Episode Transcript
Speaker 0 00:00 <inaudible>
Speaker 1 00:03 <inaudible>
Speaker 2 00:08 come to the breakout growth podcast where Sean Ellis interviews leaders from the world's fastest growing companies to get to the heart of what's really driving their growth. And now here's your host, Sean Ellis.
Speaker 3 00:23 This episode I'm speaking with the founder and CEO of teachable anchored nog Paul. So teachable is a SAS platform and it's disrupting the online education space. Anchor shares his journey from the grit driven growth of the early days to what is now a pretty large education platform. They have over one point $5 million in monthly recurring revenue in addition to significant revenue from transaction fees. Team's grown to over a hundred employees and they're continuing to push for about a hundred percent annualized growth rate. So let's get started.
Speaker 3 01:04 Hey Yonker, welcome to the breakout growth podcast. Hey man, I'm super glad to be here. Yeah, I as you know, I've been offering a course using teachable for, for quite a few years now. And so yeah, it's exciting to finally be able to get you on here to tell your story and, um, and hopefully the rest of us can learn from what you've done to drive the growth that you have. Yeah, absolutely. I'm excited to share, you know, um, all our strategies and frankly lessons. So. Perfect. Um, so before we really jump into all of that, like the, the meaty good stuff, why don't we start with just what teachable is and you know, what problem that solves? Yeah, absolutely. Is a teachable, it's an online platform that helps creators monetize their expertise and their knowledge by selling information. Today it's primarily online courses, but in the future we imagine a world where more people, entrepreneurs selling their knowledge than selling physical products.
Speaker 3 01:55 And that's, that's why we are here. Yeah. Well, I'm, I'm certainly a knowledge seller, so I, uh, I, I definitely understand that. So, um, when you guys started the business, I actually worked on a couple of online education businesses in my past in, in relatively short roles. And I went into it really idealistic. It's like, Oh, I've, I've had all this success and now I want to give back to the world. And, and I really kinda just hit my head against the wall. And I don't think either of them did as well as I expected them to. So I know it's a, it's a tough space. What was it when you went into it that you felt like there was kind of an unmet need or you could do something unique and, yeah, absolutely. I mean, one thing is we never quite were as intentional about starting an online education company. I know that sounds strange, but I knew I wanted to start a business and this was just a side project that kept getting bigger and broader. And before we knew it, it was an online education company. So I started out, I'd recently moved to New York. I was 24 years old at the time. I had no idea what I wanted to do. Anyone want to start a business, but I didn't know what on. And I spent that time teaching a little bit about growth actually on
Speaker 4 03:00 you, on you, to me on at general assembly here in New York city. And as I did that, you know, sometimes you do one thing and you're like, wouldn't it be cool if I could also do this other thing? And that's how it started. I, you know, my, you to me course I had my partner out at the time. I was like, wouldn't it be cool if we could just sell this course without needing you to me, keep all the money, have full ownership over our audience and actually build a larger business? And he's like, yeah, but we all like, let's give that a shot. So initially I built the first version of what became teachable for Conrad as a first customer. And before you know it, you know, it worked pretty well. I think we had launched it a couple of thousand dollars, which at the time was massive.
Speaker 4 03:38 Um, and then I was like, if it works for Conrad, there's probably other you to meet creators out there that would find this useful. Um, and then started cold calling them. And probably the first six months it was this weird side project that kept getting more and more interesting. And about six months in I realized this could be, you know, a real business. Uh, and then did the whole Silicon Valley fundraising thing and now here we are five and a half years later. When did it kind of move from that side business? Like what, what was it that you saw signal wise that said that were where you said, okay, this thing could be real? Like, do you remember the specifics of what you were seeing? I am frankly should have done sooner because for the longest time I, you know, didn't, I was like, ah, you'll probably die out.
Speaker 4 04:16 Um, but the tipping point for us, at which point I decided to raise money was about $5,000 a month in revenue, which was men again, that was our revenue. We probably do about 40, $45,000 a month in sales. And at that point we were like, okay, this, this is ready. This in my mind as a venture backable business. Um, went to San Francisco. Um, and you know, I think our pitch at the time was Shopify for courses, did not realize quite how big shop I would be. It's pretty good pitch. Yeah. Um, but yeah, it was a, it was, it worked out really well. Our first investors, actually someone, you know, Matt Brazina, if I saw it, I think Matt was the one who originally introduced us. Yup. Yup, yup. So, um, so yeah, the whole thing. I mean, the whole thing worked out far above my expectations and you know, it was a small side project.
Speaker 4 04:58 Now we employ 120 people and help 25,000 creators earn probably over, over $1 million every day this year. Oh, that's awesome. And then I know that you, um, you know, before even starting the company and before you were doing the education stuff on, on some of these other platforms, you actually had a growth background or you were growing apps. So, um, how, how useful were, were some of the skills that you got in, in kind of building these Facebook apps and growing some, some pretty big audiences on Facebook apps as you moved into trying to grow this? This was incredibly useful in the first year, a year or two onwards. So much of it just comes down to like building a really good product, product market fit and like kind of the unsexy or parts of growth while Facebook applications are all about just like rapid, expensive acquisition.
Speaker 4 05:45 And while you know, some of those skills helped. Um, and there are a couple of cool growth type things that we did because of that mindset. Like one of the things that comes to mind is early on we built this really cool cause we had a big problem activating cause it took a long time to upload all your content. Um, we built something where people could enter their yummy credentials and it, it could pull all of their, you to me courses in under 30 seconds. So all of a sudden they had, they had this website ready to go. So that was one of the, you know, very, even though, you know, I don't like the word growth hacking, it's one of those, you know, the stories you hear of like a smart things companies did to solve the problems. So there was some of that, but at the end of the day, like all those things helped, none of them, none of them are that reason. Um, this succeeded, this succeeded because ultimately it's a product that resonated with people. Um, and you know, it was the right place at the right time.
Speaker 3 06:33 Yeah. But I think, I think even what you just said about this kind of course importer from, from you to me, you were, uh, the reason that you even wanted to start this was that you didn't like the economics of you to me, where they were taking a big chunk of your, of your income. You had the, they, they had their branding all over it. And so there's a
Speaker 4 06:52 ownership was the part that annoyed me the most. Like you, I never got an email address off my customer. So you'd have me own the a, the lifetime value, not me. And that was probably the biggest thing. Eventually I might've been able to get past all the other stuff, but if I acquire a customer and that customer is then you to me is not going to shared customer. You can't build a business on that.
Speaker 3 07:11 I think that's where it's really interesting that you, you knew you had a pretty strong pitch against you to me because that was, that was sort of your inspiration for starting it and then being able to have a seamless way to transition your content over. Uh, I think those two are probably the biggest gripe that someone would have in making the switches. Oh man, I've got everything there. And so addressing that, uh, w would definitely help get that ball rolling for you guys.
Speaker 4 07:34 Yup, absolutely. I definitely, definitely helped a lot in the early days, but similarly there were other, you know, typical growth type things. We tried that like I thought were great ideas. Like, and would have been great ideas in the Facebook app days but just didn't quite pan out. Like if we acquired the wrong customers for instance. And a lot of that has sort of been a learning experience over the last five and a half years where it's not just about acquiring as many people at the top of the funnel but actually finding qualified people.
Speaker 3 07:57 Right. But it also seems like there, there was a lot of grit and hustle. Like I, I do remember, um, Matt when he, when he introduced us and it was, it was at a time where I was thinking about starting a course and, you know, just the fact that I'm talking directly with the, the CEO of the company in terms of how, how can we get you to set up on teachable? Like that's that that shows that you weren't just,
Speaker 4 08:18 Oh yeah, we did. We did. We did every like do things you don't scale type thing. I mean, I sold a member, our second customer, um, centers all his videos in a flash drive and I had to spend four days manually uploading it. Um, and we didn't have a backend at the time. There was no backend. The backend was me entering numbers in a database. So, yeah, there's, there's a lot of, a lot of those kinds of stories of just, you know, really, really pushing and doing, just not, I won't say dumb and unscalable things that, you know, didn't make sense, wouldn't make sense now, but absolutely like helped in the early days.
Speaker 3 08:48 Yeah. Where you could have, you could have spun your wheels for a long time trying to set up the perfect system and it's kind of a ghost town at least least this way. You had kind of that validation every step of the way. And then setting up an importer, for example, is a addressing some of your own challenges of manually doing all that work. Um, so clearly the growth is that your approach to growth, I assume has changed quite a bit. But I know I read an article in Forbes, uh, from, from a couple of years ago that just laid out some incredible revenue numbers on the business at that point. And I know you've raised a lot sense then. What kind of numbers can you share on the business now in terms of what growth has looked like over the years?
Speaker 4 09:25 Yeah, absolutely. Um, so right now, I mean there's basically two, well, I mean in general as we're a business in front of grow revenue, but there's two sort of sub revenue categories we care about. One is our MRR, which is our monthly recurring revenue. It's what our creators pay us every single month. It's a standard SAS business. Our average creators pass about $65 a creator a month. And right now we have close to 25,000 fan creators. So about one and a half million in MRR. We actually hit one and half million a couple of days ago. Um, and that part of the business is obviously where we make most of our money. Um, it's, it, it used to double year over year. It's slowed down a little bit now just cause you know, the actual numbers are so high. Um, but it's still growing at a very, very healthy clip. Outside of that, we now make reasonable amount of money on payments, um, which is again, straight out of the Shopify playbook where you start processing lots of transactions on behalf of people and then you can start sort of, you know, pushing down credit card processors and stuff on fees, um, and make interesting margins on it.
Speaker 4 10:25 So last month for instance, on about, on about $25 million or so in monthly sales, we made close to $800,000 in payments revenue. So, so that's roughly a 27, $28 million run rate as a business drawing, let's call it, you know, 70, 80% year over year. Wow.
Speaker 3 10:44 And so w how did you decide to be so open with the numbers? I mean, that's, I love that you are, but there's not a ton of people that are, what's any, any, uh, anything that kind of you, uh, you thought, Oh, this is what we're trying to achieve by being pretty open.
Speaker 4 10:58 It was never an, it always started out because we had very strong transparency internally. Like, that was the first thing, just because, you know, when you started, you're a small team, you want to get everyone excited, but then just started realizing that when you kept things transparent, one you gained trust easily. Like, you know, like, like when you're transparent and open, it's easy for people to trust you too. It's so much easier to not have to remember who gets to know what information. Um, and I don't know, I'm not worried about competition. I think all of that stuff is overblown and this is the kind of thing where I think you put it out in the universe, like, you know, you get the energy back. So, um, I've, it's something we've, we've always done with that said, we're still somewhat strategic about it. Like some companies have gone, you know, with a, you can look up our MRR anytime where we still choose when we speak about our revenue and other things that, you know, still still allow us. It's still like, you know, am I like 95% transparency level or so,
Speaker 3 11:49 right. You got to hold something back a little bit, but I mean 95% would be put you in probably the <inaudible>. We're just, we're just practicing being a public company a little bit early, so that's awesome. So what, um, how, how has it cha clearly like it's the hustle and grit of the early days. I think I saw that you've got like, you know, well over a hundred employees now. Um, clearly, clearly it's a very different company from those early days. So what, what are you guys doing in terms of, uh, just, just generally, like how, how is your approach to growth changed? And then just, I've, I've, I've got other questions about managing a team and, and keeping that, that, uh, kind of startup mentality, but, well, let's, let's start with the first question of just how growth is. So to
Speaker 4 12:30 give a little bit of context, let me talk about how growth used to run for the first few years. Um, and I think what we did is there's downside store approach. But I would also say it's one of the biggest reasons we are successful, especially at all to a lot of other companies is we took growth really seriously. Like having a growth background myself. Like, you know, sometimes whatever background the founder has a kind of multiplies as a company value. Um, so we were very, very growth driven. Um, our head of growth for the longest time, Andy who came onboard, um, instituted sort of this formula we used every single month where we decided what we wanted to grow by. And in the early days it was like 30 to 40% month on month and we'd work backwards. We have this like super simple Excel spreadsheet of like, you know, how many days are in the month, how many upgrades your name, we're going to get a day, how much, you know, how much revenue, anything we're going to get from enterprise or whatever.
Speaker 4 13:22 And generally what would happen is we'd plot all this out and then we'd realize we want to grow, you know, 25% month over month. But all the things that are going to happen might only account for half of it. And then we had this like exercise to like try and find random things that could make up that difference. And a lot of our growth came from, you know, this sort of like manic discipline on how we hit these numbers and they'll get me wrong. We missed our numbers almost every time because our numbers are like super aggressive. But that exercise made us a company that did not leave growth to chance. We were very, very, very intentional about it every single month.
Speaker 3 13:57 I love that. It's uh, it's, it is, I've seen so many people who like, it's, it's easy to set an aggressive target, but if you don't, if you don't really try to calculate how you're going to get there and take your <inaudible> known and like, Oh, there's that big gap, we're going to have to figure that out.
Speaker 4 14:14 And as a result, we did a lot of things that, especially from an acquisition side, we were relatively unique at the time. Like we used webinars probably more than anyone at one point. We were doing like five webinars a week. We also used affiliates, which I guess can also be called referrals, but it's probably closer to an affiliate program and a referral program here because a lot of our customers are thought leaders themselves, like they intern of audiences and a lot of them have audiences that are other people that could be customers for us. So affiliates for instance, is a, you know, a channel where I think we have a competitive advantage relative to most of their brands. Um, so things like that we did that. Not many sass companies would do. A lot of that might almost look more like someone from the internet marketing world.
Speaker 4 14:54 What are they, do you know, all this kind of stuff. Um, we used events as a huge part of acquisition strategy and we did all of that for, let's call it the first four or five years until, until maybe last year ish, a little bit over, you know, year and a half, two years ago where we just realized that, cool, this works. But like the numbers just get really, really, really big. At a certain point we have to focus on making more money from our existing customers and not just continually like doing all this crazy top of the funnel stuff. And so, um, so let's actually look at, uh, if you were to say today what the, what the key growth drivers in the business are. What is the, what, what's the, I mean it might, it may just even be as simple as product market fit, but as there, or it could be that you're, you're constantly pushing the envelope on uncovering new things, but what, what would you try to boil it down to?
Speaker 4 15:47 So on acquisition, our goal is to kind of keeping what we're doing cause that's working. But I think that the difference in our growth in the future is going to come from expanding either the amount we make from people or broadening our target market. So I'll give you an example of, I'll tell you an exact growth playbook for the next year, maybe the next two years. It's a pretty simple one. We help people create and sell online courses today. That limits us in some ways because one courses are harder to make. A lot of times you can take months, you know, I mean you've been a course creator, so we're soon expanding what people can sell in the platform, include things like coaching and services and just like to, and this helps in two different ways. One, a lot of our creators are already selling different things, so it'll help you know, boost our payments volume by letting them also sell that on our platform.
Speaker 4 16:30 But more importantly, that helps with activation since it's much quicker and easier to get to a first sale, selling a service or selling, telling your time or selling a phone call. So that's kind of one component of our growth strategy that I think is super, super interesting. Um, the second one is a near seeing a little bit of it and this is second one has already been working over the last year. Like a lot of our growth the last year is coming. Our payments, revenue payments, revenue has been growing, you know, over doubling year over year. And again, it's not specifically fun or sexy, but by building in my mind the best payments product out there, which on the one hand helps people make more money doing things like upsells and affiliates and helping them create all these crazy funnels. But in the other hand, doing a lot of really, really, really boring, unsexy stuff, like automatically fighting chargebacks, filing VAT taxes for people in the EU.
Speaker 4 17:19 Eventually, you know, dealing with the U S state sales tax, all these annoying regulatory compliance things, doing both of these, um, to one, increase the value for our payments. Then eventually drive margin through payments because that helps us in multiple ways. One, whenever people sell, we make money off it. But in an ideal world, if we help people to sell more, that also increases the amount of money we make. So that's another big, big part of how we're gonna grow the business. Yeah. In fact, that, that reminds me a lot of Eventbrite and then that's a big part of how we generated money at Eventbrite. Yep. Um, I mean when Shopify, they went public making about I think 50 something percent of almost 60% of their revenue came from their SAS and nothing. Now it's a, now it's under 40% and their SAS revenue is growing fast.
Speaker 4 18:05 Payments is going faster. Um, so that's another big part of how we're growing. The third thing we're looking at is how can we drive demand? Um, are there things we can do to help people? Cause right now people bring their own customers. Um, we're just a technology platform. So we're thinking not, not building a marketplace, but are there things we can do to help people find buyers. Um, and that's the area we, you know, we're still just scratching the surface and are looking forward to exploring the next, you know, here or do. Um, but what's common with all these three things is they're all kind of more product based levers now. Like our acquisition machine isn't working. It'll keep working. But the real value if we are to grow, you know, a hundred percent year on year, which at this point is hard, but like where, where we would like to be, a lot of it has to come from, you know, our changing our product, broadening our product, like making these big strategic bets, um, of which, you know, hopefully even if one of them pays out, it's going to, it's going to be huge.
Speaker 3 19:01 Yeah. But I think what's, what's kind of neat as you, as you talk through this, it goes back to something you said pretty early on that your, uh, almost, I'm not sure if you would state your mission this way, but it didn't even sounded like a mission of just helping people to monetize their knowledge and all these additional services seem, seem consistent with that
Speaker 4 19:20 stretching me. I think, I think our, I think our corporate tagline is helping creators monetize their expertise. A very, very close. Right. Okay. There you go.
Speaker 3 19:27 Yeah. So, um, that's, yeah, that's, that's great. So yeah, even kind of looking at, at these additional programs that you have going forward and this idea that in the past you were setting these aggressive targets and you're saying kind of the knowns are going to get us there and filling in those gaps. What was the process that you, that you kind of went through and the, and the unknown part in identifying and sort of testing and figuring out new and better ways to, to hit the, the gaps in the, in the targets.
Speaker 4 19:57 Yup. And at the time, and I still don't know if it was a good or bad thing, probably there's pros and cons is we primarily did most of this using a marketing playbook. Like we did not have a ton of product resources at the time dedicated to this, which we now do. So we're already limited to marketing. So generally a lot of it was um, partnerships driven, um, affiliates driven, events driven. But it was just, you know, like trying to like work backwards. And I'll give you an example. Um, there was one time at this point, five years ago, we were at 50 cam RR or whatever, and we wanted to see if, uh, if we could get to $1 million in ARR, so 83K or whatever, and we were trying to make 20 or 25 K that month and that number looked pretty damn impossible.
Speaker 4 20:43 Um, but at the time what we were doing is we're getting all these off webinars with partners where they would invite their audience, we would tell them about teachable. It was called fedora at the time, um, sell and then, you know, make an offer where they could buy teachable and get some other bonuses for free. And each of those would make about, you know, two, three, two, three, sometimes $4,000 in MRR. Um, and it was working somewhat well, but the necessity of trying to hit that bigger number had us be like, what if we did like, you know, 10 of these back to back to back, make this one kind of cohesive event. Um, and have everyone sort of participate in this larger experience. And that sort of necessity is what gave rise, who would we call our summits and we've done about 11 of them since and you know, the most recent one we added about $150,000 worth of MRR. So, so we've like the necessity of sort of hitting those numbers had us come up with these, you know, crazy acquisition plays, um, that weren't always like the most, I mean they were scalable, but they're scalable with brute force.
Speaker 3 21:46 Yeah. But in a sense it sounds like it was, you're almost taking an unknown, the unknown portion of, of how you're going to hit it and saying, based on what we know, how can we, how can we really push the envelope on those things and find ways to crank that up
Speaker 4 21:59 quite a bit. Yeah. And it's funny now if you look at anyone that's in our space, other companies are now doing this exact thing that we now have been doing for like five and a half years. So a lot of this was, you know, again, us using the tools we had at the time, trying to see what we could do to like take chance out of the equation, um, and trying all these things. <inaudible>.
Speaker 3 22:19 And then you mentioned that you had a, it sounds like he's not with you anymore, but uh, but it had a growth there for a long period of time. Do you still have a head of growth now?
Speaker 4 22:27 Right now it's bifurcated. We have a VP marketing and we have a growth product Khaleed um, and they both come at it from a different perspective. The goat product lead comes at it probably more from a traditional growth framework of like, you know, looking at the entire funnel, trying to optimize small parts of it. And our VP marketing still right now has overall MRR responsibility. Uh, but again, they're cut, they run paid acquisition, they run partnerships, they're on affiliates. So we're trying to come at it from two ways. But in the past, in the past we had a head of growth, but we used to call our marketing team to grow the team. So it used to be one and the same thing. Gotcha. And you're sorta dividing out the responsibilities of dividing it out. I mean also now the bigger you get, the fewer generalists you have and the more specialists and you know as a result like having a specialized marketing team with kind of more conventional roles is a structure we had to move to. Way back in the day we had a, you know, five to seven person growth slash marketing team that kinda did everything from like writing blog posts to like partnerships to designed to being the people delivering the webinars. So
Speaker 3 23:29 <inaudible>. And do you guys still do experimentation around onboarding at this point or do you feel like you've really got that nailed in? Yeah,
Speaker 4 23:35 at this point, neither. As in we, I, we know our onboarding needs to be improved and we haven't done it yet, but we'll very soon
Speaker 3 23:41 I bet. And that will probably fall within the product of growth, correct?
Speaker 4 23:46 Correct. That would fall, fall product manager of growth. I mean, again, like as I said, we're soon releasing the ability to sell, not just courses but sell services. And so forth. And when we do that, that's when we're going to really mess around with our onboarding and try different things. Because right now, again, like when someone signs up for teachable, they have to do two very hard things to be successful. One is have an online or have an audience somewhere that they can sell to, which is pretty hard and to create a course and theoretically we can make at least one of those things much easier by letting people to sell products other than courses.
Speaker 3 24:16 And do you feel like you, you do anything today to help people market their courses once they've created them or is the idea that they're paying you that sass fee so they need to figure it out?
Speaker 4 24:25 We do a little bit through education. Um, so for instance, we bundle in training with every one of our paid plans and we actually have found that it actually lowered our churn pretty significantly since a lot of people who weren't ready to like use the product still got value from the education piece. So we don't do anything one-to-one, but we do, yeah. Education. And you know, lots of one to many type things to help people market and sell. Okay.
Speaker 3 24:48 Yeah. Part of the reason that I'm, I'm thinking like, um, you know, you mentioned that early on that part of the goal here with uh, comparing yourself to say a you to me who's taking 50% cut that you, you're, you're doing something that's more subscription-based where they're going to own everything and um, but the obviously the incentive when you're taking 50% is to get as many students into there as possible. And um, I, you know, when I look at, uh, Eventbrite for example, it's a, it's a much lower percentage, but there's not really a monthly recurring cost. It's just more, you're trying to get them as many attendees to the event as possible because you make more money as a business. So, and I know you do have plans where you get, you get a higher cut of, of the sales. So things like SEO for the courses or, or post on Facebook, any, any like tools, stuff that you've done to help them drive adoption or not? Not really.
Speaker 4 25:40 We've not done a ton. And the biggest reason why is it when we look at the most successful courses on the platform, very few of them, their funnels in turn are very rarely people just visiting a site and buying. Typically they collect an email address somewhere else, put people into some kind of sequence and primarily sell to them an email. So because the website isn't quite as point and click in terms of how people buy courses, we've deprioritized them. Not to say that there isn't some value, but that's been one of our learnings is like one, it's been fascinating to watch, but every single quarter the average price point keeps going up. Um, people keep getting better and better at selling at higher and higher prices, but when they sell at higher prices, their funnels are more nuanced as well cause it's very different again, someone to buy $1,000 product. Okay,
Speaker 3 26:25 that makes sense. So that's kind of bring your own audience and, and that's, that's a more of the target at this point. Yeah.
Speaker 4 26:32 With that said, we did, we did. But, Oh, we did launch a very, very, very, very lightweight sort of course directory listing thing to see if that works. There's only been a couple of months, but the results are promising if that does well, that's a good, that's another example of like a company wide growth experiment. We just threw up a listing service, um, got a bunch of courses to opt in. We're taking a percentage and if it works, we can, you know, double down on that.
Speaker 3 26:55 Cool. Yeah, I noticed, I noticed that you were doing that and um, and I noticed also that you didn't have kind of a search button there, so it looks like it's a more curated collection of, of courses.
Speaker 4 27:05 I mean, it's a, it's a web flow site. There's literally no tech, excuse me. It sounds like we're trying to retain the spirit of, you know, just because we're a larger company, we can still one, have fun with things like that and to put these kinds of things out quickly. And if there work, great, if not, no big deal.
Speaker 3 27:22 Right, right. It's almost like just the four Oh four tests. Like, if, if no one's responding to the front end of it, then, then why keep adding a lot more to it. So you mentioned that just as the team's grown a lot. So how many people, I think I saw on LinkedIn it looked like 160. 65 a hundred.
Speaker 4 27:37 We're about one 20. I would imagine there are the 40 people are some creators that list their company as teachable. So that were about one 20 110 in New York and 10 in North Carolina.
Speaker 3 27:49 Okay. And then you, but you mentioned that kind of as you've grown, the generalists are less likely to kind of be the day to day roles and you've got more and more specialized roles. So how do you, how do you, I mean, part of keeping everyone on the same page, it's probably the transparency that you have, but um, what are some other things that you've, you've done to kind of not become too process heavy or bureaucratic and, and have everyone kept pulling in the same direction? Yep.
Speaker 4 28:13 Um, so a lot of this and this at this point, a lot of like what I can do personally is pretty limited to the executives I hire and not even trained. Like they trained me, like I can't train any of them. Uh, but a lot of it just comes down to the leadership team and we're trying to instill the culture there and you know, kind of hoping it distills downward. I am not a like, except for, except for product and marketing. I don't have strong opinions and most, you know, other departments I like to like get, you know, strong leaders in all departments and just let them be product and marketing to I let them be. But that's, those are slayers where I feel like I have something to add to. Like, you know, frankly, a lot of other departments, I don't think I have anything to add. Um, and really just empowering them by being hands off and in turn, making that part of our culture and having a distilled downward of like, you know, you hired the right people, you then try and get out of throwaway. So
Speaker 3 29:07 <inaudible> and then have you, do you have any kind of North star metric that you, that you share across the company? Or is it just that MRR number more? Um, it's,
Speaker 4 29:15 it's MRR. Um, MRR is, sorry. MRR is probably still more of a metric that matters to me and our investors. The metric that we use the most is probably our GMV, which again, it's close to, it's close to revenue, but this is the total amount of sales our creators make. So there's also, there's also a large element of like, this is how the impact we're having in the world. Um, so yeah, we look at GMV or total sales or you want to call it, but really the amount of money are creators are making.
Speaker 3 29:43 And that in a sense where I think for a lot of companies, sort of a, a financial, a financial metric that everyone's chasing maybe doesn't, doesn't empower it, get them as excited as more of a mission metric. But I think, um, where your mission somewhat being monetizing knowledge versus there's something to be said that maybe a financial metric works there.
Speaker 4 30:03 The, the only other metric that could compete would be the number of creators who've made over a certain amount cause that's a quantity and the number of lives change or something. So we also look at, you know, how many creators have made over a thousand dollars a month for the year and things like that goes in our mind, even in our mind, if you make 1000 bucks a month, that is what we have defined to be like. Your life is sufficiently changed.
Speaker 3 30:23 Yeah. You're, you're providing some, some meaningful additional resources to someone. Um, maybe not on a company level, but if it's an individual course then, then that makes sense. Um, cool. So let's, let's kind of go through, and we've touched on a lot of already, but, um, I just like to kind of look at the, the path that someone takes from, um, becoming a new creator on the platform, which you've, you've listed a lot of ways of how you've acquired them over time, to where ultimately they're, they're locked in. They're, they're hopefully making that thousand dollars plus and a raving fan who's spreading the word about it. So what, what's that typical path look like today?
Speaker 4 30:58 So the magic moment, uh, the magic moment happens when they have their first sale. Um, literally it's actually, it's actually really funny. We have a Facebook group, you can search for the words first sale and it is insane. You have hundreds of people posting about that specific moment when they first made money online. Uh, I mean, again, like I don't know if we'll ever get to the stage of doing like a TV style branding campaign, but it would like, I, I strongly think we should just show people experiencing their first sale cause it's such a powerful moment. Um, that's, that's when it changes for everyone. So I would call that our magic moment. Now the problem is that's hard. It's not like it's a long time to value in a lot of cases to get there. So we try to think of smaller things like, you know, publishing a product, getting your website live and all of those work and help and our funnels can, you know, take people there. But none of them are as predictive of like retention and success is actually making your first sale. <inaudible>
Speaker 3 31:53 I don't remember if we covered it, but um, what, what is the typical profile of someone who's setting up a course? Is it, are they usually employed? Are they usually more consultants that are independent? Is there,
Speaker 4 32:05 so the words, the word that we're using internally now is independent business owners. So they are typically business owners. They may not quite identify as as such. And even very often they're business owners if like business of one person. Um, but that is sort of, you know, the core persona we work with. Yes, we have larger companies, we have the New York times, we have like all of these like big cool brands using us. But that's not who we build a platform for. Okay.
Speaker 3 32:30 So, so that independent business owners generally coming across a a webinar or a season event or through through <inaudible>, do you have any kind of loop where they, where they attend someone else's course and they're like, Oh my gosh,
Speaker 4 32:45 I was just going to say that. I mean, the powered by teachable buttons actually still work and it blows my mind and that's still probably been one of our biggest channels all through this is you can remove it if you want. Most of our creators don't, but their websites have a powered by teachable at the bottom. A lot of creators see that. They see a lot of them. Their first brand interaction with teachable is as a student they see powered by teachable. Then they click on that good. Our marketing site then might check out a webinar or you know, we also still have a free plan. That's arguably way too good that we need to do something with. But that also, that also forms, you know, a huge part of the top of our funnel.
Speaker 3 33:17 Yeah, well especially you have that free plans driving a lot of people to the powered by teachable. It could, it could potentially be an important part. Yup. Yup. And then, and do you have any, um, any kind of referral program where you actually send advise them for that?
Speaker 4 33:30 Uh, Nope. But we, we, we make a lot of fire revenue through affiliates. So instead of, instead of giving them a referral bonus, it's a straight up, like you can build a powerful business being a teachable affiliate where we pay out 30% of the MRR they generate for life. Um, and right now it, I need to, like at one point it was doing almost 20% of our MRR with came through to the affiliate program.
Speaker 3 33:52 Wow. That's very cool. And then let's kind of look at the, the last sort of, you know, what, what's that typical usage pattern? So what, um, are people coming, I'm, I can look at sort of myself, but I try not to do that too much. So what does, uh, w when someone's coming back to the platform, is it usually just to check on how many sales have they made? I know that usually an email is generated from that or are they creating more courses?
Speaker 4 34:19 I don't care if people are logging onto their admin panel. Like to me that's an advantage in some cases that matters. But like in a lot of cases it does not have a very strong correlation with anything. Cause a lot of people can set up a successful course and then never log in. And that is success to them that they get paid and they don't have to login. But for us, where we try to optimize towards, right from a metrics based perspective and we are there and it's really encouraging is we basically want like the GMV that any court makes to expand with time. So if like are like, you know, if the people at first sign up in 25th the people at first made a sale in 2015 whatever their sales in 2016 are. We wanted that Gore to do better in 2017 and we are there and it's like the numbers are building year over year. And that's, that's to me the single most exciting thing about the business. And that's what we want to keep doubling down on is if we're still gonna make more money from prior cohorts or at least have them sell more. Um, that's, that's sort of what we're optimizing for. So intern, that means what can we do to help our creators make even more money to make those quarter's look even better. But that's sort of how we think about retention at teachable. That's great.
Speaker 3 35:26 And then, uh, a question that I always like to wrap up with, um, is when you look at everything you know about growth, clearly you came into this with a lot of knowledge and growth. You've, you've learned a lot along the way. What do you, what do you think is the most important thing that you've learned in the last couple of years that you might not have known
Speaker 4 35:42 before when it comes to growth? Well, I mean, one, I realized I knew nothing when I, when I, when I first started. But I think, I think all of this, all of this goes in circles. I mean right now it's just if I were to start another company, I would definitely take far, far longer before I started growing it, if that makes any sense. Um, just because, uh, like just from a product market fit perspective, yes we had product market fit but we also forced it a little and we eventually got there. But you know, it did make for pain sort of doing that on the fly. And now it's really interesting seeing companies like, you know, notion and I've known a couple of companies I've invested in that ended up spending two years just nailing the hell out of building an amazing product and then scaling it.
Speaker 4 36:25 Um, so that's sort of the thing that I would probably do differently. I'm not sure if it's a grass is always greener thing cause they might be people on the other side who'd be like, I wish we started growing faster or sooner. Um, but to me, cause if you're going to think about what would we do differently and if you, again, if we were to launch a second product at teachable, we wouldn't do it that way. Where we'd be heads down for even longer. And I think part of that also comes from like just being confident, knowing that if something is good, we have the skills to grow it. Like I'm no longer worried about that growth in my mind is easy. If you have something amazing. And would you during that, that time of kind of dialing it in, would you be just not aggressively trying to grow it but you would still be trying to get people on and monetize it? <inaudible>
Speaker 4 37:07 I would like to say I would like to set a goal of like I want to grow customers by 10% a month, every month. And that's it. At that point it product good enough, you can control it. I wouldn't be like where we were, we were like, Oh we grew 40% month on month, can we do 45% next month while you know we have a bunch of bugs and other things. So that's a, that more kind of iteration level or of, of engagement and with the, with the goal of trying to get to a certain maybe set of numbers that say, okay, once we, once we get to this ability to convert, retain, monetize, then we're going to hit the gas and take off. Yep. The other thing I've learned almost makes me sound kind of dumb, but just the, like the, it's so unintuitive how like exponential growth really works. Like it's, you know, like you've, you've read about it, but like truly experiencing that, um, is just yes. I mean, you know, just compounding month over month, like th it, it to experience it feels very different than, you know, just reading about it.
Speaker 3 38:02 Yup. Yeah. I mean, I think especially when, when you, I w one thing I can say is that, um, it's, it's not always enjoyable either. It actually, the faster you grow, the more pressure you get to, to keep growing. Um, you have a lot of people that are kind of small company people that, that, that are sad, that the quaint little company has gone and, and it just, it gets messy and ugly and you have to be really, really careful to, uh, to, to scale in a way that it's actually something that's fulfilling for everyone and for yourself. Yup. Absolutely. It's hard, but, um, clearly you guys are doing some, some amazing things and I think, uh, as someone who would align with your, who, your target audiences, it's all the stuff that I tend to care about quite a bit. So I want to go through some of some of my key takeaways and it's, and as I was thinking about them, they changed a little bit based on what you, what you said there, but I'll, I'll try to blend that in.
Speaker 3 38:59 So one of them is, um, you know, you talked about growth being something that was sort of baked into the company very early on. You were super intentional about growth. That's, it's part of that culture. And, um, I don't think you're saying that that's a bad thing. I think you're saying that maybe you were a little premature with that. Would that be right? Yeah, absolutely. Um, and I again, I still think that's a big part of, you know, what made us where we are. It's so absolutely, it's really hard to know the path not taken cause the path is actually a pretty darn good one. Yup. Yup, yup. Um, and then, and then it sounds like you're, you know, another key takeaway is that you kind of move from that, that grit and hustle stage to where a lot of the things that you're doing now is more product based in terms of both.
Speaker 3 39:43 How do you, how do you extend the, the value proposition out on the product and, and, and monetize more and potentially come up with some, some additional, uh, programs for people. But that a lot of the early part was just just you know, that you personally pushing really hard and then moving to maybe things that aren't hugely scalable but you found a way to scale them and that now you're moving toward kind of really honing in that machine that that hopefully starts to start to grow. In a way. I what I found that's kind of consistent with that and I was pretty intentional about it at Dropbox because I hit my head against the wall, it logged me in. It was with the win. When your growth is all externally driven, you, you can't help but start to flatten out over time. But if your growth can be on a product driven, your, your base is your key source of growth, then the bigger you are, the more likely you have a really powerful growth engine that scales.
Speaker 3 40:39 It's multiplicative where yeah, it's a percentage of your current base is very different from like absolute adding absolute numbers. So yeah, absolutely. But I, I really do like this, this concept of, and I, I've thought a lot about this in the past as well, about the, the known and the unknown when it comes to targets, but that's setting those aggressive targets and then really being obsessive over over the unknown portion of that and aggressive about trying to figure that out, I think is, has been really powerful as well. So, um, I, you know, I, I could ask lots more questions, but I want to, uh, wrap things up here. So congrats again on all the success that you've had. Um, I'm really excited to see where you take it from here and for everyone listening, thank you for tuning in. Cheers, man. Appreciate it.
Speaker 1 41:20 <inaudible>
Speaker 2 41:26 thanks for listening to the breakout growth podcast. Please take a moment to leave us a review on your favorite podcast platform and while you're at it, subscribe. So you never miss a show until next week.
