Dan Martell - What It Takes To 20X Your SaaS in 1 Year with Ben @ Privy.com - Escape Velocity Show #24

00:00:00.000 I'm not an MBA or finance guy, right? So like CAC to LTV is like never going to be a metric that like

00:00:07.140 has me like excited, even though it's awesome. Yeah, right. Yeah. What really is going to get

00:00:12.480 me excited is when I take a step back and I'm like, holy shit, like there's businesses that 0.94

00:00:18.100 would cry if our software stopped working, you know, and like we've helped them quit their jobs 0.91

00:00:24.980 and build companies.

00:00:26.600 Admission sequence five.

00:00:28.640 Three, two, one.

00:00:39.800 Ben, thanks for coming on, man.

00:00:41.540 Dan, thanks for having me.

00:00:43.120 So one thing I want to get out of the gate with Privy, 0.85

00:00:46.780 you guys, how do you explain the tool?

00:00:50.540 Yeah, like explain the business and then we'll dive in.

00:00:53.260 Yeah, so simple.

00:00:54.980 marketing automation for e-commerce businesses so think about what HubSpot

00:01:00.300 and Marketo did for marketers on top of Salesforce we do for marketers on top of

00:01:05.500 Shopify and you guys just got in Inc 500 yes yeah we we've had a journey but the

00:01:11.640 last couple of years 100% plus growth year over yeah I think I read like 2,000

00:01:16.300 260 some percent growth you know 2017 to 2018 yeah yeah but what's crazy is and

00:01:23.500 you wrote about this on, I think it was Twitter,

00:01:26.200 you guys had $1,000 in the bank in 2015.

00:01:29.020 Yeah, total overnight success.

00:01:30.460 How does that, but you've been at it for eight years.

00:01:33.940 So what happened in 2015 that, how did you turn it around?

00:01:41.040 Was it a pivot?

00:01:41.660 Was it a restart?

00:01:42.980 So I feel like I started two companies

00:01:45.800 that have the same name, Privy.

00:01:48.560 Basically, when I first started through 2015,

00:01:51.440 we were going after brick-and-mortar retailers.

00:01:55.140 Wrong customer, wrong go-to-market.

00:01:57.520 We were trying to sell 12-month deals.

00:01:59.500 Was this like an iPad thing inside the store?

00:02:02.640 No, it was just kind of like...

00:02:04.060 So it wasn't like email capture?

00:02:04.900 Yeah, it was like a way for them to publish their offline offers

00:02:08.600 and just put those online so they could control it

00:02:11.540 and then measure the impact of their Facebook ads

00:02:14.420 or their website marketing, et cetera,

00:02:16.580 in terms of how many people walked in the store.

00:02:18.840 So it was like an offers platform for retailers.

00:02:21.440 and uh no free version we're trying to sell 12 month contracts total outbound play what would

00:02:28.420 an annual contract look like at that point um it might have been like six grand yeah six grand

00:02:34.020 we had some that were kind of like 30 yeah um we got to maybe 100,000 in annual revenue and just

00:02:40.680 kind of were you guys bootstrapped or funded uh we did a two million dollar seed round okay

00:02:45.580 in what year uh 2013 okay yeah so uh just kind of quickly saw uh the bank account diminishing

00:02:55.460 we felt like we had an interesting product and at the time everyone was talking about like

00:02:59.680 online to in-store attribution yeah it was like it's a big it was a real thing yeah and um it was

00:03:07.040 just a total yeah um and we were fortunate enough to be doing something interesting we got some

00:03:13.700 attention from some bigger businesses and i was just kind of like i don't see a path forward here

00:03:18.600 for us so let's just take one of these deals and sell the company which was exciting my wife had a 1.00

00:03:25.100 picture of me with like a signed term sheet and like at the time there was only like six or seven

00:03:30.200 of us in the company but we all knew what our jobs were going to be and all that um and a bunch of

00:03:36.640 things happened but ultimately the deal fell apart didn't sell it no you're telling me okay

00:03:40.720 You took a picture of a shrimp.

00:03:41.840 It wasn't a newspaper.

00:03:43.120 No.

00:03:43.700 OK.

00:03:43.960 I was like, can you imagine you go public and then it just falls apart?

00:03:48.020 Nope.

00:03:49.000 So yeah, it was like at the time I got a call that the deal was falling apart.

00:03:53.720 And I was sick to my stomach.

00:03:56.940 I couldn't believe it.

00:03:58.220 Had to go in and let everyone know that we basically only had six weeks of runway left.

00:04:04.980 The bank account.

00:04:06.100 Is there anything you could have done to save the deal?

00:04:08.660 or that you would do different going through it

00:04:11.020 to not cause the deal to fall apart?

00:04:13.180 Oh, my God.

00:04:14.860 I mean-

00:04:15.360 Like, was there other buyers that you could have said

00:04:17.300 that wouldn't have been so shady?

00:04:18.940 Totally.

00:04:19.440 Also, it's on me, right?

00:04:20.900 Like, first-time founder, that process,

00:04:25.480 I let the entire company get distracted with it.

00:04:28.760 It was a single, right?

00:04:31.820 But it was the type of deal that still required

00:04:34.900 required pretty much everyone in the company to engage with the buyer. And once that happened,

00:04:42.440 everyone just lost sight of what we're trying to do. And we didn't have much traction anyways. So

00:04:47.620 a lot of that falls on me. It sucked. But ultimately, I look back on that as like the 0.98

00:04:52.980 best thing that's ever happened. Six weeks of runway in the bank. Yep. Took it down to a thousand 0.99

00:04:57.680 bucks in the bank account. I have a screenshot somewhere of that. I'm like, you know, someday,

00:05:02.600 i hope i can laugh at this and now i can for sure yeah it was wild and what what did you have to do

00:05:10.100 so the so the pivot happened at that point or did it happen yeah i was kind of like in the back of

00:05:17.300 my mind i i always knew a byproduct of the product that we had built yeah like one of the core value

00:05:22.820 was uh for the one or two customers we had that sold online yeah they were like hey this offers

00:05:29.580 thing is great attributions cool i guess but like i've never grown my email list this quickly

00:05:34.380 and um i was just a little bit gun shy on that as the core value prop and did you feel it was

00:05:43.760 too simple yeah yeah i was like isn't that funny sometimes the thing that but that's not a big

00:05:49.300 that's not the thing yeah and like also crayola some of us on the team were like a little bit

00:05:55.500 Like, really?

00:05:56.140 We're going to do, like, email? 0.96

00:05:58.740 And I was like, I fucking love email. 0.75

00:06:01.420 I don't know if I can swear. 0.96

00:06:02.160 You can swear, man.

00:06:03.700 And, like, that's really cool. 1.00

00:06:05.360 He said, God damn. 0.99

00:06:05.840 We just had, he's like, oh, gosh. 1.00

00:06:07.720 What did he say? 0.99

00:06:08.480 Darn it or something. 0.99

00:06:09.200 He's like, sorry for swearing. 0.99

00:06:10.520 I was like, I wasn't swearing, man.

00:06:14.060 So, yeah, it was just, like, a little bit shy.

00:06:16.300 But in the back of my mind, I knew that, like, there was something there.

00:06:20.280 Yeah.

00:06:20.880 Spent time with our retailers that ended up selling online.

00:06:23.920 and they were like this is the greatest thing ever and so i asked a handful of them if they'd

00:06:28.360 pay for the year up front essentially to fund the three of us that wanted to stick around and

00:06:33.440 kind of try this again but like change everything that wasn't working really yeah that's cool and

00:06:40.280 and with i mean obviously e-commerce has exploded shopify you know and just like everything's

00:06:46.560 moving the retailers are definitely on it's a you know bad trend for them um was it just was

00:06:52.240 a right time in the market as well like did you feel like you caught yeah there was momentum a

00:06:58.000 few things i think we we did well one of them was timing right so when we pivoted the company uh it

00:07:04.720 was just all about that wedge and we felt like you know with shopify's growth big commerce magento

00:07:11.360 etc there were like incumbent esps that were solid for e-commerce but none of them offered great

00:07:18.080 growth tools and so um you know at the time i actually thought we were late to the shopify

00:07:24.500 ecosystem turns out we were still pretty early yeah and so there were a lot of benefits there

00:07:29.420 but then you know as we evolved the company we started focusing on things that no other vendors

00:07:35.720 in this space really do like support and live chat for free users trainings for free users

00:07:42.660 In a world where all SaaS vendors try to move upstream, in the SMB world especially, we felt like we could really do something different at the lower end of the market.

00:07:53.680 And that's worked well for us inside of the Shopify users.

00:07:56.460 One thing I would love to get your perspective on is the free tools, like the list growth tools.

00:08:02.060 Because people always talk about, call it the splintering strategy or the app marketing strategy.

00:08:09.420 but building i call them expensive lead magnets but like did you guys it was that the strategy

00:08:14.940 like hey let's give away these things to create top of funnel and then monetize inside yeah so

00:08:20.700 at the time when we were rebuilding it was myself and uh five developers grew a little bit by that

00:08:28.200 point but um for i'd say three years all we did was sit in a room and the developers were building

00:08:35.980 out new integrations so that we could get listings inside of app stores so shopify all the e-commerce

00:08:42.600 players wix weebly etc and then all the esps and what we found and meanwhile all i was doing was

00:08:50.100 live chat support so same core product solution but just more integration so you can introduce

00:08:55.160 yourself to different markets and every integration we built we'd get a listing

00:08:59.020 and some of those would be complete flops if there wasn't an engaged ecosystem yeah but it 1.00

00:09:05.180 would still help from a retention perspective if we got someone using you know a tier two esp

00:09:10.700 it was still valuable to have that integration for the user so we found you know a handful of

00:09:17.140 these integrations understood where we sat and that we could drive a lot of revenue for them

00:09:23.180 based on contact pricing yeah and we'd add a lot of value for shared users so they'd promote the

00:09:29.160 hell out of us and it was just like a really symbiotic relationship for for everyone involved

00:09:35.740 and we even today as we've grown you know to 60 people plus um approaching 8 million ARR

00:09:44.820 our CAC is like incredibly low so because of those free tools yeah because of the free tools

00:09:51.320 because of the integrations the marketplaces all of that yeah so you did the stuff that was going

00:09:56.520 to take some time, it's a bit long game,

00:09:58.520 but you're building a moat that's really tough to get into.

00:10:02.440 Yeah.

00:10:03.060 I mean, we're now at a point where we'll

00:10:04.920 add over 10,000 new stores a month.

00:10:07.340 Wow.

00:10:08.340 Yeah.

00:10:08.760 Without any paid.

00:10:09.880 Escape velocity, man.

00:10:10.800 Yeah, it's cool.

00:10:11.640 I'm having a lot of fun.

00:10:12.580 Yeah.

00:10:13.000 But the reason that works is because we're

00:10:17.760 willing to do the stuff that no one else will do, right?

00:10:20.300 MailChimp increases prices and moves

00:10:22.400 their support to higher tiers.

00:10:24.660 Other companies, you can't even talk to a human

00:10:27.080 for less than 1,000 a month.

00:10:28.940 And we're spending our time live chat with free users,

00:10:32.200 which can be incredibly frustrating.

00:10:34.060 But for us, it's kind of the only thing

00:10:37.980 that differentiates in a world

00:10:40.140 where all features look the same.

00:10:41.720 Yeah, when the tools look similar

00:10:43.620 because they're all solving the problem

00:10:44.880 the way it should be solved.

00:10:46.600 So how do you scale that?

00:10:48.240 How do you scale the differentiator?

00:10:49.960 What have you learned about, does everybody do support?

00:10:54.120 Do you guys build a great knowledge base?

00:10:56.220 How do you scale live chat?

00:10:59.060 Yeah.

00:10:59.540 Any tricks?

00:11:01.360 Yeah, just great docs, great how-tos, great video guides.

00:11:08.120 A fantastic, easy-to-use product is what I would say is pretty critical,

00:11:12.240 that in a matter of minutes or less, a couple clicks,

00:11:17.620 that merchant of ours, our users, can see the right value,

00:11:21.280 have that aha moment.

00:11:22.340 And what helped that is our integrations, right?

00:11:26.140 What helps that for us is also like our default campaigns that are live

00:11:30.480 the moment you install the software.

00:11:32.620 So there's live campaigns ready to go as soon as you connect everything.

00:11:36.420 Yeah.

00:11:37.620 So they don't have to do any work.

00:11:39.060 It's click, click.

00:11:39.780 Yeah.

00:11:40.200 I mean, they can tweak to make it look like their brand and stuff,

00:11:43.100 but even that's something that we could knock off the to-do for them.

00:11:46.440 Really?

00:11:47.440 Yeah.

00:11:48.400 So you'll actually go in and do that.

00:11:50.100 Will you surprise them?

00:11:50.900 I mean, automate it.

00:11:51.500 Automate it.

00:11:52.340 Yeah, just pull it in.

00:11:53.160 Because if we have your store, we know your brand colors,

00:11:55.820 your logo, your CSS, we should be

00:11:58.460 able to take our default list growth campaign

00:12:01.680 or cart abandonment email and turn that into something

00:12:04.460 that looks like your store.

00:12:05.660 That's really cool.

00:12:06.740 Yeah.

00:12:07.340 And what have you done culture-wise

00:12:08.840 to kind of enable that with the team?

00:12:12.040 Do you guys do anything that's unique that?

00:12:14.320 Like the support stuff?

00:12:15.620 Yeah, and just for the team, because obviously it's

00:12:17.600 a very customer-centric focus.

00:12:20.860 Yeah, I mean, I think it helps that there was a period where all I did was the live chat support and saw that benefit firsthand.

00:12:29.900 Because I think a lot of, like, founders and CEOs just immediately outsource support.

00:12:34.540 And they're like, I don't want to deal with this or it's hard to talk to customers.

00:12:37.740 And it is.

00:12:39.160 But, you know, we've hired our success and support team.

00:12:44.280 A lot of them actually come from constant contact where we found there's just incredible training programs.

00:12:50.860 um that people are used to live chat or ticketing for users that aren't that tech savvy yeah so

00:13:00.020 patience is like key and um you know that paired with the fact that that i used to do it and we

00:13:07.600 have a culture around like our success is tied to our customer success and uh and the training stuff

00:13:13.880 I think is what makes it all work.

00:13:17.140 But it would be really easy to save costs

00:13:19.380 and not invest in support.

00:13:21.640 Totally.

00:13:22.880 But not the right thing for our business.

00:13:24.060 And because you're in Boston,

00:13:25.980 and I was talking to somebody yesterday

00:13:27.540 about the cultural impact of employees from the company.

00:13:31.640 So one guy is like,

00:13:32.940 I can't hire people from HubSpot

00:13:34.320 because when they come in,

00:13:35.180 they're like, HubSpot lets us do everything.

00:13:37.300 And it's like, we don't have their bank account.

00:13:40.520 You know what I mean?

00:13:41.380 And it sounds like constant contact

00:13:43.820 has really built a great culture of, and the VSB.

00:13:47.740 I remember meeting with Gail and she's like,

00:13:49.380 yeah, there's SMB and then there's VSB.

00:13:51.520 Totally.

00:13:52.300 And the main street, that's our customers.

00:13:55.740 And the salon owner that cuts hair 0.89

00:13:58.740 and has to run her business, it's a different.

00:14:01.220 So did you feel like having constant contact

00:14:04.320 in your ecosystem to be able to pull from

00:14:06.820 was important for the customer segment you guys serve?

00:14:10.280 Yeah, I mean, I don't know the exact numbers anymore,

00:14:13.580 but I think like over a third of our company

00:14:17.120 has spent time at Constant Contact.

00:14:19.760 Certainly half of our company has spent time

00:14:22.320 at Constant Contact or HubSpot or Klaviyo.

00:14:26.780 And so having those companies here

00:14:29.300 that are further along in their journey

00:14:31.360 but have different perspectives

00:14:33.120 on what small business software looks like

00:14:36.940 has been critical.

00:14:39.140 It's also where the majority of our leadership team

00:14:42.300 comes from as well.

00:14:43.580 and what have you had to like figure out along the way obviously getting to 60 um you know in

00:14:50.740 regards to the way you structured the team or um the way you've invested in growth like how do you

00:14:57.740 how did you kind of come back from like because there's this mindset of like and i've been there

00:15:03.480 you raise a couple million bucks you're like cool we're building innovation then you get humbled a

00:15:08.620 little bit and then you got to come up but you sometimes have a little scar tissue right so it's

00:15:14.020 like how did you have to like what were those inflection points or those those those moments

00:15:18.260 along that journey uh for you to kind of like be okay grow like scaling faster yeah it's funny we

00:15:25.680 um when we hunkered down after the deal fell apart and all that stuff

00:15:30.960 we raised a little bit of money as we saw success with this new idea from uh a good friend

00:15:38.160 now mike volpe also board member cmo pubspot great dude um and even though we raised money

00:15:45.660 on the second iteration we treated the company like we had a thousand dollars in the bank account

00:15:50.600 and i think for a two-year period that was incredibly healthy because it meant we were

00:15:56.120 focused on the right things and growing the company you know in a cash flow positive manner

00:16:01.060 and then as i saw like that our wedge into the market was working it really became clear that

00:16:10.200 there was a much bigger opportunity here you know we had users all over the world like clamoring for

00:16:16.680 the product upgrading without talking to us and i was like wow we actually we could be something

00:16:21.700 much bigger and that was where i realized okay i've never seen this next phase of growth like i

00:16:28.600 need people around me a leadership team that have seen you know 2 million to 50 million right and

00:16:36.740 that's where the local ecosystem having people like volpe on the board having accomplice um our

00:16:44.600 our main investor involved was critical because it helps me balance my like hunker down in a room

00:16:52.720 mentality with, hey, you actually need to invest in the business to see the kind of growth and

00:16:59.480 product development that I wanted to see. And so finding that balance and finding a board that

00:17:06.600 understands that we want to kind of be cash efficient, yet grow the business has been

00:17:11.520 critical. And that's like the transition from being kind of like defensive versus

00:17:16.320 Like leaning into it heels to toe on the growth side.

00:17:21.880 I mean, you mentioned Mike and a few other smart people.

00:17:25.480 Like how do you learn best?

00:17:27.920 Like when you've had these moments, what's your go-to or how do you get through them?

00:17:33.940 Yeah.

00:17:35.040 I mean, that's a good question.

00:17:37.820 I think so much of this as a founder is confidence, honestly.

00:17:43.460 We're fortunate enough to have incredible economics,

00:17:47.560 incredible growth, and believe it or not,

00:17:51.940 there's a lot of times where I'm looking at our numbers regularly.

00:17:55.860 I'm like, is this good?

00:17:57.000 I just have no idea if this is good. 0.98

00:17:58.960 And that's kind of pathetic, right,

00:18:00.220 given the amount of content out there around SaaS and benchmarks. 0.80

00:18:03.680 So I find, for me, the time I spend with an advisor or a board member

00:18:10.500 or my wife right who's really a co-founder but not actually um not talking about the numbers

00:18:19.460 and thinking about the impact that we're having for our customers our employees and their

00:18:24.780 livelihoods um and just like taking that step back i find is when i'm able to reboot confidence

00:18:32.860 and understand that like i'm actually a pretty good ceo you know when you just as a founder

00:18:41.620 you always have your doubts yeah that that um it's people yeah so you you reframe it instead

00:18:48.060 of looking at like the business metrics you look at like the impact of the customer the impact of

00:18:53.860 the team and that's where you're like now we're doing some cool stuff here yeah like i'm not an

00:18:59.060 MBA or finance guy, right?

00:19:00.740 So, like, CAC to LTV is, like, never going to be a metric

00:19:04.960 that, like, has me, like, going like this,

00:19:07.700 even though it's awesome, right?

00:19:09.740 What really is going to get me excited 0.99

00:19:11.580 is when I take a step back and I'm like, holy shit. 0.98

00:19:13.880 Like, there's businesses that would cry 0.97

00:19:18.740 if our software stopped working, you know?

00:19:20.900 And, like, we've helped them quit their jobs

00:19:23.500 and build companies, right?

00:19:25.520 Or the 60 people that work at Privy and their families,

00:19:28.940 That's the type of stuff that really motivates me

00:19:31.960 and gives me the confidence to continue acting on our vision.

00:19:36.340 That's really cool.

00:19:37.240 And what books do you, like, are you an avid reader?

00:19:39.680 What's the-

00:19:40.380 Getting more into it.

00:19:41.560 Yeah.

00:19:42.800 Recently just read Behind the Cloud by B. Neon.

00:19:45.560 Yeah, it's like a must if you're SaaS founder.

00:19:47.580 Freaking amazing.

00:19:48.920 Yeah.

00:19:49.420 Actually, just kicking off a couple chapters into Reboot.

00:19:54.220 Jerry Colon, I don't know if you read that.

00:19:55.700 Jerry's awesome.

00:19:56.900 Really loving that.

00:19:58.060 If you ever meet him, watch out, he'll make you cry.

00:20:01.000 He will.

00:20:01.660 He has a superpower.

00:20:02.660 Yeah, I believe that.

00:20:03.900 Yeah.

00:20:05.300 So yeah, I'm not an avid, avid reader,

00:20:08.780 but trying to get more into it.

00:20:10.280 And so your process is more just talking to people

00:20:12.620 and kind of like getting it out, looking at it objectively

00:20:15.560 and get through it.

00:20:17.220 Support network and leadership team

00:20:19.320 and people in the company.

00:20:21.280 And how do you recruit that leadership team?

00:20:22.980 How did you, you know?

00:20:24.680 every time it's changing now that we've grown but i feel like i had done every role for a period of

00:20:34.080 time cool even hiring yeah right paperwork payroll all that stuff like and so or sales or marketing

00:20:41.900 or cs right so by having done that role at least for a couple months i get a really good feel for

00:20:50.780 what it is and like how i'm doing a mediocre job and what a profile of someone would look like who

00:20:59.020 can do a better job and there's a lot of unique things about our business it's high velocity

00:21:04.980 small business freemium right so i think like where i can find the intersection of those things

00:21:12.620 with the job that i was just doing i feel like that's a good fit but um you know again just like

00:21:20.080 prospecting people that fit the bill as opposed to just like waiting for the application so you'll

00:21:28.200 actually say okay in our growth plan i need to fill these roles let me just start putting some

00:21:33.780 feelers out like beforehand just to i'll build a list on linkedin of people that are in boston or

00:21:40.820 even remote i'll reach out to them i'll get on the phone or take a coffee and you know see if it's a

00:21:49.040 good fit that to me is what a good ceo does right they build the team the team builds a business

00:21:53.320 that is like over the last three years that's kind of all i've been doing you know like i

00:21:59.740 in a for a good reason i can't execute marketing anymore i can't like be in support and you know

00:22:07.060 there's new tools that i'm not familiar with and stuff so all i'm doing is really reaching out to

00:22:12.920 people to try to get them to join our company yeah and so you'll take them out for coffee

00:22:17.520 do you what's your what's the essence of the conversation like how do you do you have a

00:22:23.140 it's to the tune of like you go to them with a big problem like are you are you saying like hey

00:22:30.700 we're hiring we'd love to meet or do you say like hey man i heard you're really smart no it's it's

00:22:35.840 kind of like hey we're growing rapidly um the impact we're having on you know small business

00:22:41.920 globally is massive and for the last x months i've been executing this role and like it's time

00:22:50.500 for me to bring in a leader who can completely own this and build out the team down the road

00:22:56.260 and uh every every one of the leaders on the team is player coach right so if i'm bringing in a head

00:23:03.640 of people then he or she needs to be able to do all the work themselves but also lay the strategy

00:23:10.120 and, you know.

00:23:11.760 Build out the systems.

00:23:12.940 Exactly.

00:23:13.660 So I find that, you know,

00:23:16.800 there's a certain level that wants to do that.

00:23:19.400 And I think the beauty of where we are

00:23:21.140 is even at 60 people,

00:23:22.940 we're still a small company

00:23:25.600 compared to where some of these people are coming from.

00:23:28.280 So they recognize there's something rare

00:23:30.820 where usually when you join a small company,

00:23:33.520 there's risk of them going out of business

00:23:35.120 or like puttering to nowhere.

00:23:37.860 But, you know, we're kind of-

00:23:39.420 It's a good inflection point.

00:23:40.740 It's small enough, but it's got enough there

00:23:42.620 and they can grow into the organization.

00:23:46.200 Exactly.

00:23:46.980 Yeah, so it's a good bet for them.

00:23:49.980 What do you think is going to be your next level?

00:23:53.580 Like, what does Ben need to overcome to kind of continue?

00:23:58.080 Because it's interesting.

00:23:59.640 I see it often with the venture-backed companies

00:24:01.420 that where it's a joke.

00:24:03.940 It's like, I get to keep my job.

00:24:05.760 But just personally, I think there's

00:24:07.260 always like asking yourself like what's the next level for me um what do you think that is for you

00:24:13.720 like what are the skills that you're looking to develop you know obviously you read these books

00:24:18.600 what's the the big change for me as we grow and now like we're 60 i can see us getting to you know

00:24:29.240 150 200 right so just anticipating what my job looks like in that path is very different from

00:24:38.380 where we were before and really means that i need to become a manager and a leader as opposed to a

00:24:46.620 founder so how do you differentiate those two founder is just like you got to be scrappy as

00:24:53.580 do whatever it takes to get it off the floor.

00:24:57.880 Very reactive.

00:24:59.460 Totally.

00:25:00.300 And hand in everything.

00:25:02.700 Leader, CEO, manager is more about recruiting,

00:25:09.480 motivating, communicating across the company,

00:25:14.580 sharing a vision that is clear

00:25:17.320 so that everyone understands the context

00:25:20.520 and bringing in just incredible people to run each division and team and all that.

00:25:26.700 So I think it's a big transition for me because it was hard for me to see past our original acquisition offer.

00:25:37.760 It was hard for me to say, oh, this could be a billion-dollar company someday.

00:25:42.840 And now that we're kind of on that trajectory, there's just very real transitions that I need to go through.

00:25:50.360 doing that yeah what do you like how do you guys lead like in regards to cadence meeting cadences

00:25:56.440 tools for communication what does that look like inside pervy yeah it's evolving quickly yeah so

00:26:04.460 slack we used to do like this all company once a month meeting where i'd have every department

00:26:13.600 head share their numbers yeah like in all hands yeah like in all hands and it just felt like

00:26:18.400 overkill because people already knew the numbers um i think like a lot of people were just a little

00:26:24.200 bored honestly um which was interesting because like people are hungry for transparency and we

00:26:29.780 run a transparent company but so we're switching that so every friday now um we kind of cycle

00:26:35.680 through a department and then do like a show and tell like here's what our marketing's working on

00:26:40.300 this week here's some of the numbers that we're focused on challenges etc um and then i do a

00:26:46.800 weekly email now uh this week at privy to the entire company where it's almost like a blog

00:26:52.000 post about like what's happening some shout outs um some of the numbers um how long have you been

00:26:58.240 doing that a month okay like i'm talking all this is new i just started a monthly internal only

00:27:06.280 podcast where i go back to that format of like company performance less about cross team and

00:27:13.040 more about like arr growth runway burn sas metrics and is it just you sharing your thoughts on these

00:27:20.300 things it's me actually walking through the deck that like i'd share at the board level yeah and

00:27:26.920 post that in our wiki okay and i do a voiceover to kind of bring it down so that everyone in the

00:27:33.080 company can understand yeah uh and then i send that out to the entire company and that history

00:27:39.060 is there so that's relatively new been getting a lot of positive feedback on that and then we

00:27:44.660 move to a once a quarter all hands where we bring in food and drinks and it's like me presenting

00:27:51.140 um q a all that stuff and then what about like meeting strategy what is you guys do quarterly

00:27:58.500 off sites or anything like that or what's your some of the teams are starting to do that

00:28:03.180 individually you know i haven't done that yet i haven't um and then one-on-ones do you do yeah i

00:28:11.040 meet so we've got a management meeting every monday morning yeah look at the numbers how

00:28:15.700 we're doing towards goal and that's your executive leadership team essentially yep yeah and what are

00:28:20.500 the departments that you guys have you mentioned marketing sales customer success which owns

00:28:26.360 support and account management.

00:28:29.260 Always a debate.

00:28:30.120 And training.

00:28:31.340 And then partnerships, engineering, people.

00:28:36.740 Yeah.

00:28:37.320 And when did the people come in?

00:28:40.360 Jen came in. 1.00

00:28:43.000 I love this called people, not HR.

00:28:44.960 Like, you know, the head of people.

00:28:46.940 It's just like, that's good.

00:28:47.980 I like it.

00:28:48.320 People and talent.

00:28:50.300 She came in at 30.

00:28:55.540 OK.

00:28:56.380 And before Jen, when we had a new hire starting,

00:29:00.520 I was like, all right, I'll just come in early that morning.

00:29:02.780 I'll print out some papers, and we'll figure it out.

00:29:05.560 Onward them.

00:29:06.520 Yeah.

00:29:08.620 What did Jen do? 1.00

00:29:11.740 Built a five-star candidate experience.

00:29:15.500 Whether you're going to get a screening call or not,

00:29:17.440 you're going to get a response from Privy

00:29:20.220 the entire experience.

00:29:21.700 So even if you apply and don't get moved forward,

00:29:24.300 You're going to get no.

00:29:25.380 You're going to hear from us.

00:29:26.920 Do you know what that language sounds like?

00:29:28.840 I don't know.

00:29:29.580 I would love.

00:29:30.380 I've never seen it.

00:29:31.400 Yeah, because I just want to, like, I have that same problem.

00:29:33.540 You should apply for a job.

00:29:34.060 I should.

00:29:34.740 I'd be like, Jen, say no to me.

00:29:37.300 Yeah.

00:29:38.980 But, and then, like, even from the moment they walk in, we have, like, you know, for the final round, we have, like, the agenda of who they're meeting with and their role and, like, just try to create an incredible experience.

00:29:51.120 and then proper onboarding right so there's some like training yeah hr stuff but not much it's

00:29:59.300 pretty casual around that vision meet with me meet with each department head i go through the core

00:30:05.800 values the mission uh a little bit of an introduction to e-commerce if they're not

00:30:11.260 familiar with it um we've got a buddies program that's so key so like somebody told me if you

00:30:17.760 don't make a buddy in the first like two weeks you're going to be bouncing in six months oh that's

00:30:22.300 interesting yeah because essentially you just you think to yourself i took the wrong job interesting

00:30:27.920 yeah like if and and you get like you can deliberately assign somebody a buddy which

00:30:32.520 is what we do yeah so that way it's like they'll take you out for lunch they'll integrate you with

00:30:36.140 team because if you don't build that and you just come in and just start cranking it's easy to get

00:30:39.860 lost and then you start looking i believe it yeah it's a big one believe that yeah so that's been

00:30:44.940 cool so jen came in and just built out this five-star candidate experience yeah it's amazing

00:30:49.260 so jealous but that's where it's at it's huge yeah if you're scaling and it's a people thing

00:30:54.900 you need somebody dedicated to talent um and so you guys do that every monday to kick off the week

00:31:02.160 kind of review the previous um and then they do they then go off and do their own team meetings

00:31:08.000 Yeah, everyone has, like, a team, you know, either stand-up or kind of metrics review.

00:31:14.780 So at this scale, how many scheduled meetings on a weekly basis would you have, like, recurring?

00:31:20.100 I just really have the management and then my one-on-ones with direct reports.

00:31:27.160 So that's, like, six right there.

00:31:29.800 Do you have a high-level kind of flow for your one-on-ones?

00:31:32.300 um just i bring personal notes to the table on like what i'm seeing from that person seeing yeah

00:31:41.520 um any like ideas that i have that i want to get to them and uh they bring their own agenda to the

00:31:49.460 table so if there's no agenda then we might just cancel it that week but try not to go you know

00:31:54.600 and have you what have you learned about like having to work through those leaders to get

00:31:58.380 stuff done versus going direct.

00:31:59.940 Because, I mean, as CEO, you got to watch out.

00:32:01.620 Because when you say something to the wrong person,

00:32:03.720 they'll change.

00:32:05.500 They're like, oh, this is what Ben told me.

00:32:07.740 Ben said this at the water cooler.

00:32:10.200 I was just talking out loud.

00:32:11.880 And all of a sudden, they.

00:32:13.080 We should launch this feature.

00:32:14.340 Yeah, yeah, yeah.

00:32:15.360 So what have you, like, has that been hard for you?

00:32:17.280 Or just like, as you brought in great people,

00:32:19.020 you're like, hey, I'm not going to try to tell you how to,

00:32:21.120 like, here are some ideas.

00:32:22.980 I try not to do that.

00:32:24.320 Yeah.

00:32:24.620 You know, like I, if I have those ideas,

00:32:27.380 I try to keep them to myself until I'm, like, sitting down with the leader of the team.

00:32:33.440 And there's definitely times where I'm like, oh, hey, Ted, who runs sales, like, let's sit down with Alex, one of the sales managers.

00:32:41.220 I have these ideas, but I'll let the two of them chat before.

00:32:45.060 Okay, cool.

00:32:45.400 So they're prepared for that meeting.

00:32:48.600 Okay, so you'll let Ted know, the sales manager, hey, I have these ideas for Alex.

00:32:54.020 you guys talk if you want

00:32:56.100 but let's all three sit down

00:32:57.640 because here's what I want to review

00:32:58.900 so that way Ted has an opportunity

00:33:01.200 to kind of socialize the idea

00:33:02.500 and Alex has time to prepare for the meeting

00:33:05.340 and get some numbers in order

00:33:06.800 and different things like that

00:33:07.880 so that's definitely

00:33:09.140 that happens a lot

00:33:10.800 where there's like some skip level stuff

00:33:12.880 because ultimately I think

00:33:15.260 people want to see that

00:33:17.020 I'm involved

00:33:18.800 and I still think that

00:33:21.040 even though I need to focus on

00:33:22.940 some of the bigger picture stuff recruiting and leadership you know i still have a lot of influence

00:33:30.260 and visibility and i like to do things yeah as a founder especially the guy that did everything

00:33:37.160 right yeah so you know if i'm excited about something i want to make sure that the right

00:33:42.580 people are there and we chat about it and the way the business model works you get 10 000 signups

00:33:47.840 and then do you guys kind of like qualify them in some way

00:33:51.760 to then decide who's going to talk to

00:33:53.580 or the SDR is going to figure that out

00:33:55.460 and then account exec and pretty traditional sales process?

00:34:00.360 It's a little bit different.

00:34:01.280 A little bit different.

00:34:02.080 So we'll get 10,000 new stores in a month.

00:34:06.100 We'll immediately on the first day look at them automatically.

00:34:11.280 We'll look at their traffic, their revenue, their tech stack.

00:34:14.520 You get a lot because you're integrated into their platforms.

00:34:17.740 Yep.

00:34:18.160 Their contact count, right?

00:34:20.000 And we'll assign a portion of those to the sales team

00:34:24.060 and a portion of them to just self-service.

00:34:28.840 And we look at our businesses, the freemium, the self-service,

00:34:34.960 all of that fuels a sales team.

00:34:39.300 So that actually gives me an interesting idea.

00:34:41.360 So some products, it might make sense to create a free tool

00:34:44.140 that integrates into the platform

00:34:46.240 so that you can pre-qualify

00:34:48.880 without asking people to fill out a whole form.

00:34:51.760 Totally.

00:34:51.820 Because you're even getting their customer contact info.

00:34:55.680 Yes.

00:34:56.180 Yeah, so I mean, there's a lot of inference

00:34:57.900 you can make from that.

00:34:58.840 Totally.

00:34:59.580 Yeah, how many contacts, average order value,

00:35:02.640 revenue through their store.

00:35:04.380 There's a lot.

00:35:05.560 Jeez.

00:35:06.340 Yeah, and we look at our SaaS metrics,

00:35:10.700 free-to-paid, CAC to LTV,

00:35:13.040 segmented. Are you guys credit card on file

00:35:16.040 trial? It depends

00:35:18.520 which storefront they come

00:35:20.320 in through.

00:35:21.980 For BigCommerce, Magento, etc.,

00:35:24.520 it's credit card.

00:35:26.740 For Shopify, we actually

00:35:28.480 integrated into their billing system,

00:35:30.260 Shopify Billing, so that a merchant

00:35:32.120 can just, if they want to

00:35:34.100 add a premium version of Privy,

00:35:36.160 they can just add it to their Shopify bill.

00:35:37.640 Same thing, just different.

00:35:40.680 We look at

00:35:42.280 our metrics and free to paid, uh, on a per segment basis being self-serve direct sales,

00:35:50.020 blended, et cetera. Yeah. And then do you have, do you don't, what are your channels? Do you do

00:35:54.080 outbound at all or for some of the mid tier? No, everything's inbound. Feed the salespeople.

00:35:59.460 Is there an SDR AE or just straight to the account exec? Um, we are experimenting with

00:36:05.380 what we're calling like an inbound bdr it's kind of the worst title ever but um for our smaller

00:36:13.140 business segment that looks more like very small business yeah um who come into chat and are asking

00:36:19.260 questions about premium features we'll get on the phone and they'll close a single call you know 20

00:36:25.780 30 40 bucks something like that so it's a closing rule yeah um but it's a high starts with the chat

00:36:31.620 yeah high velocity yeah like they may close 100 deals in a month yeah but it's like queued up

00:36:37.780 they're there anyways sometimes people just want to talk to somebody totally and they're uh we see

00:36:42.580 it a lot in reviews they're like oh we talked to you know gg or will to the folks we have in these

00:36:48.760 roles and they're like it was the best support experience i've ever had you know and it's like

00:36:53.520 that's part of it is it's a brand play it's like we know that you want to serve to a human

00:36:59.640 you're going to have better retention here and so let's just talk to everyone that we can that

00:37:05.760 wants to talk to us is that something you saw in the data when you looked at retention and oh yeah

00:37:10.300 yeah so we look at when a human's involved we have uh net retention of mrr over 100 wow which

00:37:18.420 for smb is huge huge um and where we don't um it's a little bit it's not that it's not important but

00:37:27.160 it's it's less important to us because it really just fuels the sales team but um it's still high

00:37:32.980 it's like 98 yeah but you know i'll take over 100 all day dude that's amazing they're just more

00:37:40.080 qualified yeah they understand the full breadth of the platform and uh they're gonna buy or not

00:37:46.400 after that conversation yeah um ben as you look back uh over the you know years eight years now

00:37:53.820 you've been at it something like that yeah who did you need to become to be the ceo sitting here

00:38:00.300 today running a 80 you know going to be 80 person company this year and i think i needed to go out

00:38:07.640 of business you know like i'm a big believer in fate and i don't think i could be who i am today

00:38:17.240 or Privy could be who it is today

00:38:19.700 without having gone through that near-death experience.

00:38:25.860 Truly.

00:38:27.240 Because as a first-time founder, I was super naive.

00:38:31.940 I was doing all the right things

00:38:33.840 because I just felt like what you do

00:38:36.800 is you do what you need to do to raise a round of funding.

00:38:41.820 And that near-death experience taught me

00:38:45.540 that had I just been closer to my customer,

00:38:50.380 had I just been listening to them earlier,

00:38:53.420 I could have saved three years off of this journey.

00:38:57.260 So for me, that was the big takeaway.

00:39:01.160 You had to go through it.

00:39:02.800 Totally.

00:39:03.440 If I had just gone and got some entry-level job at Google

00:39:06.580 or something like that, I could never have built this company.

00:39:10.560 Yeah, that's so crazy.

00:39:12.320 So in every adversity, there's always a seat of opportunity.

00:39:15.040 I mean, it's just sucky at the time.

00:39:16.660 Yeah. 0.56

00:39:17.460 Just sucks at the time. 0.98

00:39:18.100 Well said. 0.81

00:39:18.880 Ben, appreciate you coming on, man.

00:39:20.120 Awesome. Thanks.

00:39:20.900 Awesome. Appreciate that.

00:39:22.280 Thanks for watching this episode of Escape Velocity.

00:39:25.460 Be sure to like and subscribe and leave a comment with your biggest insight from our conversation.

00:39:30.540 Be sure to check out the next episode.

Dan Martell - March 26, 2020

What It Takes To 20X Your SaaS in 1 Year with Ben @ Privy.com - Escape Velocity Show #24

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