Dan Martell - The is what makes software companies so valuable.

00:00:00.000 first thing that we do as soon as we buy a company, put the prices up. Let's say they have

00:00:02.960 a thousand customers. There are some people that are willing to pay a lot more for a different

00:00:06.740 level of service. If you pay for Slack, they have this beautiful business model where you start very

00:00:11.700 cheap, sometimes free. A year later, all of a sudden you're paying 300 bucks a month for it.

00:00:15.180 You're like, whoa, what's happening? Well, you added more seats. You added this extra feature.

00:00:18.400 You wanted integration with this tool. So we're always looking for products that have not optimized

00:00:23.080 those areas of their business, but they have strong retention. Then I know how to come in

00:00:27.580 and fix the packaging, pricing, and what's called the value metric

00:00:30.460 to make sure that we increase the net revenue retention.

00:00:32.680 Because if we can go from net revenue retention of 80%

00:00:35.720 to a number that's gold standard is 130%, that is an annuity.

00:00:39.640 Every year that those same customers stick around,

00:00:42.100 even if some of them leave, the rest of them that stay spend more,

00:00:44.740 then over time, that's what makes software companies so valuable.

Dan Martell - December 10, 2023