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Remember how much easier a video game became once you found a cheat code? 

If you’re looking to build a product people love, sell it the way your customers would prefer, and grow your business, you need to invest in customer research.

It’s the ultimate startup cheat code.

In today’s market, features are mostly undifferentiated, there are more options to choose from than ever, and new startups pop up every day. The only difference between you and the next business is how well you know your customers.

And while customer research is a popular topic in the startup-sphere, the reality is that many are doing much more preaching than they are practicing. 

Not only that, but there are absolutely right ways of conducting customer research and a multitude of wrong ways. 

What Is Customer Research?

Customer research is the act of learning more about your current and prospective customers in order to better serve them with your products and services. 

Customer research is often synonymous with market research, user research, customer development, and other terms. And while there are certainly some nuances, for the sake of this article we’re going to generally treat them as the same. 

Ask yourself this question, “How well do I know my customers?”

If the most you can say about them is their job title, industry, age, and company size, you might not know them at all. I would go as far as to say that most “personas” or “customer profiles” don’t even qualify as customer research.

Customer research helps you thoroughly answer key questions like:

  • Who is the best fit for my product(s) and service(s)?
  • Where can we find and communicate with them?
  • What are they trying to achieve?

Not only should you know their job title, industry, age, and company size, you should also know their biggest challenges, their goals, how they make decisions, who they trust for advice, where they go to learn, which communities they’re a part of, who they see your competition as, why they chose your product, and much more.

That is customer research. 

Why Is Customer Research Necessary?

Sure, you could make your best guess, assume some things based on what you know, or just operate based on past experience. But the fact is that we all know less than we think we do. 

Your guesses, assumptions, or past experience could even be dead wrong. And that’s a scary place to be in.

The magic of customer research is that you don’t have to guess. In fact, your customers will tell you everything you need to know. You just need to ask. 

“I find helping people over chat excruciatingly painful as I get very impatient with the single-threaded nature of the conversation while waiting and watching them type responses. So I started asking people if they wanted to do screenshares/calls so I could help them faster. Lo and behold, paid conversions started going up. Way up. We quadrupled trial-to-paid conversions. Talking to users directly helped me establish a connection and improve my understanding of what they were looking for.” — Josh Ho of Referral Rock

Customer research helps you close the gap between what you know and what you think you know. Don’t you want to be able to predict what your customers will do or say, instead of just guessing?

A lack of customer research can be the cause of many startup woes:

  • Customers are signing up but they’re churning out just as fast as they come in.
  • Marketing experiments are expensive, inconclusive, or under-performing.
  • Prospects are expressing a lot of interest but just aren’t closing into customers.
  • New features and products don’t seem to be making a difference to revenue growth or product/market fit.

Customer research is necessary for every aspect of the business: product, marketing, sales, customer success, growth, operations.

Types Of Customer Research

Customer research can be done in two ways:

  • Primary: Data you collect yourself, which could include face to face conversation, phone call, video conference, surveys, email thread, or social media interaction.
  • Secondary: Data publicly available or collected by someone else, which could include industry studies and reports, online lists or databases, forums or online communities, social media chatter, and analytic tools.

Both have advantages and disadvantages, but generally, you want to get as close to the source as you can. Talking to people one-on-one is the ideal way to conduct customer research, although sometimes it’s just not possible.

Both primary and secondary research can be broken down into two types of data:

  • Qualitative: Concerned with understanding human behavior and assumes a dynamic and discoverable reality. Usually in the form of themes, summaries, and descriptions. Examples include quotes, word clouds, and written reports.
  • Quantitative: Concerned with discovering facts about social phenomena and assumes a fixed and measurable reality. Usually in the form of numerical comparisons and statistical analysis. Examples include charts, graphs, and tallies.

In the First Round article on Qualitative Research, Jesse Caesar recommends “If you want to know what your target is doing or how much, then go for quantitative research. But if you want to know why they’re doing it, or why they believe what they believe, qualitative research can get you that depth of perspective.”

This article will mostly focus on qualitative research, but it’s important to note that most of the qualitative research gathered can be turned into quantitative research as well by tallying themes and patterns.

How To Do Customer Research

The following are a few general principles that can be applied to any business.

The first rule of customer research: You do not talk about customer research

Keep it casual. It’s not a “meeting,” it’s a conversation.

If you’re talking to people who aren’t your customers yet, telling them that you’re doing research for your new product or company immediately introduces bias. Even if you’re talking to people who are your customers, it’s best to follow the same principle and keep the conversation focused on themselves, not your product or company. 

The goal of customer research is to test your assumptions, not to validate your assumptions. If anything, your aim should be to prove yourself wrong rather than to prove yourself right.

The typical method of customer research is to explain that you’re doing research for a new product your building, give them the pitch, describe or show the product, and then ask questions like “What do you think?” or “Would you buy it?” or “Is there anything you’d change or add?”

But most people are nice. People lie. People are agreeable. And their feedback is likely more harmful than it is helpful. People want to be supportive, so it’s difficult to get unbiased feedback during customer validation.

Which is why it’s important to have the right approach in order to garner the right feedback from the right people. This is something Ben Orenstein and Derrick Reimer experienced first-hand and talked about on their podcast with the author of The Mom Test, Rob Fitzpatrick. 

Note: The Mom Test makes for a fantastic follow-up resource.

Start from a place of empathy and curiosity

Curiosity is the desire to know and learn from others. Empathy is the ability to understand and share the feelings of another.

Customer research without curiosity or empathy will give you brief, shallow insights into your customers that may not be helpful at all. Treating customer research like a chore will not result in good data. 

Curiosity and empathy are the keys to customer research that’s actually insightful and useful. Remember that you’re not just trying to get answers, you’re trying to truly understand the motivations and desires of someone. 

A great way to cultivate this empathy and curiosity is to use a framework called Jobs To Be Done.

By thinking about your product in terms of the “jobs” your customers hire it for, you’re forced to step inside their shoes and experience the world as they would.

“The marketer’s task is to understand what jobs periodically arise in customers’ lives for which they might hire products the company could make. If a marketer can understand the job, design a product and associated experiences in purchase and use to do that job, and deliver it in a way that reinforces its intended use, then when new customers find themselves needing to get that job done, they will hire that product.” — Clayton Christensen

What started as a goal to increase milkshake sales has turned into an actionable framework for using customer research to drive product innovation and more effective marketing.

Jobs to be done is entirely dependent on practicing empathy and curiosity, getting inside the heads of others to understand how they think. A common framework to put this to action is to think of it in four different parts:

  • Push of the situation: What was it about their situation that led them to look for a new solution?
  • Pull of the new solution: What was it about the new solution that led them to try it?
  • Habits holding them back: What habits do they have that held them back from trying a new solution?
  • Anxieties of the new solution: What anxieties do they have about the new solution?

Talking to customers with this framework in mind helps you round out a complete customer journey and explore territory you may not have ventured to without it.

Ask the right questions

Still, even with the right mindset and frameworks to use, it all comes down to asking the right questions. 

Asking the right questions eliminates bias and prevents you from asking leading questions. Some of the best practices for asking the right questions include:

  • Ask open-ended questions
  • Don’t ask yes/no questions
  • Don’t ask leading questions (asking a question that suggestions or even injects the answer that you want or expect)

Here’s a list of questions to ask both prospective customers and active customers that fits into the jobs to be done framework without introducing bias.

For prospective customers:

  • What are the most persistent and painful problems you experience? 
  • How have you tried to solve this problem in the past?
  • How did some products work for you and others fail you?
  • What happens if you don’t solve this problem?
  • If you could wave a magic wand and create the ideal solution, what would it allow you to do? How would it work? How would it help you?

For active customers:

  • What was going on in your world when you started looking for something like our product?
  • How did you try to solve this in the past?
  • How did some products work for you and others fail you?
  • Why didn’t those solutions work out?
  • Why did you originally decide to try our product?
  • Why did you decide to go with our product rather than others you’ve tried?
  • What is the primary benefit that you have received from our product?
  • How would you feel if you could no longer use our product? Why?
  • What would you likely use as an alternative to our product if it were no longer available?
  • Have you recommended our product to anyone? If so, how did you describe it?
  • What other roles or titles besides yours do you think would get a big benefit from our product?
  • How could we improve our product to better meet your needs?

Great questions to ask, regardless:

  • What are your favorite blogs, newsletters, podcasts, or websites to keep up with?
  • Who do you look to for inspiration or advice?
  • Which events, online communities, or forums do you spend time in?

Of course, questions can be personalized to your specific business or industry. These are merely a starting point. Adjust the phrasing and exact words to fit your own style and voice.

Keep asking why (dig deeper)

The single most powerful question you can ask in tandem with any of the questions above is, “Why?” 

Often when someone answers a question, they’re only telling you about 25% of everything they could tell you. We tend to hold back because we don’t want to seem like we’re talking too much.

But in this situation, the more the better, always.

So when they answer your question, always follow up with another clarifying question or asking them to tell you more about that. 

For example, if you ask them what their most painful and persistent problem has been in the last few months and they tell you that it’s ‘the challenge of attributing leads and customers to certain marketing channels,’ ask them why that’s an important problem to them. And if they tell you because they need to know which channels are working and which ones aren’t, ask them why again. Maybe they tell you that they just got a bit of funding and need to know where to invest, and now you’ve really gotten down to the root of it.

There’s so much more to explore than what’s at face value. Keep channeling your empathy and curiosity to dig into the true motivations and desires of someone. Usually two or three “why?”’s get down to the real answer.

And if they don’t respond right away, don’t be afraid of the silence. Avoid copping them out with “that’s okay if you don’t know…” because the reality is that many of these questions are very thought-provoking and may not conjure an answer right away.

Silence is avoided like the plague nowadays, but you can use it to your advantage to get a more honest answer from someone if you just give them a few seconds to think critically.

How To Find The Right People To Talk To

Talking to the right customers and prospective customers is just as important as talking to customers in the first place. Basing critical decisions on feedback from the wrong customers could send you in a direction that could be devastating.

But don’t let that discourage you from trying to find the right customers. They’re there, you just have to know where to look.

One of the best sources of customer research is going to be to identify your “best” customers from your user base.

Just based on looking in your CRM or database, you could curate a list of top customers to talk to based on finding segments with one or a combination of these characteristics: 

  • The highest average deal size
  • Short sales cycles (the time from sales conversation to close is small)
  • Lowest churn or longest retention

You could also talk to your sales team (or maybe you’re the sales team) and ask them questions like:

  • What were some of the largest deals we closed in the last year?
  • Which customers were the easiest for us to close? Why was that?
  • Who typically bought our product or service? Or in other words, what was the most common title of the person buying our solution?
  • Who were other decision makers that were involved in the buying process?
  • When you’re on a sales call with a prospect, is there any situation or circumstance that indicates someone is more likely to buy? For example, are there any tell-tale situations or scenarios whenever you see it, you know this lead will close? (Or this lead will never close).
  • For the companies that bought our product/service, what was the most common reason they bought?

Your customer success and support team will also be a great source for identifying customers to talk to by asking questions like:

  • Which customers or groups of customers have a low support headache?
  • Which customers really see the value of our product or service?
  • Who are our largest accounts?
  • Who do you view as our “best customers?”
  • What companies have we been able to sell additional products or services to? Why?

One final method for identifying who you should be talking to is to ask a simple question at the end of each conversation with someone: “Who else should we talk to that you think would get immense value out of our {{product or service}}?”

It may take a minute for them to think about it and identify someone, but this can be a great way to get a warm introduction to another company like them that’s either already your customer or has the potential to become a customer.

Once you have a list of at least 10-20 customers to talk to, it can be as simple as sending an email asking if they have 30 minutes to spare for you to get to know them better so you can make a better product for them. 

Thanks to tools like Calendly, Acuity, Zoom, and Appear.in, it’s easier than ever to talk with your customers. Make sure to thank them for their time, smile, and reassure them that there are no right or wrong answers — you’re just looking to get to know them better.

As you explore each avenue and take notes on what you find, patterns and commonalities will emerge. Make sure to list them out and suss out what these commonalities have to do with being a great customer for you.

How To Do Customer Research Without Physically Talking To Customers

While talking to customers directly is the best primary source of data, you can get equally insightful data from secondary sources as well. 

And just because you’re not directly talking to customers doesn’t mean that none of the principles apply anymore. Still, don’t mention that you’re doing customer research, start from a place of empathy and curiosity, ask the right questions, and keep asking why.

Another great primer to conducting secondary research is to practice what Amy Hoy’s Sales Safari. Think of it as a mission: your job is to collect as much data from relevant sources as you can to uncover the triggers, motivations, fears, and desires of people.

As you go through each source, record patterns and trends you see. Write down the exact words and phrases people use. Categorize what you find as you go along to surface the trends.


Surveys tend to be pretty polarizing. You either love them or hate them. They work for you or they don’t. 

Surveys make for a great research tool if you:

  • Can gather enough responses to deem it statistically significant or insightful
  • Want to discover ideal customers or prospective customers to talk to directly
  • Don’t have time or energy to talk directly with all the customers or prospective customers that you could
  • Have a large audience you can tap into, such as a community, email list, or social media following

Many of the same questions mentioned above can also be used in a survey format. In some cases, the person you’re talking to directly may not be able to recall the specifics of something to answer your question, but they’d be able to take the time to go back and jog their memory to give a really insightful answer via a survey.

For example, if you ask someone directly what their favorite blogs, newsletters, and podcasts are, they may list a few off the top of their head and then you’d have to pry some more to get them to list some more. Whereas if you ask someone this same question through a survey, they may be inspired to pull out their phone to list all their favorite podcasts, dig through email to find newsletters, and look in their browser bookmarks to find favorite blogs and websites.

Some widely-accepted survey best practices include:

  • Make the survey about them, not you: Put yourself in the perspective of someone taking your survey and think about why they would want to take the time and energy to take it. Orient the survey around how their responses will benefit them. A great survey makes someone feel understood, appreciated, and achieved for helping you.
  • Minimize the length and time required as much as you can: Data shows that the longer a survey is, the less time respondents spend answering each question. There’s a careful balance between length and brevity. Too few questions won’t give you the insight you need. Too many questions won’t give you the quality of insights you need.
  • Order questions from easiest to most demanding: To support respondents to complete the survey and give the best answers they can, consider starting your survey with easier questions and then gradually increasing the difficulty of the questions. Starting with easier questions gets respondents engaged and encouraged so that when they get to the more demanding questions, they are more likely to give a sufficient answer.
  • Design questions and potential answers to be as easy to understand as possible: Both super-specific and immensely vague questions are difficult to understand. Surveys can get over complicated very quickly. The goal is not to create the most intricate survey; the goal is to create the most insightful survey.

For more on survey design, Stripe Atlas’s Principles of effective survey design and Zapier’s survey design guide are both great resources.


Reddit offers a unique opportunity for anyone looking to do customer research with its enormous size and breadth of content. As of this writing, Reddit is the 5th most popular website in the United States and the 17th most popular website in the world. And according to the last available estimates, there are over 330 million users and over 1.2 million subreddits.

Len Markidan’s guide to irresistible content ideas using Reddit can also be translated for customer research. He explains a simple process to mine Reddit for relevant data:

  • Find the most relevant subreddits: Use the search bar to input keywords and phrases related to your product or service. Reddit will suggest subreddits based on your query that you can search through.
  • Search for specific keywords and phrases: Once in a specific subreddit, use the search function again to search for keywords and phrases like “how to,” “help me,” “struggle with,” “figure out,” and more variations. 
  • Scan posts and comments: Sort the results by comments and search through each relevant post and the top voted comments to quickly surface what people are saying and feeling.
  • Engage the community: For any recent posts or comments, practice digging deeper by asking commenters to..
  • Show original
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  • Share
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  • Favorite
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  • Add Tags 

There are more funding and financing options for startups today than there ever have been before.

There’s also been an explosion in debate and transparency about navigating startup funding and financing. Bootstrapping vs VC, debt vs equity, profitability vs hyper-growth, sustainability vs substantial exits, the list goes on.

We’ve also talked about our own journey at Baremetrics, sharing what it’s like, which is better, and lessons learned along the way. Others have as well, which we’ll explore further down.

Let’s explore the funding and financing options for your startup.

Funding Your Startup

The truth is that funding options aren’t all that different from one another. Viewing it as a binary option — to get funding or not to get funding — is not an accurate reflection of reality.

Every business is funded, it’s just a matter of how it’s funded.

For example:

  • Company A was funded by some of the founders’ savings, a small line of credit from the local bank, and profits from customers.
  • Company B was funded by a small grant, a loan from the founder’s parents, a seed round, Series A, Series B, and then profits from customers.
  • Company C was funded by pre-orders from customers, a friends and family round, and then through revenue-based financing for a period of time.

For Companies A, B, and C, they all exchanged equity for capital, leveraged debt, and used profits from customers to fund their startup.

How To Evaluate Funding Options

Stray away from absolutes.

“I would never raise funding” and conversely “I would never bootstrap” are both equally ignorant positions for a founder to hold.

Every business, every founder, and every market is different and requires a unique approach.

I guess what we’re trying to say is: Do what’s best for you, your business, and your customers.

Choosing the right combination of funding for your business is just as fundamental as choosing the right co-founders (or not), the right market, the right product, and the right team.

To get started in finding the right funding options, answer these two questions as thoroughly and honestly as possible:

  • What do I value?
  • What do I need funding for?

For each funding option, ask: “Is this funding option aligned with my values and goals for the business?”

It’s quite possible, maybe even probable, that you need to sit down and do some critical thinking about what your values and goals are, so that you can compare them with every funding option you consider.

Incentives are frequently misaligned, and the wrong funding option can be disastrous for your business.

While not disastrous, these startups demonstrate the significance of choosing the right funding for your business. Buffer spent $3.3 million – about half of all the cash they had on hand – to buy out their main venture capital investors after eight years since founding. After seriously considering an acquisition offer, Wistia decided to take on $17.3M in debt to buy out investors to focus on independence and profitability. Gumroad floundered, restructured, and then re-focused on profitability after failing to build a billion-dollar company. And don’t forget about Tettra’s journey from nearly failing to profitability and the nitty gritty of their seed round.

Now let’s explore the vast variety of startup funding and financing options out there in more detail.


Dictionaries and founders alike can’t agree on the definition of what it means to bootstrap a business. The best representation of what bootstrapping means today is starting and growing a business with minimal resources.

Bootstrapping purists insist on only using revenue from customers to fund the business. Taking pre-orders from customers, encouraging annual subscriptions, and even offering lifetime deals are just a few ways to make it work as a bootstrapping purist.

Others maintain that bootstrapping can also include other self-funding options, which could also include personal savings, loans, credit cards, and income from a job, consulting, or extraneous product. Whether founders want to admit it or not, less-than-ideal funding sources like personal savings and credit cards are more popular than you’d think.

More recently, the concept of “fund-strapping,” aka taking outside investment or external funding options with the intention of not having to raise any more funding again, has become another viable option for businesses. TinySeed, Earnest Capital, and Indie.vc are pioneering the way for new funding options for bootstrappers.

While bootstrapping has a couple different interpretations, it’s evolved more into an ethos rather than a technical definition.

“Don’t wait for someone to give you permission. If you are a writer you should write (don’t ask a publisher for permission). If you are a filmmaker you should make films (don’t ask a studio for permission). If you’re a founder you should build your product (don’t ask an investor for permission). Build your startup in a way that you don’t need investment. That way, if you decide to ask for it you’ll not only have no problem raising the money, but it will serve to add fuel to an already burning fire, rather than be consumed trying to start one.”

Rob Walling of TinySeed

The benefits of bootstrapping center around prioritizing control, ownership, profitability, and building a “small” but lucrative business. While bootstrapping founders can take a much more calm approach to running a business, it can also be accompanied by slower growth and a long, slow ramp to reach where you want to be.

My company, which I classify as ‘bootstrapped’, has been funded from a combination of my personal severance from my last job, my personal consulting, and customer revenues. I had ~$30k in severance to begin with which I used to pay myself for a couple of months, during which time I got my company to ~$5k/mo in product revenue and also did multiple tens of thousands of consulting. To me, the biggest risk in not taking outside funding is not being able to pay yourself which can then lead to making short term (bad) decisions for your company. I was able to take that challenge off the table by consulting and severance, which enabled me to build the right product and business that became self-sustaining about a year later.

John Doherty of Credo

Here’s a quick overview on some of the leading funding options for bootstrappers:

Started by Rob Walling and Einar Vollset, Tinyseed is “the first accelerator for bootstrappers” and is completely online. According to their terms, they invest $120,000 for your company’s first founder, then up to $20,000 per additional founder. The fund does take a permanent equity stake in your business of 8%-15%, although they do not take a board seat or hold any voting rights.

Earnest Capital is a fund by Tyler Tringas with SureSwift Capital that makes seed stage investments in “bootstrappers, indie hackers, makers, and real businesses.” Earnest Capital invests via a Shared Earnings Agreement, a new investment model developed transparently with the founder community with the intention to align with founders who want to run a profitable business and never be forced to raise follow-on financing or sell their business. A 3-5x return cap is agreed upon before investment, Earnest takes no equity, and Earnest is paid back over time through a percentage of “Founder Earnings.”

Indie.vc is a fund lead by Bryce Roberts with investments ranging anywhere from $100,000 to $1 million. With their V3 terms, founders typically pay 3%-7% of monthly revenue until they have repaid the fund 3x the amount invested. Each time a payment is made, the fund’s ownership stake is reduced with the founders’ ownership shares increasing since founders can repurchase up to 90% of the fund’s ownership stake through the recurring payments or even lump sum payments, while the fund maintains a minimum of 10% of the equity it was initially allocated.

The great thing about SaaS is that it’s a very cheap business to start. The primary investment is usually time. I started HostiFi 1 year ago with less than $500 of my own money invested, and about 2 months of work. It’s now generating over $5k MRR. I began working full time on HostiFi at around $2.5k MRR, and never required any additional investment. I applied to Earnest Capital, TinySeed, IndieVC, and HustleFund mainly for mentorship and ended up taking investment from Earnest. Having some capital has helped though, I am less stressed about month to month revenue now and able to focus my efforts on more long term growth strategies.

Reilly Chase of HostiFi

If you’re interested in learning more about these options and how they compare, Matt Wensing of SimSaaS has written a great quant analysis between TinySeed, Earnest, and Indie.vc, although keep in mind that longer time-spans do need to be taken into consideration and, of course, do your own due diligence as well.

If you’re looking for more options, Outseta produced an alternative funding options cheat sheet and Matt Hartman also has an extensive tweet thread on VC alternatives.

Also worth noting are the terms Rand Fishkin used to raise a $1.3M seed round for SparkToro as well as the SAFE RightMessage co-founders used to raise over $500k.

At the end of the day, bring it back to values and incentives to choose the best option for you and your business.

Particularly because there are now a few types of funding that can be broadly grouped into ‘funding, but not VC’ there is a temptation to micro-analyze the ‘cost’ of each of them. The question is framed as: ‘If I am exactly as successful as I think I’m going to be, which of these forms of capital will cost the least?’ I’m happy for founders to do this all day—there is a reason I surveyed all the financing options available that could meet the criteria of ‘what kind of funding would I have taken’ and decided to create our own—but I also don’t think shaving a percentage point here or there is the top priority… particularly if you don’t plan to raise a Series A-F afterward. The real question to ask is: ‘Does this agreement align the investor and I toward the same shared goals and priorities? Are our incentives aligned?’

Tyler Tringas of Earnest Capital
Equity Financing

Equity financing is the process of raising capital by selling shares of stock in the business. Equity financing can take many different forms and shapes, depending on the business model and time of investment. Usually, equity financing is broken down into “rounds” of investment at different stages of the business, though the names for each round are mostly arbitrary.

The upside to exchanging equity for capital is that it can allow a startup the resources they need to get to market with a product, build the team necessary, and reduce risk for founders who would otherwise have to rely on self-funding otherwise. This capital can also greatly accelerate the progress and trajectory of the business with resources that others may not get for years down the road.

Spencer Fry, founder of Podia, bootstrapped his previous three companies and now has taken  on venture capital for his latest startup Podia. In his post about bootstrapping vs raising money, he talks about how raising money has allowed more resources, faster, the ability to compete in a growing market, the ability to build a high-quality business without sacrificing certain areas, and having great accountability.

The downside of exchanging equity for capital is that the founder(s) give up ownership, and sometimes even control. It’s very unlikely that you’ll get that ownership back, or even have the opportunity to. Don’t forget that equity is ownership, and you want to bring on the right owners with the right goals and incentives.

Below is an explanation of different forms of equity financing at different stages of the business. A business may raise funding through equity financing multiple times, which are known as “funding rounds.”

Pre-seed: Friends, family, and angels

This is usually the first real stage of funding through equity. Though venture level investors and funds are beginning to test the waters and investigate this space more, it’s typically been a less formal round of fundraising reserved for friends, family, and angel investors.

Choose your investors wisely. While it might feel generous to give Aunt Carol a piece of your business in exchange for some capital, she may not be making a wise decision personally or be a valuable source of advice. AngelList is a great source for finding angel investors, and should be carefully considered as well.


Seed capital is typically the first formal investment round raised through accredited investors like angels, seed venture capitalists, incubators, and accelerators.

Incubators and accelerators generally provide groups of startups with workspace, business advice and training, and potential funding. Each startup gets support from the accelerator or incubator plus networking opportunities with the other startups. In exchange, the incubator or accelerator may take an equity stake, especially if they provide funding.

Notable investors, incubators, and accelerators for seed rounds include:

For more, read Geoff Ralston’s guide to seed fundraising and Justin Kan’s guide on how to raise a seed round.

Venture Capital

After seed funding, a business will often turn to venture capital to make the next stage of their business a reality.

Venture capitalists (aka VC) usually come in the form of experienced investors looking to make large returns by investing in business ideas. Rather than a loan, which a recipient is legally bound to pay back, a VC accepts a certain amount of risk that they won’t make the money back, in hopes that some of their investments pay off huge. Although there is acceptance of risk, they are very selective of who they support.

It’s worth noting that VC has traditionally been the primary financial vehicle for billion-dollar  companies. And it’s not that VC helps a company eventually become worth over a billion dollars, but that VC can be the right instrument for companies who are on a billion-dollar trajectory. Going back to what founders value, ask: “Can I build this into a billion-dollar company in the long run?”

Venture capitalists usually operate in “late-stage” funding rounds for businesses who have an established business and are growing rapidly. These rounds can be accompanied by other types of investors and funding methods, but are usually lead by venture capitalists.

Series A

The Series A funding round is usually after a seed round with the purpose of optimizing and expanding on what’s already been done and proven to work. At this point in the business, Series A funding normally goes to two key areas: hiring and customer acquisition.

Series B

The Series B funding round is a demonstration that the business is successfully deploying capital and can continue and even improve on the results seen from Series A funding. Profits may still be scarce, though the startup should be firing on all cylinders and demonstrating traction and business model that works.

Series C and beyond

Every funding round after Series B is essentially another larger, Series B round to continue on deploying capital to expand and grow. From here it’s likely going to be a sprint to an exit event, either through acquisition or IPO. Every round is accompanied by even more demanding due diligence to verify traction and expectations in tight timelines.   

Bridge round

Bridge financing is an interim financing option used by companies to solidify their short-term position until a long-term financing option can be arranged, often in the form of a loan or equity investment.

A bridge round “bridges” the gap between the time a company is set to run out of money or have to downsize resources and when it can expect to receive another infusion of funding or reach profitability.

Notable venture capital firms include:

To see a more comprehensive list, see this list of 1,000+ venture capital firms by Golden.

Convertible debt

Convertible debt can also be called convertible loans or convertible notes, which can essentially all be used interchangeably. Convertible debt is when a company borrows money from an investor with the intention to convert the debt to equity at some later date.

It can be advantageous to the company if it believes its equity will be worth more at a later date, then it will dilute less by issuing debt and converting it later. The transaction costs, mostly legal fees, are also usually less when issuing debt vs equity.

But why would investors issue convertible debt? Sometimes they are so eager to get the opportunity to invest in a company that they will put their money into a convertible note and let the next round investors set the price, especially early on in the company’s lifetime when it’s difficult to calculate an adequate valuation. Sometimes investors believe that the compensation, in the form of a warrant or a discount, are valuable enough to make it worthwhile. Debt is also senior to equity in a liquidation so there is some additional security for an investor to take a debt position vs an equity position.

A SAFE is a similar alternative investment model pioneered by Y Combinator lawyer Carolynn Levy and open sourced. The “simple agreement for future equity” was created and published as a simple replacement for convertible notes. In practice a SAFE enables a startup company and an investor to accomplish the same general goal as a convertible note, though a SAFE is not a debt instrument. Investors invest money in the company using a SAFE. In exchange for the money, with a SAFE, the investor receives the right to purchase stock in a future equity round (when one occurs) subject to certain parameters set in advance in the SAFE.

We self-funded to $100K MRR, then we raised $435K on SAFEs at $20million/20% discount. A little less than a year later and around $250k MRR, we asked both SaaS Capital and Lighter Capital for a loan. Lighter Capital said yes nearly immediately, it was about 3 weeks from our ask to the wire (for $800k) hitting our account. The process was easy, the only unexpected bit was we had to get life insurance for $800k payable to lighter capital on myself. We borrowed the money because our return on capital is much higher than the cost of capital on the debt and there are no strings attached – no board seat, warrants etc.

Aaron Rubin of ShipHero
Leveraging Debt and Revenue-Based Financing

Debt is capital you have to pay back. Many lenders mask terms and conditions to make their loans seem more attractive, but in the end, all debt must be repaid. There are also some alternative methods for deploying and collecting debt, but again, it all must be repaid.

The advantage of leveraging debt and revenue-based financing is that you don’t have to sacrifice equity. Debt allows you to maintain ownership and full control over the company. There are also many more lenders than there are investors, and it’s generally easier to secure loans than it is to secure investment, especially in a time crunch.

The disadvantage of leveraging debt is that it can introduce a lot of pressure and liabilities to a business. Unlike a traditional equity investment that doesn’t have to be repaid, not repaying debt will result in legal consequences that could shut down a business or even hold founders accountable for repayment. It’s also worth noting that debt can constrain the capital available to use to fuel growth because of the recurring repayments with interest, whereas you don’t have to pay any interest with equity financing.

Debt and loans

Savvy entrepreneurs can take advantage of programs such as the U.S. Government-backed Small Business Association (SBA) loan program.

If you’re looking for a more flexible source of financing for your new business, consider a business line of credit. Often described as a hybrid between a credit card and a traditional business loan, a line of credit is a pool of funds established by the lender with a maximum credit limit. You can draw from the line of credit for nearly any business purpose and in any amount, up to the credit limit.

The difficult part about taking a..

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We were frustrated. When we started Demio, we firmly believed that webinars were the most powerful marketing tool for bringing in leads and sales, but the results for our own webinar campaign were disappointing.

People were registering, but less than 30% were showing up. Our PPC ad costs were skyrocketing, and the costs for getting registrations were way higher than the revenue we were generating each week.

Ready for the kicker?

We are literally the co-founders of Demio: a webinar platform built for marketers.

We were using webinars to sell our own product.

And we were failing miserably.

It makes you question your efforts, your ability, and your business.

My co-founder, Wyatt Jozwowski, and I started Demio in 2014 when we realized there was a strong need for webinar software that actually worked for marketing.

We were working for our own side businesses and using webinars to sell our own products, but we were continually having issues with platforms like GoToWebinar, where they would freeze or crash on us. I think Google Hangouts had just come out and they were super delayed and really slow. So, we wanted to build a platform that had all the marketing and sales automation we needed with a webinar.

After a two-year development process that we naively thought would only take two months, spending $100K on a product that we eventually had to trash and rebuild (ouch, that hurt), and burning through $450K of bootstrapped funds on development (I talked about this painful moment here), we somehow did it: we built a reliable webinar platform that was actually delightful to use.

Then, the challenge was finding people to use it — and pay for it.

We knew the best way to sell the product was to use it by hosting webinars for marketers. The webinars would create a viral loop in which a great experience combined with our Demio product branding would attract more users.

So, why weren’t people joining our webinars? Had we gone through all of the drama of the past two years for nothing?

“Putting together a webinar campaign is a lot of work, and it takes time. When things go well, it’s worth it times 10. When things don’t go well, it feels like a big waste of time,” Wyatt says.  

Luckily, the pitfalls and hurdles we had to go through over the two years of development taught us the learning power of failure (and, more importantly, how to find what works to move forward).

Now, after testing different approaches, we’ve discovered the key drivers behind a successful webinar funnel. Today, we’re going to share them with you so you can do your own experimentation and figure out what works for you and your customers.

Discover the right hook for your webinar prospects

No, I’m not talking about knocking out your prospects with a boxing move.

In marketing, a “hook” is a short story, phrase, or concept that immediately makes your prospects want to look deeper into your offering.

In my humble opinion, the right hook is fundamental to a successful webinar campaign. I learned this lesson the hard way.

I thought to myself, “Could I attract new cold leads into a pipeline to introduce them to my brand, solve their pain, and offer a paid solution?”

Of course! The struggle is when you start this process without a strong enough hook, so you begin to see high registration costs, low registration numbers, low attendee numbers, low engagement numbers, and low sales.

For example, the title and introduction of this blog post has a hook embedded in it. Can you guess what it is?

If your answer is “co-founders failing their way to webinar success,” you’d be correct.

I could have easily titled this piece: “How To 10x Your Webinars,” and plenty of people would read it. But would the right people for Baremetrics read it?

If you’re a SaaS founder who’s allergic to hype and a fan of transparency, metrics, and accountability (a.k.a. Baremetrics’ target reader/customer), a great marketing failure story from two successful founders — and the lessons you can take from them — will make you look twice.

The hook increases all your numbers, but most importantly will attract the RIGHT prospects.

Here are some webinar hooks we’ve tested in the past:

  • The Case Study: “Case Study of a High Converting Webinar”
  • The System: “Copy and Swipe the “Smart Webinar System” that Easily Converts at 20% to COLD TRAFFIC and Adds INSTANT REVENUE from Our Ad Campaigns.”
  • The Formula: “The Simple Webinar Formula that Can Turn $1 in Ad Spend into $4 Profit on Every Campaign…  Even on Your First Webinar”

Finally, after participating in Facebook groups for marketers and listening to what our early users were saying, we found a winner with this:

We had discovered our target customers’ core struggle, and it wasn’t converting cold leads or turning ad spend into revenue. Our core audience of solo entrepreneurs and small business owners had tried every tactic they could find to grow their business — and they were exhausted.

A 24/7 automated lead conversion machine hit a burnt-out business owner right in the pain point.

Fish for a captivating hook before you use a formula

There are formulas a-plenty that claim to boost the hook-ability of content, ranging from headline generators to finding gold in popular Kindle highlights. And those hacks can come in handy — as long as you know what your particular audience cares about.

The two of us did some research and discovered how to always find an interesting and relevant hook: talk with and listen to your current, previous, and prospective customers.

Sounds fairly doable, right?

Take the time in the early stages to do your research. Know your prospects. Talk to them, survey them, really dig in. Make sure and test that you have a hook that interests and attracts the RIGHT prospects.

Volumes have been written about how to talk with people to gain marketing insights, so we won’t go in-depth here, but here’s what Baremetrics’ very own Josh Pigford says about finding the right positioning for an offer:

“The most efficient way I’ve found is talking to real, live humans. Not blogging. Not tweeting. Not shooting a mass email out to a list asking what problem they want solved.

Have a real conversation, on the phone, to other people in the industry you’re in and figuring out what they hate about running their business.”

The secret to finding an inescapable hook:

Look for the struggle.

Copywriter John Carlton says that an attention-worthy hook exists outside of the obvious list of product benefits and features:

“A great hook has nothing to do with how the client sees the product. It usually isn’t part of the features list, and only occasionally shows up among the benefits. Non-veteran writers miss it, because it’s not obvious to ANYONE associated with the product.”

Coming up with a great hook requires that you don’t just listen to what your prospective customers have to say about how your product helped them achieve their desired outcomes, but also what they wrestle with while working toward their goals.

Here are some questions to answer about your customer that will lead to finding the right hook for any marketing content — whether it’s a blog post, a podcast, a webinar, or a tweet:

  • What values do your customers care about?

Customers love nothing more than a brand that “gets” them. Understanding and delivering on what matters to your customers is key to building trust and loyalty.

Baremetrics customers value transparency and data-backed decision-making. They’re looking for the real stories behind the numbers: the good, the bad, and the painful to revisit.

So, with every bit of content, Baremetrics delivers that raw, open, realness their customers are craving. Last year, Josh’s tweet with a link to a Google sheet listing his business successes and failures got over 443 retweets. That may be the most excited people have ever gotten over a spreadsheet.

What are your customers picking a fight with?

Everyone has something that drives them nuts about their industry or the way other people do things. When you promise that your webinar will offer them a way of doing something without their pet peeve, it shows your customer you’re rooting for them to win.

Codeacademy Content Marketing Manager & Strategist Ashley Hockney offered a webinar for SaaS marketers that tapped into a common battle content marketers are waging: the quest to create and promote robust content without burning out.

  • What is something your customers have tried before that didn’t work for them?

If you’re reading this piece, chances are you’ve either attempted a webinar campaign and failed, or witnessed other webinar or course launches crash and burn. Tapping into failures your customers have already experienced is a way to demonstrate empathy for their struggle.

TeamGantt offers weekly webinars focusing on general education topics for project managers. They listen deeply to the discussions people in project management have about different methodologies and the common problems they encounter. Their webinar topics, like “Why Agile Isn’t Working for You,” reflect those failed attempts with a promise that with the right approach, prospects will find success.

Putting your hook to the test

Alright, now that you’ve sharpened your hook-detection skills, it’s time to do what great marketers do best: experiment, find a winning formula, optimize, repeat.

In this stage, split tests will be the name of the game.

When we were searching for the right hook for Demio prospects, Wyatt and I didn’t just test titles; we tested every piece of content for the webinar campaign, from Facebook ads to pre-webinar emails, trying to land on the right pain points that would drive our audience to our presentation.

Soon, we could tell when a webinar campaign was sinking like the Titanic.

Low registrations, high cost per click on ads, high registration costs on ads, low conversions, and low attendee numbers all corresponded to the same problem: the message was not resonating with the target audience.

But whenever we stumbled on a good hook, we had lift-off.

Truthfully, when you find a marketing message that targets the right audience at the right time, you see a landslide of results. You’re no longer fighting for it. You see costs go down, ROI go up, and engagement skyrocket. This is such an exciting feeling, and when you can combine marketing success with a stellar offer, you’ll see huge results.

“You can absolutely tell when your attendees are genuinely excited for your event. There’s a different energy, a different level of engagement, and all of it ultimately shows in your conversions, “ says Wyatt.

Now that we’ve pivoted our customer persona and are changing our focus from small businesses to SaaS marketers, we’re discovering again that the “24/7 Conversion Machine” webinar angle isn’t as successful.

To our warm list of entrepreneurs and small biz owners, it worked well, but, again they know, like, and trust us. However, when we offered it to colder prospects in SaaS marketing, the audience wasn’t as enthusiastic. This could be a targeting issue or the campaign hook.

So…back to testing we go.  Yippee.

Alright: we’ve established that finding a great hook is key to an unmissable webinar.

Once you discover the right hook, how can you build an exciting campaign that leads up to and follows the webinar event itself?

Go narrow on campaign strategy and simple on tactics

With all the funnel-building tools out there, you may be tempted to create an epic funnel map with 20 emails, dozens of Facebook ads, retargeting, and every other growth hack out there.


DO NOT ATTEMPT (at least, not at first).

If there’s one thing the two of us learned spending two years and $450K building 40% of the product we first set out to create in two months, it’s the power of simplicity.

I can’t state this enough: go simple to start. Only complicate the process and add more tactics once you see traction begin.

The key to a successful webinar campaign is building anticipation.

“In the past, I’ve had webinars with higher registration rates, but ultimately a pretty bad attendance rate,” Wyatt adds. “This can all be related back to the pre-promotional phase; I did a bad job of setting expectations and making it a must-see event.”

Fortunately, Demio has some marketing-savvy customers from whom we’ve learned the art of creating FOMO (fear of missing out).

But more on that in a minute. (See? Anticipation.)

Think of your webinar campaign as an MVP

Your goal with your webinar isn’t to capture every eyeball out there; it’s to deliver relevant, valuable content that convinces your ideal customer that your product is the answer they’ve been looking for.

So, when you’re building your post-registration campaign, keep it simple and powerful. Lean into your hook without pestering or overwhelming your registrant before or after the webinar.

Here’s a bare-bones funnel map to get you started:

The folks at SaaS startup (and Demio customer) FunnelDash are fans of letting their webinars do the talking and keeping their campaigns to-the-point. They start with a series of Facebook ads:

This Facebook ad, targeted to freelancers, leads to the webinar registration page, which converts at 44%:

FunnelDash reports they spend $1,500–$2,500 on Facebook ads, per webinar. Their cost per lead for webinar registrations averages out to $4.47, and they typically earn around $55 per lead in revenue from their webinars.

Leverage affiliate partnerships to spread the word about your webinar

The surest way to reach your target customers is through someone who is already reaching them.

Demio was able to shift from a free beta to a paid launch thanks to a referral network of hundreds of affiliate partners.

We had a lower usage level on some of the free beta users, but the people who actually did use the platform gave us great feedback. In fact, many of those people signed up to be affiliate referral partners instantly.

The affiliates invite their lists to Demio’s automated webinars in exchange for recurring commissions on sales.

Looking at the market and other SaaS programs, we decided on a 40% referral commission structure so people can make a good amount of money with a great platform.

Like Demio, FunnelDash relies on their affiliates to get the word out about their webinars.

“We would have Company XYZ send 2–3 emails on our behalf (that we wrote and they would adapt to their audience) to promote our webinar. Then, we would do the same for them to promote their webinar,” reports Tanya Brody, FunnelDash’s Content Marketing Manager.

Keep your webinar reminder emails short and packed with FOMO

“Getting someone not only to register for an upcoming event, but then actually take the time out of their day (at a scheduled time) to show up is challenging,” says Wyatt. “The only way to do this effectively is to build excitement around your event and do a great job of demonstrating the value that will be received.”

With a 20% conversion rate and/or $250 in revenue, per attendee, FunnelDash has discovered a winning formula for wrangling webinar registrants into their events.

They have a series of five “anticipation” emails containing registrants’ unique join links to the live webinar so they can easily find it when the time comes.

As for timing, the secret is to send reminders far enough out that people will mark their calendars, but close enough that they won’t forget they registered.

Email 1: Three Days Before the Webinar

FunnelDash sends their first reminder email three days before their live webinars.

“We also include a free guide in the confirmation email and the first anticipation email,” says Tanya. “This guide prepares people for what they’ll learn in the webinar and even shows them how to use FunnelDash before they see the full presentation.”

Email 2: 24 Hours Before the Webinar

The next email goes out the day before the webinar and includes a special video message from their webinar presenter, Tim Paige.

Tim’s video gives a sneak peek at a few of the slides attendees will see the next day. It also tells registrants about the three free gifts anyone who attends the webinar will receive (FOMO FTW). Finally, the video encourages registrants to join the webinar early and to write down any questions they have so Tim can answer them live, during the webinar.

Emails 3–5: Day of the Webinar

The last three emails go out the day of the webinar:

  • One first thing in the morning to get registrants excited about joining later that day.
  • One an hour before the webinar, so registrants don’t lose track of time and miss the whole thing.
  • One 15 minutes before the webinar, encouraging registrants to join right away.
Reel stragglers in with a replay and post-webinar sequence

About 20% of webinar conversions happen after the live event, so be sure to offer a recorded version to send folks. Ensure FOMO with a limited-time offer, and with a “live” or “hybrid” webinar replay, you can run the replay at certain times so a team member can be available via chat for questions.

“Our email sequence starts by sending registrants to the replay page,” says FunnelDash’s Tanya. “As the time draws closer to the deadline to get the offer, we talk more about the offer and losing the opportunity to get in on it. By the time we send the last email on Tuesday night, we get another 2–5 purchasers.”

To see FunnelDash break down their high-converting webinar strategy, check out their story here.

Create a webinar that teaches more than it sells

All this effort is for naught if your webinar is just a thinly veiled sales pitch that’s all about your product and nothing about your customer.

“Just like anything, take time to build something that people actually want,” advises Wyatt. “The medium won’t work unless you’re really doing something of value.”

Keep testing and optimizing…and failing and improving

A webinar campaign is only as good as the value it delivers. If your target audience changes or your offerings change, you need to re-evaluate your strategy and re-adjust your positioning.

“Don’t give up if your first event gets a low show-up rate,” Wyatt says. “There are lots of factors to tweak, completely change, and improve.”

Case in point: as we re-focus our attention to the SaaS market, we’re in the midst of a shift to a robust content marketing strategy to increase organic leads. We’ve put our “24/7 Conversion Machine” webinar on pause until we can discover a more meaningful way to communicate the value of webinars to SaaS marketers.

As I mention here over and over, we need to continue testing, but as we do so, we want to pause our ad campaigns and allocate that budget to great content marketing.

No doubt we’ll also stumble in our content marketing journey, too. But that’s a good thing.

So, here’s to your next failures. May they lead you to profound discoveries and success.

TL;DR? Here’s a quick summary of the webinar marketing wisdom that we ( Demio co-founders David Abrams and Wyatt Jozwowski)..
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Intros, a product we launched to great fanfare three months ago, is being shutdown, having never made a single penny and costing our team months of work.

But I’m getting ahead of myself…

Playing the middleman

Since starting Baremetrics, we’ve always been a bit of a middleman between companies and people interested in those companies. Many of the people who log in to a Baremetrics account aren’t just the employees or the founder of a company, but also people who’ve got a stake in the company.

Investors, potential investors, potential acquirers…there’s a whole world of people that someone may add to their account to give them insight in to how their company is doing. In addition, I personally get emails quite regularly from investors and buyers looking for companies.

So middle of last year we started playing around with an idea: what if we created a marketplace of companies looking for investment or acquisition and gave investors and buyers access to that?

Companies of all stages could get in front of interested parties, and investors/buyers could quickly filter down to the exact companies they were interested in based on live, accurate, financial data. Nobody else offered anything like that.

Yes, there are places like AngelList where companies can manually enter snapshots of their data, but that becomes quickly outdated and it’s easy to fudge the numbers a bit…not in a malicious way but in a “let’s put some spin on what these numbers mean” kind of way.

We would effectively cut out a significant portion of due diligence while giving investors and buyers dealflow that they’d have to work incredibly hard to get (or that would be nearly impossible, from a data perspective) otherwise.

Sounds like a really great match, right? So, we pushed ahead!

Validating the idea

We didn’t want to go in to building this with only a premise. We wanted to validate the idea as much as possible before we wrote a single line of code.

As a team we talked through the problems we were trying to solve and our lead designer, Martin, put together a functional mockup.

I then scheduled video chats with about a dozen investors and buyers and walked them through the idea, showed them how it would work and gathered all their feedback on it.

Early mockup

The response was universally positive.

“This solves a huge problem for me!”, “I’d definitely pay for this.”, “Please tell me this will be available soon!”

It was comment after comment of how great it would be to have a tool and marketplace like this.

After all of that positive feedback, it felt like validation enough to keep moving forward with actually building out the product.

Onboarding and a faux launch

To get any kind of market off the ground, you have to “stock” it with product. In this case, companies were the “product” we needed to get in to the market so that investors and buyers would have any interest in shopping.

Since this was based around Baremetrics as a product, we started with our existing customers.

The whole system was 100% opt-in, meaning companies would have to explicitly toggle the feature on and agree to have their data anonymously included in the marketplace.

That got the ball rolling, but we really needed a lot more companies, so we did a faux launch on Product Hunt. This let us get a lot more companies opted-in and it also set in motion conversations with investors.

I put all interested investors in to a sales funnel and started a pretty typical sales cycle with each of them. This was great because I could get more information about exactly how they’d want to filter the companies, thus giving some insight in to if we’d have enough companies that actually met their criteria.

Those conversations went on for about 6-8 weeks while we put the finishing touches on the investor-facing side of things and by mid-January we were ready to start letting some investors in to try things out.

Rumblings of trouble

As we let in investors, we decided to include the paywall from day one…meaning nobody got “free” access just for being a beta tester. We didn’t need help validating functionality…we needed help validating the economics of this.

The way we set up pricing on this was to give access to anonymized company data to a curated list of investors. But if they wanted to get an intro to a given profile, they’d have to be on a monthly plan of $500/mo, which would let them request non-anonymized data and an intro to up to 25 companies each month.

Investor’s view at launch Paywall when you clicked “Request” on a company

Remember, they’re getting a filterable, live data set that lets them narrow down to exactly the types of companies they’d be interested in. No back-and-forth trying to figure out what their real growth has been, what their current revenue is, how many users, etc. It’s all there right out of the gate.

But the feedback we started getting, even on day one, hinted at a deeper problem.

“If you could just make this one data point part of the anonymized data”, “100 companies that meet my criteria just isn’t enough”, “We don’t pay for data”, “I prefer to do this the way I’ve always done it”.

When it came down to actually acting on their feedback from those early mockups and fork over some cash, we hit a wall. And I mean really hit a wall. As in, not a single investor was willing to pay.


I heard dozens upon dozens of reasons why it was “a bad fit” for them. As a team, we were stumped.

How were we so off on this? How did we go from all the investor excitement (I had lots of investors checking in almost weekly on progress as we built this out), to something that’s a “bad fit” that we can’t charge for at all?

Maybe we were blinded by optimism. Maybe we were blinded by dollar signs. Maybe investors are just a really tough market to sell to. I’m really not sure.

Making the call

After about a month of trying to get investors to pay for it, I decided we needed to pull the plug. We’d spent months working on this, conversing with hundreds of investors and companies to figure out the right balance for the marketplace, but it just didn’t make sense to keep forcing it when there was zero monetary traction.

Yes, we could have kept pushing forward and tried out some different pricing models, but honestly the prospect felt very uninteresting.

We’ve always built products for companies and this was going after a completely different customer (investors)…which we have really no connection to from a marketing/sales perspective. We also had no desire to turn this in to an enterprise play. That’s just not part of our culture.


I have a few theories on why some of this didn’t work, but they’re just that…theories. None are exactly provable but I find it therapeutic to write them out.

  • Investors don’t actually have much money to spend on external tools. Yes, they’re dumping 5-8 figures in to companies, but that money isn’t just sitting there for them to spend on tools like this.
  • This tool could actually have replaced junior associates in some VC firms…so convincing them to use it would never have worked. We’d have to go farther up the chain to sell to more senior folks, but doing that dance just wasn’t interesting to us.
  • Changing someone’s workflow is really difficult. This type of workflow just isn’t how most VC’s work. They’ve got their existing sources and workflows and little things they’ve picked up over the years, and that’s hard to change.
  • Part of me wonders if our product gave companies more of an upper hand than some VCs were comfortable with as companies were the ones deciding if the VCs reaching out to them were worth their time. But I don’t have empirical data there.
  • Our pricing model may have worked better as some sort of percentage -of-deal type of thing, but the runway on that would be too long from a cashflow perspective and we don’t really have the manpower to deal with all the overhead of following and managing the actual deals. Also, see above re: this sort of thing not being interesting to us.

All of that may be off base, and really a lot of it points to my ignorance on the deep workings of the VC world…which, if anything, is another reason why we weren’t the right company to tackle this.

What now?

So, what happens to all this now?

Technically, we’ve removed the product from the marketing site and the app and we’re in the middle of purging all the associated data.

Functionally, we have this product that works beautifully and part of me wishes we could partner with someone who’s got deep ties to the investor world who could really make it work.

One of the parts of this that really excited me was that it put companies in front of investors of all types and put them in the driver’s seat. They got to decide who they wanted to talk to, giving them a bit more of an upper hand.

I hate to see that go, but at the same time, it’s just not something we’re equipped to put all our energy in to at the moment.

I appreciate all the feedback everyone gave over the past few months with this and my pride hates shutting down a product that barely saw the light of day, but the alternative just doesn’t make sense for us at this stage.

The post Sunsetting Intros: A post-mortem on shutting down a product we just launched appeared first on Baremetrics.

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Baremetrics by Corey Haines - 5M ago

This is the Baremetrics Growth Manifesto — the same one that sits in our internal wiki — that we use to guide everything we do that’s related to growth.

Why make this public?

Well, as you’ll read below, transparency is one of our core values.

We believe that sharing how we do things — our wins, struggles, strategies, etc. — is a rare and beneficial endeavor.

Ultimately, we believe that helping you grow helps us grow.

What Is Growth?

Before we start talking about growth in all it’s detail and intricacies, it’s important to establish what exactly we mean when we’re talking about growth.

I asked Twitter how they described their role in growth, and one stood out:

“I do whatever it takes across departments to help a business grow.”

— Hiten Shah (@hnshah) January 18, 2019

Growth is a discipline developed in the startup world that takes a very focused, systematic, and data-driven approach to activities that directly impact the growth of revenue.

Now, what impacts the growth of revenue for a business is going to vary on a case-by-case basis. We’re not going to pretend like we’ve come to the final and ultimate definition of what growth is.

It depends, just like many other crucial business functions.

How we think about growth at Baremetrics is as a blend of sales, marketing, and customer success.

Growth has the unique opportunity to think of the customer journey holistically, which blurs the lines of what used to traditionally only be sales’ job, only be marketing’s job, or only be customer success’s job.

The easiest way to illustrate this is with the AARRR framework, aka Dave McLure’s Pirate Metrics.

Traditionally marketing would handle “top of funnel” activities in the Acquisition stage to generate leads, sales or even customer success would handle the “bottom of funnel” activities in the Activation stage to convert leads, and customer success would handle activities in the Retention, Referral, and Revenue stage to keep customers. Growth engages all five stages and even works to create “loops” between once disparate stages.

Growth loops are more easily illustrated (and excessively referenced) in consumer products like Dropbox and Pinterest, for example, but are just as relevant to B2B SaaS, memberships, and subscription products.

A growth loop is a system for using the acquisition of one customer to acquire another customer. A growth loop can also be a system for using the retention of one customer to retain another customer.


Despite all this talk about acquiring customers, growth loops, etc., we propose that acquiring new customers actually shouldn’t be your first focus.

Focusing on acquisition before activation, retention, referral, and revenue results in your classic “Leaky Bucket” problem, where newly acquired leads and customers “leak out” of holes in the system because they aren’t properly engaged, activated, or retained.

A starting MRR of $100,000, with $10,000 MRR growth, but with 12% revenue churn actually results in a contraction in MRR. Acquisition without retention results in failed growth.

Focusing on retention… a modest growth rate of $5,000 MRR with only 3% revenue churn results in a positive gain in MRR.

Now, what if we optimized acquisition after retention?

Pairing $10,000 MRR growth with 3% revenue churn results in massive gains.

This is why we advocate for a bottom-up approach to growth.

Start with the Revenue stage, then move to Referral, then Retention, then Activation, and once all of those are optimized, THEN focus on Acquisition. Here are some examples:

Working on Revenue — turning free users into paying users, up-selling and cross-selling, expansion to higher tier plans — can create negative churn, which means that you’re not losing any revenue at all to churn, in fact, you’re gaining revenue.

Working on Referral — creating referral programs, affiliate programs, encouraging collaboration, making a product that customers are proud of — reduces customer acquisition costs (CAC) and creates a passive stream of new customers.

Working on Retention — encouraging adoption, onboarding correctly, educating customers on how to get the most value, fixing bugs, shipping new features — reduces churn and increases their lifetime value.

Working on Activation — leading customers to the “aha” moment, converting trial users, converting deals, showing why your product is the best solution for their problem — increases conversion rate and properly communicates the value of your product.

Working on Acquisition — bringing awareness of your solution to the market, generating demand for your product, creating new trial users, creating new deals — increases the number of qualified customers you can introduce to your product.

Working “bottom-up” makes for a firm growth foundation and helps to retain the optimal amount of revenue growth possible.


This is a list of principles that guide the way we plan and execute growth at Baremetrics.

  1. Transparency– Internal and external communication will be honest. Financial and marketing performance are public. Struggles, lessons learned, and wisdom will be given freely. Conversation will be free of politics, shame, and hidden intentions.
  2. Do things that don’t scale– Don’t be afraid to put in the work and go the extra mile for something that you know will make a difference, regardless of its “scalability.”
  3. Reduce friction– We refuse to force people to hurtle obstacles and jump through hoops just to talk with us. We also strive to make every process and product experience as streamlined as possible.
  4. Honesty– We won’t lie about our features, use tactics to trick users, exaggerate to make ourselves seem more impressive, or pretend to be a company that we’re not. What you see is what you get.
  5. Benefits > Features– In everything that we say, do, and show, we must answer “how does this help the customer?” Focus on what the feature enables someone to do, not what the feature is or is able to perform.
  6. No jargon – Write with simple words. Unless 99% of our customers would know the word, don’t use it. Also, limit the use acronyms when possible.
  7. Be storytellers– Story is the most natural way we understand things. We will not be clinical or cliche. Every word, phrase, and sentence will be crafted. We will write like we talk, and do it with excellence.
  8. Be specific –Make it easy for people to do exactly what you want them to. Leave nothing to interpretation.
  9. Be human– Let is not forget that we do not sell to organizations, we sell to people. Each of us is human. And we will treat each other with love and respect.
  10. Customer-driven, not company driven – Think first for the customer, their needs, and their desires.
  11. Be proud– Whatever you do, be 100% proud of it. Just go do or make something you’re happy to stamp your name on.
  12. Trust is everything – Trust is our greatest asset with our customers. Any behavior that could break trust must be out of the question.
  13. Everything is marketing – Each and every one of us are marketers. Marketing is also the way we communicate product changes, the way we answer support, and the way we talk about our customers.
  14. Simplicity– Every word said, feature created, process made, design drawn, and code written is done with simplicity in mind.
  15. Innovation– Screw consensus. Go big. Make bets. Take ownership. And think outside the box. The words “that’s just how it is” aren’t in our vocabulary.

Drift also has a fantastic marketing manifesto to draw inspiration from for your own business.


I’ve come to adopt a process outlined by the folks at GrowthTribe called G.R.O.W.S.

1 .  Gather (G of G.R.O.W.S)

  • Brainstorm freely. There’s no such thing as a bad idea. Just write it down.
  • Center around objective (Acquisition/Activation/Retention/Referral/Revenue)
  • Start with three key criteria:
    • Name
    • Hypothesis
    • Metrics to be measured

2 . Rank (R of G.R.O.W.S)

  • Score experiments by impact, confidence, and effort (or other preferred framework)
  • Order experiment ideas by ICE scores
  • Determine:
    • Resources/time available
    • Time to market
    • Buy in from other

3. Outline (O of G.R.O.W.S)

  • Create a one-page brief that elaborates on what you’ve already written down about it and then goes into detail about how you will execute it.
  • Make sure everyone knows what they are doing and who is responsible for what.
  • Reverse engineer all the necessary components into a full list of things to do to go in your project management tool.

4 . Work (W of G.R.O.W.S)

  • SHIP
  • Ensure measurement is in place
  • Give it enough time to test and know when you’re able to come to a conclusion

5.  Study (S of G.R.O.W.S)

  • Determine results:
    • Worked
    • Didn’t work
    • Inconclusive
  • Discuss learnings:
    • What should we start doing?
    • What should we stop doing?
    • What should we continue doing?
What We Won’t Do
  • Poach competitor’s customers with lies, excessive discounts or special treatment
  • Scrape Facebook, LinkedIn, or Twitter for email addresses
  • Beg for links with one-size-fits-all cold email outreach
  • Offer a “one-time-only mega discounted exclusive” deal
  • Pretend something is manual or live when it is in fact automated
  • Publish vague round-up posts featuring influencers
  • Pretend to be a thought-leader or expert in something that we’re not
The Mission

Our mission is to equip businesses with the tools they need to grow.

By providing tools, insights and education with minimal effort on the business’s part, the barrier to making actionable business decisions is lowered dramatically.

Everything we do is driven by this mission. Everything we do — products and features created, content produced, ads run, resources made — needs to positively answer the question, “Does this help businesses grow?”

The post Baremetrics Growth Manifesto appeared first on Baremetrics.

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Yesterday I wasn’t feeling great, mentally. I had a level of anxiety I hadn’t felt in a long time that started in the morning and really persisted through the night.

I can’t pinpoint it to any one specific thing. It was more the sum of a dozen small things. I felt like I hadn’t been leading the team well through a big product change, parenting has been taxing lately, I was second guessing all sorts of life decisions, the things that typically bring me joy day in and out have just felt really uninteresting and on top of that, the weather yesterday was dark and stormy…which perfectly matched how my brain felt.

I was telling my wife last night that really I just didn’t want to be around anyone, be anywhere or do anything. I felt tightly wound and nothing could relieve that tense feeling.

Today I’m feeling immensely better and it got me reflecting on how important it is to not just have healthy habits as a founder, but to actively pursue them. And while yesterday was a great example of how those things don’t always work, I generally do feel a lot of joy in my work and very little anxiety.

So, I wanted to talk about some of the things I do as a founder that combat this state of anxiety.

Remove work email from your phone

Yes, the space phone in your pocket can do lots of amazing things, but one of the most destructive things it enables is constant connectivity to your business.

Don’t bury the mail app in some subfolder on your phone…completely disconnect it. Make it so checking your email from your phone simply isn’t an option. Otherwise you’ll do that thing humans do where they fill every slow moment, like waiting in line at the grocery store, with mindless activities like checking your email.

Whether you’re in the grocery store or in bed killing time before you go to sleep, checking to see if you’ve got work email gains you nothing and saps your brain of a much needed break.

Remove Slack from your phone

For many of the same reasons you should remove email from your phone, you should also remove Slack (or whatever chat/communication app your company uses).

You have nothing to gain by staying on top of every single thing people say in your company and by attempting to do so, you’ll have a constant case of FOMO as you wonder “Oooo, has anyone said anything business-altering in the past hour?!?!?!”

Take up a hobby

I’ve written about this in the past. Hobbies are one of the greatest ways to increase joy when you’re a founder.

Most founders are natural problem solvers and love having projects to work. That’s great. But if you use all of your brainpower on solving the same problems (i.e. your business problems), you’ll eventually find yourself burning out.

Hobbies are the way you enable yourself to keep being a great entrepreneur for many years to come.


I use the term “meditate” loosely here, but I highly recommend meditating. One of the easiest ways is using an app like Calm or Headspace as it guides you through what to do. Ultimately, the goal is to give your brain a complete break from the infinite number of thoughts it thinks.

Doesn’t have to be long. Some mornings I’ll just do 3-5 minutes. But I can’t overstate how impactful a clear slate can be for the rest of your day.


There’s an amazing connection between physical exertion and the release of stress. For me, doing something that just completely wears me out simultaneously releases all the anxiety and stress that builds up mentally.

I’m currently training for a marathon, but running has been my exercise of choice for a number of years.

Talk to someone

I recommend finding someone you can brain-dump with on a regular basis. And I recommend they not be involved with your business. You need someone you can mentally vomit on and not hold back.

For me, that’s my wife. She’s an amazing listener and after 15 years together, she knows me and my mental state better than anyone.

Your spouse, your partner, a therapist…have someone who can listen to you at any time. And regularly make use of that. Schedule a time every week or two, if that helps.

But at the end of the day, it’s imperative you get the thoughts out of your head that are dragging you down.

The post Staying mentally healthy as a founder appeared first on Baremetrics.

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How good are you at converting free trials into paid users?

If you’re like most companies, probably not as good as you’d like.

According to a recent study, companies end up converting between 1–10% and 40–50% of their free users. Even when you knock it out of the park, you’re leaving a lot of potential revenue on the table.

To illustrate: Let’s say you crush it and achieve a 50% conversion rate out of 5,000 free trials this month. Your average sale is $40, which means that even in the most favorable scenario, you’re leaving $100,000 on the table.

Few companies, and fewer startups in particular, can afford to forego on that kind of cash.

Beating the average

At Dollar Flight Club, we help travelers explore the world’s most alluring destinations on a budget.

Over the last two years, we’ve tested and tinkered with countless pricing structures. In late 2017, we dialed into the free trial model. Just six months later, we’ve optimized and experimented our way to a 76.5% trial-to-paid-user conversion rate.

Maybe we got a bit lucky. We know it’s not feasible for every company to convert that many trials. But, to continue our example above, even a 10% increase in conversions can increase revenue by $20,000.

Who couldn’t use that kind of cash?

So how exactly were we able to convert more than three out of every four free users into paid subscribers? We used nine different tactics that were implemented quickly and had a compounding effect week over week.

If you’re looking to increase your conversions, you can do the same.

1. Build a product with high value and low cost

First things first: Your product needs to add value to your users’ lives. Otherwise, what’s the point?

We priced our service at $40/year, and the average user saves more than $500/flight. Book a single flight and save more than 10x. Value delivered.

The key is creating an extremely compelling offer. Make the potential customer feel “stupid” for not trying your service.

2. Use A/B testing to get more people into trials

You need volume if you want an increased conversion rate to translate into real money.

To increase trial signups, we used Instapage to A/B test landing pages (it’s cheap and easy to set up). We also hired a part-time designer to make things look more professional. If you’re looking for a very cheap option, check out Fiverr or Upwork.

Ultimately, we decided to show people the difference between Free and Premium memberships. They could easily see what value they were getting by upgrading. This was one of the most influential decisions we made. People won’t understand the value unless they see it in right in front of them.

3. Simplify pricing structures

Initially, our pricing page was a bit overwhelming. We offered monthly, quarterly and yearly pricing options which cluttered our page.

Ultimately, we dialed it down to two simple options: a seven-day free trial that moves into a $40/year subscription and a $9/month option to start today.

The goal was to make it super obvious that signing up for the seven-day free trial was the best option. And it worked.

4. Include more hooks for paid signups within your app

Our main value prop for going Premium is that you get every deal we offer and you get to choose your specific departure airport (free members get some deals but they can’t always choose airports).

We reminded free members what they were missing as often as we could by adding a bunch of hooks throughout our site.

Hook 1: Right up front, we told them a deal they missed out on recently: a $296 roundtrip flight to Barcelona.

Hook 2: When a free member views a deal within the app, they see messaging that indicates they need to try premium to get deals from a specific airport rather than a region.

5. Leverage a proper analytics platform

It’s time to ditch that Excel spreadsheet you’ve been using to track customer metrics manually.

We started using Baremetrics Trial Insights for analytics. It provides a wealth of vital data about what customers in your trials are doing, how they’re converting and which trials are almost over so you know who to target.

Having this information at your disposal is critical to increasing your conversion rate.

6. Communicate with your users

One of the most valuable things you can do is learn about your audience.

It doesn’t have to take a ton of effort, either. Simply create a Google Form or Typeform for free, spend 20 minutes populating a survey and send it off to your users. To get people to fill it out, consider incentivizing your audience with a gift card (e.g., $100 to Amazon) or something similar.

We surveyed our customers and uncovered a lot of awesome insights. Here are some of the kinds of questions we asked:

  1. How long have you been part of the Dollar Flight Club community?
  2. Have you heard about our Premium membership?
  3. Why have you not given Premium a try?
  4. How likely are you to try Premium in the near future?
  5. Would you pay more or less for Premium?
  6. What feature do you think would be most useful to you?
  7. What can we do to convince you to try Premium?

We found out a lot about who our customers were, what they want and what they thought about Dollar Flight Club. Some key takeaways from our survey are as follows:

  • Many of our users didn’t know our Premium offering existed. We simply made that messaging more prominent and trial signups increased.
  • Most users didn’t want to start a free trial because they weren’t planning to travel in the near term. Our flight deals, however, can work for anyone looking to travel over the next 12 months. We put that messaging up front and signups increased.
  • Our users were cool with paying $40/year for our service. We knew with certainty that our pricing wasn’t scaring anyone away and we didn’t have to adjust it.
7. Focus on the customer journey

If you want to increase your conversion rate, you need to take the time to nurture your users. You need to keep them engaged during the trial period, learn more about them as they move across each step of the customer journey and get them to see the value in what you’re providing.

At Dollar Flight Club, we send each of our trial users a welcome email series designed to keep them engaged so they convert and see value in what we’re offering. Here’s what the series looks like:

  1. Welcome emails. When someone signs up, we thank them and tell them to log in to their accounts and update their departure cities. We want them to take action right off the bat.
  2. Successful customer stories. Next, we send them stories that demonstrate real value. We show trial users exactly how we’ve helped real people while encouraging them to contact our support team if they need any help.
  3. Premium explainer. We tell our new users how Premium subscriptions work and ask them about their dream destinations. The goal, here, is to get them to log back into their account and browse the site.
  4. Cheap flight inspiration. To keep new users engaged, we then send valuable and helpful content to get them thinking about traveling on a budget.
  5. Social media invitation. Finally, we invite our users to follow us on social media and join our “private” Facebook group.

We made a push to create great content for our trial users to help them along their customer journey and learn how to use our service like a pro:

8. Optimize the onboarding experience

To make sure our trial users knew how to interact with our platform and understood how things worked, we installed Intercom and utilized their in-app messaging capabilities.

New trial users were met with the following message when they first signed in:

“Hey there friend, so glad that you’ve joined the Club! This is your home dashboard where you can see all your deals. We’ve already populated it with past deals so you have an idea of what type of cheap flights are coming your way. Now that you’ve joined, we’ll start searching the web far and wide for the cheapest international flight deals just for you. Keep an eye on your email for alerts! To make sure you get the right deals in your inbox, double check that your Departure Regions (or Departure Airports if you’re a Premium Member) are updated.​ If you have any questions about how things work check out our support articles or contact us at support@dollarflightclub.com. – Happy Travels, Jesse”

We found that people had been canceling their trials because they didn’t set up their accounts properly. Simply adding this message had a huge impact on our conversion rate.

We also used a free service call Hotjar to see where people were getting confused within the app and made appropriate adjustments.

9. Assemble a strong team

You can’t do everything on your own.

We made some critical hiring decisions early on, building a strong team that could deliver more value to our users. As a result, we were able to find even better flight deals—and a lot more of them.

Increasing your conversion rate may sound like a daunting task, but it doesn’t need to be. Follow these tactics and watch your subscriber base grow. Good luck and happy travels!

The post How Dollar Flight Club achieved a 76.5% trial-to-paid conversion rate appeared first on Baremetrics.

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