Lenny's Podcast · Feb 1910 lessons on bootstrapping a $200m business | Patrick Campbell (ProfitWell)
Patrick Campbell bootstrapped it and sold it for over $200 million, and says earlier funding might have led to a billion dollar exit. It gave its metrics product away free, ran eight niche shows, and drew on $30 billion in ARR of data.
Tips
- Agree on what good shipping tempo looks like for each team▶ 30:15At ProfitWell marketing agreed on one medium launch a month and one big one a quarter, and product supplied one thing a month for marketing to position.
- Build a middle-of-funnel pool with freemium and niche media▶ 1:02:10Freemium converts retain 10 to 20 percent better than free-trial or sales converts, and their NPS is about double. About 80 percent of sales and marketing budgets go to top and bottom of funnel.
- Define who your values exclude and screen for it in interviews▶ 8:05Once ProfitWell defended these values consistently, everything got better, and a company of over 20 people stopped escalating trivial conflicts to HR.
- Use a final-interview culture case study with a Slack scenario▶ 1:07:00About 10 percent of candidates wanted a zero tolerance policy for the situation.
- Use problem, cause, solution to think from first principles▶ 35:50ProfitWell's metrics product had a growth problem; causes included low willingness to pay and a small market, so the solution was freemium plus paid-for-performance products.
- Take funding if you aim at a billion dollars in annual revenue▶ 12:20ProfitWell sold for over $200 million, but Patrick believes earlier funding could have led to a billion dollar exit.
- Do not skip competitor research; run a competitive intelligence program▶ 48:20There are 16 times as many competitors as 10 years ago, and CAC is up about 110 percent in B2B, 145 percent in consumer and 220 percent for sales and marketing software.
- Do not build a paid analytics product; go upmarket or give it away▶ 29:10Metrics were free while paid products were monetized separately on a paid-for-performance model.
- Build products that are either daily workflow or fully hands-off▶ 27:30Patrick says the data came from about $30 billion in ARR flowing through ProfitWell Metrics.
