Projections… What Are They Good For?
Welcome back, everybody. Another episode of Bootstrap Web. The street continues, Brian. How are doing? Yes.
Brian Casel:Yes. Street continues. You know, we're we're doing good. I'm I'm liking this. It's fun, but man, it is hard.
Brian Casel:We we're struggling to come up with things to talk about because it's like we only talked to a week ago. But but at the same time, we just get to a point where we're just like, alright, let's just hit record. We'll figure out something to ramble about.
Jordan Gal:Well, because there's there's an infinite amount of stuff to actually talk about, but maybe from a from a cold start point of view. I have a few things this week that are just at the ready just because they're top of mind, top of the to do list. I just got back from LA, so it's all very fresh.
Brian Casel:Hell, yeah. I'm pretty psyched. Two days from now, I'm heading out to Colorado, one of my favorite places in the world just to be. I love that state. For big snow tiny comp west.
Brian Casel:And of course today I'm picking up a cold, you know, two days before my trip. So hopefully this isn't gonna be like a super spreader event.
Jordan Gal:That's fun.
Brian Casel:I mean you know that's always fun. It's sort of like round two of my mastermind meetup snowboarding trip.
Jordan Gal:And this group is the one that's been consistently the same group for years.
Brian Casel:Yeah, yeah. There's some overlap in the two groups but yeah. This one is more like a master they're both like masterminds but this one's like the same group for the last ten years. This same group does a fall trip so we hung out only what three or four months ago in person and we're in a slack so it's like we're sort of just like picking up where we left off.
Jordan Gal:Right. There isn't that much background that needs to happen. Everyone knows what's going on.
Brian Casel:That's nice. I mean, in terms of topics like, at some point, maybe today, maybe not, but like at some point maybe I can talk about these tiny comps because I feel like Brad Tunar and Dave Rodenbaugh and I have, you know, we're going on like nine years of these things and we've figured out how to really run a pretty good event. Maybe I could talk about that at some point.
Jordan Gal:That's cool. Maybe if I actually enjoyed skiing, would have gone with you the last nine years, but I don't.
Brian Casel:Yeah, yeah.
Jordan Gal:Well, I just took a trip of my own. Just got back from LA last night.
Brian Casel:Yeah. Let's hear about that.
Jordan Gal:There's an e commerce event there put on by a company called Retail Summits, and they're they do this all over the country, also international. And they've done a great job of putting together merchants and vendors and software and just ecosystem around e commerce, but not focus on Shopify. And that's kind of rare in e com world. And it's also not very enterprise, so it's kinda just right for us. So we started sponsoring these events.
Jordan Gal:I went, I moderated a panel. It was nice to kinda be back on stage and feel that like nervousness and pressure. That was good.
Brian Casel:And About how many people are are in
Jordan Gal:the limit? 150? Like Which is kinda yeah. Like That's a size.
Brian Casel:That's like a Yep. Sweet
Jordan Gal:Sam was there from our team, and Jessica, our VP of Product. So it was also great to see them. We got to go out to David Chang's major Domo, which I've been meaning to go to for years. So we got a chance to hang a little bit and have dinner and talk. It was great.
Jordan Gal:It's kinda like one of these things where you don't really know what the ROI is gonna be, if there is gonna be an ROI, but it's still good. So we did meet with a merchant and that might work out. And we met with some partners and we kind of reconnected with someone that used to work at Rally, but now works at a different agency that their like specialty is is helping merchants migrate off Shopify. So all of a sudden, we're like, hey, we should do business together. So I think one
Brian Casel:of my in terms of that that ROI question, just judging from a little bit of my personal experience, more from hearing from friends who are heavy into conference going as like a marketing channel for them. My sense is that it's less about how can you get x number of customers from these events. It's probably more about the partners. You know, like partner relationships. You know, you might pick off a few customers from going to one of these events, but if you meet three new partners who turn into relationships that drive hundreds of new customers over the next year or two, That's where these events it's a little bit hard to track but like it's more about these relationships.
Brian Casel:And I mean that's been my experience too.
Jordan Gal:Yeah, I totally agree. And I think it's even worse, there's like a double negative, like, effect. If you go looking for customers and for ROI, you almost give off, like, the thirsty vibe, which, like, repels. So really just going with an open mind to meet people, it's almost like a lazy approach to it, but it actually ends up being more effective because you're yourself. And then you get to know people, and then all of sudden you make friends, and that's that's where the partnership turns in to ROI later on.
Jordan Gal:You know, when you when you kind of aren't asking for it directly.
Brian Casel:So I mean I know you're only a day out of this event but like is this something you would purchase a sponsorship for again?
Jordan Gal:Yes. So so we purchased an annual sponsorship for five events. So I'm looking at it from that point of view. I'm saying, okay. Here's how much the sponsorship cost.
Jordan Gal:Here's how much on average each trip will cost between airplane and hotels, and therefore, we've made this lump investment for the year. And then when I do think ROI, I basically look at that and I say, okay, three or four customers come out of that and we're good type of a thing. So it's like once the check's written, I think less about ROI and I think more about let's get out there, let's go meet people, let's send people from our team to go meet people and learn and get to know and just
Brian Casel:And there's like other benefits too other than direct customers, right? It's your team getting together, it's your team talking to customers, it's getting out there, you know?
Jordan Gal:Yes. And the team getting together, you know, it's just so much fun. So having, like, a two hour
Brian Casel:Any excuse to get on
Nathan Barry:a flight and
Jordan Gal:go go hang out. Got back just in time to take the family to the Michigan Northwestern basketball game. So got to go with the kids to go to, like, a, you know, college basketball game. It was fun. What's going on on your end?
Brian Casel:Awesome. Yeah. This week, we shipped workflows in ZipMessage, which was a big one. It was a big one from a number of points. So it was just a big thing to build.
Brian Casel:We we've been building this for over two months. It's basically what workflows are are like you can you can build these automation workflows. Right? Like picture a step by step sequence of events that happen and you can not only like drip content out, you can do that. Like, let's say you wanna automatically post a message into a conversation thread once a week.
Brian Casel:Like, you could schedule that out and and have have that cadence built out. But you can trigger messages. So like when someone has viewed my message, then trigger the next one. Or when someone has posted a reply to my message, trigger the next one. Right?
Brian Casel:So so you can use these workflows to do things like a simple use case is and I created these like recipes tutorials on you know, this is a really complex feature. So I had to really document exactly how it all works and then I documented some recipe like tutorial stuff for for this. It's like a simple one is you send a message out to a client and you need that client to send you back their feedback or their response within three days. So you can then queue up an email notification to send to them three days from now to like nudge them to reply. But you can build in a rule that says if they do reply before then, then don't send it.
Brian Casel:You know, just cancel that workflow. You can get a little bit more complex and then build out like an interactive course. Right? So you can do things like show them lesson one, which you prerecorded as a template, lesson one. When they view lesson one, then show them lesson two.
Brian Casel:When they view that, show them lesson three. And similar concept with like a an interview format or like a a workshop where it's like question one and then you need to wait for them to post their response and then show them question two and then question three. And if you want, you can build in like delay times in between these things. As you can tell, like it's a really complex thing for us to build, but it's all done. I think it came out really really well.
Brian Casel:We did a ton of testing on it. I think it's a really significant feature because it's one of the first big steps that we're taking beyond just a messaging app and now now you can literally do much more important powerful things with it. Like I was just saying, like an interactive course which is something that a lot of coaches do. Right? It's just like this is this is the first of several upcoming features where it's like this is a big step in terms of how big the product is and and how much it occupies in your stack in your business.
Brian Casel:Know, that's that's what we're going for here.
Jordan Gal:Well, on releasing it. That's exciting. I'm sure you now have a lot to think about in terms of how to position and talk about it.
Brian Casel:Yeah. And also it's just a big relief for me as I talked about the one that just came before this, threads and now workflows. Those were the two big, like, bottlenecks in our in our dev cycles for the last two to three months, you know. And those are both now shipped. So it's like now we've got like a I'm thinking of it like, you know, those like hill charts in Basecamp that sort of track like it's an uphill climb and then you sort of get to the top and then it's sort of downhill from there.
Brian Casel:I feel like we're near the near the top of this mountain of it from here to the end to over the mountain is like we've built the the road map, the vision and we we've fully launched everything that we're gonna do. I would say we're about halfway or maybe a little bit more than halfway and everything else that we're going to build to complete this vision there's still a lot but I think the hardest things are behind us so everything else is going to be sort of downhill. It's not necessarily going be fast but it just seems like it's gonna be smoother from here on out.
Jordan Gal:Okay, good. Yeah, it's a good analogy there. Let me ask you to put on your product manager hat for a sec. So the concepts inside of that set of features that you just talked about are familiar with apps, right? Triggers and workflows and if this, then that.
Jordan Gal:So when you approach that, of course, you have to apply those concepts to your specific product and audience and point of view. But when you do that, are you going blank slate, take a piece of paper, first principles approach? Are you saying, let me look at others that do it well, let me look at some competitors, let me look at other apps that I know have similar concepts but are not in the same space.
Brian Casel:This set of features I did start to mock up in Figma before I got into the browser. That's where the initial sketching and and layout ideas took place. And then it got much more refined and adjusted once we were in in the browser. So workflows, let's talk about that. That one, there are some patterns in the UI that follow pretty standard conventions.
Brian Casel:So our workflows are it's not like a visual canvas builder, you know, if you will, but it's more of a linear workflow which a lot of apps have. So somewhat similar to Zapier. Zapier is like linear top to bottom layout or but it's also very similar to any app that has like an activity feed with like a a line down the left side and circles to indicate each event in this activity feed. That's a common design of of a workflow. Right?
Brian Casel:And then you click into it and then you have, you know, the editing panels for each step in the workflow. That was a little bit more custom because we have different, you know, different ins and outs of how those things work. Actually, the more difficult thing that took me a lot more time to conceptualize and design was the other thing that we did here was we built logs. So you can look at any workflow and see all the logs and the history of how many times that workflow has run or when it will run. Because I feel like that's one of the areas that a lot of these apps either don't even offer or they do a really poor job and it's really really frustrating when you're dealing with something like workflows which you're sort of depending on and you're putting a lot of trust in a workflow.
Brian Casel:Like, you know, but like this is one of my big frustrations with a lot of, you know, email marketing tools that have workflow stuff built into them. Like, I'm putting a lot of trust in this thing to say like, you are gonna email my client five days from now but only if these conditions are true. Right? Like is that is that
Jordan Gal:really You're gonna gonna make me look bad basically.
Brian Casel:Otherwise, you're gonna make me look bad, right? Or you're gonna post this message into the Zip Message conversation but only under these conditions and at this time Or like it actually is gonna post it and and you're not gonna miss it. Right? Or backwards auditing. Like, did that thing send?
Brian Casel:Did that thing post? And when did it post? And and what triggered it? Or if something was skipped, why was it skipped? Answers to all those questions are actually built into our interface.
Brian Casel:And so we have like this section where you can just click on logs and it's sort of like a list of all the runnings of a workflow and then you open up each one, you can see each step. So it it took a long time to hash out. So basically, I do all that interface stuff and then I work with one of my developers to wire up the back end. But this would this was one of those features that we more or less built it in about a month and then we ran into some technical walls and I went in and I sort of rebuilt a lot of the logic and then we came back in and spent another few weeks testing it and refining it and getting it right, you know.
Jordan Gal:So you were comfortable taking the risk of overbuilding because you wanted to inject your opinion into it around the logs and history.
Brian Casel:Yeah, I mean there's certain things about this type of feature because the other thing that guided my designing this was pretty early on I started thinking about like, okay, when when we eventually launch this feature, I need to be able to go to the market and say, this is what you can build with this. And I I literally had that concept in my mind. And like, if I'm gonna build an interactive course with this or if I'm gonna build an an interview with this or if I'm going to build one of those reminder emails to my client, I actually started to draft out like what a tutorial for for one of those use cases would be And then sort of work backwards from there, like, okay, we would need to have this functionality in order for that to work and that's what dictated what we built. It's such a big feature that, like, it's we can't just MVP it. Like, we sort of had to build mostly all the things.
Brian Casel:There's probably more stuff that we can build on top of this later, but it's the key pieces are there now.
Jordan Gal:I like that concept. I do that without realizing that I'm doing it. But as we're thinking about a feature and talking about the small decisions around a feature, in my mind, I am visualizing how we talk about the feature in our marketing and what I want to be able to say. Yes. So it's like, no, it's the story will hit harder if we can say this thing which goes beyond like the basic feature set.
Brian Casel:And that was actually a really helpful step in this process, thinking back on it now. So like, I had the basic concept for how the the UI should work and we started building it and it was only like a couple of weeks in that I that I did that exercise of starting to draft a use case tutorial for like a future use case. And then I was like, oh, we're missing a couple of key features. Otherwise, this tutorial is not gonna work. That definitely informed the direction.
Brian Casel:The other one that came before this was threads and, you know, there are definitely conventions that we looked at. Like, my developers and I like so think of threads in Slack. Like, we were looking at that. That that's a known convention. Like, seeing the thread button on the bottom right corner of the chat.
Brian Casel:We don't do the thing in Slack where it's sort of like an overlay on the right side of the page. Don't like that. But then with threads, I wanted to make it a little bit more flexible than most. So it's like we follow the convention first. Like it it looks and functions the way
Jordan Gal:you would
Brian Casel:expect but one of the things that we did was make it easy to move messages around. You can you can reorder them. You can pull a message out of a thread and into the top. You can move a message from one thread into a different thread. So this was this one was designed like first, just solve the problem of like being able to have threaded comments in a conversation.
Brian Casel:That's the basic. But we're building into a bigger feature in the future. So these threads will also be used to like structure a course, to make a whole module in a course via thread, to be able to rearrange those messages, turn a whole thread of messages into a template which is something we're building right now. A lot of this stuff is like how is this gonna adapt as we ship the next two, three, four features?
Jordan Gal:Hence that a lot of uphill climbing before you can reuse a lot of these foundational things that you're building.
Brian Casel:Yeah, exactly. That that exactly. So now it's like we have these things in there so everything else is relatively easy to build.
Jordan Gal:Cool. On my side of things, I think the next topic for me to talk about, very exciting, annual budget process. So the the TLDR is that I I feel like I was wrong in my assumptions around this process. So so every year, you know, we have a board of directors. I need to submit and get approval for a budget.
Jordan Gal:And that includes projections with expense projections. So like what's gonna happen financially over the next year, and then I need to get that approved by the board. So I've never done that before. At Cardhook, we never had a board. I was just the only person on the board there, you know, at the corporate level.
Jordan Gal:And so I never had to get anything approved or whatever. And then after the seed round, there was still no board, and it was all up to me. Like I I have projections, and I look at that with the leadership team, myself and Rock and Jess, and it helps whenever we look at it. We get we get value from looking at the numbers. But this felt like a little different because it had it had some added weight and stress to it.
Brian Casel:Yeah. You talked about this before. I don't think it was a budget process. It was like
Jordan Gal:Maybe a board meeting and like deck and like slides and all that. Right. So okay. So now we we have a board meeting coming up. It's actually next week.
Jordan Gal:And I need to like go through the budget. Okay. So I went into it a little annoyed. Like I gotta go take a lot of my time and focus on this thing. And it's going to be a snapshot in time full of assumptions.
Jordan Gal:And then I'm going go operate the business how I think the business should be operating. I'm not going to go use this document every day and look at it. Am I doing the right thing? So I was not dismissive. It was just kind of like, okay, fine.
Jordan Gal:This is like a chore I need to do. But what happens, and I think it happens to all of us. If you hang out with an Excel sheet and you swim around some numbers for a while, eventually those numbers start talking to you. And they start revealing things to you, some things you like and some things you don't like, but it becomes more undeniable when you're looking at the numbers, and you have control of it, and you're tweaking things, and you're kind of, you know, what happens if this happens in the next
Brian Casel:Especially when the numbers are are projection. Like Right. Versions of the future.
Jordan Gal:Yes. Yes. Now the stress, I think the part that I get like a little negative about is that you submit this to the board and then you're gonna review it every quarter. And then at the end of the year, you're gonna be judged on how you did. I'm on the board of a company now.
Jordan Gal:It's a direct to consumer company. And the CEO there is fantastic with numbers. And we go we go over his budget, and he is remarkably close to his estimates. It's very impressive. It's within a few percentage points.
Jordan Gal:But the business has been around for years and does significant revenue and they kinda know what their business is. And I always look at them like, we're so early stage. Like, what like, don't
Brian Casel:Yeah, you got to be able to move fast and change plans and
Jordan Gal:like we're looking for product market fit. I like to take calculated risks, right? All of us are like what are our resources? What do I play it safe with? Where do I put where do I take risks?
Brian Casel:What are the implications of like, okay, you put this budget together. What if the priorities completely change by quarter two?
Jordan Gal:That's right. Okay. So to that end, I had the same, right? In private. I'm in my room here looking at this budget.
Jordan Gal:In the back of my mind, I'm saying, what are the repercussions? So I email our lawyer, and I go, yo, Eric, let me understand all these documents that I signed. What's in there? What happens if I'm not good at projecting and I don't hit numbers or we come in under over like what does this what does this mean? So he helped me understand that everyone does this.
Jordan Gal:Everyone has a hard time doing it. Yes, you are judged on it, but it's not like it's not like you're gonna get fired if you don't hit the numbers. Right? It's not like a public company or late stage company that's like, you know So it took the stress off for the most part. And so I just wanna talk about what this thing looks like because I think it's helpful.
Jordan Gal:Another one of my friends asked what goes into it. So let me just run down what this Excel sheet. It's a Google Sheet, but what the sheet looks like. Okay? So at the top
Brian Casel:This is great radio. Just describing a spreadsheet right now. I love it.
Jordan Gal:Look, for this audience, people are to like it.
Brian Casel:Right? Yeah, I know.
Jordan Gal:Okay. So at the very top, I have revenue projections. And underneath the revenue projections I have the inputs of the revenue projections. The number of customers, the growth rate from one month to the next, the average revenue per customer. For us it's average GMV, and then that gets applied in average transaction fee.
Brian Casel:What's funny is I actually, I literally have the same spreadsheet and it's an open tab on my browser right now. There you go. Was literally just playing with mine today.
Jordan Gal:So I
Brian Casel:think The twelve month projection, you plug in the metrics, yeah.
Jordan Gal:Okay, cool. So look, a lot of people kind of have this and I've always had it. It was the first time I had to basically publish it and give it to someone else. Right. Mine, really
Brian Casel:I just showed to my wife and a couple of mastermind buddies. It. Good for
Jordan Gal:you showing your wife. Okay. So once I have revenue and the inputs that go into it, including churn and so on, then below that I have, really what I have is our accounting software, and all of those expense categories brought over. And then right below that, I have EBITDA. And there's actually a new row in there that I I think is worth taking a very quick detour.
Jordan Gal:Interest rates being as high as they are. All of a sudden, the interest you can earn on savings is significant. I happen to not be like a decamillionaire, like liquid in cash, so I don't care personally to the same degree. You know, I did move some money to Wealthfront. I'm making a few bucks there, but the venture money is a different ballgame.
Jordan Gal:If you take 4% and you put $10,000,000 in an account, that's 400 ks a year. Divided by twelve months, you're talking $30,000 plus a month. So, a lot of these venture companies, ourselves included, all of a sudden have a very interesting new revenue flow. Seriously? Yes.
Jordan Gal:That's right. What I did not expect to add into this projection and what has improved the picture significantly
Brian Casel:Is this a common move with funded companies?
Jordan Gal:Absolutely. No. No. I didn't really know or think about it or care, but now I do. Right?
Jordan Gal:So we brought in, right, a significant amount of money and all of a sudden it's my responsibility to take care of it. So my first approach is, well, safety. I'm not taking any risk with that. No one's paying me to invest it. They're paying me to keep track of it and spend it responsibly.
Jordan Gal:But if you then look at a 4% rate and you look over at Mercury, right, I'm sitting in Chase right now earning point 01%. I look over at Mercury and it's 4.1%. So over the last two weeks, I'm like, hey, I'm like a financial wizard. I'm just moving money from one place to another. And all of a sudden we have this new line item of real significant revenue that helps with our day to day operations.
Jordan Gal:So that's something that I did not expect to have inside this budget, but but but now we do.
Brian Casel:Super interesting. I use Mercury and I haven't even like thought about that. It's not it's it's obviously much not not the the numbers that you're dealing with here, but yeah.
Jordan Gal:But still it's it's not relative. Right? Exactly right. So okay. So now that I have revenue, then I have all the expenses, I have total operating expenses, I have EBITDA, then I have this interest line item, which everyone's very happy about.
Jordan Gal:And then below that, I have cash flow implications. I have a starting bank balance. I have a almost like a cash basis profit slash loss, which also takes into account the interest revenue, and then I have an ending bank balance. And so I have that for every month, and I can look at what happens not only to revenue based on growth and churn rates and all that stuff, but most importantly, what happens to cash. And now I feel equipped to understand how much risk I should take and when I should take it and what the limits of that risk should be.
Brian Casel:Does this exercise, in your current scenario, doing these board meetings, like do you feel like it makes you more aggressive or more risk averse or what?
Jordan Gal:That's a good question because that's really what you're being forced to confront. I would say going in, before starting the process, I felt more aggressive. I basically said, look, you know, our competitors are struggling. Our product is good. I don't know if you remember, at Cardhook, when we launched the checkout product, the churn was out of control.
Jordan Gal:It was eight out of 10 merchants that started using it would leave within thirty days. It was a mess. We finally got it under control when we launched version two and all that stuff, and that's when it got better. But Rally's not starting off that way at all. No one leaves.
Jordan Gal:Everyone's like, well, I'm getting a better conversion rate. I'm not leaving. So that part of it feels amazing. So I just felt generally aggressive. Then I went into the numbers and it spooked me.
Jordan Gal:And I said, Woah, hold on a second, hold on a second. This is like a game of survival. We don't want to go too aggressive this year if I'm thinking in a multi year context. Then, like that deeper level of the numbers are starting to talk to you version of things, I started to really understand that we actually can be aggressive because being less aggressive didn't give us much benefit. Because if you're going to have to cut expenses, and what basically means cut team, then you're going to have to do it.
Jordan Gal:And so when I looked at what happens twelve months from today in making an adjustment like that, and then I look at making the adjustment, call it six months from today, like reducing expenses significantly, like a lot of other companies are doing, What I saw was that the benefit we would get from it, like the extension of runway, right? Like if we do it in six months, that means we have this much runway, and if we do it in twelve months, then we have x. The benefit was so negligible, it was like two months difference. It was like and then that's when it kind of became clear.
Pippin Williamson:Then it's like
Brian Casel:a risk to be overly It's just not being aggressive enough. That's right. I've done the same exercise with my projection spreadsheet a couple of times now in the last few weeks and actually I'm looking at it again today. I think that my mindset when it comes to looking at this sheet and looking at the next twelve months, It has sort of evolved like whereas when I was younger in my career, I probably would have been spooked a lot more easily about like, Oh, what if these numbers don't trend the way that I hope they do? Or what if cash gets tight, then I'm gonna like rapidly change strategies which might fuck up the business.
Brian Casel:But now I just have this attitude like, let me put it this way. We have a strategy that we're gonna execute no matter what. But I need to see what that looks like in a spreadsheet.
Jordan Gal:Yeah and how much you can help that strategy along by throwing money at certain problems and experimenting.
Brian Casel:Yeah or just like I know we are gonna be spending on these things this year. I'm not gonna not spend on those things. There are decisions on like this marketing channel or that marketing channel like those are separate strategic discussions. Those to me are not spreadsheet discussions. Those are like, they cost what they cost and if that's the thing that has the highest likelihood of success, we're gonna spend on it.
Brian Casel:The question then is like, how do I manage cash flow and runway? And what are the implications if we run out of runway? Like that's what I look at. But if we run out of runway, it's because the strategies didn't work the way that they expected to work. And I don't know how else to explain it, but I don't look at it like, Oh, we're gonna tighten up or loosen up based on these projections.
Brian Casel:I just look at the next twelve months. It helped me gain comfort in just sticking to the plan and just seeing it and really acknowledging what the reality would look like in scenario A or scenario B. I think I talked about that a few episodes A
Jordan Gal:lot of what I get from it, like from the emotion is I just wish we had more money. Just want more money. I just want to be more aggressive. You know, that's like when I look at it, when I think about the conversations I had with investors and the term sheets and all this other stuff, it's like, another
Brian Casel:thing don't think about it that way. You have way more money than we do in in our backyard.
Jordan Gal:It's all relative. That's right. That's right.
Brian Casel:The thing that I wish that we have is I think that we're pretty fast and moving, but I wish I had more speed to to know what's what sooner rather than later. Because right now I feel like I don't know. It takes you months to find out. I feel pretty confident in the direction that we're going and all the research that I've done, to confirm this direction, but I don't know what's what yet. I don't know what you know, the the the metric sells in the spreadsheet, like what the conversion rate is gonna be and what the ARPU is going to turn out to be six, twelve months from now after we change prices and after this and that changes.
Brian Casel:And like, I have these plans in place, the strategy in place that, you know, but that's the plan. I don't know what reality will look like yet. And and I don't know that that's even something that money can buy. Like, it's still just time.
Jordan Gal:Agree. But there there is a certain approach to the planning for it and how optimistic or pessimistic you are. When you look at those revenue projections, like I just I just flip flopped because when you're fundraising, the incentives to be optimistic and then like triple it. Because whatever whatever optimism you think you're applying to your numbers, there are other people out there that are going so far into absurdity around their optimistic projections that if you keep it reasonable, you look bad. Like, I have seen other decks of other companies in our space at similar stages, and it's so, so beyond absurdity that it shocked me into thinking like, Oh my God, I cannot be reasonable.
Brian Casel:Okay. So what is the strategy with approaching it that way? Like, would you make-
Jordan Gal:It's YOLO. It's just fuck it. YOLO, just tell them we're gonna be billionaires. Don't worry about it.
Brian Casel:Is it literally for raising and it's not Just
Jordan Gal:raising and valuation and FOMO and word-of-mouth.
Brian Casel:And it's not like sales, like market size, potential conversion, like we like No.
Jordan Gal:It's you would be in shock to see some of the stuff people do. It shocks me, and I'm getting used to it. It's still like I mean,
Brian Casel:that shit is But I mean like, like but still like at the end of the day, like I get that it's a different game than the VC game, but like at the end of the day, we're still building a business that needs sales. And to make projections that are so wildly beyond what could possibly really happen, I don't see the strategic value in that other than raising more money. It's only communication.
Jordan Gal:It literally signaling to the investor that you are thinking gigantic, that you want to own the market. It's almost like a checkbox on like, yes, they are thinking absurdly. Absurdly. Yes. Like I have seen, like, we have a million people now, and next year it'll be 1.25, and within five years it'll be 65,000,000 people.
Jordan Gal:Like that. You're like, Hold
Brian Casel:on. Wait. What happened there?
Jordan Gal:Yes. So that's when you're fundraising, and now all a sudden when you're getting something approved by the board, the incentive is to be like, Oh, no, no, we're not going go that fast. Sorry about Because we wanna beat it.
Brian Casel:Okay. So then in these conversations, in these pitch decks, you you're making the rounds like, is there any conversation around like, okay, so what happens between year two and year three to justify going from 10,000,000 to 65,000,000. Like what reality changes? Is it just the hunch on the on the market opportunity to say like
Jordan Gal:It's so easy.
Brian Casel:Just make
Jordan Gal:it up. Make it up.
Brian Casel:Is it like, oh, well that's when the world is gonna change. And we're gonna be there.
Jordan Gal:That's when everyone catches up to our beautiful vision realizes that we're right all along. Got it. So it's like so easy to just talk through it. It's really tough because sometimes you talk to investors and they point to your deck, and they're just like, well, you know, give us like detail on this. And we're like,
Brian Casel:guys. It's a number on a
Jordan Gal:page. Yeah. Why are we why are we pretending? What are we what are we talking about here?
Brian Casel:Right.
Jordan Gal:So but so now it's flipped though when you're submitting something to the board. You don't want to overdo the optimism because twelve months, you might look bad. And really what you want to do, right, the incentive is to thread the needle where it's just optimistic enough that it looks like you're not going to crash and burn and your company's dead, but just so because then you can beat it and look like a hero and you beat projections. So it's it's a bit of a a bit of a dance, but the value still came out of it even if there are political machinations attached.
Brian Casel:Yeah. Yep. Was a good topic.
Jordan Gal:We made it interesting. Alright,
Brian Casel:what else we got? We did put it out on Twitter today. I think there's a couple things.
Jordan Gal:There's a few things on sales there that I could talk about what we're dealing with right now, and then everyone's dealing with it. Everyone's trying to grow and and get leads, and so let let me throw this at you, and then we can kinda talk about it in the context of some of these Twitter thread Twitter responses that are like, well, where are you getting leads? What are you doing for sales? What's working in b to b? So right now, we have room for one more hire.
Jordan Gal:Like, we are at the very tail end of our post funding hiring spree. Okay? We have one more, and that role is to help fill the pipeline. So top of the funnel, get people scheduled demos.
Brian Casel:My mind, that is the hardest question mark to fill. Okay. So I And we've talked about this, right? Like Yes. It's it's Sales process is easy, like demos, onboarding.
Brian Casel:Okay. It's not easy, but like you could just map out the process You and show show
Jordan Gal:your products, you get better at it. Yes.
Brian Casel:Get strangers to come to your website and click a button and sign up, you know, that's product market fit. And you gotta you gotta get the bottom.
Jordan Gal:So so our debate internally, and my guess is in some ways, this is the debate that everyone's having. So when we do outbound, it works. We we send emails, we make phone calls, people do demos, and they sign up. If I look at our existing base of customers right now, a good portion, I'm gonna say 50% came from outbound. And so it works.
Jordan Gal:Okay? So like, let's just let's just hold that assumption off to the side for a second. Outbound works. Now, do we hire someone to continue doing more outbound, or do we go toward a healthier version of sales, which is partnerships that generate inbound referrals? Now, the difference between the two
Brian Casel:Why is it an or? That's my first question.
Jordan Gal:Okay. It's or only to a degree. You're right. It's not like we're not gonna do outbound, right? But it's like, where are you gonna put, you know, a brain, a well paid, experienced, thinking person that's gonna be creative, where do you want them to focus, you know, every day?
Jordan Gal:We're still gonna do outbound. We're still gonna send emails no matter what. It's like what type of pipeline do you want? What type of people do you want in your pipeline? Because it is a very different type of experience when you reach out and basically convince someone to come check out your stuff.
Jordan Gal:Basically, you know, come to our stall. Let her show you what we have. That person in the pipeline views your company and your product in a very different way than someone that their agency came to them and were like, I met this new company. You gotta check this thing out. Here's what it does.
Jordan Gal:And they say, I want an intro. And they say, cool. And then they're in their pipeline, and they're like, I heard your stuff is awesome. I wanna see it. Those are those are one entry into the CRM, but completely different experience.
Jordan Gal:So I'm not looking for entries into the CRM. I'm looking for success. I'm looking for happy paying customers that grow and love us and talk about us. I'm very hesitant to keep focusing on outbound even though it works, but it fills the CRM with entries and people that are not as warm.
Brian Casel:Yeah. No. I mean, it it makes logical sense. Right? Like, it's cold outreach, literally cold, which means like you are interrupting them and it's and I've done cold as well.
Brian Casel:We've been doing it. But it's interruptive, right? So you are basing on hope on a few things, right? Number one that they are even receptive. There's a lot of people probably myself included who just automatically delete cold outreach no matter what it is.
Brian Casel:Then there's a smaller subset who are maybe receptive. Obviously that comes down to the targeting and everything. But then you're also hoping on the timing. Like they happen to feel that pain when you reach out to them and it's like, Oh, it's a coincidence. Oh, it's good thing you reached out to me because I've been wanting a solution like that.
Brian Casel:That feels like you're hoping for luck. Right? You know, the other side of the equation, inbound and this really speaks more to product market fit, you know, that's why that's so important in my mind. Like, yeah, you can do outbound and I I honestly hate this term demand generation. Like like we can just press a button and and generate demand.
Brian Casel:Like what we really want and what I think most successful products have is product market fit, which means there is some The market's coming to you. There's there's market coming to you. Whether that's SEO or some other version of inbound traffic, word-of-mouth, in certain communities, certain markets, but a lot of SEO is it plays into it or like app store optimization, stuff like that. Like, people are searching for solutions somewhere because there is a pain that exists and that's that's product, you know. So like the perfect mix is having a really strong product market fit where you know people are gonna just come and find you and then try to amplify that with more outbound and more branding and stuff like that.
Jordan Gal:Right. Ideally, they've heard of you. I think it matters the nature of your product. So for example, the nature of your product has a pretty significant amount of search and a significant number of people that can potentially benefit from it. Our product people don't know that this type of a product exists because they just assume, well, I gotta use the checkout that my platform gives me.
Jordan Gal:So there is a bit of a, like, disruptive pattern which does lend itself to outbound. Like, hey, hold on. You need to kind of, like, change your assumptions here.
Brian Casel:Right. Like, this is a thing that you should know about. Yeah.
Jordan Gal:Yes. That's definitely improved significantly over the last eighteen months between Fast and Bold. Absolutely.
Brian Casel:I guess you could like align your outbound with activity. I'm sure you guys are already doing stuff like this where you know someone is in the process of starting up a new store, you know, that's the perfect moment to reach out.
Jordan Gal:Yeah. A lot of our outbound is triggered from tracked events on the web. So if someone creates a new BigCommerce store, they're gonna get an email from us. That type of thing. Or if we see them switch certain technologies, yep, that helps.
Jordan Gal:So when you look at your effort in changing the product, do you see big changes in the way you're gonna sell or are you looking more toward an inbound SEO driven, Like, how do
Brian Casel:think We do a bit of outbound and it's like it's like every time I think about turning it off, I get a couple new leads from it. I'm like, oh,
Jordan Gal:shit. Alright.
Brian Casel:Well, we'll just leave it on.
Jordan Gal:I love it. What do you mean by outbound? Just emails?
Brian Casel:Just email. Well, we do a combo of email plus zip message. So it's been like emailing to highly likely candidates who are perfect fits for us and then usually, they ask is, can I show you our product? Literally using a I'll I'll record a video for you. But really, it's a template video that I recorded once, months ago.
Brian Casel:And I show them like, I'm showing you our product and this, you're looking at it, is our product. Right? That's actually worked fairly well. I wouldn't say fairly well. Like we get a small handful of leads a month from that.
Brian Casel:The vast majority of our leads are definitely coming from Google. I can track that. And we do have a portion that are viral. We see a bit of that too. So And then we also have a chunk of just people talking about us and linking to us, referring people to us.
Brian Casel:So it's sort of a mix but far and away Google is still the top and we're working on that more. Yeah. To answer your question going forward, we are working on a new website and one change that's gonna happen on this website is the call to action. We're gonna have two. At least to start off, we're gonna have two.
Brian Casel:Right right now, the only call to action is sign up for a free account. It's gonna become you can sign up for an account or you can get a demo. So we're gonna introduce a a demo process, a a call. I'll be salesperson number one for probably the foreseeable future and we're gonna do that, you know, get into the demos thing because I think our product is evolving into a bigger, more significant product which means it's a bigger buying decision. It's gonna it it is definitely going to like one of my expectations with this is it's gonna slow down the sales process for for a single person.
Brian Casel:Like a single lead is gonna take a slower time to evaluate us and demo us and then even the implementation and onboarding is gonna have more steps than we've had before, you know?
Jordan Gal:You're going closer to the foundation of someone's business. Yeah. They're really building a lot on top of your platform and
Brian Casel:having I'm actually excited about that. Like looking back on the first year, you know, when I initially started ZipMessage, one of the things I was super psyched about was how fast it is for a lead to find us on our website, sign up and actually just start messaging someone right away getting value. And people still experience that today and we get pretty quick conversions that way but I'm actually excited to get back into the sales demo game, you know. I had it with AudienceOff, I had it with ProcessKit and I haven't had it really at all except for like talking to customers and doing research and doing some support. We haven't had a formal like sign up for a demo, talk to me and and really evaluate the tool.
Brian Casel:We haven't had that. And then onboarding and and so like I'm I'm psyched to sort of build that out this year for two reasons. One is it will just get me more in touch with customers, especially customers who are in the market right now, like shopping for a tool like ours. Like I haven't had too much interaction with those people who are shopping right now. A lot of my customer interviews that I've done were were with existing customers or just other people that I met.
Brian Casel:But introducing the demo process and I and this is one of the I don't have that many like blanket recommendations for new SaaS startups but one is like when you're brand new and you have zero customers, force them to a demo process because it forces you to talk to customers but it's even better because you're talking to customers who are interested right now.
Jordan Gal:Mhmm. Mhmm. I I agree with that. I can't imagine to get fully hands off approach but I mean some people are are are good at it. I I hope that that goes along with a higher price point with what you're doing.
Brian Casel:I mean Yeah. New prices are coming later this year and then
Jordan Gal:Right. But it makes sense.
Brian Casel:Yeah. And and I could I could even see maybe later in the year, would introduce an actual paid onboarding service or
Jordan Gal:Mhmm.
Brian Casel:Migration service. If you have a lot of content hosted somewhere else, bring it over here. We'll we'll help you out with that, you know. Setting up those workflows I talked about, like help help with that. Like that could all be built into it.
Jordan Gal:Yeah. I like to think of this as like flying closer to the sun. Like you're just moving into hotter territory for better and worse. It's more critical. There's more stress, but the pricing is higher.
Jordan Gal:The churn is lower. The onboarding takes more time, so all this mixture of things that are better and more difficult at the same time. We we did it like very literally at Cardhook because we used to just be we used to just take the email from the checkout page, and then we became the checkout page. Right? So we were like, oh, we can add value here, but if we really wanna add value, we gotta go all the way in.
Jordan Gal:And in some ways, right, you're going from messaging into like, let me power your your business and all the good and bad that goes with it.
Brian Casel:Yep. I mean, it's a lot of big changes coming and a lot of stuff I haven't even talked about publicly yet. Yeah, I'm pretty psyched and I'm also a little frustrated that it took us like two years to to get to where we are now. But
Jordan Gal:Yeah. My I I think we're kinda running out of time, but the the last point I had to talk about was figuring out what business you're actually in. And we're, I guess, about two years ish. I don't like to think of it as that long, but something like that. And it does feel like I have a better understanding of the business that we're in now.
Jordan Gal:Significantly better than than when we started. It sounds very similar for you.
Brian Casel:Yep. 100%. Yeah. I forgot if I talked about this earlier but like I could kick myself for not structuring the strategy from day one now but like, but I also believe that I wouldn't have figured it out had I not had a product in the market and customers to talk to to point me in this direction, you know.
Jordan Gal:Yeah. And hopefully there's the payoff there. Alright, dude. Well, it's Friday afternoon. I believe it's six degrees out.
Jordan Gal:Yeah. I'm super cold
Brian Casel:over here too.
Jordan Gal:I'm gonna stay right in my house. It's my wife's birthday this weekend. So I got some pressure.
Brian Casel:Have a
Jordan Gal:good time. Go out.
Brian Casel:Yeah. Awesome, man. Thanks for listening. Alright. Later, folks.
Brian Casel:See you.
