Show Notes
In this episode of Startups For The Rest Of Us, Rob interviews Josh Pigford, the founder of baremetrics about competition, transparency, and funding.
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Transcript
Rob [00:00]: In this episode of Startups For The Rest Of Us, I talked with Josh Pigford, founder of Baremetrics about the good and bad of competition, transparency, and funding. This is Startups For The Rest Of Us episode 244.
Rob [00:21]: Welcome to Startups For the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob and Mike is on vacation and we’re here to share our experiences to help you avoid the same mistakes we’ve made. So Mike is out-of-town in Hershey, Pennsylvania with his family and so this week I decided to bring Josh Pigford, founder of Baremetrics on the show because he has a lot of unique experience. He has bootstrapped a SAS business for the past couple of years and it had a great growth trajectory and amidst that, he’s had a ton of competition crop-up. He’s also raised a small round of funding to help with his growth and he’s been very transparent with all of their numbers actually published a dashboard with all of the growth numbers and the lifetime value in turn and pretty much opened a kimono on it and that’s at demo.baremetrics.com. So I talked to Josh about all three of those topics because of anyone I know he’s really in the midst of the throws of competition, funding, and transparency, so I hope you enjoy his takes on these topics. Let’s dive right into the interview. So today I have the pleasure of speaking with Josh Pigford. You probably know as the founder of Baremetrics. You haven’t heard about Baremetrics that they are one in click analytics for stripe. So for using the subscription API with stripe particularly if you have a SAS app, Baremetrics gives you a really cool dashboard of all your numbers and your turn and lifetime value and all that kind of stuff typically the stuff that you spend a week or two with the developer trying to build out so it’s not something that most SAS providers want to spend their time doing, and Josh has the pretty unique story that he’s had strong growth since he launched. He got out ahead of the market and then raised a little bit of funding and that’s why I wanted to have him on the show today to talk about it. So, thanks Josh for taking the time to join us.
Josh Pigford [02:13]: Thanks for having me, Rob.
Rob [02:14]: Absolutely. All right. So I want to cover a couple of topics today in particular. The first one I want to start with is transparency. Transparency is something that you’ve been a big advocate of in the sense that from really early on in Baremetrics history, you wanted to kind of have a live demo of Baremetrics, of the dashboard, and so you’ve just opened the kimono and essentially, you show all the numbers for Baremetrics that’s at demo.Baremetrics.com for those who want to go check it out, and it’s your live numbers obviously you’ve obfuscated those customer names in there that are changed for the protection of the innocent but you have real lifetime value and your real monthly occurring revenue and all that stuff. Tell me a little bit about the motivation for it and if you think that’s been a plus or a minus for Baremetrics’s growth.
Josh Pigford [02:58]: Sure, sure. So we back in, I guess been a year and a half now, so February 2014, I had this idea like I need a demo for the software and I mean I guess I didn’t have to have one but it just seems like it was the easiest way to convey the value and honestly, it was all kind of the result of my own laziness so I thought I needed a demo and I could spend a ton of time pumping out like fake data and trying to generate enough fake data to look like I have a legit dashboard but I mean there’s a lot to Baremetrics so like there’s a dozen plus metrics in each of those, have their own individual metrics pages with even more in depth data on all of those. It would’ve taken so much time to put all together and I thought or I could just add a line of code and make my own stuff public. So, I went with the lazy route and at that time, we weren’t making a ton of money, we’re kind of doing like I don’t know, a few thousand bucks a month and so just decided, “I will put it out there.” And there’s I guess a little bit of altruism to it in the sense that I’ve been building software for the web for a decade and I always appreciated other people kind of given me a look into what their startup looks like successful or not, and there’s a little bit of that aspect of it but I mean it initially was a bit of laziness that turned into something bigger.
Rob [04:16]: Sure. And now that you are obviously substantially more than a few thousand dollars a month and since your revenue is public, I don’t have it [?] but it looks like I think your MRR right now is 32,000 or 33,000. Now that this takes a little bit bigger and you have competition and that kind of stuff, do you – and maybe regret is too strong of a word but do you still think it wasn’t a right choice and are you happy every day when you wake up and see your numbers in public?
Josh Pigford [04:38]: So it’s a mixture. It was at the right move, absolutely, I mean so many things came out of it so, kind of the biggest plus was that Buffer, another startup decided to make their stuff public through Baremetrics as well. And then they’re substantially larger. I think their MRR is like $400,000 a month or maybe like 500,000. So it’s a lot of money and a lot of people follow them. And so that would not have happen had I not made mine public because like kind of that wasn’t even an option to make all these revenue public, or at least not in this like easy one-click setup. So, I don’t regret it. It was definitely the right move but man, did it bring up a number of copycats that poured in after that was substantial. So, yeah, but there’s been a couple of I would say legitimate competitors but the [?] 90+% of them, a lot of them just literally, directly ripped off like the design and everything. So, it’s one of those things like it’s sort of a bit of a gold rush in a sense that the way I certainly can’t compare of like their metrics to the app store but I mean in the same way that you hear somebody makes a lot of money on the app store, “Oh, I can do iPhone apps too.” And they copy lots of people and it’s sort of the same as you see but they’re not much more scaled but that’s kind of happened here. And so that’s just really annoying more than anything like that’s the part that’s so frustrating and then the other aspects of it like because we have to be kind of private, we don’t want to surface individual customer’s data. I feel like we have to give a somewhat scaled back demo. And so, the fear is that that kind of almost implies. The Baremetrics doesn’t do as much as it can, but it does we just can’t show it all from the privacies side of it, so.
Rob [06:23]: That’s interesting. Yeah, I hadn’t thought of that. So, as you’re clicking and digging into detail, you can’t necessarily show every screen of –
Josh Pigford [06:29]: Exactly. Like I can show a couple of screenshots here and there but I mean I can’t let you, we get into the okay well especially when we start talking about like customer profiles and stuff. We have to, at that point have to generate a lot of fake data because we can’t show any kind of customer identifiable information there. So, we’re looking at different ways to handle that but it’s like there’s pros and cons but the pros is far with the cons.
Rob [06:52]: Yeah. Right. And so it sounds like you do feel like it brought some competition once folks saw your growth curve, but the pros were that it gave you this plastering on.
Josh Pigford [07:00]: Sure. Like if you look at our graph, like MRR for instance, the big inflection point is when Buffer made their stuff public because it just instantly brought a ton of exposure. And so it changes the angle of the graph permanently. And so, yeah, from that perspective, it was unquestionably the right move.
Rob [07:19]: Right. And for folks who want to check that out, it’s at buffer.Baremetrics.com. Another thought in transparency, I want to hear, I get your thought on it. I think there’s been a movement towards it and I think the first time I heard someone devolves at the revenue a few years ago, I can’t even think of who was like [?] has done it for a while, you have become famous for doing it. It blew me away right it’s this totally unique groundbreaking thing. More and more companies are doing it now, do you feel like it might be losing some of its impact and losing the maybe the bump that if someone came out today, let’s just say I came out today and exposed all of drips back in stuff, do you feel like it would still be worth doing or that the pros maybe kind of getting water down and a lot of people are doing it?
Josh Pigford [08:04]: I don’t know that I would suggest, I mean that’s kind of mixed back here because we sort of kind of partnered with Buffer and so it just opened startup thing where so baremetrics.com/open. You can see, I don’t know, it’s going to be seven or eight different startups that have all made their Baremetrics dashboards public. And like there’s this aspect of like wanting to support people being transparent because I think it can be interesting. The problem is, transparency just solely for transparency stake I would say has lost its kind of gimmicky at this point. I think when you can use it to tell some kind of story, right, like for us, the story it tells is like the Baremetrics story, right? Like it is a demo of our software. It makes complete sense from that perspective and the fact that the numbers, or our actual numbers kind of has this like, “Oh, that’s neat” kind of aspect of it that’s I think kind of been going a long way to maybe adding some sort of face to the company, but like [Josh Mo’s?] random billing software or like I don’t know, maybe he sells some subscription T-shirts or something like or his numbers are all that interesting, probably not to all startups but maybe to other T-shirt companies. And so, like if he’s taking the role of trying to help other T-shirt companies like show you how to start them and kind of the ups and downs, okay, like I think that can be interesting. Or like on a regular basis taking a look at your numbers and saying, “Okay. We had a big spike in user turn, let’s talk through that publicly about like why that happened and how we can fix it because I think that’s helpful to other startups.” But I think a lot of people just like start posing their numbers like because that’s just what people do, and I think there’s a little bit of vanity to it as well like I was guilty of it at first in the sense of like I would post on Twitter like our MRRs are X and some of that was just I’m excited because “Wait, hey, the company is growing.” But I mean to some extent sure, I’m like I feel like I was bragging to some extent too and so, I tried to be a little bit more humble about it at this point but –
Rob [10:07]: Sure. Yeah. I’ve definitely caught some people or in my mind like I feel like certain people are transparent to truly help others and then some folks, I do get the bragging vibe from them of like, “Look at me, look how cool I am.” That thing, and it gets an easy trap to fall into for sure.
Josh Pigford [10:25]: Yeah. And especially early on, like and if you feel like you get a little it attraction and especially we’re like it’s easy to look at yourself from the lens of basically the people that are in your little circle of influence and if maybe you’re doing better than the 10 guys that you hang out with then it’s like it can quickly it can kind of become a bragging thing but like if you’re doing it just to kind of be like a shell off, I think it kind of turns people off.
Rob [10:49]: Right, right. Yeah, there’s an interesting thing I was thinking about. It’s like there’s ongoing transparency which is kind of what you’ve done and what Buffer has done and then I think there’s like point in time transparency which you just touched on where you might write a single blog post about how churn went up, this is what it was, this is what we got it to, and here is what we did, and that’s super helpful, right? But you’re not necessarily just saying, “Here’s my churn every day. You can come and look at it. I think that point in time aspect is something that I’ve personally lean towards like I will, you better MicroConfs, I will often devote everything. I do it once a year if that and it’s not necessarily a commitment that I’ve made but I have an open source, or not open source but I have made everything open but I think there’s some value in transparency. I guess it’s just, yeah, I just wanted to hear your take on it.
Josh Pigford [11:32]: Well, I mean earlier on, the first and that is six to eight months after I made our stuff public, I would do a monthly blog post like, “Hey, here’s the July update of our numbers.” And what kind of touched on what worked and what didn’t but I mean to some extent it was like it was a point in time thing and not necessarily all that useful, and so we stopped doing those but like to me there’s a lot more value so content marketing works really well for us and specifically made once a week writing, end up of a blog post as I’m able to push up that week but like trying to just genuinely be helpful to other people and for us our target markets and other startups so rather entrepreneurs and so that’s sort of an easy thing for us, but I think like transparency when like when it matters to other people is what’s more interesting, right? Like I remember a couple of MicroConfs ago, we talked about making your numbers public like the one where you have shown, not this past but like a couple of months ago but the one before that would drip yeah, and how that just like showing the growth of that was so interesting to me and kind of opened my eyes a little bit about like, “Oh, okay.” So like that’s probably what something more successful looks like, well actually that might have been three years go.
Rob [12:55]: It might have been HitTail.
Josh Pigford [12:56]: HitTail, that was what it was.
Rob [12:57]: Yeah. So, this is when you were back before Baremetrics, right? This was when you –
Josh Pigford [12:59]: Yeah, yeah. So this was PopSurvey and contemporary and like stuff was in my head, I kind of go in okay but also at the same time and sight it was awful, and now that I’ve like you to have a different level of success there. And so, but when I saw like how HitTail, how you’re able to grow that and it’s like that’s when I sort of thinking like okay, like, “I could potentially make some software that could make a lot more money than it’s making right now and I just needed to find a different thing to do that with but that’s where it was super helpful, right?” So for you to release those numbers, because it was a motivator for me.
Rob [13:31]: Right. Yeah, that’s a good point. I want to switch it up a little bit and talk about funding because you’ve been a bootstrapper for a decade or more. You launched PopSurvey, you had Temper, I’m sure there’s many others that I haven’t heard of that you bootstrap. When you launched Baremetrics, it was getting great, growth numbers and at a certain point you were offered funding. The numbers were public, I’m pretty sure. It’s a half million dollars and you took the funding. And I know that there are some folks out there that say, “You should always take funding. You should never take funding.” And I’m not in either of those camps and I know that you weren’t either, so I’d like to hear what your motivation was and what your decision process was like when you were considering, do I keep Baremetrics all my own or do I take some money and essentially move faster but now have some investors that I’m working with?
Josh Pigford [14:21]: Yeah. So for me, there had been this point where Baremetrics was doing from like a growth perspective, talking in percentages, I think was doing between like 20% and 50% every month growth with MRR and so at that point, and our numbers are public so those are the kind of growth rates were investors start like, “Oh, that’s kind of interesting. How can I have the piece of the pie?” So I started getting all these phone calls or emails or whatever and I humored a few people but for the most part it was just kind of the typical like I’m just not comfortable with giving that much of the company and we just aren’t really jiving or you sound like a jerk, like all these kinds of things where it just wouldn’t sit right with me and I was fine with where we were at like I think when most of the funding email started, it was me for the most part and then like I had just hired another engineer. And so like, we’re doing fine and I didn’t have any really big aspirations at the time but I was still kind of riding the wave of like, “Oh, this works.” And so, yeah, then this $500,000 thing came up and just the terms ultimately like I mean honestly, if you start thinking of the health of the business and maybe what my goals are for the business, I would’ve been an idiot to not take it and I think that’s where my mind shifted change was like I was proud of the bootstrap aspect of it but when you start looking at things from a different perspective of like well the things that we could do with this money and what are the sacrifices relative to that. If the sacrifices aren’t anything I’m opposed to then well yeah, why not? So the evaluation, there’s 500,000 for at a $10 million evaluation which equates to 5% and –
Rob [16:06]: So they don’t have control?
Josh Pigford [16:07]: No, and so technically, so it’s a safe like they don’t even have the shares. They get the shares in the event that we sell or that we raise an all-around –
Rob [16:14]: Raising it around. Right. So it’s essentially a convertible note, right, it’s a loan –
Josh Pigford [16:19]: But it’s not even that, I don’t have to pay it back unless like if I shut the business down, if there’s no time, there’s no date attached to anything, like nobody’s hand can possibly force me in any perspective. So, like it would’ve been dumb for me to not take it.
Rob [16:35]: Yeah. Those are some very generous terms.
Josh Pigford [16:37]: Right.
Rob [16:38]: And when you’re making that decision, there’s this money in the table and obviously the terms are favorable and that’s the interesting part is I have stopped saying, “I won’t take funding.” And I’ve started asking myself these questions like when I go and refuse or whatever like, “Under what circumstance would I?” And it’s a different way to ask it but obviously, there were very appealing terms. You took the money. Did you know when you took this half million dollars, how you were going to spend it?
Josh Pigford [17:03]: Yeah, absolutely. I was itching to hire some people like after I started thinking through, when that was suggested as, “Hey, we can put in this amount of money.” Like I instantly started sitting down and brainstorming of all the ways that I could spend it and ways that what does Baremetrics need to grow and to see the goals through that I had that can keep Baremetrics growing and people ultimately what was going to make that happen. So, that was an easy one, for sure.
Rob [17:34]: And how long? Has it been about a year now?
Josh Pigford [17:36]: So, it’s been 10, let’s see, we closed on the deal in I think September.
Rob [17:42]: Okay. So like 9 months, 9-10 months, yeah.
Josh Pigford [17:44]: Yeah. Somewhere around there.
Rob [17:45]: So now you have some perspective and some distance from it, was it the right choice? Was it a good choice for you?
Josh Pigford [17:51]: Yes, absolutely the right choice. I think in [?] sight, I think I would’ve done a few things differently. There was a little bit of a, “Holy crap. There’s half a million dollars today in my bank account now. Woohoo. Let’s spend some money, right?” And I mean part of it is the investor wants you to spend their money. They’re giving it to you not so it just sits there in a bank account but at the same time like I probably spent too fast and at the time I was still maintaining the like 20%-30% average growth rate per month and then like shortly thereafter, it started the growth rate, it started like not tanking but it wasn’t 20% or 30% or more.
Rob [18:28]: Leveling out.
Josh Pigford [18:29]: Right. It’s just like that was inevitable but it happened over the course of 30 to 60 days like it happened pretty quick and I think from that perspective, I’ve kind of ended up overshooting early on how much I was spending. So we’re like at a point now like we should be fine without like needing to raise any more money but it’s just like having to be a little more cautious with our spending money at this point.
Rob [18:51]: Right. Yeah. When you’re growing like that, it’s easy to get ahead of yourself and say, “Well, in six months, we’re going to be at 50,000 or 60,000 recurring revenue and therefore we need to staff up to all of these people and it’s easier to spend money quick when you’re growing up fast, I know the feeling. Now, you leveled off after you raised the money, did you catch any flock from your investors? Did they expect that or were they kind of concerned when that happened?
Josh Pigford [19:11]: Yeah. So, they’ve just been helpful. We have a roadmap wise with the stuff that’s on the roadmap is partially influenced by customers. It’s partially influenced by like investor input about ways that we could potentially expand from a market perspective. And so, if anything, they certainly weren’t like, “Oh man, this is best bad news.” Like sort of, “Hey, yeah. There are some things that you work on to probably fix these things and so that’s us kind of getting [?] now.”
Rob [19:40]: Right. Now, typically, if you’re going to raise an angel round, the majority of folks are going to give you this money, expect the series A then a series B and they want $100,000,000 evaluation, right, or they want $100,000,000 market. Was that the expectation that was communicated to you or did you guys talk about kind of the fun strapping around where you said, I’m going to raise this single round, I want to use it to get the profitability and build a nice profitable business, was any of that discussed?
Josh Pigford [20:05]: So some of those discussed, like if we think of the purpose of my funding round, my money technically came from General Catalyst which is a big VC. They’re not typically like angel round investors. But as part of this stripe specific fund the faith created and they’re like one of the main investors in stripe. So, and for them it’s like it’s a mixture of sure, they want their money back with some returns on it but it’s also this sort of load confidence in the stripe ecosystem for them so like marketing play is not necessarily the right phrase but it’s like for them, it was just as much about saying like, “Let’s beef up. Stripe, they’ve got however much hundreds of millions of dollars put into the stripe. So, if they can make stripe more successful, then this is like then that kind of pays off indirectly for them.
Rob [20:56]: It’s almost like a strategic, it’s a strategic investment for them, right? And to build the ecosystem.
Josh Pigford [21:01]: Exactly. And so that’s kind of again, like that was one of the way that I was sort of unique from that perspective. And so that’s sort of when I also have a little bit stress from the, “Oh, man. I’ve got to get their money back” from a I’m a good human being perspective like I don’t want to lose their money but at the same time they’re not like screaming at me about anything [crosstalk] –
Rob [21:22]: Yeah. That’s nice. So, to kind of wrap up the funding portion, we talked about the advantages and kind of the no brainer aspect of raising this round for you, you’re nine or ten months out, have there been any major kind of negatives or regrets or like bad things that have brought about?
Josh Pigford [21:38]: Not really. I think in hindsight I would be a lot more careful, and this is just naiveté on my part without the evaluation side of things because of you think of it in terms of how much of the company are getting up like okay, at the end of the day kind of giving up 5%, fine, whatever. Like I would give up more, right? So I have thought like, hey, what about I could actually technically add onto the same round even nine months later and that would be great, more money, right? But the probably is I kind of got like a Silicon Valley evaluation which in a lot of times are a little inflated. And so, it makes it a lot harder for me to raise additional funds if I wanted to because a small time investor is like, that’s not worth it for them at that evaluation because they’ve got such a tiny piece of the pie. So, I think in hindsight I probably even though like they suggested the evaluation, I can hindsight I probably would’ve should’ve downplate that a little bit so they get easier to raise more.
Rob [22:41]: Yeah, right. Instead of potentially having to have a downround later or –
Josh Pigford [22:45]: Exactly, right. Because nobody will stop so –
Rob [22:47]: Right. Do you watch Silicon Valley on HBO?
Josh Pigford [22:49]: Yeah, it’s great.
Rob [22:50]: I love that show. So remember when he negotiates with the VC because he wants a [?] evaluation?
Josh Pigford [22:55]: Right, like that’s that.
Rob [22:56]: Yeah, yeah. I totally get it.
Josh Pigford [22:58]: And it was sort of one more point here to the whole evaluation thing like I raise money from a big VC fund whereas there is a whole slew of by single person angel investors, a lot of them completely disconnected from the tech scene who would love to give people money for pretty decent evaluations and like not have a lot of demands about things, like I think that’s sort of where the dogmatic bootstrapper mindset comes from is all the really awful junk that they read on tech grunge and that’s not the norm like. That’s not what most of the investment world looks like just because the rest of it is just boring, it makes for bad news. So, I think like if people are interested in like say they just want $100,000 like a really long way for them. You can probably find one angel investor or a few angel investors who would come in together at a decent evaluation to give you that money and that would just be genuinely helpful or maybe they’re completely hands off and they just kind of want to get their hands dirty in the tech space. So, I think if people are interested in that they should like ignore the hype that they read elsewhere and just kind of start poking around places like AngelList to find like individual angel investors who were just kind of want to help people out because they exist for sure.
Rob [24:22]: Right. Yeah. I like the term colon from customer that I usually call it fund strapping and that’s where you raise a small seed round of I like to think of it as between 100,000 and 500,000, I’m kind of being arbitrary about that but I think that’s probably the range you’d want to do it and you raise it from between one and five angels and it’s like you said, they don’t take control, they’re going to board sit. They can’t kick you out and then you use it essentially to get to profitability and it’s more of the way that traditional businesses are funded say a restaurant or a carwash or dry cleaner, you’re just probably going to have a lot of higher profit margin than those, so it’s an interesting part.
Josh Pigford [24:55]: And I don’t want see, that’s the thing like there is I guess a small possibility that it would make sense for us to try to raise a series A or something like that, but what I am stanchly opposed to is having to be the founder, a founder who just raises money all the time because there are so many that do have to do that where the CEO is essentially the guy who like, okay. He raised around well, six months later he’s going to start again because it takes six months to close another realm. He has to keep doing that over and over and I hate that junk. So, I have no intention of doing that. Profitability for me is the goal.
Rob [25:32]: Right. Yeah, I think of it, I use the phrase building slide decks instead of building a business, right? And I prefer to build the business, so [crosstalk]. Cool. Okay. So, our last topic of the day is competition. I like to think that any time you have a good idea and you execute on it and you achieve some success, you are going to by nature bring competition into your space and you have done that well, you had a good idea with one-click analytics for stripe. You obviously have success and more public about it and so many competitors have sprung up around Baremetrics. Do you think that competition is good? By I say good I mean beneficial to you or because you kind of hear both mindsets of well, competition validates the market but you are already in the market, you had already validated that was working so do you feel like, boy, having more competition is helpful and it’s generating more attention around the space or do you feel like the more crowded it gets, the harder it is to be heard above the noise?
Josh Pigford [26:30]: So, to me I think of it from the point of view of the customer, right. So, competition is ultimately good for customer which I think ultimately is good for us because we’ll hear indirectly a customer say like, “Hey, I was checking out their competition and they had X feature which means, translates to they solve X problem that I have.” So, can you solve that problem for me? Well, maybe not right now but if I hear it from enough people, then yeah, we’ll try to solve that problem for you. And I think that it’s good from that perspective or it stops being good is when there are two dozen people or companies who are all kind of the same. And so, we’re trying really hard, I think this sort of space, this sort of like analytics that you don’t have to think about or work to set up kind of set up a space. We’re at a point where we’re kind of start to kind of fork where there’s a lot of people playing the baseline metrics game where click here, connect to stripe account and you get MRR lifetime value cheering all these stuff. But on that level, it’s not like it’s useful but there has to be something else pass that I think for it to be really valuable but that also it’s really difficult to build but that’s where I feel like we’re starting to kind of fork off on our own is trying to move away from my numbers game and move into the genuinely useful for making business decisions game like helping people understand why things are, what they are, and how to fix them and that kind of thing. And so I think the prevalence of so many competitors right now has helped pushed us in that direction which I think is ultimately a positive thing, but I mean like holy crap is that annoying.
Rob [28:09]: You’ve seen people pop out with your whatever and I don’t know anybody who’s done this but I would have to imagine because I’ve seen it with my stuff, people are popping up probably using your same tagline, probably using names that are similar to use, probably using designs that are similar to yours.
Josh Pigford [28:22]: Oh, sure. That’s amazing, I mean almost there’s one that I’ve seen making the rounds a lot more maybe their content stuff like the stuff that they randomly post on their blog I’ve seen a lot and I’ll go to their software or whatever. It is a direct rip off of Baremetrics and it’s just like how do you sleep at night? And people are using our logo but like changing from a different shade of blue or something, I mean just stupid stuff that’s like at the end of the day, copycats, their motivation is purely to try to make a quick buck and in a year they won’t exist. But for the year that they are around like, I mean you’re like the annoying kid at school that keeps tapping me on the shoulder like, go away. That’s kind of how I feel about them.
Rob [29:04]: Yeah, no, that make sense. You were in the space where the onboarding is really easy, right? It’s one click to get in, it seems like that would be a double edged sword. It’s easy to get people onboard but then it’s easy for people to switch. Yeah.
Josh Pigford [29:16]: Switching cost are way too low right now and so yes, that is probably our number one problem from like a charm perspective is that switching cost are so low which is in the short-term good for a customer because it gives them a lot of options. At the same time, it makes for a customer who doesn’t want to get invested in their software which maybe for them, that sounds like a good thing. But, I think when you’re like so wishy-washy about trying to solve at the end of the day solve your own business problems, being wishy-washy and not saying like, “Here’s what we’re going to use. Here’s what we’re going to stick with, and this is what we’re going to base our business around.” When you stop acting like that, you end up with stuff that’s just not useful at all. And so, yeah, so we’ve got a bunch of stuff that’s coming out soon that the switching cost will be much higher and that sounds a little like just rude, but at the same time, I think it ultimately will make for software that people in the long-term get a lot more value out of.
Rob [30:11]: Right. Well, I mean it’s hard if you have 20 people in the space, or 15 people in the space with no maybe one clear leader and everybody else is kind of milling around creating noise. The customer is actually not getting the best software because everybody is competing whereas if they’re only two or three in the space and they’re really [dooking?] it out, then you’re going to get some awesome new features, right? You’re going to be innovating against each other and that kind of stuff. So, I think it’s interesting that it’s essentially, it’s like the one-click stripe analytics as you said has almost become a baseline for a lot of these products and you know how to rise above it which in the short-term is probably painful and it’s annoying to see all the competition but in the long-term it’s going to make for better products and just going to make you move pretty fast which I think is better for customer.
Josh Pigford [30:55]: Yeah, 100% agree with that.
Rob [30:57]: Cool. All right. So you’ve actually have a customer, I don’t know how – or I’m sorry, not a customer but a competitor crop-up who’s offering one-click stripe analytics for free, so they’re just kind of doing a free-mium model, when you first heard that news, I can imagine the look on your face, was that brutal was it were you kind of like, “Yup. I knew this day would come.”
Josh Pigford [31:17]: I was totally wasn’t surprised. I think start kind of poking around to see okay first, how are you even doing that? Because that gets expensive to store massive amounts of data and processes, like it’s expensive. So it’s like how are you guys pulling that off, and then you start realizing, okay. This is actually like a lead generator for their other business that which is a completely legitimate business, the other one is and lots of people love them but it’s like when you’re like releasing tool just as a lead generator, then no way does that software sort of stand the test of time because it’s ultimately like a loss leader for you and that’s just so hard to maintain especially on a small team. So they don’t worry me and our customers feedback on that has been basically the same that like, “Hey, we’re using this other one because it’s free but like no way would we ever stop using you guys. Their stuff is just not good.” So, it doesn’t bother me and in reality, so in the next month or so, hopefully, we’ll actually have a free version. I think this plays into our long-term plan, like in the short-term we actually may take a little bit of a hit but in the short-term, yeah, we’ll start playing a little bit of the free game, the free-mium game and see how it plays out. We haven’t, because we’ve never had a free plan, I mean a year and a half in and we’ve never tested it. So, it seems a little short-sided of me to not at least humor that as a possibility.
Rob [32:43]: Right. As a test, and so that, I mean it was kind of my next question is like so how do you compete with free because obviously this is going to happen to anyone who has a good idea and has some success, we’re eventually going to get a free competitor and it sounds like so far, number one is you know the game. You’ve been doing this now for 18 months, 2 years. And so, you know what it takes to really run this service in terms of cost and team size and then continue to innovate. And number two, is potentially fight fire with fire, maybe release a free version and to continue to build in an innovator, you have to stay ahead of the game. You have to keep building features that they don’t have.
Josh Pigford [33:19]: Exactly. It’s just one of those things where you kind of have to just, I know what our goals are and I can’t make any assumptions about what my competitors’ goals are. I like the types of problems that one competitor is solving for their customer base however small it may be is not necessarily the same as what I’m doing. And so, it would be super short-sided of me to say like, “Oh, well they just launched some feature. I need to do the same thing.” No, not necessarily, like their customers may want that but our customers may not. Or, the way that we solve that problem is totally different. So, I think it’s just being hyper focused on what it is that you do and you do well is kind of the way to not worry about competition.
Rob [34:05]: Well said. All right, sir. So, folks want to keep up with you online aside from checking out baremetrics.com, what you get is one-click SAS analytics for stripe. How would folks keep up with you whether it’s blog url or Twitter handle?
Josh Pigford [34:20]: So Twitter is @Shpigford and I that’s really about it. I don’t blog much anymore.
Rob [34:26]: All right. I would recommend your podcast which is called Founder’s Journey.
Josh Pigford [34:30]: Yup.
Rob [34:30]: Is that right? I’ve been listening to it for the past couple of months and it’s essentially you reading some blog post that you’re posting on the Baremetrics blog and adlibbing, you’re adding more stuff which has been kind of cool.
Josh Pigford [34:42]:
Rob [34:43]: Very good. Well, thanks again for coming on the show today, man.
Josh Pigford [34:46]: Thanks for having me, Rob.
Rob [34:47]: That wraps us up for today. Thanks again to Josh for coming on the show. If you have a question for us, call our voicemail number at 1-888-801-9690 or email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by Moot used under creative commons. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, and we’ll see you next time.
Great interview.
I like the idea of “point in time transparency” rather than this level of sharing that only seems to help competitors.
If the story of your business is important and you are targeting people who would care about revenue, then this point in time really makes sense because it allows you to craft a story and release only the metrics that are important for the story, rather than baring everything to the world.
It does not seem like Josh would have many competitors if he had spent the time on creating a demo of his product and not just released that level of detail to the world. It does seem to have got him a lot of press and eventually may have helped in getting that investment with very generous terms. So maybe it paid off. It just seems like there could have been a better way to go about that.
Great episode. So much of the focus of SFTOU has been on bootstrapping and it was great to show a bootstrapper that then accepted venture capital.
It absolutely made sense for Josh to raise money – especially with someone that’s also an investor in Stripe which is the core product that BareMetrics is built upon.
Both bootstrapping and raising money can be the “right choice” depending on the startup, founder(s), product, and trajectory.