Drip

“Marketing automation is a multi, many, many billion dollar opportunity, and the landing page market is not. It's a very small market.”

“I'm going to assume they're going to go high end with an enterprise sales team and run that playbook, and now they have the money to do it, and they didn't need to sell any equity in it.”

“If I were still running Drip today, I would take a long, deep, hard look at any type of marketing or sales efforts we were doing, and I would be cutting earlier rather than later.”

“I remember with Drip, we were like, oh, they're, everyone's comparing us to MailChimp and Aweber, and they have a free plan, and 15 dollars a month, and 19, and then the moment where it was like, wait, Why don't we try to position ourselves against Infusionsof…”

“I knew that 30% of our new users came from integrations.”

“I had 17 email threads going with founders saying, hey, if we build this, would you pay this much for it? Got about 10 or 11 people said, yes, I would at least try it out.”

“To watch you get to 10 K and MRR in like 60 days really showed the power of an audience, you know, and we still see that these days.”

“It took us from November of 2013 till about, it started changing in May, but it really peaked in terms of Like churn just plummeted, trial to pay, like doubled, just every sign of product market fit you can imagine happened in like a 90 day span from May to Au…”

“And so stage three, I have as a product market fit and the numbers that I wrote down, and this is starting to be from memory. So you got to give it a little fuzzy around the edges, but this from about 12 K MRR up to about 25 K MRR. And that was me and two W tw…”

“You limit your option set when you take money early. So I, I've always thought about that, and what we've always looked at is how do we raise just enough to get going, but to then keep those relatively low acquisition offers in play, because it's just much mor…”

“Having a small win early on and getting to some money that is in your bank account where you can then take bigger risks. Like I'm now in the position where I can just take bigger risks and I can grow a tiny seed, which is not going to really pay me much of any…”

“Never raised funding. I was pulling some money off a hit tail for a while, but at a certain point drip was totally sustainable.”

“I felt like with Drip, Derek and I, like we made, he made some, like a lot of great engineering decisions and he wrote really good scalable code, but we just, we kept outpacing it and we would have to every four to six months go back and do this and upgrade th…”

“That was the stuff we did for the first several years was like all the caching and all the, Grouping queries, and we had read replicas of our, of the database, but it was purely write load on a single data store. You have this Postgres database with 30,000 que…”

“This was a really hard thing for me during the drip acquisition process that took 13 months and was for five months was like 30 hours a week for me.”

“The only way to get around this, or to figure out how to get more You know, more value based pricing is to not just have it be number of subscribers. It's to introduce feature gating, right? Where, well, I know the agency wants an integration with some Salesfo…”

“What I did with Drip was I went out and pre-validated that at least a few people would be willing to pay, at the time it was, I said, a hundred dollars a month, it actually wound up being 50 dollars a month for what I had in mind to build at Drip... And I did …”

“And we use Zoom for video chat and voice chat. And we have for, well, I mean, I used it. We switched to it in 2014, probably with Drip.”

“You know that that was a driver in the Drip days, because we had the widget, the Powered by Drip. You know that that was a driver in Calendly's growth.”

“NET Invoice was a big reason I could then buy Hittail years later, and Hittail revenue, net profit was a huge reason that, that I could start Drip.”

“Is this app complicated and is going to need 24 seven support and it has a lot of moving parts and it's going to be hard to scale and there's going to be performance stuff and there's a lot of things moving around. I think of like an analytics app or like, you…”

“It wasn't until we got the blueprints built that people, and you could just one click import, you know, a blueprint that we really started getting the mid-level and the lower end marketers.”

“By the time we sold Drip, I believe between Sherry and my retirement accounts, we had about 300,000 dollars, which I was late thirties, is that right? Eh, I might have been early forties.”

“We were about, I'm trying to think, we were a few months after launch, and we had grown to eight, 10 K a month, and we just were churning everybody out.”

“Andy responded to every support request for the first like three and a half years of Drip's life. I think it was three and a half. Maybe it was two and a half. Every single frontline support was just one guy, Andy”

“I did stop, I will admit, at the worst times of Drip, when it was growing fast and we had cash crunches, I stopped contributing to retirement. My bet was that Drip would make enough money in the end, whether through an acquisition or whether through throwing o…”

“But if I'm personally, I'm going to spend years building a drip, a seven figure, an eight figure app, I do believe that you have to care about that problem. Or care about that solution or care about that customer base. There has to be something drawing you in …”

“One of the advantages of bootstrapping drip in Fresno, California is that we could hire developers for about a third of the price as the Bay Area, and it was about a three hour drive to the Bay Area.”

“In fact, with drip, we'd print a hundred t-shirts at a time. And I believe the cost, I went directly to this printer that I had a good relationship with, and it was like high quality print, high quality shirt, seven bucks, eight bucks a piece. And then we had …”

“You had founded a little side project called CodeTree that you built up to, if I recall, it was about four K MRR and we talked on this podcast about how you sold it for 128,000 dollars right around the time we Sold drip as well.”

“You know, you want to talk about regrets, it's not selling drip, it's staying working a full-time job too long, or it's not doubling down on things and taking bigger bets with different amounts of money that I had at the time.”

“From the time you broke ground on code until we sold it was three and a half years. And from the time we really finished the slow launch till we sold it was two and a half.”

“And even, even drip, which seemed really fast, was from the time we broke ground on code, was three and a half years. And that was three and a half years to sail, you know, to exit.”

“We chose to sell to Leadpages rather than some other interested acquirers because I did trust that they were going to treat us well. And they did. And it wasn't based on any of the gotcha numbers, right? There were, there was no like revenue. There were no mil…”

“I looked around and I realized, hey, I don't want to build stuff from scratch because it just takes too long, so I have the means, I'm going to acquire something. And I actually got in a conversation with the owner of the second largest website for tabletop ga…”

“As we were building Drip early days, it was going to be a nice little, I wanted it to do 40, 50, 60 K a month. I wanted it to be this amazing lifestyle business that threw off a bunch of cash”

“I have not had the itch to launch production software since we sold drip.”

“With me, it was a drip price increase with, You know, no grandfathering that happened very quickly, and again, I was not involved anymore, and I sat and kind of watched the debacle unfold.”

“AppSumo deals are good for your app. If it's relatively low support, there's not a ton of onboarding, you don't expect it, you know, it's not complicated. Like I imagine doing an AppSumo deal with Drip and that would be a nightmare, right? Because it's just a …”

“Another way is to go into a large space with a hated competitor. So that's what we did with Drip going against Infusionsoft. Xero did this against QuickBooks. Stripe did this against every payment gateway ever. I would say that's probably more of a step three …”

“The other thing that I used to do, cause I don't like sales. I don't like sales calls, But I've done them when I needed to, especially in the early days of Drip. I did some for Hytale too, but especially in the early days of Drip, I would get on the call and I…”

“I think we were a little undercapitalized, like I would have, I should have raised an angel round, I would not have raised venture capital, I have no desire to go on that treadmill, but I probably could have raised 300 to 500 grand pretty early on, and at a go…”

“When I sold drip, I was like, have some money to play around with. Like, I don't buy individual stocks. I tend to be, I buy assets, you know, I buy like index funds and stuff. I'm going to throw like two percent, maybe three percent of our net worth into crypt…”

“And so we had 35 tier one integrations by the time we were, you know, year and a half, two years into drip.”

“So we obviously had the really wide funnel on the lower end starting at 49. I think even better, I mean, you know, if we had been able to have like a 19 dollar plan, That would have been cool. And then we had folks in the 500 to, I forget what the top end was …”

“And when we were acquired by Leadpages, which was a 170 people at the time, they had all of this figured out. And that is actually like one of the advantages, I think, of seeing both sides You know, basically working in a venture-funded company, they had thirt…”

“Back with Drip, we had a Powered by Drip link in our email capture widget that people could put on their site, and our lowest plan was 49, and that included the link, you couldn't shut it off, and at the 99 plan, you got whatever it was, double the subscribers…”

“Derek and I would sit down and, you know, then the rest of the product team, as we expanded, we whiteboarded the out of things. We whiteboarded Everything. And that's the equivalent, right? That was our hand sketching.”

“And frankly, probably would be, you know, at this point, if I was still running it would, you know, be in, in the eight figures, which obviously it is now with the new owners.”

“One of the reasons I started TinySeed is I wanted this fund to exist for me, because during the drip years, we needed money and we were doing all types of crazy stuff to cut costs. And it was super stressful. And I wanted to really quickly raise A couple hundr…”

“After the drip acquisition, he has enough money that he could basically angel fund himself, right? But he took tiny seed money back in batch one.”

“Drip had, when we sold it, Drip had net negative churn more months than it didn't.”

“When we were considering selling Drip, we were getting inbound interest. I think we had five inbound over the course of about 18 months.”

“Post acquisition, when the company grew from the 10 we were at during acquisition up to a hundred and, I don't know, a hundred, a 120. By the time that, that I left, we had a monitor with all our key performance indicators of the company.”

“Hittay was doing close to 400,000 dollars a year in, in annual recurring revenue with very little expense. So all of it was going essentially to my bottom line. And I was using that to fund drip.”

“Perhaps my biggest, it's not a regret per se, but one of the things that I would have done differently looking back building Drip Is I kept toying with the idea of raising a small round at two 50 to 500 K one time round just to do what you're saying, which is …”

“And then I got Hittail up to about between 20 and, well, it was about almost 30 grand a month, and then when I was thinking about selling it, because Drip was taking off, one of the developers I'd hired to work on Drip, we were Ruby on Rails stack, I had him r…”

“Drip had a 3400 person launch list before we launched, and that was because I was talking about it far and wide on this podcast, on every podcast interview that I was doing around that time, I was running ads to it, and we didn't have a product, right?”

“Competition doesn't matter. In my opinion, when you're talking about the beginning of seeding something, I mean, look at you and drip. I mean, you went into a space that had an insane amount of competition and you just executed and executed and all of a sudden…”

“To build Drip today, years of development as a solo developer, that you cannot get anyone to sign up. So that, those are amazing markets if you have funding or if you have, you know, multiple people working on it.”

“We did early access with Drip, and people paid for early access. They weren't given lifetime free use of the product. They weren't even given, you know, a discount. They weren't given a year free. We didn't offer any of that.”

“I know today you could not build drip with no code. It's just, it was a big complex app. It required custom code basically to do it.”

“I've talked on this podcast and elsewhere about how my biggest regrets around building and selling drip Was never what I did, but it's how I felt while I was doing it.”

“The basic piece of how to avoid login sharing is usually that if two people log in from the same company, they need to see something different. Right? In order to charge by seat. So if you think about logging into a CRM like Salesforce or Close or even like Tr…”

“With Drip, I got 11 yeses. With WP Engine, Jason Cohen got 40 yeses before he started coding.”

“My first hire that was not a developer was a customer success manager, and she dramatically improved The number of people who not only converted to customers, but who got onboarded and stuck around because the price points were worth it.”

“As we were building, I'm going to use drip as an example, even though it's older because I did exactly this. We were undifferentiated and we were plateaued. We did not have strong product market fit.”

“And in fact, once we started implementing sales demos, we either doubled or tripled, I forget the number, but we doubled or tripled our conversion rate on drip sales demos versus people who were just signing up by themselves.”

“With Drip, we would take a customer's ebook or a series of blog posts and we would turn them into an email mini course. So it was copying, pasting, formatting, some things like that. And so I had essentially a support person who took that over and would build …”

“I talked to 17 people. I got 11 yeses. For me, the tipping point was at 10.”

“Answering questions on Quora, which is something I did in the early days of Hittail, in the early days of Drip, and even a little bit in the early days of TinySeed, and I did that myself.”

“With Drip we had 3400 people on an email list, and I think I started doing it in, I think the first launch was to 300, and then we did another 300, and I realized we could totally handle it, so then we went up to like four or 500, and I believe by the end we w…”

“So when we were growing Drip, people would Say, do you have split testing? Because we need to split test everything, and eventually we built split testing and one percent of our users used it, but everyone thought they wanted it.”

“With Drip, we did do a Drip two point O launch because the one point O launch happened in say November of 2013. And we peaked at eight or 9000 MRR and then plateaued because to your point, our pricing wasn't figured out. Our features were not there. We didn't …”

“That was our visual workflow builder in Drip, and it solved literally 50 feature requests that had come through, you know, in the span of a year.”

“Your customers will come to you with feature ideas. Don't build those features. Dig in and find out what is the job that feature is trying to accomplish.”

“Dude, I even remember, so Leadpages acquired Drip, they had a 170 employees, and I remember getting in there, and they were, they had Leadpages, and they had Center, which was this product they were trying to get off the ground, and some people there kept sayi…”

“So in the early days of drip before we launched, I had 3400 people on an email list.”

“There were some folks charging like 10 grand to migrate and, you know, get your stuff set up on Drip.”

“And so I would just be pretty honest with them and be a human upfront about this is who I am and this is the goal of the call rather than trying to talk them into it or trying to act like someone that I wasn't, right? I didn't try to channel some fake extrover…”

“But the reality is, I mean, in the final days of Drip, when I was there, we're doing tens of millions a year in revenue. Team is 125 people or so. We were getting close to, I think it was about one 75, 200 feature requests per month.”

“Even again, when we left Drip, it was doing tens of millions a year with tens of thousands of customers.”

“In the early days, getting a Loom or equivalent recorded for your support or for your KB is way faster to do. Over time, it is essentially a type of debt, video debt, documentation debt, because we did that with Drip in the early days, right? Instead of writin…”

“We were literally losing deals over just that, and they were significant deals, they were hundreds of dollars a month, obviously thousands of dollars in ACV, at a time when we were, I think we built it when we were a 20 to 30 K MRR, And I knew that there were…”

“Like, I was, I already had some experience, I had a lot of marketing, I had a lot of sales, self-funded, a 150 to 200 grand in cash to get us there.”

“Drip was, what, the 300th email marketing application, and our competitors who, like, I think VentureBeat did a top 10 Marketing automation providers, maybe it was like top 15, and we were number, I honestly forget the number, like 10 or 11, and everyone ahead…”

“Even with Drip, I talked about it being a 50 dollar starting price point. Most of our growth, especially as we got later, were folks paying us between 500 and 2000 dollars a month. It was the big lists that made, that moved the needle for us, and that's the pa…”

“With Drip, I was spending a non-inconsequential amount of money, maybe a thousand a month, maybe more on Facebook ads.”

“My last SAS drip, we had 12 customer, full-time customer support people by the time we had, I think it was 30 or 40,000 free users.”

“15% of our customer base was e-com, and we had never marketed to e-com.”

“I mean, the first product person we hired, we were doing several million in ARR and his salary was a 165,000.”

“This is one of the bigger mistakes that I made in the early days of Drip, is I hired really junior people, and it was, you know, I use the excuse that, well, this is all I have money for, and I want people to be local, and really, to be honest, in Fresno, Cali…”

“I believe we did this with Drip because we went from, we had three or four different email providers that we were using that were APIs that, that sent emails. And it would take us a matter of weeks to switch and we were sending hundreds of millions of emails a…”

“Drip actually launched with four different ICPs, and we actually narrowed over time.”

“I don't think there was a single Kind of traffic source, so to speak, that was more than 15% of our monthly trials, and so we had like, yeah, and it was all time, and I was running, I was like, dealing with Facebook ads, I was paying somebody to run those, we …”

“What we noticed was on the lower end, you know, if someone was going to pay us 50 dollars a month or a hundred dollars a month, those are our cheapest plans. It had to be product led. I was not, we weren't going to do a demo. We were, you know, there's just th…”

“When I sold Drip, I experienced a barrage of congratulations, while mentally, I was almost at my breaking point.”

“When we were building Drip, you know, I was about a 150 to 200,000 of my own money, and that got us to product market fit, and then no other money raised”

“The valuations for, like, almost no revenue were, like, ten million, and I did put, I put, like, five grand into one of those, and I put 10 grand into another, and all of them either went to zero or returned, one returned me 11 grand for my 10 grand investment…”

“The reason we did is because I saw the ESP market, and I was like, MailChimp, and HubSpot, and whoever else, you know, Infusionsoft, and everybody charged per contact or subscriber. That's probably the way to do it. And I was aware of net negative churn and al…”

“I call that false demand the curse of the audience. And if there's two curses to it, one, you tweet it out or you email your list and everyone's like, oh, I kind of want to check out what they're doing and everybody's really interested. And then they're not ac…”

“We did not even have a Shopify integration, and 15% of our customers were e-commerce.”

“When we launched our visual workflow builder that took Derek five months to build, that was an unlock, and we went from growing, From, let's say, three to 5000 MRR each month, up, it went up to 10 K a month.”

“And we found that we had a two to three X improvement of conversion for those instantly.”

“After we sold Drip, we sold it to Leadpages and they had a 40 person marketing team.”

“Like, Drip has more than 10 X'd since we sold it. In fact, it 10 X'd within probably two years, maybe three.”

“One of the reasons that we sold was I was like, how far can we take this before we plateau? I don't know. I mean, I could do some math on it, but it, and I saw that, and then I was like, how are we going to get past that plateau that is coming? It wasn't month…”

“And as we launched Drip, I overextended myself Financially, because I believed that I could find it just right off the bat. I was going to launch right into product market fit.”

“Even if you hear the story of Drip, how I sent out 17 emails and I got 11 yeses.”

“We were growing two grand of MRR per month, and then five grand of MRR per month, and then 10 grand of MRR per month, and we hit seven figures, and we were doing well”

“People have asked me, like, do you ever regret selling drip? And I've never had a day where I regretted, but I do regret the way that I operated during those years, and the way I let my own mental health deteriorate”

“So I bet 11,000 dollars on .NET Invoice in oh five, oh six, It was a tremendous bet. It was a money I had just painstakingly worked hard to save nights and weekends. Then I bet 30,035 thousand maybe with legal fees on Hittail in 2011. I bet 200,000 dollars bui…”

“Every time that I was doing more work than I wanted to be, it was always like, this is a season, this is not permanent. I don't know if this season is a month, or if it's five months, or six months. I never did it for a year straight like that. I did feel stre…”

“Lightweight marketing automation that doesn't suck was the H-one of DREP for years. So what does that imply? That implies, and then I named, because I wrote the whole copy for that long form landing page, I named Crap. Who was it? It was Infusionsoft. It was M…”

“We sold Drip. Part of it, I was unhappy with, you know, the fact that I was managing 10 people. I would have kept doing it. The other part is that we had a bunch of inbound interest, and then we got an offer that we kind of couldn't refuse.”

“This is exactly what happened with Drip in the early days, when all Drip was an email capture widget, and a email sequence, and that's all it did, and we were trying to charge 50 dollars a month for it, and people were like, I can cobble this together with oth…”

“Even with my audience of 20 or 30,000 at the time when we launched Drip, we got up to seven or 8000 MRR and then plateaued hard with high churn.”

“And our competitors, a lot of them were annual only, and, but Drip was super sticky, right? The churn was net negative, and so, you know, we didn't have this particular issue, and it allowed us to kind of outmaneuver and outcompete based on that pricing model,…”

“We applied and got rejected. They said it's too, they're like, it's too generic, you know, that Drip email is a thing that's existed for the prior art, is what they said.”

“With Drip, we were, what, 20% more than MailChimp, I think, 20 to 25%, and we were like, well, we were way cheaper than all the marketing automation, you know, Infusionsoft and such was like five, three to 500 and up. And we were like, 50 to a hundred.”

“Myself, zero. I was trying to remember if we did it at one point with Drip, and maybe you remember.”

“I think it took at least five or six months from the first line of code until it was in, you know, patient zero's hands, customer zero's hands.”

“At Drip, when we were bootstrapped, I was able to hire some of the best talent in town without paying them as much as they could get from other employers and keep those folks, like none of them left”

“Because we know you can build a CRUD app, we know you can build Basecamp, we know you can build Drip, we know you can build MailChimp, right? It might take you a while, These are certain things that will happen. There's no technology risk.”

“And at one point when we were building Drip and I wanted to talk to some Ex-sales people and marketing people from some competitors of ours who used to work at those competitors, I similarly contacted them via LinkedIn, said, I'd love to talk to you, and said,…”

“There's a certain amount of repetition and understanding and practice, and it can translate from app to app, but I don't think it, like, just because I was, yeah, Derek and I were good at product at Drip, I wouldn't be good at product at Simewell. I mean, it w…”

“It's not good, and I was Mr. Swoop in, and I was like, well, obviously I'm a founder, so I can solve all these problems, and it really burned me out, and as you said, it taught my team to just come to me with everything, and it was not good for growing the org…”

“And in fact, the profit that I get, the earnings I get from TinySeed are significantly less than I made when I was building Drip.”