Matthias Henze is the Co-founder and CEO of Jimdo, Europe’s leading provider of do-it-yourself website creation software and a Spectrum portfolio company. Founded over 12 years ago out of a farmhouse in Germany, today the company has more than 200 employees in Hamburg and Tokyo and has helped customers create over 25 million websites.
In 2018, Jimdo released Dolphin, an entirely new product that makes it exceptionally easy for users to create websites. We spoke with Matthias about product innovation as well as the challenges and choices that emerge as companies introduce new products to the market. The interview with Matthias is the first in the Growth Perspectives series featuring entrepreneurs and operational leaders from the Spectrum portfolio in which we get their take on strategic growth initiatives and best practices for fast growing companies.
Q: Thanks for taking the time to speak with us Matthias. As time has passed, how have you approached keeping the product up to date with changing user needs and market demands?
A: We look at how our customers use our product and analyze that data. We’ve developed a lot of expertise and we can talk directly to our customers as their needs evolve. We also look at market trends. For example, there’s a lot of emphasis today on “DIY” and how people should do all these things themselves. That’s empowering for a small business, but only up to a point, because it’s not possible to do everything yourself. There aren’t enough hours in the day. So, we’re trying to look beyond DIY and say “sure, you can do it yourself, but should you have to?” How can we streamline, simplify and automate this process for you? If we do our job right, people can spend less time worrying about their website and more time running their business. That’s where we see the innovation potential.
Q: How do you approach budgeting and resource allocation to product innovation? Do you think doing it well requires material capital allocation?
A: I believe that product innovation can start small, with a dedicated team that is aligned and focused on the task. Once you see that the idea works, you apply more resources. Our latest product, Jimdo Dolphin, began as an experiment and has turned into one of our biggest successes.
Q: Speaking of Dolphin, it’s a new product that radically simplifies the website creation process for users. What led you to introduce this new product?
A: We saw an opportunity to serve our customers better. We noticed that for people without web design experience, which is most people, a standard website builder was not a great solution. Even with all the tools and promises, it was still hard to create a professional-looking website. Either people weren’t satisfied with the results, or they were overwhelmed with options and dropped out of the process. So, we developed Dolphin to provide a totally different approach. The goal was to remove all the blockers that typically trip up a beginner, and to keep everyone moving confidently through the process so that they are proud of the finished result. We know it’s working, because our rate of finished and published websites is much higher than before Dolphin was introduced.
Q: When you decided to build Dolphin, you chose to build it as a stand-alone product instead of an update to the existing product. What was your rationale?
A: Yes, a lot of people asked us if we thought about changing Jimdo Creator instead of building something new. But to innovate, it’s important to experiment and take risks, and that’s why we decided to build Dolphin separately. That way we could try out an entirely different approach, without sacrificing the qualities that make Creator so great—its power and flexibility. Dolphin is for a new market of entrepreneurs who want something that’s simpler and easier to use than a traditional website builder. It streamlines the whole website creation process and even helps you with the steps after you create a website, so that you can start managing your business from one central place.
Q: I believe you elected to have discrete teams working on each product. Why did you make this decision? What advantages did this give you and what disadvantages did it present?
A: The Dolphin team was operating in a different mode: exploring a new idea, experimenting and trying things out. That’s why we decided to create a dedicated team that was isolated from the rest of the company. We wanted to avoid distractions and be able to focus on the innovation. It worked well in the first stages. Then, when we knew the path forward with the product, we brought the teams back together.
Q: Did having the Dolphin team and the existing product team generate any organizational challenges?
A: Yes, it was a new experience for us. Since we wanted to let the experimental process play out, the Dolphin team didn’t operate with the same transparency that we’re used to at Jimdo. And for people outside that team, it was a bit strange to know that there’s this important thing going on, but no one is sharing it yet. We don’t typically operate that way. Also, Dolphin was built on a new tech stack that not everybody in the company had experience with. When we merged the teams, we had to onboard people to the new code base efficiently and add more engineers with a different tech background and expertise.
Q: What advice do you have for other entrepreneurs as they think through the product innovation challenge?
A: First, it all starts with the customer. It’s important to understand the customers’ problems so that you can make the right assumptions about how to solve them. Talking to your customers and studying them is very important. Second, it’s important not to fall in love with your favorite solutions and ideas. Keep an open mind, keep testing, learning and adapting. And, finally, I can’t stress enough the importance of resilience. When you’re in it for the long haul, you take the ups and downs and learn to appreciate all the surprises along the way.
Thanks to Matthias for taking the time to speak with us about Jimdo’s customer-centered approach to product innovation. In an environment where innovation can lead to meaningful market share growth, a company’s product engineers and designers have a critical role in contributing to product evolution and long-term sustainability. Jimdo’s ability to leverage data and engage small, focused teams willing to take risks, while always keeping the customer in mind, is central to the platform’s success. We encourage our readers to give Dolphin a try and share with us how they're tackling product innovation.