Jordan Gal – Two Years in the SaaS Trenches – MicroConf 2017

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  • Intro (Rob & Mike)
    • 17% of people here need an idea
    • 23% have an idea
    • 24% building
    • 8% just launched
    • 27% launched and growing
    • 1% “essentially retired”

Jordan Gal – Two Years in the SaaS Trenches

  • We are gonna look at the last 2 years of my company’s experience
    • Going from “starter” → “growth”
    • Got to a more sustaining place
    • Instead of just showing my highlight reel (“it’s just a rocket ship up and to the right!”)
      • A — not true
      • B — not useful
    • Jordan Gal
      • Helps e-commerce companies who sell physical products make more money
      • First product — Cart abandonment recovery
        • Trigger emails if someone starts checkout but doesn’t buy
      • Second product — Shopify checkout funnel
      • Bootstrapped Web
      • Portland, OR
      • Wife and 3 kids
      • Run a company called CartHook
      • Run a podcast with very good friend Brian Casel
    • “Success”
      • We read blogs. We hear podcasts. People we consider success-ful.
      • Blinds us from what they went through to get there
      • Funny word. We project a lot of ideas onto this word
      • It can blind us
    • “Failure”
      • We see this very negatively
      • How does this correlate with success? What does the REAL story look like?
      • What happens behind the scenes of the highlight reel?
    • Fail #1: Finding a cofounder
      • Auto-email from Drip: “Ben” is a new subscriber
      • Looked into who he was
      • Ben Fisher
        • New York
        • Looking at e-commerce
        • I reach out
        • Turns out he’s kind of looking to reverse engineer my product(!)
        • Met up with him
        • Go out for drinks in LA. We hit it off
        • Decide he’ll come to Portland to work for a month, see how it works out
        • That’s how I got my cofounder
      • Lesson: Be aggressive
      • First cofounder left me
      • I failed to grow the business to a sufficiently interesting place fast enough, so when he got an interesting job offer, he took it
      • But there’s always something else around the corner
    • Fail #2: Raise money
      • “I’m interested in discussing a potential acquisition”
        • Didn’t lead to anything
        • If it did I’d be giving a very different talk right now. (Right, Rob?)
      • Fail was that we didn’t grow fast enough
      • Success was that the energy around it led to conversations with friends, and others, and ended up raising money
        • Ever since then, it’s been SO EASY
        • (It hasn’t).
      • If a customer says “I have a great FB ads person”
        • I don’t let that pass me by
        • I look into it. “Can you introduce me?”
        • Something may come from it
        • You get a little tidbit, you turn it into something big
      • We’d get emails: “we want to use CartHook, but it doesn’t integrate with EDD, or whatever”
        • I’d say “We’d love to look into that. Do you know someone there you can introduce us to?”
      • (The ultimate MicroConf fail!)
      • Usually comes with a press release; feeling super cool at dinner parties; talking about it loudly in cafes so people hear
      • But we raised because we didn’t have enough money
      • Received email:
      • Lesson: when you see a little opportunity, you can turn it into a big opportunity
    • Fail #3: Build a flywheel
      • Felt pretty good about it
        • We’d go to BuiltWith
        • Find sites we could integrate with
        • Send to VA to qualify them
        • Another VA to load it into LeadFuse or similar
        • Handed off to me for demos
      • Went home
      • …Stops working completely
      • We were talking directly to the decisionmaker…
        • Worked with the smaller platforms
        • As soon as we went to the larger platforms, we weren’t talking to the decisionmakers any more. Didn’t work any more. Total failure.
      • Make deals. Let’s prebuild our JS into other platforms
        • Now everyone on those platforms sees our logo, our integration, drives leads to us like crazy
      • Did this with Recharge, Crate Joy, lots of others
      • You give a talk about how something works? Then it doesn’t work? You find another way.
      • Spoke at MC 2 years ago about how we built an outbound sales process
      • Now we have integrations
      • Lesson: Find another way
    • Fail #4: Hot new product
      • The checkout page is locked down. You can’t customize it — maybe the logo, that’s pretty much it
      • Knew this Shopify quirk was a big limitation
      • Shopify told us we’re using the wrong API
      • Had to start over
      • CartHook.com/checkout
      • If your gut says GO, do not quit. Stick with it
      • We had enough people asking for a new Shopify integration
      • Bumped into a problem with the integration. A quirk
      • Had a business with brothers. Learnt a lot about the checkout process
      • Launched solution to it as a new product
      • The process of creating this new product was a Greek tragedy + comedy
      • 6 months of Dark Times™
      • Finally got to the point where it was all OK
      • Now it’s hot
      • Took a LONG time to get there
      • But feels good to deal with all that failure & finally get to a good place
      • Lesson: If you believe, don’t quit
    • MRR picked up again after that pain
    • Fail #5: Become premium offer in the market
      • It’s awesome now
      • But how we got there was not on purpose
      • Sounds great
      • Problem was, we ran too fast. Right into a wall
      • Didn’t have the documentation… the onboarding…
      • It’s a checkout product. If there’s anything wrong, that’s a PROBLEM
      • Find out what’s wrong
      • And added more friction (require live demo before buying)
      • Didn’t slow anything down!
      • Attracted just as many people — but now much higher quality customers
      • People perceived us as premium
      • Sounds awesome
      • $97/mo → so many signups
      • Had to slow everything down
      • Needed the personal relationships
      • So, wanted to slow everything down. Tripled to $300/mo (which is expensive for Shopify)
      • Lesson: CHARGE MORE! And… I dunno what else… it just happened.
    • Lessons
      • Be aggressive
      • Parlay baby (little opportunities → parlay into bigger opportunities)
      • Find another way
      • If you believe, don’t quit
      • Charge more ¯\_(ツ)_/¯
    • So much hard work
      • Finally starting to pay off
      • A few weeks ago, stopped requiring the demo. We were finally ready (enough) to do that. MRR shot up.
    • Fails are inevitable; genuine
    • Highlight reels are not
    • You’ll experience things, good and bad. If you want glory, you’ve got to go through pain
      • You’ll get your butt kicked
    • “Success is the ability to go from one failure to another with no loss of enthusiasm”
    • @jordangal
    • [email protected]
    • Q&A
      • “Integrations. Did you have some kind of affiliate deal? Or kindness of their heart?”
        • Neither. They’re trying to provide value to their customers. Everyone wins. “We’re successful at making our customers money. We believe this will help your customers make more money.”
        • It’s a value-add to their customers
        • They love that
        • Some back and forth. “You’re more expensive than our platform is.” We have different pricing models for specific platforms (e.g. Recharge) that aligns better (not necessarily cheaper, just different) with how they price their product
      • “When your price went up, how did you handle people who signed up for cheaper?”
        • Grandfathered them. They kept the old price. Even people who said “I saw it at $97, but now it’s $300?”
      • “You tripled your prices and signups didn’t slow. When are you tripling them again :)”
        • We try to tie our prices to how much value the product provides. $300 is just a floor
          • $300/mo up to $50k revenue
          • $500/mo up to $100k
          • We have people are paying many times that
          • “I make $2MM a month, what can you do for me?”
      • “Cofounding is a lot like dating, I understand. How do you know when you’ve found the one?”
        • You can’t
        • Ben and I tried to reduce the risk first
        • Kind of like moving in together first
          • A month; 6 weeks; of no commitment, let’s just see if we like working together
        • Some stressful times. Requires getting on
        • Are the skills complementary?
        • Do you get along? Is it fun, do you enjoy each others’ company?
        • I don’t know if you can tell. But that “moving in” period was hugely important
        • & Speak to others you know about that person
      • “Where did the product ideas come from?”
        • Used cart abandonment in my store, it was horrible to use
        • After selling the store, set out to create a better version
        • That worked the way I’d want it to work
      • “You mentioned you’re not technical. I find it hard to believe. How much technical is ENOUGH to found a SaaS?”
        • I DO NOT write code. Don’t know how to do anything there
        • I understand conceptually what’s happening
        • So I can explain that our Javascript picks up an email on the blur event, etc, etc
        • Even if I don’t know how to possibly change it or anything like that
        • Ben has had some frustration with my lack of fluency!
        • “Is it not a disadvantage?”
        • It CAN be a disadvantage. But our culture is a marketing and sales culture, not a dev culture. I don’t see any logic in me trying to learn coding now.
      • “Do you think about how to prevent failure? Or just plow along and expect the inevitable”
        • The ideal is a smooth path. Go for that. But don’t be surprised or discouraged if something doesn’t go to plan. That part is completely expected — everything going right would be COMPLETELY unexpected. Doesn’t happen
      • “How did you find the right balance between work and live when starting a company”
        • Truth is — I launched CartHook with the original founder while in Berlin for a month
        • Figuring out where we wanted to live
          • I’d work in a coworking space in a new city for a month
          • Seemed silly to work 80hr/mo when Berlin & family was outside the office
        • There’s always guilt involved. You manage it, figure out what’s acceptable to you and your family. But the first stage is brute force, it’s not easy. Balance is hard. I don’t think I’m qualified to fully answer. Just tried to stick to my priorities
      • “At what point did you decide to jump to full time?”
        • Founder left. Started doing some consulting.
        • I knew I WANTED to go full time, but didn’t pull the trigger
        • As the acquisition became more promising, and could see that growing it faster was a valuable thing to do, made the decision that it was worth it
        • Took money from friends, family, it was stressful
        • Decided to go all in
      • “After taking funding, do you now feel pressure from all those people?”
        • No, it’s my own pressure
        • We call it “cheating a bootstrapping” — we took money from people who didn’t expect us to go Series A, etc, etc.
        • Ideal is to not raise any more money so there isn’t that pressure
      • “You have a cofounder, but you mentioned you’re the boss. Asymmetrical partnership?”
        • It’s really symmetrical. There needs to be someone who makes the final decision, but that’s a technical point, otherwise it’s very symmetrical. Very much a partnership.

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