Ask your customer’s customer

when i worked at red bull, one of the restaurant sales strategies was to seed fake demand.

here’s how it worked. you’d ask students and colleagues to patronize the restaurant and ask “can i add a red bull to that?” the cashier says “no,” because they don’t carry red bull.

a week later, low and behold, a red bull rep walks into the restaurant. “have you guys considered selling red bull?” “actually yes, we’ve been getting asked about it all week.”

we can’t control our customers, but we have a pretty good idea of what controls them — their customers.

so take a page from red bull, and build a way for your customer’s customer to sell for you.

Churn as a growth metric

As marketers we’re taught to avoid churn. The more enlightened ones among us understand that reducing churn = growth.

Now try this one on for size: use your churn rate to set your growth goals.

Suppose you have 1,000 subscribers paying $20 per month for your SaaS platform. Your top-line is $20,000 MRR, but you have 12% churn.

This means if you acquire zero new users for a full month, you would only have 880 subscribers next month, and your MRR would drop to $17,600.

OK, now check this out.

If churn is 12%, you could merely double it and set that as your baseline growth goal.

Suddenly, you have 3 cases by which to measure the health of your business:

  1. Worst case — zero new customers, 12% churn, $20k –> $17.6k MRR
  2. Base case — 12% churn + 12% growth, $20k –> $20k
  3. Growth case — 12% churn + 24% growth, $20k –> $22.4k

In the growth case, you’ve grown 12% in a single month. Maintain this focus on 2x churn for a year, and you’ll grow to at least $87,000 MRR. Huge.

Of course, this does not account for the natural reform that occurs when churn is as high as 12%.

Businesses with empathy are likely to uncover new features, support gaps, pricing, or customer persona issues that enable them to reduce churn from 12%, while still maintaining a growth of 2x their worst case.

Next time VCs or peers claim you need to be growing by an arbitrary metric, consider this strategy instead. Plans rooted in reality are good plans indeed.

Peak Scrape

2014

“Where can I find Travis Kalanick’s email address?”

2015

“What’s the best price for 10,000 leads?”

2016

“How do I compel prospects to respond to me?”

Data is no longer the problem; Information is free. I’ve personally scraped half a million contacts for $0.

As sales people get better at finding prospects, prospects get better at ignoring them.

My friends at Nova.ai are trying to fix this. I’ve tried to fix this.

Because when Aunt Jemima understands “mail merge,” everything changes.

It’s almost like we have to…

* Build human relationships
* Rethink scale
* Create a monopoly

If you spend most of the day deleting bounced emails, you’re doing it wrong.

I Am a Musician

Ryan Kulp is a musician

You have beautiful hands,” she said.

It was my first day of 6th Grade. We were shuttled around to the art, band, orchestra, and drama extracurriculars. We were to choose one discipline that would define our middle school career.

One teacher, Dr. Scruggs, grabbed my hands and said I should play violin in her orchestra. I obliged.

It’s been 15 years since that afternoon. Here’s what I have to show for it:

  • Can play several instruments
  • 2,000,000+ views on YouTube
  • Performed 100s of times
  • Recorded 4 studio albums
  • Failed to turn a profit

I could make excuses about why this happened.

Like, my parents’ discouragement. How they lectured me to put music in a little box called “hobby,” and to get a college degree + “real job” instead. 

But while those excuses would be accurate, they don’t change anything.

Next March I’m hitting the studio one last time, to record yet-another-album and attempt to make something of my God-given talent, music.

I’ve had a lot of success in building technology companies, but I will always be a better musician than a marketer or developer. So my heart, and my savings account, says I should give it another go.

As we approach Spring 2017 and the launch of my next album, you’ll notice some changes on this blog and my profiles around the web. I will be getting back to basics, as a musician first, employee second.

Introducing Fomo

When I moved to San Francisco last Fall, I committed to not hanging out.

Through a mutual friend I met Justin Mares, and we started hacking on dumb projects.

Fast forward a few months, we discovered an ecommerce plugin called Notify. It helped increase online sales by showing recent purchases, in real-time, to website visitors. We loved it.

This March we bought Notify and drafted a plan to grow it. Today, that plan goes live.

I’m proud to introduce my latest project, Fomo.

In one line of code, Fomo turns customer interactions into instant marketing material. Syncing with everything from email signups to ticket sales, it’s the online equivalent of a busy store.

With over 2,500 paying customers already, we think we’re up to something special.

To keep in the loop on all things Fomo, check out our new blog. We’ll be writing about startups, the future of marketing technology, and of course, the power of social proof.

Cheers,

Ryan