TinySeed Tales

Startups For the Rest of Us

TinySeed Tales S2E5 | The Gamble of Raising Prices

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On Episode 5 of TinySeed Tales, we learn about the success of their recent outbound email campaign. We also hear about their progress with raising their prices and transitioning away from Gather’s solo pricing tier.

The topics we cover

[02:00] Checking in on the past few weeks

• A little bit of an emotional roller coaster
• We have definitely made some inroads with teams
• We haven’t had the growth that we were hoping for
• Feeling a a little anxious about how it’s all gonna play out.
• There’s a time here where it’s very uncertain because you’re kind of leaving the solo practitioners behind, but you haven’t quite reached product market fit.
• There’s also a little bit of insecurity with the product
• It’s a huge mind shift all together selling into these teams
• We were hoping for more of a spike and it’s just been this slow, steady growth, which is not bad. It’s growing as usual, but that’s not helpful when you had to take all this risk

[05:51] Patience can be dangerous

• Going forward Gather will be dropping their solar plan altogether.
• Half of their signups in the last month have come from their new cold email outreach campaign that’s focused on larger teams.
• Had success from a customer development standpoint early on in the product before we ever even built anything. Brian was emailing tons of people and talking to them as much as I could
• We actually had quite a bit of traffic last month but the conversion rate was half what we usually have, so it just speaks to the fact that we aren’t speaking to the right people right now.

[07:31] Yet another pricing increase

• Currently they offer a tier at $99 a month and one at $159 a month, as well as a custom enterprise plan. That’s way up from $39 a month, which was their lowest price plan when they joined TinySeed.
• My feeling is that price is not really an objection when we’re selling to new people
• It’ll be interesting to see, you know, if we do start getting price objections from at least the solo people, we kind of predict that we will.
• Next month we’re planning on doing another potentially really big price jump.
• Raising prices is increasing the speed of learning and if it works, although it’s a big gamble, the payoff is pretty
• In order to keep this up, like we would eventually need to hire some sales reps and some account executive types.
• But when we move into this double triple price thing, you know, like into the, let’s say $250 average revenue per customer, Then the whole model shifts and changes and it looks way more interesting.

[15:19] High points from last week

• We did have to literally within five minutes of each other team annual signups. Both of them were from our cold email outreach and they had both had demos and that felt really good
• We had an existing customer that’s requested pricing for 20 teammates, so we provided a custom quote for them. But if they do decide to go ahead and sign on that, that will become our single largest customer, both in number of users in revenue as well.

Links from the show

• Gather | Website
• Brian Elliott | Twitter

Startups For the Rest of Us

TinySeed Tales S2E4 | Being Married and Being Co-Founders

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00:00 / 24:33

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Brian & Scottie Elliott are the husband & wife co-founders of Gather, an interior design project management app.

Today we’re going to dive into the stress that comes with entrepreneurship and how it shows up in their personal lives. Moving up from one customer segment to another is hard. Each customer segment is like an Island with a body of water between them. They’re crossing that body of water from servicing one and two-person teams to serving larger architecture firms with 20 person teams. We hear how they are managing this difficult and stressful moment both as co-founders and as married partners.

The topics we cover

[01:40] Leveraging testimonials when moving upmarket

• It’s an approach you should explore as early as possible when trying to move into a new segment of the market
• One of the reasons why trials are kind of a little bit lower this month is because some of the traffic that we’ve been getting is probably more geared towards the residential side and they’re seeing this new messaging.
• You have two islands and a body of water in between them and its messaging and sales process and pricing and positioning and all that around going after one person, two-person teams versus a 10 person team and those are the two different islands.

[06:09] Cold email experiments to attract larger teams

• Averaging 12-15 demos per week (initial goal was to get to 10)
• Finding one repeatable channel at this stage is huge
• Cold email has been the channel that has worked the best for Brian & Scottie
• Most businesses that start B2C end up transitioning to B2B and end up raising prices. Means less churn, fewer flakes for demos, better conversion.’
• Demo to trial isn’t as high as they’d like it to be.
• One reason for this could be due to the longer sales process

[11:27] Cashflow management

• We had a really good month last month — the best month we’ve ever had.
• The biggest stress is just around the channels that we’re investing in and wondering if they are going to perform like we want them to.
• These are challenges with going upmarket. First, you have to figure out if you have product-market fit with teams. Then you have to find a channel or two that work. If the channel works, do the people stick around and can you find enough people who sign up and stick around? Can you find them fast enough with the channels you have such that you don’t run out of cash
• At the current burn rate we have about 6 months cash in the bank
• If pushed, would consider debt-equity or debt financing as a fallback option
• Founders do all sorts of things to maintain their runway, including credit card debt, personal loans, raising funding, even borrowing from their 401k. But with each of these, you have to weigh the risks to the business, as well as your personal financial situation.

[18:09] Dealing with stress as entrepreneurs and a married couple

• The situation causes us to feel a little bit on edge and we have no one else to take it out on.
• Now we’re being much more conscious of our personal spending ad so I think that has also manifested itself just a little bit in some additional stress because we’re really tracking all of our expenses really tightly and we’re making sure that we don’t spend foolishly.
• No silver bullet for stress, but certainly meditation, exercise, and being aware that you are stressed.
• Even though there is this sort of stress and there’s sort of some existential risks to this experiment that we’re running, it also feels aligned with where we want to go as a family and as an exit plan from work life at some point.

Links from the show

• Default Alive
• Equity Financing vs. Debt Financing: What’s the difference?
• Gather | Website
• Brian Elliott | Twitter

Thanks for listening to another episode of TinySeed Tales. If you haven’t already, be sure to check out Season 1 of TinySeed Tales where we follow the Saas journey with Craig Hewitt of Castos.

Startups For the Rest of Us

TinySeed Tales S2E3 | Is This All Worth It?

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00:00 / 26:42

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Brian & Scottie Elliott are the husband & wife co-founders of Gather, an interior design project management app.

Today, Rob chats with Brian & Scottie about their new hires, setting ambitious revenue goals, and managing stress and anxiety as entrepreneurs.

The topics we cover

[01:01] Update on hiring, new sales, and more

• Hired a VA
• Hired an industry expert to help with marketing/copywriting
• Scottie & Brian now focused on documenting the processes
• Had their first “team plan” subscription
• One thing you’ll notice as an entrepreneur is that when you start to expand your team beyond just the founders, new hires, propel you to get more organized, creating standard operating procedures like Brian & Scottie are now doing is a big step towards cementing the continuity and value of the business.

[03:18] Attending the TinySeed retreat and setting ambitious revenue goals

• Brian and Scottie attended their first in-person retreat for their TinySeed batch
• Setting batch goals are less of a punitive thing and more of a “let’s do this together and let’s be ambitious together”
• Once we started talking about specific numbers, it forces you to reevaluate how you are thinking about pricing
• There are a number of levers that we have at our discretion to pull. That number gave us, like, it allowed me to think about the numbers that mattered the most and the ones that would provide the most leverage.

[13:13] Anxiety, stress, and entrepreneurs

• We had a pretty high churn month
• Because we are now starting to carve that path to that new type of customer, our features are no longer speaking to the other subset of customers
• The fear is that this (churn) happens every month
• Whether you’re going upmarket, whether you’re changing from one vertical to another, whether you’re expanding into other verticals going from vertical to horizontal, there are all these changes you can make that are really scary while you’re doing them.
• It’s important to look a few months ahead and imagine what it will look like if it succeeds

Links from the show

• Gather | Website
• Brian Elliott | Twitter

Thanks for listening to another episode of TinySeed Tales. If you haven’t already, be sure to check out Season 1 of TinySeed Tales where we follow the Saas journey with Craig Hewitt of Castos.