Dan Martell - Raise Your Prices Effectively with Patrick @ ProfitWell.com - Escape Velocity Show #10

00:00:00.160 What are you trying to do with a business?

00:00:01.960 You're trying to foster a relationship

00:00:04.500 that is an exchange of value, right?

00:00:06.560 And so as I get closer and closer to that customer,

00:00:09.080 I can have a better and better relationship.

00:00:11.120 Now, it's going to freak us out a little bit,

00:00:12.560 because it gets a little bit.

00:00:13.360 When it's done wrong, but edge case.

00:00:14.640 Totally.

00:00:15.240 And if it gets less opt-in, more opt-out,

00:00:19.640 that's going to freak us out a bit.

00:00:21.200 But that's what really gets interesting, right?

00:00:23.680 And that's where I think if you're just hiring a bunch

00:00:26.580 of the statisticians, and that's really

00:00:28.380 what Google at all have been doing,

00:00:31.260 that gets really interesting about what you can build,

00:00:33.660 or at least the foundation of what you have.

00:00:36.060 Admission sequence start.

00:00:38.520 3, 2, 1.

00:00:50.160 Ladies and gentlemen, Patrick Campbell.

00:00:51.600 What's up, man?

00:00:52.060 What's happening?

00:00:52.880 Dude, appreciate you being on here.

00:00:54.780 I love that we got some Zevia just cranking. 1.00

00:00:57.900 I am the United States Dan Martell when it comes to Zevia.

00:01:00.900 Oh, you got people hooked on it?

00:01:02.080 You're getting distribution?

00:01:03.060 I'm probably not as good at you as the evangelism,

00:01:06.720 but it's definitely an addiction in a good way.

00:01:10.080 That is good.

00:01:10.660 When I went to your event in Jane.

00:01:13.440 When was that event?

00:01:14.340 No, it wasn't.

00:01:14.860 December.

00:01:15.120 December.

00:01:15.660 Feels like years ago.

00:01:16.560 Yeah, I went December, then I showed up again in January.

00:01:19.440 And you bought me some and hid it.

00:01:21.520 And then all the organizers or the people attending

00:01:23.820 were like, what's in there?

00:01:24.960 Because they thought I was drinking vodka.

00:01:26.520 The Dan Martell special.

00:01:27.360 I said, that's not vodka, that's root beer.

00:01:29.740 Enjoy.

00:01:30.240 It's like clear root beer, too, which is always good.

00:01:32.300 It's so tasty.

00:01:33.300 Check it out if you haven't.

00:01:34.620 Everybody watching Zevia. 0.54

00:01:36.420 They're not a sponsor, but should be.

00:01:38.120 No, they shouldn't.

00:01:38.820 They should give me equity is what they should do.

00:01:41.580 Patrick, you've been in the software space.

00:01:44.380 I consider you, obviously, one of the top thought leaders

00:01:47.380 around pricing and just product.

00:01:51.760 You're a top-rated speaker any time there's a,

00:01:55.860 I never try to go after you.

00:01:57.180 Always go first.

00:01:57.900 That's my trick.

00:01:58.980 There you go.

00:02:01.060 Talk about the business, Price Intelligently, ProfitWell.

00:02:04.060 Which, where are we going with the name?

00:02:05.380 We're at ProfitWell now.

00:02:06.140 OK, ProfitWell.

00:02:06.840 All ProfitWell all the time.

00:02:07.660 All ProfitWell all the time.

00:02:08.680 I know there was kind of a refocus

00:02:11.880 of which name to lead with.

00:02:13.800 Size of the business, clients you work with.

00:02:16.080 Totally.

00:02:16.580 So long and short of it is ProfitWell,

00:02:18.660 we're focused on subscription growth, which I know

00:02:21.480 is kind of generic, and so we're still

00:02:22.880 trying to figure out our positioning.

00:02:24.840 I know you had April on the podcast as well.

00:02:26.840 That's her favorite word in the world, I think.

00:02:28.340 Yeah, well, that's all we're trying to figure that out.

00:02:30.280 But we have a core product.

00:02:31.580 It's a free subscription financial metrics product.

00:02:33.820 You plug in your billing system, get access to your MRR, your churn, all those fun SaaS

00:02:38.180 and subscription metrics.

00:02:39.800 Have about 20% of the entire subscription market on there, which is great.

00:02:44.960 And then we sell products that help reduce your churn with your pricing, and then your

00:02:49.640 accounting and revenue recognition.

00:02:51.260 And that's how we basically make money.

00:02:53.520 Across 10 million ARR, we've got about 65, 70 people in Boston, and then also an office in Rosario, Argentina.

00:03:00.300 And the 10 million ARR is just on the software?

00:03:02.880 So it's all subscriptions and all software.

00:03:04.640 So our pricing, it's kind of a misconception of our business.

00:03:07.160 It's not a nefarious misconception, but we don't do consulting.

00:03:11.660 We're not like a McKinsey or a Simon Kutcher who's going to sit with you four days a week and buy you fancy dinners.

00:03:18.180 We, our software, basically, we go out, we collect data, run it through our algorithms,

00:03:22.620 and then that spits out things like price elasticity, relative preference for features.

00:03:27.700 And then we put that into a framework, exactly.

00:03:30.620 We put that into a framework to basically understand what you should be doing.

00:03:34.060 And we work with, you know, anyone and everyone from, you know, Atlassian and Autodesk all

00:03:39.140 the way down to, you know, like a Lyft or a Blue Bottle Coffee, you know, in terms of

00:03:44.240 like more consumer subscription products.

00:03:46.000 And so, yeah, and on ProfitWell, we

00:03:47.540 have any subscription product you can think of.

00:03:50.960 We probably have that somewhere on ProfitWell product, yeah.

00:03:54.640 And talk about the freemium, the free forever, the free,

00:03:58.800 because I like that concept.

00:04:00.940 It's different.

00:04:01.440 A lot of people don't understand there's

00:04:02.480 different ways to slice it.

00:04:03.560 Well, I think with freemium, a lot of people,

00:04:05.960 they misunderstand what freemium is and what it isn't, right?

00:04:09.400 So freemium is an acquisition model.

00:04:11.240 It's not a revenue model.

00:04:12.320 It's not pricing.

00:04:13.240 Like a lot of people think like, hey, let's just

00:04:15.200 put free out there, and that'll give us a bunch of leads.

00:04:18.680 Sorry, I just wanted to burp there.

00:04:19.940 Oh, that was great, man.

00:04:20.640 You did it with the style.

00:04:21.980 Yeah, yeah.

00:04:22.480 I just went off.

00:04:23.240 I didn't want to get that or into the mic here for Jared.

00:04:26.420 But, or J-Dog, excuse me.

00:04:28.020 But basically what we're doing with freemium

00:04:30.800 is you want to think about a premium e-book.

00:04:33.920 And so for us, we were in this really, really competitive

00:04:37.140 environment that we didn't know was competitive.

00:04:39.120 But we launched very quietly, and then all of a sudden,

00:04:43.860 Barometrics came out, and then ChartMogul came out,

00:04:46.060 and there were like 30 other products.

00:04:47.860 And so we looked at it, and we were

00:04:49.020 going to charge for it originally.

00:04:50.200 We had this idea of maybe giving it away for free.

00:04:53.020 But for us, it was one of those things

00:04:54.400 where our two biggest competitors raised money,

00:04:56.820 were bootstrapped.

00:04:58.080 And so we did a bunch of research,

00:04:59.740 and what we found is that basically no one

00:05:02.160 wants to pay for business intelligence or analytics

00:05:04.400 products.

00:05:05.420 The NPS of our competitors, as well as some of the other BI

00:05:09.600 and analytics products in the space,

00:05:11.280 averaged out to about negative 15.

00:05:13.200 Really?

00:05:13.740 Yeah, it's terrible.

00:05:14.580 Well, the thing is, is the BI industry is like, hey,

00:05:17.400 you know what?

00:05:17.880 You got a bunch of data?

00:05:18.900 We're going to give you a shit ton of graphs, right?

00:05:20.740 And there's no intelligence there.

00:05:22.220 It's just like, we gave you a bunch of graphs.

00:05:24.360 Now go do your job, right?

00:05:26.100 And so we're like, OK, this is really interesting,

00:05:28.060 because you have this environment, then, where there's

00:05:30.720 data, analytics, insights, and outcomes, right?

00:05:33.540 In order to get the outcomes, you need the insights.

00:05:35.460 In order to get the insights, you need analytics.

00:05:36.840 In order to get the analytics, you need the data.

00:05:38.520 And so we started looking at this.

00:05:40.280 The willingness to pay was terrible for BI products.

00:05:43.140 Our attention was terrible.

00:05:43.980 How do you calculate that?

00:05:45.080 I've seen reports for some of the work you've done,

00:05:47.020 some clients I coach, Proposify.

00:05:49.460 They've shared kind of your incredible work.

00:05:51.540 And is that survey to the customer?

00:05:55.160 Like, how do you guys get that?

00:05:56.380 So we send, we go right to the customer, the prospect,

00:06:00.180 the target customer.

00:06:01.140 And depending on what you're trying to do,

00:06:03.480 we'll talk to prospects versus customers

00:06:05.660 versus people who have never heard of you but our targets.

00:06:08.640 And yeah, we go out.

00:06:09.540 Do you pay them to answer those surveys?

00:06:11.040 At times, right?

00:06:12.020 So with current customers, we might not

00:06:14.420 pay them, depending on what we're trying to get after.

00:06:16.460 Because with surveys, if they're 30 to 60 seconds long,

00:06:20.420 you don't have to pay someone.

00:06:21.620 If you want to get anything over that,

00:06:23.000 you really should pay them.

00:06:24.380 And if you pay them, you can get 15 minutes of someone's time,

00:06:26.600 which is a lot of information that you can gather.

00:06:28.840 And so we go out and we collect this data

00:06:31.460 in a very regimented manner.

00:06:33.200 And then that feeds our algorithm.

00:06:34.700 So we have these algorithms that we've developed

00:06:36.800 that get to willingness to pay and price elasticity.

00:06:39.600 And it basically takes advantage of how human beings think about value.

00:06:43.120 And so we think about value as a spectrum.

00:06:45.620 So I don't inherently know that this Stevia or this Zevia, excuse me, is a dollar, right?

00:06:51.560 But I know that roughly different things around this price are a dollar.

00:06:56.160 And so this should probably be around a dollar, but maybe I'd give it a little more premium

00:07:00.040 because it's a little bit more healthy and a little bit more like whole foods, if you will, right?

00:07:03.920 And we know that this can is worth less than the computer that this podcast might be running on.

00:07:10.200 So we can take advantage of that by asking ranged questions.

00:07:13.840 And based on those ranged questions, that data we get, once we clean it and do some other things to it,

00:07:17.980 we can actually get to about plus or minus about 5% of actual willingness to pay.

00:07:23.740 And you can do the basic versions of what we do and get to plus or minus 25%.

00:07:28.840 But even then, you're still like getting something rather than what most of us do is not know anything about willingness to pay.

00:07:36.120 So you figured that out for ProfitWell, the SaaS product, decide to go freemium.

00:07:43.540 And sorry, I'll let you deconstruct the free forever versus the free trials.

00:07:47.940 Well, basically, we looked at it and we're like, we either should kill this product because it's terrible.

00:07:52.500 Or what we found is because we want to get these outcomes, we wanted to help people with their pricing, their churn, etc.

00:07:57.540 And to do that properly, we need data.

00:08:00.360 And so it was an idea of like, well,

00:08:01.780 this can help our CAC, our customer acquisition costs,

00:08:04.320 by giving away a free product.

00:08:05.640 We can give a ton of value.

00:08:06.720 It's like a really expensive lead magnet.

00:08:08.480 It's a really expensive lead magnet.

00:08:10.320 And it's netted out.

00:08:11.980 And there was a little bit of naivete

00:08:15.780 and a little bit of betting on this, right?

00:08:18.140 Because it's a big product.

00:08:19.960 We have companies that are competitors

00:08:21.740 that they have entire businesses around selling what we give

00:08:24.280 away for free.

00:08:25.080 And so it's netted out, though, because now our data network

00:08:28.980 is so, our network effect with our data is so good

00:08:31.840 that every time we get more accounts on ProfitWell,

00:08:34.560 our paid products get better, because we're

00:08:36.940 using that data to basically hone in.

00:08:38.400 And how do you monetize it?

00:08:40.260 So we have Price Intelligently, which it's getting more and more

00:08:44.560 on top of ProfitWell, because that was our legacy,

00:08:46.640 our initial product.

00:08:47.600 So it's going to look a lot different in the next couple

00:08:49.460 of years, where it'll look like touchless software

00:08:52.080 at some point.

00:08:52.920 We'll have a $50 a month option for price intelligently

00:08:55.880 at some point in the next couple of years.

00:08:57.540 To give you some thoughts on how to fix your pricing.

00:08:59.680 Totally.

00:09:00.180 Well, it'll probably be things that actually just

00:09:01.900 fix your pricing.

00:09:03.420 So think about localization, internationalization

00:09:07.100 of your pricing.

00:09:08.220 That's a very specific problem that with enough data

00:09:11.960 and some good mechanical frameworks,

00:09:14.180 I can sell you a product that does that for you,

00:09:16.860 that automatically updates your currencies

00:09:18.500 and all this other things.

00:09:19.620 There's some billing systems that'll do that.

00:09:21.740 But we're going to have the right pricing data in order to do it better than anyone else.

00:09:25.840 The product that we have right now that is a pure outcome-based product is this product called Retain that attacks delinquent churn.

00:09:32.360 So credit card, we're the best in the world at recovering failed credit cards.

00:09:35.700 And now we're going after a voluntary churn as well because we have all this data and we want to attack things.

00:09:40.660 You know if they're active or not.

00:09:41.380 Yeah, we have activity levels because there's engagement data and profit well.

00:09:44.700 But we also know things like when is the best time to ask someone to upgrade to an annual payment, which helps reduce your churn.

00:09:50.520 Yeah.

00:09:51.020 But you shouldn't do it when they're purchasing.

00:09:52.900 You should probably do it then.

00:09:54.240 But that's not the optimal time, right?

00:09:56.280 And the optimal time isn't the end of the year.

00:09:57.940 There's some sort of time frame when it makes sense.

00:10:00.920 And we know that with the data.

00:10:02.400 And so we can come out with features that do that.

00:10:03.960 Yeah, and just prompt rate an app to take care of it.

00:10:06.520 Totally.

00:10:07.040 So it's really about revenue enhancement.

00:10:09.340 Totally.

00:10:09.800 Because with Retain, I don't charge you $50 a month.

00:10:13.140 I charge you based on success, right?

00:10:15.340 So we have these bands.

00:10:16.300 So we have people paying us $10,000,

00:10:17.820 tens of thousands of dollars a month for Retain.

00:10:19.600 We have plenty of people paying us 50 bucks a month

00:10:21.820 because it depends on how much we're actually getting for them.

00:10:24.880 And if I can get closer and closer to those products,

00:10:27.200 they almost become, I like to call them anti-active usage

00:10:29.840 products.

00:10:30.340 With Retain, you don't have to log in to get the value.

00:10:32.440 You just turn it on.

00:10:33.120 It does its job, right?

00:10:34.600 And then you can get back to your customer.

00:10:36.460 You can get back to your product, those types of things.

00:10:38.820 And we can take care of the mechanical stuff, if you will.

00:10:42.540 In the SaaS context of scaling from the two million AR,

00:10:47.320 you guys went through that.

00:10:48.400 You've seen so many companies in your product use your product

00:10:51.700 that have done that, kind of the $160,000 a month onward.

00:10:55.700 What are they doing right to kind of accelerate that journey?

00:11:00.140 Yeah, from 0 to 2 or 2 to 10?

00:11:02.000 No, 2 to 10.

00:11:02.840 Yeah, because I think from 0 to 2, you can basically brute force.

00:11:07.080 Totally.

00:11:07.480 I know that sounds terrible to anyone listening or watching this.

00:11:10.160 You can.

00:11:10.820 At 0 to 2.

00:11:11.140 Laka just talked about, or not Laka, ConvertKit,

00:11:13.820 Nathan talked about how they did outbound.

00:11:15.820 Yeah, totally.

00:11:16.440 Like $50 a month.

00:11:17.320 Absolutely.

00:11:17.720 Doesn't work.

00:11:18.560 Brute force.

00:11:19.060 Doesn't scale, but it's brute force, right?

00:11:20.660 And so I think from 2 to 10, the most successful companies,

00:11:23.980 they're using what's called a value metric with their pricing.

00:11:26.580 So that's how you charge.

00:11:27.660 And instead of charging, hey, there's

00:11:29.620 this tier that has these features,

00:11:31.480 this tier that has those features, plus a few extra,

00:11:33.600 and this tier that has everything,

00:11:35.380 charging based on some unit of value.

00:11:37.280 So with retain, the unit of value

00:11:39.100 is how much money we recover for you, right?

00:11:41.280 And we all don't have the luxury of that pure of a value metric.

00:11:44.700 Sometimes you've got to take a step back and get a proxy.

00:11:46.960 So for, I don't know exactly what ConvertKit is,

00:11:49.900 but I think it's like some measure of contacts, right?

00:11:52.340 It's a very traditional marketing automation one.

00:11:54.300 And what that does is basically, as people get more contacts,

00:11:56.920 all of a sudden they're willing to pay more

00:11:58.560 because they're like, yeah, I'm being more successful.

00:12:00.480 I'm getting a lot of value from ConvertKit.

00:12:02.520 I might as well pay more for it.

00:12:04.200 And if they get less contacts, they're

00:12:05.620 paying less, which they appreciate.

00:12:07.120 So your churn goes down, your expansion revenue goes up,

00:12:10.280 and everything kind of falls into place.

00:12:11.680 And really, that's the one thing that

00:12:13.960 can carry you from 2 to 10, and you

00:12:16.160 can get everything else wrong with your pricing

00:12:17.820 and you'll actually be pretty OK.

00:12:19.720 I think the other thing that's kind of interesting for the 2

00:12:22.080 to 10 folks is solving your gross churn on some level.

00:12:26.960 I think a lot of people from 0 to 2,

00:12:29.300 they get into this mindset where they don't really

00:12:31.220 think about churn because they're just brute forcing

00:12:33.220 that growth.

00:12:33.720 And they're able to add enough top of funnel to kind of mask it.

00:12:36.160 It's literally, when I look at the year 4 to 5

00:12:39.720 is when it starts, you've gotten so much.

00:12:42.560 The churn as a percentage is now,

00:12:44.580 Like, you can't add that many new customers, where all of a sudden

00:12:47.280 you start going sideways.

00:12:48.500 Yeah, you can rack and stack reps,

00:12:49.920 but then all of a sudden you just get to this plateau, right?

00:12:52.460 And I think what happens with a lot of companies

00:12:54.280 is that the earlier you can solve your gross churn

00:12:57.420 or know where your gross churn should be, 0.97

00:12:59.220 a consumer product like Xevia as a service,

00:13:02.060 churn rate's going to probably be 10% on a gross basis a month.

00:13:05.100 And that's terrible compared to B2B SaaS.

00:13:07.320 Trends are your whole customers every 10 months.

00:13:09.380 But what's funny about that is that that other 90%, 1.00

00:13:12.100 you're looking at how flat can you get that retention

00:13:14.920 curve over time.

00:13:15.460 How long can they stick around, yeah.

00:13:16.580 So your net retention might be zero,

00:13:18.760 or it might be over, because they might consume more,

00:13:20.860 or at least they stick around for a long time, right?

00:13:23.340 So if you can figure out where you should be,

00:13:25.860 and then optimize that as much as you can,

00:13:28.020 because Xevia, once they get to 10 or 8,

00:13:30.220 they're probably not going to get much lower than that, just

00:13:32.200 given the nature of the product.

00:13:33.460 Yeah.

00:13:33.960 But if you can optimize that.

00:13:34.780 Point of admission returns a few.

00:13:36.040 Totally.

00:13:36.700 And then, because some people, they try to get to zero,

00:13:38.820 and it's like, you're never going to get to zero.

00:13:40.360 that extra percentage after the 10,

00:13:42.320 if that's your kind of like ballpark,

00:13:44.260 it's just that much harder to get one.

00:13:45.580 Totally.

00:13:46.080 It just takes so much more effort.

00:13:47.500 But that's the other thing, because going from 2 to 10

00:13:50.320 and then 10 to 100, if you don't have your gross churn

00:13:53.060 figured out, it's just not going to happen.

00:13:54.720 Or it's going to be incredibly rare and an incredible market

00:13:57.440 that none of us are probably in.

00:13:59.260 And then the value-based pricing, that obviously impacts

00:14:02.380 its expansion revenues.

00:14:03.280 What about like add-ons?

00:14:04.520 I mean, plans are, especially if you're,

00:14:07.480 it seems like every SaaS, not all,

00:14:09.040 But most of them start SMB, mid-market, and move up market.

00:14:13.800 Is that something they should be thinking about at that size

00:14:16.000 from their perspective?

00:14:17.700 It depends on their DNA.

00:14:18.840 I think add-ons, absolutely.

00:14:20.480 So when I look at someone's pricing strategy,

00:14:23.280 it's do you have a value metric?

00:14:25.000 That's the first thing I look at.

00:14:26.260 Well, really, I look at how their ARPU is growing.

00:14:28.540 Because if ARPU hasn't grown, then there's a problem.

00:14:30.680 And the way that you get better ARPU

00:14:32.140 is you have a value metric that your customers grow over time,

00:14:35.540 and then hopefully you get better at getting larger customers

00:14:37.960 and smaller customers, but you also have an add-on strategy.

00:14:40.900 I think add-ons are one of the least used but highest impact

00:14:44.560 things you can do.

00:14:45.700 Because switching your value metric,

00:14:47.560 oh, we're contacts, or we're users,

00:14:49.300 we should go, that feels like you're

00:14:50.740 ripping out a core piece of your product.

00:14:53.380 So people can get really politicky about it,

00:14:55.540 and they won't do something.

00:14:56.900 But throwing out priority support, hey, here's this add-on,

00:15:00.160 guarantee you 20% of your base is willing to pay for it.

00:15:02.800 Just seeing that consistently, might be $100 a month,

00:15:06.000 might not be a ton, but across your base,

00:15:07.800 it might be a good portion, right?

00:15:09.640 And you could basically just keep giving the same support.

00:15:12.180 You just make sure you prioritize those phone calls

00:15:14.220 or those emails, right?

00:15:15.940 But add-ons are huge.

00:15:16.960 And I think that a lot of people don't focus on it.

00:15:19.300 Now, I wouldn't give the advice of going after enterprise

00:15:23.860 unless it's in your DNA.

00:15:25.620 For us, our DNA is selling deals that

00:15:28.860 are at least $50,000 a year up to $350,000 to $500,000 a year.

00:15:34.120 And so when we go, we're not the growth hackers

00:15:38.760 when it comes to even our free product, right?

00:15:41.260 We're not the best in the world at getting

00:15:43.300 those low-end customers or that low-end pace.

00:15:46.240 And so for our DNA, if we were to switch over to an SMB,

00:15:49.120 like, hey, we're going to try to go get $100,000, $50 users,

00:15:52.720 it's just not good for us.

00:15:54.120 I think sometimes people get distracted

00:15:56.600 where they try to change their whole DNA

00:15:58.140 and they go start chasing the Fortune 500.

00:16:00.560 But they're really, really good at demand gen.

00:16:03.500 They're really, really good at some of these more SMB type

00:16:06.260 things.

00:16:06.740 And I think you've got to stick with your DNA,

00:16:08.500 especially from 2 to 10.

00:16:09.800 Once you get over 10, then you kind of have

00:16:12.360 to go with everything, because you just

00:16:14.120 have to for that growth rate.

00:16:15.500 Yeah, even verticals or industries,

00:16:18.260 focus on one, nail that.

00:16:20.540 And then maybe 10 plus, you can kind of broaden that.

00:16:22.580 Well, that's what we're doing.

00:16:23.500 So we really focused on B2B, a little bit of B2C SaaS.

00:16:27.260 And now we're broadening everything to subscriptions.

00:16:30.600 So it's not just the B2B and the B2C SaaS.

00:16:32.740 It's subscription media, subscription e-commerce,

00:16:35.980 everything subscription.

00:16:37.840 And we've always had a little bit of the base

00:16:39.760 with the free plans.

00:16:40.600 But you're going to start seeing our product marketing

00:16:42.940 is going to change.

00:16:43.720 Our blog posts are going to change a bit.

00:16:45.280 We're going to get a little more targeted with certain things

00:16:47.200 because we're trying to go deep in those verticals

00:16:50.140 to sustain the growth rate, essentially.

00:16:51.860 So I mean, that's one thing that I think

00:16:53.980 anybody that consumes your content,

00:16:56.020 subscribed to your emails, the amount of content

00:16:58.140 you guys put out there.

00:16:58.960 We talked about this in Dublin at Sass Talk

00:17:02.800 about the media angle.

00:17:05.860 How do you think about that for your business?

00:17:07.920 I mean, again, Sass business, content,

00:17:10.240 but obviously content's super overplayed.

00:17:12.640 Yeah.

00:17:14.660 How did you guys think about it?

00:17:16.000 How did you approach it in regards to the investment?

00:17:19.160 Because it can't be cheap.

00:17:20.140 We were just talking about gear.

00:17:21.900 I don't know.

00:17:22.400 Jared's got a lot of really good stuff.

00:17:23.500 I know.

00:17:23.840 He keeps telling me I need all this stuff.

00:17:25.280 And I'm like, for real?

00:17:26.380 Yeah, yeah, yeah.

00:17:27.360 But you were telling me your guys made you

00:17:28.920 buy some jellyfish thing.

00:17:30.180 Yeah, like 20 grand.

00:17:32.120 That was after doing it for a year, though.

00:17:33.680 OK, so at least you had some, you knew you were going to invest.

00:17:36.400 But how do you think of content and media for your business,

00:17:40.740 and what SaaS companies might it make sense for?

00:17:43.880 Totally.

00:17:44.420 I think that if you are in the content world,

00:17:48.300 meaning you're going to use content to grow your business,

00:17:52.680 we're all going to be media companies

00:17:54.280 on some level at some point.

00:17:56.080 And the main reason for that is when

00:17:58.780 you look at the life and times of an e-book, right?

00:18:01.780 Because that was like the offer.

00:18:03.760 You could put out an e-book five years ago,

00:18:06.700 and if it was 100 pages, you were like a god.

00:18:09.160 Like, how dare you not charge for this?

00:18:10.920 This is amazing, right?

00:18:13.380 And you could do that repeatedly.

00:18:14.980 That's the HubSpot playbook of the last 10 to 15 years, right?

00:18:18.460 The problem is, and we saw this in the data,

00:18:20.260 the life of an e-book has basically

00:18:22.220 gone down from having really good lead velocity

00:18:25.040 for, like, six months to probably, like, less than two months.

00:18:28.780 Wow.

00:18:29.340 So, and that's, like, for good offers, not just, hey, I took my blog post, I made it

00:18:33.500 into a PDF.

00:18:34.160 PDF content upgrade.

00:18:35.320 You're good to go.

00:18:36.320 And so now you're looking at situations where you look at some of the best people in the

00:18:40.480 world at keeping time on site, more visits per week, these types of things.

00:18:44.540 Those are media companies.

00:18:45.540 Media companies are the worst in the world at monetizing that traffic, right?

00:18:49.480 Best people in the world at monetizing traffic are software companies, typically, right?

00:18:53.320 And so if you're in the content space, and there's a couple of other things that we thought about, but you got to be in the media space, essentially.

00:19:01.340 And the constraints for us were twofold.

00:19:03.760 One, it was, hey, how do we increase the number of touches per week?

00:19:09.740 So if the average number of touches per week that you can expect through your blog as well as social and things like that, let's say the max average, which we calculated, was like 1.6.

00:19:19.020 How can we raise that to five?

00:19:21.720 Because media sites like Bloomberg, et cetera,

00:19:24.800 they're getting five to seven touches.

00:19:26.380 That's their max average.

00:19:28.540 And so how can we increase that?

00:19:30.820 And so the other constraint was, if we emailed you every day,

00:19:34.920 how would we be able to do that without pissing you off?

00:19:37.440 Yeah, value.

00:19:38.160 Totally.

00:19:38.660 Yeah.

00:19:39.280 And all of a sudden, it just started

00:19:40.320 converging on this media concept.

00:19:41.920 And so what's your definition of when

00:19:44.040 you go from just content to media?

00:19:45.980 I think you start producing a lot more series, a lot more

00:19:48.480 shows.

00:19:48.900 So the basic inroads for most companies

00:19:52.320 is some sort of a podcast, right?

00:19:53.880 Because you're building this audience over time.

00:19:55.920 And that's the other thing you see in the data.

00:19:57.420 When you release an e-book, it goes like this.

00:19:59.100 Goes up, and then goes down.

00:20:00.420 And then it's just like this really short long tail

00:20:02.500 and kind of trends towards zero, right?

00:20:04.380 With a podcast audience, it's just like always going up.

00:20:06.540 Might not be like growth velocity or anything like that,

00:20:08.920 but it's always going up as long as the content's OK,

00:20:11.760 if not good.

00:20:12.840 Right?

00:20:13.380 And so we basically were like, OK,

00:20:15.460 the biggest constraints here, how do we

00:20:17.140 make sure we build the audience?

00:20:18.180 And then the other constraint was,

00:20:19.860 what if we had four or five shows?

00:20:22.020 What if we had a show every single day?

00:20:24.520 Different personas, different use cases.

00:20:27.320 And so we started with what I like to call bottom

00:20:29.500 of the top of the funnel content.

00:20:31.420 Pricing page teardown.

00:20:33.100 We have this benchmark report show that we do every week.

00:20:35.180 I saw that Backblaze one.

00:20:36.180 That was good.

00:20:36.720 Yeah, yeah, yeah.

00:20:37.260 My buddy Gleb, CEO, is a good dude.

00:20:39.600 Yeah, yeah.

00:20:40.180 I'm glad that he came out favorably.

00:20:41.680 Yeah, no, it was good.

00:20:42.800 I think they're crushing it.

00:20:43.620 I think Carbonite, they're definitely

00:20:46.320 playing the old school game, which it works,

00:20:48.980 but I think GLAD is going to net out.

00:20:51.100 But long story short, basically we're like,

00:20:53.560 okay, now we have these constraints,

00:20:55.060 that's what we really tried to figure out,

00:20:56.500 and we're not completely figuring it out yet,

00:20:58.820 but because then it's like, how do you get beyond

00:21:01.480 just doing, like having one interview show is good,

00:21:05.620 but then how do you like, what do we do next, right?

00:21:08.000 What do we get more interesting?

00:21:09.060 So we have this documentary series

00:21:10.620 that we're coming out with,

00:21:12.500 we're doing a lot of partner shows now,

00:21:15.080 There's a bunch of other cool stories that we're doing.

00:21:17.600 Yeah, man.

00:21:18.800 And it's funny, because before we jumped in,

00:21:21.500 because we're bootstrapped, because this is not

00:21:23.080 like an easy investment, it turned into.

00:21:24.920 That's what I asked, because I mean, it's real money.

00:21:26.900 Well, we got into two full-time hires.

00:21:29.700 They were both young, hungry kids right out of school,

00:21:32.060 essentially.

00:21:32.640 And so that made it a little cheaper.

00:21:34.080 And they were like, yeah, let's do this.

00:21:35.580 And so it took a lot of hand-holding by me.

00:21:37.700 But then they know the technical side of this better than I do.

00:21:41.520 And then it took basically starting

00:21:44.300 to really commit to it.

00:21:45.840 And the way that we kind of got over that cost hump

00:21:48.540 is we looked at it and we were like, OK,

00:21:50.700 what if this completely fails?

00:21:52.020 What if it's just a blog?

00:21:54.280 It's just blog content, and that's how people look at it?

00:21:57.060 Well, it's stuff that we'd be really proud of, right?

00:21:59.160 And we were like, OK, if we're really proud of it

00:22:01.340 and it completely fails from a monetary perspective,

00:22:04.080 it's not going to fail beyond where our blog was.

00:22:06.560 It's not going to do worse than the content that we're already

00:22:08.880 writing.

00:22:09.420 And so, yeah, I think we're, we still haven't figured this out,

00:22:12.600 but that's kind of like the mission.

00:22:14.100 And now what's kind of cool is like Wistia is getting into the game. 0.99

00:22:17.680 Jay Akunzo is getting into the game.

00:22:19.040 Like everyone's kind of starting to converge on this concept.

00:22:20.720 Dan Martell's getting in the game.

00:22:21.840 Dan Martell.

00:22:22.560 I don't mind saying it.

00:22:23.480 Danmartell.com.

00:22:23.880 Patrick Campbell inspired right here.

00:22:25.660 There you go.

00:22:26.260 Yeah.

00:22:26.780 But that's the thing.

00:22:27.740 Like now it's like, cool.

00:22:29.080 Like this is great for everyone.

00:22:31.360 And then like, how do we be the best at it?

00:22:33.800 And that's, that's great to have competition, right?

00:22:36.420 Like I would, you know, you're going to see our site.

00:22:38.600 The production quality is crazy.

00:22:40.020 I mean, I saw your studio.

00:22:42.840 You know what I love is the concept of other personalities

00:22:46.340 involved so that you don't have to be the Gary Vee show.

00:22:49.460 I think that's really cool.

00:22:50.620 Well, that was a big thing, because it was really

00:22:52.640 easy for me to do it out of the outset,

00:22:54.440 because I just have all the cursive knowledge stuff going

00:22:56.940 on, where I know the pricing.

00:22:58.400 I know this.

00:22:59.000 I can do it up front, so I don't have to involve anyone else.

00:23:01.840 Now that we have the production going,

00:23:03.600 now we can bring in other people, and they can do it,

00:23:06.440 and we can do it really easily.

00:23:07.640 Guide the editorial, but not be involved.

00:23:09.200 Totally.

00:23:09.720 And that's basically this year, Q2 2019.

00:23:13.460 The goal by the end of the quarter is I'm not writing anything.

00:23:16.420 I'm just like exec producing, essentially.

00:23:18.160 And it's like a big task.

00:23:19.460 You don't know everything that's going on in the inside.

00:23:21.940 But it's a big task, because our Protect the Hustle series, 0.99

00:23:25.080 that shit's scripted aggressively. 0.99

00:23:27.020 Dude, I mean, I remember seeing the first, 1.00

00:23:29.060 when you started doing this, and I was thinking,

00:23:31.000 I think he's scripting everything.

00:23:32.780 Yeah, it's everything, except for pricing page teardowns

00:23:35.060 and not scripted.

00:23:36.120 We're trying to get away from most scripted shows.

00:23:38.420 Totally.

00:23:38.920 I mean, just talk about the overhead.

00:23:40.500 Totally.

00:23:41.000 But that's what sometimes makes it really good.

00:23:43.680 100%.

00:23:44.180 That's what's super tough.

00:23:44.760 Yeah, yeah, every word matters.

00:23:45.880 Totally.

00:23:46.260 Because I mean, this show, which is new,

00:23:48.960 right, you're going to have some people who are probably

00:23:51.120 really smart, but they're just dry.

00:23:53.340 They may not make the cut, bro.

00:23:54.600 Right?

00:23:54.900 And so that's what you have to do.

00:23:56.340 But then you spent the hour.

00:23:57.620 You maybe cut it together, right?

00:23:58.980 And so that's how we were.

00:24:00.440 And we were also trying to experiment with what

00:24:03.100 would be a non-interview show.

00:24:05.680 And the whole second season is just going to be interviews.

00:24:08.500 But they're going to be cut nicely and all that kind of stuff.

00:24:11.180 Yeah, long story short, I think that's the future, man.

00:24:13.500 Early days, media.

00:24:14.560 If you're going to do content, you

00:24:15.600 might as well treat yourself like a media company.

00:24:18.000 And we're looking at hiring.

00:24:19.000 And I like the idea of shows, characters.

00:24:21.460 Totally.

00:24:21.960 Well, think about it like if you think of Howard Stern.

00:24:24.280 I mean, you know, whatever you think of him,

00:24:26.100 like, you know, he has these characters.

00:24:27.820 He's got Robin.

00:24:28.320 He's got, you know, like, and that's

00:24:29.960 why I love giving shouts to J-Dog.

00:24:32.460 Yeah, yeah, yeah.

00:24:33.040 People are like, is there somebody behind the camera? 0.99

00:24:34.500 I was like, fuck yeah, you think I sit here and just talk 0.98

00:24:37.020 to a camera by myself? 0.99

00:24:38.180 I'm not that disciplined.

00:24:39.240 I almost needed to keep me on pace.

00:24:40.320 That's what I used to do when we were testing this.

00:24:42.440 Oh, I did it for a bit.

00:24:43.380 Yeah, you do it too.

00:24:44.160 Yeah, for like six weeks.

00:24:45.420 And then I was like, I need somebody there just

00:24:47.120 to hold me accountable to show up to take care of it.

00:24:50.760 I know we were joking about it.

00:24:51.860 I do feel like you could be the Joe Rogan of this world.

00:24:54.740 Well, I appreciate you saying that.

00:24:55.820 Because I know he's heavily influenced our gear.

00:24:59.560 But only because I think that your personality

00:25:02.920 and your connections, and also your incentives,

00:25:05.980 like what you're trying to do with your brand and stuff,

00:25:08.600 it's the perfect convergence of you.

00:25:11.200 I mean, maybe you wouldn't want to give up this time.

00:25:13.100 I know you protect your time really well.

00:25:14.380 But you doing a three-hour interview with someone

00:25:17.320 and keeping them entertained.

00:25:18.320 I can do it.

00:25:18.820 I mean, we do it anyways.

00:25:19.320 We go for dinner, and we'll talk for two or three hours.

00:25:21.100 Yeah, you do it anyways.

00:25:21.680 And I think that that's something serious.

00:25:22.780 And sometimes I wish that those comments, and that was it.

00:25:25.720 And I definitely try not to make it about Q&A.

00:25:29.500 Man, it's like any new medium.

00:25:30.940 I remember when I started doing just

00:25:32.340 even my YouTube video, it's like finding your voice, right?

00:25:34.440 Yeah, absolutely.

00:25:35.180 It's slowly but surely.

00:25:36.520 And I don't want this to be that generic, like,

00:25:39.840 tell us how you got started and all the, you know,

00:25:42.780 and then make it.

00:25:43.500 But you know what's funny is there are people,

00:25:46.840 like, you ever watch Hot Ones?

00:25:48.240 I think we talked about this at one point.

00:25:49.280 Oh, the wing thing?

00:25:49.980 Yeah.

00:25:50.480 Yeah, I've seen an episode.

00:25:51.520 Like, Sean Evans, that show, the wings are interesting.

00:25:54.840 And it's like a side thing.

00:25:56.320 But he's just such a great interviewer.

00:25:58.660 And I think, and that's why he can have the generic podcast.

00:26:02.300 And it can be better than anyone else's.

00:26:04.040 And I think you have, not to blow smoke. 0.99

00:26:05.840 I have no incentive to blow smoke up your butt here. 0.99

00:26:07.680 Hey, man, keep going, do tell. 0.98

00:26:08.480 But no, but seriously, I think you're interesting enough.

00:26:10.820 You have enough interjections.

00:26:12.240 And you could interview people in that style.

00:26:14.460 I think there's like, I don't know if I could do that.

00:26:16.440 I don't know if I could do the straight interview show,

00:26:18.480 just because I have some limitations there.

00:26:22.020 But I think you can do it.

00:26:22.940 I appreciate that, man.

00:26:24.860 One thing that you did, Patrick, that I think is awesome

00:26:28.020 is those videos with people's names in it.

00:26:30.380 Yeah.

00:26:31.280 You know what I mean?

00:26:31.880 I can't tell all our secrets.

00:26:33.080 That's still a good channel.

00:26:34.280 Yeah, no, it's still a good channel.

00:26:35.660 Act surprised if you get one of those emails.

00:26:38.480 But you got a $50K minimum, quarter million dollar deals,

00:26:43.380 and you're trying to stand out.

00:26:45.500 I mean, that to me is the fun things

00:26:50.140 about building a business.

00:26:51.500 Like, I don't know.

00:26:52.460 It sounds fun.

00:26:53.300 It sounds like, hey, I'm going to do this video.

00:26:54.680 It's personalized.

00:26:55.500 It doesn't work.

00:26:56.080 And then scale it, right?

00:26:57.640 Yeah.

00:26:58.540 If you don't mind unpacking a little bit.

00:27:00.040 Tell everybody.

00:27:00.800 Like, how did that work?

00:27:01.720 Where did the idea come up from?

00:27:03.440 So the only reason I'm like, OK, I'm packing it

00:27:06.460 is because I think a lot of people will be like, oh,

00:27:08.160 that's too much work.

00:27:09.100 And I'm not going to tell you.

00:27:10.240 They won't do it.

00:27:10.860 People don't like doing hard things.

00:27:11.860 I'm not going to tell you exactly the ROI.

00:27:13.520 The ROI is insane, not even because of our ARPU.

00:27:16.180 Like, our ARPU, our average revenue per user,

00:27:18.060 could be so much lower, and it still would make sense.

00:27:20.620 But what we did is all these channels,

00:27:23.740 like, we're not getting major channels anymore, right?

00:27:26.160 And yeah, we'll get, like, Snapchat.

00:27:27.960 But it's not amazing for B2B.

00:27:31.720 And so we might get ABM is basically

00:27:34.140 just a reinvention of email and enterprise sales.

00:27:37.120 Totally.

00:27:37.620 People are like, ABM is just a veneer on top of things

00:27:40.720 we used to call name.

00:27:41.760 Totally.

00:27:42.140 It's just renaming stuff.

00:27:43.100 So it's like, OK, how do you reinvent email?

00:27:44.760 Well, Vidyard and Wistio Soapbox, some of these things

00:27:48.580 have been good.

00:27:49.180 Like, hey, I can put a video.

00:27:50.440 I can put a thumbnail in there.

00:27:51.500 And I can send it.

00:27:52.360 And that's a little bit different.

00:27:53.580 It's a little bit novel, right?

00:27:55.320 So we took that a step further, and we're like, OK,

00:27:57.060 this is interesting.

00:27:57.720 but how do you do it right?

00:27:59.220 If we're gonna put all this work in there,

00:28:00.560 how do you do it really well?

00:28:02.440 And so what we ended up doing is we took,

00:28:05.080 we basically took just the first experiment was,

00:28:08.180 I would sit in a room for an hour

00:28:09.820 and then just record all these videos

00:28:12.040 just on like a 5D or something like that.

00:28:14.780 And then we would have a post producer

00:28:17.640 basically just take every single video and create it.

00:28:20.280 And it gets a little bit easier

00:28:21.280 because it's the same format for all these.

00:28:23.960 And then the thumbnails we would outsource

00:28:25.900 and the thumbnails are really what gets in

00:28:27.720 We've experimented with using a GIF or using other things.

00:28:30.780 So just to explain to people the experience

00:28:33.240 is you're a founder.

00:28:34.740 You get an email from Patrick.

00:28:36.600 It's a personalized thumbnail.

00:28:37.800 Personalized video and thumbnail, yeah.

00:28:39.880 And what do you go through?

00:28:42.660 Sure.

00:28:43.080 So I'll say, like, hey, Dan, Patrick, you're from ProfitWell.

00:28:45.000 How many of these have you done?

00:28:46.020 I've done a lot of these.

00:28:47.220 The script is already coming in my head, yeah.

00:28:49.040 It's just, like, in searing there.

00:28:49.860 Yeah, yeah, yeah, yeah.

00:28:51.000 No, but it's like, hey.

00:28:51.740 And go.

00:28:52.160 You're like, hey, it's Patrick.

00:28:53.460 No, it's literally like, hey, Dan, Patrick, you're from ProfitWell.

00:28:56.400 And then normally, like, I'll insert something about, like, you know, really, really loving the content you're doing through DanMartell.com.

00:29:02.640 Like, looks super dope.

00:29:03.900 I actually really watched this video.

00:29:05.160 Like, I'll get, like, something personal.

00:29:06.600 Because you're just trying to get people out of the flow.

00:29:08.420 They're like, hey, what's this email?

00:29:09.500 Then they click the email and you're like, oh, this person looked at my website.

00:29:12.400 Or they're familiar with my company.

00:29:13.900 That's a big thing.

00:29:14.620 Like, and then it gets into basically a quick pitch because you're just trying to get them on the phone.

00:29:18.940 And so it'll be, like, 30 to 45 seconds in length.

00:29:21.600 and sometimes we'll cut like the second half will be like the same and the first half will be like

00:29:27.360 very personalized but um and then we have a now we have a teleprompter that basically just like

00:29:32.340 we copy and paste this and like it just goes through yeah i'm just to make basically be

00:29:36.220 automated and i don't know it works out really well was that your first taste of media in some

00:29:40.520 ways like when you guys started that or had you guys already been doing that's a good question

00:29:44.680 we've been doing i just think that's good like outreach yeah like and then um yeah we like just

00:29:51.380 Video production.

00:29:52.280 For video, we started taking our blog posts

00:29:56.660 and just doing a video that accompanied the blog post.

00:29:59.140 Oh, that's cool.

00:30:00.140 That's all we really were doing, because we were like,

00:30:01.800 oh, video is like the future.

00:30:02.920 It's great.

00:30:04.220 I know the Wistia guys really well,

00:30:05.480 so I drank a lot of that Kool-Aid.

00:30:06.860 And so it was one of those things where that started working,

00:30:09.100 because people don't read.

00:30:11.700 I mean, it's terrible.

00:30:12.500 But we would write these really, really deep posts,

00:30:14.440 and you'd have like 20% of the group get to the bottom

00:30:17.120 and read the whole thing.

00:30:17.920 And those were like our homies.

00:30:19.420 But then it's that other 80%, they're not getting the message

00:30:22.640 or they're just retweeting a headline, that type of a thing.

00:30:25.860 So yeah, it's one of those things where,

00:30:28.400 and then the ABM, we call them ABM videos.

00:30:30.800 That's what came next.

00:30:31.920 And then the series is what we're always working on.

00:30:35.140 I think we talked about bobbleheads, 0.99

00:30:36.660 because that guy showed up in Dublin with those bobbleheads.

00:30:40.220 He made those himself.

00:30:41.140 Those are handmade.

00:30:42.220 Yeah, people were like, oh, that was 3D printed.

00:30:44.460 No, he hired somebody to carve my face into a bobblehead.

00:30:48.100 That's cool.

00:30:49.300 But I mean, there's neat stuff like that for ABM.

00:30:52.880 We're doing some of that.

00:30:53.920 We have a Glowforge in the office, which

00:30:55.720 is basically a laser cutter.

00:30:59.080 But it can etch and do a bunch of things

00:31:00.820 into wood and different materials.

00:31:02.380 Yeah, and so we're working on, it's just, you know what it is.

00:31:06.000 It's building a relationship.

00:31:07.520 And sometimes it's hard to stand out from the crowd.

00:31:09.820 I like that it's creative.

00:31:11.260 I just like it.

00:31:12.240 And I like that.

00:31:13.780 I was never an artist or anything,

00:31:15.280 but this is the stuff I like to create.

00:31:16.780 I always like to build stuff, right?

00:31:18.360 And so I get to, like, screw around with the Glowforge, come up with, like, a cool thing.

00:31:21.800 And our designer will probably do, like, the finished, like, product, and then I'll, like, help with, like, getting it together.

00:31:26.920 But, yeah, it's just one of those things, like, standing out to start the relationship.

00:31:30.740 It's the same thing, like, you know, not to use the dating metaphor, which is so overused, but, like, you know, if you're using those apps or, like, even just you're in the bar or whatever, like, you know, like, just, hey, how are you?

00:31:41.680 Like, yeah, that works.

00:31:43.000 But, like, if you stand out a little bit, like, and you're interesting, like, people want to have that.

00:31:47.340 But yeah, not too far.

00:31:48.720 Not that much?

00:31:49.340 Not that much.

00:31:50.220 But yeah, yeah, yeah.

00:31:51.420 But just a little bit.

00:31:52.720 You start that conversation, right?

00:31:55.320 What do you think, for you guys, on the G2 crowds,

00:32:00.680 the Capteras, what's your thoughts on that?

00:32:02.340 Because I see that for mid-market customers,

00:32:05.300 some people are leaning into it.

00:32:06.700 It's generating a lot of lead flow.

00:32:08.840 What are your thoughts?

00:32:09.580 I'm assuming you guys are listed up there

00:32:10.920 with the ProfitWells.

00:32:11.760 Yeah, yeah, yeah.

00:32:12.900 We had gotten to this crazy PR disaster with them, actually.

00:32:19.140 Oh, I didn't know this.

00:32:20.140 Yeah.

00:32:20.640 So it wasn't, it was just.

00:32:21.780 Is there any other stuff you've gotten

00:32:23.080 disasters with I can bring up in the middle of the show?

00:32:24.660 No, no.

00:32:25.040 That's fine.

00:32:25.540 No, it's fine.

00:32:26.040 Actually, I talked about it in my talk, actually.

00:32:28.020 And so, yeah, we had a situation where there was clearly

00:32:31.680 a fake review.

00:32:33.000 There was someone who put positive reviews on us,

00:32:35.200 and it came back, and they also put negative reviews

00:32:37.340 on some of our competitors.

00:32:38.900 And so it looked super fishy.

00:32:40.960 It looked super fishy.

00:32:42.560 Against you guys.

00:32:43.980 Oh, no, for us and against them.

00:32:45.540 Yeah, and so they tweeted it.

00:32:48.080 And these are guys that I've reached out.

00:32:50.980 I've sent these guys notes and been like,

00:32:52.980 our competitor CEO is like, hey, obviously we're competitors.

00:32:56.100 But if there's anything we can do, blah, blah, blah.

00:32:58.680 And so they tweeted it.

00:32:59.520 And then the other competitor CEO retweeted it.

00:33:01.800 They called us unethical and all these other things.

00:33:03.780 And you guys didn't, you obviously didn't have anything.

00:33:05.560 We didn't do anything.

00:33:06.320 Yeah, at least, I mean, I don't, it's hard to.

00:33:08.660 But you were proactive on reaching out.

00:33:10.640 Yeah, it's hard to disprove a negative, right?

00:33:12.320 And so I reached out to DJ Crowd and everything.

00:33:17.120 And this is a category that gets like 100 visits a month.

00:33:20.240 Like nothing, right?

00:33:21.820 And so for us to game this system would have been ridiculous.

00:33:26.720 Waste of resource.

00:33:27.780 Yeah, and so it's just one of those things

00:33:29.980 where I interviewed everyone in the company,

00:33:32.000 and I was like, hey, did you do this?

00:33:33.740 Did you not?

00:33:34.560 It's not OK you did this, but if you did,

00:33:36.040 I need to know so you can fix it.

00:33:37.840 And everyone was like, I have no idea what you're talking about.

00:33:41.820 and then did partners and everything like that.

00:33:43.940 Didn't find the answer.

00:33:45.120 I have not found the answer.

00:33:46.120 I have some theories.

00:33:46.940 But basically, and then reached out to these guys

00:33:49.820 and wrote them really long emails,

00:33:51.540 didn't get a response, but was just like,

00:33:52.980 we don't want to win this way.

00:33:54.320 If you notice, because they mentioned other unethical stuff

00:33:56.820 that we do.

00:33:57.320 You went above and beyond, man.

00:33:59.100 I don't think I would have been

00:34:00.300 Yeah, well, what I want to do is just be like,

00:34:02.060 F you guys on Twitter, that kind of thing.

00:34:04.400 But it was just one of those things where it's like,

00:34:08.100 the search for truth is a big thing for us.

00:34:10.220 It's a big thing for me.

00:34:11.240 And it's like, they think that competitive ads

00:34:15.320 are unethical.

00:34:15.960 I don't think that's true.

00:34:17.120 But if something like this happens,

00:34:19.480 it's clearly this is wrong.

00:34:20.720 And I empathize with, if I noticed this and they were

00:34:23.240 doing this, I'd be pissed at them, too.

00:34:24.800 I'd probably assume that they were doing terrible things.

00:34:27.680 But anyway, so I handled all that and everything.

00:34:29.620 And basically, it was resolved, if you will.

00:34:32.000 But it was one of those things where we actually

00:34:34.060 started looking into G2 Crowd.

00:34:35.460 And we're like, shouldn't we be optimizing this?

00:34:37.180 Should we be doing something?

00:34:38.360 And so we started doing some optimizations.

00:34:40.580 And we get some decent traffic from it.

00:34:43.820 But I think for our category, it doesn't make a ton of sense.

00:34:46.400 Because it's just subscription analytics.

00:34:48.740 It's so niche.

00:34:50.200 And most people, we're not competing.

00:34:52.580 I do think that those sites, though, to kind of get back

00:34:55.620 to your core question, I think that they're good.

00:35:00.360 Because people are craving information.

00:35:01.820 They're definitely influencing decisions, man.

00:35:03.780 Absolutely.

00:35:04.320 I don't make a decision on software anymore

00:35:06.400 until I go do some due diligence on that.

00:35:07.920 Yeah. I think the problem, though, is that in what we got swept into is, like, so when they did a review of the entire category, G2 Crowd and Capterra, we all lost positive and we all lost negative reviews, all of the companies, which was really interesting.

00:35:22.500 And so there's some sort of, like, review fraud problem there.

00:35:27.280 They've got it. They know about it.

00:35:28.640 Well, just this world, right?

00:35:30.420 Like, just this world of reviews because, like, you know, think of Yelp.

00:35:33.860 I thought I've heard that they have to take screenshots.

00:35:36.320 If you review, you've got a screenshot.

00:35:37.420 You do, but I don't know how much are they checking it.

00:35:43.360 Because if there are thousands of reviews

00:35:44.800 getting submitted a month or a week,

00:35:47.480 they can't be checking all that by hand.

00:35:49.560 And so it's one of those things where I think that we've

00:35:51.560 actually talked to, in the wake of this,

00:35:54.080 we actually talked to GT Crowd.

00:35:55.480 And we're like, listen, we know, because we

00:35:58.020 have these tens of thousands of sites on ProfitWell,

00:36:00.840 we know this person is actually using the product.

00:36:04.000 We know perfectly.

00:36:04.920 and we know that this company potentially wants reviews,

00:36:08.460 like we could actually set something up.

00:36:09.780 Oh, that's huge.

00:36:10.320 We could build a little product where we're like,

00:36:12.080 you know, it's a little product where you can send this out.

00:36:14.640 Take the NPS score.

00:36:15.660 If the NPS score is good, you could send it to a review.

00:36:17.800 There are SaaS tools out there doing this.

00:36:19.300 Totally.

00:36:19.800 Yeah.

00:36:20.300 And so we were like, well, we could do that.

00:36:21.720 And we talked to Goddard and some of the crew at Teach

00:36:23.640 Crowd.

00:36:23.940 And we're still thinking of doing it.

00:36:25.620 But it was one of those things where I think

00:36:27.000 that's the problem.

00:36:27.860 And I think that everyone's coming

00:36:29.480 at this research problem a little bit differently.

00:36:31.920 Because you have the review sites that are just doing

00:36:34.100 straight up reviews.

00:36:35.220 You have Blissfully and those types of companies

00:36:37.040 that are looking at your credit card payments

00:36:38.700 and then want to do something with that data.

00:36:41.920 We kind of have this potential as well.

00:36:44.780 We don't know on an individual basis,

00:36:46.620 but we could automate this or have people opt into it.

00:36:50.580 We would know who has the best retained customers

00:36:53.420 in the CRM category.

00:36:54.560 We would know who has the highest growth.

00:36:56.360 So you would actually use that as an indicator

00:36:59.300 to those companies, not necessarily.

00:37:01.180 You could drive reviews for them as a tool set.

00:37:04.060 Yeah, yeah.

00:37:05.260 But we could have someone like.

00:37:06.940 Yeah, you can have a real data point.

00:37:09.520 Totally.

00:37:09.880 Like, hey, they have the best reviews,

00:37:11.920 but they're actually only third in terms of retention.

00:37:14.380 Yeah.

00:37:14.980 I don't know.

00:37:15.520 As a customer, that's interesting, right?

00:37:18.060 Now, do they want to put that data out there?

00:37:20.120 Who knows?

00:37:20.940 Like, that kind of a thing.

00:37:22.100 We would never force that.

00:37:23.220 Yeah.

00:37:24.120 Totally.

00:37:24.620 And that's what we talked a little bit about GT Crowd

00:37:26.320 with like, hey, we have some other data here.

00:37:29.240 Like, that might be interesting.

00:37:30.300 I don't know.

00:37:30.800 We would have to, like, you know, this

00:37:32.720 would have to be an opt-in thing and all that kind of stuff.

00:37:34.960 But it's something we've thought about.

00:37:36.140 Have you ever thought of monetizing the back end

00:37:38.860 from a fund?

00:37:40.080 I mean, just the other day, it occurred to me

00:37:42.120 when I was looking at a few clients that I coach.

00:37:44.280 And they were like, we're thinking of raising

00:37:46.040 some revenue financing, some debt financing.

00:37:48.520 And I was like, if I'm a lighter capital or somebody

00:37:51.100 like that, I'm buying because you guys have perfect data.

00:37:54.840 Yeah, we, so we.

00:37:56.480 Amazon's doing it already with their.

00:37:58.780 It's super tricky, because we will never sell anyone's data.

00:38:04.660 Yeah.

00:38:04.960 Like, we will never sell it directly.

00:38:06.500 But to offer financing.

00:38:07.780 Totally.

00:38:08.080 We've thought about this.

00:38:08.920 OK, you did that, because I mean, it would come to me.

00:38:11.220 So we've thought about raising a fund.

00:38:13.060 We thought about debt financing.

00:38:14.440 We thought about, hey, let's white label Lighter Capital

00:38:17.740 or ScaleWorks as debt fund or something like that, right?

00:38:20.140 And so we thought about it, because I think it really

00:38:22.180 helps our community as well, because ultimately, we're

00:38:24.280 trying to create a community experience.

00:38:26.000 And so it's like, hey, here's alternative financing.

00:38:28.760 or here's intros to VCs.

00:38:31.000 I think what we ran into, and we don't really

00:38:33.280 care about making money off of that,

00:38:34.940 because it's hard to make money off of debt.

00:38:37.620 Yeah, unless you're that company.

00:38:38.960 Unless you're volume added.

00:38:40.160 Totally.

00:38:40.860 But we thought about, OK, well, we

00:38:42.880 can help these companies at least vet.

00:38:45.480 So we were talking to Lighter Capital about, hey,

00:38:48.000 when you go through your Lighter Capital application,

00:38:49.940 if you have one of these billing systems,

00:38:51.640 hook up to ProfiWell.

00:38:53.300 We've talked about some of that stuff.

00:38:54.600 But it's also one of those things we're thinking, we're like,

00:38:57.200 OK, how do we, we don't want to half-ass this, right?

00:39:00.100 Because it's something that's pretty serious for folks.

00:39:02.620 Totally.

00:39:03.120 And they don't want to think that your motivations are not.

00:39:07.720 Totally.

00:39:08.880 Once you kind of go past it, it's hard to come back.

00:39:11.440 You know what I mean?

00:39:12.020 Totally.

00:39:12.440 Yeah, we just don't, we're very sensitive about,

00:39:15.820 we won't look at anyone's account unless you tell us.

00:39:18.120 We do research the data, but we have to have a minimum of 30.

00:39:22.160 It's anonymized.

00:39:23.020 And we kind of know, we've put in some breaks

00:39:26.980 so that we take out outliers right away.

00:39:28.840 Because if you look at some aggregated data,

00:39:31.120 and you split it even by one segment,

00:39:32.840 you're like, I know that class pass is in that data

00:39:36.200 or something like that.

00:39:37.060 So we're just really smart about it.

00:39:39.280 But I think that what we've really focused on

00:39:41.280 is making sure that there's a really clear line there.

00:39:44.260 And we can do the research.

00:39:45.300 And you can opt out of any of the research.

00:39:46.820 We have plenty of people who they're not paying us.

00:39:48.800 They're just like, hey, I want to opt out.

00:39:50.220 We're like, cool, whatever.

00:39:51.600 But yeah, I think we need to be careful about that line.

00:39:55.780 It's interesting.

00:39:56.440 Yeah, it's totally interesting.

00:39:57.460 Like a lighter could buy the company.

00:39:59.740 Yeah, I don't think we would sell to anyone like that.

00:40:02.140 Like we would go under before we did that.

00:40:04.280 For sure.

00:40:05.200 Just because some people were like, oh, sell to PE.

00:40:07.140 And PE would love the data.

00:40:08.200 And we're like, no, it just doesn't, not values align.

00:40:11.540 But we have thought about raising a fund.

00:40:13.540 I think the mezzanine product for ProfitWell

00:40:17.920 is basically using all of this knowledge

00:40:20.620 to properly buy and get into an M&A situation

00:40:24.600 with a bunch of companies, right?

00:40:26.100 So basically, buying or implementing

00:40:28.920 or building a company every quarter, right?

00:40:30.840 There you go.

00:40:31.500 But yeah, we've thought about that, right?

00:40:33.100 Like, because if we can get free cash flow

00:40:34.840 from the SaaS products, we're building this community

00:40:37.500 through the media.

00:40:38.220 And then all of a sudden, we're sitting there

00:40:39.420 and we're like, cool, how do we sustain these growth rates?

00:40:42.100 Like, well, the best thing to do is add products, right?

00:40:45.060 That we can sell either to this base.

00:40:46.760 But it's going to be a while because we want to get

00:40:49.360 retained for every part of the funnel.

00:40:51.600 So there's going to be an acquisition retain at some point.

00:40:53.940 There's going to be a pricing, retain, et cetera.

00:40:55.640 So as we march against that mission

00:40:58.500 and understand that truth, that's

00:40:59.760 going to allow us to at least have opportunities like that,

00:41:03.540 which it's a little daunting to think of because there's

00:41:06.060 enough stuff to figure out right now.

00:41:07.480 Totally.

00:41:08.060 What do you think the future of SaaS holds for us?

00:41:11.020 I mean, that's a big question, but in regards to product.

00:41:16.020 So I'll throw this one out there.

00:41:17.380 He said to me that every SaaS product is going

00:41:20.760 to have a free version.

00:41:22.120 Yeah, I believe that.

00:41:23.040 You believe that?

00:41:23.740 I believe it might not be something directly related

00:41:26.740 to their product, but it will be directly related

00:41:28.900 to their customer.

00:41:29.920 OK, and when you say that, you mean the problem that they're

00:41:33.400 trying to solve?

00:41:33.900 Yeah, like you and I talked about a lead magnet.

00:41:36.040 You're even talking about a lead magnet that isn't an e-book,

00:41:38.740 but is like a little app, like a little calculator

00:41:40.980 or something like that.

00:41:41.500 Yeah, just like the greater products that HubSpot did.

00:41:43.980 But that's a free product, basically, right?

00:41:46.980 That's what Vidyard did with their GoVideo slash View.

00:41:49.560 Totally, totally.

00:41:50.560 And so I think that because of the density,

00:41:53.320 And it's not about peak SaaS, peak subscriptions.

00:41:56.080 I don't think we're there yet.

00:41:57.700 I think we're going to get there, but the implication of that

00:41:59.900 isn't going to be, oh, there's no more subscriptions.

00:42:02.100 I've always thought about this, and we're

00:42:03.360 going to come back to this thread.

00:42:05.100 There's a certain amount of expenses

00:42:10.400 that a company is willing to invest

00:42:12.220 for operational tool sets, right?

00:42:14.500 And back in the day, they might have

00:42:16.480 had to be bigger to buy this hardware

00:42:18.120 to have it on prem or whatever.

00:42:20.680 But there is a certain amount of, OK,

00:42:22.980 a death by 1,000 SaaS products.

00:42:24.600 I think what you're getting at, and it's something

00:42:26.700 I agree with, is that there's going

00:42:29.220 to be a, not death, but a very commoditization

00:42:32.700 of any function-based product.

00:42:34.560 Yeah, something that's horizontal.

00:42:36.700 Sending email.

00:42:38.400 You got 1,000 companies that help you send marketing

00:42:41.340 or transactional email.

00:42:42.700 There's 20% of them that are good from any access

00:42:46.760 that you look at.

00:42:47.940 But you look at what happened with live chat.

00:42:50.760 every marketing product now has a live chat widget.

00:42:53.320 Because it's like, oh, it's really easy to build.

00:42:55.140 It's easy to get built.

00:42:56.760 It's hard to get right.

00:42:58.220 But I think any function-based products,

00:43:00.160 that's where they're going to go.

00:43:01.320 And then it's going to be a lot of these outcome-based products,

00:43:03.640 where it's like, basically, I just solve it.

00:43:08.180 Like, why do I have to have a WYSIWYG editor?

00:43:10.740 Why do I have to do the work?

00:43:11.980 Why do I have to be sitting here and do the work?

00:43:13.820 Just do it.

00:43:15.000 Like, just solve my churn or that part of my churn.

00:43:17.240 And then I'll take care of the other part

00:43:18.580 that's more complicated.

00:43:19.500 Just building my business.

00:43:20.280 Yeah, so I think the free thing is definitely a big deal.

00:43:22.860 But I think these function-based products

00:43:24.780 are going to get commoditized.

00:43:25.780 So do you think like an Amazon trying to disrupt itself

00:43:28.360 when they went from CDs to online,

00:43:30.820 SaaS companies should consider, how would somebody

00:43:34.320 disrupt our business model by providing a free version?

00:43:37.220 Yeah, like if I was HubSpot, I would start thinking about,

00:43:41.760 how do I blow up my entire marketing product?

00:43:45.700 And not in a way of like, that's going to be around for a while.

00:43:49.080 Like, database marketing, it got better with marketing

00:43:52.800 automation, but it kind of looks similar, right?

00:43:55.800 You just don't care about what's in your database anymore

00:43:57.960 like you used to because of cost.

00:43:59.680 But I think it's like, how can HubSpot start automating

00:44:03.060 some of these little things, right?

00:44:04.420 Yeah.

00:44:04.920 And you see this with, like,

00:44:05.480 So then it's, again, outcome-based.

00:44:06.480 I just use it.

00:44:07.260 I get the outcome.

00:44:08.040 Totally.

00:44:08.400 Like, lead flows, those sorts of things.

00:44:09.700 Asking me to configure this stuff and figure this stuff out,

00:44:11.320 it doesn't make sense.

00:44:12.200 And that's what was beautiful about, like,

00:44:14.040 Drip or ConvertKit, right?

00:44:16.080 Where it was like, hey, we're going

00:44:17.320 to get rid of all of this other stuff.

00:44:19.540 And we're just going to focus on this one thing.

00:44:21.880 Problem is that in order to grow,

00:44:23.340 you start focusing on lots of different things.

00:44:25.920 But with AI and machine learning,

00:44:27.460 which it's going to be a good decade or so

00:44:30.560 before that's even useful, because we're all

00:44:33.560 using the same models right now.

00:44:34.860 No one's innovating on the models right now.

00:44:36.700 You can't afford to.

00:44:37.600 Well, it's expensive.

00:44:38.980 And obviously, Google is going to come out

00:44:41.020 with something amazing, or Amazon is.

00:44:42.760 Or use our APIs.

00:44:43.500 Totally, exactly.

00:44:44.560 And then they'll tax us every call.

00:44:46.540 But I think that's what's really interesting is like,

00:44:48.420 just do it for me.

00:44:50.120 Like if you think about a Xevia subscription,

00:44:51.920 like that's the purest thing, right?

00:44:53.380 Because it's like, I know I'm going to need this much.

00:44:55.720 It's renewable.

00:44:56.140 It's probably not going to be an actual subscription.

00:44:57.640 That's the other thing.

00:44:58.300 I don't think you're going to charge a subscription

00:45:00.700 necessarily.

00:45:01.300 You're going to be charging recurring revenue.

00:45:03.380 So when you think about like Xevia,

00:45:05.560 your usage might go up or down depending on the month,

00:45:08.080 depending on where you're at, et cetera.

00:45:11.140 So what some of the coffee companies have done,

00:45:14.040 they give you a scale.

00:45:15.700 And then they measure how much is being used.

00:45:18.100 They know.

00:45:18.700 And then they prompt you immediately

00:45:20.200 when your usage is in danger of needing more coffee.

00:45:23.980 Yeah.

00:45:24.520 And so I think there's going to be a lot of that

00:45:26.360 where you're going to have recurring or predictable

00:45:28.780 revenue.

00:45:29.320 Because I've seen there was a guy, his name's Scott.

00:45:31.740 He's like an e-commerce.

00:45:33.880 He's got a podcast show.

00:45:35.440 He used to be in the management consultant.

00:45:37.000 I forget what it was called, but his name's Scott.

00:45:38.940 And he talked about Amazon essentially saying,

00:45:42.160 well, if we just sent you boxes of things we think you want.

00:45:44.920 Yeah, send back what you don't.

00:45:45.880 And then you send back what I don't.

00:45:47.760 And then I get smarter over time.

00:45:49.400 And big enough data set, you can look at neighborhoods

00:45:52.060 and be like, and then literally, I just

00:45:54.360 get better and better and better that when a box shows up,

00:45:56.940 you're like, I want it all.

00:45:58.360 Yeah, yeah, it's wild.

00:46:00.160 Yeah, I don't know if that, yeah.

00:46:01.360 I don't know how far away.

00:46:02.500 I mean, Amazon's literally, they have little trucks

00:46:05.940 driving around doing the prime near real time.

00:46:08.620 And then you get in a situation.

00:46:09.980 So if we raise, we're thinking of raising money,

00:46:14.060 and I don't think we're going to,

00:46:15.180 but if we raised a considerable amount of money,

00:46:16.920 where we had a five-year project we could work on

00:46:20.960 or something like that, I would hire as many statisticians

00:46:23.940 out of the Midwest as possible.

00:46:25.420 Because Target, all of these other companies,

00:46:27.380 I don't know if you read that story from Target

00:46:29.040 three, four years ago, where they started sending ads

00:46:33.300 to the house for pregnant moms. 1.00

00:46:36.720 And it was like a 17-year-old kid or whatever.

00:46:38.920 And the dad got really pissed, came into Target,

00:46:41.780 was like, how dare you send this?

00:46:43.000 And then all of a sudden, they knew, based on her shopping

00:46:45.460 habits, that she was pregnant, which is amazing to me.

00:46:49.060 I think people, they think, oh, that's really scary.

00:46:51.680 But it's like, what are you trying to do with a business?

00:46:54.980 You're trying to foster a relationship

00:46:57.520 that is an exchange of value.

00:46:59.580 And so as I get closer and closer to that customer,

00:47:02.080 I can have a better and better relationship.

00:47:04.120 Now, it's going to freak us out a little bit,

00:47:05.580 because it gets a little bit.

00:47:06.640 When it's done wrong, but edge case.

00:47:07.660 Totally.

00:47:08.260 And if it gets less opt-in, more opt-out,

00:47:12.640 That's going to freak us out a bit.

00:47:14.200 But that's what really gets interesting, right?

00:47:16.700 And that's where I think if you're just hiring a bunch

00:47:19.600 of the statisticians, and that's really

00:47:21.400 what Google at all have been doing,

00:47:24.280 that gets really interesting about what you can build,

00:47:26.680 or at least the foundation of what you have, basically.

00:47:29.920 So I don't know.

00:47:30.820 It's interesting.

00:47:31.320 I think in the subscription world,

00:47:32.680 because that relationship's baked so much into the revenue

00:47:35.560 or how you make money, I think it's

00:47:37.260 going to get really fascinating as to how far you take

00:47:41.020 that relationship with those customers.

00:47:42.460 How do you, I mean, the advice you give around pricing,

00:47:44.960 around, again, relationships, the more you build,

00:47:47.040 the more you can anticipate creating value for them.

00:47:50.400 And I think it was David Hauser recently

00:47:52.840 mentioned on stage, founder of Grasshopper and Chargify,

00:47:56.300 that you should increase your prices every six months.

00:47:58.500 You said it in your talk.

00:48:00.260 I mean, does that mean increased price, price test?

00:48:03.720 Unpack that, because everybody wanted

00:48:06.100 to run back to their dev teams and be like,

00:48:08.020 hark up the prices.

00:48:09.100 Yeah, I think that, like most advice,

00:48:11.500 it's situational, right?

00:48:13.280 And I think that you should be changing something

00:48:15.680 about your pricing every three to six months.

00:48:17.500 But that could mean value.

00:48:18.700 It could mean changing up your packaging,

00:48:20.620 changing up your target add-ons, making your value metric lower,

00:48:24.740 which is an effective price increase.

00:48:26.380 Like, if I give you six Zevia's a month for $10,

00:48:29.760 and then I'm going to give you four for $10,

00:48:31.740 it's a price increase, but it doesn't necessarily

00:48:33.400 feel like one.

00:48:34.600 Probably with a good, it does feel that way.

00:48:36.860 But with software, it typically doesn't.

00:48:39.280 And so I think that at a good pace,

00:48:43.600 you should be effectively raising your pricing

00:48:46.220 every six months.

00:48:46.920 I think the problem, though, is that a lot of us,

00:48:49.160 we're not innovating as much, or we're

00:48:50.640 in pretty competitive industries.

00:48:52.660 So let's imagine, as your product gets better,

00:48:54.840 your price should improve, because your price

00:48:56.220 is that exchange rate on the value that you're providing.

00:48:58.960 And so what ends up happening is if you increase that value,

00:49:02.680 you should capture some of that.

00:49:04.000 And you should train your customers to expect that.

00:49:06.500 Worst thing you can do is wait five, six years,

00:49:08.800 and then raise your price, you're

00:49:09.800 going to have a ton of people who are pissed off.

00:49:11.680 Yeah, just because people, I mean,

00:49:12.940 like Drip tried to do that recently,

00:49:14.860 and they didn't really communicate that well.

00:49:16.800 You know, recently you were doing a session for my group,

00:49:19.060 and you gave the advice to one of my clients.

00:49:22.600 He actually redesigned his whole pricing, thanks to you.

00:49:24.820 That's awesome.

00:49:25.440 From Structured Studios, shout it to Noah.

00:49:27.400 But because he pretty much, you know,

00:49:29.380 he's a category owner for their niche.

00:49:31.560 And he was worried he was going to grandfather everybody in.

00:49:34.420 And he said, hey, you know, that would be really dangerous,

00:49:37.480 because you can't increase your ARPU

00:49:38.740 if everybody's already your customer.

00:49:40.780 Totally.

00:49:41.200 And when you have market share, that's really dangerous.

00:49:43.720 And so the grandfather discount is what we recommend.

00:49:46.000 Hey, everyone, you've been so loyal.

00:49:47.440 You're amazing.

00:49:48.220 You've added a lot of value.

00:49:49.420 We're going to give you this price at a discount

00:49:52.580 for six months, 12 months.

00:49:54.560 Everyone else new is going to get the new price.

00:49:56.960 And then after six to 12 months, you're

00:49:58.300 going to get the new price, the price increase as well.

00:50:00.420 And that typically works really well.

00:50:01.520 But that's OK.

00:50:02.020 Yeah, six months.

00:50:02.720 But he was like going to.

00:50:03.760 Forever.

00:50:04.300 Forever.

00:50:04.800 Yeah, yeah, yeah.

00:50:05.540 It's just a bad idea, because it's really

00:50:08.160 great to do that when you're at 0 to 2.

00:50:11.000 It feels good.

00:50:12.000 Even 2 to 10, it's OK.

00:50:13.480 But after 10, and if you only start doing it after 10,

00:50:17.000 you're going to have a lot of struggle between 10 and 15,

00:50:19.380 because people are going to get aggravated with you.

00:50:21.620 You should just train people to pay for the value

00:50:24.380 that they're getting.

00:50:25.700 On a personal side, Patrick, as you kind of continue

00:50:29.280 to grow the business, who have you

00:50:31.580 had to become to build this business? 0.85

00:50:34.460 Yeah, terrible person.

00:50:36.020 No, I'm just kidding. 0.96

00:50:37.240 More ruthless.

00:50:38.560 No, you know what's funny?

00:50:39.600 I have, you know what's, it's interesting.

00:50:44.500 I have become, I don't know what the exact word is,

00:50:47.480 but like when you're in the zero to two like range,

00:50:50.940 and even the two to 10, like it's very frantic, right?

00:50:53.220 Because you're like, oh my God, if I don't do this,

00:50:54.840 everything's going to be terrible, right?

00:50:56.340 Oh, that person, that support request.

00:50:58.300 Yes, the thing they're saying is obvious.

00:51:00.400 Like we obviously should have it, but we don't, right?

00:51:02.940 there's all these things that just kind of like nitpick at you and like get in

00:51:06.500 get inside and like I don't think I handled that stage really well because

00:51:10.920 like I think I handled it well from a pragmatic standpoint because I just

00:51:14.700 would like put the team on my back all-nighters all that kind of stuff but I

00:51:18.820 don't think I handled it well from like a mindset standpoint and now I've gotten

00:51:24.240 into this world where I'm not patient from a pragmatic standpoint but I'm very

00:51:27.940 patient in conversations I've gotten a lot more patient my team would probably

00:51:31.500 say like that's not entirely true but it's not binary my wife would also say that totally yeah

00:51:36.220 but it's gotten um one of the biggest things that unlocked me was like really working on this

00:51:40.540 concept the most charitable interpretation principle so like you know let's say you say

00:51:45.140 something that like bothers me rubs me the wrong way frustrates me or it's like you say like half

00:51:50.720 of something and i just assume the second half normally what we do especially as entrepreneurs

00:51:54.740 we're so like type a or so like you know direct is we will just assume too much we'll get pissed

00:51:59.940 off we'll get aggravated we'll do something and then we'll like snap at someone be too direct

00:52:04.220 and I've gotten really good about like okay someone said something and then thinking in

00:52:08.120 the back of my mind okay this person like assume they're smart assume they're competent and assume 0.99

00:52:13.920 they have good intentions if you do that like they still might be an idiot or something like 0.97

00:52:18.740 that or that the thing they might be coming up with might just be ill-informed but you at least 0.97

00:52:22.460 won't get into the like secondary tertiary problems of like getting into an argument and if you've

00:52:27.140 ever gotten into a situation where like someone said something and then you start arguing with

00:52:30.880 them really aggressively like that's probably what happened and then yeah it's probably because

00:52:34.640 then you get to the end and you're like oh you meant this other thing yeah i agree with that

00:52:37.720 and you're like well you just went through like 15 minutes of like a terrible thing with someone

00:52:42.240 who's probably important to you on some level and like you now have repercussions because of that

00:52:47.020 right for that future conversation and so that's helped a lot and it doesn't mean you're like

00:52:51.320 nicer doesn't mean you're less like direct it just means you're a little

00:52:56.720 more patient with like before you're like hey that's a terrible idea like you

00:53:01.080 hear it out you understand it then you can talk through most charitable

00:53:05.240 interpretation principle yeah and it works out really well but anyway so that

00:53:09.380 I've become more like I don't want to use Zen because I'm definitely not Zen

00:53:13.940 but I've become more like like okay like I think it might be empathetic

00:53:19.160 Absolutely.

00:53:20.000 So when that stuff went down with the reviews on Twitter,

00:53:23.360 my first instinct was like, F you, blah, blah, blah.

00:53:25.580 But I didn't do that.

00:53:26.480 I was like, again, like I said, I was like,

00:53:28.220 I mean, these guys have been hurt by us

00:53:31.260 because we eat their lunch on certain levels.

00:53:34.760 We have people coming to us all the time

00:53:36.820 that are churning off of them.

00:53:39.040 And this looks fishy.

00:53:41.000 If I was in their shoes, I'd be pissed too, right?

00:53:43.180 And so it doesn't mean I'm any less competitive,

00:53:46.000 but it does mean I'm going to go, OK,

00:53:48.300 Let's not react to this.

00:53:50.460 Let's respond to this, find the truth, figure stuff out,

00:53:53.540 and then move on, right?

00:53:54.800 And it helps a lot.

00:53:56.600 It's helped my blood pressure and sleep

00:53:58.680 and all that kind of stuff a lot.

00:54:00.000 So I don't know if I've changed, necessarily,

00:54:02.120 but that's been a big piece that's

00:54:03.880 changed, if that makes sense.

00:54:04.920 Well, you're aware of it now.

00:54:05.860 So indirectly, if you can change the way you react, then.

00:54:08.860 Well, you know thyself, right?

00:54:10.060 I think one of the, it's kind of a terrible thing,

00:54:12.660 but one of the things that building a company forces you

00:54:14.840 to do is figure out who the hell you are. 0.56

00:54:16.340 I think it's a beautiful thing. 0.84

00:54:17.580 No, but it's horrible because it's like,

00:54:19.900 if you knew that before you started the company,

00:54:21.600 everything's great.

00:54:22.680 Like your third company, your fourth company,

00:54:24.480 it's awesome because you're like, cool,

00:54:26.160 I know my strengths, I know my weaknesses,

00:54:27.540 and just because of weaknesses doesn't mean it's bad.

00:54:29.480 It's just like, I've got to do something else, right?

00:54:31.740 And I think if you're doing that in the company,

00:54:34.800 there's a lot of collateral damage, right?

00:54:37.380 If you're learning as you do other people

00:54:40.340 on the receiving end of that growth.

00:54:42.660 And it wasn't like, so I had terrible friendships

00:54:45.180 Like, in the early days, my relationship.

00:54:48.120 In hindsight, it wasn't going to work out anyways.

00:54:49.980 But it was a seven-year relationship that definitely

00:54:52.420 did not end great because of the company.

00:54:54.480 And I take ownership, but it definitely

00:54:56.640 was exacerbated by the company and all that franticness.

00:55:00.340 Like, my health has gone terribly.

00:55:02.160 There's all these things that I had to pay for in order

00:55:04.560 to learn myself and know thyself.

00:55:07.620 And so I wouldn't go back and do it differently.

00:55:10.420 Like, with the knowledge I have now,

00:55:11.680 I'd obviously do it differently.

00:55:12.680 But to get that knowledge, I wouldn't trade anything.

00:55:15.160 Right?

00:55:15.960 But it's one of those things where it's like, we don't talk.

00:55:18.820 And this is why I admire what you've done with your kids

00:55:21.280 and stuff like that.

00:55:21.860 We've talked about that, where it's like,

00:55:23.620 you're kind of training them to learn themselves

00:55:25.780 and take ownership of their lives early on.

00:55:28.960 And it's not that my parents didn't do that,

00:55:30.920 but they didn't do it on the emotional side, especially.

00:55:33.400 100%.

00:55:34.000 And I think it's one of those things

00:55:35.680 where we could do better at that as parents and things

00:55:38.560 like that on an average basis.

00:55:40.540 Where do people find you online?

00:55:42.080 I know on Instagram you're Patacus. 1.00

00:55:43.900 Yeah, and Twitter Empaticus as well, childhood nickname.

00:55:47.200 And then just PC at ProfitWell.com.

00:55:49.340 I'm also pretty active on LinkedIn.

00:55:50.680 It's a crazy amount of people that have your email,

00:55:52.360 and you actually do reply to all of it.

00:55:53.980 I do reply to all of it.

00:55:55.060 I have a system, and it takes a while,

00:55:56.980 but I do reply to all of it.

00:55:58.580 Dude, you're a wealth of knowledge, man.

00:55:59.940 I really appreciate you being on here.

00:56:01.000 Good for hanging out, man.

00:56:01.820 Awesome, dude.

00:56:02.500 Thanks for watching this episode of Escape Velocity.

00:56:05.620 Be sure to like and subscribe and leave a comment

00:56:08.500 with your biggest insight from our conversation.

00:56:11.140 Be sure to check out the next episode.

00:56:13.900 You

Dan Martell - September 12, 2019

Raise Your Prices Effectively with Patrick @ ProfitWell.com - Escape Velocity Show #10

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