An Unconventional Business: 10,000 Users, One-time Pricing, & a Two-Person Team – Claire Lew

0:00[Music] [Music] yeah this is my first time at micro comp actually my first time in Vegas it's a interesting place now I'm liking it so far it's good but no I'm really excited to to share a little bit about our company how we've been running things and yeah just hopefully some of it ends up being useful so as Rob mentioned I'm the CEO of a software tool called know your company and what we do is we help business owners overcome growing pains and we specifically work with business owners who have about 25 to 75 employees and typically for a lot of you in this room you know you might fit that

0:49category one thing that you may notice you know in running your company as you grow from 5 to 10 30 40 50 people is that the feeling of five people in a room it's very different when you all of a sudden have 25 and knowing how people feel about the business knowing how people feel about you know what's going on where things are heading you just aren't as in touch anymore and so that's what our software helps with and we work with really over 10,000 employees in about 15 different countries we work with companies like Airbnb Kickstarter techstars medium so a lot of software companies but also companies in

1:30the retail space ad agencies let's see you know even actually churches and nonprofits as well and a funny thing that people will often say to me when they learn about our business is they'll say Clare can I ask you a weird question and I say sure and they'll say how do you make any money they hear our pricing model and as Rob mentioned it as well and it's a little perplexing to them so what we do is we charge $100 per employee once so if you have 20 employees it's $2,000 you pay that just once and that's it so no recurring fees no annual fees nothing and for a lot of people they're

2:25like well it sounds like you might be leaving money on the table like why did you do that and does it work so we have these questions of okay you know why did we price things this way does it actually work not just about our pricing but actually about a lot of different aspects of our business whether it's how we sell our software whether it's how we actually run our company so that's really what I'm going to talk about today and really pull back the curtain on is exactly you know why is it that we do certain things and running new your company what are things that we've

3:04learned from that what's worked what's not worked and then most importantly what are things that you can actually take away from those experiences and hopefully apply to your own business so first a little bit though about Who I am and how I became the CEO grow your company a little background to about our company's history so sorry excuse me I'm about three years ago I wasn't the CEO of Nar your company I was an employee and it was an employee at an early stage ecommerce startup in Chicago and I was part of a six-person team and I was incredibly unhappy so so excuse me so so

3:45unhappy at that job and the reason I was unhappy even though the work was challenging even though you know it's given a lot of responsibility my co-workers were great the reason I was unhappy is because I felt as though I couldn't give feedback to my boss I felt that if I had an idea a suggestion you know something that I felt like I could share to make the company better I didn't feel comfortable sharing it and it drove me insane you know I consider myself a pretty upfront honest person so you know I first for a bit you know I just kind of sat with it and was like

4:18okay I'm just a you know disgruntled employee and then the more I thought about it the more I researched it I realize that this is a problem that doesn't affect just this six person startup if anything it affects every single company and it affects you know companies not just with six people but 16 60 people right and who's doing anything about why you know why isn't there a solution to it so what I ended up deciding to do is to solve it in some way and quit my job completely cold had no idea what exactly you know I wanted or how I was going to do this but committed to really

4:50making this the problem I wanted to solve and really make it my my life's work so I ended up you know first taking some time just to become an expert on the problem as much as I could so I devoured every single news article every single journal you know any publication I could get my hands on to become an expert and as they did this that you know I started to get some ideas for okay you know how maybe I could help solve this problem okay some theories for what might actually work and I was like okay well these are just ideas I need to apply them so ended up doing a

5:26case study on a company where I came in as a consultant I interviewed every single employee in the company and then presented some recommendations it's the company about how they could improve their environment and the craziest thing happened it helped it works so I thought okay well I didn't envision myself becoming a consultant but maybe this is something that you know I'll do so I ended up starting a consulting business and because I knew in the back of my head you know I don't I don't want to be a consultant for forever you know I decided okay you know what I I thought I could build a software product around

6:00this you know I bet there's a way to automate some of these ideas around the philosophy I have to solve this problem so I went to you know learn how to code the very first company that I started was actually a company called the starter League and it was the first beginner focused software school in Chicago and one of the first in the country and we started about five years ago and so I went back to that school and actually had never taken any of the classes which is funny but finally went back took some of the classes and started to to work on you know teaching

6:30myself how to code you know taking these classes building a prototype on the side and around this time you know and looking to you know to grow my consulting practice and around this time I got introduced to the CEO of 37signals at the time and now Basecamp so Jason freed and Jason ironically enough had grown his company to about 40 people and it was the biggest their company had ever been in their 15-year history and you know he said Claire this is you know it's crazy that you're working on this problem because I'm suffering from this exact same problem so two things one can we hire you as a consultant will be your

7:08first client and can you come in and work with us on this problem and then too you're not gonna believe this but we're building a software product around this and that was New York company so they built the software product really for themselves and it was you know in early early stages and I was you know working on my own product at the time but came in you know did the consulting work for them it ended up being incredibly helpful they learned a ton of insights and you know as I'm working on my product you know I have a couple country or a couple companies that are

7:38interested in it you know that are looking to buy it and you know know your company for 37signals you know they launched it as a product and it's really taking off so they signed up almost 100 companies in less than six months so just incredible traction and a huge reason just because you know the product worked so here I am you know heads down doing my own thing trying to grow my consulting practice I'd taken up you know hostessing at a restaurant on weekend nights you know it's this is for me I'm like this is you know this I just want to solve this problem whatever it

8:09takes and Jason ends up calling me up and this is about I would say yeah two and a half yeah two and a half years ago and so it's Clara I have this crazy idea new your company has gotten to be so successful you know we we really just can't you know manage it and we want to be focused on Basecamp we want to go all in on Basecamp so what if we've never done this before what if we spun out the company to its own separate company separate LLC and then asked you to run it as a CEO and you would cone it with us but you would grow your own team

8:40build it up from scratch you know what do you think of that idea I was like sounds okay like maybe maybe I'll take can I think about right no so yeah so that happened in let's see December of 2013 so I became the CEO of New York company and in January of 2014 but I provide that history and I by that context just I guess because I feel like here I'm definitely in a room full of peers and I know the journey is you know as does mention it's not always linear you know you think something's gonna happen but then it doesn't but so here we are you know two years now into

9:16running near your company growing now your company and for the first eight months actually ran it completely alone so as a one-person company of doing customer support you know designing the UI for features I'd hired a part-time programmer but really you know it was just me I did all you know every single sales call it you know every single bit of marketing you know I coded our blog and rails from scratch you know it did everything and then about eight months in hired our first full-time programmer who's still with us today so we're now a two-person company you know doubled in size but since that time and in that

9:53time in those two years me and the other the other employee his name's Matt you know we've been really really deliberate about the choices that we've made in building the company and really deliberate about how we do certain things and so that's exactly what I'm going to share and what we've learned from that so first one of one of the things that we do and it's possibly you know just the most recognizable is just that we don't show our product on our website at all so if you go to know your company comm right now you'll see a lot of copy you know some stuff about values

10:32and you know customer testimonials and then the only way you can buy the product is if you fill out this form and you sign up for a 30 minute in-person demo with me that's the only way so why is it that we do that seems a little bit odd especially when you know the beauty of software in a lot of ways is that you can take something that you know typically would have to be done manually and in person and scale it you know why would you go back to doing something so manually so the reason for this and the reason why we don't show you know the

11:09product at all you know there's no video no screenshots nothing is really because we know exactly the best way that no your company can be used and we really really want people to get those good outcomes we are incredibly focused on making sure people have the best experience possible when they use the product and so it's really important to us that when people come to our site they're not just signing up and you know taking a tour of the product and you know saying that they the you know they want to try it out just just because but because they're committed that you know they're willing to take 30

11:48minutes out of out of their day and you know jump on a call they're committed they you know they want to act on this feedback and that's important to us because we know that in order for the software to work you have to be committed it's you know it's a piece of software where if you want to get honest feedback from your employees this can't be just you know a thing where you're trying to check the box on we know that your entire company has to be using the software it can't just be a slice of it and that the the CEO who's really the person who's leading the initiative is

12:21bought in right so filtering for that high commitment turning people away you know focusing on making sure that people really good outcomes it's huge for us and so because of that you know everything on our site is actual or sorry our entire demo is really about that as well so what we do is sure a demo it's not the most efficient thing in the world I mean I'll tell you it's exhausting right and I'm sure for a lot of you who do in-person demos as well I mean it's a lot of time and energy right so it's not the most efficient efficient thing in the world but it creates trust

12:54so all of a sudden a CEO you know who sits who is on a call with me is able to establish the trust up okay exactly what situations does this worked well and you know I get to learn okay here you know exactly tell me the the problems that you've been facing and I'll and I'll say exactly and pinpoint exactly how our software can help the other reason we do this is and is because you know when I'm in those demos I can provide exactly what those best practices are and again you know focusing on making sure that people get really good outcome so I can

13:24say oh you have you know people you know the majority of your company is remote but you have an in-person office well here's how you can use our social question to make sure that you're integrating those people oh you're hiring you know eight new people and you know on average every single month let me tell you how you can use our icebreaker to be able to make sure people feel as though they're being welcomed and you're giving them a good first impression so I can give these best practices around how to actually use the software because I'm on a call with them not because you know I'm just

13:52showing them you know the product on the site and then the last reason for why we do this is that in a lot of ways it's the perfect market research I can tell you you know to incredible detail the exact situation in which someone heard about our product the exact objections that people have you know the first questions or confusions that they have when I show them a screen when I'm taking them through the demo like it's incredibly incredible rich information that we've translated to our marketing site to improving the product to figuring out you know how do we you know better our messaging so it's it's been

14:32really the perfect market research for us in continual market research right continual customer development so the results from this in terms of what we learned is that because of this we actually have incredibly high retention of our customers because of the people who are coming in are highly committed 98% of our customers stick with us so in terms of churn it's incredibly incredibly low we have really really great customers they get a lot out of the product they talk about us right which then leads to a high number of referrals again if you're focused on getting good outcomes right instead of just trying to capture everyone you can

15:09if you're focused on making sure that if you know exactly the situation that your software is going to be successful in you know and and you make sure that those outcomes happen for people people will talk about you and so 13 percent of our sales actually come from referrals which if I guess you're in the restaurant business is probably not the highest number but in terms of the fast business it definitely is something that we're really proud of now the obvious downside to you know not showing the product on the site and having to do all these in-person demos is that you know we are having

15:40a lot of people who who aren't signing up there are gonna be not as many people who are reaching out to begin with so on average we get about 26 demo requests a month I end up demoing about 65 percent of them because some people might not be a good fit they might be too big too small and they just might not end up you know being interested so I end up doing about 17 demos per month I mean when you think about you know how you know how many are you know how big that number is how big it could be you know that top of

16:06the funnel it's not as big because we're doing these demos and we acknowledge that now the takeaway though for I think for you know other businesses though and what we feel really really strongly about is that focusing though on these on the fit and the outcome of of what you're able to do it it can I mean you'd be surprised the results that it leads to and so that's something that we've always come back to it's a big core and and how we run the company another thing that we do is that we turn away potential customers so I've kind of alluded to this so we know that the

16:46software works best if you have really 25 to 75 employees the most lower bound is 10 so it doesn't work that great if you have less than 10 employees and it doesn't really work if you have more than a hundred and we know this so if you're not you know really between ten and a hundred people we won't sell the software to you even if you're willing to give us the money to do it and trust me we get a lot of requests especially from bigger companies 300 400 you know person companies they say Claire we'll give you you know 40 grand like we'll buy it like I don't even need a look at

17:16like we just like I know I want it and it's like we you know we can't we can't give it to you because it's just not going to work and so just because you know someone is willing to give you the money someone is willing to buy it doesn't mean that you should actually let them the product simply doesn't work for everyone so we don't sell it to everyone we know that we would be doing those customers a huge disservice if we let them use the product the product would let them down it just wouldn't work and then maybe they talk poorly about the product maybe they'd come back

17:51and ask for a refund it's just it's not worth it for us to what's important is to focus on the people that we know it's exactly going to work for now another segment of people who we focus on because we know that it's important for their by and in order for the software to work is that we only work directly with CEO or something the manager in a company and the reason for that is you need to make sure that you have their buying in order for the software to work and so the yeah the nice thing about that is because these people are so committed because we

18:24know that these are going to be the people who you know we're going to be the decision-makers in the company we naturally get to work with the early adopters we naturally get to work with people who are willing and excited to build a product and don't have to do as much kind of arm-twisting to convince them and so what it's actually resulted in is when I do these in-person demos we have a pretty high close rate so I close about 30% of all the demos that we end up doing so really high conversion rate so we average about four to five sales so again the downside is at the top of

18:56the funnel isn't as big because you know we're doing a lot of the stuff in person but the trade-off is that we're able to work with people wherever they'll buy incredibly quickly and it's the right person who's buying and so again it comes back to having those really good that really good outcome so in terms of that takeaway though for us we always try to remember that we have a very specific target in terms of who our product helps we know exactly who the software is gonna be most successful for so we stay committed to that we stay committed to that really narrow audience and it's hard again when you have people

19:30who are willing to give you money you know who are bigger or smaller or might not you know you're like maybe it would work in that situation you know maybe and for us you know we have to have the discipline to stay really specific and to pick that narrow niche another thing that we do as a company is we never say that we sell employee survey software or we never say we sell employee engagement software it's yeah just not how will you describe ourselves so if you look on our site you know if you ever hear me you know talking about what we do is a

20:06company we just just don't do that and the reason for that is because it's not what we sell we feel like we do not sell employee survey software that's not the job to be done that we're selling that's just not what the value is that we're providing for people so give you you know an example and again many of you I'm sure are familiar with the jobs to be done framework so you know you have a product say it's a hammer or maybe it's a lawnmower or it's a milkshake you know you go to the store to buy you know a hammer right are you really looking to

20:42buy a hammer are you looking to hang a picture are you really looking to buy a lawnmower are you looking to have your lawn be manicured and green and are you looking to get a milkshake err are you just really really hungry hungry late at night and you know it's the perfect thing that's gonna make you you know not hungry anymore and feel really good right so oftentimes when we think about what we're selling we tell people we sell a hammer you know in our store you can't you know come by our lawn mower or hey you know we make the best milkshakes and really that's that's not

21:11what you're selling right it's not what you're selling you're selling a job to be done and for us you know we don't sell employee survey software what we sell is we sell helping you avoid losing a key employee we sell helping you overcome company growing pains we sell that we make it easy for a distributed company to feel connected across the world right and it's something again we're very deliberate about this in our copy you know we have a whole section on our home page where we talk about you know is this you have you felt this situation right growing and the amazing thing is even when I do these demos the

21:53reaction that I'll get once you know we end up talking to people as they'll say wow you know Claire I'm on this demo because the copy on your site resonated exactly with what we're going through it's you know no one's actually ever talked like when I read it it's exactly what I felt and so for us the thing that we always keep in mind is sell to those situations right and I think you know when you reflect on your own coffee on your marketing side or you think about how you pitch you know your own product selling to situations another thing that we do and this is what I had learned alluded

22:28earlier to in the talk is that we charge for our software only once so again it's $100 per person and you pay it just once so again if you 30 employees $3,000 we pair this also with a 90 day money back guarantee so you know if you've been using the product for 3 months and for some reason it's not working we'll give you every penny of that okay so why again why do we do this a lot of people are confused you know it doesn't make sense right and the reason why I've been a real believer in this pricing model for our business at least and at least

23:13for now is because it really aligns with the value that we're trying to create for our customers so what I personally believe is that when you're getting feedback from your employees you should not get feedback from them for just three months or six months or even eight months my belief is that if you really want to get to know your company you need to get feedback from your employees for life for as long as they're with you at the company and when you offer a subscription model right where someone can pay once a month it's super easy for someone you know in month two to be like

23:51I didn't really like that answer I'm just going to turn this off or you know we're just really busy and we're not into the feedback thing anymore so I'm going to turn this off right however if up front you had to pay $100 per person you committed and put an investment in the single person for as long as they're with you at the company when you run into those you know sort of difficult situations of ooh you know that answer was kind of tough well you know I'm gonna still keep using now your company I'm gonna make sure that this is something that's gonna work for us right

24:24so for us it aligns exactly with the outcome that we're trying to create we're trying to have people feel more encouraged about thinking about feedback again not just in terms of this is your saw you know a little experiment or a thing I'll do for a little bit and if I like it I like and if I don't I don't know no no no no no that's that's not that's not how you get really good feedback from your employees that's not how you create an open on its culture what you have to do is you have to continually ask for feedback right so it encourages this high commitment and

24:52again we know that that's what's necessary for our product to work so the pricing is directly in line with again that outcome that we're trying to create it's all so simple right $100 per person simple easy to remember and it's different people will ask about it you know on occasion now the results from this it's interesting because people say well Claire you know you don't have any recurring revenue then well in fact 70% of our revenue from last year was recurring and what that means is every time one of our companies added someone you hired someone it was $100 right so what we did is we helped our companies

25:32grow right so again thinking about how the pricing can align with the outcome that earned on the value we're trying to create we you know we help our companies grow and so every single time you know that they're doing well they're learning a lot from new york company they'll add one person and it's $100 so again 70% of our revenue ended up being recurring so in terms of that takeaway you know okay is one-time pricing that might work for your business maybe maybe not but thinking about pricing in terms of how it can be aligned with your outcome and how to just keep it simple that I think

26:04is something that could be useful for you know for you guys here today and then the last thing I want to share of you know one thing that we do is just the fact that yeah we are two people on purpose and you know I'm sure some of you in here have been at that stage or are currently are in that stage and it's something that we have had the option to grow you know we're a bootstrap company and so growing you know in terms of adding people it's it's it's not as a comfortable experience but we could do it definitely we could do it but we

26:37don't and it's a very yeah explicit deliberate choice that we make and the reason for this is because for us it forces focus and you know pretty intuitive right when you only have two people you can only work on so many things right but the most fascinating thing especially in working with hundreds and hundreds and hundreds of companies who are struggling with growing pains and struggling with you know the the growth of their company is that focus is the number one thing that they feel like they lack and it's because you know they've hired too many people you know taking on too much stuff at the same time right so the beauty

27:12about having just two people is that it forces us to focus not because you know it's it's a nice thing or because we have the discipline to it's just because no we actually just have to we have to right the other thing is that it forces quality it means that okay if we are going to only choose to work on this one thing right now it better be really good it better be really really good so all of a sudden the bar for what we feel can be you know helpful for our customers you know what is actually going to be something of quality that goes up and

27:41it's really pushed us as a company to make sure that every single thing that we're putting out the door whether it's a blog post whether it's a new feature whatever it is is of high quality and so one thing that we do actually you know more tactically in doing this is that we'll take one month and we'll just pick one thing for that month so maybe it's working on a new email drip campaign that's the one thing we work on that month maybe it's a new onboarding feature that's the one thing that we work and we just take one month one focus keep things really really simple

28:09and the funny thing that's resulted from this is that we actually have stopped working on a lot of things that just don't matter in hindsight right so a lot of you know kind of neat ideas that I'll get you know we just won't end up working on and it's actually a great thing because I probably had I gone down that path should not have been spending my time towards it so the things that you know you you try to let go of right you know the the features that you know might bloat your product the things that you try to let go of also and those things

28:37do go away when you do have just two people so take advantage of that smallness and you know see it really is it's something that you can use to hone in on picking that one two things three things and doing those things really really really well so these takeaways these are the things that we've learned for the past two years in running near your company and it's takeaways that I personally reflect on a lot and try to stay true to especially as we evolve the business especially as we think about you know how we want to change things and actually right now we're in the middle

29:18of going through a really big change to the business I'm excited to share that with you and how we're in the middle of applying some of those takeaways and actually I would ask if anyone's live tweeting not to tweet about it yet because we're hoping to ship this in two weeks and you can talk about it then but what we're looking to do is move to self sign so what happened is you come to the page and now you can actually see the product now you can sign up use it for a few weeks and buy it if you want okay so you know so why are we doing that when I

29:55just told you that we don't show the prodding this switch so ultimately you know what we acknowledge is that there are constraints in that manual process that I told you right the number of people who are coming through the top of the funnel are inherently going to be less because you know some people just don't have the time to sit down for a 30 minute demo we get that right but ultimately we want to help more people we want to help more business owners who are 25 to 75 people who are facing these challenges and so for us if there's a way where people could come to the site

30:27and buy it themselves without having it to be me cuz mind you I do every single demo right and sure I could hire a sales team but you know still in that in a sense you know the business doesn't scale so you know and wanting to help more people you know we thought about okay well moving to self sign up you know how can we do that and in fact a lot of the things or these takeaways you know that I shared with you I mean this is exactly what we're thinking about as we move to self sign up so in terms of focusing on fit and outcomes okay sure

30:59people need to be able to see the product before they buy it so we'll put it on the site you know we'll put a video we'll put screenshots but how do we make sure that these people add all of their employees right I mentioned that that was a big part of making the product successful how do we make sure they're the CEO right how do we make sure that they're you know gonna have a high commitment and for us what that means is again optimizing for trust versus efficiency so one thing that we're actually gonna do in the onboarding process is when you go to add your

31:29people or pick your start date for know your company instead of their just being some coffee and some fields you plug in and then you hit next what we're gonna try is actually having a video of me talking for about a minute and saying hey so I'm gonna ask you to do this thing it's kind of big but we're gonna ask that you add all of your employees and not just a slice of them and it needs to be at least ten and here's why you know we spent two years observing exactly how the products been used in the best ways you know in the best cases

31:57that it's been used and so creating trust will take a little bit longer for them to get through that on boarding process because we're gonna have a video instead of just copy where someone can just click you know absolutely but again for us what's most important is that these people who are coming to sign up for the product trust us and it's really really hard to trust a system so we cheat a little bit and what we're getting them to do is trust in a person and having the video trusting in me so it's something that we're gonna try the other thing that we're keeping in mind

32:28as we move to sell signup is we're still going to stay focused on this narrow niche we're going to have a stringent requirement around you can't sign up for the product unless you have at least ten people that if you do want to sign up you have to be a CEO a founder or a manager in the company so that's something that we're still going to maintain even though we're moving to self sign up we're still going to be really focused on selling to specific situations so you know case studies will be incredibly huge for us as we move to you know be people being able to see the

32:58product it's not just those screenshots of you know know your company's UI but its screenshots of a know your company question or email that Airbnb used and here are the exact responses and what the employees exactly said and then here's the exact action that you know the head of design ended up taking from it right so being really specific about here's the exact situation that you can use the software we're actually going to still keep the same pricing model when we move to the self sign up to we're gonna try it out I'll let you know how it goes so it'll be still 100 dollars per employee

33:33you'll pay just once so if you want to buy it well invoice you you old seven days to pay out the invoice check PayPal credit card etc and again it's because of our belief in that outcome of we want people to continually get be getting that feedback and then we're still gonna be just be two people at least for a little bit and again you know I'm not opposed to of course eventually you know if the needs of the business do become bigger you know hiring people but right now it's amazing how much we get done it's amazing how much to our advantage being small has been and I think it's

34:02something that we can continue so if you're curious about when we're gonna launch if you're curious to take a peek you know maybe apply some of the things that we do to your own business just drop me a note at Clara know your company comm put something like self sign up kyc micro comm something like that in the subject line and I'll make sure to send you a personal note when we do watch because yeah I would love for all of you to hopefully find what we do we do well or not so well to be helpful because yeah that's really why I'm here and why I wanted to come to micro conf I

34:36was really excited to give this talk in particular is you know I want to be helpful I want to take the learnings that we've gained from the past two years share them so if you know you want to come find me sometime today talk about you know some of the things we've done with our business and how we've been selling the software definitely would love to talk about that if you're a founder and you're more curious about okay I you know I just grew to twelve employees and I'm trying to figure out how to make sure to get honest feedback let's talk about that would love to

35:05share you know what we've learned from the hundreds of companies we've worked with and then lastly if you're looking to use technology as a way to get to know your company better and want to actually check out the product you know I'd love to give you a demo whether it's here we can sign up for one do one later but I would love to offer three free employee accounts if you do end up buying just make sure to mention micro comp to me so yeah thank you so much for your guys's time today appreciate it

35:38hi I'm I'm reading a a recent book called smarter better faster on productivity research by the same guy they did the habit David Allen good Duhigg and he has a chapter on productive teams mmm-hmm and he deals in depth with exactly the problem you mentioned at the beginning being on a small team and feeling you can't speak out yes and then Amy Edmondson did some research in the 90s and Google project Aristotle or something are you just productizing this research and social science and productive teams is that the basis of the software it's a great question so I don't know I know a bit of Amy's research I don't know if

36:25I'm familiar with the book that you that you referenced in particular but our philosophy is it's based on something really really simple which is that the core of dysfunction in a growing team is simply that there isn't enough information to the people who need it and the way to get information the way to get answers is to ask questions you can't get answers unless you ask questions so the key really to the software is actually very very simple it's all about asking really really good questions in the right way and at the right time and so that's actually why in a lot of ways for our product you know

36:59now more than ever the products been working incredibly is we have two years worth of data exactly what are the best questions to ask you know in what ways in what situations so that's yeah that's pretty the the to its core the most the most essential part of our philosophy and what what the product was really built around

37:24hi Claire I had a question for you about like so you've had these companies that you've got on here and you've got this cap of like 75 employees before you'd say no we can't do that anymore so let's say you're at the top end of the cap you've signed these guys up they start growing now they're at a hundred employees I mean what do you do oh sorry you're too big now we can't do no your company anymore I mean what's the what's the scaling limit there I guess yes actually yes so it's really interesting we have quite a few companies who graduate no your company and you know

37:53they'll come to us or we'll go to them and we'll say hey you know how's it feeling right now like do you feel like people are you know hesitant to respond because there are so many people who are you know a part of a part of the questions and you know they'll say yes or no so we'll work with them to say okay we we don't think it's gonna you know a good fit for you anymore or they'll come to us and let us know so that's for some companies for other companies and we have quite a few companies in this situation they will start using the product with us when

38:18there are 50 60 70 people and they'll actually continue to grow and continue to use the product so our biggest customer right now is actually three hundred and eighty people and they actually still use the software so they're a little bit more of an outlier you know I don't think that's the typical case but the reason for them of why at 380 people the software will still work is because they started when they were 70 right so they have the routines in place everyone's already bought in and then as they've grown that's you know been maintained I think it's more of yeah I don't think that's

38:45the norm and so it's something again you know we and we've tried it on occasion you know there'll be you know a hundred ten person company and I'll say hey here's the thing this is what we've seen I don't know if it's going to work so you have to be willing to know that and we're very very honest with people so with the out one of the two situations we'll either graduate a company or you know we'll know that hey if someone's at 70 and then they grow really quickly that it actually may work out well for them so your pricing model is really unique I'm kind of curious what did the

39:16decision-making process - did you go through to get to that point yeah great question so I didn't pick the pricing model which is you know something that's pretty unique about the business it was something that Jason when they built the product that they came up with it was him and they have a data analytics person Noah and he was the one who actually came up with the pricing and for them I mean I'm not gonna lie their intentions I think we're definitely really really different around why they did it when they launched new your company the product was an experiment for them they had no idea what was gonna happen so to see

39:53what the return would be on an experiment they wanted to try one-time pricing because that would be an easy way upfront to tell whether or not this was gonna work so that was the primary motivation for me the reason why I kept it because you know I could've easily changed it to subscription is that I noticed that the behavior of these customers who were coming in and saying okay you know I'm giving you a check for you know four four grand like alright here we go you know this is a program all of a sudden again that commitment I started to see that that was a huge reason for why the software

40:22was successful and then again that coupled just with my personal belief about how you should be getting feedback from your employees it's something that I really wanted to maintain but in terms of how the actual model itself originally was you know created it was really for that reasons if hey this is an experiment we want to try it out and yeah so it seems like something that would be interesting something else real quick to do just for the audience for you to expand on you and I talked briefly last night about the fact that like as these companies grow you charge them for the additional employees

40:54because I think that factors in the could you just comment on that for yeah absolutely and that's you know when you saw the flight of seventy percent of our revenues or Karimeen that's been huge for us and and that was the other you know learning that they wanted to have is you know how fast these companies grow so on average we have about 50 employees who are added to new year company every single week right so every every company adds around four people every single week that's how fast these companies are growing right so it's interesting because again when you think about you know the problem that we're

41:22solving we're solving or we're helping companies who grow that quickly manage that growth so if we do that well then they'll continue to grow so the thought behind that is well you know let's make a bet that if we do a good job they're gonna continue to add their employees and you know one indicator for us is well if you know the products not doing so hot for a company is will notice that oh they're not adding as many employees you know we'll reach out and we'll find out oh you know they're just not hiring right now right but for us that's also a great indicator of okay well how how

41:50well is this working but yeah yeah my great point of we do charge $100 for every new person who's at it how do you qualify your leads you said you only give about 17 demos a month how are you qualifying them to figure out if they're a good fit for the demo yes great question that's actually kind of evolved over the past year so I'm glad you asked that so originally we actually didn't even have a form on the site so if you go way way way back when from when know your company was originally launched the marketing page if you were to go to new year company

42:24comm was actually just a letter so it's deer business owner with growing pains and it was signed originally first by Jason and then I rewrote it and then wrote it for me and then you would just email me at Claire know your company comm and tell me about your growing pains right so every person who reached out would set you know right literally like sometimes you know a few paragraphs sometimes a few sentences saying here are the growing pains that I'm going through so I would really look for okay are they actually suffering from the pains that I know software solves for - are they the right size because for us

42:57in particular company size is a lot to do with whether the software will work well and then three what position are you at the company or tell me about the work that you do right are you the CEO or are you an employee who you know might want to refer this to the CEO right so what do I do in that situation in that situation what I say is hey you know the product only does really it's built originally for the CEO so two things you know I'd love for your CEO to also be on the demo or you know I'm happy to provide some information for

43:22how you could get your CEO to actually do the demo but we do only work directly with the CEO or the business owner is that helpful does that answer your question oh no it's me actually sorry I should have clarified that so I do this yeah it's all it's super super manual so it's um you know all the if you you know fill out that form like right now it'll go to my email address right and we ask that you say you know how big you are and if you don't you know a lot hey like could you tell me about how big you are if

43:52it's you know if I feel like someone didn't give enough information about the growing pains that they're experiencing all ask hey could you tell me a little bit more about that right so it's yeah it's it's very it's very manual and again I think the beauty of that is we've learned so much from those interactions you know we've learned exactly if it is an employee who's reaching out why why they want to use the product or what are the obstacles for them to recommend the product to their CEO it's think it's incredible information because we've been doing it manually I'm working on a product that's fairly similar in the

44:29recruiting space based on cultural fit I'm wondering the research that you did around the psychology and the the basics of how you're you're getting the employees to understand they're fit and their engagement how much has that applied as you've learned and has that has that gone away in terms of what you've learned from your customers are you still basing it on that great question it's definitely a mixture of both so I it's it's interesting it's a huge reason actually why I do the talks right so the the software itself focuses again it's all based around asking questions right and and and being able to get the information that you want but

45:14for me you know the outcomes we're trying to create for our customers isn't just getting the informations it's it's them being a better business owner it's them being able to run their company but are not having to you know these sweating at night trying to understand okay why aren't my employees being honest with me like that's what we're trying to do so it's so because of that for us a big part isn't just having the software but providing information around it so those best practices you know we email email out monthly tips to our CEOs about the best ways that they can use the software we actually even

45:42have a Basecamp project that we put all of our customers on this is pretty unique so that they can actually email or just on the Basecamp project and its public you know to hundreds and hundreds of CEOs if they have a problem with anything if they don't like something if they want something to be better they can post it on Basecamp and I'll get back to them right away you know I pretty much have been on the phone with almost every single one of our customers at some point and then the other thing I was gonna mention it was oh yeah and then it's a huge reason why I give these

46:10talks is because or not this talk in particular but most of the time when I actually end up speaking about is how do you take information that you get and actually use it or how do you create an environment in your company where people even be willing to answer the questions in the first place how do you create that sense of trust so it's definitely a combination because the techniques around that are more based on a lot of you know the early research that we've done but also yeah just a lot of learnings too so I hope that answers it's it's a mixture of both cool hey I'm Scott

46:47we actually a four-person company but it's my wife and I and two employees and for us if like no offense to anybody who has twenty plus employees but it hurts us way worse if we lose an employee then those people were there twenty employees so like to me this is more painful than you know like I feel like a 75% company sitter I'm just curious what you have to say around small companies anything I mean I get that some of its about like being out of touch because you're too big but for us it's about like you know like we have two one two of our two

47:20employees are both pretty meek in a lot of ways about like how like comfortable I feel like they are with like giving feedback and you know I mean some of that might be the culture that we create but I'm just curious what you have to say about that so oh yeah no absolutely I mean being you know a very small company myself I can tell you you know we lost Matt like oh my god it would just be me so I totally hear you on that it's funny he and I actually used the product ourselves as a two-person company but the reason why we don't like

47:49to recommend that or sell that is because you know for us it's different it's alright you know it's our product right but for other people we feel like it would be overkill and you know when you do have typically I don't know if this is in your case but typically if you have four people you know you're usually in the same room or you're usually talking all the time and you're pretty close to knowing where people are at what they're thinking about what you know how they feel about the vision of the company what they're working on that's typically the case so really what we solve for is when you are bigger the

48:19tendencies you don't know that stuff you know you you know when you have ten people you know you it's it that's really the tipping point of oh man like I really don't even know what those two people are working on oh I have never asked about their opinion on employee benefits I wonder if they like it so that's been more the tipping point one thing that's interesting though is we made one exception actually very recently a few months ago where we had a company that with six people and they begged to use the soccer bag they said you know really you're struggling with the growing pains

48:50and it's actually works really well for them and the reason for them it's worked well is because they're a remote company so they don't have that in the same room can just lean over and ask what someone's up to or kind of have that social interaction so it's worked really well for them what we do say though for companies who are small and you're like I really I don't know I feel the pain like I don't know clear like I think it could be helpful as we say hey you know what wait until you grow because you will grow you know wait until you get those two more people three more people

49:21when you get to six or eight and then reach back out and you know I'm sure by then you know it'll definitely work for you we just don't want people to use the the product and be like oh this is just too much like I already know all this stuff so cool thanks sorry my name is Jason I've built small companies similar to yours 1 2 3 4 people typically when you have a very small team that's actually producing a lot of work there's a lot of automation involved and it seems like in your case you actually have almost no customer automation involved so very high touch a lot of

50:03personal effort your personal emails are blowing up it's really obvious you're incredibly driven you're incredibly focused incredibly willing to work hard but how are you protecting yourself against burnout as I'm you know as when I was growing my company the first time I hired someone I was like I don't have to do that anymore and it was amazing how much faster the company could move when I was able to just take a little pressure off me I have kids now I have no ability to do that again and no interest but I'm curious how you're protecting yourself against burnout and how you're assuming like maybe you're not able to do

50:37actually as good a job as if you brought someone on who just focused on that one ask and wasn't trying to do the product the marketing the convincing of the CEO etc totally such a good question it's actually why we're moving to self sign up because of that reason that's definitely a huge part of it which is yeah I mean we we made these deliberate decisions about the business of making a lot of things manual again we did it on purpose and we knew it was only going to be for a certain amount of time you know we're going to take these two years build a really solid foundation of the

51:07business know our customers better than you know than anything else um so that's what we've done it we've gotten to a point where we feel like you know we've learned enough about exactly how the product can be used or we can now package it up and masters to beaut it you know automate a lot of those things so I asked I'm totally with you it's not a sustainable business by any means the thing that I was excited though about the talk to share is that while you know the actual specific tactics day-to-day of doing a lot of the stuff manually may not be sustainable in the long run one

51:37it's really surprised I'm sure you know this one it's surprising how far you can get for how long doing it manually and how much you learn and then too with those learnings how much of that you can actually package up and put into when you're ready to go automatic which is what we're right you know right in the middle of so um yeah that's I'm excited to share maybe you next year you know with with how things go but I'm so with you it's it's definitely not something that you know I I mean I just can't be you know doing demos for for years and years and years and years so we're at

52:09that tipping point now cool clear I had a question yes most companies are a very common path for growing a company is to start in a less expensive market and then you move up more into kind of an apprised you know the other market case in your case you guys are actually turning away the upmarket because you're not going with the two and three foreigner has that been a difficult decision and is there you know you talked a little bit about yeah I'm wondering but like is there a really strong reason why you haven't done that or you just not you're not valuing growth as much as say

52:45lifestyle you know or or whatever or what how have you thought about that yeah that's another really good question Rob so for me my personal passion and who I want to help is I want to help small business owners personally it's you know it's a very personal thing I've never worked for a big company yet you know you know it started this isn't you know the third company that I've run but I've never you know I've never been a part of the big coming so this is what I know this is what I feel like you know I can I can relate to and the people I can

53:10help the most the first you know first that's not to say though that this problem of not knowing your employees isn't if anything the most painful the bigger you are so I definitely feel that pols I know man you know I have friends you work in you know 300 400 person companies and I know there is a version of this product that could work well for them but for now you know because I have such a strong passion for helping small business owners this is where we want to stay focused on and I know I you know I really feel eventually though like we want to help more people and I'm

53:43confident there's a version of new your company as it is that could help them so yeah [Applause] [Music] you