How talking to every customer helped build a $250K/yr startup

A few weeks ago, I wanted to know how long my customers were staying subscribed to Mixergy Premium and data like that, so I signed up for Baremetrics.

After I signed up, I got an email from the founder asking if I wanted to jump on a call so he could show me how to use Baremetrics to grow my business.

I was so impressive by what happened on the call that I invited the founder to come onto Mixergy. Josh Pigford is a Mixergy fan and the founder of Baremetrics which provides analytics and metrics for Stripe.

He’s here to talk about how he built his business and how calls like ours grow his company.

Josh Pigford

Josh Pigford

Baremetrics

Josh Pigford is a Mixergy fan and the founder of Baremetrics which provides analytics and metrics for Stripe.

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Full Interview Transcript

Andrew: Hey there freedom fighters, my name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. And a few weeks ago I wanted to learn how long my members were staying subscribed to Mixergy Premium and what a new customer of Mixergy is worth to me. You know, the kind of data, the kind of stuff that you think is essential to business and should be there, but I didn’t have for a long time.

So I signed up to Baremetrics, and after I did that I got an email from the founder asking me if I wanted to jump on the call. Basically he was offering to show me how to use Baremetrics to grow my business. So I took advantage of that call, and by the end of it I was so impressed with Baremetrics and so impressed with the call that I said, “Josh, you’ve got to come on here and talk about how you use calls like that to help keep your customers longer, reduce your churn, and have them love the product as much as I do.

He said yes, and that’s what we have here today. Josh Pigford is a Mixergy fan and the founder of Baremetrics which provides analytics and metrics to companies like mine. This whole shebang here is sponsored by AndrewsWelcomeGate.com. If you are having trouble getting your hits to stick around longer, getting people who just hit your site to get their email address, I’ve got a page that works like magic for me.

You’ve seen it on my site a lot, and I want to make it available to you as a template. You just change my logo to your logo, make a couple of other tweaks to it, and it’s all yours and you can convert your hits into email addresses. It’s just available to you at AndrewsWelcomeGate.com, AndrewsWelcomeGate.com.

All right, Josh. Welcome.

Josh: Okay. Thanks for having me.

Andrew: So in preparation for this conversation, I quickly searched my inbox for your name, and I found an email from you from years ago for a previous company, PopSurvey. Here it is from February, 2012, from January, 2012. It was essentially saying the same thing, that you said to me when I signed up to Baremetrics which was … Do you remember what I’m talking about?

Josh: Yeah, because I’ve been doing … Any previous businesses I’ve always done this, have a phone call with the customer.

Andrew: So as soon as the customer would sign up for … What’s PopSurvey?

Josh: So PopSurvey was like a survey, almost a platform similar to SurveyMonkey.

Andrew: But it was prettier and it was simpler and …

Josh: Yeah.

Andrew: So you called up customers right after they signed up, and you used the word “was”. It’s no longer there. Well, it is but it’s not…

Josh: Sort of.

Andrew: … fully functioning any more.

Josh: So it’s there. I no longer have anything in relation to it. So I think it’s still up and running.

Andrew: So here’s the thing that gets me. I felt like the call you did with me was so magical that, of course, it’s going to make customers love you and stick around longer.

Josh: Sure.

Andrew: And have them tell you what to do to improve your product so that you can generate more revenue from them and bring in more people like them.

Josh: Sure.

Andrew: So now I’m seeing it’s not the magic bullet, right?

Josh: Sure.

Andrew: What did you … When you made those calls, what did you learn that … Yeah, what did you do?

Josh: So what I found like comparing PopSurvey to Baremetrics, there is the deal, the reason that Baremetrics works so well and this combination of have a phone call paired with like a product that somebody needs is the bigger thing, the point to keep in mind is that you have to be solving a big enough pain. So PopSurvey, for instance, the customer service side was great. People like the phone call. They got more value out of it. But the pain point that PopSurvey was solving is nowhere near what Baremetrics solved.

So when you first signed up at Baremetrics, you logged in, all your stats are calculated for the first time. And it’s like for most people sort of this like, “Oh my gosh” kind of reaction. I have no idea. A lot of people, they have never seen those numbers before. So it kind of changes their business for them. PopSurvey’s like, “Well, I could use Survey Monkey, or I could use the nicer looking PopSurvey.”

And the bigger reason that it didn’t work is that PopSurvey wasn’t solving a big enough pain.

Andrew: I see. And so when you were getting on a call with them, you found out that you weren’t solving a big enough pain. Were you able to identify a pain?

Josh: To some extent. I mean, like nothing though that keeps people around for a long time.

Andrew: I see.

Josh: Not so much.

Andrew: What were the reasons that people would sign up to PopSurvey?

Josh: So a lot of them, they were tired of SurveyMonkey being kind of clunky or kind of looking like a high school exam kind of thing. Just a page full of fields to fill in versus PopSurvey’s was a little more fluid experience. So they enjoyed that, but that’s not enough to keep somebody a business pain for a long time for most cases.

Andrew: Why not?

Josh: Because I think people also…

Andrew: You still want to represent your company well with the survey.

Josh: Sure.

Andrew: You have to pay Survey Monkey anyway, don’t you? It’s not a free product. I know there’s a free version of it. So why, if they needed a survey and they were willing to pay for one company, why wouldn’t they be willing to pay for another company?

Josh: So I think like you look at the type of the customer segmentation there like Baremetrics, my customers tend to be like you, like the business owner, or the guy who’s running all the analytics or the metrics, or marketing, that kind of stuff. Whereas Pop Surveys was typically – there were some entrepreneurs, but a lot of it were people who were just button pushers at a company who weren’t necessarily decision makers. So, somebody told them they needed to survey somebody, so they decided “I want a survey, this is the nicest looking one. I’ll send a survey,” and they’re going to use us again.

Andrew: So that’s what I’m learning. It has to have a big enough pain or else people don’t care that much. It needs to address a problem that someone who has the money to solve it, of course, is going to be there, and it should be an ongoing issue because that’s one of the other issues that you discovered: That people didn’t need to send out surveys every single week, so they’d send them out –

Josh: The pain has to be chronic. It’s got to stay there.

Andrew: Got it. And when you have a membership program like I do, you’ve got to know on an ongoing business are people leaving, how long are they leaving, if I try something different will it work. Okay, so it is a chronic ongoing thing. You also had a different company that still seems to be up and running. Why am I blanking on the name, I’m even looking through my notes and I can’t come up with the name.

Josh: Temper.

Andrew: Temper, yes! So, Temper is another beautiful product. I love the design of all your products including and especially Baremetrics. Simple form on the bottom right corner on the site that I can have triggered when my users are on it that asks them how happy are you with the site. And when they click a smiley face that indicates how happy they are, you can follow up with a question saying “why?”

Josh: Same thing. And I think that’s even worse than Pop Survey in the sense that to me, it’s a solution looking for a problem. People aren’t necessarily looking, “How can I track customer satisfaction over time?” They still look at that. An d interestingly enough, Temper was technically part of Pop Survey, owned by the same entity, and we built Temper to try to fix the reason that people didn’t stick around for Pop Survey, and that you only need to send a survey once, a couple times a year, if that.

So, we were saying, “Let’s just have this miniature survey that you can just leave all the time and track it all the time. But people still wouldn’t use it long term and they didn’t know how to use it long term, what to do with it.

Andrew: Okay. All right, so these phone calls are not panaceas unfortunately. But they do help improve your business as you told me when we were on the phone. You said that just about anyone who you talk to, any customer you talk to sticks around. The ones who leave are the ones who you don’t talk to. Is that right?

Josh: That’s correct.

Andrew: Okay. So, Baremetrics was solving a problem for you. I think it was a Monday night that you were up, trying to figure out what?

Josh: I needed for Pop Survey and Temper those kind of Metrics, so MMR, Lifetime Value, Churn, that kind of stuff. Didn’t trust any of those solutions out there, didn’t trust my ability to hook them up correctly.

Andrew: What were the solutions, because I looked for solutions, frankly. I even had people in my audience – I offered them to pay them money to solve the problem. I gave them access to all my data. It’s a complicated problem. What did you see that was out there?

Josh: So, you think of more generic data driven tools. So like a KISSmetrics, or a MixPanel, those are great tools. But when you’re saying revenue based metrics, so talking money, not talking conversion rates and things like that, most tools out there don’t give you anything you need, or they’re this generic charting application where you just hook up a dozen different data sources and then you have to build up your own custom charts, things like that. So, that was and still is most of the landscape. They try to be a generic work for anybody type of tool. And in trying to work for everyone, they, for me, didn’t work at all. So, that was the impetus for me saying, “I’ll just – Stripe’s got the data, let me just build it myself.” And that was how that started.

Andrew: Yeah. And Stripe does make it easy. That’s what I use for part of my membership is handled by Stripe and that’s the part that I can hook in with you. I can’t hook in the others, the people who are using that old, cruddy system that I used to have. But all I have to do is say to Stripe, “Yes, trust Baremetrics. Then Baremetrics sucks in all the data, does the analytics on it, then gives me all my charts right away.

The idea came to you, you built it for yourself. Was there anything that came to you that said, “One day, this will be another big product and I can make big money off of it.”?

Josh: Not at all. Honestly, that was almost not going to launch at all because I launched it 30 days after I initially had the idea. I remember having a conversation with my wife where I’m thinking, “I’ve got 2 stash products already I don’t need a third one to juggle here. What am I doing?” I kept talking to other entrepreneurial buddies and other SaaS companies and the overwhelming response was, yeah, I don’t have anything…I’m doing this in a spreadsheet manually, and nobody wants to stare at spreadsheets all day, and so I eventually just launched it to see what would happen, and it took off.

Andrew: The first thing you did was you tweeted about it?

Josh: Yeah, that was about the only thing I did for the first three months was tweet.

Andrew: Just tweet. What did you say in the first tweet that got you the first customer?

Josh: Something like, do you use Stripe? If you use Stripe, check it out, I just launched an analytics for Stripe kind of thing. I mean, something really basic. At the time, I had a very low following on Twitter. A lot of people say you have to get a couple thousand Twitter followers, that’s how you got your customers, but at the time I didn’t have any of that. And people at Stripe are really good about following on my page.

Andrew: Let’s take it a step at a time because I do want to understand each, including Stripe’s hand in this.

Josh: Sure.

Andrew: The first thing you did…you tweeted out. Do you remember your first customer?

Josh: The first customer, at least the first one that I remember, so the guy is at CircleCI, they’re the first…at least handful, maybe two or three, and they signed up for the $250 a month plan. Which I was giddy about at the time. And they’re still customers today… That first customer kind of validated…I tweeted, and that was my sales process for the first three months.

Andrew: And that one worked, so you said, all right there must be other people out there?

Josh: Yes.

Andrew: You were the only coder on this?

Josh: Designer, developer, front and back end for the first six months.

Andrew: You told Jeremy Weisz in the pre-interview here at Mixergy that you did no customer interviews, no customer research, nothing beyond the initial conversations with friends.

Josh: That was it.

Andrew: Why didn’t you do more, since your friends were giving you so much guidance, since you believe in interacting with customers, potential and real, and existing?

Josh: To me it was just still sort of a side project, and I needed to think for myself regardless. I was going to build it for myself no matter what, and I was kind of…curious if other people were getting the use out of it, would I want to release this myself, but I didn’t do any sort of “how much would you pay for it” kind of customer interviews stuff at all.

Andrew: And you didn’t do anything that said…was there anything that, once you launched it, you realized, you know what that should have been in there from the beginning, I just didn’t think about it but talking to customers told me that.

Josh: Yes, after launching, doing customer interview stuff was major. That led to…a lot of talking to every single customer. Early on, I probably had a phone call with 100% of the customer base with the first twenty or thirty customers. Talking through, what is working for you? What isn’t working for you? And that led to two months later me scrapping the entire thing and starting over, literally starting from scratch.

Andrew: What about this Josh…when you talk to customers and you’re earnest and you’re eager to help and you want to satisfy them so that they stick around and you’ve taken their money so you especially want to make them happy and you get the kinds of results you get at PopSurvey, doesn’t that just make you feel like, you know what, at this point, I’m not talking to customers, I can’t handle it. Not intentionally, not where you sit down and plan out to never talk to customers again, but where you say, you know I have other things to do and you stop doing it.

Josh: …I mean that’s kind of what would happen with PopSurvey and [??], is that it slowly…because you kind of get worn out, like not getting a positive response. You’re getting some money, but that…the sort of constant, “oh this is great”…then the next day they would cancel…

Andrew: That literally happened to you.

Josh: Absolutely. And…it’s hard to get honest feedback from customers, so I think over the years, I’ve learned how to dig that out of people.

Andrew: That’s another issue. So one issue is you get really depressed, especially when the product stinks at first. Didn’t you, at some point, you said your stomach would drop when you’re making calls for Baremetrics?

Josh: Well yes…because sometimes I didn’t know what the response would be. Because I know on my end, as the founder and at the time sole coder, I knew every single wrong thing with the product. I knew all the stuff that was broken and I just knew…

Andrew: What was broken when you launched?

Josh: Things like the data imports would maybe work half the time. There are just lots of errors. Handling the amount of data that I was, I didn’t know how to handle that from a coding perspective, so the server would be down a lot. Numbers wouldn’t necessarily add up like they were supposed to. And I knew that any phone calls would have… somebody’s going to be so ticked off.

Andrew: And did that happen? Did someone say these numbers don’t add up?

Josh: People would say that, but no one was ever mean about it. Everybody was so supportive in the sense that, hey this doesn’t add up, help me figure out why it’s not adding up, I want to keep using the product. Like don’t cancel my product. I’m happy with it, just we need to figure out what’s wrong.

Andrew: That’s the kind of reaction you get when you’re solving such a big problem that nobody else has solved or addressed.

Josh: Right.

Andrew: Right?

Josh: Yep.

Andrew: If there was an alternative system people that would have gone to it. But if…

Josh: Sure.

Andrew:…there’s nothing else. And people are desperate for it then you get that encouragement. Keep going. Keep building it. Keep making it work. OK. So we were talking about making calls to people and the feedback that they gave you that helped you uncover needs that you didn’t know were there.

Josh: Sure. So that’s ultimately kind of what led to like figuring out that I was solving a big enough pain for people to pay as much as 250 bucks a month for it at the time. And they still were sticking it out even though it wasn’t solving a big enough pain. But learning like how can we solve larger pains for more people. And that’s what those phone calls turned into was learning the intricacies of people’s businesses. And I, like, especially if you’ve got, if you’re in B to B where your customers are actually businesses. I think learning not just what they say they’re pain is. But what it is that they, learning about their business in general gives you a lot better context of what the pain is and kind of what angle to solve it from.

Andrew: Do you have an example?

Josh: [??] So somebody might say like the type of business model that they have. Or the type of billing. Like they may bill annually versus monthly. Or they may bill weekly versus monthly. And…

Andrew: I see.

Josh:…the types of customers they have. And the type of product they’re selling all affects what kind of product they need.

Andrew: Give me a specific.

Josh: So like if they, if their product is something like a PopSurvey that their customers don’t need frequently well then you need to build. Like in the case of Baremetrics we need to try to build a dashboard that helps them understand why that happens. Why that person, why a survey company or whatever has a lot of churn. Those, like, do those customers come back 6 months later? Maybe. And we should try to service that for them.

Andrew: And can you do that?

Josh: Yeah. So like it depends on the metric. But like that’s simple.

Andrew: What’s a metric that now takes into account that someone might cancel and then come back a month later?

Josh: Correct. So like we partially have that. Then we’ll fully have that in the next…

Andrew: And which metric takes advantage of that?

Josh: So that would be like if you’re looking at customers on an individual level you can see the entire lifetime value of that customer whether…

Andrew: I see. But churn doesn’t take it into account?

Josh: The churn will take it into account at the moment. That’s, we were having that conversation yesterday actually about fixing that side of things.

Andrew: What do you mean at the moment?

Josh: So at the moment it would assume that every time that customer cancelled there was churn. But you can potentially say, if depending on the time frame that they return in…

Andrew: Ah. So you could eventually say…

Josh:…to knock out.

Andrew:…if they’re not back in 2 months that’s not really churn.

Josh: That’s not really churn.

Andrew: Just a pause.

Josh: Yeah.

Andrew: Got it. I was trying…

Josh: But it’s that kind of stuff that like, certain businesses have a major problem with that. Other businesses don’t have a problem with that at all. In trying to account for that much product you wouldn’t know unless you like figure out why their business exists and the use patterns, usage patterns.

Andrew: I would imagine other revenue is one of those.

Josh: Yeah.

Andrew: So you had a SaaS need where people were paying on a monthly basis. But…

Josh: Yeah.

Andrew:…there are some people that have that plus they have non-recurring.

Josh: Yep.

Andrew: [??]

Josh: So we come for that too, and we, but it kind of gets funneled into this just other big revenue…

Andrew: Right.

Josh:…metric. But it’s hard to like, it’s hard to include that in SaaS based metrics, you know, or recurring based metrics ’cause it’s not recurring.

Andrew: So you’d make, you’d get these calls, people would tell you things are broken.

Josh: Yep.

Andrew: He would understand. You’d keep talking to them. You’d get an understanding of what their business is like. And when you rebuilt it from scratch how was it different after you talked to customers?

Josh: Sure. A lot of it was just people that overall just sort of overarching thing was people wanted to know on a deeper level what their metrics mean and kind of what behind that. What about breaking it out by plans? So, comparing different plan metrics. And I need to see metrics from a year ago versus just 6 months ago which is what we launched with. And more metrics covering different types of metrics covering things like coupons and all sorts of stuff. So that was sort of the impotence of us re-launching [??]

Andrew: I see. Days of cancellation like Monday is a big cancellation day?

Josh: Yeah.

Andrew: Saturday is a cancellation day. Sunday.

Josh: And we’ll, like we’re very, next week or so well have the time of cancellation too. So you can see. Like everybody cancels between 8 and 10 o’clock in the morning.

Andrew: What’s the point of that?

Josh: So it helps you to potentially cut people off at the pass-on. Letting you tie into, say an Intercom type of product where you could say typically people cancel. You could say our turn rate indicates that someone cancels six months after they sign up and they typically cancel on a Monday morning. So, you message them a day or two before the Friday before to try to reach out, and figure out if they’re happy with the product, make sure that they are getting value out of it. And if not . . .

Andrew: Message them. Intercom is a big thing that I see on your site.

Josh: Yeah.

Andrew: What does intercom allow you to do?

Josh: So, intercom lets us set up different triggers to automatically message and kind of stay in contact with . . .

Andrew: So, you can say with intercom something like if the person’s been with us for three months and it’s a Monday, I think you should, we should message them. What kind of messaging does it let you do?

Josh: So, in this case, we would do, typically, I’ll schedule another phone call. So, I’ll say, hey, I want to make sure, see how business is going. I don’t think you’ve been around our Baremetrics that long enough to get our two month follow up email.

Andrew: Nope.

Josh: So, you’ll get one that says, like checking in to make sure that you’re getting value out of Baremetrics, see how your business is doing, to schedule another quick phone call because I found that we have a 60 day money back guarantee. So, we don’t have a free plan or free trial, but most people if they cancel, cancel within that 60 day range.

Andrew: I see.

Josh: So, I try to message them before they get to that to see if we can work out any problems.

Andrew: And intercom allows you to do that. What else does intercom allow you to do?

Josh: So, that’s the main thing is. We use it for those kinds of emails or surfacing features you may not have known about. So, just little things like that where . . .

Andrew: So if I’m here for five days then you might pop something up that says hey did you know that you can do this other thing that you didn’t touch before?

Josh: Right. Or if I can tell that you haven’t used that feature at all and then message you to say hey FYI did you know that we have notifications. That kind of thing.

Andrew: Oh, interesting. And the messages, do they pop up on the bottom right?

Josh: Depends on the type of message. So, the email follow up or the e-message say let’s schedule a phone call is an email versus the feature, kind of life cycle stuff, comes up just like a little box.

Andrew: Okay.

Josh: Within the app.

Andrew: I see. All right. So, you’re tweeting out. Obviously, tweeting is not enough. You mentioned stripe because you connected to their platform, you have a little limitation which means the people who use authorized.net or Alternate Brain Tree, PayPal, etc. can’t use you, but it also means that stripe wants to help you. What does stripe do to help you out?

Josh: So, initially, early on, Patrick and John, the co-owners of Stripe, I mean day one, I, they saw, they monitor the Stripe keyword and so they saw that, hey Baremetrics, this cool new tool, builds on how Stripe is launched. And so they, since then, have been very generous and tweeting it out as well. So, they have updates like they’ll keep tweeting and like if you email Stripe asking hey I need some kind of additional analytics, then Stripe, Baremetrics is who them and their support team also recommends. So, that kind of stuff. Like a lot of, maybe not high volume, but extremely, relevant leads. You know, like Stripe recommending you is a good one.

Andrew: First customer came in. $250. How long did it take you to go to about a thousand?

Josh: A thousand was within, I think, the first month.

Andrew: First month?

Josh: Yeah.

Andrew: That’s all reoccurring as long as you keep your turn down. So, a thousand within the first month, you know you’re onto something.

Josh: Yep. And that kept up. So, I think that the first four to six months our monthly growth rate was like 30% month over month growth. So, quickly got into the multiple thousands and you know, we’re at 20,000 now.

Andrew: Four months in, you had 250 customers and I think it was soon after or around that time that you decided to launch demo.barometrics.io. What’s that?

Josh: So, demo, I, in February. So, we relaunched in January, rebuilt from scratch. The first version, it had a demo but it was just dummy like, there’s nothing real there, I just put in some numbers. When I relaunched in January, you could now deep dive into every metrics. So, doing these dummy pages was no longer convenient to try to have dozens of these pages, I’ve got to fill in dumb data. So, I knew I didn’t have a demo, especially because I was requiring you to pay upfront and decided the lazy, easy thing is for me just to make my own metrics public.

And then after I had made that decision, it was sort of, hey this could be an interesting marketing play. People love to read numbers. But it was sort of an afterthought. So, in February, I make that stuff, I made it public just, in which is still there today and that was sort. That changed the angle of our chart, of the growth chart.

Andrew: What was it? What month did you launch it? February?

Josh: That was in February.

Andrew: Of 2014. So, actually I see January 2014, your monthly revenue, recurring revenue is $2,400, February it goes to $3,800, March you go to six thousand a month recurring, April, you go to about ten thousand.

Josh: Yes. So those were a good few months.

Andrew: Those are a really good few months, and now it’s all public. Any downside to showing this stuff publicly?

Josh: So, the biggest downside, and I think there are two, one is that there is a lot of scrutiny in the sense that if you are a potential customer, you could make an incorrect assumption that, “Okay, well your churn looks kind of high, that must mean that people aren’t happy with it.” Which, in reality, it’s true that’s some percentage of it, but some of it is businesses are going out of business, or, you know, customers ended up needing to build their own thing in house because they’ve got a dozen different sources of revenue.

There are lots of reasons for that, but people can make broad assumptions. The second is competition. So, namely, people seeing, like, the success that Baremetrics has had and thinking, “Okay, I know all of their numbers. I can pull that off and probably do better.” So competition comes up a lot more because of it, I would say.

Andrew: What about this? I see enterprise $4.99, enterprise $3.49, enterprise $11.99. So it looks like people are paying different prices for the same product sometimes.

Josh: Well, same, but it’s different. They have different needs, right? So those customers at the different price points, the $11.99 a month has a ton of customers. Our pricing is largely based on the number of customers you have. So what the enterprise level does, I mean, one enterprise customer could be saying, “They’re getting a better deal,” but they have different needs as well. I haven’t had a problem with that at this point.

Andrew: Then, and this was really exciting, you added buffer.baremetrics.io.

Josh: Yes.

Andrew: What was the deal with that? That’s very similar, where they’re showing their data publicly. What’s the deal with that? Were they getting paid for it?

Josh: Sure. So interestingly, I was at MicroComp, in Las Vegas, and I think that was in early April. I’ve known Heaton Shaw for years, so he and I are good buddies. He’s an advisor for Buffer, and we were talking about, I had made, prior to this Baremetrics stuff was public he was familiar with that. He said, “Buffer, Buffer’s hardcore on the transparency thing, that’s their shtick. So we should make their stuff public.” So a couple weeks later, that was what came of that. So the deal with him was, they have a comped account. They have a free, I think they would typically be on an enterprise level plan.

Andrew: So that’s it. You just give them a comped account, and in return for that, they gave their data publicly. Anyone can just go through and see how much money they made, what their churn is, and so on. They just have to go to buffer.baremetrics.io. When you started to put that up, you were nervous because?

Josh: Well, because there is the potential for that scrutiny side of things, right? So I would start getting emails from people saying, “Hey, Buffer’s numbers look wrong.” Like, other people analyzing Buffer’s data and then criticizing Baremetrics because of it. There’s that sort of a downside, but I think in reality, Baremetrics has seen some big benefits where other people have thoroughly analyzed their Baremetrics data and told them places that they could improve their business. So I know they’ve gotten a lot of benefit out of that.

Andrew: What about this? That your service wasn’t ready to handle all the views that were coming in and all the data. By the way, can you move back just a little bit?

Josh: Sure.

Andrew: I’m noticing that we’re cutting off your chin. So, what about that, was it ready?

Josh: So that was, I was nervous, because they would have been at the time the biggest customer, both the amount of customers they have and the amount of data. So at that point I’m still a one man show, and not really knowing what I’m doing from a server/sys admin kind of perspective. When we initially started getting their data in before we launched the public stuff, there were a lot of issues. Issues with the stability of Baremetrics and being able to calculate all of this data. So there were many sleepless nights there. Then it launched and it was fine.

Andrew: Really? There weren’t any issues at the time? You didn’t have some data left out?

Josh: We would have that sporadically after the fact. So within the first couple of weeks, we’d notice, we started, because we had a huge influx of new customers that came because of the Buffer thing going public, so Buffer plus the whatever dozens of new big customers coming in, yeah, it made for a stressful few weeks afterwards.

Andrew: I heard you were up…here I’m looking at my notes. “Up at 3 a.m. not knowing what to do next and I would just go to bed until 5 a.m. and hope to wake up and get back to solving more issues.” That’s what it was like?

Josh: That’s what it was like for a couple weeks there.

Andrew: Sorry? Yeah.

Josh: Yeah.

Andrew: And it was just you at the time?

Josh: Yeah.

Andrew: And you were so desperate that you started to Tweet out about how tough this was? And what happened? Before you say what happened, what kind of issues were you Tweeting out about?

Josh: Well, things like, my Heroku bill was like pushing five or six thousand a month, which is…eating up all of my profits, because I’m just trying to fix the server stuff by throwing more server resources at it. So, my tweets are like how can I fix this so I’m not spending my entire revenue on server stuff and, you know, things are going really slow. How can I speed these things up? Pretty simple Tweets. And then I start having other developers start reaching out saying, “hey, let’s hop on a Skype phone call and chat about it.”

Andrew: Why would they do that? Why would real developers who have real jobs get on a call with you to help you with your thing when they have their own issues?

Josh: I think the biggest thing was that at this point I’d been public with Baremetrics for a few months and so that in itself, people kind of knew the Baremetrics journey. I started blogging about what had and hadn’t worked for us from the business perspectives and I think people were just genuinely sort of interested in seeing Baremetrics succeed. And if they could help out, great. And that ultimately led to my first hire, which was one of the guys that had reached out.

Andrew: Ben Sharp.

Josh: Ben Sharp. So, I had known him prior to Baremetrics but we weren’t in any way…I didn’t reach out to him and say, “Hey, Ben, can you help me fix this?” He just saw that I had tweeted about it, reached out, and came on board.

Andrew: I’m going to do a quick follow up to what I said at the top of the interview because it’s very important for people that do this, whether they do it with me or not, and then I want to come back and ask more about that first phone call and the second call that you do with people.

But, as I’ve said all along here at Mixergy, it’s not enough to just have hits to your site. It’s great, it feels wonderful, it makes you feel like you have this big number that you can share with your friends. But frankly, hits aren’t enough. What you need is a real funnel. A funnel where people come in, they discover, they get to know you a little bit better, then eventually they buy from you. And that in between part, between hit and buy, often is: get their email address so you can build a real relationship with them.

It’s tough to do, especially if you don’t have a lot of traffic and you can’t really A-B test everything. That’s why I recommend that you copy what’s worked best for us. I had some people who created this beautiful page for me, I A-B tested it against some other pages, I tweaked it, made it really work, and now it’s become my most effective way of converting hits into email addresses. And at this point, I don’t do anything except for that one page because it works so well.

Well, my friend Clay Collins said, “Let’s turn that into a template that anyone can use.” They could swipe out the Mixergy logo and replace it with their logo. They could swipe out the text about how many interviews I’ve done and come up with their own stat that they can put on and all that stuff. Very easy to change.

If you want to try it for yourself, it’s just a buck. All you have to do is go to Andrewswelcomegate.com. Andrewswelcomegate.com. It’s so good that even if you’re just launching something new and you don’t have a website you can use it. And you don’t have to worry about being able to manage it and make sure it takes your email addresses and sends them to AWeber and Fujisoft or whatever you use because it’s being managed by leadpages.net. Those people are so good at making sure that this page stays up for you, that it’s easy for you to customize, and that the email addresses you collect go where you want them to go. That’s why I teamed up with them, that’s why it’s available to you. If you need, or even want to try it, all you have to do is go to Andrewswelcomegate.com.

Your first call, you get to know more about the person’s business. But what do you say that allows you to reduce turn? Why is it the people who talk to you don’t leave?

Josh: So, the reason that I think a lot of people leave is they don’t necessarily understand the metrics or they feel like they’re not getting enough value out of it. So, they look at the numbers, they know the numbers, but then the reaction is “I don’t know what to do with these.” So, the purpose of the phone call is to help people know what to do with them. What can we do to reduce turn? Why does my Ltd. matter?

Andrew: That’s a big thing that I had, too. I said, “I want to know this data. Now that I want to, I hate it. Now I see how many people leave, I see their names, you know? What do I do now? If I can’t fix it, then it’s just going to be a slap in the face every day.”

Josh: Exactly.

Andrew: So, that’s what you heard on the first call and so what do you do to solve that?

Josh: So then it’s a matter of usually I’ll talk to some customers as long as an hour to talk through, “Hey, let’s take a look at your business. We’ll go to whatever your website is.com, check out, look and see what your business does. And maybe we can talk through some ways to reduce that, or we’ve put together resources on what churn is, how to reduce it, things like that. We’ll send people to those resources. That’s typically the response, and then it’s … The phone call ends with a very open ended like, “Please let me know if you have any more questions about metrics or why your numbers are what they are.”

And then there’s a follow-up two months later, another email in the same vein. That kind of keeps the conversation going.

Andrew: So the first call, a large reason why it works is you show people how to use Baremetrics to improve their business. And so if you can show them how to do that, all they have to do is make another 70 some odd dollars a month because of Baremetrics, then they keep it around.

The second call, the one that happens about two months in, what does that do?

Josh: So that’s like almost a check in to see if your business is doing better, but you feel like Baremetrics has improved your ability to run your business. But it’s also like, it’s sort of a reminder like, “Hey, maybe you haven’t been using Baremetrics as much as you could have. Here’s a reminder that Baremetrics is still here. You’re paying for it. Let’s see if we can do another call to see if maybe you have some additional questions that you haven’t had a chance to email me about.”

Andrew: Okay. Then how do you know that that’s enough? You’ve been around for a year, so you can’t … about two years.

Josh: So I mean, in general I would say like once I can get people really ingrained into making Baremetrics a part of their daily workflow, and a lot of that might be getting their team onboard too. So adding additional users to your Baremetrics account. The more I can do to make Baremetrics a part of your daily workflow, then the more likely you are to stick around.

And so part of that, I mean, this is part of the lifecycle stuff automated with intercom is to send people information about notifications. So email notifications or email reports, things that remind people of the value that they are getting out of Baremetrics on a weekly basis.

Andrew: What about this? It seems like it’s telling you a lot of features that you need to add because if you have to show people how to use this to reduce their churn and count on them actually doing it and squeezing it into their day, it’s never going to happen because people have other things to worry about.

Now don’t get me wrong. I shouldn’t say never, this is really important because it affects revenue and it affects the whole business.

Josh: Yeah.

Andrew: But if you know that people should be making calls to their customers at a certain time, why doesn’t Baremetrics just sent out an email the way that you send out an email?

Josh: You’re saying automate the customer outreach stuff?

Andrew: Yeah.

Josh: Because it depends on the business. That goes back to the reason I had the phone calls to begin with is in part to learn more about what their business needs. So if you take like a B2C customer, like they might have 20,000 customers, it’s a bad idea to schedule phone calls with that many customers, right? So like it would make sense to try to automate all those outreach. You can’t scale that. So that’s the reason why we don’t do that.

Andrew: It still feels like data is not enough. So …

Josh: So I agree with that. I complete agree with that, and I think that that’s like the source of our biggest churn is like just knowing the numbers isn’t long-term useful. So you need to know why the numbers are what they are. So like we’re working towards saying, “Okay, your churn went up 5% this month. Here is why that happened.” So it could be listing the customers that cancelled, and then you could reach out to them.

There are things like, okay, setting goals. So if we can reduce churn by 2%, what will our MMR be in six months? So then you can set these goals, these things to work towards, past just the numbers.

Andrew: My friend, Karem Myan [SP] told me about hook feed. Basically to do the same thing with an emphasis on more of what to do to keep people whose chart was disputed to fix that, people whose credit card expired, I think they do that, that kind of thing.

Josh: So I mean, I won’t speak too much about them, but in reality they have … like the metrics aren’t really there. They’ve got a couple, maybe two, top level metrics. I think they’re more on the netifiation side of things, so letting you know somebody’s card is cancelled. At the same time Baremetrics has that. So you can get a notification when somebody’s card cancels or bales or if somebody cancels or a slew of other sort of notifications about them.

Andrew: I see. And it makes it easy to email people after they cancel. So if someone cancels I see their name on the right side. And I could click a button and…

Josh: Shoot them an email.

Andrew:..email them and ask them why.

Josh: Yep.

Andrew: And you and I talked about this. I’ve tried that before with people. And after they cancel they don’t want to talk to you anymore.

Josh: Yep.

Andrew: They’re done. So is there a way to get those people to have a conversation after they’ve cancelled?

Josh: So after they’ve cancelled, I mean that’s a hard one. I think it requires some persistence. So like just really sending them like a couple of emails. Cause sometimes they just forget about it. So but if you can catch them before they cancel. So that’s having a phone call maybe. Sure initially. But also maybe 6 months in. And you might catch them before they cancel. And if you know they cancel typically after 10 months shoot them an email at 8 months or 9 months to try to learn what they may not be happy with.

Andrew: I’m looking to see what else you did to grow your business and get more customers. It seems like being on Hacker News was helpful.

Josh: So Hacker News was, it depends. So I would say the larger thing that helped was me blogging about just act like startup stuff. So not necessarily like 10 tips for growing your business. But, like how to get our first 100 customers. Or how, I think one of the articles was how we got $650 worth of customers for $6 with retargeting. So that it’s like a step by step here are the things we did. Practical stuff that nobody else can really write about because they haven’t done it.

Andrew: I see.

Josh: [inaudible 00:01:38]

Andrew: So what we did is more powerful than 10 things you should do.

Josh: Right.

Andrew: Got it. Because people…

Josh: People always want to know what other people have done and had success from.

Andrew: And then it sends traffic to your site. Does Hacker News actually convert into real customers?

Josh: I’ve had, a lot of articles end up on the front of Hacker News. But maybe 2 of them have converted to like real paying customers. It depends on, that’s what an interesting thing is. Like that retargeting article got converted extremely well. It got to the front page of Hacker News. And, I mean, it sent a ton of customers, like thousands of dollars in customers.

Andrew: Okay.

Josh: And another article a month later may have sent one. So…

Andrew: I see.

Josh:…it’s just so kind of back and forth. You never know.

Andrew: And I, it looks like you find all those people come in. And you try to get them to either hook up, is it, as a demo or give you their email address.

Josh: Yeah, so like we’ll try to get them if they don’t sign up try to get them on. We have the SaaS Metric Academy which puts them on a, I think there’s a maybe 5 email…

Andrew: Mm-hmm.

Josh:…sequence which teaches them how to use the metrics. So not necessarily a bare metrics push, but how to use metrics to make your company better.

Andrew: And that’s also done with Intercom?

Josh: That’s done with Drip.

Andrew: Okay.

Josh: Rob Walling’s product. So I do that. I mean like that, that works really well. And that’s so hands off. I mean it’s super easy.

Andrew: Yeah, Drip is really good for sending out email in a structured way.

Josh: Yep.

Andrew: You’re a guy who’s been an entrepreneur since you were a kid. You said your parents helped you think this way.

Josh: Yeah. So my parents were big kind of do it yourself kind of people.

Andrew: Mm-hmm.

Josh: Like my dad’s like a duct tape can solve anything kind of guy. And I think they’re very supportive of the if you want something, not necessarily a thing. But if you need something done just do it yourself. You know, instead of go out and buy the thing just make it. And so that was instilled early on. And I can click. It made me comfortable. I shared, I shared with my wife this morning about how having this mindset of like I’m going to make something. And there’s a decent chance it’s not going to work. And that’s fine. Like I’m okay with a thing not working. And I think a lot of people have, especially new entrepreneurs, have a really hard time with the fact knowing, coming to grips with the fact that their thing probably won’t work. And…

Andrew: Were you depressed when PopSurvey didn’t work considering the team that you had, that you were working with, the co-founders of Grasshopper who had done who had done well? Did you get down…?

Josh: Yeah.

Andrew:…at all?

Josh: I don’t really feel like I was down about it. To me it was just a problem to fix and ultimately deciding that’s not a problem I could fix. So in moving on to Baremetrics like seeing how

Andrew: Did you have a salary salary?

Josh: No. I was consulting on the side.

Andrew: Oh. You weren’t making a salary from that.

Josh: I was taking a small profit from it each month. But I was literally splitting my time between that and consulting.

Andrew: Consulting, were you doing development work?

Josh: Design and development work.

Andrew:…for other people.

Josh: Yeah.

Andrew: Oh wow. How’d you learn to code?

Josh: I taught myself a decade ago just out of sheer necessity. I didn’t want to pay anybody else to do it. So I teach myself.

Andrew: Again. Do it yourself.

Josh: Do it myself.

Andrew: You were around about a decade ago. You were actually around in the AOL dial up days.

Josh: Yes. Yes.

Andrew: Running it back then too. What was it?

Josh: So that was, like early on, I think because I’d gotten used to the internet at an early age. It became something I was comfortable like just, it was fun to build something online. Like I enjoyed doing that. So early on, even as a junior high kid, like getting my hands dirty that way just in core, kind of, I was comfortable with.

Andrew: You were up until 3:00 am coding stuff even as far back as college.

Josh: Yeah, in college that was my thing was I was just making stuff. And a lot of it, I don’t know if I mentioned it earlier, the first thing I ever launched to make money was called Really Dumb Stuff.com. So I had a series like really, whatever. So like I had a really fun arcade after that. Just these series of different things that I could kind of test the waters to see if I could make money off of it. And there’s hundreds of those. Literally hundreds of those just random run-off things just sticking my toes into the water to see what it was like.

Andrew: And just make you money with advertising largely?

Josh: Yeah, at the height of it I think I was doing like 5,000 a month off of a tutorial website. I mean just crazy stuff that wouldn’t work now but at the time worked.

Andrew: Why did the tutorial site work well?

Josh: Because AdWords and whatever Yahoos ad network were paying out massive amounts of money because it was a gold rush. They actually all crashed but, you know, for a six months span, I’m making a lot of money.

Andrew: So then you’ve been around for a while. How old were you when you launched Baremetrics?

Josh: So Baremetrics, that was a year ago. So thirty.

Andrew: Thirty. Don’t you feel like I didn’t have a big hit. Everyone around me seems to have one. Maybe it’s just not right. Maybe there’s something wrong with me. Maybe there’s something wrong with the whole model and everyone is faking it.

Josh: Sure. I think the problem, or maybe the benefit here was I didn’t know any different. So I had one quote, unquote job ever. I mean in a professional capacity. It was a seven week span, I was an interactive designer and-

Andrew: [??] the names was Sabotage, was the name of the company?

Josh: Well, no, so that was what I consulted as for about a decade. But I worked when I was living in Colorado, there was an interactive firm that I worked for seven weeks and I did the commute for an hour a day thing and I hated it and literally seven weeks later, I said this isn’t worth it. And so went back to just self-employment.

Andrew: I see. So there was just no other way and that’s why you dealt with it?

Josh: Yeah and it was like, I was comfortable. I’ve been officially self-employed for ten years and so I don’t know any different. I’m fine with the ups and downs and I’m comfortable with that. And I’ve been married for that long too so that’s always been part of the equation for us.

Andrew: You know what, I’ve had days at Mixergy where things weren’t going well and I couldn’t figure out what it was going to be and I felt really, maybe shame was the word? Definitely down, especially around my wife. I wanted her to see how well I was doing, not to see that I was struggling and trying to figure things out. Did you feel any of that?

Josh: Yeah. I mean there were certainly days and especially around tax time, invariably we screw up the taxes and end up owing some money. And each time it’s like, bam, I feel like I’ve dropped the ball. I should be able to get a handle on this this long in. This far in. And that kind of stuff. And when consulting, like having trouble. I don’t know, I need to get a ten thousand dollar client quick and so my response for that, like when my wife would express concern about feeling a little stressed. Because that’s like a security thing for her is to know that the money is going to be there next month.

My response to that is to step it up and like, okay, I’m going to stay up tonight, all night. I’ll find some work. That’s a fix it mentality for sure. And I would go into that mode and then forty eight hours later, I’m fine.

Andrew: And where would you find the work?

Josh: Lots of times I’m just hitting up previous clients or looking for whatever kind of design job I can find or something like that.

Andrew: So go back saying, hey, I have some free time. Do you need any value?

Josh: Yeah, I can help you out.

Andrew: That’s the benefit of being a developer and a designer. Or either one frankly. I remember talking to Matt Muliwagon [SP]. I asked him, why did you take a risk on Automatic and working with WordPress and creating it and he said, you know, I’m a developer. I can get a job anywhere.

Josh: Well right. That’s the thing. Even if Baremetrics flops, okay, I can still for the foreseeable future get a job somewhere.

Andrew: Right. Well it hasn’t. Where’s the revenue now? Monthly recurring revenue?

Josh: So I think it’s 22,000 a month?

Andrew: Wow.

Josh: Tickin’ right along.

Andrew: In about a year. So really well, well done on the growth. Anyone who wants to follow up and check it out, can just go to demo.baremetrics.io. Josh it’s good to have you on here.

Josh: Thanks for having me.

Andrew : Well, actually wait, I can’t end it like that. Wait, we ask you what could other people do. I got to go soon because we’re almost at the top of the hour but we asked what other people could do to duplicate your success. You said, “Well, here’s what I do-email and phone call one day after sign up. We talked about that.

Josh: Yep.

Andrew: Free metrics consulting is the other thing that you do with your customers.

Josh: Uh huh.

Andrew: That you get on the phone with them. Why do you do consulting for free with them?

Josh: Because they get they ultimately adds to them getting more value out of their metrics. So they stay around.

Andrew: And I remember talking to you and I said is “Is this good churn or bad?” and you said, “You know, maybe in your business, actually okay.” I’ve heard that Jason Cohen from WPEngine

Josh: WPEngine, yeah.

Andrew: Yeah. He had turn rate and you started to try to figure out why do I have it? How do I figure it out? And he talked to Matt Moldway, who is an investor and also works with in the same business. They both do hosting for WordPress. He said “Oh that’s fine. That’s the same thing as ours. You can’t really improve that.” And then he stopped worrying about it. So that helps to get a sense of where it should be.

Josh: Yep.

Andrew: You intentionally give feedback to customers even if they’re not asking for it. That’s a third tip that you have. Why?

Josh: So, I think a lot of times people need feedback or need some input or advice but they’re either afraid to ask for it to ’cause they feel like that they might sound stupid. Like, I’m a business owner and I don’t know what the metrics are. Or they are looking at the wrong problem, like they think that “Oh, here’s the problem” when in reality the root of it’s in Web [return] that’s 50% and they don’t realize that that’s a bad thing. So trying to like show them what sometimes they can actually make some …

Andrew: How do you [frickin] find the time for this? I mean you have to do hiring and you have to manage people. You have to decide what code works and what doesn’t. You have to deal with server issues, like anyone else. And you also have these random calls in the middle of the day, so you can’t even.

I mean you didn’t say to me, “Andrew I’m available at 9:00 AM on Friday.” You said “When are you free to talk?” And I shot over a time that was convenient for me and you jumped on. What about this whole thing that if you’re in flow and you know that you have a call coming up, ya don’t allow yourself to fully get in flow.

Josh: Sure, well to me though, building up customer base is the flow. Like, if the customers aren’t there and they’re not stickin’ around, then I have a problem. Like there’s nothing for me to get in my ‘

Andrew: But then if you talk to one customer but it keeps you from working on this other issue that improves the product for everybody, that seems harsh.

Josh: But you remember like so my lifetime value of a customer is

Andrew: That’s actually …

Josh: Let’s see.

Andrew: up on your site, isn’t it. You have

Josh: Twelve hundred bucks right now so like a little phone call to keep a twelve hundred dollar customer around is not a bad use of my time. Now eventually, this won’t make sense. Like this doesn’t scale, right? And eventually it will become like OK, enterprise customers get this kind of thing. But, for now, it’s working fine in the cust in revenues growing so we’ll keep it up until it doesn’t make sense anymore.

Andrew: All right and then finally you said, “We follow up with people who cancel.” What do you do to follow up with them?

Josh: So, we require them to tell us why they’re cancelling. A lot of times, that’s kind of useless information but at least it lets me it gives me something to email them about and say like “Hey, you mentioned this. Here’s why I think this might have been the problem. Maybe we can get you back or either way let’s have a quick chat about this and learn more about it.

Andrew: Okay. So if they and it seems like the big thing that most people say is “Costs too much, not enough time.”

Josh: Right.

Andrew: Right..

Josh: That’s typical.

Andrew: That’s typical. Not but it’s not really the problem

Josh: That’s not the problem at all. Like, they’re just it’s ultimate, they’re not getting enough value. Why are they not getting enough value? ‘Cause if they got enough value, they would pay for it. Right?

Andrew: Right. It can cost too much at eight bucks if they got three new customers at a hundred bucks a piece each month.

Josh: Exactly.

Andrew: So you have to but it does give you a reason to email them and say hey you know what you said that it was costing too much maybe it’s because we didn’t show you value. Did you know that you can do this? And you actually have access to their numbers, so you can say well what about this over here? We can help you reduce turn.

Josh: Or I can see like well they only have five customers. Like their metrics isn’t the tool for them.

Andrew: All right.

Josh: So its chasing it down.

Andrew: That makes sense. All right, now that we’ve got all that out of the way, this was a great interview. It’s great to have you on here and we can just keep following along. Like looking at the demo-demo.barmetrics.io. Thank you for doing this.

Josh: My thanks, Andrew.

Andrew: You bet. Thank you all for being a part of it. Bye guys!


  • Sarunas

    Josh, thanks for the interview! It’s nice to see which statistics is worth to track. Do you plan to expand your product to integrate with other payment processors, like braintree, fastspring and etc.? I believe that there are a lot of people like me, which is not from USA and can’t sign up with stripe.

  • Thanks Sarunas! Right now we’re 100% focused on Stripe. They’re expanding pretty quickly to other countries and already have the large majority of the bigger countries where a lot of entrepreneurs are.

    Down the road we may expand, but we’ve got our hands full as-is. :)

  • Hey Josh! Great to see you on Mixergy buddy! Congrats on the success of Baremetrics. Let’s catch up soon!

  • Khalil

    Hello Josh, I was really inspired by your do it yourself attitude and since Im also in college wanting to pickup some coding skills I wanted to ask you.

    If you knew what you know now back when you started learning to code which languages/framework would you focus on (assuming that you want to build saas stuff)?

    Great Interview, learned a lot!

  • Thanks, Khalil! Knowing what I know now I wouldn’t have cared about languages/frameworks. They don’t matter. They don’t sell products. Customers don’t care and they certainly don’t pay you based on the language/framework you use.

    Use whatever gets the job done the fastest. Simple as that. It’s literally the only thing that matters when you’re trying to prove a business idea.

    Don’t waste time trying to learn some new programming language if you already know one.

    Instead, spend your time learning how to sell.

  • Chris! Thanks man! Hope you’re doing well.

  • All is great!!!

  • If you integrate with Authorize I think you’d absolutely crush it!!!

  • I think it’d also crush my soul. :)

  • Awesome Josh!

  • I just wanted to say this was an inspiring interview with a lot of great info for someone starting a SASS business.

    Josh, your blog has helped me think though a lot of SASS related issues, thanks for that. Hopefully I get to use Baremetrics sometime soon!

  • Thanks so much Andrew! Really appreciate that.

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