy problems and concerns. Blockers are mostly around capacity - we’re still a very small team trying to build quickly but responsibly.

What are some of the things you did that “didn’t scale” to shape your solution today?

QAing our system has been critical. It took a ton of time to review our results and train our system to better recognize and remove risks, but that human attention meant we had better results than most competitors. Now we have processes and systems that are scalable and help us maintain a high-quality experience as we grow.

What did you learn to best engage with your customers? How did you build a tight feedback loop with your customers to rapidly improve your solution to their problems?

I rely on email. We’ve had some feedback on Reddit and Twitter, but since we’re a privacy product, we don’t want to push people to engage with us publicly. We don’t have a rigid process here - it’s mostly trying to be as welcoming and open as possible. Even if a member has a bad experience, we want them to feel comfortable being totally open with us. It’s the only way to improve.

Walk me through how you landed your first few customers as you were building your product or service.

We posted the idea on a Reddit privacy thread. It got a solid response and upvote count—a lot of interest and suggestions. We then built a landing page and posted it again on the thread. That was how we got our first 1,000 ish sign-ups.

As I mentioned before, we started with just a list. We did a lot of the searching and formatting manually and ran all the code locally. It was not pretty or scalable. It was just a monthly email people signed up for.

Team: Handling Disagreements About Feature Priority

If you’re a solo founder, walk me through a time that you had a conflict with your team. What was it about? How did you handle the situation? What was the resolution, and how did it impact your working relationship with your cofounder?

Our team’s disagreements are mostly about prioritizing features for development. We handled our most recent disagreement by discussing the feature in terms of impact on our members and impact on our team. Sometimes it’s important we prioritize internal or devops work so small problems don’t keep happening over and over and exhausting our capacity. Sometimes it’s important to prioritize making our product better for our members. In the recent discussion, we decided to prioritize a feature that impacted our team’s capacity.

The result was a good opportunity to discuss things that were frustrating, time-consuming, and risky, then prioritize our own sanity and efficiency.

What key qualities did you look for in key early hires to increase your chances of discovering product-market fit, and how did you prioritize what types of hires you needed to make first?

I prioritized hiring a founding software developer first. This was critical since our product is complex and tackling a really challenging technical problem. I looked for people dedicated to building great software, the ability and excitement to own the product, and empathy with our members who are struggling to protect their information and privacy. I also looked for grit and flexibility since we were really early stage, and crazy things can happen.

If there was a potential employee of your startup reading this Case Study right now, how would you convince them that joining your team is the next best step in their career?

There’s a huge opportunity for Kanary to shape how people protect their privacy and security online. We’re building a dedicated team to tackle the complex technical and social challenges that stand in our way. Being one of the early members of a team like ours is a rare opportunity.

Joining Kanary would mean having total ownership over your work while having the support of a team to review, discuss, and always make each other better.

Most importantly, the challenges you’d solve would have a direct impact on everyday people’s safety, privacy, and dignity.

Being an early member of our team means generous equity and ownership over where we go next.

Working alongside smart and passionate people who help you do your best work is always the best next step in a career, and that’s what we’re setting up our team up to do.

Fundraising: Founder-Market Fit Is Critical For Pre-Seed Startups

How did you set expectations with investors at seed and Series A? What is the main difference in those expectations as your company grows from one stage to another?

Raising a pre-seed is mostly about vision, team, and some traction. Investors want to know you are going to do everything in your power to do what you say you’ll do. When you explain all the things you want to do with their money, does the investor believe you?

Our primary investor, 2048 VC, has several great posts on how founders should think about fundraising. At a pre-seed stage, I think establishing founder-market-fit is very important as you pitch investors. At Series A, (I’ve yet to get there), it seems like product-market fit is much more important.

Takeaway: Starting Small, Staying Focused

What are the key lessons have you learned so far from your journey to achieve product-market fit?

I’ve learned that starting small and focused on a problem you have is often a hack that can save a ton of time. Yes, there are a million problems you *could* solve. But which ones can you solve today? Those are often good starting points that set you up to iterate toward PMF.

What’s the hardest problem you’re facing now after solving the prior one(s)?

Scaling our tech is hard because it’s adversarial (companies don’t want to delete your information). We have to be creative about how we build our tech to scale big but still be personalized and seem small. We cannot afford to have the quality of our service suffer as we grow.

Kanary Founder File:

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