Sub Club Podcast: How V1 Sports Doubled Revenue with Bold Bets — Alex Prasad, V1 Sports

0:00hello I'm your host David Bernard and my guest today is Alex Prasad CEO of V1 Sports the leader in video golf swing analysis software and seamless video lessons on the podcast I talk with Alex about the power of user segmentation executing bold strategic shifts and why imaginary customer conversations are sometimes better than real ones hey Alex thanks so much for joining me on the podcast today really looking forward to chatting thanks for having me David super excited to share our story and hopefully there's a learning or two that's applicable to your listeners I think there will be and that that's why I wanted to have you on the podcast the

0:37interesting thing about V1 Sports and what I wanted to focus on was how and I think so many apps are going to relate to this it's like V1 Sports had amazing early product Market fit and built a great business around that and then went through the Wilderness so let's kick it off with what that early product Market fit was and then we'll go through how you came in and the things you did to really get it back into a growth State yeah so this company is over 20 years old maybe closer to 30 which is crazy to think about from a technology company perspective not a lot lasts that long

1:08basically right and the first Innovation was being able to send video over the Internet before really anyone else could and applying it to this golf context so I know today everyone's streaming 4K four NFL games and their quad screens on YouTube TV like hiking through the woods right but that was not the case 20 plus years ago right and then the second was teating on that video so that instructors could do a video analysis whether in person or purely remotely and send it right over the Internet so that Innovation won roughly 30% market share in North America amongst golf instructors that's our B2B side of the

1:41business Revenue cats working on the consumer side we'll be talking mostly about that but that became less Innovative over time like every Innovation right and so it won that market share then there was a plateau for a while in terms of growth so especially on the consumer side learned a lot of things to then start to Kickstart whatever maybe phase two whatever you want to call it growth and not in a straight line not because we're so smart but through a lot of trial and error and a lot of learnings let's talk through that so what was the state of things when you join the company and

2:10then let's start talking through that early what it took to take this great business but great business that had kind of plateaued and get it back to growth yeah well if you think about a 30-year Arc in technology I like to step through phases so late '90s like who's the best company Ford and then maybe Microsoft right so you go from let's sell a lot of stuff Ford right like big expensive machines to Microsoft let license software right and deploy that so here's your CD and install it on X number of computers whatever right and then you start to move I'm skipping like lots of Shades of

2:47Gray here right you know into like a subscription model but so when there's a business that's of that age you have remnants of each of those models and I would say now we're like in a platform model right with two sides of a Marketplace and so on and so forth is the best you know the best in quotes right the most interesting thing and maybe we've actually aged out of that and now it's AI something right but so yeah it was a puzzle because you had vestages of each of these business models which were the best practices at the time lying about basically so we needed to put a stake in the ground and

3:22say which of these are we really which is Antiquated by age or maybe not still pertinent you think about these users I mean we have high 80s per retention on the B2B side of the business so these guys are happy where they are they like the thing and they don't really want fundamental like that behavior regardless of what we're doing to them if you will means like I don't really want to move right I'm happy where I am thank you just keep delivering this thing to me without disruption so we had to look at those various business models and choose one and then try to harmonize

3:52around it and so especially on the consumer side because the business started purely B2B I would say the strategy was I don't want to say immature that sounds negative not the point but it hadn't been focused on as to like how do these pieces of the puzzle go together right so not surprising that opportunistic line of business plateaued because it wasn't really the focus as the starting point it wasn't the Genesis of the company it sounds like this is why you joined is you saw that there was like a ton of potential but what did the business look like at that point like size and users

4:24and you already mentioned 80% retention which is insane yeah um so 30% market share on the B2B business has not changed a ton over the last they' been with the company a little bit over four years now with annual contract values increasing that's the exciting story there again not really our focus on the consumer side again it's not being critical right it's just like the order of events was that the consumer thing was opportunistic but it had never in my opinion been thought about rethought right once it reached a certain size so because of that B2B Dynamic the focus was really don't disrupt the inst structor consumer relationship so some

5:02instructors would have issues with the fact that we could sell directly to their customers that were on the platform so we re thought that we made some bold decisions which did create some friction on that B2B side but we basically switched from a fremium model to a free trial model to simplify things because fremium in my opinion in a direct to Consumer business is probably the most complicated monetization strategy you can have and we got to be really clear the a statement really clear metrics really know where to draw these lines right otherwise no pun intended for a video telestration company draw the lines Father Dad joke

5:38right so but it hadn't that premium strategy had been really I think deployed more defensively to like keep the pros happy if you will and still today the pros students athletes can join the platform are never going to disrupt with a pay wall the interaction between the two just like a touchstone third rail you're never going to change that it's a fundamental tenant of our business if you will but we did rethink that premium business model because the thesis statement I think was fairly weak to be blunt because it wasn't again it was like an add- online of business right it was not the main event so it

6:13didn't get that level of thinking when something's opportunistic you attack it and you take the money that's there right but that's very different than being methodical and thinking about it from scratch I want to interject because I think a lot of ABS can relate and maybe I need to help point this out but so many apps if they're four five six years old they don't have as much kind of business strategy debt as VI sports did but they probably have more than they realize there's features that they give away for free in their premium strategy that maybe are higher value that they should be putting behind a pay

6:48wall there's ways they do things that haven't been rethought in years and to your point earlier things have changed so much consumer willingness to pay via subscription has changed onboarding patterns have changed even like willingness to pay higher prices are surprisingly doing better and better if you can deliver the value consumers are more willing to pay higher prices for software these days and I ever thought consumers would be willing to pay for so I think this is how if you're listening in and you're like what does this like golf app have to do with my business I think this is the meat of it is that if

7:25you've been around and your business has plateaued at all or even if you've just been around a bit and and are still growing but want to grow faster like taking a minute to re-evaluate some of these like core aspects of the business can produce incredible fruit so then what was your process like how did you gather data talk to users what did it look like to figure out where those opportunities were to shift the business strategy well how much time do we have so uh so I'm a corporate lawyer by training and that you know perverted or rewired or whatever adjectives you want to use my brain um not a litigator no

8:00one makes TV shows about corporate attorneys but the first was just to challenge our assumption so one of our kind of it's not a core value but it's just lurking outside of our core values is nobody knows anything nobody right I believe in experience shares I'm not giving advice telling you our experience here's what worked for us here's what didn't apply it to your situation right I don't know enough about your situation to tell you right that my Approach is right or wrong our approach is right or wrong and then another kind of corporate lawyer thing it's a logical syllogism everything that we're doing what are

8:31these implicit assumptions that we're making to make decisions right and the more time that passes the more dated those like Bedrock assumptions are I think one of the things that our team is most proud of is it feels like we've been in the last four years like 15 different companies completely disorients our board which is a whole different master class that someone needs to give me but I view that as a sign of progress and success so there's lots of times we actually come back to something that we may have done previously and someone says well we already tried that and I go whoa but that was 18 months ago and think about

9:05all the things we've learned let's go back to so I'm a big fan of why are you where you are can you go back and critically evaluate that and are those still true sometimes they might just be truisms right and you might just say check check check for instance for us we're never going to make the student pay to interact with their instructor we're just not going to do it we go back every once a while say well we could and we go no but that's violates our core Val you know and these people have a long relationship with us we're not on the pro side right we're not going to

9:33disrupt that okay great that one hasn't moved but what about these other things so first for us was just go back to the beginning and so free trial is just simpler right we couldn't reconstruct the thesis statement behind the premium strategy so he said we need to make things simpler and like get back to the basics and by the way if you switch from free trial or from premium to free trial he going to make more money doing it you might burn users story we can talk about that and bad reviews whatever so there are costs right so that was I want to say I use the word easy a lot when I

10:06think I mean simple that was simple it was a or b you got to choose a door pick one right but we decided basically to retreat to move forward meaning there's a lot of assumptions that are stacked here and we don't really know how many of these are true where's a simple place to start to explain the universe that we're living in and then proceed from there and try to meticulously Brick by Brick right lay these down so you have a solid foundation and again we had such high turnover a feature and a bug in some ways and so institutional knowledge got eroded to some extent it was easier

10:36to do that because there weren't a lot of sacred cows to us but also harder because there was fear around well what are we disrupting right because we didn't have that full knowledge so that was a start at least simplifying things so we could list the four or five assumptions that we thought we were operating based on and then building off of those yeah let's talk about that one assumption then so it sounds like people would open the app go through onboarding and then be able to use the app and certain features for free but was there a premium tier at that point and what did that look like and then when you say

11:06switch to free trial is there no longer any free usage of the app like you have to pay to use the app like what data what hypothesis did you have how did you test it this is a transition maybe a lot of I did this in my weather app so I've already talked about this on the podcast it was always intended to be short-term but it worked really well in the short term and so now I'm going to revisit freemium once we get the product to a certain point where the costs align and things like that and we're in a different market so like you said

11:33experience is something you need to learn from but not always directly apply but anyway so yeah what did you mean by freemium what did it look like in the past and then what were the kind of user research and data that kind of helped inform the hypothesis and then how did you validate that yeah so there's a limited number of ways to improve your golf swing just like fundamentally right so you could work with someone that's working with a coach right you can look at your own swing with video we View that as like foundational Elemental if you want to improve any athletic thing if you're not going to watch yourself do

12:05it your level of seriousness about improving is in our view because we're thinking about our ICP right reduced significantly so you're not really the droids we're looking for probably right and so video telestration goes along with that and being able to look repeatedly right the swing what's the same what's different and what's a flaw based on what I know or what we're teaching you and then looking at contents there's only three or four things so we were allowing you to do basic telestration in this premium but not Advanced we thought that was way too thin of a hair to slice right to split there's no way you're either in or out

12:36right and so when we still have way more free users like 3x 4X like monthly active users than we do paid basically we just split up the constituent parts right so they interacting with the pro because the pros are generating about a third of our new registered users on a daily basis are coming from this relationship so yeah we don't want to disrupt this so what does that mean today send videos to your coach go back and forth with them interact with them so the pros experience and your experience hey there's this free app this is what you use to interact with me right let's go great but then there are

13:10three quarters of the people that are not coming through that channel right so kind of teas segmentation we can talk more about that but the three quarters is where there's all this volume here right 3x of volume so that's some of the decision- making progress or process just at the starting point who are you and how did you come here right you came through a pro or you didn't let's just start there by the way when you're trying to remodel the airplane while it's flying doing some basic things like that is hard don't get me wrong and we're at a place now where we actually think we do that well but that was like

13:40the problem two years ago so that was a starting point and then it was is it reasonable to have to pay for that like how much convincing are we doing with the fremium tools and we can talk about data and like when do you know to go or not that's a good thing that we've talked about previously David but that was just Instinct I think largely like when we don't know and we don't have data to pointed out we try to retreat make things simpler so that we like are on more solid footing obviously not like you burn a bunch of money or like stop charging people or whatever right but

14:17Retreat like it's too complicated it's a golf app this isn't that complicated right but if we don't understand what's going on like adding in more and more factors is not going to make it easier it's going to make it harder right so let's simplify this thing here's the thing do you want it if you do you'll pay us if you don't yeah should you have a free trial sure try it out before you buy right but we' really just Tred to simplify as a starting point and that was more Instinct and really not Instinct about what the best reaction would be in the market Instinct that we

14:43didn't know so what are we supposed to do if we're driving this vehicle we're not in control of it what's the first thing that you slow it down try to understand what's going on because we just keep going faster we're going to hit something eventually right that's the way we thought about that and then as we got more fine-tuned certainly cly data and instinct or whatever started to come into play but at the start it was simplify and respect the existing relationships and I think we did that at least what did the Gathering data look like what did it look like talking to users having conversations figuring out

15:12how you could make this transition from premium to the free trial that transition versus I think it's about maturity of a company like in where you are that was more of a naked bet to be blunt right we just knew what we didn't know and so we had to make a leap but I taught us a lot so we got all these reviews of people who were in the premium and all of a sudden now some of their things right had to be paid and you get these reviews and lots of onear reviews so if you go back in the look at the V1 Golf app in the iOS store and you

15:42go back two years you a massacre right and the responses were I've gotten this for free for nine years and now I have to pay for it I hate these guys I like to say the more time I spend in other people's shoes the more effective I have been for the day cuz it really at the end of the day it doesn't matter what we want it matters what our customers want right cuz we are trying to get our customers to open our wallet and so I like to a lot of calls that we have are thinking things through and I'm not saying anything what are you doing I'm

16:11like I'm playing out I'm having a fake conversation with a real person so I'm having a conversation with this guy who was leaving me a onear review saying I got this free for nine years and now I have to pay I don't think I have that conversation in real life I think the guy pays me you don't come to the bar and get a free drink and come again next week because the bartender likes you or whatever and and go well yesterday or last week you gave me a free drink so I'm entitled to another one hey thanks for the favor I'm going to pay for this

16:35one for sure right in real life that's what would happen so there were these decisions where we understood there was going to be friction to be blunt right with users but that we were comfortable with having that conversation when we kind of War gamed it out people are going to say that and I said not in lacking empathy but so what if you're a user who's looking to download this app and four onear reviews and it's four people who are upset that they had a thing for free for almost a decade and now they got to pay you know 60 bucks and I understand the star rating like

17:09that's important but we have to make this shift here because I think for every four that complain 10 are going to subscribe and that's basically what happened so there's a little bit of blunt force there and that was uh I guess the data in that case were more mature now we don't have to make bigger bets like that are a little bit bigger leaps that we just hope but there the data was war gaming out the conversations right and trying to draw a line between reasonable and unreasonable which is completely subjective and which conversations are we comfortable with and which ones are we not and that was

17:39one that we were comfortable with so you really like burned the bridges because this I had this exact same debate and I landed on the other side of it for my app that if I recall correctly part of this decision was that as a business you needed to make money like you needed to move the dial financially and how do you only made it free trial for new users and grandfather Dan this like really passionate long-term cohort of users you knew you were going to leave too much money on the table that you needed to propel the business forward so it was also like a business strategy decision

18:15that like we need the money and we're willing to take it on the chin to get the cash flow we need to keep moving the business forward yeah you know a lot of people like called us greedy and if I showed you the financial history of this company that's the kind of hilarious statement so yeah we we just made that we just made that leap David I it's like almost not a lot of thinking required to explain the background behind it we needed to do it for the financial stability viability of the company we just can't run if it's a nonprofit it's a different story we're

18:46still in a process of moving users over a new pieces of software and sometimes my team asks and I jump in to a conversation and I say look like we're running a business and these people are working hard and they deserve to be paid yeah so we offer a service if the service isn't for you then find a different service or don't choose not to consume this service it's really that simple maybe a different way of saying it is you can't please everybody much harder when those people are already in the tent and some may perceive it as you kicking them out because you're changing the rules of the

19:19game no one liked doing this to be super clear I was like aha we got them you know like let's squeeze these guys right like not at all but you know to run a viable business you're going to have to make some decisions like that and I would just say for as hard as it is in your case right in mine with your weather app it's no different I think maybe a little bit of encouragement if someone's looking down the barrel of that to having set the right stuff in the first place right yeah you say you can only come into the theater if you buy a movie ticket and then there's

19:49people in the theater that didn't pay they got in a back door or whatever you going and seeking them out and saying hey you're have to pay to be here that is a conflict I get it you're less likely to do it in that scenario than the person at the front door but fundamentally you should right like you owe it to your shareholders you owe it to your business and the people that work there you can give them better raises we can invest more in the product for the users that are paying you can go down that it's just kind of a matter of fairness and that's not a word that's

20:14really in my vocabulary but if you're going to use our thing you got to pay for it and if we change the permissions if you will it also helps you know my wife's a doctor I work for a golf company it's like it's a golf app right this is not kicking you out of the hospital and you need life saving procedure or something right wow but then I guess it speaks to the core product Market fit that you had these users using those free features for such a long for nine like you said nine years somebody's using something for nine years it's because it's delivering a ton

20:45of value so you already talked about you took it in the chin review wise but then like how did it go was it like an incredible success yeah I mean it grew 80 90% in 12 months or something thing in terms of Revenue so yeah there was just a lot of you could just do the math right and you go wow there's a lot of people that are using the heck out of this that transition was about future use it was not about holding people's data hostage and so on and so forth and one lesson I do think that we've learned is that when we try to communicate a

21:15nuanced message with three points the first point is heard and the other two aren't that's because people are busy it's not like people are stupid that's not what I'm saying but really repeatedly we we' spent a lot of time when we do these disruptive things because this has been a turnaround whatever the right word is right but a rethink whatever the right phrases there's been a lot of disruption and we're are still disrupting in other ways and other lines of business Etc to try to get everything in the same strategy on the right path and it's just funny Maybe funny is the wrong word but how

21:47repeatedly there will be a nuanced thing that we're trying to say to folks and really to take away one point and they move on there's a recent example I SP you the details so I guess my point is if you're looking at one of these decisions and you believe that the aggressive decision is the right one just know that the five weeks are going to spend massaging well no there should be a a fifth email right that communicates this it is a little bit binary right you're going to move someone's cheese you're moving it that's the way they're going to perceive it the fact that you did it to the 95th

22:18percentile versus the 55th percentile is likely lost because they're upset that the cheese has moved I don't know if that's points to don't do that extra work I'm just saying is unlikely that it will be recognized if you move change the game on someone right so just you know buy or beware or fair warning you won't be praised well I know you had to do this but you did it in the best possible way you're not going to get the first part so you won't get the second part so how did you communicate it because that that's a a big deal again why I wanted to have you on and why I

22:46wanted to talk to this is because I think there's a lot of apps out there making decent money not growing struggling that should not necessarily go from premium to really burn the boats and bridges there it would be hard for me to in good faith recommend a lot of apps go quite so dramatic but hey if you're struggling it's a business you need to make bigger bets and this was a big bet so then if people are going to make a big bet and make a big change especially to existing users how did you communicate it and sounds like you know you've you've already shared one lesson

23:19but any other lessons in that communication that people could take away from well I think the 8020 rule applies right and I think fewer better customers are better in general it's a general rule if we could Pile in a million users but they were all on the knife's Edge at every renewal right and we knew they didn't really get value we call them zombies right like we got a lot of zombie users out there that maybe they forgot I mean that's a dirty secret of the subscription business right is that everyone has some percentage of users this is why consumers revolt against subscriptions and why businesses

23:56like subscriptions they forget that they even have the subscription right no one wants to talk about that if you're in our shoes but that's a part of the business model right and one thing they gave us confidence I think was this which is that if you have fewer better customers you're going to spend less time trying to manage churn spend less time just like worrying right about like how tenuous your grasp is on these folks what if the people that are really getting value out of it have to pay for the value right again that's a theme of simplification right so that was what I think gave us a lot of Solace and that

24:31comes down to segmentation and trying to understand your customers and if you believe you have customer lots of customers that actually love the product you should charge a fair price for it and if you're worried so so worried that this kind of applies to price increases too right so so worried that a 10% price increase or and maybe not today's but the last couple years inflationary environment is going to run off all your customers I would just encourage you to think through why and is it because you don't have conviction that your product is really like solving one of these people's problems right or your user's problems

25:05and if that's the case the problem isn't the price increase the problem is Right understanding those customers and delivering the value right I think this comes down to trying to treat people like they are people and not users right because we have all this data and thousands of users and so on and so forth everything becomes a spreadsheet but we forget that fundamentally it's people and so I like to spend like I said a lot of time on other people's shoes but then also a lot of time pretending like these interactions are happening in real life oneon-one does that make sense would you do that in

25:37real life look everyone knows it's software it's programmed to give you this answer that's fine but if it doesn't feel right or doesn't mimic the human behavior the chances of success are lower in my opinion right so again to the person who has that issue with the N9 years free whatever let's play this out in real life are we okay with that are we okay okay with other people over hearing that answer is yeah right whatever percent of people are not going to like it right and that will create that Snowball Effect that you're so worried about sure but most people we think that's reasonable these guys are working

26:10they're delivering a service and they're not getting paid for it they should get paid for it probably right segmenting your customers understanding where they're coming from and what they're doing and then are we scratching the itch that they have right can give you a lot of confidence alth that being said I don't feel like every day I wake up and go I don't think we understand this well enough right it's not like you reach a point oh we got it we figured them all out mission accomplished we've landed on the moon whatever no if you're not paranoid about that all the time but that's the root cause issue of

26:35everything right Are you delivering the value to these people that they feel like they can't live without and if you are you got a lot of freedom and flexibility do a lot of things so our average user spends 21 minutes a month in the app or monthly act abusers that's a ton right which is not a license to abuse them but it is okay these people get it and they're going to be retained at a high level it's something to build off of right and the ones that are in and out real fast or not using it that that level we want to understand why but

27:01we also know that a lot of those people are like not savable not the ideal Customer because there are ideal customers over here what's working for these people let's really drill in here and understand and apply it to more with the understanding that these people might only be 20% right everyone is not your ideal customer you teed up uh segmentation which which I do want to dig into but but just one more time restating the question what did you tell them though this is the like practical takeaway for folks if you're going to make a big change to the way you operate to asking people to pay did you just say

27:35like you know this business will fail and you will not have an app you need to start paying and then like did you do that through on the pay well like brass tax like how did you actually implement this change and communicate with users about the change yeah that's a funny that's what you wanted to say for sure this is a for-profit business and we can't subsidize you and all those things we said it nicer but there wasn't a ton there was hey look Yeah by you investing in right this subscription we can deliver a better product kind of period and that goes back to my lesson of

28:07everything that comes after that they're not listening to I have to say total personal opinion take or leave I disagree with the no explanation change which I've seen more and more of lately where people like your price is going up or or here's a link to your new billing statement right and then you click in there and realize that the price increase that does again you and me David right I say that to you or like I we have an interaction like you buy a service or product for me in real life and I just don't tell you that the price changed aren't you going to walk out

28:37when you look at the receipt later or whatever be like hey what the heck this used to be right and now it's that's not cool and if I had just said hey David you're I'm your dry cleaner the shirt's five bucks now not three bucks because of all these reasons You' been like yeah okay but I've been going to you for forever and I like you and whatever so it is what it is right yeah I had this exact experience recently so I had a HB contractor come did some work the bid was $2,100 yeah he finishes up I pay he leaves and then I looked at my credit

29:06card statement and it was $3,000 $900 more than the bid and he they never explained to me and I've been like calling them and like about ready to do a charge back on my credit card just to get their attention to your point it's treat people like humans and like having just had that experience I very much relate to not just increasing the price just to increase the price and actually communicating about it so and then it see sounds like you had some more to go on that yeah well it just I think it comes back to the fear right so let's put ourselves in the shoes of the

29:36contractor or the hbac company right they set an expectation it says a lot more about them right and like what's going on in their head and I get it I have sympathy for being in that position because happened to me many times I set one expectation and I can't deliver on it that's crap it's like one of my least favorite things in life but like trying to skate through is just never going to to be it's just delaying the pain basically right they delayed the pain until my charge back right but it would have been felt so much better just for them to say hey look it was a bigger job

30:10than we thought it took me longer here's why maybe it took me longer because I'm not very good you don't have to say that part right but this is why and that's the point to the three or third fourth or fifth thing no one's listening anyway right you're going to hear oh man it's 900 more bucks but at least he told me right and now that expectation has been reset in a negative way to me to be sure but it's just kind of the right way of doing things my wife likes to say I'm too honest a lot of the time like weird comment but I get it but it's because

30:38I'm not smart enough to keep track of the lies basically right like I'm not smart enough I need a really big notepad yeah so it's just easier and simpler and more genuine and people will appreciate it that would be another thing about segmentation is you'll listen to the squeakiest wheels but don't over listen to them right it's important to be tracking that for sure and asking a lot of wise and see if you can even get them so maybe the inverse of the like if you give four reasons only going to hear I moved your cheese and maybe the start of the first explanation but like a lot of

31:14time we're building towards a call right or the actual conversation with the squeaky wheel and then again we just playact it out are we comfortable in that scenario do we feel proud is the wrong word but do we feel okay and comfortable in it right well I can't believe that you're making me pay for for something that I've used for forever and I've never paid for I'm like yeah I can right like where's the other place that's giving you you know a free house or a free car or a free whatever right you say it nicely but you try to get to the why and if you get to a why that's

31:40like bizarre you go okay that's on you not on me moving on right right sometimes you get to a real why you go oh someone else set this expectation that we didn't even know or what right and you go oh wow okay thanks for sharing that with me yeah Our advice was always and you can't do it on the consumer side but as we've moved stuff on the pro side I always tell my team that you have complete and total autonomy to make it right but there are some guard rails and we'll set them ahead of time you can't use a thing for free for forever you got to pay

32:14something right but if you can reach a reasonable deal we don't want people to leave angry right if you can avoid it but you have to at least move the person towards the goal right so I'd love to have a Playbook and a hard and fast black and white rulle for everything and there's a policy there's a policy but more we just have a really great team we trust them to make decisions and diffuse situations but not diffuse them at our expense right you can treat someone like an adult and compromise and reach somewhere that's you know at least a step in the direction but yeah you have

32:44to have the tough conversation you can't just not have it it's been so fun diving into this I didn't expect to get quite so deep on like product psychology it's ultimately and I love the way you keep bringing it back to these are other human beings on the other side of it and I think that's where a lot of folks in the subscription app industry are maybe heading the wrong direction currently like over optimizing their pay wall on data and not putting themselves in the user shoes of what does that actually feel like and then how do you to your point diffuse that situation through communicating effectively and if your

33:23goal is just to make as much money as you can as quickly as you can sure go for it but if you're like trying to build a truly great business it's going to stand the test of time and to your point earlier which I loved have users who care enough to pay have the users that matter not just a bunch of zombie users who forgot that's a good subscription business I think a lot of people these days are building toward not having a great subscription business they're over optimizing on price and other conversion metrics that do bring in a lot of those very poor quality users that aren't going to new and the

33:58magic of subscription app businesses is those users who are going to stick you with you for a decade and be willing to pay for the value that you're creating not just tricking people via dark patterns and other stuff because then you're just going to bleed out those users on the back end and then you're pissing off the people who would otherwise become like your really amazing like 10e users so anyways it's been really great diving into the like psychology aspect of building a great business by like caring about the people and the other end yeah I think it's look the promise of SAS and subscription businesses is a

34:35scalability in the margin that's why most people get into it right as opposed to a professional service or something else right restaurant has like 0.5% or 1.5% you know like really really hard businesses and like the faster you run not necessarily the faster you get ahead so get that but there's something and we fall into it all the time myself included that breaks your brain in ter terms of running such a business is you're so hyper to get to the scalability that we forget that the way to learn is inherently unscalable activities we call it the hamster wheel someone called it to me the gerbal power whatever metaphor you

35:17want to use build the gross manual maybe bespoke process first right and learn from it and do it so get a little bit of data have hypothesis get a little bit of data pay wall is whatever right to prove the point okay this pay wall is doing better than that pay wall why opinions enter now right and then attest those opinions and choose the best one we get so obsessed with well that's not scalable well how do we know because we don't even know where we're going yet the idea isn't inherently scalable or not the execution of it is so test the idea purposefully in an experimental way

35:53and then what a great problem I I like to talk about great problems let's let's create good problems what a great problem we have a thesis that we're doing some manual gross lots of hamsters running on wheels or whatever thing and it's working and now we just have to make it scalable like how do we take this manual thing and write it into the software how we take this manual thing and not make it a survey that zaps somewhere but make it a core part of our back end right great that's great if all those are the problems we're working on every day I'd be on vacation 24 hours a

36:21day right that'd be great we'd only those are that's fantastic right this works now we just have to scale it up again in this industry we get so obsessed with the scalability part that we miss like we just skipped because we reject any idea that we can't immediately see the through line to scalability well gee whiz there's a lot of good ideas and talking to people's not scalable we just talk to a lot of people and that will create a hive mind that will be useful so yeah this is a pattern that we saw the same with planning right like there's all these pain in planning at the outset if you

36:52ever seen squiggly lines and then you know pain and how much planning is involved no pain at the beginning if you don't plan but lots of pain later similar Dynamic but again everyone falls into the Trap but I think particularly people that are attracted to sass because they see that opportunity Rome wasn't built in a day to use a cliche but all these overnight success stories when you start to learn about them it's like they took them eight years to figure this stuff out right it explodes onto the scene and it wasn't because they built this super scalable thing eight years ago because if it was super

37:23scalable eight years ago they wouldn't have just come onto your radar today right so yeah that's just a not a flaw and logic but just a pattern that you know I find ourselves getting sucked into all the time that just pump the brakes for a second can we learn as much as we possibly can now first don't worry about how we scale it we'll figure that part out because it'll be worth it because we'll be the courage of our convictions if you will what I see over and over again in the data is apps do come out of nowhere but they come out of nowhere with dark patterns with not

37:54actually delivering on value but they're really good at paywall optimization onboarding optimization but not really good at building a great product yeah the execution is there but not the product Market fit yeah it's crazy yeah and so then and then they grow and then they just hit a cliff and then die die die die die because like you're saying it's like that's that's sass it's people actually have to use the product for you to get value over time and if all you're doing is converting folks and not retaining them then you're not building a good business so but part of understanding those users and I did want

38:28to transition to segmentation is it part of being able to Think Through who these users are what they like how to communicate to them how to most effectively sell them is understanding who they are so talk about how you think about user segmentation and understanding who those users are again not the expert right like just an experience share what we've learned and you I don't know if this stuff works that we're doing you we we'll find out I guess right I really mean that this is my my first rodeo in this role and in this industry so maybe I'll be better my family say you'll do better next time

39:01doesn't matter if it's a good thing or a bad thing we'll do better next time like you'll know more you know U you do something really good like you'll do better next time and if you do something bad like you'll do better next time so this comes back to what we were talking about earlier in just War gaming out real life conversations but we reached a point where yeah we had plateaued again if you will and I think we're still actually there to be completely honest we got that growth of changing the business model great and Okay now what's the next thing oh man right and it

39:25really we again rechallenged our assumptions it came back to what do we know about these people the answer was like not a lot right we're looking at their user where are they clicking and why and how much time are they spending on the screen I'm like man but the data can tell us where to look but it can't tell us the story right of the people and so we started treating the app like you were walking into a golf shop or like you were walking into a retail shop and started asking and were really worried about the tradeoff between right straight line onboarding and get the

39:54person in right and scalability and whatever and creating more friction the more I talk to other people in the space and people that I respect talked a lot about positive friction and that you're going to filter out bad users sooner and the ones that do make it through you're going to be a lot more confident with that you have product Market fit Etc so that's basically what we've done and we started asking people like why are you here by the way we're going to get way better at asking that question because I think we're only scratching the surface but what we found was that hundreds of

40:23people a week maybe 10 15% of all the new registered users wanted to find a coach and believe it or not even though we talked about coaches and the golfers we didn't really facilitate that well we were facilitating existing relationships not building new ones and so just as a starting point there when we started asking the question why are you here there's only four or five ways to improve as we were talking about earlier one of them is to meet a coach is that interesting to you we've battled a lot about are we collecting information are we pushing them towards a result and again I don't have answers there but we

40:52found out there's a significant number of people that are actually even though we're not putting it into the universe that this is a place defying to coach that's what they're here for so what if we gave it to them and it turns out those people even though that's not what this plus Golf Plus premium if you will right subscription gives you are a much higher likelihood to subscribe as well so I think on the next Rodeo Whenever Wherever that is that's fundamental in first is some sort of onboarding sequence where you just ask what are you doing here what do you think like on a you know on a B2B business right you

41:26would ask what's your me of success right super important customer success question same thing here on the consumer side and it sounds so basic simple but I it took us years to get to the conclusion we should just ask I mean we looking at all this data and it's like a lightning bolt one day like why don't we just ask are people going to leave because they got one minute or less right survey of just these fundamental basic things maybe actually probably yes at the fringes but these are people that were not your ideal customers anyway right so like when we look at the whole like you know least common denom minator

41:57not just in math but like is a thing and limboing to it is not going to get the rewards are going to come from that those icps or that 8020 rule it's not going to come from optimizing everybody because then you're going to dilute the product for the people that are your icps and you're going to be playing to the crowd that's unlikely to subscribe anyway and that kind of goes back to a confidence that is this a tool that actually has value and people really want and if the answer is yes the total rful Market could be too small Etc but think about that phrase total

42:27addressable Market you can't address an non-addressable market so don't try to you know right attack the people that like fundamentally aren't really that into you to begin with so that was a a breakthrough for us just ask and then then we say well how do we make this more straight line you go back and forth It's not black and white but again like a fear of asking came up implicitly in our conversations because they thought you'd run people off who you were going to run off by asking them why are they here I mean people not people that are really into it and want to be here right

42:57I love the framing of what is your measure of success I think in consumer we don't think about that as directly so I do think about like jobs to be done that's a famous framework that I've kind of like used as a mental model to understand user behavior and then speaking of my weather app I I think all the time about there's a job to be done of like when is it going to rain do I need a raincoat do you know do I need to take my umbrella do I need a jacket today like that that's one job to be done but there's actually so many

43:32other jobs to be done in even something as seemingly simple as a weather app and that's why some people gravitate towards some weather apps that that just tell you in the morning do you need an umbrella like I think there was an app called Poncho that its whole thing was just like do you need a raincoat today or not and then it sends you a push notification in the morning and that's like finding a really clear measure of success the measure of success is that I don't get caught out in the ring without my Rin Cod or umbrella and then understanding that measure of success then helps you build the better product

44:03to meet that measure of success and so even something as seemingly simple as a weather app has all these different jobs to be done has all these different measures of success and understanding from your users what that measure of success is then focuses you one like you were saying on the more valuable users who are going to pay for it and then potentially even seg men in those to show them the higher premium tier if you have two different tiers or there's different ways to optimize that into a better experience for them getting the premium tier versus the lower tier because that's what's going to actually

44:40deliver for them and they're not the kind of user that's going to be happy with the non- premium tier even if that on an AB test the non- premium tier converts better but you're missing the forest for the trees because there's some users who aren't going to find success in that non- premium tier or whatever and so just by understanding these measures of success as you framed it and asking what that measure of success is can help tremendously and doing that onboarding like you said it can be tricky and create friction but where's the payoff and that the payoff can be tremendous yeah I mean easier the

45:14higher the ACV is right to create more friction because you understand that the payoffs there and $70 a year now is our Golf Plus subscriptions that's not high ACV by anyone's definition but yeah I mean that's maybe a good summary of this conversation is these aren't black and white things and you're going to keep moving the dials more of this less of this right we want to decrease the flow because we need higher value oh wait no that's too much because look at all the breakage right so open it up a little bit and then yeah measure of success is obviously the way we're thinking about

45:46it and then the question is how can you ask that question in the right way to elicit the right response that's the really hard part you can't just say what's your measure success what do you mean what's a measure ex I don't I don't understand right so the why are you here and again that goes back to like can you do it in real life first in your head fake right coming to the golf shop what are you you know what are you looking for do you want this you want that and so for us you're coming to the golf Improvement store how do you want to

46:12improve well I don't know okay well there's these couple menu choices and then again Shades of Gray art not science we had this conversation because we I think been successful in thinking about that metaphor you walked into the golf improvement store what would you do next if you're the clerk if you will greeting the person coming in the person says I want to improve this way but maybe we want them improve a different way because we can make more money doing that right or it's a higher value do you just go with the flow of the customer do you say well there's also this other option just so you're aware and is that

46:44friction towards the goal that they stated right these are all you don't know right and that's where the data comes in right because you can measure those things those are little incremental improvements changes but our position total opinion land as I like to say statement was make them understand that other options are there right that's why you put a menu in front of someone even if they say like they know exactly what they want to order like well here's a menu just in case you know if you want to peruse it but that's again it's not black and white that's not I can't write a book and I chat shbt

47:10can't give you the syllogism of right how to get that done it's Instinct right but using the data to fuel the Instinct you know if like three people stick their tongue out at you and run out of the store because you say I don't care that you said you wanted this I'm going to give you that you're like well okay don't do that right you have to modulate based on re so yeah all hard problems to solve you kind of alluded to it earlier that in golf there is a higher ACV but then also probably a higher willingness to pay higher comparable like we've talked about this on the podcast a lot

47:42weightlifting apps going to the gym is 60 bucks a month hiring a personal trainer is 60 bucks a session or 120 a session if you're at a fancy gym and so how do you think about pricing and to me that almost sounds low you can hardly get on a course these days for 80 bucks and you're only charging them $80 a year when they're in a hobby that's probably 5,000 a year 10,000 a year I mean if they're like really going for it and buying new clubs all the time and have a pro teaching them and they're traveling the world to golf and you're only charging 80 bucks a year how do you

48:15think about that you're right it is just math at the end of the day how many people willingness to pay is super high for the most Avid and then you move into less Avid and then how much are you willing to pay Fierce competition because the underlying tool the video analysis is largely commoditized right so there's a downward pressure at this stage right downward pressure on pricing it's not like there's not a lot of other ways to get that job done on both sides of the business it's been about how do we make this you position it as the first step the fundamental step the step

48:47that needs or a place for you to grow and start again the horsepower here is largely commod or the engine is largely commoditized so what are the things around us this is the only place where you can a but BC and D as well right so if you're going to compare a against anybody else Apples to Apples but we can do b c and d so if you really want to grow and improve you want more options to do that in a place to grow over time that applies to both sides of our business so that's why you should start here because it's not a dead end right

49:16it's not a short dead end alley right like you can continue to grow into different ways when you're ready for that and a is the same as everyone else's a that's the way we've thought about it yeah hard to split it's funny most golf companies are selling I don't know if most is the right word but a lot of golf companies are selling things that are a lot higher ticket price right and so I found that many of in any industry the most exciting businesses is a lot of people model off of those businesses they're of often High ticket price items right but if your ticket price is a fraction of

49:52that you can't mimic their behavior because unit economics just aren't there right so if you're selling golf clubs you got two or three extra zeros a year if you will right versus what we're selling you can't take that business model and then apply it to something that's 100th of the cost you can't do it right so you have to approach it in a fundamentally different way so you can talk about expansion Revenue opportunities of which for us on the consumer side are fairly limited but yeah that initial get in the door price that's opinion statement I don't know advice is stuff but I don't think the

50:25optimal price is the maximal to get the most Revenue out of just that first bite at the Apple if you will if that word salad made sense right because I think most would aspire to put a software product out where they can go on a journey that the more you use it the more value you get out of it and then therefore the more value You' pay for it right so the revenue maximizing over the lifetime of the customer price may be artificially low versus if you were only selling one tier and one set of options you would put that at the highest price possible basically right you just do the

50:56m at that stage and then for all of us right thinking about ACV and renewal rates Etc right you're trying to it's a multivariable equation obviously but really we learned this on the B2B side where we didn't really have expansion Revenue opportunities for a long time once you have them it radically changes the way you think about that first step the first opening of the wallet because I just want to get you in and start to interact and learn more about you yeah you're paying something for the service but there's this growth pattern that could be really interesting for you and for us right that's another courage

51:26lowercase C but courage of convictions kind of decision because I think most people Dan Martell SAS Academy calls it commission breath right if you were selling cars or boats or houses sure because it's likely one transaction going to do with these people it's not repeat players right it's you're trying to maximize the value of that one transaction but for us which I think is a largely socially beneficial Dynamic if you will it's a repeat game so take the guy for as much as he can right off the bat is probably unlikely to be longterm the most effective strategy and see that that goes counter to what so many people

52:02are thinking I mean things we've discussed on the podcast and other things is when the data says a higher price works you go for the higher price and you scale up but again it's like what business are you building are you building advertising Arbitrage where you're just going to find as many users who are willing to pay as possible and charge them the maximum Revenue possible today to keep that flywheel going or are you looking for those better users that you're going to build a relationship with and have more opportunity to monetize them over time and I think I already talked about this on a past

52:34episode but there's this incredible chart that Dimitri the founder of Flo shared on LinkedIn that shows and I think it was actually also shared in Eric Crowley's GP B Hound consumer subscription report and it it shows that over time Flo has actually had net revenue retention increase where the initial cohort retention in year one is like 60% Revenue retention and then it actually goes up year after year after year because they are selling more into those users users upgrading to a more premium tier users buying other features that they didn't get with that initial payment and that's a fantastic business that's why Flo raised at a over billion

53:18dollar valuation and had competition to get into the round whereas if you're over maximizing that initial and you have really bad turn and you don't have any kind of industry above Benchmark Revenue retention you're in a much worse place as a business moving forward so I love that framing you mentioned in there commoditization of the primary technology of V1 Sports and this is something I think we all are seeing in the consumer subscription space which means a lot of folks the last few years have jumped in and and there's a lot of commoditization going on in our space and I thought it was interesting that rather than pointing to the willingness

54:01to pay and all the price comparisons in the golf industry you went right to our primary technology is commoditized and just the blunt reality that you live in that you would recognize that and then so directly state it but then you must be thinking okay that primary technology is now commoditized what about our product is differentiated that we can charge for and then what new products can we build that are highly differentiated that we can increase that Revenue over time by adding these addons and new features and new things that people will be willing to pay for that aren't commoditized maybe like a great point for folks is if you have a

54:41commoditized product you probably do want to aim for that more kind of industry standard pricing but then figure out where you can really differentiate and that's where you charge and maybe the differentiation is the whole product and then you can fight back against that commoditization and charge a higher price but you got to actually be differentiated to charge that higher price so how are you thinking about that differentiation I really believe that execution wins nine times out of 10 for sure so even if your internal don't say it out loud assessment is that your product is very similar or commoditized versus others I do think you can have confidence that

55:18executing the competition is a path to some level of success just probably not a,x growth success right there's some hard limit there but if you're okay with whatever percent growth a year so it just depends what your goals are probably you can start with that and everything falls after that what's the point what are your goals but yeah I mean we've tried really hard and just like the entire Journey it's been about what's unique to us so this answer again the execution of this really hard really complicated but the answer was fairly obvious which is this unique position that we're in almost 100,000 monthly active users at high

55:52tide every summer spending that 21 minutes a month and all these instructors I wonder if they want to go and the answer was yes right so that's what we're really working on and again the starting point was why are you here and then when they started telling us that was a big thing hey I want to find an instructor I would take help from an instructor oh guess what the more people that want help from an instructor the more instructors want to be here unlock right and are we optimized that not even close we're trying very hard to execute on that so for us it was fairly obvious

56:18again it was us again looking around the room of the resources that we have say well what are unique resources that we have but yeah I mean I would I guess to put myself in a different scenario cuz ours is unique if you had just the b2c business right so these spare parts aren't lying around just make sure you're getting the most out of what you're doing would be you know again trying not to give advice but from that execution piece even if the product is commoditized can you out execute the competition with focus and diligence the answer I think is yes 99% of the time if

56:46you're built like you are David or me like can you focus on something for longer than two hours no way longer than 2 minutes maybe right most organizations you multiply that difficulty by many people really can't so not that talk out of both sides of our mouths and don't Focus too much on conversion or whatever at the outside then but also really focus on it if you're convinced of two things I think you're in trouble one you have a commoditized product and there's lots of competitors to do something similar and two you've rung the rock for every ounce of efficiency everywhere around you I don't think most people are

57:17in that boat it certainly make marketing Etc more challenging and so you do need to at least come up with a genuine this is why we're different right statement even if it's on soft things like we actually answer the phone for support or we've been in the business for a long time so you should trust our brand you can find those differentiating factors even if the core may be very similar but yeah I would challenge that the assumption that if you're commoditized or you think your thing is commoditized that that's the end of the road because I guarantee that there are ways you can execute better there's lots of room to

57:49run there again if your goal is to be a trillion dollar market cap company yeah your thing has to be the latest Nvidia chip don't get me wrong right and that just is what it is but there's lots of space between no growth and Bonkers growth to move and you might just have to be realistic that it's not going to be a th X every year but if it's 10% every year 20% every year reliably because you keep getting better at what you're doing that might be a happy spot but yeah obviously highest and best is find a new thing and make it better but that's a shiny object syndrome that lots

58:17of us are prone to fall into yeah but I think this whole podcast has been a great lesson on how to act actually find that differentiation is think about users have those conversations in your head with actual user I've never done that that I'm going to that's one key takeaway I'm going to do it's like I have done user testing I have had those user conversations but I don't regularly look at a feature look at a dialogue box that I'm creating look at marketing copy and then picture somebody standing in front of me and make it into a conversation like I think it's a really great way to operate as you're building

58:54a consumer product is to like put that consumer right in front of you and think about it so I think this whole whole conversation has been a great way to focus you on not chasing that shiny object syndrome but actually finding the things that users care about so thanks for sharing all your lessons in getting there and growing and burning the ships and everything you've done along the way because I I think this is going to be super helpful to folks so yeah thanks thanks so much for sharing thanks for having me David I love to reflect and it's a work in progress and there's no

59:23destination that's been arrived at just to be super clear and anything you wanted to share as we wrap up you have any job openings that that might be a good fit for folks or or any way the audience can interact with you or help you if anything any of this was stimulating you want to have a conversation experience share whatever Alex at V1 Sports pretty easy yeah just Reach Out happy chat happy to learn more from you know more people in this space well thanks so much for for joining me Alex this was so much fun thanks David thanks so much for listening if you have a minute please leave a review

59:56you and your favorite podcast player you can also stop by chat. sub club.com to join our private community