Patrick Campbell - 7 Growth Tactics We Used to Scale to a $200 Million Exit (Turing Fest 2022)

Don't miss Patrick sharing his top tactics that led to the $200m acquisition of ProfitWell by Paddle.

Head to www.turingfest.com to learn more about Europe's best cross-functional tech conference.

Transcript

1. 1 Lessons from bootstrapping to an exit over $200M
2. 2 Let’s talk through fundamentals you’re (likely) ignoring.
3. 3 “Who are you preachy, bearded man? 🤔”
4. 4 I get it.
5. 5 I’m the human embodiment of tall poppy syndrome.
6. 6 Cut myself down all the time.
7. 7 Hey - I’m PC. 👋
8. 8 Started this company called Pro fi tWell.
9. PW exists to help subscription companies grow automatically.
10. Free, accurate, real time fi nancial metrics for subscription businesses. Metric Two minute integration with:
11. COMPANY NAME You’ll be in good company. 20% of the market uses Pro fi tWell
12. COMPANY NAME $1,240,578 TOTAL MRR LTV RECOVERY Emma Young UPGRADED $200 Kyle Turner REACTIVATED $200 $5,678 Drastically reduce churn Retain™ Audit proof revenue recognition Recognized Proprietary pricing software and services for monetization Price Intelligently Unit Economics Churn Insights In-App Usage Data Financial Data Survey Data
13. 13 Then we sold for over $200M.
14. 14 Why ?
15. 15 We exist to run and grow subscription companies, automatically.
16. People “The thing that builds the things”
17. 17 “People and culture are everything 🤔”
18. 18 Then why is the average tenure of a manager 17.2 months?
19. 19 Avg Director on up tenure is only 22.3 months.
20. 20 These people defend your culture, but they aren’t sticking around that much.
21. 21 Why?
22. 22 We’re scared of losing people.
23. 23 We don’t de fi ne who we’re for, nor hire and fi re based on these values.
24. 24 Let’s walk through an example.
25. 25 Pro fi tWell believed in “giving the most charitable interpretation”.
26. 26 The girl story.
27. 27 Design the culture around 99.99% of occurrences.
28. 28 Integrity with con fl ict. Con fl ict MCI
29. 29 Integrity with con fl ict. Talk Directly Con fl ict MCI
30. 30 Integrity with con fl ict. Talk Directly Talk Directly Con fl ict MCI
31. 31 Integrity with con fl ict. Talk Directly Talk Directly Manager Con fl ict MCI
32. 32 Integrity with con fl ict. Exec Talk Directly Talk Directly Manager Alt Manager Con fl ict MCI
33. 33 Integrity with con fl ict. Exec Talk Directly Talk Directly Manager Alt Manager HR Con fl ict MCI
34. 34 What about the .01%?
35. 35 Integrity with con fl ict. “God Forbid” Things Exec Talk Directly Talk Directly Manager Alt Manager HR Con fl ict MCI
36. 36 What happens if this is hard for someone?
37. 37 We’re not great for them.
38. 38 We also hired poorly.
39. 39 Five happiest moments of your life?
40. 40 Two of the top ten worst moments of your life?
41. 41 R-word case study.
42. 42 You can disagree with everything.
43. 43 That’s great. You de fi ne your culture.
44. 44 But make sure you de fi ne it.
45. Chaos “What even is the vision?”
46. 46 Alignment is everything.
47. 47 Our Mission
48. 48 Our Mission
49. 49 Our Mission
50. 50 Our Mission
51. 51 Our Mission
52. 52 Of course, this isn’t reality.
53. 53 Our Mission
54. 54 Our Mission
55. 55 How do we generally move people in the same direction?
56. 56 Paddle’s Mission
57. 57 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW
58. 58 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing Guiding Principle 2 Guiding Principle 1 What
59. 59 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing Be the most helpful brand in SaaS Do it for you What
60. 60 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing “Recur Media” 1. Audience Growth 2. Field Guides 3. Director Level Content Be the most helpful brand in SaaS Do it for you How
61. 61 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing “Recur Media” 1. Audience Growth 2. Field Guides 3. Director Level Content Process Metrics Feedback Cycle Tempo Be the most helpful brand in SaaS Do it for you How
62. 62 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing “Recur Media” 1. Audience Growth 2. Field Guides 3. Director Level Content Process Metrics Feedback Cycle ๏ 6 shows per year ๏ 1 product launch a month ๏ 1 brand video per month ๏ SEO to the max Tempo Be the most helpful brand in SaaS Do it for you How Much
63. 63 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing “Recur Media” 1. Audience Growth 2. Field Guides 3. Director Level Content Process Metrics Feedback Cycle ๏ 6 shows per year ๏ 1 product launch a month ๏ 1 brand video per month ๏ SEO to the max Tempo Be the most helpful brand in SaaS Do it for you What How How Much
64. 64 Alignment is how high performing teams become a high performing company.
65. Constraints “Do more with less”
66. 66 Why is Pro fi tWell free?
67. 67 “We read a blog post”
68. 68 “We read a blog post”
69. $0B $3B $6B $9B $12B $15B $18B $21B $24B $27B $30B 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 69 Pro fi tWell Install Base
70. $0B $3B $6B $9B $12B $15B $18B $21B $24B $27B $30B 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 70 Pro fi tWell Install Base
71. $0B $3B $6B $9B $12B $15B $18B $21B $24B $27B $30B 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 71 Pro fi tWell Install Base 34+ Other Companies
72. $0B $3B $6B $9B $12B $15B $18B $21B $24B $27B $30B 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 72 Pro fi tWell Install Base Stripe Fund Invests $500k in Baremetrics 34+ Other Companies
73. $0B $3B $6B $9B $12B $15B $18B $21B $24B $27B $30B 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 73 Pro fi tWell Install Base Stripe Fund Invests $500k in Baremetrics 34+ Other Companies Total Funding Amount $3.7M
74. 74 The reverberation of “fuuuuuuuuuuck”
75. 75 Let’s think from fi rst principles.
76. 76 “What the f**k does that mean?”
77. 77 It means you STOP and think.
78. 78 Problem Problem/Cause/Solution
79. 79 Cause 1 Problem Problem/Cause/Solution Cause 1 Cause 1 Cause 1 Cause 1
80. 80 Cause 1 Solution 1 Problem Problem/Cause/Solution Cause 1 Solution 1 Cause 1 Solution 1 Cause 1 Solution 1 Cause 1 Solution 1
81. 81 Cause 1 Solution 1 Problem Problem/Cause/Solution Cause 2 Solution 2 Cause 3,4,5 Solution 3,4,5
82. 82 Problem Problem/Cause/Solution Distribution and monetization of Pro fi tWell has become dif fi cult due to competitive pressures and limited resources
83. 83 Lack of WTP Problem Problem/Cause/Solution Massive accuracy issues No name recognition Not a lot of money Product is behind Distribution and monetization of Pro fi tWell has become dif fi cult due to competitive pressures and limited resources
84. 84 Lack of WTP Problem Problem/Cause/Solution Massive accuracy issues No name recognition Not a lot of money Product is behind ๏ Free ๏ Accuracy is #1 ๏ Commit Distribution and monetization of Pro fi tWell has become dif fi cult due to competitive pressures and limited resources
85. 85 “The fi ve why’s”
86. 86 “Whoever holds on to the most customers in the end, wins.”
87. 87 Freemium. Competitive programs. Community. Events.
88. 88 Freemium. Competitive programs. Community. Events.
89. 89 Freemium. Competitive programs. Community. Events.
90. 90 Freemium. Competitive programs. Community. Events.
91. 91 “Why didn’t you sell for $1BN hotshot? 🤔”
92. 92 That’s a great question.
93. 93 Poor market escape velocity and vectors. 1.
94. 94 Poor market escape velocity and vectors. 1. You need to raise money earlier than you think. 2.
95. 95 Poor market escape velocity and vectors. 1. You need to raise money earlier than you think. 2. Hiring Director on up is incredibly dif fi cult bootstrapped. 3.
96. 96 Poor market escape velocity and vectors. 1. You need to raise money earlier than you think. 2. Hiring Director on up is incredibly dif fi cult bootstrapped. 3. We were on a collision course with billing and payments. 4.
97. 97 Enough? Everyone get some value?
98. 98 This stuff is hard.
99. 99 You need to cuddle with the chaos.
100. 100 You need to KEEP GOING.
101. 101 Questions? On Twitter @Patticus
102. 102 DECK TWO
103. 103 Lessons from bootstrapping to an exit over $200M
104. 104 Let’s talk through fundamentals you’re (likely) ignoring.
105. 105 “Who are you preachy, bearded man? 🤔”
106. 106 I get it.
107. 107 I’m the human embodiment of tall poppy syndrome.
108. 108 Cut myself down all the time.
109. 109 Hey - I’m PC. 👋
110. 110 Started this company called Pro fi tWell.
111. PW exists to help subscription companies grow automatically.
112. Free, accurate, real time fi nancial metrics for subscription businesses. Metrics Two minute integration with:
113. COMPANY NAME You’ll be in good company. 20% of the market uses Pro fi tWell
114. COMPANY NAME $1,240,578 TOTAL MRR LTV RECOVERY Emma Young UPGRADED $200 Kyle Turner REACTIVATED $200 $5,678 Drastically reduce churn Retain™ Audit proof revenue recognition Recognized Proprietary pricing software and services for monetization Price Intelligently Unit Economics Churn Insights In-App Usage Data Financial Data Survey Data
115. 115 Then we sold for over $200M.
116. 116 Why ?
117. 117 We exist to run and grow subscription companies, automatically.
118. 118 Ok. Let’s jump in.
119. People “The thing that builds the things”
120. 120 “People and culture are everything 🤔”
121. 121 Then why is the average tenure of a manager 17.2 months?
122. 122 Avg Director on up tenure is only 22.3 months.
123. 123 These people defend your culture, but they aren’t sticking around that much.
124. 124 Why?
125. 125 We’re scared of losing people.
126. 126 We don’t de fi ne who we’re for, nor hire and fi re based on these values.
127. 127 Let’s walk through an example.
128. 128 Pro fi tWell believed in “giving the most charitable interpretation”.
129. 129 The girl story.
130. 130 Design the culture around 99.99% of occurrences.
131. 131 Integrity with con fl ict. Con fl ict MCI
132. 132 Integrity with con fl ict. Talk Directly Con fl ict MCI
133. 133 Integrity with con fl ict. Talk Directly Talk Directly Con fl ict MCI
134. 134 Integrity with con fl ict. Talk Directly Talk Directly Manager Con fl ict MCI
135. 135 Integrity with con fl ict. Exec Talk Directly Talk Directly Manager Alt Manager Con fl ict MCI
136. 136 Integrity with con fl ict. Exec Talk Directly Talk Directly Manager Alt Manager HR Con fl ict MCI
137. 137 What about the .01%?
138. 138 Integrity with con fl ict. “God Forbid” Things Exec Talk Directly Talk Directly Manager Alt Manager HR Con fl ict MCI
139. 139 What happens if this is hard for someone?
140. 140 We’re not great for them.
141. 141 We also hired poorly.
142. 142 Five happiest moments of your life?
143. 143 Two of the top ten worst moments of your life?
144. 144 R-word case study.
145. 145 You can disagree with everything.
146. 146 That’s great. You de fi ne your culture.
147. 147 This isn’t even Paddle’s culture. We’re fi guring that out.
148. 148 But make sure you de fi ne it.
149. Chaos “What even is the vision?”
150. 150 Alignment is everything.
151. 151 Our Mission
152. 152 Our Mission
153. 153 Our Mission
154. 154 Our Mission
155. 155 Our Mission
156. 156 Of course, this isn’t reality.
157. 157 Our Mission
158. 158 Our Mission
159. 159 How do we generally move people in the same direction?
160. 160 Paddle’s Mission
161. 161 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW
162. 162 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing Guiding Principle 2 Guiding Principle 1 What
163. 163 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing Be the most helpful brand in SaaS Do it for you What
164. 164 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing “Recur Media” 1. Audience Growth 2. Field Guides 3. Director Level Content Be the most helpful brand in SaaS Do it for you How
165. 165 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing “Recur Media” 1. Audience Growth 2. Field Guides 3. Director Level Content Process Metrics Feedback Cycle Tempo Be the most helpful brand in SaaS Do it for you How
166. 166 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing “Recur Media” 1. Audience Growth 2. Field Guides 3. Director Level Content Process Metrics Feedback Cycle ๏ 6 shows per year ๏ 1 product launch a month ๏ 1 brand video per month ๏ SEO to the max Tempo Be the most helpful brand in SaaS Do it for you How Much
167. 167 Mission We exist to grow subscription revenue automatically Core Metric: Subscription Revenue on PW Sales Support Product Engineering Marketing “Recur Media” 1. Audience Growth 2. Field Guides 3. Director Level Content Process Metrics Feedback Cycle ๏ 6 shows per year ๏ 1 product launch a month ๏ 1 brand video per month ๏ SEO to the max Tempo Be the most helpful brand in SaaS Do it for you What How How Much
168. 168 Alignment is how high performing teams become a high performing company.
169. Expansion Revenue Sell to your existing customer base
170. 170 Best subscription companies out there have 20% or more of new revenue coming from existing customer base.
171. 171 Most it’s 0%.
172. 172 How do we get there?
173. 173 Multi-product companies grow at 30-50% higher rates than single product companies.
175. 175 We went multi-product early.
176. COMPANY NAME $1,240,578 TOTAL MRR LTV RECOVERY Emma Young UPGRADED $200 Kyle Turner REACTIVATED $200 $5,678 Drastically reduce churn Retain™ Audit proof revenue recognition Recognized Proprietary pricing software and services for monetization Price Intelligently Unit Economics Churn Insights In-App Usage Data Financial Data Survey Data
177. 177 Add-ons.
178. 178 Add-ons are one of the most underutilized aspects of any SaaS company.
179. 179 Lifetime value is 18-54% higher for customers with at least one add-on.
180. 180 “Less than 40%” rule.
181. 181 Relative Value of Features (x-axis) Willness to Pay Relative to Median (y-axis) .25 .5 -.25 -.5 -25% 25% Country of Origin Brand Differentiable Feature (high value, high WTP) Add-On Feature (low value, high WTP) Core Feature (high value, low WTP) Commodity Feature (low value, low WTP)
182. Pricing Raise your prices if NPS > 20 after Sept 1st
183. 183 Increase revenue per customer quarterly.
184. 184 Lots of ways to do it.
185. 185 You need to (still) raise your prices.
186. 186 *GASP*
187. 187 We’ll fi nish the third wave of cuts by end of September.
188. 188 Changing Pricing: Principles and a Practical Guide ๏ Don’t “legacy” your existing customers ๏ You should be doing this only once per year (two if you’re fl ying
189. 189 Do your research.
190. QUANTIFIED BUYER PERSONAS PRICING STRATEGY DATA COLLECTION & SEGMENTATION ANALYSIS & DECISIONS EXPERIMENTAL DESIGN Your pricing process needs to be data driven DATA DRIVEN PRICING Basic Statistical Models
191. 191 Do an impact analysis.
192. 192 Changing Pricing: Principles and a Practical Guide ๏ Don’t “legacy” your existing customers ๏ You should be doing this only once per year (two if you’re fl ying ๏ People with +50% or more get a phone call or personalized message
193. 193 Proper messaging is key.
194. 194 “Over the past 12 months we’ve added so much value to Pro fi tWell: - We’ve made you $18,418 - Feature A is now standard in your account - Feature B is awesome, and you use it daily”
195. 195 “Over the past 12 months we’ve added so much value to Pro fi tWell: - We’ve made you $18,418 - Feature A is now standard in your account - Feature B is awesome, and you use it daily” For us to continue to invest in making Pro fi tWell better for you and the COMPANY crew, we need to increase our prices.
196. 196 “Over the past 12 months we’ve added so much value to Pro fi tWell: - We’ve made you $18,418 - Feature A is now standard in your account - Feature B is awesome, and you use it daily” For us to continue to invest in making Pro fi tWell better for you and the COMPANY crew, we need to increase our prices. You’ve been insanely loyal to Pro fi tWell though, using us for the last four and a half years, so as of today we’re raising prices on new customers, but since you’ve been so loyal we’re going to keep you on your existing plan for the next 6 months (after which we’ll bump you up to the new price of $XXXX).
197. 197 “Over the past 12 months we’ve added so much value to Pro fi tWell: - We’ve made you $18,418 - Feature A is now standard in your account - Feature B is awesome, and you use it daily” For us to continue to invest in making Pro fi tWell better for you and the COMPANY crew, we need to increase our prices. You’ve been insanely loyal to Pro fi tWell though, using us for the last four and a half years, so as of today we’re raising prices on new customers, but since you’ve been so loyal we’re going to keep you on your existing plan for the next 6 months (after which we’ll bump you up to the new price of $XXXX). Thanks for letting us be a part of COMPANY’s mission. If you have any questions at all, let me know. All replies go directly to me.
198. 198 P.S. If this materially impacts your business, let me know and we’ll work something out
199. 199 Changing Pricing: Principles and a Practical Guide ๏ Don’t “legacy” your existing customers ๏ You should be doing this only once per year (two if you’re fl ying ๏ People with +50% or more get a phone call or personalized message ๏ Focus on them, not you ๏ Legacy discount ftw
200. Retention Shore up your customer base
201. 201 Plan optimization.
202. 202 Longer term plans mean much higher LTV.
203. 203 Quarterly and annual plans have 150%-800% higher LTV.
204. 204 You need to ask after they sign up though.
205. 205 Subject: Discount on your WHOOP subscription Hey Hiro, wanted to let you know that there’s a way to save money on your WHOOP subscription. We’re giving those members who’ve been with us a while 2 months free if they sign up for our annual plan ($240). Click here to easily get on the annual plan and we’ll take care of the rest. — Johanna Timms Member Success Upgrade your subscription DISMISS UPGRADE PLAN Get 2 free months of WHOOP by upgrading to annual ($240.00).
206. 206 Subject: Discount on your WHOOP subscription Hey Hiro, wanted to let you know that there’s a way to save money on your WHOOP subscription. We’re giving those members who’ve been with us a while 2 months free if they sign up for our annual plan ($240). Click here to easily get on the annual plan and we’ll take care of the rest. — Johanna Timms Member Success Get 2 months free by switching to an annual plan for $240.00/year. Questions? Contact Us CANCEL CONFIRM Upgrade your subscription DISMISS UPGRADE PLAN Get 2 free months of WHOOP by upgrading to annual ($240.00).
207. 207 How many annuals should you have?
209. 209 Cancellation fl ows.
210. 210 • Add friction • Redo the fl ow Why? Want to leave • Catalog to automate • Predict future churn
211. 211 • Add friction • Redo the fl ow Why? Want to leave “I can put you on the $XXX plan for 90 days” Salvage Offer • Catalog to automate • Predict future churn
214. 214 • Add friction • Redo the fl ow Why? Want to leave “I can put you on the $XXX plan for 90 days” Salvage Offer Maintenance Pause “Put you on plan for $XX to ensure your data is here when you’re back” “Pause your plan for 90 days until this blows over” • Catalog to automate • Predict future churn
215. 215 • Add friction • Redo the fl ow Why? Want to leave “I can put you on the $XXX plan for 90 days” Salvage Offer Maintenance Pause Freemium Tier “Put you on plan for $XX to ensure your data is here when you’re back” “Pause your plan for 90 days until this blows over” “We’ll bump you down to our free tier for now” Play Chicken “We’ll be here for whenever you want to get started again” • Catalog to automate • Predict future churn
216. 216 You will lower your cancellations by 10%-25% with cancellation fl ows.
218. Lead Flow Capture now, harvest later
219. 219 “Whoever holds on to the most customers in the end, wins.”
220. 220 Freemium. Competitive programs. Community. Events.
221. 221 Freemium. Competitive programs. Community. Events.
222. 222 Freemium. Competitive programs. Community. Events.
223. 223 Freemium. Competitive programs. Community. Events.
224. 224 Enough? Everyone get some value?
225. 225 Let’s recap.
226. 226 Team and alignment over everything.
227. 227 First principles on the rest.
228. 228 Go back to the fundamentals.
229. 229 Questions? On Twitter @Patticus