Episode 721 | 7 Key Takeaways from the 2024 State of Independent SaaS Report

Rob Walling:
Welcome back to another episode of Startups For the Rest of Us, I’m Rob Walling. I’m your host this week and every week. And in this week’s episode, Asia Orangio and I talk through 7 key takeaways from the 2024 State of Independent SaaS Report. There are many more findings or takeaways than just seven, and of course you can download the complete report at stateofindiesaas.com. But here in this episode, Asia and I talk through our thoughts about the report and some key findings. And without further ado, let me welcome Asia to the show. Asia Orangio, great to have you back on Startups For the Rest of Us.  

Asia Orangio:
Yes, thank you so much again for having me. Always a pleasure.  

Rob Walling:
So it’s been awesome working with you this year on the State of Independent SaaS Report. So for folks who aren’t aware, this is our fourth report that we’ve done over the course of five years, and we survey our entire … All the MicroConf, TinySeed, Startups For the Rest of Us audience. And this year we got, I believe you were just telling me it’s just under 700 usable responses, and that’s statistically significant. I’ve seen other reports done with 2 to 300 folks responding, and so these numbers start to have some meaning at that point in my opinion. But this year you helped do some data analysis and had some pretty interesting findings that we’re going to talk about in this show. 

Now, I do want to say one note before we dive in, is we talk a little bit about slides and visuals and such, and it’s because we have used part of this episode on the YouTube channel. And if you go to microconf.com/youtube, you’ll be able to watch this video and see the full slides. But if not, we did talk through the findings so that if it’s audio only, you should be able to follow. So I’m curious, from your perspective, State of Independent SaaS Report, what do you see as the value to something, to putting something together like this? Because you reached out and said, “I know you’ve done three of them, you’re probably going to do another one. Do you want some help with it?” And obviously that means you have an interest in it, and you feel like there’s some benefit to the community to have a report like this. So tell me your thoughts on that.  

Asia Orangio:
Absolutely. So I was just counting the other day, how many founders have I worked with over the last six years that I’ve been running to DemandMaven, and it’s over 100. It’s well over 100 if we count how many people I’ve advised, how many people I’ve just consulted just in a call. And I get so many questions about how am I doing? How am I doing a comparison to my peers? And also there’s tons of just market research data and reports like this about the SaaS industry as a whole. But when it comes to indie SaaS and bootstrapped companies and founders, there just is not nearly as much. And I’ve always looked at the State of Indie SaaS as like this is the report for a lot of my clients and I get so many questions that I just can’t answer because there is no stat, there is no … No one’s dug deep into this. 

And so I was working with a founder more recently and I remember he had really good questions about, “Okay, yeah, I know what the stats are for the average activation rate, for example, of average SaaS companies and PLG, but what about my peers and bootstrappers?” And I remember thinking, I don’t have an answer to that, but I would refer to the State of Indie SaaS a lot. And so I was very motivated by what are some additional questions that we can ask? What are some other data points that we can collect to help support founders? And I think this specific report was we leaned a little bit heavier on the operations side because I was getting lots of questions from founders about how to structure their teams, how to think about their tool set and what they’re using. 

And then also pretty much everyone I talk to is always wondering, “Well, what about my specific context?” So anyway, so that’s a little bit of backstory around the motivation and what I … Me kind of feeling like, well, I can’t answer these questions, but maybe I can. Maybe I can help get answers to this and clear a little bit of the fog and debunk some myths about what this looks like.  

Rob Walling:
And that’s the reason we started doing it actually, was for exactly that reason. I would see the state of SaaS or the state of venture capital or the state of this and the growth rates, if you don’t have 200% year over year every year, blah, blah, blah, you can’t … And it’s just like, well, yeah, that’d be nice, but that’s not the game we’re playing. And so I was talking it over with my team back in, I think it was 2019 when we first started talking about doing this. And it was like, “What would it take to do this? How hard would it be? And what are the questions that we want to ask?” And look, the data in this report is, it’s directionally correct. It is a data point, it is a lighthouse on the … It’s not the exact prescription or 100% infallible. It’s like any other statistic. It can tell a story and it can be made to tell different stories. 

But especially the first report, it was so eye-opening. I just had no idea what percentage of bootstrapped, mostly bootstrapped SaaS companies asked for a credit card upfront. I had a feeling that it was like X%. I remember I used to tell people, “I think based on TinySeed and MicroConf, like my gut is this.” And it turned out to be relatively close, but it was so neat to not just have to save my gut to actually be like, “Oh, here’s a screenshot of that page.” And then recently, it probably happens every four or five months, someone on X, Twitter will say, “What’s the most popular country in the world or city in the world for bootstrappers? Where are all the bootstrappers?” And it’s like, well, we have this data, at least for our bootstrappers, the 700 or so folks who responded. 

The tough part for me has always been naming the report. Originally when I first came up with it, I was like, “I want to call it the State of Bootstrapping.” That was this report. And then I realized, A, is it really bootstrapping or is it bootstrapped SaaS? So then I was like, “Well, it’s State of Bootstrap SaaS.” So then it’s like, okay, so can people who raised funding, let’s say they take a little bit of money from TinySeed, can they no longer respond? Because those are mostly bootstrap companies and I think they should be in the report because they’re in a similar community and a similar economic boat. They’re venture capitalists who will say, “If you’ve raised less than a million dollars, you are effectively bootstrapped.” That’s how they view it. And for me, usually the number is in the 250 to 500K. I think that’s when you start to transition and like, “Oh, you’re pretty well … You’re reasonably well funded.” 

So coming up with Independent SaaS is like, I had to coin a term to basically be like, how do I … Because I can’t say the State of Bootstrapped and Mostly Bootstrap SaaS. It’s too cumbersome. So anyways, but before we go on, if you want to go to stateofindiesaas.com, you can download the report that Asia and I will be talking through today. And we have each brought a handful of findings and I’ll say thought-provoking insights that have some of which are puzzling. And I’m like, I didn’t expect that. And others it’s like, oh, this is totally in line and this supports my view of the world. If you could pick one finding that it most supports your view and one that was completely surprising, do you remember what those might be?  

Asia Orangio:
Yeah, the one that just makes me feel very validated …  

Rob Walling:
I love it.  

Asia Orangio:
Is, it’s got to be the model. So I get tons of questions from founders about, “Okay, but what are the average growth rates?” Ironically enough, I don’t think that we asked … We did ask about activation rate, but we didn’t ask for the specific number, which to be fair, how you define activation rate is its own thing, which is why we didn’t do that. But when it comes to like LTV churn and month-over-month growth, a lot of founders have questions about, “Well, which model is ‘the best?'” And I think the answer at the end of the day is going to be, it depends. It depends on your market, it depends on what your product is, all those things. But the thing that still made me feel like yeah, was when it comes to freemium versus free trial and then within free trial opt in versus opt out or basically credit card required versus credit card not required. 

So when it comes to not requiring a credit card on the free trial, this is actually the model that I recommend the most to bootstrapped founders because you do get more data in, but not so much data like you would in freemium, but not so little like you would with requiring the credit card. And what we found, what was surprising to me was growth rate actually was much higher when you required the credit card. But when you didn’t require the credit card, it wasn’t as high of a growth rate and churn was also okay. But not requiring the credit card gave you two times the LTV, which made me feel like, okay, yeah, so more money in the pocket. But to your point, this is so contextually dependent, it’s possible that the people who responded who don’t require the credit card just simply have better monetization, they’re charging more, maybe they’re targeting an industry that they’re able to charge more. All of those things are certainly contextualized. 

And then I think the thing that also just kind of validated my perspective personally was freemium not being as successful, but I think that’s just because too many founders don’t know how to make it work. There’s not enough education about how to make freemium work and also what are the right contexts that you really should consider freemium, and then what are the resources you need to make freemium work? It’s a much different ballgame than free trial in general. But that’s what definitely made me feel validated. And then also low-key surprised me. I would’ve expected not requiring the credit card on the free trial just would’ve been way better, but it actually technically wasn’t on the month-over-month growth side, but it was on the LTV side.  

Rob Walling:
And so for folks to have context, we are running this State of Independent SaaS survey every two years and we kick out the report a few months later, and as I said earlier, if you go to stateofindiesaas.com, you can view and download the report for yourself. And with that, let’s dive in to some of the findings. You and I are going to go back and forth with findings that we pulled from the report. Let’s dig in to your first finding. We are going to each have four that we’re sharing today, but talk to us about founder count.  

Asia Orangio:
Yeah, okay. I love this topic of conversation because, well, first and foremost, solo founders, of course, you guys out there, you’re already making growth waves, you’re already doing the thing. And on average and also the median, we typically saw on average it was around 17% month-over-month growth. When it came to the median, I think most … So just for context too, median represents more of the, this is what most people are probably experiencing, and the average of course is the number that you get after looking at the entire dataset. Even still month-over-month growth, still looking pretty good. What I think is interesting though is there’s a little bit of a very slight diminishing return on the average when you look at founder duos, meaning there are two founders. 

But what I think is fascinating is once you get to founder trios, meaning there are three co-founders, this is when you start to see around two to three X average growth month-over-month. And I think that this is so interesting because I think the connotation of a trio is that maybe it goes a little bit slower, but actually I think having the third person probably … My hypothesis is that the third person probably breaks a lot of ties, so to speak. However, there are diminishing returns. Once you get to four or more, we start to see a dramatic drop-off when it comes to average month-over-month growth. Not that it’s terrible or poor or anything, it’s just not maybe as efficient as some of the other growth rates month-over-month. But I still think it’s really interesting.  

Rob Walling:
This has been relatively consistent since we started asking this question over the … Because this is the fourth report that we’ve done over five years, I think, and I’ve noticed this pattern in each of them. We could go back through the others, but I believe for some reason, and I’ve never been able to explain it, that why three founders perform significantly better than one, two, and certainly than four. I’ve always been … With bootstrappers, we have the numbers in the report, I forget if it’s like 70% of mostly bootstrapped SaaS are single founders. It’s like a huge chunk. And then another 15+% is 2 founder companies, and that’s just the most common. I mean, that’s the lion’s share, 85%. 

And the more you get, I’ve seen four co-founder bootstrap companies, usually there’s a weak link is what it is. Usually there’s someone who shouldn’t, by my judgment, shouldn’t really be part of it. And you get too many cooks in the kitchen and people can’t, like you said, can’t break the ties, decision by committee. There’s all kinds of stuff. So it makes sense to me that at four, it’s too many. But I’ve always thought like, well, three is probably too many as well, but that’s not what our numbers have shown us each year.  

Asia Orangio:
Yeah, yeah. I would’ve assumed that more than two and you would start to see declines.  

Rob Walling:
Me too.  

Asia Orangio:
No, I was surprised as well. Way back in the day, I actually worked in-house for a company that had three … They had three co-founders. And I never would’ve guessed though that statistically speaking, at least in this dataset, it would imply the opposite. But it makes sense. But I remember the CEO at the time saying three was actually perfect for them because two can sometimes spend a lot of energy trying to make decisions, but not really going anywhere. And so the third person, especially if they were a strong force of nature so to speak, they were able to create momentum by again, tie-breaking, lots of tie-breaking, lots of like, “Okay, what do you think?” And then it’s like, “Okay, well I think it’s this” and so there’s actual momentum that happens. That’s the hypothesis. Of course, we don’t know exactly why, but yeah, I was surprised too, but two to three X is a lot. It’s a pretty big difference. Even on the median, it’s two X, which I think is really interesting. So that just tells me that this is something definitely to pay attention to and to think about.  

Rob Walling:
All right, for my first finding, we asked, “When a potential customer registers for a free trial, does your company request a credit card number to start the trial?” And what we looked at in this case is over the course of the 4 surveys we did from 2020 to this year’s 2024, and the findings are that the asking for a credit card upfront has increased and then decreased again. So the first year it was 73% asked for credit card upfront. Then it went up to 78%. 78% in the next one. And it’s down this year to 71%, so about a 10% drop. So it’s not precipitous, but I am curious, Asia to hear your thoughts on in the space, especially with bootstrap founders that you talk to, do you feel like the goalposts are moving for A, free trials, B, freemium and C, credit card upfront? Maybe start with credit card upfront because that’s what this slide is about, but have you seen that goalpost moving over the past several years?  

Asia Orangio:
Absolutely, absolutely. And there’s actually, we’ll get to this in a second, but I think that there’s some very real proof behind why more and more bootstrap founders are leaving behind requiring the credit card upfront. Yes, with the founders and the companies that I work with, absolutely. I think there’s a little bit of aha moment coming. It feels like there’s a communal aha moment happening around the opt-out credit card requirement or the opt-out free trial, which basically means you’re requiring the credit card. I think there’s a lot more movement towards opt-in free trial, and I think we’ll probably also discuss a little bit about freemium as well, but definitely, I’m absolutely seeing this. I have some hypotheses about why, but we’ll get into that in, I think, in one of the future slides that we’re going to cover.  

Rob Walling:
Yeah, my default has tended to be if I don’t have any other information, I ask for credit card upfront because usually I want to narrow the people who are going to try the software to folks who are actually interested and I think might pay. Now it depends though. It depends on the space. If the person who’s going to use the software is different than who’s going to pay for it, probably not the best idea because they don’t have a credit card. If a software developer at a certain company is going to use it but doesn’t have a credit card, then obviously you might need to allow free trial without a credit card. 

The thing, the mistake that I’ve seen folks do is either enact freemium where they then have the bootstrapping and using freemium where they push revenue down the line and maybe they don’t have the criteria in place to do it. But also then they get a lot of noise, especially in the early days. And similar with removing credit card, you can get more people in, you can get more feedback, and that’s the pro. The con is you get more people in and you get more feedback. And depending on how well you are at dealing with that, if you’re a first timer, that can be completely overwhelming. And so when I say I default to it, I mean it’s like a 60-40 for me. It’s not an always, never, but it’s like with no other information, that’s what I do. However, I think there’s a lot of leeway here for it to go up and down.  

Asia Orangio:
That’s so interesting because I’m the total opposite.  

Rob Walling:
Is it to get more data? What’s the reason that you would go with not having a credit card upfront for a free trial?  

Asia Orangio:
If you already have a really dialed in sense of who your customer is, then I think why put the limits on the free trial? And also I find that when you are able to get a little bit more information, I just feel like assuming that you have help and that you have experience in this, I’m actually very confident in my ability to detect, okay, who’s actually qualified? What do we got to do to activate people? 

I think to your point, if you’re less confident in your ability to do that, then yeah, require credit card upfront. Once you get to 10, 20, 50 paying customers, I think that you can take the credit card requirement off and create more of a pipeline for yourself. But again, the assumption is that you’ve got a pretty dialed in understanding of the customer. Considering that’s literally what I do, I’m pretty confident in like, okay, yeah, we don’t have to require the credit card upfront. Yes, I do think it makes sense though if you’re very, very early, may very new, first time founder, also new to SaaS, then requiring the credit card upfront will be a really good litmus test. So I see a lot of value for sure in that.  

Rob Walling:
Yeah, that’s the key is I was referring to, if you don’t really know your ICP yet and you’re still trying to figure it out, so that’s the difference. Yeah, once you know your ICP, you’re driving traffic, your ideal customer profile for those listening or watching, that makes sense. I think we’re on the same page. All right, Asia, let’s talk about target market.  

Asia Orangio:
Yeah, this might sound really obvious, but I think that this slide just illustrates it and makes it visual for people because the market that you ultimately decide to focus on is going to have a huge impact on your growth rates. This also might not be that surprising when I say, but if you are targeting enterprise companies, traditionally speaking, your average month-over-month growth rate was probably like in the 26 or so percent. That’s pretty high actually for a company. That essentially means that you potentially more than double year over year, but there are some trade-offs depending of course on who you target. So for example, if I look in this chart here, towards the end we see consumers, so on average month-over-month growth rate looked closer to 5% for consumers. Government was pretty slow, 1.75. Now keep in mind this is the average. The medians reflected something very similar. 

But what was also interesting was depending on just how people respond to the survey, if they selected other, which to be honest, I was kind of having a hard time of what would other be? But if you were not really targeting any of these ideal customer types, then you probably saw contractions in growth. This could actually be due to a lack of focus. This could also just be maybe there are some consumer customer categories that just don’t fit within this model. But at the end of the day, who you target from a business perspective is going to have a lot to do with how you grow. That should be both … I think it should be seen a little bit as, I don’t want to say blessing and curse, but almost like setting expectations for yourself. So if you’re targeting, if you’re going B2C, if you’re going consumer, just have an expectation that growth might look a little bit different than if you’re B2B targeting enterprise or even mid-market. 

SMBs fell right in the middle, which probably not surprising. So if you were targeting small businesses, your average growth rate probably looked around like 12% month-over-month. But overall though, something to keep in mind. But yeah, Rob, I’m curious how you see this and how this reflects for you.  

Rob Walling:
Yeah. So for context, the top three fastest growing target markets are enterprise and mid-market, which is slightly smaller than enterprise, and NGOs or non-government organizations. I’m a little surprised the NGOs are there, but it is what it is. So those are the top three, which the first two certainly line up with my experience of at least having a dual funnel with enterprise and mid-market plus SMB. But with the TinySeed companies, we see the ones with the bigger ACVs, the ones with the bigger average revenue per account, per month, or per year do tend to be the ones that grow faster. On the bottom end, the bottom four are totally in line with what I would think. Aspiring entrepreneurs, education, selling into schools and academics, consumers, and then government. And yeah, none of those are really surprising to me.  

Asia Orangio:
Yeah, yeah. NGOs though, that makes me think that those software companies are solving a very big problem for them. That’s what makes me think that NGO is doing so well.  

Rob Walling:
I think the NGOs are probably enterprise or mid-market companies is my guess. We’ve broken them out because people … We used to have, well, we do have other, and people would write in NGOs, that’s our target market, and so we included it. But if you think about it, a lot of non-government organizations are actually large businesses and I think the first three all line up. 

So for our next one, we asked, “Do you plan to seek outside funding for your company within the next 12 months?” And I am glad we started asking this. I think we’ve only asked it for two years, but it was insightful for me the first year to realize this really gets sent out to the MicroConf, TinySeed, Startups For the Rest of Us ecosystem, which frankly, it’s mostly bootstrappers. It’s overwhelmingly folks who want to bootstrap and that’s fine. That’s okay. 

What I was surprised by was in 2022, 30% of respondents said they plan to seek outside funding within the next 12 months, and then in this year’s report it’s down to 23.5%. Now, a couple thoughts on that. 

Number one, it’s interesting that across all the TinySeed companies that we funded, somewhere around a third of them wind up seeking or raising additional funding. So that one third number, it seems to be something. This is even for companies who’ve taken an accelerator round from TinySeed. 

The other takeaways from year to year, if you heard me say 2022 is 30% and 2023 was about just under 24%. So there’s a decrease of 20, 20 something percent. I think that’s due to the funding environment. I’ll say this, the 2022 results were actually surveyed in fall of ’21 when things were still gangbusters. It was so easy to raise funding, everyone was thinking about it, everyone was doing it. The valuations were high, there [inaudible 00:24:14] going on, there was crowdfunding going on, all kinds of stuff. So I do think there was more of an appetite because it was just easier, money was cheaper. And this year’s survey taken, what? A couple of years later because we skipped a year in between is down to about 24%. And I’ll admit that’s just not that surprising. I think with funding being harder to raise kind of makes sense. You bootstrap until the money’s available and if the money’s never available, you just keep bootstrapping.  

Asia Orangio:
Funding being harder to raise, but then also terms not nearly as appealing as maybe they once were.  

Rob Walling:
There you go.  

Asia Orangio:
And then also I think there’s just like a … What was the quote from MicroConf most recently? “The exit strategy is death.”  

Rob Walling:
Yeah.  

Asia Orangio:
I think the culture is culturing when it comes to bootstrap in general. Yeah. But I also think it speaks maybe a little bit to the mental resilience of bootstrappers. I think a lot of people are learning about how to grow sustainably and also being maybe a lot more discerning about when does it make sense to get funding?  

Rob Walling:
And Asia for your next slide, we have a battle of the models. Talk us through this.  

Asia Orangio:
Oh yes, okay. It is one of my absolute favorite debates and it’s just because there isn’t really a right or a wrong answer, but the data is going to show us a couple of really interesting trends. So basically there’s of course offering freemium, then there’s the free trial. You can do opt-in free trial, which basically means that you don’t require a credit card upfront. And then there’s the opt-out free trial, which means that you do require a credit card upfront, you have to opt out of it. So when it comes to growth, churn and LTV, which we’re going to look at in here in a second, when it comes to growth overall, so what we find is free plans and free trials that do require a credit card, we’re going to see on average at least 10%. And for free trial credit card required, it actually is the highest. So 14% month-over-month average growth for companies that do that.  

Rob Walling:
Yes.  

Asia Orangio:
So requiring the credit card upfront does have a pretty big impact when it comes to initial upfront growth. And then not requiring the credit card had the least amount of month-over-month growth. This was about 7.6, we’ll call it 8% on average. And at first blush, that may seem like, oh, CC required for the free trial is the obvious answer and then maybe after that freemium. But not necessarily because now we have to look at churn. So for churn for the free plan, this was absolutely fascinating, but basically your month-over-month growth average, while it might’ve been 10.4 or 5%, churn was the same. It was almost 11% month-over-month average for churn. So basically freemium tended to see if you offered a free plan, you probably saw a little bit higher churn as well. 

When it comes to the free trial credit card required, the average for the month-over-month churn was 5.5%. Now, this was actually shocking to me because traditionally speaking, we tend to see really high churn numbers when you require the credit card upfront because people forget to cancel and they email you and they’re like, “Oh, I forgot to cancel. Can you cancel my thing?” And then ProfitWell and a lot of other subscription metrics will actually count that as churn, even though they might’ve just forgotten. So I was actually shocked to see that the average was about 5.5% on credit card required. 

And then finally not requiring the credit card on the free trial, 6.34, so a little bit higher. Now again, that might make you think, oh wow, not requiring the credit card on the free trial is the worst one. But then we’re going to look at LTV. But first I’ll pause here. I’m so curious, Rob, your gut reactions to this.  

Rob Walling:
It’s tough because it is averages, but my gut feel is typically that folks who are asking for credit card upfront, I would think that the churn for the first 30 or 60 days would be higher. But if they have their stuff dialed in, then beyond that, as long as they’re getting ICP, their ideal customer profile in because they are gating it with a credit card, kind of makes sense. That’s why I say it’s my default. Again, it’s a default. It’s a rule of thumb. It’s just a thing that I lean towards. So it does kind of make sense. It really makes sense to me that free plan, meaning freemium has, I’d say lower growth, but that the churn is high, which I guess this isn’t churn from the free plan. This is churn from the paid plans, which almost tells me the business is broken. 

And that’s the thing. Just bootstrappers using freemium in general usually means they don’t know what the (beep) they’re doing. That’s been my experience. You know what I mean? And I don’t mean that … I use that bad word only to imply that I just see it too often. It’s the same thing. People want to do B2C, they want to bootstrap a two-sided marketplace and they want to have freemium. I don’t know why they’re drawn to this like moths to a bug zapper, but it really is the most common questions that I get. I’ve just stopped taking these questions on the podcast. So the freemium part, kind of being a train wreck and the business being on fire, that makes a little more sense. The fact that free trial with credit card required performs better, at least with these averages, I think is in line with my experience, but it doesn’t … More questions to be asked is how I feel about it.  

Asia Orangio:
This is where I would say the story flips a little bit. So LTV, ultimately what that KPI speaks to is the lifetime value of the customer. So for as long as they spend with you, how much actual money do they spend on average across their entire experience with your product? And what we found was while the free trial credit card not required, certainly did not look as appealing month-over-month growth-wise or even churn-wise, what we found was it actually would have on average two times the LTV versus other plans. So for context, free plans and freemium, we saw an average of three K LTV. When we looked at credit card required on the free trial, it was about 3.6K LTV. Free trial and credit card not required, 6.5K, so easily 2X over freemium or free plans, and then of course a slight bump over the free trial credit card required. 

What this tells me is that while businesses might choose the free trial where the credit card is not required, what they’re basically trading off is faster, maybe upfront, month-over-month growth for basically more money in the pocket, which I don’t think you can be mad about. However, that’s not to say though that requiring the credit card upfront is not a good option. If anything, this makes me think that maybe monetization is a little bit broken for companies that tend to do the credit card required upfront. And then for freemium, it’s exactly what you said before. I think a lot of founders just don’t really understand how to make freemium work. How do you make it do the thing? But it also could speak to lower pricing plans and charging less in general because you’ve got freemium as your starting point. So it could also speak to that as well. So maybe monetization is a little bit broken here as well.  

Rob Walling:
Yeah, this one’s interesting for me because in our last slide we looked at growth rate and free trial with credit card required was growing significantly faster month over month than the others. But free trial credit card not required has significantly higher lifetime value even though the churn is higher. So it implies that without credit card required, that basically they’re charging more. I mean because for the LTV to be higher with higher churn means they have to be charging more.  

Asia Orangio:
Charging more, keeping more, I think, too potentially.  

Rob Walling:
This is where data can be made to tell a story because Asia and I could go on Twitter, X and we could say, “Well obviously based on this slide you should not ask for a credit card and we have data for it.” We could flip to the slide before. We could say, “Obviously by this slide, free trial credit card required allows you to grow faster.” And I won’t say it’s apples and oranges because they’re related, but it’s unclear. And honestly, this is why the answer is it depends. It really does depend on your space. It depends on your customer type, your ICP, it depends on your stage. If you’re $2,000 MRR versus 200,000 MRR, you have to take the data you can and the data you have and you use it to your advantage. 

And for our last slide, this one will be quick. I just like looking at it because the question we ask is, “Please select up to three advertising channels that have most significantly increased your revenue.” And the number one, 65ish% is Google AdWords. Number two with about half that, so around 30ish is Meta or Facebook ads. And then next is other, and fourth is LinkedIn. And every year I’m always like, I think Twitter ads are going to do something at some point and they never do. They’re always so far to the right. It’s like that Twitter ad ecosystem is terrible. Usually though I would expect LinkedIn to be third. Just in broader experience, it’s like it’s Google AdWords, it’s Facebook and it’s LinkedIn would be my top three that I would recommend to founders, B2B SaaS founders. 

The issue though is the LinkedIn ad tools are not great, and that’s what I’ve heard. And so TinySeed has invested in [inaudible 00:33:06], which is a SaaS that sits on top. It helps you manage and deal, basically get around LinkedIn’s crappy ad interface. You heard me say that, that’s not their marketing, that’s me just saying it’s pretty rough. The ad tech of LinkedIn is significantly behind Meta and AdWords. 

The thing that I want to dig into, and I wish I had this data with me today, is other advertising. I don’t exactly know what that is, and I bet we had a text field that people entered stuff. I’m curious if other advertising is advertising on podcasts, advertising or sponsoring events or display advertising. I can imagine those being an other. And so the fact that it’s ahead of LinkedIn might be just that it’s so varied. There’s so many different options that people kind of bucket it all in one.  

Asia Orangio:
Yeah, the LinkedIn thing is also not surprising to me. I think in order for LinkedIn to work, you’ve got to be targeting an audience that just actually lives on LinkedIn. I live on LinkedIn, that’s where I hang out now. So I’m not surprised that Meta, which includes Facebook and Instagram, I’m not surprised that Meta beats LinkedIn. And then of course Google AdWords. I mean this is bottom of the funnel keyword searching. Not shocking at all here. But yeah, LinkedIn, that’s awesome having the thing that sits on top of it. I agree, because it’s trash.  

Rob Walling:
Asia Orangio, if folks want to keep up with you on X, Twitter, you’re Asia Orangio and demandmaven.io if they want to find out what you do on a day-day basis with your growth consultancy. One of the best in the business. Thanks so much for joining me.  

Asia Orangio:
Thanks again for having me.  

Rob Walling:
Thanks again to Asia and DemandMaven for working with MicroConf to help produce this report. Again, stateofindiesaas.com if you want to download and check out the report. And let’s connect on X/Twitter. I’m @RobWalling, once again signing off from Startups For the Rest of Us, this is episode 721.