Paddle

“At least in the current climate, he's finding in the data that just blunt price increases are not working great. And so it's better to think a little bit more strategically, maybe especially in this current season, about, like, how to segment your pricing, how…”

“On your pricing page, if you express it in the localized currency, he has seen a nice conversion rate lift.”

“What we've seen here is that growth is very much flatlined in, in the past couple months especially.”

“When you look at it from a B to B perspective this trend also continues mostly in the form of churn. So this chart's a little busy, but basically churn is up a whole point and a half relative to two and a half years ago.”

“Over the last five years. Average competitors in a given industry in SaaS is up 1515, 16 X.”

“So at Paddle, for instance, we were selling to every SaaS company. We've stopped doing that. We are selling to only a very small subsection of the market right now, and we're basically saying no to everybody else.”

“What we see when we look at this across the 40,000 companies in our portfolio is that the highest performing ones, 20% of their revenue or more is from their existing customer base. Unfortunately, most the vast majority have zero or negative.”

“Adding multiple currencies, companies that do that grow 12% faster. Those that have a lot of currencies, 25 plus, grow 25% faster.”

“In Germany, most people like to use PayPal to buy software. Kind of blew my mind when I learned that, but 60% of our transactions from Germany are done via PayPal.”

“Companies that are, quote, tax inclusive, meaning they're just adding tax to their price, instead of showing it as a different line item, grow at 15% slower rates.”

“We recommend you change your prices once a quarter.”

“Often it's like around 40% of total churn, and folks tend not to think about it.”

“Doing something as simple as that, as prompting them to think about the positive we've seen can reduce churn by 10 to 25%.”

“The buying experience is what we're normally thinking about and that does matter. And we see, like, we've seen rates vary as much as 10% up to 50% on a checkout.”

“We look at this all the time with our customers, and we'll see folks missing out, both on the initial attempted payment, and then on subsequent attempted payments. Yeah, upwards of, like, 10% of their revenue, 15% of their revenue.”

“And we basically saw that you know, growth in the B to C market basically flatlined starting late last year.”

“And what's interesting is that, you know, starting, say July, August last year, we actually started to see Growth slow down a lot in the B to B space.”

“And inevitably, we hear that people are spending almost all the time on that sales and marketing stuff, especially at the founder stage, right? Spending almost all their time, they mostly guest on their pricing work, and they're not really working to gather da…”

“We gather data on what they're spending time on, and we basically found that you know, there's way more impact on spending a bit more time on monetization, a bit more time on retention, compared to spending time on acquisition.”

“You probably have a persona that looks like this, very qualitative, what is this person's age, their firmographics, what you know, their seniority, stuff like that, I'm sure all of you probably have something that's at this level, but it's not enough. And the …”

“There's a lot of customers that you can probably technically service, but they're gonna distract you, they're not in your core focus, the unit economics isn't there, so a lot of the time, you know, you might have personas that you can technically serve, but th…”

“We do, in fact, recommend, you know, changing prices relatively often, and not making the same once in a generation thing.”

“Number one is, relate to the value delivered, not internal factors. Don't say, I gotta protect my margins. Say, hey, I know this hurts for you guys, but this is gonna help us fund improvement of our products, and we have this stuff coming on that's gonna incre…”

“Paddle's raised three hundred million dollars in funding largely because they need to figure out how to do all this on behalf of their customer base.”

“If a customer looks at their bank statement, And you are buying a product from a company that uses a third party merchant of record. They're not going to see the company's name on their bank statement. They're going to see paddle, or they're going to see gum r…”

“Patrick Campbell, The former founder and CEO of ProfitWell, now the chief strategy officer for Paddle, is going to be telling his story. The story of bootstrapping ProfitWell and growing it to a exit that's north of two hundred million dollars.”

“It wasn't really until they hired a dedicated US team, so they were UK based and selling globally from the UK for a long time. It wasn't until they had a team completely dedicated to the US that the US really, really started to take off.”

“They had one huge whale customer. They're called Mac Paw. And Mac Paw kept growing themselves. So it was flattering their growth numbers.”

“They do a great job of offering some good survey services to figure out willingness to pay things like that, which a lot of folks take run with and use, but they don't really get into how do you implement this stuff?”

“We were a little non-specific, like over two hundred million. Cause also like we're continuing to work on a team. And so it's like, I don't know, there's some advantages in like being public. There's advantages in being opaque. We kind of chose translucent bas…”

“We're going to do for The subscription dollar, what Salesforce did for the customer record where a dollar through paddle is going to be worth, you know, a lot more coming out of paddle than using infrastructure that, you know, is currently on the market basica…”

“We monetize the transaction volume that flows through Paddle. We don't take a monthly fee. We don't take a minimum. We don't take a setup fee. We don't do any of that stuff. We only win when the customers win. So we monetize the payments that are coming throug…”

“Five percent and 50 cents is the kind of publicly available pricing. If you kind of self-serve sign up on the website, obviously there is a whole spectrum of customers. If you're doing a hundred million dollars a year, sort of the pricing does go down. If your…”

“So sort of pre paddle, I built a software company. And I really ran headfirst into the problem that we try and solve, scaled it to three to five million in ARR sort of, and ran into this problem where we were, we had a few 100,000 kind of people using these pr…”

“Tax is completely taken care of. Like, not like, Hey, we show you how much tax it's like, no, no, no. It's completely taken care of. Like if your tax gets messed up, we go to jail. Like you don't go to jail. We go to jail because we're the ones that are actual…”

“I was probably 15 ish, 15, 16.”

“It was probably because it was like in little chunks. As we kind of like built this stuff, it was probably call it a hundred K sort of to begin with.”

“I think I don't even remember what the initial kind of equity split was. It was sort of like two thirds, one third or three quarters, one quarter or something like that.”

“We got from like zero to 400 and then went back down to about like 50. Because we lost like a customer that was like contributing like 350 K and error. And then we had to then rebuild from 50 kind of back up.”

“So like actually raising capital was the first thing that we did as a business. Like can I, and it kind of comes back to kind of Patrick's point earlier, and it wasn't the initial round of money round of kind of funding, which was just a seed round from like o…”

“It was really high. Like it was because it was a sort of a little bit of a COVID aberration. Because we were, we saw like the tailwinds of all of that. We at least doubled the business like kind of over that kind of period of time.”

“I think you should always be ready to like run a process. And that means like, even if you're bootstrapped, have a deck, have like an overview, like memo or a deck or whatever it is have like some of your financials or a data room. Like you don't have to have …”

“And we did get other offers. Those other offers, they were not as compelling from a team perspective. They might have been more lucrative depending on how you look at it, but it was one of those things where the core of us as well as like myself wanted to keep…”

“It was several, it was tens of millions, like lower.”

“Two months earlier and we might have raised it like a three and a half billion dollar valuation.”

“Two months later, I think the deal might not have happened like at all.”

“It was vast majority cash. Sort of, I actually think the number, if you include sort of like, we rounded it to like a whole number, but the actual number, including the debt was pretty like substantially north of two hundred million.”

“The step for us between do we do this for SAS business and do we do it for a game is sort of fairly short versus the step of like, do you do it for SAS business? Do you, versus do you do it for Glossier or like kind of like one of these sort of D to C e-commer…”

“We're using Puddle, and now I'm in the dashboard, and I can see last month, we got expansion of expansion of RR of 400, and churn 400, so that was very even. This month, expansion of RR of 300, and churn of 100. So it's like, and then the previous month, which…”

“So we charge a flat five percent across everything.”

“We pay their taxes for them sort of like calculate and pay and remit sales taxes in 40 something different countries.”

“No, so, like, right now, and this is deliberate, the largest probably does, I think, in the region of, like, forty-five million ARR.”

“It's less than five hundred million.”

“We actually think that there is an opportunity for somebody to build kind of this almost sort of like the second most important piece of infrastructure that software company buys, which is sort of like the business infrastructure to AWS's technical infrastruct…”

“It's probably 20, 25% of new business is inbound versus the rest outbound today.”

“So revenue churn is actually, so we see on average, if we aggregate all of the customers, we see about 25 to 35% growth in underlying business each year.”

“If we look at logo churn, we have Sort of 900 customers today. And like we've lost in terms of actual churn eight customers in seven years.”

“We're just north of like ten million.”

“We don't charge professional services. We don't do any of that stuff.”

“We've roughly three X revenue every year.”