Latest / 1 to 100 / E18: The Secret Behind Marpipe’s Growth with Dan Pantelo

Transcript

E18: The Secret Behind Marpipe’s Growth with Dan Pantelo · 1 to 100

0:00
Have you seen? Have you seen the crazy wild
0:05
success of Judge dot me? Have you seen that?
0:09
Yeah, it's not successful. It's not successful.
0:13
This is my point. It's not it's a $12 million ARR
0:17
business. That's, that's nothing.
0:19
That's. Time, yeah, but I feel like
0:20
you're, I feel like you're defining it.
0:21
You're defining like successful differently, right?
0:23
Like I remember when you had talked, you had you had
0:26
mentioned about you were talking with a mentor being like, oh,
0:28
like what kind of outcome do you want?
0:30
And like you define the outcome very specifically.
0:33
But like if you were to define the outcome as generational
0:37
wealth, then the judge. Me situation is like very
0:42
successful. They're also only I believe
0:45
they're only a few. I might be wrong.
0:46
I don't know how I don't, I think they're only a few years
0:48
old, but but also they, they, you know, they just announced
0:52
that they're like going all in on Shopify and they barely
0:57
scratch the surface of their market cap like this.
1:00
Is this this like they could keep like how many reviews
1:04
businesses are out there right on Shopify, right?
1:07
They if they're, if it's true that they're eating everyone's
1:09
lunch, they have a long way to go.
1:11
So 12 million, you know, ARR business turns into 24 next
1:14
year, turns into whatever next year.
1:17
No dude, they're already half penetrated.
1:20
Are they really? Yeah, yeah, yeah, yeah, dude.
1:22
It's yeah, yeah, yeah, dude. This is the problem.
1:26
I think the question no. But here's the thing.
1:28
I think the question is, is not whether Judge me can double via
1:35
the playbook that they're running.
1:37
But like if they decided to somehow start to run a, let's
1:41
call it higher value review tool offer the leverage that they
1:47
have from their current penetration increases the
1:51
likelihood of that success like significantly versus being like,
1:56
oh, we're a new, we're a new review tool that starts at 1299
2:00
a month, like 12, like $12199. And we're going to market fresh
2:05
like is if they can figure out the the $24,000 annual contract
2:10
and whatever they need to do through the product, their
2:13
penetration that they currently have through their low cost
2:15
product multiplies the likelihood of that success.
2:19
Right. I totally agree.
2:20
Yeah, I I take everything back. If what they do is reinvest the
2:27
profit into building new products, everything but my my
2:32
kerfuffle would judge me. Is that from everything I can
2:35
tell, they are like extremely happy to provide a low cost
2:40
product with maximum penetration and to just like let that thing
2:44
run and like just draw distributions basically.
2:49
So I'm, I am, I'm super happy to be wrong about this, by the way,
2:53
like, because if they do what you're saying, Zach, what they
2:56
are doing is a bottom up attack on Yapo and then their upside is
3:00
massive, which I am like then then of course, it's a brilliant
3:05
strategy, right? And and we'll like win
3:09
massively. But who's who's?
3:10
Who's better situate like they're they have the best
3:12
layout on the on the chess board, like they're sitting in
3:15
the best position because who's who's going to disrupt who?
3:18
Like are they more likely to disrupt Yapos or Yapo?
3:20
More likely to disrupt Yapo will never can never dream of like I
3:24
think disrupting them, they like cannot unseat or or touch that.
3:28
Like they going from up market to bottom market is much harder
3:31
than vice versa. Right, like 100% because to go
3:35
down market you have to justify the the incremental unit cost of
3:38
your team's time to deliver a lower cost product versus being
3:43
like oh we are, we have a cash flowing solid business in which
3:48
people are happy with the product.
3:50
Now let's divert our team's energy to a higher value
3:53
product. It's all upside with almost no
3:57
downside. Like the only downside would be
3:59
like, oh, we're taking the eye off the ball of our cheap
4:01
product. But like judge the reason why
4:03
judge me is good and I used to be a judge me customer like when
4:05
I had that e-commerce stores like the the product is also
4:07
good. Like it's not like just a low
4:10
cost product. Like it, it is one of these
4:12
tools that just like gives you what you want and like covers
4:15
like 90% of your use cases and has like more integrations than
4:19
most of the other tools. Like I've what I've found with
4:22
like higher value or higher subscription cost tools is that
4:26
often what happens is they, they actually have less integrations
4:30
and they, and then you end up buying a bunch of other tools
4:32
that are also higher priced because you already made the
4:36
choice on this one. And like you're like, fuck, like
4:39
this wasn't just choosing 1 high-priced tool.
4:41
This is now choosing like 10 high-priced tools if
4:44
integrations are needed for the success.
4:48
Rashab, Is there a world in which like so Fermat is a like
4:53
enterprise, great product, right?
4:56
Like you guys, you guys go after like enterprise, like long term
5:00
enterprise deals, right. Is there a world in which like a
5:07
motivated upstart can create like the judge me to your yacht
5:11
PO? Like is that like can someone
5:13
create like a super low cost commodified version of what you
5:17
do for for the masses and the mom and pop stars out there?
5:21
Yeah, Yeah, Yeah. I mean, we're trying to do that
5:24
to ourselves actually. So we have like a $500 a month
5:30
version now, which is like what I would describe is the Judge Me
5:35
version of Fermat because basically it's like now in the
5:39
band of LP building tool, but it is the entirety of the Fermat
5:45
product suite like cut up for an SMB, right.
5:51
So like people are like, for instance, choosing that over
6:00
like Replo basically. So, so it is like the, it is
6:03
like the equivalent of what I would describe as the Judge Me
6:06
version of Fermat. And so maybe it's like personal
6:09
bias because like we, we did it ourselves, which is why I like,
6:15
I'm not sure if it's easier or harder.
6:18
Like I don't know which direction is easier or harder.
6:21
Do you see what I'm saying? I'm asking the, I'm curious
6:24
because we're doing something very similar right now at
6:26
Marpipe. Does it feel like running a
6:28
separate business? Like does it, how is it going?
6:31
Like you know, you launched like the other like the kind of, you
6:34
know, self-serve version of it, right?
6:36
Like yeah, I mean, is it how old?
6:39
Like how far along is it? Is it, is it going really well?
6:42
Like our retention metrics and growth?
6:44
Like are you growing it the same way?
6:45
Yeah, Yeah, I can. Yeah, I can tell you guys all
6:47
the data. So we ran a pilot in December of
6:51
eight customers that we did not announce anywhere.
6:54
So we literally sent out like 50 emails to our e-mail list and
6:58
got eight people to sign up. And of those 86 retained for
7:02
like over six months, OK. And their usage patterns were
7:06
incredible. And I was, it like didn't make
7:09
any sense at all, like why they were using it so much relative
7:12
to the rest of our customers. So we like try to understand
7:16
that and then we like launched it in the sense that we now have
7:22
we then assigned an AE to like dial for dollars basically.
7:27
So this guy his goal is 20 customers a month at this like
7:34
roughly 500 to $1000 a month MRR contracts.
7:40
So basically he's paying back his own salary on in month one
7:46
of the of the outbound. So it's still not, we're still
7:49
not marketing it, but we started doing Dial for Dollars and then
7:53
we launched a public pricing page with that offer in April or
7:59
May, I can't remember now. It's been like 3 months
8:02
basically. And the retention, sorry, the
8:05
turn, monthly turn is like 10 to 15% if I'm not mistaken.
8:10
So Zach was like talking about a bunch of tools that he uses for
8:13
turn mitigation, which we're like starting to implement.
8:16
But again, the usage of these customers is like nothing I've
8:20
ever seen. Like they are, they're like
8:24
thrilled to have access to the tool.
8:27
It's like, yeah, I, I was like, genuinely not expecting this.
8:32
And so we're in the early days. We hired after and after this
8:36
one guy success, we hired 3 more AES because I'm just like like
8:42
being well this is like what being well capitalized enables
8:45
is like instead of like slowly growing it, I'm just like F it.
8:48
Like let's just see what extreme we can push.
8:51
So we're going from 1:00 to 4:00 instead of one to two, right?
8:54
On the outbound AE side, the second AE we hired is going to
8:59
close 8 deals in his first month here.
9:02
The next two who we hired have already booked three meetings in
9:05
their first week here. Are they thinking from?
9:09
Your like existing e-mail list. Phone.
9:16
Yeah, Dial for dollars. Dude, the cold calling is
9:19
working really well right now. Cold.
9:21
I know, it's crazy, right? Now, Yeah, yeah, that's working
9:24
that we're scaling out cold calling also.
9:26
I had no, I had no idea cold calling would work as well for
9:30
right. Like marketers are picking up
9:32
the phone. It's crazy.
9:34
I recently got up sold through a cold call from SCM Rush.
9:37
So maybe it is working and I never pick up my phone.
9:41
Maybe it was because like, oh, like we, we definitely have a
9:43
little bit crossover from SEM rush.
9:45
I was like, maybe this is actually like a real call,
9:46
another sales call. But yeah, I mean we haven't
9:51
test, we haven't tried that at all.
9:52
We've actually like just started putting like kind of attention
9:56
into our sales process, so. Don't do e-mail outbound, Jack
10:01
and Zach. I don't know, Dan, if you guys
10:03
have success with e-mail outbound, but it's like trash
10:06
for us. But calling works, yeah.
10:09
I mean, that's how I got, I got our first 100 customers e-mail
10:11
outbound. This was three years ago. 3-4
10:16
years ago. It works for us.
10:18
Yeah, four years ago. Almost exactly 4 years ago now.
10:21
Wait, Dan, you guys do e-mail outbound and it works?
10:23
Yeah, but we just, we can't, we can't scale it too much.
10:26
That's, that's the only thing. It's consistent.
10:29
So we're running, we're running cold e-mail outbound.
10:31
It's booking a set number of meetings every week.
10:33
But when we try to push it further, you just can't.
10:37
Like, it's like a retargeting campaign, you know, Like it
10:40
works great, but you can't scale it.
10:42
That's how we're looking at e-mail right now.
10:44
What scale, what scale can you hit in meetings?
10:47
Like what's the is it like in the five to 10 range?
10:50
Is it in the 10 to 20? Like what range are we talking
10:53
in terms of meetings per week? 5 to 10 per week with one person
10:59
allocating like maybe 20% of their effort to it, you guys.
11:10
So you guys don't run anything at all?
11:17
Yeah. So your your outbound channel is
11:19
like all is all calls I feel like.
11:25
Rashad, for you, cold e-mail could work really well because
11:30
you guys do have like legacy sort of competitors in a space
11:36
that you could identify through like built with or store leads
11:40
or something like that, Like you have like very targeted cold
11:43
e-mail. Yeah, we, we could.
11:47
So I mean, OK, this is like, I mean this good discussion.
11:52
But I, I feel like for us, the biggest reason we have found
11:57
cold e-mail to not be effective is it's not obvious to us that
12:01
the person we are cold emailing doesn't know us already because
12:06
our marketing is sufficiently wide that people are aware of
12:12
Vermont. It's actually more effective for
12:14
us when we do retargeting ads than it is to do cold e-mail
12:19
outbound. And so it has more to do with
12:22
like, just like catching the person in the moment when they
12:27
are ready to make the purchase. And that's why for us, our cold
12:31
e-mail efficacy is really bad because you can't just like
12:33
e-mail someone every week, right?
12:36
But you can keep them on a retargeting campaign forever,
12:40
right? And not have like a like a
12:43
frequency cap or whatever it is, right?
12:45
And so, yeah, so we have this like dynamic where I think
12:51
because the awareness level is very high, it has more to do
12:54
with when is the person ready to purchase and not like are they
12:58
reachable via e-mail. Do you do things for the sole
13:01
purpose of generating like top of funnel?
13:04
Like brand awareness for Fermat. I mean, that's like, I mean like
13:09
I, I, I don't know what else robot does actually like, you
13:14
know what I mean? Like I can't, I literally can't
13:16
think of anything else that that like that we do.
13:19
It's kind of a big part of the, the go to market play, right?
13:23
You've got sales team, you've got everything else that's
13:25
working to get people across the finish line.
13:27
But yeah, I, I couldn't agree more on the just how competitive
13:30
e-mail is that top of inbox? Real estate is so fragile.
13:34
But if you call someone, they pick up, you've got them, right?
13:37
If you send them an e-mail and they don't check it within, I
13:40
don't know, an hour, 2 hours, it's on the second page of their
13:42
inbox and I'm going back to the second page to, to see it, you
13:46
know? You guys have like a, a cold
13:48
e-mail that you always seem to come back to that like always
13:52
works, whether you're using it to get customers or even just
13:56
get someone's attention. Like I have one that like I've
14:00
tested a bunch of different things like even not selling,
14:02
like just wanting to get in front of someone.
14:04
I like send the original cold e-mail.
14:06
It's like like outlining the whatever I want or like whatever
14:10
I'm willing to give or something.
14:12
And then by far the thing that gets the most replies out of
14:15
anything I've ever sent is a is a reply to the first e-mail that
14:20
just says and it's all lowercase that just says am I totally off
14:24
here or Nah, TXT me if easier with my phone number and then
14:31
sent from my phone. I have like honestly my reply
14:34
rate is like 80% and most people will text me like I recently I
14:41
recently tried to get in contact with like a like a I'm not going
14:48
to say the exact position, but AC level at like a publicly
14:51
traded very large company and sent the e-mail.
14:55
Nothing tried to get like an intro nothing sent.
14:58
Am I totally off here or Nah text me if easier.
15:02
Sent from my phone and had a reply within like 5 minutes on
15:06
on text. I'm I'm sending, I'm sending a a
15:10
note to my to my e-mail guy right now to test that.
15:17
Wait, Dan, just look in. Look in your Outlook, in your
15:19
outbox. Dude, just do it.
15:22
Let's do this. Let's do this live, man.
15:26
Go to your send, search for someone who hasn't replied to
15:29
you in 2 days and send that message.
15:34
I'm going to need to log into these like outbound tools that
15:37
they use for the first time in ages right now.
15:41
Oh, you can't. It doesn't just show up in your
15:43
sent in your sent in your. Gmail, I mean it's not, it's not
15:45
going the e-mail outbound running isn't going from my
15:48
e-mail, it's going from like our team members emails.
15:52
Got it. OK, got.
15:53
It from Marpipe with four ps.com.
15:57
Try marpipe. Get marpipe, marpipe.
15:59
Now we got it all. Mar pipe now.
16:04
Not mar pipe later like Jack would like to think.
16:07
Mar pipe now. Man, so funny.
16:17
And I was scrolling through the list of things in my head, like
16:20
I was scrolling through the list of things that Robba does.
16:22
And I was like, wow, it really is all top of top of.
16:26
OK. So you guys raised a ton of
16:28
money and you can, you can, you can, you can, you can blow money
16:31
fast on big shots on goal with marketing things.
16:35
What is like is it events that's that's working the best for you
16:39
guys? Is it events?
16:41
Yeah, yeah, dude, the combo, I'll tell you like the insights
16:46
that I had probably last year, which is the thing that we just
16:50
like keep leaning into is events and social content.
16:57
If you just keep doing that, it creates this aura that you are
17:01
everywhere all the time and like that.
17:05
And and that that is how people feel about us.
17:07
It's just like, dude, I just keep seeing you guys like that's
17:11
that's like the number one thing people will say to me.
17:14
And it's because we show up in people's social feeds and we
17:17
show up in real life. Like someone from the team will
17:21
be at some event every week we're at, by the way, as of July
17:27
24th, we have done 50 events this year.
17:30
That's like an insane number by any way.
17:34
You measure that? Yeah.
17:36
How do you think? Do you just like, look at like
17:38
every event that's happening in like e-commerce and like DTC are
17:42
just like, all right, if it's happening, we're sponsoring it
17:45
and you get the package Sears and you guys make like some, you
17:49
know, impromptu decisions like feel it out.
17:52
Yeah, or buy a ticket like someone goes.
17:56
Yeah. Are you sending?
17:59
Yeah, it's it's like, OK, I saw you guys were just hired.
18:01
I saw Alexa just made a post you guys are hiring for like an
18:03
events manager person. This makes this makes sense for
18:06
you guys when it comes to social content.
18:10
You mentioned the content piece. Is that like your whiteboard
18:14
videos or like, is that like, you know, is there more like
18:18
what's the content engine look like?
18:21
Yeah, I mean, like the answer is in the question, right?
18:24
It's like there's a bunch of content and then there's like
18:28
the one thing that doesn't look like the others, which is the
18:31
whiteboard thing that I do once a week.
18:34
And so like when I am at an event, people will like walk up
18:38
to me because I'm the whiteboard guy.
18:40
And so this like plays into the whole like social content event
18:45
marketing system because there's like a thing to talk about now,
18:52
like like jet, like general content doesn't give you
18:55
anything to talk about, right? It's just like, hey, actually
19:00
this podcast is good in that context because this podcast is
19:03
not like other forms of content because it's like a we're like
19:08
very transparent about how we think about SAS and SAS pricing
19:11
and E com and all that sort of stuff, which like in like the
19:14
Twitterverse feels very taboo. And so that's like helpful
19:17
because it's like another thing that someone can like talk to
19:19
you about when they see you in person, but it's just, it's just
19:22
fodder for like basically two things.
19:25
One is build connection and the second is build trust, right?
19:28
And there's like something about going on a whiteboard which both
19:31
builds connection and trust. And so that's like basically the
19:35
yeah, that's basically what's happening.
19:37
Yeah, we're, we're, we're right now like spinning up this engine
19:43
at Marpipe for the for the first time really like our kind of
19:48
our, our marketing. So I'm a partner in, you know,
19:51
events business in the space called ecom founders that you
19:54
guys have participated in, in some of our stuff before.
19:58
And so like we get to see like I, I kind of over the past
20:01
years, year to two years when we were like kind of building this
20:04
up. I got to see first hand like how
20:07
crazy effective events actually are.
20:09
And so we're we're we're like we're we're building out our
20:12
like Mar pipes whole like kind of engine there, like how we're
20:17
selecting events, how we're showing up at all of them.
20:20
And we're currently hiring an in house, a full time in house
20:25
content creator. Like I want someone who makes
20:27
content like just like Oren John and like Ashwin, like those
20:32
guys. I want a full time person doing
20:34
that at R Pipe like all day. Very hard to find, by the way.
20:38
Very hard to find. Yeah, yeah, yeah.
20:40
You don't need that. Just run catalog ads with your
20:42
different subscription plans. That hasn't that hasn't
20:48
convinced you to do it yet, Jack, That's true.
20:50
So we've got to try something else.
20:53
One of the things I like about creators like Orange John, I
20:55
mean, you know his name, he gives you distribution.
20:59
I, I'm not against the idea of owning your own distribution,
21:03
having your own creator, but assuming the creator is good,
21:07
like really good, like orange on right, somebody who's been able
21:10
to build an audience, then they don't need you.
21:12
Or maybe they need you, but you transact for them as a partner
21:15
and you get the distribution from them.
21:17
I think partners are awesome. We've worked with Oren in the
21:19
past and you know, we've tapped into his audience.
21:22
If you take the angle of creating the content yourself in
21:25
in house, you get to own it for some time and for as long as you
21:29
retain that employee. But it will slip from you and
21:33
you won't have a reliable system for working with creators for
21:37
distribution as well as content, right?
21:41
I think you should do both. You should do both.
21:43
Like you know who does this? You know who does this really
21:45
well, death to stock. They brand new stock image
21:49
company. There's a million of them out
21:50
there. They're literally a a commodity
21:53
SAS product and they're absolutely fucking up the
21:56
industry right now because they're pulling this off this
21:59
like distribution thing really well and no other stock company
22:01
knows how to do it. They're like, you know,
22:03
sponsoring all of like, you know, those guys content.
22:07
They have their own built channels, their own own channels
22:09
where they're just like making cool stuff designers want to see
22:12
all day. And it helps that they have a
22:15
really high level of taste too. Yeah, I guess significant level
22:19
of their success is their product, right.
22:20
Like it's like you have stock image website like Adobe Stock
22:25
and it has everything in the world.
22:26
Whereas like death to stock is a niche of Adobe Stock and they
22:30
chose a niche that related the most to their core user, which
22:36
is just like very high taste, very high art direction type
22:40
stuff. And so like, the question is, is
22:42
like, can death to stock get as big as Adobe stock and like or
22:47
like Shutterstock or something like that?
22:50
And it's like, well, maybe, but the issue is, is like to get
22:53
that level of, to get that wide of an umbrella, meaning the
22:58
person that's downloading an image of like a medal to put
23:01
onto a random flyer for their T-ball league, like that would
23:08
never be on death stock. So it's like an interesting
23:10
thing. Like I, I like, I subscribe to
23:12
it because of like the product. And I think they disrupted it.
23:17
But like the disrupted disruption only happened in a
23:20
niche like. Do you guys buy this like
23:24
concept of like luxury software where it's like, you know how
23:28
like at the grocery store, like you'll have the same product,
23:30
but like if Fishwife packages the tin fish with like really
23:35
good design and packaging, you'll pay twice as much for the
23:37
same tin fish If it like looks really good and feels luxury and
23:41
like the cool kids of DTC are doing it right or whatever,
23:44
right. Like, does that same thing exist
23:46
in software? You think?
23:47
Like there'll there's room for players that are just like a
23:50
luxury version of a of a commodified thing.
23:54
Long as the the quality goes beyond like the marketing
23:59
website and into the product, the feeling of luxury needs to
24:02
also be in the product, not just like the landing page.
24:05
Whereas like in this case, you could put the tinned fish in a
24:08
different container and it elevates the experience at some
24:12
level. The actual use of software and
24:15
especially because it's on subscription and not one time
24:17
payment means that that feeling of luxury needs to like also
24:21
exist. Like I think inside of the
24:23
product. I mean, it's like the number one
24:25
thing that like we focus on is like fit and finish of product
24:31
and not as much on features. Yeah, yeah, yeah, I'm working on
24:36
I'm so we're, we're picking up something at Marpipe right now.
24:39
And I'm actually, I'd be really curious to get your guys like
24:41
feedback, like a kind of like a trial by fire.
24:43
Like tell me where I'm going wrong.
24:44
Like let me know like if this is a good or bad idea.
24:49
I don't know. I by the way, I hope I'm not
24:50
hijacking the conversation. I don't know if you guys know
24:52
that's. Good.
24:54
OK, OK, cool. So, so, OK, so you know, like
24:58
what what Marpipe does is like we, we, we turn the product
25:03
catalogs for brands and so they're like best looking and
25:06
hopefully best performing ad creative, right?
25:08
So we're like, kind of like a design platform for product
25:11
catalogs, right? You can upload your spreadsheet
25:14
of products and then in Marpipe you can cook up like really
25:18
awesome dynamic templates that transform it into like things
25:21
that look like ads you'd actually run rather than just,
25:24
you know, skew images. And then you have like that
25:26
opens up the whole world of like, you know, unlimited
25:28
creative testing for catalog ads, which people can't do
25:31
without something like Marvite. You can't create a test catalog
25:33
ads. So, so, so, so that's what we
25:37
do. We call this feed.
25:38
There's like, there's this whole industry of like product feed
25:41
enrichment, right? We call our product enriched
25:44
catalogs because, you know, we say like when you design your
25:48
catalog, you've improved that, you've enriched your like, you
25:51
know, the core raw asset. So instead of like using the
25:54
core raw, like regular thing, enrich it, make it look better.
25:57
There's also other things that fall under this like category of
26:01
feed enrichment, like for example, understanding like
26:04
which products used perform well and don't and like auto
26:06
filtering them out of your feed so that the bad skews don't run
26:10
in ads is like another way to enrich the feed another way.
26:13
Another thing is like most feeds are dumb and don't have a lot of
26:17
information that's important for you to include.
26:20
So using Gen. AI to supplement the information
26:22
in your feed with like better meteor descriptions, good
26:25
taxonomy, that's a form of feed enrichment, right?
26:29
So feed enrichment is for people who want to get like, who are
26:31
like good, like who are running catalog ads and want to improve
26:34
them or, you know, you want to want to go down that route.
26:37
That's the world that Mark Pipe plays in and that's what we're
26:39
known for and or like are good at.
26:41
That's why people come to us. The other thing that like the
26:44
the piece before feed enrichment is like feed management, right?
26:49
Just like the actual product feed itself, right?
26:53
Which is like feed anomics and those types of companies are
26:56
participants in that ecosystem, right?
26:59
Exactly. There's a huge ecosystem and
27:01
the, the, the thing about it is it's an absolute necessity.
27:04
This is like feed enrichment is a nice to have, but feed
27:07
management is a need to have for every single e-commerce
27:09
business. Like if you're selling things
27:11
online, you need to use a Go data feed, a data Feedwatch or
27:14
Feedanomics or Flexify. There's a whole industry around
27:18
feed management and everybody has to use it right.
27:21
The thing is like when, when marketing budgets are getting
27:24
cut, like Marpipe is one of the things that they would cut,
27:27
right? But if you're an e-commerce
27:29
store, you can't cut feed your feed management software tool
27:32
because that's like your source of truth on like what you sell.
27:35
It's like your spreadsheet for like managing your actual like
27:38
product inventory and your, your thanks, right?
27:41
So it's a, it's a, it's an essential critical category.
27:44
So, so everyone needs to use a feed management tool, right?
27:48
And we, we looked at kind of when we're talking to our
27:50
customers, like obviously we, we work with all these customers
27:53
and that like use feed management tool.
27:54
Everyone has one and we're really involved in that value
27:58
chain because we're taking that feed and enriching it.
28:01
And everyone hates their feed management tool.
28:02
Like these are all like a bunch of really old stale companies.
28:06
And like the, the tools are like very like, look very clunky,
28:11
like were built a really long time ago, right?
28:13
And, and we found out that it's kind of like a glorified
28:16
spreadsheet almost, you know, it's really not like crazy hard
28:21
software to build. And we like the actual hosting
28:25
costs are also really low. Like to power feed management
28:29
for like a regular size, mid size Shopify brand is like not
28:33
that expensive. The margin is really high on it.
28:35
And every brand has to pay like a few 100 bucks at least to
28:38
their feed management tool. So we are like, what if we build
28:42
1 and release it for free, right?
28:44
As like a, as like a lawsuit, right where it wouldn't really
28:47
be like that much of A lawsuit or because it's just so cheap to
28:50
like host this for brands and we just do like completely free,
28:54
basic, basic feed management should be free.
28:56
Here's a totally free one that Mark Pipe is offering.
28:59
You can just RIP and replace. You could save a few 100 bucks
29:02
that you pay to whatever it is you use today and use Mark Pipe
29:06
for free. And then when you're ready to
29:07
like grow and start like getting fancy, you can pay us to enrich
29:11
it. What do we think?
29:12
Where, where, where can we go wrong here?
29:15
Well, 8 plus. OK, I'm going to say, I'm going
29:19
to say something different. One of our customers or one of
29:22
our competitors tried to do this and it didn't work.
29:25
And one of the reasons why this didn't work is because, and they
29:33
approached it the same way that you're approaching it, which is
29:35
like, oh, this is like pretty standard.
29:38
Everybody kind of uses it, but they forgot about like the
29:40
nuances of making something like good.
29:45
And when you don't have the incentive of growing the
29:50
business, like at the end of the day, at the, at the, at the 1st
29:53
of every month, the only thing that you're going to be worried
29:56
about after you release this is still growing the business,
29:58
right? And so when you have a big thing
30:02
that needs improvement but doesn't directly grow the
30:05
business, it like gets pushed back to like the, the bottom of
30:09
your, of your backlog. And then like what we did kind
30:12
of in response is like, oh, fair pricing on a similar product,
30:17
but we have the incentive to still make it better outside of
30:20
like our loss leader is better. I think like potentially a
30:23
better approach would be like you get the marketing bump of
30:27
like maybe it's free for 30 days or something because then you
30:30
also get like a little bit of urgency built in.
30:33
But then beyond that, like if you actually build good
30:36
software, like just charge for it and continue to make it
30:38
better, I really don't believe ever like the free tool will end
30:41
up in most cases like annihilating these speedonomic
30:45
type tools. And so why leave that Tam on the
30:49
table when it could be in your pocket like maybe you could?
30:52
Zach. Yeah.
30:55
Dude, dude, can I, can I, can I share a point of view on this?
30:59
OK. I think that I think the insight
31:03
was in the setup, which is like for a certain number of skews,
31:08
you enable it for free. So like the upsell and the price
31:11
actually is baked in because the the problem with the feed tool.
31:15
So unlike what happened in your case, this feed tool has a
31:19
natural mechanism where as soon as you cross a certain excuse
31:23
threshold count, like by definition you will start paying
31:26
for it. So you don't even have to do
31:28
like a time period thing. Did you say that?
31:32
Like the thing that it was going to be free to start.
31:33
Like it's a premium, then it's not free.
31:37
So we, we were, what we're releasing is a free version
31:42
capped at 100,000 SKUs and very, very few brands like whatever go
31:51
like if you're over 100. So there's like basic feed
31:54
management tools and there's like complex feed management
31:56
tools which like if you're Nike and you operate in 73 global
32:00
markets and have like 73 different product feeds that are
32:03
all divided in languages and all that shit, right?
32:06
Like we're not serving that. We're serving the basic feed.
32:09
And then the basic feed market, the amount of brands over
32:12
100,000 uses like very low, right?
32:15
Like most brands don't have over 100K skews.
32:17
So it would generally be free forever for most brands under
32:22
the current setup that we have it and we're still work shopping
32:25
this right now, right? This is like a work in progress.
32:27
We're still kind of figuring out the nuances for shop.
32:30
Maybe you think that we should like augment that.
32:31
But the idea is if it's free forever for a bunch of brands
32:34
and they come to marpipe to like just do their basic everyday
32:37
feed management, which is like a commodity at this point.
32:40
When they when they're ready, like in built into the product
32:44
will be tons of upsells to enricher feed.
32:47
Like for example, like, hey, did you know, like, hey, when we see
32:50
you're running Meta Facebook ads, like Meta catalog ads,
32:54
there's a ton of, you know, skews that you're running ad
32:57
spend to that you don't even know about that are like not
33:00
performing well. If you just click this button,
33:02
it'll fix that problem for you. But you have to pay.
33:05
Just click that button. So when you say commoditized, is
33:08
there free feed management tools on the market right now?
33:11
Yeah. This is kind of what I wanted to
33:12
talk about because I think this is a question of who you're
33:16
competing with, you know, for all the e-commerce brands that
33:19
we serve, right? Sure, you could sell or try to
33:22
sell trainers at $3, but you're going to be competing with team
33:25
or you're going to be competing with Amazon.
33:26
You're going to be competing with these Goliaths that operate
33:30
at tiny margins, own the manufacturing and it's just
33:33
probably not feasible for you to to play in that space.
33:36
They're going to squash you, right?
33:38
Shopify, I mean, I've been out of the loop for a minute, but I
33:42
know of like 10 million plus brands that will just use
33:47
Shopify's feed and the Facebook and Instagram sales channel app.
33:50
And they'll use Google and YouTube sales channel app for
33:52
their feed to YouTube to Google. So it's like that might be the
33:56
space that you're competing in, which is a feed that's
33:59
absolutely free and you can edit directly in Shopify.
34:02
I mean, don't get me wrong, there might be demand from the
34:05
market for something that's better than that for like feed
34:08
management tools. Like I know of lots of brands
34:11
that are just using the Facebook and Instagram sales channel app.
34:14
So this is a the the just one, one thing on that just Jack cuz
34:19
I think I would agree with you normally, but the Shopify meta
34:23
integration feed integration is a disaster.
34:26
You guys wouldn't know this because you're not close to the
34:27
problem, but everybody is unwinding it.
34:29
Why? Because Shopify has built a
34:32
dependency on their app ecosystem to make feed tools
34:35
people actually use. They haven't built a good one
34:37
out themselves. So when they announced this big
34:39
meta integration, there was all this fanfare about like, oh man,
34:42
they're like, you know, solving that.
34:43
But then brands realized you can't do basic shit like just
34:47
modify your feed, create categories, add tags to
34:50
products, all that basic stuff you cannot do in Facebook with a
34:53
Shopify integration. So then all of these people are
34:56
now unwinding it and going to like that.
34:58
That has already happened, right?
34:59
A bunch of brand, like everyone who's tried it, who's like
35:02
seriously running catalog ads. No one uses that anymore because
35:05
it was riddled with problems because Shopify over relies on
35:09
their app ecosystem for people to, like handle those things and
35:12
didn't like understand the nuances of like what what makes
35:15
a good like feed management tool?
35:17
Yeah. I couldn't.
35:18
Now there's like, yeah. But it's like, who occupies the
35:21
space for the 8020 product? For the product that just isn't
35:25
good enough, but it does the job for a lot of users.
35:29
I mean like like I said, I've been out of the the loop for a
35:31
minute, but I used to work with hundreds of Shopify brands and
35:34
so many of them had stopped using data feed watch and just
35:37
started using Facebook and Instagram.
35:39
I mean like the Facebook and Instagram sales channel app
35:41
replaced like conversion tracking setups for all of these
35:44
e-commerce brands. They were like oh wow, this just
35:45
works. Maybe it's not the best, right?
35:47
Maybe I need all these other tools and I'm like, ascend to
35:50
something better. But it's the 8020, right?
35:53
That that's, I think that's the space that you play in.
35:56
And then you've just got like, maybe I mean, hope that that
35:59
product doesn't get any better. And there's, there's a really
36:01
good reason why it wouldn't get any better.
36:03
But for a lot of brands, I think it, it fills the use case,
36:07
right. It solves the use case.
36:09
Yeah. I, I'm, I'm, I'm going to take
36:11
the other side of this, which is I think like the particular
36:15
problem statement that Dan plays in is like, I'm enhancing this,
36:22
like it is already in this pipeline in a very like direct
36:27
way. And so saying, hey, I'm going to
36:30
help with the first part of the, the pipeline.
36:33
So that way like flow comes to the second part of my pipeline
36:37
is incentive to make sure that that product is good enough.
36:41
And again, like the words and the the words matter here, which
36:45
is like the basic tools inside of that is like a what will end
36:51
up happening in practice, in my opinion is not that there will
36:54
not be demand for it. It is that the demand for it
36:58
will then demand more features, which is closer to what Zach is
37:01
saying. And so once you start to hear
37:05
your customers complain, you will have to price those things
37:10
that are the higher leverage features for a feed management
37:15
tool, which then lands you in the same place as the quote UN
37:19
quote other players in the space.
37:21
So like you will never be able to have like a it will not in
37:24
practice be free for everyone all the time.
37:27
What it will be is an on ramp for everyone that is feature
37:32
gated in a way in which as like demand for additional features
37:37
or a high SKU counter management will just be a Mac like it will
37:42
be 1 of the ways that you think about enhancing that feed, which
37:48
today the app that you have on your feed management is the the
37:54
image change, right? And image change will end up
37:57
becoming one of your apps That is like one of the things that
38:00
people do. I again, like in my view, I
38:03
think it is I think it is the right way to do it and I think
38:09
you have plenty of incentive to like have a good enough on ramp
38:16
that gets people asking you for more apps on top basically.
38:21
Yeah, like like Jack, I, I yeah, Anyway, that's that's my view,
38:25
but. I like what you said there about
38:27
good enough because I think that Dan and Rashaab and and Zach
38:32
before play as well. You kind of occupy in the the
38:35
space of not just good enough, but better, right?
38:38
I think one of the main reasons people don't get more pipe is
38:40
because their catalog ads slap and they're like, actually, I
38:42
don't need this. And what if it breaks things?
38:44
Is there any risk of introducing more pipe when my catalog ads
38:47
are already getting all my spend and they're crushing, right?
38:49
I think it's the same thing with them.
38:52
All right? People could build landing pages
38:55
in gem pages in their Shopify store, but they want something
38:57
better, right? They're not coming to you for
39:00
good enough. So if you play in that space of
39:03
good enough, like who are you competing with, right?
39:05
That, that that would just be my concern.
39:07
But I also think that if you can surprise and delight and serve a
39:11
real market demand that isn't being served by the good enough
39:14
right now, then then yeah, it can work for sure.
39:17
Zoom has a 40 minute like free version like I, I think like the
39:22
model for this type of business is quite proven.
39:26
Like I, I don't actually think it's that risky.
39:29
Yeah. Well, here's here's the fun
39:31
part. It's we're already doing it,
39:34
it's happening and it's coming out August 1st, so, so.
39:37
We're going to find out. So we're going to fucking find
39:41
out. Yeah, exactly.
39:42
And the campaign is. So we're not, Jack, to your
39:44
point, we're not. We're not saying we're better
39:49
than your current basic feed management tool.
39:52
We're saying we are at parity with them and we're free and,
39:57
and, and, and we have this so and, and then shop to your
40:00
point, you're absolutely right. There's this basket of features
40:02
we call basic feed management, which is good enough for most
40:06
small brands. And then we're going to say
40:09
there's advanced feed management.
40:10
So obviously the best, the next basket of features that's like
40:13
more complex, right for, for more sophisticated use cases
40:16
that's going to be feature gated, but we're going to run
40:19
this big campaign that's going to be like.
40:21
Basic feed management should be free.
40:23
Why are you paying a tax? Why are you like, you know, why,
40:26
why you should, no one should be paying a few 100 bucks for their
40:29
basic feed management tool. And yeah, the, the, then the
40:33
incentive, then it'll just be, and that's like a big bet to
40:35
just get a bunch of, to blow the doors wide open and like the Tam
40:39
we can speak to now. And then from there, it's how
40:42
well our product can upsell and how well we can upsell within
40:45
the product. Yeah.
40:47
So we'll see. Maybe I'll come back in in six
40:49
months or so and kind of give you guys the the the breakdown
40:52
on how it went. We could do like a before and
40:54
after or something. See how it goes.
40:58
Yeah, I, I, I'm betting, I'm betting on the upside, so.
41:04
My biggest point was just about leverage.
41:06
That's it. Like if you're going to build a
41:08
tool and you could have charged someone for it, potentially
41:15
there is more leverage in that than the upsell motion.
41:21
Because there's also like a lot of documentation about the
41:23
premium model and like what size your Tam needs to be for premium
41:28
to make sense. And like generally 10 million is
41:31
like the benchmark across the board of like having like really
41:35
solid support and like product focus on premium.
41:40
If your Tam is under 10 million, it and like there's like a big
41:43
Patrick Campbell like article about it.
41:46
And I just like look from like a resource constraint perspective,
41:50
which is just like you have dev resources.
41:52
The leverage on those dev resources is like, yeah, you can
41:55
get some sort of viral effect or K factor of a free tool or you
41:58
could get revenue in. And I don't know, like, but like
42:05
that's just the question. In the next 12 months, does the
42:07
business grow more from adding a new product SKU that people are
42:11
willing to pay for, or does it come from a free tool with a
42:15
percentage of people that go to the main product?
42:17
If the free tool doesn't lead to revenue growth, it would be a
42:20
failure. The mechanism for it going to
42:22
leading to revenue growth would be through US upselling.
42:26
Like if we could just upsell 2 percent, 1% of those people,
42:29
we're in a really good place, right.
42:32
So, yeah, we'll, we'll, we'll have to.
42:34
And that's a that's that'll that'll come down to like, yeah,
42:37
good execution. We'll have to do episode,
42:39
episode follow up and like September 1st, September 30th
42:42
and we'll we'll break it down. For sure on the topic of
42:47
pricing, this one came out recently and Jeremiah sent in
42:50
our chat the whole point of SAS, the whole point is that
42:54
subscriptions fund ongoing improvement.
42:56
Charging extra for new features breaks that trust.
42:59
Want to sell new functionality separately, go back to selling
43:02
licensed software. What do you guys think?
43:04
Yeah, I'm. Yeah, I'm happy to have him pay
43:08
upfront for the use overtime instead of overtime.
43:12
A SAS is a payment plan. So I'm happy for anyone of this
43:16
variety to just like for me to say like, yeah, you can just pay
43:19
all 24 months upfront actually and there is no SAS fee.
43:22
Like totally fine by me. Rishabh, how much would you best
43:24
sell in a lifetime subscription for amount for?
43:30
24 months worth. Like I was just like, no, I'm
43:32
saying. How much did you sell A lifetime
43:35
for? Like there's a number, right?
43:42
Like sorry, what I am saying is like my assumption of the
43:47
customer lifetime is like somewhere between two and three
43:50
years. And so like like let's just call
43:53
it three years. And so I would be willing to
43:55
take two years worth. So I don't like I'm just going
43:58
to make something up. If this person is like on the
44:01
500 a month plan, then it's like, yeah, I'm like happy for
44:05
you to just upfront pay me 12 K, that's it.
44:11
You know what I mean? Like you like don't pay me 500 a
44:14
month. No, that is what I'm trying to
44:18
say. You can't think this is a good
44:19
take? There's no way.
44:22
No, I don't think this is a good take.
44:24
That's my precise point. I'm pointing out what I think is
44:27
like the logical fallacy of of this take.
44:34
Where where like from the perspective, I think the from
44:36
the perspective like he's the Xavier guy.
44:40
See, you know, he's talking from from the perspective of like
44:43
that right from the customer perspective here.
44:45
But like at Marpipe, initially when we launched the merge
44:48
catalogs, our turn numbers weren't as good as we wanted
44:52
them to be. So how did, what did we do?
44:53
We kept building like valuable new features that we just kept
44:56
layering in for free and making sure you get high adoption until
44:59
our turn rate was fixed and we had like amazing retention.
45:03
Then when we had our amazing retention, we figured out wow,
45:05
OK people like the amount that people pay to the value that
45:09
they receive is has been met and is like satisfactory to all
45:12
customers. Now when we add more valuable
45:15
features like after that point when we add more features, we
45:19
can charge more, but not before that.
45:21
Until your retention is amazing, you keep.
45:24
Just. Throwing in the value, but after
45:27
that point the market gives you signal that you can charge more.
45:30
I think of a SAS brand was like, you know what, from today to
45:33
tomorrow we're just going to charge more to all new customers
45:35
and the market was willing to pay it then fine.
45:38
You know and I man the whole point of SAS being that
45:41
subscriptions fund ongoing improvement.
45:43
The whole point of SAS is an R&D, right?
45:46
The point of. SAS is a payment model.
45:48
No no no. This is my point.
45:50
SAS is a payment model, it has nothing to do with features.
45:54
OK. Like I pay on an on.
45:57
I pay on an ongoing basis instead of upfront and it is
46:01
like a benefit to the buyer that they can pay ongoing instead of
46:06
upfront because it spreads the cost over time and the risk is
46:10
taken entirely by the SAS company.
46:13
Like that's that's why most SAS companies have to pull like many
46:16
SAS companies. Not most right like 4 play you
46:18
guys bootstrap, but many SAS companies, the reason why they
46:21
raise capital is is precisely because SAS is a payment
46:25
mechanism right? And so you have to fund it
46:30
upfront. I can't.
46:33
I don't understand what you mean by.
46:35
It has nothing to do with features, right?
46:38
Like how can? Like, let me give you a good
46:45
example. You are going to add, you're
46:47
going to add like a feed management tool, right?
46:52
And you're choosing like you could choose to price it like
46:55
Zach is saying, right? And or a customer can just like
46:59
go buy from someone else, right? Like a feed on omics or
47:02
whatever, what whatever these other tools are called.
47:06
So what I'm trying to say is that the fact that there's an
47:10
ongoing price has nothing to do with whether or not you are
47:14
adding that as a feature. Like those two, those two things
47:18
are, are, are separate, right? Like like this take would imply,
47:26
like, hey, that thing should just be included because I'm
47:28
already paying for this other thing.
47:30
Like that's what I mean by they're, they're unrelated.
47:33
Like SAS, SAS is a payment mechanism.
47:36
Now, if we, if there's like a value problem, that's just a
47:39
business problem, no matter how the payment mechanism is, is, is
47:43
structured, right? Which also I agree with, by the
47:48
way, Dan, like, I, I also agree with that point that like a way
47:53
to fix the value exchange problem is to add new features,
47:56
right? You can also reduce the price,
47:59
right? That I don't know that that
48:01
would have worked in your particular case, that I'm just
48:04
saying that like, yeah, I, I, I, I think, I think that there is
48:08
like a, which is why we are doing this, which is why I like
48:10
this podcast. Honestly, it's like, I think
48:13
like I hope more and more people listen to it because I think
48:18
there's just a lot of like fallacies that people hold about
48:23
like the business of SAS, which is like, it turns out it's just
48:27
like any other business, you know what I mean?
48:30
Like it's, it's like not special.
48:33
Right. I can see the wheels are
48:35
turning. What do you think?
48:37
Do you think that customers subscribers are owed access to
48:40
new features? No.
48:42
You're not owed anything because the contract that you signed up
48:46
for it last month, you knew what the features were and then it
48:49
changed. And so like, this is silly.
48:52
I get what he's saying sometimes, but you were already
48:58
happy paying the previous price without that feature.
49:01
I mean, I think if you're a SAS company that doesn't do this
49:04
well, then like meaning, oh, you're like nickel and diming
49:10
people and that's just like running the motion poorly.
49:14
But like generally what you should be doing is trying to
49:16
build a new product and get more money like and like you won't
49:20
get the money if it doesn't provide value.
49:23
So like it doesn't really matter.
49:25
Like I think this is a guy that just saw his Amex bill and got a
49:28
little butt hurt or something. I think this is charged.
49:30
Yeah, I think he's he's not happy with the features being
49:34
locked. I do want to say real quick, one
49:37
thing that I thought was really interesting, and this is more
49:41
applies to you, Zach, than than to, I guess, like me and Rashad,
49:45
but someone who's doing really interesting pricing
49:47
experimentation constantly that I've been creeping on is Chase
49:50
Moseni with Creative OS. Every week when you open his
49:54
site and his pricing page, there's always some crazy neat
49:56
shit going on. He's always testing like very
49:59
interesting offers and he has a lifetime offer going right now.
50:02
I've just been like opening his page and going back to say like
50:05
what experiments is Chase running right now?
50:07
It's really interesting. He thinks a lot about pricing
50:10
and I'm just looking like look at his plans are always changing
50:13
and I just you guys should have him on and talk about the space
50:16
pricing experiments as the next one.
50:19
Potentially, I think experimentation's good, but like
50:25
maybe focus on product. Generally.
50:34
Damn. Oh.
50:35
My God, dude, that has to be the end.
50:38
That was a perfect ending to this podcast.
50:40
That was the perfect ending. Oh, my God.
50:45
All right, Dad, you did us. A song I didn't know.
50:47
Are you guys competitive? Are you guys competitive?
50:50
Is that? Wait, was that?
50:51
No, I don't. I don't.
50:52
I mean, I don't think so. No, they're friends.
50:56
They're friends. Yeah, no.
50:57
Friend, friend, friend. But like I mean by my general,
51:00
like I mean we're running our first, we're not even running a
51:02
pricing experiment. We're just literally after we
51:05
get up this call, I'm getting on a dev call and we're going to
51:07
try credit card upfront for free trial.
51:10
That's our big change that's coming.
51:11
So we'll see, maybe by next week I'll I'll have a Lamborghini in
51:15
the back so. This is great.
51:20
This is great. I got to jump.
51:21
Thank you guys for having me. This is a full jam.
51:23
This is a very good hang. All right.
51:26
See you guys. Bye.
51:26
See you guys.