Talk on Revenue at Founder Institute Sacramento

coming up is the recording from my presentation at founders Institute Sacramento I share three approaches to revenue that has helped me grow this very business I talk a lot about the macro and the micro stuff I loved it got a lot of great feedback from this very presentation and I hope you enjoy it as well

yeah so just making $100 a month with no idea of what he was doing but then in 2013 he decided to start a podcast so he can pick the brains of out craters the he'd learn including co-founder of Shazam chatbox Crossy Road etc and that changed everything now Steve runs an app marketing agency app app masters back Co where he's helped clients get featured by Apple hit the number to pay back overall and get coverage on TechCrunch Mashable ventureBeat and other major publications he also writes for The Huffington Post entrepreneur calm the next web light hack and his blog at masters so thanks

for the intro talk about revenue now this is ym look like what I just felt

like hey I'm gonna work for be calm I'm gonna learn everything I could still had no idea how is gonna become an entrepreneur and so I want to start off this talk with revenue and we're talking about like okay here's some tactical things but also the broader scope I've been doing the potty ass before the bus years I had no cleaning my corporate job seven months after star Podcast because all I was trying to do was just really learn from people in the absolutely a minor right through that little bit on into this start coming to me I don't know that much yeah right but and they'll started coming that enough meaning and now we're in our fourth year when things are phenomenally you can see the seeds and the connections that was building as I was just really trying to learn from people and that has grown so the more connections that I made the people that you more of me the revenue is taken off

too but you can see the effects lots of a long time you see those foods evaluated for years so I wanted to kind of talk about that you that if you have or if you're on the verge so I'll going

I talked about this we helped a lot of clients and then so you know like it's just we should focus on that marketing campaigns and really drive down those marketing campaigns that drive downloads on a budget so that's essentially what we do so I'm just going to so just the

learnings from all this right I think so many times we focus but we focus on detail jabal I'll pick you as an example but can you focus on the data especially engineers I'd talk to you my goodness I'm gonna fill this platform I'm gonna get all this data I'm gonna sell this data right and you're funky and you focus so much on that the outcome and not know what is the fuel value that I'm bringing to the table who am i targeting who are my customers what is the value of this product that I ability I think too many times we just focus on big data could sell this thing too much on the outcome and not enough following who am I really helping here like I know 100 melting bean Indies the startups really figure out the OP space right trying to really drive a tremendous amount of growth on a really tight budget that's why monkey right I didn't say they look I'm gonna drive message now is I'm gonna make billions of dollars

no I'm not talk about the outcome talk about the value first probably you gotta get to super space first before you the

other thing I wanted to talk about was being religious about so I'll just give you the backstory when I left my startup job I had a great consulting client perfect yeah I'm first month I made up the the money that is giving up from that all right and then I thought that was very like you're forced in some video courses you're gonna do apps I'm gonna be great right I had this preconception but back in it's all that no network like four months into being on my own my consulting client which made up by revenues left right so I just

jobs I'm gonna go back to my old boss the kg need help with anything exactly how about you know like I got some time he needs a mouth touch I just did not get religious about how I was gonna make money I was like I'm gonna be an entrepreneur that's it I'm gonna make it work I'm gonna figure it out right and I think the first time I left corporate job my corporate job I was like our own fantasy that's it bill this I see wedding I would get myself three months and if it doesn't work they don't go back I was very religious this was the one way I was gonna meet right and this next time I wasn't I think it's characters I knew that I wanted to be an entrepreneur that was not necessary so you just gotta figure it out sometimes it's just give yourself enough time way to just figure stuff out and I bring up this example you know Airbnb back in the day they knew they were on some idea they're running out of

money built up 40,000 and dead hey credit card now what are we gonna do took off at the PNC and then like how do we turn this is they made some cereal and made 30,000 off this cereal and just figured it out they made it work that's when they got inside I see so for me I felt like hey let's not get too religious about how we're gonna get there we have an idea and let's figure it out all right blasting I'm gonna get really tactical here from a pricing setting when I'm focused on like I think you all know are you gonna make money I think the biggest problem I see is where's the perceived value it's so hard because SSA you can tell me your thing costs $100 for me that could be cheap or it could be expensive but there's no pristine that but there was a study done anybody read rationally there you go I love this book so Danny Ariely he says okay they tried it right they said you make very irrational decisions

so he had this pricing plan right from The Economist the first plan was a subscription for the online service at $59 Sega was praised for 125 then you get both for 25 boom easy decision perceive value right on if you just look at 125 million that's really but because you comparing it now does proceed on I know where I'm gonna buy so here's why 84% bought the print and then web subscription when they had this all 16% just bought y'all my version but what happened one of these guys he said he said I let's remove the middle one right just flit now because I don't have the perceived value anymore I'm just comparing the two 68% but the web only and 32% now look I'm a man of action okay I didn't just read this book like Jessica sunny I complied it right we did the same thing our previous started this is what we're selling we're selling the subscription package a $30 or is no stated 30% if you chuck

sign up for Yui it's pretty cool deal right well what we're seeing was 60% were they were buying the the monthly and then about 40% on URI now obviously we want to give them one really stay longer they only have to make a decision once thank you rather than 12 times a year and so I said all right I read this book I think you gotta try something got good gotten again I changed for this now I made up this apology didn't exist didn't matter you so you can buy whatever you want here you get the same thing right cuz we just wanted to run this test all right now I'm gonna split this up monthly I'm gonna take out some of the features and then uh I feel like premium and then the core features they're gonna stay right because I know that the only one really wanted to that's all they really want ramen test this so here's what happened we're not only increased conversion by two hundred thirty three

percent a versus B or you'll also saw eighty six percent of the people going into you and the 14 percent again it's Christine you value it's not know what it's not about $300 a lot of money right that's what they thought until I show them the 289 that's not that much more so here's what was side by side two hundred thirty three percent increase in conversion just by showing the plan again is up all about proceed belted it works in the half space that works at my fantasy football team doesn't matter what you're selling if you can just show me perceive value right immediately I'll pick the right one I'll pick the one

coming up in here here's the problem but I think if I can get sucked in and then with a perceived value - oh I get this I get why one is buildable I get why it's not so much about what you're selling with your pitch with pricing whatever it is like per

transaction or like a month it's up to you right I think for me personally I suppose to pay so it's all about figuring out what the lowest barrier is gonna be to get them to pay because all I'm doing is mentioning the early stages is validating that there's any fear that people are actually living paid for this I've done both I have a subscription-based service that started back in 2015 or 14 didn't work now four years later I launched the same exact thing the same exact pricing I've done I've got more customers in like one week of swamp watch that ever did that first year so it's also about timing I got build up enough for anybody to be able to do the monthly recurring stuff but I couldn't do it in the first year and so I don't think for me it's like if you're trying to sell something doesn't my package is trying to get out what are some best ways to I guess I guess generate leads to see if you get more

customers and how do you I guess end up closing them so you're the event space right anyone after um basically event promoters for concerts and festivals where they whoa where do you live online Facebook Instagram he's moving all the time with social media so a couple of ways Raven is how I would I say hey minute can I interview you I'm signing this little blog or You Tube channel 20 real quick for you struggles they talk to me by you become a successful event promoter that's it don't be selfish but really try to learn from them all right that's easy yes for them right yes and then you go great awesome Tim later hey what do you got going on oh whatever so I think for me everything I think everybody's a brand you know and so if you start building a trend yes if you want to be more savvy but just target them on Facebook like you can target people write titles of event promoter karate or like Facebook groups or link

just get in there that's what it's going to be a long a longer long term so I

would say it works it's but you I believe everything works like if you look at Evernote struggling right now they can't get people they gave away too much right so you got to really figure out like this slide I said I need a core features I knew what my customers wanted if you don't know what those core features are you're never gonna figure out what they're gonna be so it's not about guess who will work or what did not work i discharged them up front all that works you can do a trial with them you'd be fine with it right now I might go that route just because then you get paid but then you need to figure out what that core value Evernote's struggling for something oh I'll be fine with a free one forever next question Oh what do you the expectations people have for the free version because the upside is that a lot more people who are downloaded it but do they really see any value in that

so versus something that is some other competitor that is paying what's your experience in that so he gave me example so the Dropbox have started all the the free versions of people downloaded that but sometimes like you can just download that free and just just be with that versus um people don't pay as much attention because it's free and you're not seeing any value to that and what's table the same product you actually put for $29.99 they will actually pay more attention to that and use it so um in your experience when you have marketed all these parts like where do we I mean when they try to sell free apps what is basically better versus the subscription would be planned so this way I think really depends because it depends on what the problem yourself for that jump because it's gonna get them to pay faster right and so if you're talking about a drop box and you did a small almost mathematical question

hey how much is my cost per user and how many people are actually gonna end up converting that means like okay well if I you know one intent and I might give away stuff for free I think it really are you solving the real problem right and if you are if you're saving me time you're saving me money now for Adam obviously I'm gonna mention that differently meaning that probably less for certain categories like maybe the kids category for tipping category you're probably gonna be free and then you're gonna have to figure out what their percentage figure out if you're planning to offer a fairly robust professional level of your application is offering a free version toxic to your offering so what's the offering so it's far management software specifically told to the cannabis industry with an emphasis on normality needed right you're gonna charge us a shitload of money anyways and so you're gonna need

to really walk in through every step of the way yeah these are customers that are willing to pay a lot of money and you've got a lot of in holding to do convince them to come over you know I think it's going cheap in that's Kevin was worried about yeah I'm always worried me my biggest fears like nobody's going off this that's my baby does the free demo model work for that kind of thing like you can think first 30 day we get him once a week even if I didn't have anything built like a buzz when I sure envy you versus we're about

three months away from getting are you signed up you know we're just happy it's all sweet Chuck and I knew I would know where to play I'm gonna get on a WebEx with you and I just know where to click thank you sweat it's gonna work you go with your file I want them all my first

some of trends you see in terms of long stay tuned for Memphis tomorrow with you today subscription everything I'm just like SAS I mean I don't see a being different and just that they're taking

less money appear subscription out you're not taking 30 to 10 to 15 and half developers they're not able to sustain them developers acquisition costs are high hey my guess

it's gonna be where you don't know like you're gonna get until you check in you pop up I pop up we're just there doing activities together groups but it's geared toward people that are gonna be okay so that's that's my core user but I was reading like the membership economy and kind of that got me going back and forth swirling like okay is this something that good freemium thing people want to pay more to get like they vetted people that have gone through like a background check so you can go okay we're live in San Diego I just want to hook up for this activity I know this person has an actual profile

there's internet security some people said they would pay for it like oh I'm gonna cut you off right now so sometimes

it's like that type of idea because when I hear that but it's a chewy but the if you sometimes people will say I won't be any developer and you better charge because how you to make money and then if you gonna go freely you bet raise a shitload of money cuz then I you seen yourself for a very long time and in the second part from a launch strategy but here's what we're

gonna do would you be willing to check in at these restaurants when you check in and work there because then I think it's it's so difficult to launch an app like that you need so many people on there a market in a region where people are willing to take a risk for them strategy

would you recommend Google things on how much money you got all right if you can do peloton you both if because you're especially not like yours you probably right so if you got if you can't do it and you've already got customers if you're just testing out an idea hey that's where most of people are

experienced you need to subscribe to what he's doing it's God cast and all that to soak up the wisdom cuz he knows so many amazing people and he's just he's got so much inside of him