I Grew This SaaS by 13% Every Month for 13 Months (Self-Funded SaaS)

0:00[Music] [Music] so today I'm gonna be talking about the inside story of self-funded SAS growth I didn't want to give the revenue away in this first slide because it's kind of a punchline later in the talk but I'm going to be talking about how we've seen with drip thirteen months of thirteen percent month-over-month growth which adds up and I think that started at about night we were at about nine thousand in revenue when we started that pace of growth whenever I consume media asked myself you know what's in it for me what am I gonna get out of this and frankly you guys are pretty tired and you're gonna

0:45sit here for about forty minutes so there's gonna be a lot of stuff I'm going to talk about but three of the things that I think might give you know be of most interest to you number one is how great marketing can make you fail faster I'm gonna talk about what that means even though it sounds counterintuitive I'm gonna talk about three things you need in order to grow and how to scale marketing and why not to scale it too soon so this talk is is basically a three-act talk and it's based on this 3-step marketing playbook that I now take from app to app to app

1:22and the three steps are pretty simple they're gonna sound pretty intuitive on the on the surface the first one is to is to build something people want okay and Paul Graham has said this the equivalent statement it's this is a synonym for finding product market fit like I asked Jason Cohen about earlier so this is the point where you have built something that a lot of people want to use and your churn goes down and your trial of conversion rate goes up and all the numbers start going in the right direction so that's the first step and I posit that it's actually the hardest of these three steps and the

1:58first act is gonna be a first and part of a second act are gonna be about that second one is to find your position in a market and this is something I had ignored for a long time if you go back five years and you rate or you listen to me on the podcast or you you look at my writing or my book or anything I ignored this positioning thing entirely I was all about building an app getting some channels getting people to come use your app and that was it but with with drip which is a bigger space it's more competitive I've realized the critical nature of figuring

2:27out your position and communicating it very effectively I'm going to talk about the process we went through to do that and then the last step of this is to scale when I say scale I don't mean you know like Jason Cohen wpengine scale I mean scale for someone like me Jason should I use the handheld or are we good enough we're good right I mean scale for someone like me who wants to keep employee count to a minimum who wants to scale revenue and wants to scale efforts up while not managing a large company and and most likely not raising funding so the this first act

3:04each of these acts is about 10 minutes and I have a couple intermissions this first act is about building something people want and in order to kick us off I have my friends from from loser I don't if you've heard of lose that but they have a nice little video on how hard it is to build something people want and this goes into other there multiple pivots what have you could leave user of news on members of your family what if your photo filters had an API and what if that API had its own proton filter we believe in the power of iteration we originally started off as

3:39stumble monkey which was like Airbnb but for online dating so when you left town you could rent out your spouse and partner great idea but we found out it was illegal so then we had to pivot [Music] we changed our name to goo goo goo PITA that's with six RS and that app was like Spotify meets Grindr but for rental cars but run as if it were for a hotel and then from there we pivoted again and formed a flip spot that was like Instapaper meets Kickstarter and a little bit like Quora but without the questions and we took your credit card payments and made them made immediate

4:21gifts every startup can tell you how much you learn from failure and if you look at how much we failed that's where you can see how smart we've become [Music] we believe in radical impactful transparency something that we call rat and Perrin see that's why we're gonna bring cameras into our office and show you the process and our team as we build our app you're gonna get to see the best social local mobile and real-time web app that's ever been built from the ground up watch out world because the vooza volcano is about and disrupt [Music] so go to busan calm they have about 30 or 40 videos like that it's kind of like

5:24the office but in the startup space alright so this talks about drip any drip customers or trial users in the in the room show hands nice good hometown crowd and I'm gonna talk about that kind of a journey that Derek and I took building and launching drip this first act again is about building something people want and if you'll recall if you've seen my talk from last year's Micro Kampf I spent 58 minutes and 15 seconds to be exact talking about building drip so I talked about how we validated the idea how we built the launch list of about thirty four hundred people the benefit of

5:58customer development and the slow launch and then how good onboarding really helped their launch and you know I went through the onboarding and all that stuff so I'm not gonna rehash all that but that was building and that was getting to launch and at the end of that launch revenue looked like this we broke ground on code in December of 2012 and this graph is from January of 2013 to December of 2013 and you'll see the revenue in July I was like I was like three or four hundred bucks because we were doing a slow onboarding process slow launch and then each month we would email you know another 500 people or 300

6:33people on this big-ass launch list that we had and in the end by the time we hit December yeah we had 7,500 recurring revenue that's good news but there was a problem and the problem you can see in this graph still at 7,500 and then in January we get a dip which is not atypical for b2b apps because Christmas tends to kind of recommend stuff February wasn't growing March grew barely April grew barely a little and the problem was it was not trial volume it was churn and the number of people not converting from trial to paid so is not metrics were off I still had a bunch

7:12of traffic we still had a bunch traffic but thing the numbers were not there we were bleeding people out of the bottom of the funnel do you've an idea of the churn numbers the simple churn realistically you should look at churn in a grid you should look at first 60 days and then separate that from past that but I'm just gonna say simple churn which is everybody in your whole get and then divided by how many canceled yeah yeah the other way around but it's um it was up in the high teens it was like 18 percent alright and realistically you want to get that number down closer to even in early days

7:45you want to be at about 10 yeah at about 10 percent into 12 percent and the interesting thing you can see it in this graph this is the daily trial count so I'm no graphs in this in this talk are gonna be of unique visitors or website traffic or anything because that that doesn't really matter that much there's kind of a vanity metric every graph you see will I to be revenue or it's gonna be daily trial count or things like that I think I'm trial two paid conversion as well so okay so this December six thing is right as the launch ended and you'll see the trials trailed up but that was

8:20okay because we expected that right because we did a big launch to a huge list and the good news about this graph is you'll notice during the holidays it trailed down and then right around here we started marketing again and sure enough we got a nice big bulk of trial so you'll see you know right here we cross sixty trials this is basically in a thirty day period we had sixty trials and up here we peaked probably around a hundred trials now that's not gonna scale you up to a million dollar business but for a business with a price point of 50 bucks and ninety nine bucks

8:50a month that's enough to see trends right you can see when people are not converting and you can get start doing some some number stuff and this is our trial to Payton right and in this graph we can see that right there that was right at the end of the launch so that was twenty one day that's December 27th twenty one days after you know the initial launch so our launch went really well we converted I mean that number at the peak there is about fifty percent I think it was over fifty percent was like fifty one percent of our trials were converting to paid that's a great number

9:21you want to be between forty and sixty percent as a rule and then it dropped off the face of the earth and then we bounced around now the real danger zone is here so we get through into February and suddenly were under forty percent and for me that is an unacceptable level for a b2b app credit card upfront under forty percent is scary and you could just you can see it here laughing here at 35 or something you're not gonna be able to scale a business up you may be able to get a business - 10 K - 12 K but you're not gonna get a

9:51business - 40 K a month or 50 K without it it's just gonna be really hard you're gonna piss away a lot of time so I wish I could also show you the turn graph but we don't have historical churn numbers I only have the previous 30 days available to give you an idea of I've thrown out some numbers and I wanted to have one slide where you could refer back to kind of my rules of thumb and actually Reuben was on the podcast just last week and we threw all of these out so it's also on last week's episode Oh so at the end of the talk I will give

10:21you a link to my slides the one caveat I have is my plan was to upload them at lunch and then there was something happened and so I didn't upload them yet but I'm gonna give you a URL well where they will all be maybe the half an hour after I'm done talking I'm gonna just try to upload them right at the end so these are my rules of thumb I'm gonna zip them real quick because they're kind of dry but if you're asking for a credit card upfront I want to see I want to see that the visitor to trial percentages are between 0.7 and 2% it depends on

10:50price point typically so a smaller price of about 10 20 bucks a month should be I put about one and a half to two percent a trial - paid like I said I want to see 40 to 60 percent and then that first 60 to 90 day churn you're gonna have a bit of a range 20 to 40 but again if you go if you're over if you're over 40 your that spreads really tough and if you're under 20 you're doing fantastic and then for post 60 or 90 day churn there's always a break and different some apps have the first 60 day churn and they see

11:17it drop way off and some have first 90 day and drops way off so you have to just look at your app engage it and post 60 to 90 if you're if you get down under 8 with a small bootstrap business like this you're doing pretty good you can't raise a venture you know venture funded round at that level but you can grow business to 40 50k at that point with the right price points so getting around the 5 to 4 to 7 is good there is another David Ogilvy quote and it's one I like he says great marketing only makes a bad product fail faster and what he was

11:49saying is if you put out a crappy you know peon if Procter & Gamble puts out a crappy tube of toothpaste and you bring me in to market this thing it's just gonna fail really fast cuz a lot of people are gonna use it and they're not gonna like it and drip was not a bad product so this quote doesn't actually fit but if we had kept going on the velocity we were spending money on some ads investing into development driving trials into the funnel we would never have grown past you know 12 grand a month or just just some number that wasn't enough right so my quote is if

12:26you haven't built something people want great marketing will only make you feel faster if you haven't hit product market fit yet stop marketing and go and work on operation retention you want to figure out why people are churning you want to figure out why they're not converting initially and you want to go after that two years ago I did a whole talk on that from Microsoft 2013 you can also watch how I did approach this exact same problem this is very very common exact same problem with hid tail and how I attacked it there so what we did with drip because we're at a point now where

13:02it's like alright we're turning out too many people and not enough for converting what do we do so instead of adding the typically at a text box when someone's canceling I we went with a different approach and instead of I I've kind of taken the opinion that when someone's canceling they're in a kind of a hurry and they want to just get out and they often just type asdf boom and they're done what I've started doing is sending them an email using drip right so drip was using drip and it would say someone just cancelled with their own event and then about 20 to 30 minutes

13:32later you'd get an email that says a quick question and this is another one of those kind of a Joanna Wiebe headline right hi I was hoping to spare 15 seconds of your time and let me know why you decided to cancel even if you only have a few minutes it can only give me a few words please do it and I have a PS and everything and it says Rob founder a drip so it looks really like it comes from me and and it does I wrote it and we got a lot of good feedback from this and I want to say good I mean helpful

14:00not necessarily good about the product so we got a lot of feedback like this it's a clean looking and feeling tool and we kept that because you the UX is good you know it's it's like a it's an easy tool I mean we spend a lot of time on that we kept getting it's a clean looking and feeling tool but it is a bit too pricey for what it does we got this loved the product but unfortunately the pricing is way too high for what we'd be using it for great product but I didn't really see much difference from MailChimp and the price wasn't competitive enough so

14:30there's two things you could you know we got hundreds of these so this is just a sampling of three you get them all over the map and you kind of have to group them into categories these three and others like it made me think all right we have two choices our pricing is $49.99 and it goes up from there we can either lower pricing as everybody says we're too expensive or we can build more features and figure out how to make our product worth the price we are charging okay and I call this aspirational pricing and I'm kind of a fan of this idea now of getting people in and

15:05figuring out how to get them to be willing to pay a certain amount I think productize consulting is a good example of that it's figuring out what someone will do to pay you know like Patrick was saying 500 a month or 2,500 a month and so that's what we did so we set out to then find out okay everybody was not everybody but some people were saying it's too expensive now what's interesting is you know if you look at it technically we had built something that some people wanted because we had 7,500 recurring revenue we had up 125 isch customers paying us so I knew that

15:38we had something but it wasn't enough for the broader market right it was like two-thirds of people don't want this and then you have a one third of people really happy so we're trying to figure out what do we need to build to keep that other two-thirds or as much of it as we can and that was the next thing so then people would email and say the feedback I showed you right too pricey and I'd reply and that's kind of the cool thing about this approach is it instantly opens a dialog you just you just give you feedback and it's now a conversation hey yeah totally it's you

16:07know I I would say I agree with you but I would say hey yeah sorry to hear that what what do you need what did you expect what would make this worth 50 minute you know 50 bucks and 99 bucks we got feedback like this again it's all over the map but here's a few sample these are actual customer replies I'm so cancelled customer replies so tired of having people on multiple lists receiving duplicate emails and having to hit my providers API to work around their lack of automation I'd like a demotion rules like infusionsoft office autopilot I'd like tags and a rules engine and I had no

16:42idea really what most of these things meant this is 15 months ago and I was like Derek and I talked and it's like what is this rules engine thing people with behavioral email this is so irritating this is not what we built that's not not our vision for the product right so the way we filtered this and this is how I'd recommend doing this is you're gonna get a bunch bunch of comments hundreds of comments if you get in these conversations from customers and the first thing you're gonna have to do is filter them through your gut you're gonna have to say is this within my vision and is my vision

17:22gonna get me where I want to go and I started realizing that my initial vision of the product may not get me where I wanted revenue to be then when I took that that once you filter it through your gut then it's time to talk to someone else I'm gonna say my mastermind because that's who I wouldn't talk to I also talked with Derek who's my technical co-founder actually if Derek someone may want to ask me about that later but where is Derek you hear yeah all right so here in the back and you filter it through an advisor through a technical co-founder through a mastermind group through somebody who

17:59somebody else who has a stake in this or who has a stake in your success all right so this is this is what we did and these are really this I have two or three questions here that we said do we build these features like this rules thingy or don't we and the first one was does it fit into my vision of the product second one is will this feature matter in two years because you got a bunch of features that was like let's add a hyperlink to this let's add a button here let's add an option for this and it's like you know that's not going

18:25to move the needle yet we need to do something big to turn the table and the third question was is this gonna grow the business and so that's what we set out to do this was about three about 60 days or 90 days of just constant asking should we build they should be build this filtering asking opinions thinking about it how hard is this gonna be to build and we eventually did say we're gonna build this rules engine now in the end if you know the story of drip a rules engine is really the the right word for it is probably marketing automation that's kind of that that correct position for

18:56it but I didn't know that at the time and so what was interesting is we started building the rules engine we started building one rule at a time and we rolled him out and we we literally saw revenue do this and so this if your call the other one ended in April okay where it was just it was maybe eight thousand right so it's just a little bit ahead of December and then as we roll it we started pushing it out in April pushed more out in May more out in June and suddenly by July almost at 11,000 that feels good right we're starting to feel good but I was kept thinking like

19:31yeah but is it because we have more trials and it wasn't until recently that I went back it was I was putting this talk together and this is our trial count during that period exact same period that revenue went up this is from the end of February till June the trials literally fell in half right I mean you're up at about a hundred here and then you're down to about I don't know 60 50 or 60 and yet revenue was going up why was revenue going up because all the other numbers churn going down trial to paid going up and when the numbers are doing that you don't need more trials to

20:08make more money right so we suddenly started retaining people and that's when we knew that we had built something that people wanted that was when I first caught the first glimpse of product market fit well let's see we were totally there we didn't you know you know bottom out in in terms of churn like some big VC funded companies do but it's a spectrum product market fit is building something people wanted to spectrum and I knew we'd built something that more people wanted than just those initial hundred who are paying us so the next step is finding the your position and we spent quite a bit of time

20:42figuring this out and I'm going to talk about it after this mission this is a bit of a non sequitur but it's from HBO's Silicon Valley it's about a 60 second clip and it's about the challenges of finding a good name for your product this guy here is the founder and he named their start-up Pied Piper not great news we love the name Pied Piper it's a classic fairy tale well I've looked it up it's about a predatory flat as two murders children in a cave it has all that going for it Richard and I still hate it Richard if we are going to change the name we need to do it now

21:20names stick my name is only Jared because Gavin called me that on my first day my real name is Donald but Jared we already bought the t-shirts I can't take these back it was an online order what is that atrocity are we an Irish pornography company I thought we were gonna replace the name Pied Piper I thought it was just a placeholder placeholder would honestly be a better name than Pied Piper Richard I've actually been holding off telling people that I'm the co-founder of Pied Piper because frankly it's a little embarrassing okay well um just remind you you you aren't are not the co-founders so please don't tell anyone

21:57Richard take a Vyatta that's not a name that I found it's a name that found me on a Vision Quest something that you should do no no I'm not gonna eat a bunch of drugs and sit out in the desert and put some name randomly pops in my head well then I question your leadership all right you watch more on HBO now okay so act 2 is finding your position so I'm certainly not an expert in positioning there's a lot to be said on it but once we once we found this position and I saw how well it worked I realized it's super super important the key of positioning

22:29is to just be different in your market right so you could come in and you could say all right we're an email marketing app and that could be your headline email marketing app so someone comes and they said the first question is how are you different right how are you different in the market and there's really three approaches that that I've seen people do to find their position or to be different I should say the first one is to invent a category so 10 12 years ago Marketo and par dot they invented this category of a marketing automation no one had ever heard that word before and they

22:59millions upon millions of dollars defining that category cousin no one knew what it meant 20 years ago there was no email marketing right there was no email marketing software someone invented that my guess is it was constant contact or eye contact and they raised millions and millions of dollars because when you invent a category it is really expensive so probably not an option for most people in this room definitely not an option for me the second approach in which I think is the optimal approach is to take a position inside an existing category and then the last one is to I see this all the time and this is what I was trying

23:33to do for about three months in my notebooks is to compare features or to have your headline be a list of what you do rather than your position in the market so they already said this inventing your own category invented if you have millions of dollars or many years to invest and features in essence what I've seen is they make you either a commodity or they confuse your users whereas positioning is a defensible corner of a market that you get in and then no matter what features other people build they always remember that you are the you know the lightweight marketing automation that doesn't suck or you are the fastest you're the

24:12high-performance WordPress host they're a bunch someone could come out today with a WordPress hosting that was exactly every feature for feature it was WP engine but I will always and most people here will always think yeah WP it's the fast WordPress house because if that's their value prop and that's its position they took very early in the market and they repeated it over and over and I just said the punchline of that slide sorry closed out IO has done this okay steli you'll hear from him tomorrow closed at i/o didn't come out and invent a category there has been sales outbound sales and CRM software before right they came on the scene and

24:46they said never never enter your never log your calls or emails again and that's the position they took right now if you're not a sales person you're like what does that mean and that's exactly the point like if you're a sales person you know that logging calls and email sucks and I will always think of clothes that I owe even if they try to change positioning later which is pretty hard to do I will think of them as the guys who allow you to make the calls and send me emails through the app and that's their position that's their difference and bear metrics josh is here

25:15in the room you know if I were to say before I flip this up if I said all right who can think of you know what's like one click SAS analytics for stripe anyone anyone like 80% of the people in this room would have said Bayer metrics there are other one-click SAS analytics providers for stripe but he got in there first okay so this is what I was trying to do we had built something people wanted and I'm trying to figure out how do we describe what drip is now it's email marketing with this rules engine so could my headline be email marketing plus rules engine and I was writing

25:47like this that was awful drip is the best way to send emails to your prospects trial users and customers based on who they are and what they do and I literally suggested this as a headline and a friend of mine in my mastermind group said do not put that on that I will quit this mastermind group if you do that the next one this is even worse email remarketing talked about inventing a category this is literally in a notebook I happen this is email remarketing tool that will increase your conversion rate from blah blah blah you stopped listening already because it's way too long and no one cares and this

26:16is you know things from my notebook epic email automation email automation what is that no one knows what it is because I made it up behavioral email these are all things that I was trying to find a way to not be part of the of the crowd because I was trying to separate myself and make myself so different that I couldn't be grouped in with the MailChimp's or the infusion sauce and I realized in the end that this was a it was a mistake and if I had moved forward with this I don't think we'd be anywhere near where we are today I think we'd probably rant about

26:46my guess maybe half the revenue because the positioning has done us a lot I still see this this is a headline of a it's not a competitor direct competitor of ours but someone in the space this is the headline on their home page customer engagement made easy customer use of subscribers they're all people and then it's basically record segments automate and I've seen this company and a few others in these spaces who have not latched on to an existing category because really with there should be just a category that these guys should be able to kind of put in there and instead they're explaining what they do it's

27:20almost a feature list or it's a here's what we do and it's the tend to as we go back to these these websites we see them change every three weeks every month they're continuing for like two years we've done this Derek and I and you keep seeing it's like man they they haven't really found what works for them yet you know and I think am I gonna act like I know everything but I think that if they latched on to an existing category and then built out a corner of it they they'd be better off and this is versus an app like Marketo which you haven't heard over them their

27:53best-in-class marketing automation suffer and if you know what that means then those four or five words say more far more than that entire large paragraph of a bunch of stuff up there that not many people are gonna read so that was my epiphany and that was like 90 days of thinking and talking to people so the choices as I saw it where we were either gonna do the whole compare features thing and do the big block of here's what we do and we nurture entertain and we're email remarketing or we were gonna call ourselves an email marketing tool + automation or become marketing automation and I really was against this

28:29because it's a very enterprise-e to enterprise the idea and the marketing automation tools that most people think of are someone call one out Marketo Eloqua silverpool that's annoying Infusionsoft right and ontraport and for me that felt like I don't want to go I don't want to be in that group like that's not who we are our UX is too good I don't be thought of as this crummy old software right so I got in I'm on my mastermind call I'm pitching all of that to the my two guys Jeff from ambassador who's here in the audience and Ruben from bit sketch so we do a call every

29:04two weeks and I say all right guys here's all my stuff here's my notes I showed him all the headlines and they were both kind of like yeah I don't know about it and Jeff eventually was just like are you joking he's like why don't you just say what do you just say your lightweight marketing automation that doesn't suck and make that your headline and so we did and and it a be tested it split tested really well and suddenly that was one more thing that our old explanation did not cover and any series of sentences and features and all that stuff could not communicate what we were

29:37any better than when he's got six words we haven't changed the headline to date now I haven't done a lot of split testing but it still converts quite well so for us we carved out a corner of an existing market right we didn't invent a category we just said were the ones I didn't want to be grouped with the other guys in it you know cuz it feels like they're big enterprise software and so that's exactly what we did is we grouped ourselves with them but kind of over here this is how we're different from them so that when you first come to our website you think what is this tool oh

30:08its marketing automation what kind of heard of that and then you look and you said well how are these guys in with an Infusionsoft Marketo and part out then and ride in the copy it's a long-form sales letter if you go to get drip com you're gonna read we just spell it out so that was act 2 then I'm gonna wrap up with act 3 which is about scaling up because once we had built something people want it and they weren't churning out and we had this headline that now converted quiet a few people and got a lot of interesting people interested people into the product it was I one say

30:39it was a slam dunk because it still work but this is my opinion actually the easiest of the three this is blocking and tackling like these are tactics right and this is stuff that a lot of us in here have done successfully I did in with hid tail I've done it with a number of other products and so this is the fun part I'm gonna kind of zip through a few of them but I will show you this this is kind of this funny initial projection I had in a marketing plan when you get a chance and get the slides afterwards just take a peek at it the numbers are actually not

31:09far off so we did not hit the goal is was to hit this is pre-launch I wrote this 20,000 and monthly recurring revenue six months after launch that was my internal goal we didn't hit that because of this whole learning phase that we had to go through right of the positioning and the rebuilding and blah blah blah but if you're thinking about building a b2b app look at these numbers because you know they're not too far off like I was picking middle-of-the-road of my ranges and things wind up being pretty close to that so it's just a little helpful helpful thing if you're interested so this this is the end

31:41result this is this is the money slide right here so I almost cut it off too yeah thank you

31:52and so you know to give you again the time frame like this was launched and that seemed like a lot of revenue and then we kind of did the whole build something people want until it was right around May ish and then the next 60 days was finding positioning and that's right in July at the end is when you know we relaunched it was called 2.0 and then that that started kind of stepping stuff up and you can really see the three phases I've talked about this in well several times but when you when if you're gonna build an app from scratch or if you're gonna buy and Rehab an app

32:26you're gonna go through three phases the building phase which is when you're writing code which always takes too long and then the learning phase which is a lot of what I just talked about learning is figuring out what to build finding product market fit building something people want figuring out your positioning and then there's a point where you scale it up now if you try to scale it up during this learning phase you will lose your shorts like you will spend money and you will not get the customer the revenue will not grow because you believe them out so yeah so that's it now I'm gonna talk about kind

33:03of the steps this is blocking and tackling like nothing here is gonna be surprising there's no whiz-bang thing it's just doing all of these things and executing on them the first thing that I always do when I'm gonna set up a site is get you know an email marketing course start collecting addresses even if you can only build a list of a thousand or 2,000 people it's crazy the number of trials you can get when you launch new features when you do a webinar when you announce have anything interesting to announce and when you have blog posts and such so that's the first step the second step I always do

33:31is get re targeting in I use perfect audience there's a droll there's a bunch of other providers I've just used these guys for years there they were a YC company so those were the first two things the next thing I did is the same playbook this is should sound familiar and I hope it does because I've been talking about the same playbook moving from app to app to app and that shows you just how repeatable this process is okay so concentric circle marketing in short is first you communicate what you have to your audience then you move out one circle to your colleagues or your friend you could say friends or

34:06network or whatever word you want to use but this is my professional colleagues who I know a lot of you for them from micro cough and I could come on their podcasts and do integrations with their apps and that kind of stuff and then the third is the cold audience right this is actually like cold like paid advertising people who've never heard of you have no warm connection to and so those are the three rings that I go out and innermost one is easier to convert and then the second one is you know a little harder and then cold is that's that's where you scale up but it's where it's hardest to

34:35convert so circle one I think I only did two or three things right when we relaunched as drip 2.0 I wrote two blog posts one for my personal blog suffered by Rob the other one for the drip blog and you'll notice neither of them mentions anything about new features and either of them mentions a any specifics they are both any specifics of like what we had built or what we had done they were both aimed really tightly at the audience so my suffered by Rob is about you know all this stuff right they were talking about something similar to the podcast so the biggest gamble of

35:11your career and I go down how you know that we were entering this really hard market and the story of getting there and then the other one is kind of a it's my manifesto it was on the drip blog and it's I believe we are I'm pushing I'm putting all my chips in on that marketing automation is the future of email marketing that's what I communicated in this post and here's why you should care and here's why you should be using this ASAP okay and and they did pretty well I spend about 16 hours writing the two of them I had a between a couple lists at about 17,000

35:41people which is always good when you have really good content at least I really tighten those up they're pretty good it does okay and so you'll see that's the day I sent the email to the 17,000 and so trials you know now they have this really tight conversion rate and we're not churning people out we went from scales cut off I think is that a hundred I can't even oh that's 50 and that's a hundred so you know we had been hanging around 50 60 and then we went up to almost 200 trials over the course of that and then kind of leveled out over one hundred about a hundred and twenty

36:13so that was a really nice increase and that was that first initial increase you saw in July in August it's a good thing I did for my audience Derick and I had recorded a 15-minute call every week for nine months and I edited that down it was like nine hours of video or audio and I edited it down in two hours and then I published it and again this is not gonna scale you up to infinity but it got about four thousand five between four and five thousand unique listens at this point and I don't know how well it worked but it was kind of fun to do and it was it was easy

36:43enough circle - I knew some folks who work for some companies because I come to micro Kampf and so you know talk to Gumroad and Josh at kickoff labs and I've got no way dat from that say peer from somewhere else and then member mouse works in our building and over the course of a couple months we built some integrations and this goes back to integration marketing it's a concept of doing writing really kick-ass integrations that provide value to your customers and their customers and then both telling your customers about it and if you can get an email sent to the zapier list the zapier i

37:17guess other pronounced zap your list of 60,000 or 70,000 people you're gonna have a good day and so that's that's what we did here and I want to underscore that this is not it's not a tactic of building a crappy integration and an expecting everyone to promote you like we spent a lot of time on these things and built him out well and just as a footnote integration marketing is something that I stole from Rubin gamma has a bid sketch he was the first guy I ever saw do this and it works we now have 21 integrations with drip the other way that I talked to colleagues was

37:51there's a bunch of podcast and this I already done a podcast were for drip when its first incarnation I wasn't gonna do it again and some dudes start to contact me so John McIntyre from the makhmud guys from growth hacker TV WP elevation Brian and Jordan who are in the audience and then other folks contacted me just to publish stuff because the more you get out there the more people want to hear your voice so they want to put a quote from something or they want to use your dunning emails which is you know what what stunning did and that's cool the more you're out there you're just gonna start spreading

38:19right so last few slides is about cold audiences and what we did to then branch out into that third concentric circle one is we publish a new blog post on the drip blog every week and have a company who helps me do that I don't write them myself but I work tight with them to define the headlines and these things work I mean you'll see that yeah there's only 11 tweets 11 tweets 27 LinkedIn shares it's for the cost it's a no-brainer and this gives us an excuse to email our list and it's yeah you know it's essentially content marketing you could call it but it's also just providing

38:53value to the audience's that that use drip so that's been a big win for us and the other one is we do have a little bit of a viral element this is not bread as many trials as I thought it might but we do have a powered by drip link in that if you can do that if you have an option to do it for your you know with your customers it helps it helps you grow the more you grow then the more you grow right that's how I rally works the other thing we did aside from Gumroad here these are all cold emails that I send so

39:19I cold emailed stripe and Unbounce and PayPal and DPD and we're currently in charge if I and some of them played ball with us we integrated with all of them because our customers wanted these integrations but some of them like charge if I published blog posts about it and emailed their list so this is just integration marketing taken taken out one more circle right it's the people I didn't know it's just called emailing and I think lastly yeah last last thing that we've done that's really worked is still do an SEO it's a lot harder a lot more expensive and it doesn't work as well you know drip

39:52marketing software you go search for it we are the number one organic result in Google so why are there three listings above us because Google's kind of screwing everybody now so it doesn't work as good as it used to but it does work right none of these individual things accounts for more than 10% of our trials we have a lot of things going on and this like I said it's blocking and tackling it's the same approach the same marketing plan I had four hit tail and I just copied it over and started modifying things for drip so interesting just to know as I think this is my last slide our second

40:23two last things we haven't done that I have done in Prior products but just haven't had time for really and yet we're still you know where the revenue is but by the way please if you haven't already I should have mentioned please don't tweet out my revenue or like post that anywhere right now I've just I'll let it out eventually but I kind of like to give stuff to microcon folks and I'm not super comfortable at the whole world knowing what my revenue is so if you could oblige me things we haven't done are I just haven't done any split testing aside from that initial headline I brought

40:53someone on who will we start in a few weeks to help me with that but haven't had time we have done zero aside from that initial push way back you know over a year ago when I was trying to market and it wasn't working haven't done any paid acquisition at all and we need to that's another channel I know we could scale this thing up haven't done any webinars really want to aside from getting invited to do a few for some other people haven't done an absolute tail and worked really well but yeah I talked to Noah Kagan and he said that drip is a little too hot like to hire

41:22yeah it's too high a price for his folks in there a little more beginner beginner audience and the last one is outbound email I did hire a firm to do it for three months it was spent quite a bit of money and the scale wasn't there they were getting us a good solid ten or twelve leads you know for several thousand bucks a month well at the scale I mean ten or twelve trials even wouldn't move the needle and that wasn't ten or twelve trials it was ten or twelve leads that hopefully I could get a few of them to convert so for now we're kind of you know backing away from

41:51that so to wrap up this is a three steps you really have to nail all three if we hadn't built something people wanted I would say drip would be as a guess maybe twelve grand today 12 grand a month maybe fifteen if we just kept pushing on it but I'd be so pissed off too you know I'd be so frustrated because you're just not growing if you don't find your position I think we'd be between fifteen and twenty probably the position it's a defensible position and it's really work for us and then of course if we can't block and tackle then you're not going to see the scale part of it so that's it

42:25I'm open for questions

42:31you're up that was awesome so is there any way how can you sort of measure externally that you've found your positioning how do you know it's a good question like I said I as soon as we did it it felt right like there was this gut component to it and then I wanted to validate that and we split tested to try to validate it and that's as far as I took it at the split test we saw that it improved on pretty dramatically the number of people who click through and who sign up for trial so I think you could oh here's the other thing the reason that I went with like

43:13with marketing automation was not just because of what Jeff said but because of what other people were telling me our customers or people who had canceled kept saying are you marketing automation or are you more similar to intercom or customer or bad VIN or vero or these other things that really don't call themselves marketing automation and so they my customers were using vert or you know this phrase for me and that was part of the external validation but there wasn't data as much as conversations in those early days because we didn't have enough volume to really you know get actual numbers Scott yeah hey so I'm a fairly large

43:49drip customer as you know I've got probably 60 to 70 thousand emails in there for three different websites some pretty heavy user and for us it's we find a lot of value and it kind of becoming a sales database for us because obviously something like close i/o would never really work for like a consumer thing which we are and I'm just curious where you see marketing automation in general and drip going you know obviously without talking about things you don't want to it yeah yeah for sure so when we when we launched marketing automation is like six different things there's email portion of it and then

44:24capturing leads and that kind of stuff and then one of them is lead scoring and the other one is kind of a CRM aspect right and we only had four of those when we launched so lightweight kind of fit it we implemented lead scoring and lead scoring works now if it's not active in your account let's get it active it's in beta but it's it's it works so we can do a checkbox you going and then CRM what we've done to date is we've integrated with pipedrive and clothes IO and so what you can do is I don't I'm not gonna this is sales pitch but you could in essence say

44:56anybody who has a lead score over a certain amount I will automate in rule I want to pump them in to close out IO and then use a tool that's actually really built for CRM to do it if you want to do one on one follow-up we have toyed with the idea of building not a full CRM in drip but kind of an external plugin or something that does it but I don't know yet but marketing automation in my opinion it does encompass all of that if you were full I mean Marketo part auto give yourself they all have a CRM component to it I

45:33mean this is kind of a grand slam for a single founder company to get to that kind of revenue level a timeframe you have but I'm wondering to founders know the two founders well still it's a at least a homerun so well said do you have any goals for the next twelve months that you're willing to share with us yes and no I don't share I just not something I do I just haven't shared goals in advance of anything that I've done this is a Grand Slam but I really you know in terms of Patrick Mackenzie's talk of leveling up in terms of a podcast episode and a blog post that we

46:13published in the last two months call and I called it stair-stepping right it is a Grand Slam but it's not a it's not like a unicorn that just magically happened I can walk you back ten years to when I first started making my revenue on dotnet invoice one-time sales 2,000 bucks a month and then I acquired six of it you know on and on and on and it's like it's it's levelling up and getting there so yeah got it but what are the what are the goals yeah the goals are to grow revenue a lot more because with the churn and with the numbers I'll just say the way they are

46:46it has a lot more to grow before it plateaus and I have an Excel model that shows me when I at the current number of trials when it's going to Plateau and that is a ways down the line right now assuming everything stays the same so this is definitely my biggest play and this is I'm all-in on this like all the chips are in you know I've been taking hit tail revenue and other stuff to grow this hey Jack hey so it seems like your initial idea was much smaller than where you wound up and so if you start out with a small idea and through

47:18just listening to you I had one idea and now I'm realizing that there's a lot more that I need to put in there in order to fulfill where I want to go with this particular idea so my question is is if you don't pivot into more work you actually realize you need to do more work before you get there would you have still done it would you have still taken the steps that you did so if on day one the day we started writing code if I had thought boy it's not gonna be the small idea we actually need to write like a year's or the code which is what it

47:49ended up being would I have still embarked on the journey I think the more interesting maybe I'll I'll answer it in a second but I think the more interesting thing that I want to point out is you know this the smaller idea if I was a single isola founder who still worked a day job and was trying to launch drip the initial incarnation got us to seventy five hundred a month and I I do think it could have got at eight or nine and that's that's pretty damn close to being able to quit your job if not enough right so drip was not a failure and they knew I don't want to lay it out

48:21like that seventy five hundred was me failing it's just that I have different goals now because other apps because I'm stair stepping up right I wanted to do something bigger with that said I don't know if we'd ever build apps from scratch if we knew how long it was gonna take I don't know if I ever would have I would probably still be working for a credit card company if I knew that in 2005 I'd make well in 2001 I'd launched my first app in 2005 I get my first revenue and you know in 2009 I quit consulting and I was late eight I could consulting but knew who's gonna take

48:54that damn long I probably this is not a wise decision you know it just is adjacent go inside this right it's like something's wrong with us to want to do this but I don't know maybe maybe we'd still would have done it sure so my follow-up question then is if I have the smaller idea and now I'm thinking a little bit bigger should I still start small we could talk about specifics later maybe but in my opinion yes I I'm a fan of getting to revenue very quickly you know again the 7500 a month that it was bringing in was doing a heck of a good job paying salary and

49:31some marketing expenses so if we you know it's kind of like do you launch hourly and get to revenue or do you wait a year and just turn away in a basement with no customers you know that would if you think about the path that we took not almost all the feedback we almost all the pivoting or whatever you want to call it the justments the positioning all that stuff the features there's all based on customers using it so the only reason this worked one of the other reasons was that customers were using it you know so I would say build your small idea launch it get some people using it

49:58and then see where you wind up we're gonna take one more question so I'm curious about your motivation levels throughout the because I mean that was kind of a long slog it feels like an you know it'd be kind of interesting to see it on your chart of your revenue or where that is yeah I when I originally thought about this talk I actually wanted to plant like or plot my mood and I also wanted to plot payroll because I hired out a head of revenue and it it was not anything I've ever done and it was pretty rough 2014 was probably my roughest year as an entrepreneur I'm

50:36glad to have come out of that in November December it was like okay we launch we finally got it out there and now it's time to scale his mother up right it was eight almost eight grand a month I'm gonna be at 20 grand in six months or in a few months frankly January to June was excruciating and it's just a few bars here but that's like six months and for someone as impatient as me and probably most people in this room that is a frickin long time it is so long and it's all indecision because it's not like we have a goal and by June we'll hit it it was like every

51:11week we were having the same conversations are we doing the right thing should we do it you can hear some of that although I guess our our little audio documentary ends like in December so it ends before that but you can hear the anxiety and all the stuff in that audio documentary I pointed out it's a startup stories podcast calm if you kind of want to hear part of that process and then yeah in July and August once it started going up then it was all it was all hooray since then this is the fun part you know so I think that's it for me today thank you very much Rob

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