ZipMessage has a new name...
Welcome back, everybody. Another episode of bootstrapped web. Brian, we've got carnage in the finance market. So
Brian Casel:we're gonna
Jordan Gal:Yeah. Crazy day. Yeah.
Brian Casel:Yeah. I mean, was crazy because you, you know, it this this all is sort of going down with Silicon Valley Bank and Yeah.
Jordan Gal:Last twenty four hours.
Brian Casel:I I've actually been completely tuned out on on that whole story. And I know you're totally tuned in. But
Jordan Gal:Yeah. I mean, being being in venture land, this is the only thing people are talking about. So my phone is full of text messages, of concern, emails. Everyone's trying to figure out the situation.
Brian Casel:Yeah. I've even been I'm I'm, like, tweeting, but I'm not, like, watching Twitter that much today and yesterday. So I've just been on on work stuff. So yeah. It's it's actually all it's, like, pretty fresh to me.
Brian Casel:We'll we'll hear about it on air.
Jordan Gal:Yes. I'll I'll happily give my 10,000 foot view. We're not gonna claim to be, you know, banking experts, but but it's it's a pretty scary situation. Yeah. But before we get into that, what do you got going on?
Jordan Gal:How's your week?
Brian Casel:It's, you know, busy as always. But you know what? I think today or when this podcast airs, I'm gonna start to roll out all the changes, and I'll announce a whole bunch of stuff with the product today. So here we are.
Jordan Gal:We've we've been we've been hearing bits and pieces of it. And, you know, if you're ready to kinda dive in, let's get started. I'll kind of ask questions that come up and I think would come up for anyone in the audience. So Sure.
Brian Casel:Well, let's just start with this. I'm changing the name from Zip Message to something else. We're gonna go with Clarity Flow. It's gonna be the new name of the product. And, yeah, it's gonna be at clarityflow.com.
Brian Casel:And if you're hearing this, then I hope that I got clarityflow.com live by today.
Jordan Gal:There you go.
Brian Casel:Talking about it on this podcast is kinda, you know, lighting a fire to to get this little project out the door by by Thursday. We've working on
Jordan Gal:for, like, a working on it for a year.
Brian Casel:Yeah. Basically. Yeah. Alright. So clarity Yeah.
Brian Casel:So, you know you know, it was know that so you know that I've been talking about the the, you know, the repositioning of the product, making it more of a coaching platform. I can talk a bit more about that. But you had asked me on, I think, on the show a few months ago when I was talking about, like, here in 2023, I'm really thinking about this as, like, a relaunch of the business in many ways. We're not starting from zero. We're not re rebuilding the app from scratch, of course.
Brian Casel:But in every other way possible, I'm I'm I'm thinking of this as re envisioning of what the product is, and who it's for, and where it's going, and the focus, and the value. And you had asked me, well, are you gonna change the name as well? And you were one of many people that I that I hear from in my, you know, mastermind groups and and whatnot. And that question has has been coming up ever since I've been talking about this this directional change since, like, late twenty twenty two. And to be honest, for most of that period, I was like, no.
Brian Casel:I don't think we're gonna change the name. You know? It wasn't even that I was really personally tied or interested in I got never really loved ZipMessage, to be honest, but it's just the process of changing the name and the idea of rebranding. I just did not wanna even do it. So I thought that I could just do everything else.
Brian Casel:Reposition. We're we're changing the pricing. Like, a lot of stuff is changing, but maybe keep the name. But by by January, it was clear. Like, you know what?
Brian Casel:If if this is gonna have the best chance of success, we have to have the right name. Because there are some things about the name ZipMessage that sort of detract from from where we're going with this.
Jordan Gal:Right. The the words in the name itself Yeah. Right, you wanna make sure that you're giving across the the right picture of what the product does. And it's also I mean, it's a good opportunity. If you wanna kind of like relaunch and restart, in a in a positioning context, then I feel like a name helps.
Jordan Gal:And it is a lot of work and potentially a distraction, But if you conclude that it's the right thing, then it's like, alright. Let's go go the whole way.
Brian Casel:Yeah. And, you know, when I say it's a lot of work, it's not just designing the new website and and doing all that, but it's a lot of extra logistical work. And I don't know how much we can get into here, but, I mean, it's also gonna be mean, like, changing the domain name, changing the domain on accounts, and and a whole bunch of other stuff. So it does complicate things. But in the end, it it I believe that it has to happen, and now is a better time to do it than any time later on.
Brian Casel:So, I mean, first, like, why? Just before the the name itself. I mean, you know, it really comes down to, number one, we are repositioning as a coaching platform. So, you know and and I feel like in in many ways, we are changing categories here, change like, shifting product categories. You know, you you might have thought of Zip Message as a messaging tool, obviously, like a like an alternative to Loom or even Slack or Voxer or any of these other, like, chat apps or or messaging apps.
Brian Casel:We need to move away from that. And and everything everything that I've learned from coaches, and I continue to have so many of these are you okay there?
Jordan Gal:Oh, yeah. I'm
Brian Casel:fine. My bad. Yeah. I continue to have these research calls with coaches. It just it just becomes clearer and clearer what the product actually needs to be.
Brian Casel:And one of my thoughts with where ZipMessage, the product, was is it got to a point where it just felt like a one feature product, you know, just the it was just the ability to record and swap messages back and forth. Right?
Jordan Gal:And Nothing wrong with starting narrow in that way, but at some point, it sounds like you felt like you need to build more around it.
Brian Casel:Yeah. And and it got to a point where, you know, through doing all those jobs to be done interviews, I start I start to really get a lot of clarity, for for lack of a better word, on moving from just a feature to an actual product that that solves a a larger problem, a more valuable problem, and a more essential, like, utility, especially if you're a coach. So you know, so I spent most of the month of January year, you know, and I hated this process, but just looking for names. Like, making massive lists of name ideas, brainstorming, like, constantly Domains. Literally, like, twenty four hours a day on these, like, domain sites just like you know, because you gotta come up with a name, but I'm pretty set on, like, it had to be a .com.
Brian Casel:I don't wanna do one of these other things. Mhmm. I also had some requirements. Like, I I don't like it when names no offense to to Rally, but I I don't like having these modifiers in the domain. Oh, yeah.
Brian Casel:You know, I I want the brand name Clarity Flow to be the whole domain. Yeah.
Jordan Gal:Rally made that pretty difficult. So I think it's a it's a cool 20,000,000 for rally.com. Yeah.
Brian Casel:So I I get it. Yeah. So, you know, I didn't wanna, you know, have to resort to, like, use Clarity Flow or whatever it was. Right? I you know, the a lot of people have asked, well, if you're going into coaching, why not use the word coach in the in the name of the product?
Brian Casel:Right? And I thought about that. I I considered several names that included the word coach in it. I landed on, you know what? No.
Brian Casel:I I don't wanna actually use the word coach even though we we are really positioning for coaches as as you'll see if you look at clarityflow.com. I I think, first of all, it's it's just a little bit too limiting. You know? I think for the long term, we we will be focused on coaches, but you never know what happens down the road or how how this whole market might change or whatever it might be. But so I didn't wanna, like, limit it that way.
Brian Casel:But also, you know, there are several other tools for coaches that use the word coach. I don't wanna be sort of, like, you know, confused with with them. I remember when I was working on ProcessKit, our main competitor was Process Street. And, I mean, all the time, people would confuse us. You know, we would have, like, customers saying like, customers saying to me on sales calls, like, I love your your your tool called Process Street.
Brian Casel:I'm like, well, we're Process
Jordan Gal:Street. So I hear you. People call us Rallyon.
Brian Casel:Oh, yeah.
Jordan Gal:Yep. Yep. We actually just bought a new domain.
Brian Casel:Oh, did you?
Jordan Gal:Yes. We did.
Brian Casel:With Alright.
Jordan Gal:With modifier because we're not gonna spend $20,000,000 on a domain. Okay. Now I have to ask. Let let's take a few steps back and get get a few of, like, the foundational things. Who's this for?
Jordan Gal:What's what's the problem that it's tackling? Right? Like, this is an opportunity to kinda, like, go back to fundamentals and say, here's why we're doing this.
Brian Casel:Totally. This I had a tweet about this today. This is what makes it so difficult. This road to product market fit, it's so difficult to do it now. I'm two years into the business.
Brian Casel:We have a customer base. We have a user base. We're not huge, but there's a little bit of, you know, name brand recognition among some circles. Right?
Jordan Gal:Inertia, SEO.
Brian Casel:Inertia. But then then you also have technical, like, product design assumptions and technical decisions that were made very early on. Now, knowing what I know now after literally a year of research with customers, you know, the fun the fundamental goals, the fundamental assumptions about who we are building this for, they're, like, all different than they were when I actually started Zip Message. And we're not starting from scratch. Like, we're not rebuilding.
Brian Casel:So it's been really, really challenging to, like, work through all these new features and, like, adapt the product and even adapt our marketing. You know, hopefully, the with the launch of clarityflow.com and everything, it becomes a lot more clear. But, basically, from all my conversations with with coaches, it's it's become, like, shockingly like, every call has been shockingly similar Mhmm. Where even though the coach the coaches might be in completely different markets like, I talk to business coaches. I talk to speech language coaches.
Brian Casel:I talk to music teachers. You know? All there's a jujitsu coach. There you know, there's all sorts of different coaches out there. They all operate the same way in more, you know, more or less the same structure to their business.
Brian Casel:They use similar types of tools. They have similar goals. They use the same words. And what it came down to was they a coach needs to build their business in in this way. Number one, they need to be having conversations with their clients.
Brian Casel:Coaching is obviously all about the client relationship. Right? Conversations and and the and the async conversation piece is what we've been up until until now. So it's like we have the the big check mark on on that coming into it, which I think is a is a big differentiator for us compared to a lot of other tools in this space. They don't have a really strong conversational, relational element.
Jordan Gal:They're they're starting from a different point of view.
Brian Casel:Right. And number two is almost every coach has some sort of course or a library of content of, like, course like content. More often than not, it's actually more like a library than than a lesson one, lesson two, lesson three course. But what a lot of coaches do is they go to the course sellers, the course platforms, and they try to put all these 50 plus videos in a in in a course platform, and and then they try to pull videos from that and hand them to their coaching clients and use those as jumping off points for their for their coaching relationships, we're building a much more interactive course basically, making it like a course platform, but it's completely integrated with our conversations flow. So, you know, you can have your entire course.
Brian Casel:You can build interactive workflows. So when a student or or a coaching client is going through your videos, they can easily just, you know, message you and ask questions and get feed and get coached through their course. Whereas the other platforms don't make that very easy. The third piece is group spaces. So a lot of coaches are moving into, like, group coaching and having, like, these, like, mini groups, mini membership areas, which is very common.
Brian Casel:And then the fourth piece, of course, would be payments. So, you know, selling access to your coaching programs, selling access to your interactive courses, selling access to you to have conversations all async will will be getting into, you know, one time and subscription payments all all handled. And, you know, the other thing that that has come up a lot over the last year or two years with ZipMessage is that what every coach is trying to do is they're trying to take ZipMessage and duct tape it into a course platform or duct tape it into their payment solution, duct tape it into their wherever they do their their group membership areas. Right? And you can do that to a certain extent.
Brian Casel:We have a Zapier integration and everything, but it's it it is just clunky at best, especially when you have your coaching clients dealing with multiple logins, seeing multiple different tools. It it you know, there there just really is much more of an opportunity to give a coach a fully seamless experience for their client to, you know, purchase, interact with the coach, get access to their content, and just have it all happen in one place. You know?
Jordan Gal:So this this came out of conversations with Zip Message customers? Is that is that the core of it? Is that, like, you know,
Brian Casel:where For the most part, I talked to a lot of coaches. I would say maybe 80% of them have been Zip Message customers. But I was also introduced to several other coaches who are not.
Brennan Dunn:Mhmm.
Brian Casel:And all the similarities. I mean, literally, this week, I had three three new conversations. You know? Oh, I've got all my videos stored in this WordPress course platform. And then and then I invite my my clients into this Discord over here, and then I take payments with just Stripe invoices.
Brian Casel:And then I, you know and and I try to Zapier it altogether, but it doesn't really work. Like, that comes up every single time.
Jordan Gal:Okay. So so like a a bundled vertical solution for people with that set of needs and problems is is is that's what you're building?
Brian Casel:Yep. Yep.
Jordan Gal:So so how did
Brian Casel:And you and, you know, just the one thing is that you know, because I know that there are lot of, like, Zip Message users maybe listening to this
Jordan Gal:Mhmm. Sure.
Brian Casel:This thing is that, like, again, we're not rebuilding the product from scratch. So everything that you've been doing with Zip Message in terms of sending, receiving messages, record having conversational flows, all of that is very much still in the product. You can continue to use it that way, and it that's actually, like, the core of our product. Like, we're you know, we we've built workflows and
Jordan Gal:Right.
Brian Casel:Sub threads and all that. Like, it's all it's all built around that. Like, we start with conversations and we and we build it into a coaching platform, basically.
Jordan Gal:Yeah. That's well, that's good because, you know, I my guess is a lot of people listening have encountered this in one form or another. And it's really difficult to figure out how to not waste all the work that you've already done, how to keep existing customers happy, to still pursue a different looking potential use case. So how did you get to the point where you want to take this on? The risk, the work?
Brian Casel:I mean, we've been talking about this thing, product market fit forever. I felt like I had plenty of evidence from all of my research, but also the the numbers that showed, like, we did not quite nail product market fit with what we had with with Zip Message. You know, something needed to change. And early early in '22, I was just looking at several different options for, like, niching down in some way. But the it was it just became painfully obvious that coaches were the the one.
Brian Casel:And even going back to the very, very beginning of Zip Message, we had coaches using it. And I thought I would niche down from the get go. And I looking back, I I wish I sort of did Mhmm. Because it would have been so much easier to to have those fundamental assumptions from day one. But I didn't.
Brian Casel:And You were
Jordan Gal:you were part of the cobbled together solution.
Brian Casel:Yes. Right. That's that's what we've been. That that's and and, again, that that speaks to the name change. Like, if you're if you're looking at Zip Message
Jordan Gal:Like, that's gonna handle messaging.
Brian Casel:That's only just for messages. Right? That that can't handle my courses. That can't handle payments. That can't handle my groups.
Brian Casel:Like, you know, hopefully, with the new website that you can see now on, you know, as of today, we have just a one page version on clarityflow.com. We'll be building it out in the next few weeks. But hopefully, this starts to illustrate just the all new vision for what what Clarity Flow is. Mhmm. You know?
Brian Casel:And I think it'll be interesting to see you know, it's like, I feel really confident given all the customer research that I've done, but I still have that sense of, like, I don't know. Because, you know, when people come to zipmessage.com today, they see a a completely different product promise. When they come to the new Clarity Flow, it'll be a whole new value proposition in terms of what we're showing them and and and offering them. So, you you know, just never know how, like, the market is actually going to react when they're faced with, like, what you know? I don't know.
Brian Casel:I I guess I'll I'll learn a lot in the next few weeks.
Jordan Gal:I think most of us get in our heads and end up being more worried about more things than the general public.
Brian Casel:I'm sure that's true.
Jordan Gal:Right. That's all of us do the exact same thing. Yeah. Yep.
Brian Casel:The other thing that I'll I'll talk about here is that we are changing prices. We're changing the model too. And and, again, this comes back to, like, the fundamental assumptions. Zip message was freemium and relatively low priced. And that's because early on in the first year, I committed to the idea that, like, we're in this market with all these other messaging tools that we're basically competing with all these free tools.
Brian Casel:That's right.
Jordan Gal:And you were competing with one that had, like, the default. It's like competing with Calendly. Yeah. Right. You were compete competing with Loom, was a default.
Brian Casel:Yes. Yeah. And, you know, part part of that decision to to go with freemium was to to to have, like, the viral the benefits of viral, you know, where you can have a lot of free users who are sharing it with one another and messaging with one another, and that's your top of funnel. In reality, what I saw, especially as we saw more and more coaches using Zip Message, was people were not using our free plan like a free plan. They were using it like a free trial, you know.
Brian Casel:So we would we would see a lot of people sign up for the free plan and then just convert to paid, like, on day one or within a few days. And we just did not see a lot of people using like, heavily using the free plan for a long period of time before upgrading, which is what you sort of want to see with a freemium product. You you wanna see that usage. You wanna make the free plan even more generous to get that those high volume numbers at the top of the funnel. I maybe I I I I just didn't fully commit to that as a strategy.
Brian Casel:I you know, it was limited in so many ways. But, you know, now in in this new world where we're speaking just to coaches, we're we're powering their entire business. You know, we we have this platform that does all these things. We're in a market now where these similar tools, and especially when you're using multiple tools, are in multiple $100 a month, and and they don't generally do free plans. Okay.
Brian Casel:So we're we're entering a completely different environment around pricing. And so we are gonna be changing our pricing. We're we're basically ending the free plan, going to a more traditional free trial, couple of new tiers, raising the prices a little bit. Well, like, the base price is is a little bit. The other prices will be higher.
Brian Casel:Mhmm. All these prices are gonna be going live to new customers in April. So, you know, new people starting, they'll they'll be on the new plans. All the newest features like programs and workflows and and spaces and then payments, like, they're only gonna be available on the on the new plans. Mhmm.
Brian Casel:The legacy plans and this is where it's like all this extra work to to plan all this out and to and to handle the logistics of of moving over everyone. Right? So I've been working through this, and there are a couple different groups of customers. There's, like, the general pool of legacy customers. So that's, like, anybody who is currently a paying subscriber on on Zip Message today.
Brian Casel:You know, they they will get a three month coupon to, you know, 30% off for three months when they upgrade to the new plans. And they and they'll have a long period of time, like, between now and near and and, like, the end of the year to to make their upgrade. There's a smaller group of early access folks who who run coaching businesses, and they've been asking and asking for all these new features. They're getting in first, and I'm personally working with them and onboarding them and making sure that we have the product perfect for them. We're doing public case studies with them.
Brian Casel:So they're they'll be upgrading to the new plans, but they'll they'll lock in a lifetime discount. So, I I mean, it's it's been like a long time of, like, figuring out the logistics on this. And then, I mean, just the other thing is, like, changing domains too, you know. Again, going back to those, like, fundamental assumptions about the product, with ZipMessage, it was really important that everybody got, like, a zipmessage.com/rally or zipmessage.com/brian. Right?
Brian Casel:We're moving away from that. I mean, there there still will be the intake pages that we have, but we're with this shift to Clarity Flow, accounts will be going to account slug or accountname.clarityflow.com.
Jordan Gal:Mhmm.
Brian Casel:And we'll be launching the the ability to map your own domain to it. So you could just use your own website.
Jordan Gal:Okay. Yeah. We have a lot of those issues between the, you know, marketing site, the admin, and then the pages on the web. And then the pages on the web, the merchant can, you know, plug in their own domain.
Brian Casel:Yeah. So it's like a lot of, like, technical logistics around, like, just changing the the domains and and handling the subdomains. But then it's also, like, with these accounts, when you upgrade, you're also changing the the domain on your account. So, you know, just it's been a lot of logistical work on, like, planning out the next few months. But that this this game plan basically starts today with the launch of of clarityflow.com, which as of today, it'll be this one pager asking for early access sign ups that goes to a survey, to get more more research on people who are reacting to what they see there, and then building out the rest of the pages.
Brian Casel:And then by April is when, like, the full website on clarityflow.com will be completed and fully launched. And that's when I'll start to, like, actually redirect zipmessage.com to clarityflow. And then it yeah. So that's I know there's, a lot a lot I just wanted to, like, get out finally on the podcast and not beat around the bush on it. But Yeah.
Jordan Gal:Well well, on that we can settle in and kinda talk through this every single week. Yeah. But I think I have one one last question is, you know, how how do you feel? You put a lot of work into this.
Brian Casel:A ton of
Jordan Gal:work. You you put in a big big bet. You know?
Brian Casel:That's Yeah. That's what it is. Big bet. Yeah. I mean, I feel like I'm still very much in the thick of it.
Brian Casel:I don't think that you know, it's just it's just not done yet. Yeah. It will feel good to get it out there. And I I have been sharing it privately with some customers already and and all my friends and advisers, I've been sharing it behind the scenes. But it is good that the name and the domain will start to get out there.
Brian Casel:And now we are you know, my my developers and I, we're we're working on getting these new pricing stuff launched. And so I'm really eager to just get the new like, get us to April when we have the new plans live and the new website live. So and that to me is where I feel like everything restarts. It's like we're back to the starting line starting from that point forward. Because it's like, right now, we get sign ups, we get conversions, we get churns right now, but it's all in the world of Zip Message.
Brian Casel:Right? In in April, all of that starts in the world of Clarity Flow. And and it's like, I I just expect Zip Message will will continue to have the product market fit issues as long as it's the the zip like, the zip message world. And Mhmm. Everything else becomes more optimal and and working with what the what the long term vision is gonna be with Clarity Flow.
Brian Casel:You know?
Jordan Gal:And I assume you can also start splitting your time more toward marketing and away from just, you know, constantly building and all the shifts and the rebranding and the new name and the new website, all the other things that have kind of are necessary to to launch before you can start going on marketing.
Brian Casel:100%. I'm already starting stuff on marketing right now. Not only just the new website, but, like, with the new website planning out the whole content strategy. Once we have the site live, we'll we'll be getting into some ads and stuff like that. Podcast for coaches, case studies with our customers.
Brian Casel:So, you know, I'm I'm onboarding these customers. We we we need to be creating case studies out of them. So a lot of that work is happening, and it's still it's it's still just not very not very calm. It's just, you know, we have a ton of work to do on the product. And that, you know, that's the other thing that's been on my mind a lot lately is it's this is actually a good thing if you step back, but it feels shitty in the moment, which is, like, literally every single day.
Brian Casel:I either have paying customers sending me support requests. Like, this doesn't doesn't solve my need or can I can I do this with the product, this or that? Or I have other people emailing, like, they're just looking at the product today. They haven't signed up yet. Like, can I do can I do online courses?
Brian Casel:Or can I can I how can I integrate this with my online course platform? Or how can I do this or that? And it's just, like, constantly, every single day, like, requests and asks. Like, why does it not do this? Or how come I can't achieve this?
Brian Casel:And my response is always, oh, alright. You can partially do it right now, but we're just couple weeks away from Yeah. From launching, like, some some new features that will make this so much easier. And and it's just that routine every single day. And that that is, like, grading on me to feeling like, all these people keep asking for the same things, and I don't have the product in hand to to give the give it to them.
Brian Casel:So we're still working through that that product road map to to get it there. You know? But it's but at the end of the day, I think that that is a good sign, if I'm honest.
Jordan Gal:Right. It's also motivation. Frustrating.
Brian Casel:But It's it's motivation, and it's and it does show that there's this market of needs. And it's it's I mean, what's exciting to me about it is that they're all the same. Everyone's asking for the same things. I did not see it that way with process kit when I was working on that. I was I was getting a lot of requests for a lot of different things.
Brian Casel:This is like everyone's trying to use it in the same way, especially and and now we're attracting a lot more coaches. So they're all asking about it, like, in building their coaching practice, which works very similarly from one to the next.
Jordan Gal:You know? Pretty exciting, man.
Brian Casel:Yeah,
Jordan Gal:man. Congrats. It's out there. It's in the wild. And, yeah.
Jordan Gal:Now now we can kinda you know, this is like a new it's not even like a new chapter. This is like book one is completed, and now book two of the series begins.
Brian Casel:This is this is the the sequel. Yep. Awesome. Yeah. What do you got going on your end?
Brian Casel:Well, I don't know if there's
Jordan Gal:that much for us to add on the Silicon Valley Bank situation, but it is really bad. Hopefully, by the time this podcast gets published next week, things have settled. But right now, startup land in The US is in full chaos. It is not even an overstatement to say that. My text messages and my inbox are full of VCs saying, are you okay?
Jordan Gal:Do you have money in Silicon Valley Bank? And everyone's checking on everyone else, and bank failed.
Brian Casel:It So, you know, we were talking before recording on this a little bit. So, like Yeah. Let's for for those who are not familiar with this or not or just not paying attention to it because to be honest, like, I I don't have like, I'm I'm not involved in Silicon Valley Bank. Like, I it's just not necessarily something that's right on my radar. I I would imagine there's actually a lot of bootstrapped startups and builders and makers who are just like, alright.
Brian Casel:That I see a lot of stuff on Twitter, but, like, what's actually happening here?
Jordan Gal:You know, yes. But also Silicon Valley Bank was the default bank account with Stripe Atlas for a very long time.
Brian Casel:Mhmm. Yeah. Silicon Valley
Jordan Gal:Bank is everywhere in the ecosystem. They process payroll. They do I I have my personal mortgage for this house that I'm sitting in with Silicon Valley Bank.
Brian Casel:Yeah.
Jordan Gal:And, you know, when I opened that account, part of the deal there was to put money there. So I I have personal money there. We don't have corporate money. We're at Chase and Mercury. But Silicon Valley Bank, I mean, the name refers directly to their market.
Jordan Gal:They set up shop in Silicon Valley, and they became the default bank for startups. And they have been a huge and essential part of the ecosystem from venture debt to keeping your money there to treasury management to loan products to wealth management to individual people after they made money from their startups. A lot of VC funds have their money there. I mean, it is fully plugged in.
Brian Casel:Yeah. So all all of a sudden this morning, they, like like, there's basically a run on
Jordan Gal:It it was a run. And and the the very quick version of what happened was that they were incredibly successful in growing their assets under management over the last few years by something like a 100,000,000,000. Like, they they went from, like, a 100 to a $180,000,000,000 under management or something like that. With that, they started to look around to see what they should be doing with that capital. And somehow, it appears someone over there had the idea to buy an enormous position in a bond portfolio, something like $80,000,000,000 or $60,000,000,000 of bonds yielding 1.5% over a ten year time horizon.
Jordan Gal:And what happened over the last few months is rates went up. If you're holding a bond portfolio and a set of securities that are yielding 1.5% and now the risk free rate from the government is at four plus percent, the value of your portfolio has gotten decimated. Mhmm. And so what they did is what they needed to do, which is to shore up their position. So they sold about $20,000,000,000 worth of that portfolio, took a loss, and announced that they were doing a fundraise between selling off those securities and an equity capital raise.
Jordan Gal:And when that happened, equity holders, this is a public company, equity holders knew they're they're gonna get demolished by $2,000,000,000 in shares flooding the market to to raise money. And so the stock price went down by 50% in one day. And then all of a sudden, people from the outside are looking at this and saying, a bank, like the fifteenth largest bank in The US, publicly traded. The stock price just went down 50%. And then people start to get worried.
Jordan Gal:And then it's a very straightforward, like, game theory human
Brian Casel:Yeah.
Jordan Gal:Chain of events.
Brian Casel:Get my money out.
Jordan Gal:Right. Well, I got you know, if imagine you're a startup. You have 200 employees. You have $50,000,000 in Silicon Valley Bank. The game theory is very straightforward.
Jordan Gal:It's safer to move at the chase. You know, it's very straightforward.
Brian Casel:Yep.
Jordan Gal:And then everyone's on Twitter and information spreads like wildfire. And yesterday, every VC in the Valley emailed their portfolio companies and said, we don't wanna cause a bank run, but you might wanna get your money over to here. And that happened everywhere, all at once throughout Twitter, through all the social networking channels between text messages, Slack, email, and then all at once, Everyone took their money out, and the bank failed this morning, and the federal government took over today.
Brian Casel:Wow.
Jordan Gal:That's it. Twenty four hours.
Brian Casel:Incredible.
Jordan Gal:Incredible. And now people are stuck. If you have money there
Brian Casel:Yeah. That that's my next question. It's like, what what happens to the with this lack of liquidity for any companies that or or people who have, you know, large sums of money that are still tied up in there?
Jordan Gal:Yeah. The the crazy thing is throughout all the things that I mentioned a minute ago between stock price going down and bond portfolio losses, they still had plenty of money in terms of liquidity for depositors. Right? If you look at, like, a ratio of how much cash you actually need compared to your deposits, right, I mean, fractional banking makes that very low. So they had plenty of capital.
Jordan Gal:Mhmm. But be if everyone pulls it all at once, then no one has enough capital. Yep. So right now, they're stuck. If you have money in Silicon Valley Bank, you cannot get your money.
Jordan Gal:And the FDIC insures only up to 250 k. And then in some situations, a million or $2,000,000 depending on arrangement that the bank has with the federal government. And now the government has taken over. And so everyone got an email basically saying, alright, here's the process. If you have more than $250,000 you know, put your information in here, which is effectively, like, get on the list
Brian Casel:Get online.
Jordan Gal:Bankruptcy protection. Yep. And and it's very unlikely that depositors are not made whole. I don't think The US has allowed depositors to get washed out in a bank crisis. Like, I don't even know when the last one happened.
Jordan Gal:You know? Yeah. They always make the depositors whole because this is the good old US Of A, and you can't have that
Brian Casel:happening. But this is Silicon Valley Bank, which is like startups have their payroll tied up in this.
Jordan Gal:That's right. So payrolls are failing, and then you start to realize how deep into the ecosystem this is. Think about something like Stripe Atlas. We use Rippling. Rippling for HR runs our payroll.
Jordan Gal:Rippling happens to use Silicon Valley Bank's rails for payroll. So even though our money is in Chase, if we wanna pay payroll, we I got an email today saying you must switch to our new JPMorgan partner, like, today if you want your payroll to go through. Wow. So it's just it's it's everywhere. And silver Silvergate?
Jordan Gal:Yeah. Silvergate Bank failed, like, last week. So this is not not good. This is not good.
Brian Casel:Wow.
Jordan Gal:Silvergate was the bank that took the risk and took on a lot of money from crypto companies and was targeted
Brian Casel:I mean I mean so if we could, like, trace back where something like this starts, is it just the the state of the current economy with interest rates so high and and, like, we're still not, you know, we're still sort of, like, overheated a little bit there. Is that is that what's actually causing this, or was there was like
Jordan Gal:I think this is a scenario like the classic Warren Buffett, you know, when the water goes out, you see who's naked. And, you know, if if things aren't managed properly with foresight, think I mean, in hindsight, it looks pretty silly to put $60,000,000,000 into a bond portfolio, not only yielding 1.5%, but locked up or, you know, with a ten year time horizon.
Brian Casel:Mhmm.
Jordan Gal:Yeah. Because that just tells you, well, if interest rate's gonna go up, you're gonna get decimated. Maybe the logic was, alright. If interest rates go up at worst, we sell for a loss and it's no big deal. But if you don't communicate that perfectly,
Brian Casel:you you get what just happened. Yeah. Yeah. It's it just seems like it's amazing that, like, that kind of decision could could happen and then and then trigger this this chain of events. Right?
Jordan Gal:Yep. And it's, yeah, it's psychological more than financial. So I don't know. I I I know what my reaction was privately, you know, sitting behind this desk last night at 10PM. My risk preference went to zero.
Jordan Gal:And I went over to Mercury, and I liquidated our treasury account that was earning 4%, and I'm making my way back to Chase. So the those, like, game theory, like, when you're in private, how do you really think? Those things are happening everywhere. And, I mean, I I mean, I'll be honest. I did the same thing with Wealthfront.
Jordan Gal:I have money at Wealthfront because it's a great system, but kinda freaked me out because it's smaller.
Brian Casel:Yeah.
Jordan Gal:So, you know, this is the stuff that happens with these, like, confidence shakes, which is why the US government comes in usually comes in and says, this is a fluke, and we got it, and everyone's gonna be made whole to make sure that confidence stays there so people don't freak the hell out. But it's it is a it is a bad day in the American startup economy.
Brian Casel:Yep. Unbelievable.
Jordan Gal:Yeah. Pretty crazy.
Brian Casel:Yeah, dude. Well, what else is happening, like, on on on ground level over at Yes. Rally HQ?
Jordan Gal:Yes. That's right. Thankfully, you know, that is
Brian Casel:a Can you share the new domain, or is that not yet?
Jordan Gal:It's it'll it's you'll love it because it's sorry. It is getrally.com. So we we do use what do you call it? A modifier? Yeah.
Jordan Gal:Yes. But
Brian Casel:Okay. That's I I like that better, I think, than I mean, rally on is kinda cool because it's, like, kind of a catchphrase, but I could see how it's
Jordan Gal:It people called this rally on.
Brian Casel:They thought People call it rally on.
Jordan Gal:And it which isn't, the worst thing in the world, but it it just, like, became a little bit of a distraction. Yep. And then this came up and it wasn't expensive, so we just pulled the trigger.
Brian Casel:Yeah. There you big deal. Yeah.
Jordan Gal:And we're working on a new marketing site ourselves, which will probably launch in the next, I don't know, three weeks, four weeks. Mhmm. So it's kind of perfect timing. I'm like, alright. Let's just make the chase.
Jordan Gal:Right? It doesn't change the logo. It doesn't change the app domain and so on. Yeah. Yeah.
Jordan Gal:So my my week, I spent in LA at a conference called the Montgomery Summit, which was as hoity toity as it sounds. It was this beautiful conference at the Fairmont in Santa Monica. It was not bad in terms of being there, and they really ball out. So we're it's like dinner at the Getty Villa, and, like, it was all out.
Brian Casel:What is this what's the conference all about?
Jordan Gal:Okay. So the conference is put on by March Capital. March Capital led our series a, which eventually the announcement will go out sometime in the next two weeks or so. So these are lead investors. So these are people.
Jordan Gal:We we we love them. But their DNA, their background comes from, like, the larger finance world. So this is, like, hedge funds, private equity, growth equity, and VC all mixed in. There are more people wearing blazers than not. Right?
Jordan Gal:So this is not like a startup conference with T shirts. This is like This isn't a microconf. It is not microconf. Yes. And and, you know, microconf, I feel much more at home at, but it was amazing to see.
Jordan Gal:So the opening conversation was between Jamie Montgomery, the founder of March Capital, and Mike Milken, right, the old school LBO king of junk bonds from the eighties, who's a brilliant guy, an extremely, you know, multibillionaire. So it was really interesting to hear all of the chatter and mood around the economy, around what's happening with later stage valuations and going public. And so it's cool to be there. And Jessica, our VP of product, you know, that I've been working with for five plus years, came down with me. So we just had three days of just soaking it in and, making plans and plotting.
Jordan Gal:And we met with a few people in LA. We met with some people in our ecosystem. There was one night that was a dinner for e commerce industry. And I just come back from those types of events just so like, it's like the ambition just gets blown up like a balloon.
Brian Casel:Yeah.
Jordan Gal:It's just like you realize how big the world is.
Brian Casel:Do you take
Jordan Gal:how big these opportunities are.
Brian Casel:So a trip like this, do you is your like, what's your, like, primary it sounds like there's, like, multiple reasons to go down there and and have a good time. Like like, you know, there there's the investors. You're you're gonna go hang out with your team. What are the primary, like, touch points that you're looking for here? Is it is it just like FaceTime with the people that I'm associated with?
Brian Casel:Get like, build these quality relationships? Is it find partners to to work with this year? Is it customer growth? Like, what are you thinking there?
Jordan Gal:So I I I would categorize it into, three parts. The number one part when I when I go in and I'm talking to Jessica, alright. Here's our goal. It's it's effectively putting ourselves in a position to capture serendipity.
Brian Casel:Mhmm.
Jordan Gal:Like, you just don't know who you're gonna meet, who you're gonna sit next to at dinner. So we're just gonna go in and be open to what comes our way. Right. And that's how I generally like to go to a conference overall because if I have, like, a really specific target, I'm gonna talk to this person, that is always like, oh, he had COVID. Actually, he's not here.
Jordan Gal:You know? It's it's like impossible.
Brian Casel:That I mean, that I think that captures the whole point of conferences in general, at least in my experience. It's that serendipity. It's like the more yeah. Like, the more these are literal literal relationships that you're building. It's such a different experience than just knowing somebody on Twitter.
Brian Casel:You know?
Jordan Gal:It's Yes.
Brian Casel:It's actually hanging out and getting drinks and doing dinners and and then meeting some person that you never knew existed, they're doing something super interesting.
Jordan Gal:Yes. And it overlaps, they know someone that's doing some right. So so that was, like, point number one. We also had very tangible point. We wanted to meet two people specifically that we set up a lunch with and wanted to mind meld in person.
Jordan Gal:So that was really important. And then number three, the part that was unexpected, it was such an interesting experience because I had Jessica there with me at a lot of these meetings. Right? So it was like like three or four people in a meeting. And I I tell I share my thinking and my assumption and my stories with Rock and Jessica all the time.
Jordan Gal:Part of their difficulty is they just kinda have to take my word for
Brian Casel:it. Mhmm.
Jordan Gal:You know? I'm like, this is what I'm seeing and feeling and sensing in the market. And they're like, alright. We don't see any proof because we're not in those conversations and Zoom calls, and we're not putting together these pieces like you are, but you say so. Mhmm.
Jordan Gal:This was a crazy opportunity where we went and we sat down with strangers. One of the things the Montgomery Summit does is it allows people that are going to request meetings.
Brian Casel:Oh. And they just arrange it.
Jordan Gal:And and they just and it literally, it's like Table 62 at the bungalows between 12:30 and one. So it's it's just dozens of tables like that throughout the entire time with people meeting.
Brian Casel:Oh, cool.
Jordan Gal:Yep. Which is which is great. And we you know, I probably got 20 meeting requests and accepted, like, six of them because a lot of them are like, we invest $50,000,000 at a time and we do you know, we take people public. It's like, cool story, but it's not for us. So the people we had real overlap with, we meet with.
Jordan Gal:So Jessica and I had so many of these meetings, and the other person that we're meeting with told the same story of what's happening in the market that I tell them. And I kept looking over Jessica like, Yes. It's not it's not just me.
Brian Casel:Yep. She can she can vouch for you now. Yes. She can go back to Rock and the team and
Jordan Gal:Like, he's not crazy. Yep. This is really happening. This is what other people think also. Like, we are going in the right direction.
Jordan Gal:This is the part that's risky, but we heard it here and here and here.
Brian Casel:And are these conversations like again, like it's it's it's more like, this is what we're seeing and and what are you seeing in the market and just sort of like observational, like like sharing notes? Or is it like example. I'll give you an we we actually have like overlap in what we're doing and Yeah.
Jordan Gal:I'll give you an example. I talked to the founder of a company that runs a headless front end for e commerce, and they're going towards Salesforce and SAP. And from the conversation and my hunch and what the founder that I talked to said, they're going up market there because those merchants are in so much pain and they wanna modernize, and modernizing on the front end first is a great pitch for them. Like, we understand you're never getting off SAP. It's gonna take three years to do that, But modernize where it matters most, where your shoppers interact.
Jordan Gal:Yeah. Okay. So I have that conversation through me.
Brian Casel:I just like the way that you just described that. Like, that seems like really for me, like, as again, as as like an outsider to the whole headless e commerce ecosystem, that's that's one of the things that just sort of like clicks with me. Like, you go to these large entrenched brands that are on these old legacy systems, and like, this is your path to upgrading on the front end.
Jordan Gal:Right. One piece at a time. That's like composable commerce. Whatever it is what it's turning into at the enterprise is we're never getting off of this, you know, CRM or this PIM or this thing or this order management system, but we wanna do things that actually affect the customer. Okay.
Jordan Gal:So that's a conversation, and then that goes to Rock and Jess. And what it turns into for Rock and Jess is that is an enormous amount of work to do in SAP integration. And so it's riding on like a piece of insight for me, which is, you know, cool and all. I've kinda led us into good places in the past, but that that's a it's a big leap of faith. Yep.
Jordan Gal:So then we go there and we meet someone who works at SAP. Or we work or or we talk to someone, you know, someone who works at an agency, and they're and then they parrot back that same logic without me saying anything about it at all. And it's just another important outside data point on an assumption that I brought into the company and I'm making an argument for, and that it's very, very helpful.
Brian Casel:Yeah. Exciting.
Jordan Gal:Yeah.
Brian Casel:I I don't know how much more time we got. I think you mentioned some some new go to market stuff.
Jordan Gal:Yeah. Yeah. We had two people start on the go to market team. Someone in partnerships and business development and an SDR. And what's happening it's great when it works out this way, but this week we just have a bunch of good things happening.
Jordan Gal:Our GMV is, like, 50% up where it normally is. People that use the product and left are coming back this week. Other people are saying yes in onboarding, and these people are joining at the same time. So it just feels Nice. Great to have that momentum.
Jordan Gal:And it's funny how that happens when you're, like, out of town, just so everyone knows. Like, this is the team effort. I can be out of town. I'm not necessary. It's not like me, like, pushing things forward.
Jordan Gal:Like, no. This is the the team doing this.
Brian Casel:That's that's I mean, that's that's the dream. That that's the best part, you know, thing when these things are happening. Right?
Jordan Gal:Yeah. It is definitely it's definitely there's a scary, stressful undertone. When we went to the conference, it feels like most startups are in one of three places. The first place, actually healthy, making money profitable or close to it. That's first.
Jordan Gal:That's where everyone wants to be. The second place is you raised a lot of money at a very high valuation, and you have an enormously difficult time catching up to that valuation. Right? If you if you succeeded in fundraising over the last years and you raise a $100,000,000 at a billion dollar valuation, you need to grow so much to get close to a billion dollar valuation again that that is extremely stressful. And a lot of people looking around and saying, I don't think this is worth the next five years of my life, and they're they're starting to leave that situation.
Brian Casel:Yeah.
Jordan Gal:And then the third part is you don't have enough money, you're not profitable, and good luck raising money right now.
Brian Casel:Right.
Jordan Gal:Right. So so everything everything feels very, very tough. And investor the only good thing is that investors at the late later stages are losing hope in that recovering. And so a lot of that money is being pointed downstream to new companies, which is a good thing. Yeah.
Jordan Gal:So seed stage, pre seed is still is still in good shape.
Brian Casel:Yeah. Yeah. Yeah. I mean, I'm still in this you know, you're talking about how, like, you know, you're out of town this weekend, but, like, things are things are happening in the business right now. I still feel like everything has to basically start with me.
Brian Casel:And what I'm trying to do now is we have three developers and myself and a marketing person, a couple of marketing people. And I'm trying to get it to a point where, like, I am starting these projects and then off then they're off and running. Now I can start the next one. And so what we we can't you know, because this transition from ZipMessage to Clarity flow is like so many different projects happening at the same time. Like, literally, like, one dev is is overhauling our billing logic.
Brian Casel:Another dev is working on a on a our big programs feature. You know, I'm working on a new client onboarding setup for for coaches. And then and then I've got this the website, and then I gotta get my my team going on the content strategy. It's like, if I could just do the first 15% of, like, the creative input on each of those and then put it in into the queue for my team, that's that's how I'm trying to, like, survive through this big transition right now. And it's really it's just really chaotic.
Brian Casel:But that's I think that's, like, my mental model on this is, like, multiple projects. I do the first 10 to 15%, then hand it off and let somebody else own the rest of it.
Jordan Gal:But that gets it off on the right foot in the right direction.
Brian Casel:Yeah. I spent a lot of time, like, scoping it out, and and we do a lot of shaping and talking about it, and then they go they're off and running. And then I'll I'll probably come in near the end and, like, finish up the the feature or whatever it is, and then, you know but it's just a lot of stuff happening.
Jordan Gal:Oh, yes. Well, you know, this thing is hard no matter what you do, and you have, like, made it much harder over the last few months, but it feels like it's the right thing to do. And I'm looking forward to over the next few weeks kinda digging into, like, you know, feature decisions, positioning, what competition looks like. And the big thing I think that everyone needs to be thinking a lot more about than they used to is just go to market. How do you get this in the hands of people and in front of their eyeballs?
Brian Casel:Yeah. I'm I'm really excited for the next few weeks because it's like shit's about to really get real. It's like, finally, we're it's like we can start again and and just get all all this stuff really up and launched.
Jordan Gal:Know? Cool. Well, let me be the first to tell you because no one else knows. But congratulations.
Brian Casel:Thanks, buddy. Appreciate it. Hell yeah. Alright. Well, we did it.
Brian Casel:Another week.
Jordan Gal:Another week. Have a great weekend.
Brian Casel:Alright. Later, folks.
