Managing client flow and administrative tasks remains a significant challenge in the rapidly evolving landscape of independent businesses. Yuval Kesten, Chief Product Officer of HoneyBook, shares insights into how a modern platform can alleviate these burdens. Reflecting on his extensive experience at Meta and now at HoneyBook, Yuval details how integrating advanced technologies like AI and embedded fintech simplifies operations and enhances overall efficiency for freelancers and entrepreneurs in service-based businesses.
Podcast Takeaways:
- Yuval details the bottom-up culture at Meta and its influence on him.
- Building a client flow management platform primarily for independent service providers.
- HoneyBook’s target market focuses on committed businesses.
- Independents face challenges as their businesses grow.
- Integration of embedded fintech features to manage cash flows efficiently.
- HoneyBook’s careful approach to providing loans as part of embedded finance.
- The successful adoption of financial features, including tax savings.
- The application of generative AI in assisting with client inquiries.
- Future plans for enhancing platform functionalities with more AI technologies.
- Insights on building a team culture that embraces new technologies and efficiencies.
HoneyBook’s Client-Centric Success Model
In a recent SMB Tech Innovators podcast episode, Brian Busch sat down with Yuval Kesten, the Chief Product Officer of HoneyBook, to discuss the company’s innovative approach to client flow management and the integration of artificial intelligence (AI) into their platform. This conversation highlighted HoneyBook’s journey from its inception to becoming a vital tool for independent service-based businesses. The discussion covered key insights into the company’s product strategies, community engagement, and future directions, providing valuable lessons for tech enthusiasts and business owners.
A Journey from Meta to HoneyBook
Yuval Kesten’s Background and Lessons Learned
Yuval’s journey to becoming the Chief Product Officer at HoneyBook is a testament to his extensive experience in the tech industry. Having started his career as a software engineer at Twitter, Yuval quickly climbed the ranks to become a director, working on search and news-focused products and later on e-commerce and emerging markets. His tenure at Meta (formerly Facebook) was particularly influential, where he embraced a bottom-up culture that allowed for diverse product and leadership experiences.
At Meta, Yuval learned to adapt his leadership and product management styles to team dynamics and challenges. This adaptability became crucial when he joined HoneyBook, a company with a distinct culture and mission. Kesten’s ability to transfer and refine his skills in a new environment highlights the importance of flexibility and continuous learning in a tech career.
HoneyBook’s Unique Position in the Market
HoneyBook is a client flow management platform designed specifically for independent service-based businesses. Yuval describes client flow as the process of selling and delivering personalized services, which is crucial for independents who are passionate about their craft but overwhelmed by administrative tasks. HoneyBook’s vision is to support these entrepreneurs by handling the mundane aspects of their businesses, such as invoicing, scheduling, and client communications, allowing them to focus on what they love.
Historically, HoneyBook started in the events industry, catering to DJs, florists, event planners, caterers, and photographers. Over the years, the platform expanded to serve a broader range of service-based businesses. The core value proposition of HoneyBook lies in its ability to streamline client interactions and administrative tasks through a combination of CRM (Customer Relationship Management) and online client experiences like contracts, invoices, questionnaires, and brochures.
Understanding the Independent Service-Based Business Community
Focusing on Committed Businesses
HoneyBook’s main focus is on dedicated businesses—those that are committed to their service-based ventures. Yuval explains that the company first identified which audiences it would not focus on, enabling it to concentrate its efforts on those who are passionate and committed to their businesses. This commitment is crucial as it aligns with HoneyBook’s mission to alleviate the administrative burdens that can overwhelm independent entrepreneurs.
Yuval shares a personal anecdote about his sister, an architect who runs her own firm, to illustrate the challenges faced by independents. As her business grew, she became more successful but also more overwhelmed, highlighting the need for effective tools to manage business operations. HoneyBook aims to support independents at various stages of their journey, whether just starting, hiring their first team members, or expanding through a franchise model.
Identifying and Supporting Overwhelmed Clients
HoneyBook employs a sophisticated approach to identify and support clients overwhelmed by their business operations. By segmenting users early in their journey, HoneyBook can tailor its services to those likely to benefit the most from the platform. The company’s data science team plays a pivotal role in this segmentation process, using various inputs to estimate whether a new user is a committed business.
One proxy metric used to determine commitment is a business’s annual revenue. HoneyBook has found that businesses earning above $20,000 annually are more likely to be committed and more likely to benefit from the platform’s features. This segmentation allows HoneyBook to focus its resources on the users who need them the most, ensuring a more personalized and effective service.
Embedding FinTech for Enhanced Client Experience
The Evolution of HoneyBook’s Financial Solutions
HoneyBook’s journey into financial technology (FinTech) started with a robust invoicing and payment solution, which has been a core part of the platform since its inception. Recognizing the broader financial needs of its users, HoneyBook has since expanded its offerings to include more embedded financial solutions.
Yuval explains that HoneyBook’s unique position allows it to have visibility into its users’ future income, which is crucial for providing practical financial management tools. This insight led to the development of new features aimed at helping users manage their cash flow, taxes, and savings. One of the key steps in this journey was offering loans to members, which served as a test to gauge their trust in HoneyBook for handling their financial needs.
Building Trust with Financial Products
The loan program’s success demonstrated that HoneyBook’s members were willing to trust the platform with more aspects of their financial management. This trust paved the way for introducing business bank accounts, debit cards, and other financial tools that offer a comprehensive view of a business’s financial health.
By integrating financial management features with its existing CRM and client flow tools, HoneyBook provides a seamless experience that addresses independent service-based businesses’ administrative and financial needs. This holistic approach simplifies business operations and empowers users to make informed financial decisions.
Addressing User Anxiety with Financial Insights
Yuval highlights the importance of empathy and understanding when developing financial products. Many independent business owners experience anxiety when dealing with financial matters, particularly taxes. HoneyBook aims to alleviate this anxiety by providing clear, actionable insights and tools that help users manage their finances confidently.
One notable feature is the ability to estimate taxes and save for them within the platform. This feature has been highly adopted by users, reflecting the strong demand for effective tax management solutions. HoneyBook also offers other savings buckets, allowing users to allocate funds for various business needs, from equipment purchases to marketing campaigns.
Leveraging AI for Service-based Businesses
Early Adoption and User Feedback
HoneyBook has integrated artificial intelligence (AI) into its platform to improve user experience. Despite initial concerns about creatives seeing AI as competition, a survey showed that HoneyBook’s members are open to adopting AI tools. This positive response has prompted the company to explore different AI applications within the platform.
AI-Powered Features and Their Impact
One of the first AI-powered features HoneyBook introduced was automated responses to client inquiries. This feature significantly reduces the time it takes for users to respond to potential clients, addressing a common pain point for many independents. The adoption rate for this feature was impressive, with many users leveraging AI-generated responses to streamline their client communications.
HoneyBook’s approach to AI focuses on usability and impact. Each AI feature is measured by its weekly and monthly adoption rates, ensuring the tools are genuinely valuable to users. This data-driven approach allows HoneyBook to prioritize features that significantly reduce user friction and enhance the overall client experience.
Future AI Developments
Looking ahead, HoneyBook plans to continue expanding its AI capabilities. The company is exploring various use cases where AI can further reduce administrative burdens and improve business operations for its users. Yuval emphasizes that the goal is to deliver practical, high-impact AI solutions that seamlessly integrate into the platform.
Building a Team Culture for Innovation and Efficiency
Raising the Hiring Bar
In the fast-paced world of tech innovation, it is crucial to build the right team. Yuval underscores the importance of hiring individuals who are not only skilled but also curious and capable of working independently. This approach is essential for maintaining efficiency and fostering innovation, especially in a company that operates with a lean team structure.
Fostering Curiosity and Accountability
At HoneyBook, curiosity and accountability are highly valued traits. Yuval believes hiring individuals with these qualities can significantly enhance the company’s ability to capture new opportunities and navigate the challenges of a rapidly evolving industry. This philosophy is reflected in HoneyBook’s hiring practices, prioritizing grit and the ability to self-learn over traditional credentials.
Maintaining a Strong Team Culture
Despite the challenges of scaling and the need for efficiency, HoneyBook is committed to maintaining a strong team culture. This commitment involves hiring the right people and fostering an environment where team members feel empowered to take initiative and explore new ideas. Yuval’s experience at Meta has influenced his approach to building and nurturing a team culture that supports innovation and personal growth.
HoneyBook’s Vision for the Future
HoneyBook’s journey from a niche events management tool to a comprehensive client flow platform for independent service-based businesses is a testament to its commitment to innovation and user-centric design. By leveraging AI and embedded FinTech solutions, HoneyBook continues to enhance its platform, providing valuable tools that help users manage their businesses more effectively.
Yuval’s insights into the company’s strategies and culture offer a glimpse into HoneyBook’s future. With a strong focus on empathy, usability, and continuous improvement, HoneyBook is well-positioned to remain a leader in client flow management, supporting the dreams and passions of independent entrepreneurs across the US and Canada.
Listen to Harnessing AI and service: HoneyBook’s client-centric success with Yuval Kesten, follow HoneyBook and connect with Yuval on LinkedIn.
