The Close.io Blog

Startup Sales: Selling Vision vs. Reality

startupsales-visionreality

As a founder, you have a vision for the potential of your startup: a successful company, a team of amazing people. You’re working on an awesome product that solves your customers' needs better than anything else in the marketplace, and your customers love you.

Then, you open your eyes and look at what’s there, now, in reality: a struggling startup, a crude and buggy first version of a product. Many features are lacking. The UI is just functional enough to let people use it.

The hard thing about startup sales is balancing the vision and the reality.

Focusing your pitch on the reality of your situation will stifle sales. However, when you sell too much of the vision, you will over-promise and under-deliver. Both of these scenarios are a recipe for disaster: a lot of unhappy customers.

Resist the Urge to Oversell

In a sales situation, you have to resist the urge to oversell on the vision. You will feel that urge because it’s a cognitive bias that all successful salespeople possess: unbridled optimism.

You will want the deal to happen, and you'll be tempted to say anything to push the sale forward. Thus, your thinking will be skewed by default toward being too optimistic when assessing the situation: the product will be amazing – soon. Your next update will include all the missing features, and these iterations take no time at all in your imagination. In reality, you may be many months or years from delivering on your vision. This disparity between your sales promises and delivery will upset your customers and drive your project into the ground.

Sell the Vision - Just Not Too Much

You need to address the difference between what you have to offer now and what the customer wants in an ideal solution.

Are the crucial features going to go live within the next two to four weeks? If so, you can start selling them to your prospects. Simply inform them about the timeline, and let them decide if they want to begin using your product now so they can be ready when the updates come online.

Additionally, it's very important to deliver on the promise of bringing those new features to market as scheduled.

When in doubt, it's always best to under-promise and over-deliver. Tell the client you will have the features online in four weeks when you know you can have it done in two.

This way, they will be pleasantly surprised if you get it done in two, and they won't be upset if you find that you need the extra time and don't deliver until week four.

Don’t Let Them Buy…Yet

Clients will appreciate the fact that you put off accepting their money until your product is ready to deliver the results they need. If it will it be more than two to four weeks before the features they need will be implemented, add them to your contact list for that update. 

This is particularly important when you aren’t sure whether you'll be able to release the update on schedule. Tell them, “No, this is not the right time for you to buy,” then ask if you can contact them when the product is ready for their use.

Put them in your sales pipeline CRM, and keep them in the loop. Regularly let them know that you’re making progress and how each update to your product will help solve problems for their business.

When you’ve released the features they want and need, you can go back and close the deal with these clients. They will appreciate your effort to deliver the services they need before taking their money.

This Is How You Get Brand Advocates

Customers who know that you have their best interests in mind will love you and recommend your products to others. You put their interest over your own, and they appreciate the effort. You didn’t try to close the sale with them when it wasn’t right, and they respect that commitment to their success.

Even some of the people who didn’t buy will become advocates for your company simply because you are honest and forthright in your business practices.

In startup sales, it’s important that you truly care for your customers – it’s what pays off big in the long-run, and it's a strategy that bigger companies have a difficult time implementing.

Three Steps to Selling Vision and Reality

As a review, here are the three things you must do to properly sell your vision while basing the pitch within the reality of what your company has to offer now.

  1. Start with the reality of where you are today.

  2. Promise where you're taking your product tomorrow.

  3. Give them some vision about where the product is headed in the next year or two.

Keep in mind that you must be realistic with your product offerings. When a customer wants you to deliver a service you are not prepared to offer for some time, refuse the sale. Stay in contact with these customers, and come back for the sale when your product has matured and you are comfortable delivering the services they need.

If you liked this post, you'll love our Startup Sales Success Email Course!

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Selling To The Wrong Customers Will Kill Your Startup

startup-sales-wrong-customers
Failing to find the right audience for your business will guarantee a startup's failure. As founders tend to be fanatical about closing their first customers and hustling their way to initial traction they need to keep in mind that not all customers are created equal. 

If you close deals with customers that ultimately shouldn't be buying your product because their use cases are not a good fit you will suffer the consequences: 

The Wrong Data and the Wrong Product
During the product development process, you need to collect feedback on what you're creating. You'll decide what features to focus on and what to build depending on that feedback. But if you have the wrong audience, you'll have negative feedback and you'll get the wrong feedback on how to improve your product. The only way you can get valuable feedback is by asking the right people.

High Customer Service Costs
If you're putting your product in front of people who it isn't meant for, they may not be able to use it easily. Selling to the wrong customer means that you will face extra questions from users: your product won't work efficiently for the wrong audience, so they'll constantly complain.

Wrong Customers Don't See Value
When you're dealing with the wrong audience, those users will routinely ask you for discounts or try to haggle. They won't want to pay full price for your product, because they don't see the value in it — especially if they fail in using your product or struggle with the process.

High Churn Rates
If you put your product in front of the wrong users, you'll bleed customers. When those users get tired of the frustration of trying to deal with a product that isn't helping them, they will stop trying to figure out your product. They'll cancel their subscription. And nothing is worse than making changes to please an audience that then disappears. It turns your time and investment into a waste.

Poor Team Morale
That situation isn't just rough for you as the head of the company. It's demotivating for the whole team that worked on developing your application. No one likes finding out their work was useless.

But You Can Fix the Situation
Rather than trying to bring as many customers as possible on board, start with just a few perfect customers: the kind who you can build your product for and who will adore your product once they put it to work. Until you have that handful of fanatical customers, you shouldn't focus on scaling your customer base. You're still in exploration mode.

With those perfect customers, you'll be able to analyze them and their needs, so that you can create a document that shows what they have in common:
  • What industry are they in?
  • What size of business are they?
  • Are they switching from another solution or first time buyers?
  • What's their budget for this kind of application?
  • Who is the decision maker?
  • Who are the users?

You can capture this information in your favorite sales CRM and manage your sales pipeline more effectively.

Qualify Based on the Best
Once you know what your customers have in common, you can use that information to recruit more perfect customers. You can make sure that everyone in your sales funnel is likely to use and profit from your product. 
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The Hard Thing About Hard Things REMIX

andreesen_horowitz

“Do you know the best thing about startups?” - “What?” - “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.”

- A conversation between Marc Andreessen and Ben Horowitz

Venture Capitalist Ben Horowitz from a16z has recently published his book The Hard Things About Hard Things. It's a must read for any entrepreneur. We wanted to review it. But there are already so many great reviews out there (like thisthis or this one). Then we thought about putting together a collection of quotes, but somebody already did that well too.

So we decided to make our own little remix of #hardthings. We took quotes, phrases and insights from the book, rearranged and modified them, and hopefully this remix will inspire you to get your own copy and read it asap.

We love startups.

But not for the reason for which most people love startups.

Most people love startups because they don’t know what it’s like.

We do.

We know the pain and the struggle.

The ups and downs.

The price of creating something awesome. (It often involves choosing the best option among a particularly ugly set of options.)

We know that things are always darkest before they go completely black. What it’s like when your dreams turn into nightmares.

That the times when you feel most like hiding or dying are the ones where you can make the biggest difference. Don’t quit.

There’s always a move.

The simple existence of an alternate, plausible scenario is often all that’s needed to keep hope alive among a worried workforce.

A startup is about starting to be the person you want to be. Even if it’s hard.

There will come a time when you have only one bullet left in the gun and must hit the target. And that time will come over and over and over again.

And just when you feel you’re finally out of the woods… you realize you’re wrong.

In the hard days nothing is easy and nothing feels right. Most days are hard. You have dropped into the abyss and you may never get out.

When you are building a company, you must believe there is an answer and you cannot pay attention to your odds of finding it. You just have to find it. It matters not whether your chances are nine in ten or one in a thousand; your task is the same.

Sometimes the smartest thing you ever do in your career will make you sick and sleepless, give you cold sweats, make you throw up and cry.

You have to demand mastery from yourself and your people. Do not tolerate sloppiness.

You constantly have to review, evaluate and improve all the things you do. And you have to know when to focus on the things you’re not doing.

When you have to fire great people because you messed up your company. How do you tell them?

When your startup starts losing its major battles, the truth often becomes the first casualty. You will want to develop creative narratives to help you avoid dealing with the obvious facts. If you do this, you’re doomed. You’ll look for any excuse not to live or die in a single battle. But not facing an existential threat is the surest way to get killed.

It’s ok to feel scared to death. Just ignore it and act brave.

Deciding what to do next is hard.

You have to listen to your customers, understand them deeply, know the data. And sometimes make a choice to ignore it all and go against what you know to be true. Having the courage to do so and the intelligence to do it at the right time is a hard thing.

Most of the time you’ll have to opt for choices you don’t feel like making. If you don’t like choosing between horrible and cataclysmic, don’t start a company.

You’ll have to recognize that things are sometimes related to the truth, but not actually true.

You have to measure results. But everything you measure automatically creates a set of behaviors.

Focus on what you need to get right and stop worrying about all the things that you did wrong or might do wrong. Focus on the road, not on the wall.

Hiring is hard.

You are not looking for positive or negative with potential hires. You are looking for a fit with your criteria.

You need people who can turn chicken shit into chicken salad.

You hire because you need more manpower to keep up with the workload. But when you hire, you need to train, even though you’re busy. Being too busy to train is the moral equivalent of being too hungry to eat.

And if you succeed and grow a large organization with hundreds or thousands of employees? At a certain size, your company will do things that are so bad that you never imagined that you’d be associated with that kind of incompetence.

Nobody is born a great leader. But if you have the right kind of ambition, you can develop the attributes of a great leader through focus and hard work.

You’ll have to give your team direct feedback even if it’s harsh. Watered-down feedback can be worse than no feedback at all because it’s deceptive and confusing to the recipient. Feedback is a dialogue, not a monologue.

You must be able to lead your company in peacetime and in wartime. These require very different management styles. Maximizing and broadening current opportunities vs completing a critical mission will set a very different tone for a company.

The Hard Thing About Hard Things has answers to all of these challenges - although they're not easy answers. It’s filled with lessons that will guide you on this crazy ride we call “running a startup”. Get the book today (or better buy it for your whole team).

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Printing from Close.io just got better

If you've ever tried to print a page from the web version of Close.io you've undoubtedly run into issues. Today we added a print stylesheet so that printing anything from Close.io – such as a list of your Opportunities or a list of Leads – just got a lot better.
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How To Propose Annual Contracts To Your SaaS Customers [Phone Scripts And Email Templates]

contract_saas_sales

SaaS customers love the freedom and flexibility that monthly subscriptions give them. But you as a SaaS business want to sign them up for annual deals when possible since that's going to increase cashflow and predictability and decrease your churn. How can you make them "give up" freedom and flexibility and commit to your product for a whole year?

The scripts and templates you find below will answer that question and help you close more annual deals. But first, let's find out if now is the right time for your SaaS company to start selling annual contracts and pre-paid deals.

When Should You Start Selling Annual Deals?

If your SaaS startup is below $1MM ARR then you probably should not focus on this. Instead, keep your customers on monthly plans. Why? Because you want to understand churn first and see how long people stick around by choice and learn from that process.

If you're above $1MM ARR it's probably a good time to offer annual plans, either pre-paid or monthly.

A Word Of Caution

Be aware that annual plans are not only a good thing, there are issues you need to be aware of choosing this route in SaaS: 

Benefits & Downsides of Annual Plans

+ Lower churn 
+ Red flags when customers don't want to commit 
+ Cashflow with pre-paid deals
+ Predictability 
- Forcing unhappy customers to stick around 
- The great churn illusion*

* (including annual contracts in your churn math instead of only including customers who can churn in your churn numbers)

Crafting Your Pitch

The core idea you're selling them is basically this:

  • Long term commitment once they know they love it (sell this when they are ready to commit)
  • Give them a Discount / Benefit
  • Position it as an Investment in the relationship (we can work harder for you / you commit longer term to us)

Email Your Customers

Here's the email template you can use to schedule phone calls. We're getting a 89% open rate and 60% response rate on this email.

Subject: I want to offer you a better price for [product]

Hi [firstname],

Hope you're doing well. You've been with [product] for a while now and we would like to thank you and deepen our relationship by offering you a better price for [product]. Let's jump on a quick call this week and explore all ways to make this happen for you!

What's a good time for a 15min call this week on either Wednesday or Thursday afternoon?

Cheers!
[your name]

Here's a template you can use for self-signups:

Subject: I want to offer you a better price for [product]

Hi [firstname],

Hope you're doing well. You've been with [product] for a while now and we would like to thank you and deepen our relationship by offering you a better price for [product]. 

Do you see yourself using [product] over the next year? If so, then here are 2 great options to get a better deal before the end of April:

Option 1: 1 Year contract - You pay monthly and save 10%
Option 2: Annual Prepaid - You pay annually and save 15%

All you need to do is to let me know by April 30 which options works best for you and I can take care of the rest. 

Cheers!

[your name]

Phone Script

Hi [Name],

How’s it going?

[Answer]

Great, is this still a good time for us to chat?

You’ve been with us now for months, and I wanted to first check-in with you to see how things are going?

[Answer – Going great]

What have you enjoyed to most about using our software? (remind them of why they love your product)

[Answer – Going well but with issues or questions]

Manage issues, answer questions and follow up with:

Other than that, are things going well?

[No]

Manage objections.

[Yes]

Do you see yourself using our product for the next 6-12 months?

[Yes]

That’s great, then why don’t you guys switch to annual billing and save money?

[How does that work?]

Pretty simple, you could pre-pay for the year, switch to annual billing, and get 15% discount , so you don’t have the haste of paying monthly and you save $$$.

[Objection – cash flow]

That makes sense. So if you could pay monthly, and still get the discount, would you be interested? 

[Yes]

I have a great option, you can sign a 1 year contract with us, and you get a 10% discount. You still pay monthly, and save money doing it. Sound fair?

Objections:

1) We don’t want to commit for that long. We’re a small business and things change.

I hear you. Do you think it’s a safe bet that you will be around in a year? Do you think you’re likely to hire more people later this year?

If yes, then you’re just making a sound financial decision by taking the discount now.

Plus anytime you hire anyone new, you would automatically save money on each new license, without actually committing to keeping those licenses. Makes sense?

2) We want to have the flexibility to switch if we outgrow you.

I hear you. You want the flexibility of being able to switch to other tools as you grow. But let me ask you, do you really want to make the switch once again this year (remind them of the pain of switching), specially when you already have our solution working well for you? You still have the flexibility to re-evaluate after 12 months.

3) We’re a startup, so cash-flow is the most important thing.

Exactly, which is why the 1 year contract is such a great option. You save 10% on your bill every month. That’s hundreds of dollars saved and makes your cash-flow situation even better.

Need more help?

If you need more advice on SaaS sales, check out our Startup Sales Success Email Course and pick my brain in a Sales Office Hour

 

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Enterprise Sales War Stories - The Profitable Distraction Trap

missedtarget

I recently spoke at Alchemist Accelerator (video of the talk coming soon). Afterwards, a founder approached me with a specific challenge: they had a highly technical product and no customers yet. But they did have the opportunity to build a tiny product for an enterprise prospect and would get paid $25k. “Should we do this or not?” he asked me.

If you're ever in a similar situation, you might find their story insightful.

They’ve been trying to sell to the enterprise for several months. They recruited an internal champion at one large enterprise company: an IT Manager who loved their product.

Lots of buying signals from him.

Finally a strong invitation: “You guys should fly over here for a meeting with the purchasing department to make this deal happen!”

The whole team got on a plane. Ready to crush that meeting.

Ten minutes after entering the conference room they realized that only one person was actually enthusiastic about this deal: the IT Manager. The other executives involved talked about maybe doing a pilot someday. A real deal was miles and miles away.

This was more of a first "get to know each other" meeting. While the IT Manager wanted to make the deal happen, he didn’t wield the power to push it through.

Disappointed, the team of founders flew back.

The IT Manager felt horrible. He wanted to somehow make it up to the founders and told them:

“I still have a bit of a budget left over for this fiscal year, and I have to spend it before the end of this month. If you can build a "mini product" for me, I can hand this over to you for $25k.”

This tiny product he wanted was a small job. Our team of founders thought they could easily get this done in a reasonable amount of time. Their startup would finally have “their first paying customer”. 

This was not really something they wanted to do and was not on their core product roadmap, but it seemed easy enough to execute and would bring them their first customer. One of the founders asked me "Should we pursue this or not?"

My answer? “Do you still believe in this IT Manager? Do you trust in his ability to communicate well within his own organization and get the deal done?”

His answer was no.

“Then find someone who can manage the process better.”

He agreed. But what about this tiny little product they could sell him in the meanwhile? Should he get this small "win" as a way to get to the larger deal later on? I didn't think so. But why?

3 Reasons Why It's Dangerous to Fall For the Profitable Distraction Trap:

  1. It would distract them from their core product. Even though they might estimate it to take just 3 weeks of work, it’s notoriously hard to predict these things accurately. It could easily escalate into a 3 month project and throw their original timeline and core focus off.

  2. It would weaken their follow up negotiations. They were in a position of strength. Their internal champion was feeling obligated to them because he made them fly all the way for nothing. Taking the deal would have shifted that dynamic back in his favor. If they had told him no on the other hand, they would have demonstrated strength. They wouldn't be willing to change their entire product roadmap and plans every day just based on what one potential customer wanted.

  3. Leveraging a deal like this and calling it your “first customer” would be unwise. Any potential customer or investor would want to inquire and talk to your "first customer" if you brought them up as a reference. If it was a customer for a totally unrelated product which had nothing to do with the core vision you were pitching, it would be worth less then nothing. It would actually make you look really bad.

How do you decline a "generous" deal like that while still maintaining a good relationship with your internal champion? Easily. Try saying something like this: 

“We would love to help you but this is not part of our product roadmap in the short term. Let’s keep in touch, and after summer when your organization is ready let’s make the original deal happen.

We appreciate that you want to support us in the short term and think there is a way to make that happen.

Who do you know in other organizations that might benefit from our solution? Who in your circle of friends and peers should know we exist?

Connecting us to these people would be the most valuable thing you could do for us right now!”

This response demonstrates focus while still allowing the relationship to grow. By persistently asking for referrals you make sure to feed your funnel with warm leads and build up your enterprise pipeline.

 

Listen to Steli having on follow-up conversation on this blog post where he goes into more details.

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Email Response Rate + faster loading in Reporting

We've recently launched improvements to our existing Reporting pages in Close.io.

The first is that we added "Response Rate" and "# Responded" to the "Sent Emails" report. This allows you to view your overall email response rate, as well as compare the response rates (along with open rates) by each of your email templates.

The existing Open Rate number gives you insight into which subject lines are getting your emails opened, and this new Response Rate information allows you to compare which of your emails are prompting people to reply. We hope you'll be able to use this information to craft better sales email templates. (See here for advice on writing better sales emails).

Screen_Shot_2014-04-07_at_6.48.14_PM_copy

Note: Open Rate tells you how many of your emails were opened, as counted by "pixel tracking". Response Rate tells you how many of your emails got replies in the same email thread after your original email was sent. In some cases it's possible that your Response Rate can be higher than your Open Rate, since we can't count your email as opened if the recipient has images turned off in their email client.

Additionally, we made significant performance improvements to both the Activity Report and the Sent Emails report. For a while now, these pages could take far too long to load. We rewrote the backend of how both these reports are generated so they now load much faster, especially for looking at reports with longer date ranges.

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Better Exporting

In the spirit of being as open as possible and giving you complete freedom over your own data, we improved the exporting capabilities of Close.io.

Here’s the gist of what you can do:
  • Export leads, contacts, or opportunities from the Leads Search page
  • Export opportunities from the Opportunities page, using more granular filters
  • Schedule an export via the API (see http://developer.close.io for more information)
  • Choose the fields you want to export and include activities in your Leads JSON export (only available via the API - UI tools coming soon)


Also, instead of looking at your browser’s spinning wheel, waiting for the export to generate, you will now be emailed a link to the generated file as soon as it’s available.

Oh, and we bumped up the limit of exported leads to 1 million!

 

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Enterprise Sales Pitfalls: Even If The CEO Loves Your Product, You Can Still Lose The Deal

CEO_Enterprise_Pitfalls

If your startup is selling to the enterprise, always make sure to identify and understand all the stakeholders involved in the deal.

As a founder of a technology company you might find yourself faced with a new challenge: breaking into enterprise sales. Few people come into this game with a playbook in hand.

I sure as hell didn’t, and I learned my lessons the hard way.

One of the most painful (and expensive) “learning experiences” a startup can go through? Investing months of work into a deal only to see it fall apart in front of its eyes.

The CEO is the beginning, not the end of the deal

Startup founders often get introductions directly to CEOs through their investors or advisors. Once a CEO (or any other senior executive) takes a meeting to listen to their pitch and gives them buying signals they think that the deal is almost done.

What could be more important than having the CEO of the company herself approve of the deal and be invested in its success, right? A lot!

The CEO is only the beginning, not the end of the deal. CEOs tend to have one or two major strategic initiatives they champion every year. Everything else will be delegated down the organization to a more appropriate person. So even if the CEO likes what you do, she's not going to be your internal champion.

A successful meeting with the CEO will most likely end with an introduction down in the organization to someone else. Now the real selling begins. 

There are two steps after the CEO wants to buy your solution:

  • Step #1: Selling all other stakeholders involved in the deal & 
  • Step #2: Selling the person that's going to manage the project internally

Step #1: Close all the stakeholders

In any organization there are always a lot of hoops to jump through before a sale is actually made.

Make sure to have a realistic roadmap of their typical purchasing process. The simplest way to do this is to ask: “Once you have decided to buy our product, what typically needs to happen next to get the deal done?”

Realize that selling to the enterprise is a complex job that can take anywhere from six months to three years.

Do your homework to make sure that you don’t invest all that time in a bad deal. There are no guarantees in this game, but the stakes are too high to be sloppy at any step in the sales process.

You need to be able to check off on all the question marks of all the different internal groups that are going to be involved in the purchase of your product.

Legal, procurement, the technical team that's going to have to implement your solution and any other department that's going to be affected by the purchase of your product.

Reach out to them early and start a dialog immediately to learn what they will need from you to help move the deal forward. You can't afford to be passive.

It's your job to manage the complexities and support all stakeholders in moving the deal to a close.

Step #2: Close your internal champion

The person who will ultimately get your project put on her plate and become responsible for its implementation doesn’t always share the CEOs excitement for it. She already has a pretty full plate and from her perspective, it might just look like more work with very little upside to her.

You need to convert that person into a real internal champion or you have no chance for success, no matter what the CEO said in your initial meeting.

Once you know who the person is who will be responsible for managing your product internally, do everything you can to sell that person on the benefits of your product to the entire organization, but even more importantly on the benefits to her career.

Find out how you can support and empower her to promote your solution within the company. Find out how you can connect the successful implementation of your solution with her own, personal goals and ambitions:

  • What goals does she have and how could your product help her accomplish them better?
  • Which objections and fears does she have in regards to your project?
  • Which objections will she encounter when implementing your solution in the organization?
  • What is the best way for you to empower her to succeed with this new project?

You need to invest a lot of time and effort into the relationship with your internal champion. The CEO might have opened the door for you in the organization and gave her blessings, but it's ultimately the project manager that will turn your product into a massive success or a devastating failure. Ignore her at your own peril.

Want to learn more about enterprise sales? Read up on The 7 Essential Rules For Successful Enterprise Sales.

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New Opportunities Page

We're happy to annonce that we've launched a new version of the Opportunities page in Close.io. This page – now with better filters and layout – is designed to help you see which deals are in your current pipeline, as well as report on past won/lost deals.

A few key improvements:

  • Faster rendering and nicer UI
  • Ability to filter by multiple users at once (rather than having to choose between only one user or "all users")
  • Ability to filter by date range (e.g. only show deals from last quarter)
  • Ability to filter by multiple statuses
  • Ability to group opportunities by close date by week, month, quarter, year, or group by user – or disable grouping altogether.
  • Ability to change how opportunities are sorted within each group.
  • API changes to accompany the new filters / options.
  • Export Opportunities to CSV or JSON

The old look:

Screen_Shot_2014-03-30_at_10.31.40_PM

The new look:

Screen_Shot_2014-04-01_at_5.51.41_PM

As always, we welcome feedback and hope you enjoy!

-Phil

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