Nate: [00:00:00] Hey Josh.
Josh: [00:00:01] Hey Nate, how are you doing this week?
Nate: [00:00:02] Doing good.
And we’ve got some guests with us today.
Josh: [00:00:05] Yeah. I’d like to welcome Jane and Benedikt founders of Userlist to the show. Good afternoon for both of you
Jane: [00:00:12] excited to be here.
Josh: [00:00:14] Thanks. I stated that because it’s morning for us for, for Nate and Josh, we’re at 10:00 AM Eastern time. And I know both of you is, are both of you are from Europe.
So so welcome. And both Jane and Benedikt are Saas bootstrap, founders pod-casters and are also part of Tiny Seed batch two and Userlist. Is it. Email marketing automation for Saas. But what I love about it is their elegance and simplicity with their solution. Is that how you guys would describe yourselves?
Jane: [00:00:45] That’s exactly how we describe ourselves these days, email platform that focuses on
SAAS needs. So that’s the selling pitch at the moment. Awesome. And we can talk how that has changed over years.
Josh: [00:00:59] Yeah, that could be an interesting, interesting topic to cover. So usually list and I guess Jane and Benedict have reached a significant milestone in the past couple of months reaching over a hundred thousand in ARR.
And they are bolt. They are sorry. They’re always helping other founders share their stories. So I thought it’d be fun to have them on our show. So they can share theirs. Did you want to start with some sorry. We can cut this part, but my co-host Nate will be the first in line to talk to them about how they got started.
And I’ll be asking questions about the later part of their Userlist. Sure.
Nate: [00:01:30] Great. Well, it’s good to have you guys on and thanks for joining us even though it’s afternoon. I know it must be kind of weird for you guys.
So, so how did I guess I’m curious, like where things kind of got started, like what was kind of the seed for Userlist? Maybe Benedict, do you have some, some thoughts on that?
Benedikt: [00:01:47] Sure. Yeah. So you sort of started in 2017, I believe. At the time I was working for Jane as a consultant, basically doing all the development work on her first project called tiny reminder. Okay. And I don’t really, like, I don’t really know anymore, but for some reason it, she decided to sell it. And it was a longer process. And in the end it didn’t quite work out the way she hoped hoped it would work out, but she got rid of it. And then during the, during the evolution of tiny reminder there was always this need of like, how do you.
Well, for one, see who is using the product, who are our users. And like, how do we communicate with them? And at the time Intercom was around, drip was around like, all those tools were around, but like for, for a company or a product just starting out, it was quite expensive and a bit unwieldy to use.
So Jane was like, okay, I need something that will solve this. And of course, This wasn’t in the scope of like birding it firsthand. But once a tiny reminder was off her plate, I feel like she felt motivated to, to put something new and asked me and our third co-founder Claire Southern corrupt to team up with her to, to basically build this tool that was missing during the tiny reminder day.
Is that a correct representation of what happened, Jane.
Jane: [00:03:10] That’s great. I it’s so nice to see, to hear the story shared by you in real time, because you know, we always talk about this in different shows, but now yeah, it’s exactly like that. I’m super lucky that he said yes, back then four years ago and clear, I can’t even imagine because we have worked together by then, but Claire.
Basically just new as in line. And she said, yes, then stuck with us for she did a great deal of work in the early stages with us. So we had like all kinds of great talent on board. I’m a UI UX person by trade Benedict’s brilliant engineer, and Claire’s a brilliant marketer. So it wasn’t like. Ingredients for success.
Nate: [00:03:52] So it sounds like a lot of the idea was coming kind of from Eugene, is that correct?
Josh: [00:03:58] Yeah.
Nate: [00:04:01] So like you had your, your tiny reminder a thing and what, what was that focus that was that focus at SAAS companies as well, or.
Jane: [00:04:09] I think the, the G the biggest driver behind his list was that I made so many mistakes with tiny reminder that I was so eager to fix them with the next product and make it truly useful and truly an essential business tool, because your reminder was form builder with vape baked in a moment.
And it was so vague. And so Vita meany, you know, as opposed to painkiller products I was like done with the productivity tools. Let’s do something hardcore and there we go, four years building a hardcore product. I really, we did seek hard. Bethel didn’t know we’ve done it.
Benedikt: [00:04:47] Sometimes. I feel like we overcompensated a little bit in that regard,
Jane: [00:04:54] not just an email, just an email platform, but like hardcore behavior-based email platform.
I’m making gestures.
Josh: [00:05:08] It’s a tall, it’s a tall, it’s a tall order, right? Like it’s a lot it’s complicated. And it was interesting because even before the call, we talked about recording software and things like that. And how you said before Skype was being used was like your status quo. And now we’re, there’s all kinds of different software out there now to do these real-time recordings, right.
It almost like, and you can correct me if I’m wrong, but it almost seems like when Intercom and all these earlier ones hit a certain inflection point, you know, they started moving up market. They started complicating their product. They started to kind of lose their original, just like core value proposition.
And it just got further and further away from kind of the. I don’t want to sound this wrong simpler user, but not, not that they’re like not smart users, but they’re just have, have less, have less robust deeds per se. And, and I feel like at that time it seemed like the perfect time for you to go like, Hey, why is this going?
Why is this harder than it should be? Why is this a PR you know, why is this becoming more problematic when it should be relatively simple? That to me seems like the impetus and where, where you kind of got started with Userlist.
Jane: [00:06:24] Exactly. You’re describing the classic, you know, life cycle off a product spends over 10 years.
Plus, you know, from being born to surviving, to crossing the. Chasm to the popular market and then going to enterprise. That’s what Intercom has been doing recently.
Nate: [00:06:43] Crazy. So you kind of got started as a way to redo all of the mistakes that you were doing before with, with the tiny reminder and. It sounds like you were kind of trying to solve your own problem.
Was there as part of that, that discovery, were you looking at other companies that were having similar problems or were you pretty much focused on, well, I have this problem, so I’m going to solve this problem.
Jane: [00:07:08] We were thinking we are entering an existing market. Like we didn’t have any doubts that people need this tool clear.
However, did a great round of research interviews before Benedict has even written a line of code. So we did follow the playbook to a certain extent. We also did pre-orders and all this jazz before going on to.
Nate: [00:07:31] Cool. That’s cool. So you talked a bit about Claire and now it’s just the two of you doing Userlists.
Would you like, could you tell us a bit about what happened there and how that, that kind of came to be,
Benedikt: [00:07:45] you want to go? Sure. So, yeah, as I said, like, she was very active in the early days. I basically did all, like the customer research did a ton of interviews produced, take a ton of. Useful like analysis of what people actually want and what the problems are and were super helpful in the early days.
But the thing was like, we’ve been, we all three of us had been doing this on the side. So we all had like our consulting businesses. So things moved slowly. I think like when we first got started, our goal was, Hey, we will be at 5k MRR. Within six months or so. And like, it took us two years, three years, something like that.
So it was a long and painful path. And at the time Claire was also running like she was running her consultants, she business, see what she was also running forget the funnel, like a online, well education community for marketers. And Userlists on the site and like two of those endeavors were generating revenue and generating income for her and use the list.
What’s not so honestly at the time I was already wondering how is she managing all of that at the same time? Like two projects at the same times, it’s already a handful. How does he manage to do three and yeah, turns out. She was barely handling it and she had to have one and sure. When you have like three projects and two of them were making money, which one do you cut?
Yeah, of course like the one that doesn’t make money. So she basically stepped down from a co-founder role into more of an advisor role. And that also meant that she basically Yeah, slow down her vesting of her shares. And eventually we faced that out as well. And now she’s basically still on, still in an owner, but not on the part anymore.
Not, not involved in the day-to-day anymore. It’s just yeah. Jane and me.
Nate: [00:09:41] Yeah. So it sounds like it’s, it sounds like it’s been quite a, quite a slug. Like you’ve been at this for how many years now you said 2013. So that’s. 20
Benedikt: [00:09:51] 17, 17. I think it was okay. 2017 when we first like got together and talked about this, but we only launched in, I think it was August, 2019.
So like, just from original idea to launch product was almost two years. Okay.
Nate: [00:10:13] So you’ve been out, out in the open for about two years. Yep.
Jane: [00:10:18] We have this beta phase for quite a while when we already had a working product and we charging, like, by the time we launched, we had been charging people for roughly a year already.
But we weren’t confident enough to, to call it a day because we’re always reliable from, from early on. Right. But never really feature complete enough to call it a finished product. So we were kind of growing in scope until we reached that point. When we were ready to announce ourselves to the public, going back to the co-founder story, there’s so many lessons for anyone who’s starting out new product.
We had a new infrastructure in place that allowed for Clare to relatively painless. Quit her like commitment because we had a formal agreement in please. We have tried to describe different kinds of scenarios when either of us would quit. We had vesting in place, which has To be honest before starting useless.
I hadn’t really learned knowing much about vesting, but it’s a great weight off rewarding founders with equity gradually instead of granting them like their shares entirely from day one. And if you can. Absolutely do that with your fonder because it protects everyone and makes it fair. Even if the relationship goes sour, you can still refer to your documents and be civilized about it.
And with Claire, we remained friends and she’s a great advisor for us. And if we didn’t have. That on the shore before starting off probably could have been different. So,
Nate: [00:12:02] yeah, that’s, that’s great advice because I guess like when you’re starting your, your little company, you know, doing all the documents and stuff like that can sometimes seem like well, like seriously, we gotta get the lawyers involved just for this.
But it looks like for you guys that really paid off,
Jane: [00:12:17] we had just a document without lawyers pretty free. Based on some template it was like an official, official co-founder agreement. And and then let me, when we incorporate, and we gradually replaced this informal document with more formal chapters of incorporation and things like that.
But even a written document is good enough. It has terms in it. Something you agree upon.
Nate: [00:12:42] Yeah. Yeah. No, that’s, that’s great advice. That’s a, that’s good to hear. So, I guess
Josh: [00:12:48] you got definitely the men, the number of companies that die because of founder conflict, either early on with, you know, division of responsibility.
Sounds like you covered those bases there pretty well. And, and especially with the besting thing, like once, once resources become, I guess, Th the dynamics change in resources either time, like you had factors with, with Claire. But also even with money, right? Like all of a sudden they’re, let’s say the business is doing reasonably well and everyone has kind of different needs.
And then all those, those, all those types of things, right. Really lead to a lot of like founder, founder conflict or co-founder conflict. So it seems like you put all those things in place and it was interesting. Cause you said, you know, you didn’t know much about them before, but you at least had the foresight to think through some of these things like, okay, how, how could, how could this work?
What are the, what are the scenarios that could, could end this? And that’s something like nature. Not necessarily a common thing. So people are so excited with the idea, so excited wanting to get building, and it’s like, oh, we’ll sort that out later. And it just seems like an annoyance at the time, but, but that was very good on you guys.
Jane: [00:14:04] It’s a bit like pre-nuptial agreement. You know,
Nate: [00:14:07] yeah. It sounds that right. So you, you’re talking a bit about getting started and stuff like that. So like you mentioned, Claire did a bunch of user interviews and that sort of thing. So how, how did you get your first number of clients like the, you know, outside of family and friends and that sort of thing.
Maybe Jane, you could talk to that
Benedikt: [00:14:26] question.
I think we got most of our, like we did an early, early access launch, so to say reorder, we did pre-orders yeah, that’s what we did. So basically when we went, once we figured out what we are roughly going to do. We put up a landing page, roughly describing what, what is this about? And did we post a blog post?
I think we had a blog post up with like, here’s what we’re going to build, and this is the problems we are going to solve. And if you want to do that, You can sign up here for, I think we have several eight years of like, how many, depending on the size of like your email list, you could basically buy six months of Userlist at a discounted rate.
I don’t remember the exact details, but we have like several packages and put them up and yeah, to be honest, like most of the people. But we’re friends and family
Nate: [00:15:24] there. There’s no
Benedikt: [00:15:24] shame in that.
Josh: [00:15:26] I’m an angel round,
Benedikt: [00:15:30] a very tiny, and I think we set a goal that we wanted at least five pre-orders or 10 pre-orders. And then in the end just got five, but we’re still like, it was motivation enough to to keep going. And I think. There was five pre artists. Only one of them actually ended up really using it and using it.
Jane: [00:15:52] Sure. We had a temporary orders and then handful of people did adopt because I can even count them in my head, but
Benedikt: [00:16:03] the, whatever
Jane: [00:16:07] the philosophy behind that is, even if you do pre-orders on, not everybody will actually use the tool. And that’s okay. I think that the very early days before we announced pre-orders that were like six months, maybe a couple of months, there was just a sign up form on the site without any content at all.
And then there was a lending page for awhile. Oh, like a to page or website, basically. And then we grew to the blog and it was always about sharing our journey with the email list, growing the email list. And then by the time we had pre-orders a few months later, we had a little list to launch it.
And we of course kept pushing through like our personal channels, because like, we all have our own little email lists, Twitter audience, whatever, whatever, not so we’ll always try to leverage that, but with SaaS, it really doesn’t translate to signups immediately. You should know, like, yeah. Having an audience does not guarantee your customers right away.
Nate: [00:17:04] for sure. And like, did you do any kind of. Outreach title thing, style things, or like, you know, going out of your way to find customers and direct them to your landing page, or was it more just, you know, I’ll mention it to your Twitter followers and here’s our landing page
Jane: [00:17:22] in our case, we came with with our own audiences.
So we’ll leverage that, but I imagine anyways, good. As soon as he can make it that.
Nate: [00:17:31] Oh, for sure. Yeah. And I’m not, I’m not trying to say whether it’s good or bad. I’m just curious as to what you guys did. Cool.
Josh: [00:17:39] It, most of your audience come from your podcast. So is that kind of the bulk of your audience stream?
Jane: [00:17:46] What’s a separate story. You like breakfast mailing list grew over like 6, 7, 10 years. Oh, wow. Pretty large. And then the podcast started taking over. So originally it was a, an audience around books and email courses. Now it’s kind of all boiled down to podcast would dance. But it goes, hand-in-hand not necessarily just the podcast, but right now the only.
A few I breakfasts that I actively run is the biweekly show. That’s like the heart of it.
Josh: [00:18:19] Cool. Oh, that’s interesting. Yeah. I didn’t know that there was an email list. I didn’t know. There was a story before UI breakfast,
Jane: [00:18:26] the podcast, little steps on how this email list grew. One of the big milestones was needing a project together with envision in 2000.
15, I think when we, when I wrote the book for them and that brought like thousands of new users to my list, it was life-changing in terms of growth. I think it took from there.
Nate: [00:18:47] That’s, that’s really sweet, like to be able to leverage your personal brand that way that’s, that’s really helpful. That’s cool.
So if you look back at those early days and kind of getting off the ground and all that, is there anything that if you could go back, you would do different.
Jane: [00:19:04] You want to do this one?
Benedikt: [00:19:05] That’s a tough one. And when Dara is something I probably do differently and that would be like pick an existing market, but maybe not an as crowded market as like email automation or marketing automation. But back then, it was a very deliberate decision because I think one of the problems that Jane and me kind of realized with tiny reminders that it’s like a, it was basically a new type of product or a new type of market.
And like, people don’t really know what to think of it. And that made it medic. So, as I said earlier, I feel like we overcompensated a little bit. Okay. Next, the next thing is something. We are doing something where we know there are some market and where we know there are players in the market, and hopefully the market’s big enough to just support one, one new tool in there.
And yes, it kind of works, but it’s also like takes a lot of competition out there and a leg as we already hinted that I feel like. Up until a couple months ago, maybe a year ago, we were mostly playing catch up, thumbs off, like adding all the features that people just expect from a tool like this these days.
So looking back, maybe we should have picked something that’s that has an established market, but maybe a little bit less competent Titian or a little bit earlier on stuff like just emerging market or something like that.
Jane: [00:20:33] I think my, my answer to that would be similar to Ben index, but would come from a different angle.
I think it’s still fine to be another help desk of sorts, but adopting a help desk is much easier than adopting a behavior based email automation tool. And if I would think about a new product today together with Benedict, because we are struggling with this together is we would Prefer product that’s much easier to adopt that you can set up in a couple of clicks because they’re there points in the funnel the need to happen in order for your product to be successful.
And one is being wide enough in the top in terms of audience, then being able to attract them. But then in the bottom, it’s about ease of adoption and founders out there underestimate the power of this so much. If you ha, if your product is easy to adopt, you can. Convert people prom, I dunno an ad in a couple of days.
Cause they it’s easy for them to get started with our tool. It’s it’s really sticky. It’s high retention, but adoption, it requires like team effort and that’s just the reality. It requires some knowledge team effort. Yeah. It’s a hard battle for them. Yeah.
Nate: [00:21:46] Yeah, totally. I could see that. And you kind of mentioned that like the being in the crowded market is very different from being in the, the lone educational style way of talking, right?
Like with your, your, your tiny reminder, you’re educating everyone why they need it. Whereas here you’re trying to. You’re trying to do differentiation. It seems like how has that been for you? Because like you had Claire as a marketer for awhile, but now you’re both not, you know, officially marketing people, I guess.
So how has that kind of worked out for you?
Jane: [00:22:19] Yes, we do have an official marketing person here on the call. I was like, it’s okay. It’s basically Benedict technical and me marketing. I cannot imagine in sane world how one person wants solo founder can do both. Cause it’s like two full-time jobs for you.
Nate: [00:22:38] there you go, Josh. You’re you’re gonna get a good job there.
Josh: [00:22:43] Yeah. I’m glad it’s not those days anymore.
But one thing I wanted to. Who, and two, I guess, I guess one of the statements that you made about you know, ease of adoption was really interesting because like for our product, it’s relatively easy to adopt. But at the same time, like to keep, turn down and keep other things, like we do a lot of, have to do a lot of customer success to get people, to launch, to get people to open up.
But we also have to do a lot of like lead segmentation to, and lead scoring to make sure we’re anyone that is interested. Cause I could put up something like, Hey, do you, you know, you want to expand your word of mouth and people are like, okay. And we get those. But on the, on the flip side, the qualification and the turn reduction is where our efforts are.
So I would probably say the opposite of you or I’m looking for more stickiness, more, more other things in our product to build in, but okay. The truth is probably somewhere in between. Right? It’d be, it’d be nice to have both and not, and I know your mindset because mine is similar to the other ways, like to want to.
Now over-correct on the other side and it sounds like, kind of like, you know, some, some of the things you guys said about starting. Starting Userlist versus tiny reminder, kind of polarized you in another direction, which also happened to me with, with Uber note, which was like an early notion type of thing, like way before motion.
So but that overcorrection is definitely it’s it’s I think it’s good because eventually we’ll all kind of end up in the right sweet spot. But But, yeah. So but I did want to ask you a couple of other questions about more, I guess, more about your significant milestone. So kind of speeding up the story.
What, what were the, what were the big things that kind of got you from that? You know, I guess it was about two and a half years ago or so once you were publicly launched it out there I think you did tiny seed and like what other, what other things kind of got you to this milestone in between there.
Benedikt: [00:24:45] Yeah, so I think milestone wise, like we had to launch that was a big one, of course. But I think the milestone that had like the biggest effect on everything was in early 2020, we decided to go full-time at least for a while. And I think our initial goal was. Do it as full-time for like six months live live from our savings.
And just focus a little bit more because like the entire, like, before that we were doing consulting under site and product on the side, like, it was always obviously context switching and. Not getting anything meaningful and dial in any, on any of those fronts. So that was the first goal.
Jane: [00:25:23] No, it wasn’t.
It was better than you’re saying you
Benedikt: [00:25:26] won’t, at least it felt that way. Like sure. We might. Yeah. We didn’t like, none of my customers were like consulting clients were upset that I didn’t produce value or something like that, but it’s like, you certainly notice that you’re not as productive as you’d be when you focus on just one thing.
So that was a big decision. And luckily, like we got accepted into tiny seed at the time. So that allowed us to extend those six months into, well, basically until today, like for now, like we’re still full-time on just Userlists and that definitely made a difference because it finally allowed us to, well, yeah, B be quicker and like be more focused and just make actual progress in shorter amount of time.
I guess it was, yeah, that was the biggest milestone so far. The hundred K AR was a nice milestone in terms of it’s a nice round number, but it didn’t really change anything to be honest, like the business is still the same after that. So
Nate: [00:26:27] I feel like as you get older, milestones get less exciting, but like 99 K MRR was pretty great too.
Benedikt: [00:26:37] Yeah, maybe, maybe what are you guessed? Yeah, I guess like, in a sense, like MRIs, just a vanity metric of sorts, at least I’m sure it pays your bills and stuff like that, but I think Dez does more excitement and like getting to profitability and stuff like that than it is to cross a certain number of, because in the end, that number doesn’t mean anything.
We could, we could have like 10, 10 K MRR and 200 K and expenses. And it wouldn’t be, it would be a pretty shitty milestone, to be honest.
Josh: [00:27:13] Yeah. Fair enough. It’s like saying, you know, page views on your websites versus actual like interest and prospects and people that turn into customers because you could have a great.
Like a article that generates all kinds of activity, but for the wrong market, for the wrong, wrong people, that type of thing. Yeah.
Nate: [00:27:32] But maybe like, you’re, you’re talking about the, the numbers itself don’t mean that much, but like what, what does mean a lot for you guys? Like what, what makes you feel really good at the end of the day that you’ve done something good here?
Benedikt: [00:27:45] I guess for me, it’s just like seeing customers solve their problems. Like as cheesy as it sounds like when people start using the product. Yeah, I get up and running within a couple of days and like actually seeing returns from the efforts and like that’s churn or like better activation rates or anything like that.
That’s the exciting part where it feels like, okay, Now I get why we’re doing this and why people are paying us and those people that are usually those that, that stick around and are fine paying a monthly fee for this. So yeah, that’s the exciting part for me. What about
Jane: [00:28:24] you? Two is exciting to us.
Call the shots in terms of, of the product for both of us, because the downside of client work is that you ultimately don’t have a say in the product direction most times until unless you are product manager somewhere. But here we can make decisions. Okay. Sometimes opinionated decisions. And of course comes with a very limited resources kind of angle, but we can still call the shots and that’s exciting.
And another aspect has been starting to find people in delegating and growing our team. We just have been lately working on, you know, changing our slack, for example. Place where to go founders, hang out towards a more structured place where team members can I hang out, hang out. And it’s exciting to transition to this company growth phases.
Josh mentioned before
Josh: [00:29:17] I did, you’ve added some team members.
Jane: [00:29:20] We have currently two people helping us with marketing. One is podcast manager, Dan, and another one is Krista or marketing manager. They’re not full-time they’re moat, but we treat them as a team members and that’s exciting.
Josh: [00:29:36] Yeah, definitely.
That’s a, that’s a good milestone to have, give you some relief from some of the things. So you can be more strategic or be again, out there in front doing the thing. Essentially you have more leverage doing it. It’s
Jane: [00:29:50] a delicate balance. Let’s trap her company. Like I can recommend any day that yeah, sure.
You shouldn’t be doing everything yourself and hire delegate, but, but the resources are limited. So what you still can do everything yourself. That’s the way to know. So this a delicate growth that happens, it’s really precious. And it’s great that it does happen.
Josh: [00:30:16] Yeah. For myself, I always put, like, I’ve always had a number in my head about my time.
Like in the, in the early parts, when I first started hiring people, it was like, okay, am I, can I, can I do this two times faster? And over, over the years it has changed. So. I think now I’m mostly thinking if I can be five times faster, then that’s still worthwhile for me to kind of step in and do something for the most part.
I mean, there’s obviously caveats and things like that one too. Fortunately, I was able to put some people in place for the engineering, so I just kind of stay out of it because at that point you’re just sort of maybe creating a mess by, by and disrupting other people’s flow or other team’s flow. But.
That that was helpful for me over time. Like just making sure that I was staying
Jane: [00:31:04] checked. I just recently took a management course that was not rocket science, but it was very helpful and timely. For me personally, as I was managing marketing processes, is that it’s based on the Gartner model. Where the, there are two modes in the business change and run.
So the change is when you introduce new things and run is where you have established processes and it doesn’t make it doesn’t make to establish anything until you figure out what works and that’s the change. But when you do the run, then you tighten the processes. You make them faster and more efficient and it different metrics and different values apply.
Each of those phases, it’s good to distinguish them in your business.
Josh: [00:31:51] Yeah, definitely. And I’ve found also with, with, with people on your team, some people are good at some things versus others. Some people are good at the change. Some people are good at the optimization and some people are good at the running and there’s no fault in that.
I feel like in definitely an entrepreneurship, sometimes out there, people like you need to be doing all these things. You don’t have to do them all, or you need to find the right people like the right balance between, you know, you too right now with, with engineering. And it’s almost like engineering and everything else, but that’s, that’s sort of, I think the role Jane, you ended up playing as well.
Jane: [00:32:28] There is this whole spectrum of opportunities these days for SAAS founders. It doesn’t have to be well, it can be yourself or you can choose. Brilliant team members to join you and work for equity. Like in our case, we’re doing it for equity, but you can also go raise a little angel round. You can go, go raise a bunch of VC money and spend it in different kinds of rhythms hiring different kinds of talents and can be combination of different kinds of resources.
So just be open to using it. Choosing what what’s a good fit for your personality and for your business model for your product. Cause some, some products are hired, like B2C stuff is probably hard to raise with you know, with a little bit of let’s trap her money. Then he probably needed VC or something like that.
So just be open. Yeah.
Josh: [00:33:15] Right. Right. So speaking of raising, so I think I’ve saw this. Maybe it was something in a, I don’t know if there’s a Twitter thread or something else related to that, but you did the tiny seed investment, but I think I saw you might be looking to raise additional money. Is that, is that something, could you tell them it’s a little
Jane: [00:33:33] bit more about that?
Oh, we are approaching. The clothes for our angel round at the moment. And the cost for this is that we’re looking to hire more developer talent on board because that’s the only thing we can’t really afford with a bootstrapper model because engineering talent is in high demand these days. So we’re doing that to support.
Subtle pivot to a full stack marketing pro platform for SAAS. So up to this date, we’ve been focusing on customer email only. And we’ve been so stubborn about it, but we can’t be anymore because the customer’s seeing that they want all their SAAS email in one place, like in same words over and over again.
So that’s what we’re making happen so that founders and product people can have marketing leads and customers. Emails and the same segmented list, which they can run consistently and useless and not juggle the leads anymore. Like MailChimp for this Intercom, for that. And the giant like crazy mess.
We want to avoid that and help people run their email lists, you know, holistically.
Josh: [00:34:48] Interesting. So Benedick has some challenges up, up as alley, I think in terms of building out more CRM related features, all these other things. I know you added a big one recently was like the company entity into, into a usable.
Benedikt: [00:35:04] Yeah, this was a recent change. That was basically the last thing we did before pivoting sort of like these days I’m working on interesting features, like double opt in and foreign builders and stuff like that. So yeah. It’s not the most exciting work, but it’s it has some edge cases that you only discover when you really start getting deep into dust. Those things
Jane: [00:35:28] we’re really going at this backwards because the typical journey is an ESP who runs, we know support. So simple marketing lists. They want to add more customer properties and behavior based stuff.
And. Drown and complexity in our case, we already have the complexity and the pied part built very well built and like proven. And we also have broadcasts and everything. We just need these you know, the intake, the marketing forms, double opt-in added on top of it to make it to marketing platform.
So it’s not that challenging as it would be for. I dunno, I’m just struggling because everybody has already edited. Let’s say MailChimp did have it. If they decided to edit on it, it would be challenging. Also for the company counts. We, we have a gigantic benefit of being in a relatively early stage company so that then it can implement those data model decisions without huge stress.
And he’s already done that because if. Customer that I decided to introduce company cows. They would probably have much bigger challenge at their stage of growth. For example, is that, is that is the correct presentation going on? Maybe.
Benedikt: [00:36:42] I mean, it’s hard to tell other companies, but yeah, I feel like we did a lot of the heavy lifting in the early days because we always knew that we wanted this automation platform.
That’s like cat to cares about data models and stuff like that. So we always had that in place and that’s basically adding layers around that core versus yeah, just starting with an email list and then trying to add later complexity on top of that. But who knows, like we, we only have experience with this particular approach.
Maybe the other one that’s easier, harder. Who knows?
Nate: [00:37:19] It sounds like your typical engineering problem who knows what’s behind it until you start working on it, right?
Benedikt: [00:37:24] Yeah, exactly.
Josh: [00:37:28] Yeah. I think Jane, I think you made a good point kind of going at it a little bit different. I th I, I I’d agree with you.
Yeah. You probably just have a lot more, I would say, built up potential energy because you’ve done all this legwork underneath the platform. And I think it’s also interesting with this day and age with, you know, product led growth being kind of more on the forefront. More people, I think, thinking, thinking product and starting in their first, obviously a lot of our entrepreneur, friends and bootstrappers and stuff kind of start in that area.
But if they’re like getting. Using your product first to do okay. The sell them upgrades or communicate based off of events, all in the customer data side and communications. And then later on it’s E it is easier probably to add on or switch out like the marketing side, which I think you said the other way.
Like, if people started on the marketing side with all these emails, they, they kind of go this opposite direction where I feel. Like a funnel, they’re going to go down and be like, okay, only a small segment of their customers could use all this customer data stuff. Are they a SAAS product? All these other things in terms of like segmentation, but for you, it’s like, well, everyone’s going to need marketing.
Everyone’s going to need to talk to one, at least one level above the customer data side. So it’s a. The features for you could, could apply to anyone that is already a customer. So your expansion should be a little more natural and just like, Hey, you love using our product and its simplicity and its elegance.
And you don’t want to get into all the other stuff out there that has these Shopify plugins, all this other stuff you don’t need as a, as a SAAS, but you just wanna focus on like clean customer communication and, and manage it all here. I could see that. As an interesting angle as you guys grow, at least continuing to upset.
Your existing customers, like you mentioned your, your churn in your expansion. So it’s like, how can you continue expanding on your customer base once you have them
Jane: [00:39:32] secretly, we also want to solve our adoption problem because people who are coming in for their plane. Launch email list. They will need just the basic installation steps.
And then if they feel, if you the astic about adding behavior data or anything like that, they can do that. But they, by that time, they would already be usable as customers and in the platform. So it’s, we are hoping that’s, that’s a smart move. Let’s see what time shows.
Josh: [00:40:04] No, it makes sense. That seems like an easier commit to get started to like upload a list.
Yeah. And things like that. Exactly. Cool. Yeah. One of the other things I did want to ask, I know Benedict, you’ve talked a little bit about this in the past. I’m not sure it was on your podcast. It was definitely on the, the, one of my, when I dropped in on your call maybe a couple of weeks ago, when you had like your live streaming stuff going on or office hours, I believe maybe.
Yeah. You talked some about the expansion and about the effects on your revenue when you kind of changed your, I guess, was it the pricing model or how you were billing? And yeah, I wanted to talk a little bit more about that and kind of what insights did you draw from making those changes?
Benedikt: [00:40:51] Yeah.
One thing we realized over time was like expansion revenue is great. And like participating in the success of our customers is also a really nice way to grow your business. Because you essentially, you end up growing, even though you don’t do anything assuming that they don’t churn, but like given everything.
Like when your customers are X as X for you get to be successful. And like we started out with a classic, like tiered pricing model in the early days. I think we had the cheapest plan was 49. Then it was like 99 to 29, 4 99 or something like. And we had like limit, like our value metrics are basically users storage and Userlist.
And we had like packages, I think it was 1,005 thousand, 25,000, 50,000 or something like that. And over time we realized that at those inflection points, when people. Like hit, hit a plan limit. There would be a lot of anxiety on our side because we haven’t like implemented automatic upgrades. So it’s always like probably emailed them and asked them to upgrade to the higher plan.
But it’s, it’s an okay step from 40 19 99. But you could already tell from 99 to 2 29. Like we lost a lot of people in that process. Because they were like, yeah, it’s a good tool, but suddenly I’m supposed to pay pay like more than double what I’m paying now, even though I just added two new users compared to last week, that was a hard, it was a hard thing to explain.
So. Sometime I think it was November or something last
Jane: [00:42:30] November.
That, that dream month when we, when we did this, finally.
Benedikt: [00:42:35] Yeah. Like we, we finally sat down and tried to figure out, like, how can we make this easier for all of us? Like for us? Because like, as we said, like, because we had so many people just canceled during plan upgrade.
We try to upgrade people. And because of that, we’re basically leaving money on the table because they were above the plan limits, but we wouldn’t upgrade them because we were afraid to lose them. So we decided to change the pricing model entirely. We Mr. Yeah, using users number of users, starting Userlist as the value metric, but instead of having tiers, we just have one base price.
For like 5,000 users. And then we charge basically per additional 1000 users. And we also implemented like automatic billing adjustments. So now we are using the high watermark of users for a given month to calculate them right. For the next month. And that part, like that number or that, that price is adjusted.
Increased and decreased based on your number of users and how that changes over time. And what that changed was for one, of course, now it automatically grows. We don’t have to go back in there and adjust it, but also the increments are like much more well done. Reasonable, I guess. Yeah. So now, like when you, when you.
Another thousand users, like your bill just increased by $10 instead of doubling or whatever. And I mean, yes, in a way, like people are still paying the same, but it’s kind of like boiling, like the frog in the boiling water, like. They don’t know, it has to increase that much.
Jane: [00:44:20] It’s also fair. Like if the jumps are not steep, we’re not overpaying.
If they need less than they pay less. So yeah.
Benedikt: [00:44:30] Oh fine. This stuff we did last year, like yeah. I mentioned going full time. That was definitely a decision. Second best thing we did was like changing the pricing model because like you can see in our growth rates that things just, they are much more stable and steady era and like overall nicer these days because of that change.
Jane: [00:44:51] Well, I now have a, have a thing to declare as the worst decision of philosophy here, or maybe the best learning experiments. We did have a $9 plan for for a few months left. And when we launched it, everything was perfect. Reasonable. The idea was that we will bring early people on board have less than a hundred users.
They will set his list up and then grow and expand. And we will, everybody will make money and be happy. But what we did was shooting our revenue in the foot for three months because everybody. Joined on the $9 plan instead of 49. So with every new user on board, we weren’t incrementing our MRR at all.
At least with the early ones. And also it does not signify any commitment. So people either fail to adopt or. Turned as soon as they did adopt our churn, but turned as soon as we upgraded them to the regular price. And overall, it’s not a great signal tool that sends your critical business communications should cost money.
And it’s okay to put that money in the commitment and the work into setting it. So when we remove it, we, it was a wonderful day. And also when we did change the pricing in November, we also raised the baseline price from 49 to 99. And we also never looked back because again, the timeframe. Is absolutely comparable to that.
So $99 is not high price to pay for your critical business communications, but it signifies a commitment and also communicates quality like a tool that makes puts you on the line with the big companies who can do powerful automation, shouldn’t cost $49. Really. Even though when we started 2017, the philosophy was to make it accessible, but people who want to access good technology are okay with paying $99.
And I’m pretty sure two years from now, we’ll be starting from 300 and like looking at ourselves as food. Let’s see so far, it seems to be comfortable pointing here.
Josh: [00:47:03] Awesome. Yeah, that’s, that’s a really good lesson. I think that was something I had to go through too, in a similar. Like, you’re not your own customer as much as in the beginning, like you guys would pay a certain amount for software, but at the same time when you started know, like, oftentimes you’re not in the same mindset of your customers, even though you kind of think you are.
And then it’s like, oh, the differences when they’re at 10 employees or 20 employees and like, $300 for a service. Okay. That’s not a big deal. Like when you’re had that much in payroll, you’re not thinking you’re. Yeah. And you do want to trust the level of service that you’re getting from a provider, but then coming from bootstrap roots, it’s like, yeah.
I mean, our first plans were, I think my first plan was $29 and that lasted maybe six months before I realized and started to talk to people and see the value they were getting at it. I’m like, oh and the fact that I had to. Help explain the product. I was like, okay, let’s, let’s start moving this up a little bit.
Cause you’d get rave reviews said, oh, someone, Hey, I started using your software and we got like five referrals. It was worth like 20,000 in sales. Why am I charging 27? But it, it kind of quickly shifts your mind and going like, oh wow. As a business owner, there’s different decisions that start to go as you, as you kind of move up the chain.
Benedikt: [00:48:25] yeah. And as hard as it turns out, like early stage startups and bootstrappers, I mean, I love them all, but they’re just not the best customers. Like it’s true. Money-wise like, I. Yeah, I love this community. I love being part of it and yeah, but like so many, so many times she puts that up, but then don’t end up using it or the thing fairs or whatever.
And. What I would just love to give them the product for free. I mean, in the end we also have to pay our own bills and have a sustainable business and turns out that’s really, really hard with that. Just that segment of the market.
Jane: [00:49:08] Speaking of the initial question, what would you change next time?
It’s probably that our kind of business is extremely infrastructure heavy. We do store plain Tio data. We do pay for email services that we use. And it’s not like when we onboard a free user, they’re absolutely not free for us. So we are not thinking to introduce free plan very soon, at least. Okay.
Josh: [00:49:37] I think usually we, we would wrap up with a question, like, what would you do differently? But since we’ve kind of covered a lot of that, we’ve covered some really good insights. I think throughout the podcast that anyone getting started could, could definitely draw from. But so what I will ask instead is, is there anything you guys.
Like to promote you know, I know you have podcasts any new features, other things anything else you’d kinda like to talk to our audience about?
Jane: [00:50:05] We have a great podcast. You should try listening to it’s called the better than, than perfect. And Did get the tattoo that says DDTP last December.
Cause it’s, it’s a little bit of a motto with Benedict cause we are recovering perfectionist. So better done than perfect is a show for SAAS, founders and product people. And we have themes for different seasons. For example, season one was about user onboarding. Then we talked about customer success in season two.
And now we’re talking about email automation. So I’m talking, I have booked like 10 amazing consultants and we discuss different aspects of our industry. We also put great effort into our show notes. We have Dan who’s writing like executive recaps manually for each episode. So if you want to read, listen, go into an in Benedict.
Benedict in is API integration. It’s really good.
Benedikt: [00:51:01] Okay. So we are planning to do more integrations this year, but we finally have a separate integration, which already connects us to like 3000 tools or whatever. So if adoption and getting things set up has been a problem for you in the past. It shouldn’t be anymore because now you can literally plug it into anything.
So. Check it out. Benedict’s
Jane: [00:51:25] really far when he does something. So when he ships something, so our Zappi integration. I don’t know, four triggers, eight actions or vice versa. So it’s like really feature reach in terms of what you can do. So yeah, you can do almost,
Benedikt: [00:51:39] almost everything that you can use and use the list to automate stuff.
You can also send out software to automate other things. So, yeah.
Josh: [00:51:50] Cool. Awesome. Well, thanks very much for coming on the show, sharing the news and even sharing the vision of what the future of Userlist is going to look like.
Jane: [00:51:59] Thanks so much for having us, Josh and Nate.