I’ve always regarded myself as a bit of a curious rebel; both of which have been strong drivers of being an entrepreneur today. (Probably to the extent where I’ve broken myself and have made myself completely unemployable.)
Knowing myself, it then doesn’t surprise me that my curiosity and rebellion are two of the five core values for Conversio (the other values being passion, honesty and independence). This is a bit of a self-fulfilling prophecy and I’d hope it’s more a case of building a team of like-minded people than one of brainwashing. :)
The one thing that’s been very important to us has been to know why we make certain decisions and how that influences our actions. To this extent, we’ve been cautious of merely pandering to the status quo and adopting an “us-too” mentality just because other companies are doing something in a certain way.
Across various topics, we’ve found that this groupthink mentality isn’t necessarily a good fit for us. Ranging from our decision not to raise another round of funding (because we wouldn’t have known how to efficiently or effectively apply the capital) to having a maternity policy of which we can be proud. This doesn’t mean that we think most others are wrong; we’re just the rebels in the room that believe there’s a way of doing things that better aligns with us.
Enter SaaS
Unlike ten years ago, there is a lot of SaaS advice out there; much of it that most of us would even consider to be best practice to some extent.
The hardest part of building a SaaS business today generally isn’t building the actual product or understanding what you could or should be doing. The much harder part if filtering through all of this information to get to a somewhat-prioritised list that will help move your needle.
Even if you get to that point though, the thing that most companies miss is how these best practices or playbooks align with their values.
Let’s consider for the moment, some of the things that would be considered for Conversio today (or would’ve been relevant in the last 12 months):
- We’re growing nicely, so raise another round of funding to continue that.
- Increase our prices as the product matures.
- Continue to move upstream to find bigger customers. Perhaps even move into the Enterprise one day.
Yet in the spirit of our “Breaking Bad”-culture, we’ve almost done the direct opposite of all of those things. And a big component of this, has been the way we’ve set up the pricing for Conversio.
If you consider that we operate in the “email marketing” or “marketing automation” space, we actually have many companies (some of which are massive, like Mailchimp) to whom we could have referred. The easy solution would’ve been to imitate their pricing and if anybody asked why our pricing was done in this way, we could merely point the finger.
We have instead tried to find a pricing model where we can align ourselves with our customers with great proximity. Not perfect, but we believe we’re closer than we would’ve been using another — more prevalent — pricing model.
This has not been without its challenges. Look at our MRR graph (remembering that our revenue is directly tied to the business performance of our customers):
You’ll see a dip and some flatter growth since our highs of December 2016, where we saw peak retail driving us upward. Since then, retail businesses have been recalibrating and it’s been a steady build upwards.
Consider this graph alongside the fact that we’re at almost $2m ARR. In April, our customer churn was only 3.5% and revenue churn 2.5%. And all of our product-related metrics were up nicely. Our NPS currently sits at a very respectable 58.7 for our paid customers.
But the graph above is not the revenue graph of a best practice SaaS company, because SaaS companies shouldn’t have down-months. Right?
One of the reasons we’re not that kind of company is the fact that we’ve chosen a values-based pricing strategy, instead of the popular value-based pricing strategy. We’ve specifically made other decisions, because the values around value-based pricing were geared towards things like efficiency, scaleability and acceleration. These are all things that just doesn’t intrigue us. We don’t get excited about these things, as much as other things.
The Road Less Travelled
The road we’ve taken has been adventurous and intriguing. Until December 2016 it felt f*cking amazing to be imagining and defining our own path instead of following a well-trodden one.
Since then, things have definitely felt less amazing. We’ve had more questions that we need to answer (“Why aren’t we growing more?”, “Are we doing something wrong?” etc) and since we now don’t have many points of reference, there’s just many things that we have to figure out by ourselves. This in turn has required great patience, which I think is most entrepreneurs’ kryptonite.
The thing that has helped us greatly in this uncertain phase of our young lives, has been our connection to our own values. As Nietzsche famously said: “If you know the why, you can live any how.”
We have long-term ambitions, dreams and goals (probably not unlike most other companies). Month-by-month we’ve become clearer about who we are and how we want to pursue those ambitions, dreams and goals. We believe that in this way the sum will be bigger than its individual parts.
Today it totally sucks looking at that revenue graph, which is never up-and-to-the-right enough (an idea for a different article altogether). But in our moments of calm and clarity, we know that we’re willing to trade short-term benefits in pursuit of this much bigger, longer-term dream.
“Don’t aim at success — the more you aim at it and make it a target, the more you are going to miss it. For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side-effect of one’s dedication to a cause greater than oneself or as the by-product of one’s surrender to a person other than oneself.” — Viktor Frankl, Man’s Search for Meaning
