Speaker 1 00:00:08 Welcome to the breakout growth podcast, where Sean Ellis and Ethan Gar interview leaders from the world's fastest growing companies to get to the heart of what's really driving their growth. And now here are your hosts, Sean Ellis and Ethan Gar.
Speaker 2 00:00:26 And this week's episode of the breakout growth podcast, Ethan Gar and I chat with <inaudible> founder and chief revenue officer at true bill. The true bill mobile app makes it easy to take control of your personal finances by showing you a complete picture of how you are using your money. It even helps you find ways to save money. In fact, true bill saved me almost a thousand dollars within a week of this recording. So Ethan, what stood out at you from this conversation?
Speaker 3 00:00:53 It was the Rocky road that they've traveled to product market fit. That was probably the thing that was most helpful for me in really understanding what's behind true bills, breakout growth success. They've actually had 47 months of growth out of their last 48, but they almost didn't make it at all.
Speaker 2 00:01:07 Yeah, they were on death's doorstep and one experiment around premium subscriptions really changed their whole trajectory, but I think it's what that experiment taught them about their audience that really mattered. So it's not just the improved conversion rate. It's that insight that it gave them that really improved their growth trajectory going forward. Exactly.
Speaker 3 00:01:29 Actually it was the eye-opener for them to product market fit for the business. They were borrowing the affiliate best FinTech models of that time period, you know, their inception around 2015 and that experiments showed them which customers value their services. And why. So I'm glad Gaia shared that with us because I think it really frames his whole approach, his chief revenue officer, as well as a lot of the key learnings he shared throughout
Speaker 2 00:01:49 The discussion. Yeah, absolutely. The affiliate model that had previously guide their, their revenue model just wasn't what was needed to drive success in that business. And so we thinking that was, was really critical, but there was, there was a ton of value in this conversation beyond even just the business model change.
Speaker 3 00:02:06 Oh, for sure. From how they use their LTV to CAC ratio as a guiding metric to how they invested earlier in that homegrown testing solution, they've really figured out how to manage hypergrowth.
Speaker 2 00:02:17 Yeah. And on the topic of hypergrowth, we invite our listeners to check out this week, sponsor rise with SAP S four HANA cloud hyper-growth companies get up and running quickly with this low cost, easy to implement cloud ERP solution. If you are working to power breakout, grow success in your business, please check out sap.com/high growth.
Speaker 3 00:02:40 That's right. And please tap the subscribe button wherever you listen. And if you can tell your friends and growth about this podcast, we always appreciate it. It's not actually, we jumped in with ya. All
Speaker 2 00:02:49 Right. Let's do it. Hi. Welcome to the breakout growth podcast.
Speaker 4 00:03:02 Hey Sean. Thanks. Glad to be here.
Speaker 2 00:03:04 Yeah. Excited to have you on. And I'm also of course joined by my cohost, Ethan, Gar. Welcome Ethan. Thanks. Hey guys. Great to
Speaker 4 00:03:11 Have you here. Yah. Likewise. Thank you.
Speaker 2 00:03:14 Yeah. So, um, yeah, yeah. Uh, we, uh, have had an opportunity to overlap over the years between the some time I spent helping webs.com, uh, and, and took a look at what you guys were doing, uh, fairly early in the true build, uh, early to build days, but I'm sure there's a lot of listeners that who may not be as familiar with it. So can you give us a quick introduction to what it is?
Speaker 4 00:03:38 Yeah, absolutely. So simply put, we think of true bill as the best platform to run your finances. That means we've built a holistic all in one app that pulls in all of your financial data from multiple sources. That's your checking account, your savings account, your credit cards, your investments into one central place. It gives you a really clean, comprehensive view, not just of where your money is, but where it's going and the patterns behind it. It also then identifies ways that you can easily save money things you may be paying for things you might not need anymore, and basically helps you get helps get you on the right financial track.
Speaker 2 00:04:13 Very cool. And, um, how did, how did you guys decide to launch this business?
Speaker 4 00:04:19 Yeah, simply put, you know, I, I've never been great at managing my money and it's, you know, I think we just set out to build the app that I've always needed. Um, you know, we, we started in 2015 and at the time, um, you know, there was just a ton of subscription companies popping up and um, you know, we, we knew we wanted to start a company and we're going through a ton of ideas and this one happened kind of serendipitously when I was looking at my credit card statement one day and I saw charge for $40 for the in-flight wifi. I thought, oh, you know, that's, that's weird. I didn't fly this month. So I started going back in time and I'd been paying $40 for 14 months before I caught it, which is kind of embarrassing to
Speaker 2 00:04:56 Admit, but that sounds exactly like something I would do
Speaker 4 00:04:59 Exactly. And so then, you know, I logged into Amex and I was like, where's my recurring charges. And there's no way to see them. And I was just baffled that there was really no easy way short of, uh, you know, going through your credit card statements with a, with a spreadsheet or a pen and paper to find who was actually billing you. And so that's where we started was, was that one really narrow pain point of just connecting to people's accounts and showing them their recurring charges. And then from there, um, as people signed up and we started getting data, I think I was just really struck by the, the lack of visibility into, into personal finance. Right. And just how many blind spots there are. Um, and so we said, you know what, this isn't an app about, you know, finding or tracking subscriptions. This is an app about just getting a clean understanding and running your finances in a healthy way, like holistically.
Speaker 2 00:05:46 Yeah. And in fact, that sounds like a bit of an evolution from when, when we spoke, uh, like a couple of years ago that, um, it does seem like at least my, my interpretation I've been using it during that, during that time as well. But it's my, uh, my interpretation was definitely more about the spotting, those recurring, uh, expenses and the savings around that. And, and so as you described the business as, as more of a centralized financial management system, that's, that's a cool evolution.
Speaker 4 00:06:16 Yeah. It's, there's been a few sort of, um, expanding of visions, uh, over the, I guess we've been working at for six years now. So over the last six years there's been, um, I think four distinct chapters where each time the scope of our ambition expanded and the, the size of the challenge we wanted to tackle expanded with it.
Speaker 3 00:06:36 Yeah. And just for what it's worth. Uh, as soon as I downloaded the app and started looking at my recurring pills, I turned to my wife and I said, Hey, do we still use this? And it instantly saved us some money. So, uh, I also very much saw in that early onboarding experience that activation moment, um, how it was really trying to take me through these levels of not just focusing on one piece of my finances, but the whole, the whole sort of big picture. So, um, yeah, what I wanted to start with is we actually interviewed Jamie Elvin. Who's the chief revenue officer of Shutterstock a few months ago. And I think Sean and I were both surprised to learn how for Jamie that role is just as much about driving the culture of innovation as it is about the dollars and cents. And I'm curious how you look at your role as chief revenue officer. I know you actually, I think you were a CEO before this, how do you look at the role of chief revenue officer and where does it fit into the context of growth?
Speaker 4 00:07:27 Yeah, it's a, it's a good question. Um, I think in a, in a B2B company versus a B to C company there, that role really takes a very different shape in B2B chief revenue officers is kind of your head of sales, usually, or head of sales and account management. Um, for us, we don't have sales and we don't have account management because we're a direct to consumer app. Right. And so if you think, okay, well the role is responsible for revenue. You sort of look at the pieces that make up revenue in a, in a consumer app and it pretty much touches the entire company, right? So, so obviously that means working really closely with marketing, to get users into the app that we can then monetize. It means bridging that gap from marketing to product because obviously product is what people are paying for.
Speaker 4 00:08:09 Um, but, uh, you know, the product team spends a lot of time thinking about how to build helpful and engaging products and maybe a little bit less time thinking about how to extract revenue from those products that you have to sort of make sure that's top of mind, right. But it also means supporting really the entire rest of the company. That means making sure that the, um, the recruiting team is, is working on all cylinders so that, uh, you've got the right amount of the right types of talent coming into the company. It means working with legal to make sure the company is staying, staying, not just in compliance, uh, from a regulatory standpoint, but also fulfilling all its obligations with all the different partners. It means, uh, mapping out who those partners are and figuring out who you're going to work with either to enhance the product or to, to, to drive revenue. Uh, so it is a pretty far reaching, uh, role.
Speaker 2 00:08:58 And do you see it as something that, um, mean maybe some companies might be thinking more like, uh, like the CEO is maybe more external facing and there's maybe like a chief operating officer who's kind of more organizing operations where chief revenue officers being something where it's more outcome-based maybe than just simply operations. So does it replace kind of even the chief operating officers that kind of a, uh, an additional role on top of what you're doing?
Speaker 4 00:09:25 It's a good question. I really, I really think it varies by company, right. But I think fundamentally, you know, you're in, you're in a service role where you sort of want to free up the creative geniuses within the company and the marketing geniuses and the product. And he says to keep doing what they're doing, but, um, you keep the business on track, not necessarily in the background, but, but free of their, their Headspace or their Mindshare. Their thing is, you know, every, there's a, there's a lot of different types of CEOs, right? You've got CEOs that love doing the, the external facing, you've got CEOs that are more operational and you have CEOs that are more product focused. So, so at true bill, um, our CEO who is my older brother, happens to be just a fantastic, uh, product guy. And so he's his, his day to day is spent primarily being chief product officer actually. So that means that, um, the more I can, I can take off his plate, the more he can focus on that, the better off the company is. And like I said, that's sort of the measurable, um, metric there is, is ultimately, you know, is the company growing revenue in a healthy way, a lot of different ingredients go into growing revenue in a healthy way. And so those all sort of tend to get wrapped into that, that CRO domain,
Speaker 2 00:10:40 Right. And assuming that, uh, that building out the team as a function of that revenue growth, um, and yeah, obviously fundraising and other things, there's a lot of indicators that you guys are doing really well. Um, one of the few public indicators that you can see is, is in, um, team growth. Um, but you know, everything from I've noticed, you know, comedy channel, I see advertisements coming up on there quite a bit for true bill, which has been really cool over the last, uh, several months. Uh, maybe it's happened longer than that, but I just started noticing it more in the last several months. Um, but, uh, all indicators are that you guys are on fire. So can you, can you give us a little bit of, uh, of an insight into that, that journey, that, that growth journey that has gotten you to the trajectory on right now?
Speaker 4 00:11:26 Yeah. Um, you know, true will is an interesting case in that we did not launch and started crushing it from day one. We had a real solid, you know, one and a half to two years of really struggling to find a product that would resonate with people and, and more difficult to find, um, a business model that that would support growth. And so we sorta chug along in a, in a flat way for nearly two years, um, during which time, you know, no investors would touch us. Um, we were sort of, not that one of the cool kids at the party, um, and it took, it took a lot, a lot of experimentation to, to get to product market fit. And then when we did, that's when things really took off. Um, and I think, you know, we, we six extra revenue year over year, then six extra revenue year over year again. And then I think like five X next year, and then like two and a half X, and then like 1.7, five extra
Speaker 2 00:12:23 Big numbers they're kicking it.
Speaker 4 00:12:25 So I think, you know, I was just looking at this and in the last 48 months, we only had one month where we did not grow revenue month over month. So it's, it's been a fun ride.
Speaker 2 00:12:34 Yeah. That's, that's amazing. So I had a follow-up question as you were going, because, um, you know, as you described your story there, I was thinking about, you know, the, the number of times that, um, people talk about like product market fit. You just know it everything's flying off the shelves it's working. That's kind of a Marc Andreessen. I think sort of when, when he, first time I read about the term product market fit, what was on some of Marc Andreessen's old blog posts. And that was as he described it as like, you'll know it when you're there, it's just, everything's going crazy. And in my experience, it's a lot more of, uh, you know, the core experience might be great, but there's, there's some things that you need to do before everything starts working well. And, um, but you, you kind of beat me to the punch by saying, I don't think we had product market fit, and then we did have product market fit. What was it that sort of flipped things into product market fit for you?
Speaker 4 00:13:29 So when we launched the, uh, the product, um, you know, if you looked at the FinTech space five years ago, it looked very different from how it looks today. Um, today you have companies like Robin hood and chime, um, and acorns and Dave and, and a whole slew of others and stash and betterment, um, that are, you know, sort of providing a, a service where they touch people's money and people. And pretty much all of those cases, except for one, I guess, uh, are paying them directly. But five years ago, the FinTech darlings were like credit karma, NerdWallet. Um, and they were monetizing via affiliate offers, basically recommending credit cards or loans or that sort of thing. Um, and so we thought that was going to be our path, you know, we'd help you understand your finances. And then we would recommend great products to you, uh, that just did not work.
Speaker 4 00:14:17 And not only did it not work, it was, it was actually really detrimental to our product evolution, because what happens is when you're solely dependent on credit card recommendations, for instance, for, for revenue, your product lens becomes, okay, how do I push credit cards in a more contextual way in more places to get more clicks with higher conversion and ultimately more paid off. Right. Um, so, so all of a sudden your, your customer is not your users. Your customer is whatever credit card company you're pushing. Um, and the way you serve them is not the, is not going to be in line with the way you serve your users. Um, so for us, what we, you know, our, our sort of last hail Mary as the company was on death's doorstep, was we launched a premium model, um, where users could pay a few dollars for, for some premium features within the app that we sort of added at the last minute. And, uh, the conversion actually just really, really shocked us. It blew away our projections, um, and instantly sort of that, that kicked off a realignment of, okay, you know what, like these are customers, not, not credit card companies or insurance companies, loan companies. So let's rely on product to build the best product for our users that they're going to pay for it, and that they're going to stick around and keep paying for it.
Speaker 2 00:15:31 Yeah, it's so, so interesting. Ethan and I, our, our, uh, our, our relationship goes back 20 plus years, and we, we worked on an ad supported games business in the, in the nineties. And I want to say, that's the last ad supported business I worked on because I came to the same realization that when you, when you have two customers that have very distinct needs, as you, as you lean toward one, the, you know, the advertiser, you, you junk up the experience for the other. And, and so you're just pulled in two different directions where it is definitely the next business I worked on after that was logged me in where same thing, we had a, a freemium model. And, um, you know, you can, you just, you can focus on one specific customer and how to, how to keep better serving that customer. And yeah, I've definitely, I, I know when I left the uproar, I had definitely sworn off any ad supported businesses, not to say that it's necessarily a bad model, but I didn't want to be a part of it for the exact reason that you said,
Speaker 3 00:16:32 I think with your premium model, what's really interesting is that you have a pay, what you think is fair, um, sort of approach, which, you know, I've seen elsewhere, but I'm curious if that's been a big factor in the success when that started and how that surprised you as you've, as you've gone.
Speaker 4 00:16:49 Yeah, well, we certainly didn't start without, so we started with, you know, traditional premium model where, um, you know, it was pay a few dollars a month for premium, and then naturally as an extension that we started to experimentation. So we said, okay, can we get people to buy annual packages? And what's the price sensitivity here. And it was in the midst of all that experimentation that, um, someone on the team to throw out the idea, you know, what, like, instead of us trying to experiment our way into it, why don't we just let the users tell us? And so that's not what we did. We launched a test where instead of saying, okay, premium is $5 a month. We said, Hey, you know what? We're all in this together. Let's why don't you pay what you think is fair. Um, and obviously the fact that we're, that's where we've landed means, you know, we're not, we don't randomly pick things, we test things. So, so it works. I, I have heard that it hasn't worked for other companies. So I think, you know, it's not just a universal, like do this and it's gonna work out. I think, you know, it lends itself better to some types of products. And I think you also have to get the messaging, right. And it has to come from a place that feels authentic to the end user.
Speaker 3 00:17:54 Yeah. Just building on that. I, you know, I noticed as I went through the, the process to set up, I mean, it's a pretty involved process and you do a lot along the way to really introduce the entire value proposition and to help users kind of understand what they'll be getting, but then you do hit a wall and it's not the usual wall, which is the paywall. You actually hit this wall first, which is give us your connect to your checking and credit card. There's no alternative there, which is an interesting sort of approach. Um, so I think with that and the pay, what you think is fair, they're both pretty, pretty bold approaches. And you mentioned experimentation, how, how much of, of, of the thinking, uh, you know, the process to get you there is about experimenting and asking the right questions of your users. Um, versus gut-feeling
Speaker 4 00:18:39 One thing we did early on that really paid off was, um, you know, when we had a small team of, I think maybe just four or five developers, we really invested in building out a very robust testing harness that we could use to constantly deploy tests. Um, in many cases, even without, without a developer resources needed, so sorry, designer or product marketing people can, can launch tests, uh, run those tests, adjust the allocation of percentages of users that are, that are seeing those tests and then get clean results across, uh, several different vectors that you'd want to measure, um, without any engineering or data resources needed. And that's, that's paid off immensely, um, beyond that is, as you mentioned, you know, signing up for personal finance app is a, it's a pretty involved experience. Um, and so that's been literally iterated over years and it's, it's a combination of both it's, it's someone forming a hypothesis, testing it, keeping what works, tossing out what doesn't.
Speaker 4 00:19:40 And then at the end of that, going right back to the starting point and, you know, forming a new hypothesis and retesting, um, you know, I guess one of the things that, that sounds obvious now, but that I didn't really grasp earlier on in the journey is you don't build a product, launch it and be done with it. Um, like launching a product, takes more resources than building it and supporting it takes more resources than launching it. So early on, I fall into this trap of, okay, we're going to, we're going to do this thing. And then the developers will be freed up and they can do the next thing. And it's like, no, once you do that thing, that's when the real work starts, because like you built it now, you gotta endlessly tune it, tweak it and adjust it to get the types of, uh, adoption engagement that you want. And so those, those resources are never going to be freed up if you're doing it the right way.
Speaker 2 00:20:28 Yeah. And is that, is that just a trap of overconfidence a bit in, in just like, oh my gosh, this, this thing needs to be built once we get it out there, it's, it's, it's gonna work. And then, and then we can move on to those other things, rather than like, assuming that there's a tweaking period that you're going to need to dial things in, or
Speaker 4 00:20:47 Is it something else? Well, it's not a tweaking period. It's eternal tweaking will never end if you're doing it, if you're doing it well. Right. Yeah. Um, I mean, and again, that makes, that makes total sense, right? Like apple didn't launch the iPhone and then say, all right, engineers, like let's move on to the next product. Right, right. That iPhone team has grown. I'm sure. Tenfold since the first iPhone. Um, so again, you know, as I say, now, it sounds like the most obvious thing in the world, but, um, it was a costly lesson to learn and it took too many, I had to learn it too many times over for, to really stick.
Speaker 2 00:21:22 And was that something, uh, in the earlier time at webs, did you, did you maybe, um, get lucky with what you first came out with, that it worked maybe a little better out of the gate and required less tweaking to at least be viable and, and maybe that, that put you in that frame of mind that that's how it works, or, or did you just forget about the web's experience? And it was exact same kind of challenge in the beginning,
Speaker 4 00:21:50 You know, what it was, and, and in trouble, the pace of development and the pace of innovation has been, has been night and day, um, you know, developing a webs was happening 15 years ago. Um, and so I just think that, um, you know, since then so much has changed, um, you know, a lot of lessons did carry over, but, um, you get into this new pace of innovation and also everything is truthful is going a lot better than things that webs for the most part. Um, the, the changes we made were more impactful that the things we launched got more adoption. And so it did lend itself to some overconfidence, certainly.
Speaker 2 00:22:27 Yeah. But, but at the same time you just said, you know, at one point with true bill, you were at death's door and, uh, and you know, I'm sure there was, there was that question at that point, are we just wasting our time? Do we, do we just fold this thing up? Do we, do we move on last hail Mary, as you were saying with, with introducing a different business model, um, like what, uh, that, that doesn't sound like that was an easy place to be?
Speaker 4 00:22:55 No, it was, it was funny. Um, so I called one of our investors and, uh, I ran the numbers. We had three months of runway left. We had 300 K in the bank and we were burning about a hundred thousand a month. And so I called them and I said, Hey, you know, here's the situation. And he said, um, you gotta sell this thing right now. And I said, well, actually, no, I don't because I have three months runway left in the base. He said, it's going to, it's going to take you three months to sell, sell it right now. I'm going to set up two meetings with you. And that I won't name the companies, but to, you know, big companies, um, for you to, and you can sell the one of them. So he, he sent those intros and I went, I had initial meetings and, you know, like an idiot, I thought to myself, um, okay.
Speaker 4 00:23:34 He says, it's gonna take three months. I can do it in six weeks. So I pulled the team into the conference room and I said, guys, we have six weeks to do something like, let's throw every idea we have on the board. Um, and we through, you know, anything we can think of on the board and we sort of ranked them on, on really, you know, chance to save the business. Um, and, uh, I said, we can do two of these things, one small one, one big one. And, um, I don't remember what the other one was, but, uh, premium was, was one of them. Um, and when we launched it, was
Speaker 2 00:24:07 That the big one or the small one,
Speaker 4 00:24:11 I think that was the small one, because it was not, um, you know, we had the product, all we had to do was put a building on it. Um, and so, uh, you know, we had forecasted 2% conversion and we launched it and, you know, I remember lunch on Friday on Saturday, I woke up and I checked the dashboard and it was at 7% slack. The team I'm like, guys, is this is this right? Do we trust this data?
Speaker 2 00:24:33 First instinct, this must be broken.
Speaker 4 00:24:35 And so, you know, we watched it for a week, we made a tweak and we got up to 12% and I was like, wow, okay. There's, there's something here. And I ran out and got someone to throw in a, an, a check that was, uh, would keep us alive for a couple more months. So we went from, you know, two months runway to, to, you know, six or seven months runway. And then by the end of that, um, we had traction in and it looked like, you know, Victoria was sort of hitting a turning point.
Speaker 2 00:25:01 You think if you, if you still had, you know, a few million dollars in the bank at that point that you would have had the urgency to, um, have to have to figure that out.
Speaker 4 00:25:14 No. And, you know, even, even after that, raising the series a and the series B was enormously difficult, um, we just did not have what investors wanted, which seems crazy now because the investors who do do that a and the B have done quite well, but, um, you know, fundraising was always really, really challenging for us. Um, and looking back now, I think that was a real blessing. If you look at sort of the people we, we see ourselves competing with, they've all raised hundreds of millions of dollars or several times more funding than us. Um, and at the time, you know, I, I sorta thought that wasn't fair and, and was a little bit resentful of that even. But, um, again now that's, that's been a huge, a huge blessing in disguise because it really forced us from the beginning to one, build a B build a real business, um, with a viable business model and to, to, to face harsh realities when, when they, when they did present themselves, um, and three to, to grow the business in a, in a smart sort of scalable way. Um, and that's put us in really, really great footing. Now,
Speaker 3 00:26:23 I was just curious when you, uh, when you're estimating the impact of premium, do you think maybe part of the reason, or do you think part of the reason why you underestimated so much was, uh, just the difference in how mobile may be performed versus, uh, other other platforms?
Speaker 4 00:26:39 That's a good question. So I previously worked, uh, before trivial, I spent five years in ad tech, and so I worked with a lot of subscription companies, uh, helping them, you know, set up in tune campaigns, uh, which meant that I would see all their, all their conversion data. And, um, you know, where we're truly is in terms of premium conversion is, is way ahead of anything I've ever seen or ever heard of. Um, so I don't think my forecast based on the data set I had were, were unrealistic, um, or overly pessimistic, I think, um, you know, for, for a number of reasons, one the type of product to the way we presented in three, just the need that people feel worked together to, to, to lend itself really well to a premium plan.
Speaker 2 00:27:23 This week's breakout growth podcast episode is sponsored by SAP. SAP helps businesses increase productivity and achieve real-time transparency with the power and flexibility of rise with SAP S four HANA cloud. If you have ambitious goals and are working to lead markets and industries, then you probably already know how important it is to align with a technology partner who will scale and drive innovation with your business with grow by SAP future industry leaders like yourself, don't have to rely on stitch together solutions that don't talk to each other to manage business finances, operations, and customer relations. Instead leveraging the flexibility of SAP's cloud based solution. You can power all these in one place and gain unprecedented insights into the performance of your business from end to end, whether you're on the brink of, or have already achieved breakout, grow success, learn more by visiting sap.com/ high-growth. Would the business have been viable if, if it had been on the low end of your expectations, or would it be viable, but just much more of a struggle,
Speaker 4 00:28:36 You know? Yeah. If we'd been, if we had launched and it had been 3% and we got it up to six or eight or 10%, um, you know, there may have been a small, you know, 10 person company there that could, that could chug along and, and try to figure something out. Um, but we definitely, there definitely would have been a path to, to hyper scaling, which is, which is what we did
Speaker 2 00:28:57 Now. That's, that's fantastic. So,
Speaker 4 00:28:59 And we, and we did have competitors who sorta fell into that, where, you know, they, they sort of existed and got about 15 or 20 employees and sort of stayed there for, for years, um, which I, you know, I have to attribute to, to not really cracking that premium conversion.
Speaker 2 00:29:18 Yeah. And so one of the things you talked about is in that transition from, uh, being more affiliate driven and sort of having a two, two customers or one big customer with the other one, just being a means to generating affiliate revenue, um, as the business shifted to where you're now focused on really serving the, the end user needs and your monetization is aligned with the value you're providing. Um, how do you, how do you think about what is the, what is the sort of the key metric that you're trying to optimize overall in the business? You might call it a north star metric, or just in general, what's kind of the health metric of the business.
Speaker 4 00:29:56 Yeah. So I think, um, and it's, it's difficult to pick one, but I would say it's the LTV to CAC ratio, right? Your lifetime value divided by your cost of the customer. Um, and within that, a lot of different numbers play into that, right? So your, um, your, your average price plays into that. Your premium conversion rate plays into that your, uh, retention plays into that. Right. And then if you're like a retention while the retention is made up, uh, you know, the biggest thing playing into that is engagement. So, so within that LTV CAC, you sort of have every team in the company being a stakeholder for, for one or both of those. Right. So, so your CAC is your marketing team. Your LTV is your product team, your operations team, your affiliate team, your, uh, customer support team, right? Uh it's uh, that's, that's kind of the,
Speaker 2 00:30:49 And is it possible to have a really strong LTV to CAC, uh, but not having, not having a user base that, um, continues to get a lot of value from the product, but it's just somehow you're you become one of those subscriptions that they forget to cancel?
Speaker 4 00:31:08 Um, well, you know, it's, it's getting harder partially because the triple it's getting harder to coast by an exist as a subscription that people forget to cancel,
Speaker 2 00:31:17 But if they're not using true bill, then you're all right.
Speaker 4 00:31:22 Yeah. I just don't think that's, that's the way to,
Speaker 2 00:31:25 That's not the goal of the business. I just mean it more, in the sense of, you know, when you take it down to those concrete numbers, they really don't necessarily say much necessarily about the mission. There are definitely, um, execution operational numbers, but in terms of the value that you provide longterm that up into the right growth is probably going to be a function of how much value you're providing to customers and continuing to provide
Speaker 4 00:31:49 For us. We haven't seen, you know, we see a really tight connection between retention and engagement, right. Um, and then, you know, what we've done is we've sort of built out our data team is really start to understand what types of engagements increase or have the biggest impact on retention. Right. And so not surprisingly, when you do something that saves someone money, um, that's the best thing you can do to increase retention, right. And, and, you know, mentally, that, that makes sense. So if you save someone a hundred bucks and this app is $50 a year, they said, you know what, I'm already two X in the green and I'll keep it around. And if it does one thing for me next year, also, that's, that's paying for itself twice again. Right. Um, so, so no, we haven't sort of been, we haven't seen that phenomenon where we were just able to get a great LTV CAC, because people, people forget about the product. So
Speaker 2 00:32:40 It's kind of understanding what's behind that LTV and behind that LTV is, is retention engagement and, and behind the retention and engagement is value. Right?
Speaker 4 00:32:49 The other thing is, you know, as, as you scale your, your user base and your company, um, you know, when you launch, you throw your, your app up on product hunters or something, you're going to get like early adopter enthusiasts, right. But your first 10,000 customers versus your second million customers are going to look very different in their intent levels, in their personas. Just everything about them is going to is going to look pretty different. Right. And so, you know, it's, you can, you can that LTV CAC ratio, it gets more and more challenging over time if you're, especially if your product is not, is not, uh, being iterated on and improved over that time. Right. So, so what you may find is, okay, like my first 50,000 customers were early adopters that are super passionate about the problem and the LTV CAC ratio, and then was great, but from 500,000 to a million customers or 500,550,000 customers that LTV CAC fell apart, because there was just no more of that early adopter audience for us to go after. And the intent level of the people coming in as much lower. So either you need to do more to build intent and get them into the product or your business falls apart.
Speaker 2 00:33:54 I've got to assume that, that there's a big aha moment in what Ethan described as signing up and like, wait, are we still paying for that? And asking, asking the spouse or, you know it, and so would you kind of consider that as like, if you can get someone to that first time of recognizing some savings, that's an important part of, of that, that lock-in,
Speaker 4 00:34:20 I think there's, there's two big pieces. Um, one is exactly that, right. If you can show someone something they didn't know, then, then you've got an aha moment. The other thing is, um, you know, we're trying to get people to think about their finances, which is usually actually a little bit unpleasant. Right. Um, and so if I said, Hey, Sean, how are you doing with your money? You'd say, I'm fine. Right. Kind of everyone's everyone's default response. Right. But I go, no, no, no, like really let's think about this. Like, where could we be doing better? What are you not doing well? Um, and if I can get you to sorta just take a few seconds to actually do an honest assessment, then that gets you in a much better state of mind to come into the app and be open to discovering. Right. And so I think our first aha moment actually happens before a user does anything in the app. Right. It's just in the education of that. Pre-onboarding almost where we get them sort of thinking in the mindset of like, where am I good? Where am I not good? And what, what do I want to improve? Um, and then from there we collect your information and then they get to the dashboard and then that's when they have the aha moment. But they've sort of been mentally primed for it.
Speaker 2 00:35:22 Yeah. It reminds me a little bit of noon. Do you know, noon? I know that it's a weight loss kind of health management app. Um, they're on fire, they're there. They're doing really well. And, uh, they have an onboarding process where ultimately, you know, the, the aha moment for them is, is more, um, when you actually have set your weight target and you believe you're going to hit your weight target, that's, that's kind of more of the aha moment. Like obviously waiting for you to lose weight would probably be too long.
Speaker 4 00:35:56 Right. And we certainly didn't invent this. Right. Like, you know, you go and you join a gym and you have to, you have to answer all these questions about like, what are your fitness goals? Um, what's your weight now? What's your ideal weight. Right. But it's, it's to get you into the mindset of goal-based thinking. Um, and actually, you know, doing a, an honest self-assessment.
Speaker 3 00:36:15 Yeah. It felt like it felt like it was a journey to help me feel like I was getting control over my finances. That's what I like. That was sort of the aha for me is I'm getting to this point where I'm going to control my finances, the savings I figure will come later, but getting control and understanding them. It seems like that first step. So yeah, it was really interesting. I'm curious what as it, what you do in your role, um, to really foster the culture and environment at true bill, so that everybody's sort of focused on, on those right. Things on, on those key metrics, but really in, in inspiring creativity. I mean, you can see it's a really creative app and the way that everything's approached, I'm curious how you inspire that creativity and foster that as an organization.
Speaker 4 00:36:53 Yeah. I think one is, is real transparency, right? Um, not just transparency, but employee education in terms of understanding what the business is and how the business works and at what matters. And then two is, um, you know, I think we've done a really good job of avoiding any type of, um, territorialness within the company. So there's, there's no element of, Hey, stay in your lane or that's not your job. Uh, I really think everyone feels very free to identify somewhere they can be impactful or, or make a difference and to simply go do that, uh, and, and to get very little pushback or no pushback along the way again about, you know, that's not your domain.
Speaker 2 00:37:40 And do you, do you see other companies kind of make mistakes in that area?
Speaker 4 00:37:44 I've definitely seen other companies make mistakes in that area. I've, I've been at companies that have made mistakes in that area.
Speaker 2 00:37:49 Yeah. Yeah. No, that makes, that makes sense. Ethan, you would go ahead.
Speaker 3 00:37:54 Uh, yeah, just as we dig a little bit deeper into the, into the organization, are there any other insights you can share with our audience just about how you create an effective organization focused on growth?
Speaker 4 00:38:05 Yeah. So with, with growth specifically, um, one things that's, that's worked really well for us is our company is headquartered in right outside of Washington, DC on the east coast. Um, but we intentionally kept a marketing based in San Francisco. And what that does is, or perhaps a by-product of that is marketing has always been able to operate very independently of the rest of the company. Um, you know, marketing teams personally, I think marketers are just at least good. Marketers are a lot of them are different DNA from engineers or data scientists or product people, even they work at a different pace. They have different risk appetites. Um, and you know, I think what inevitably happens in pretty much every company I've seen is, is that that sort of corporate leadership tries to get control over the marketing team. And it comes from a lot of fronts, right?
Speaker 4 00:39:01 Like the finance team might say, okay, we need a co uh, you know, a mortgage approval process before marketing just runs out and spends money or design, uh, might say, okay, you know what, we need approval on the materials marketing is putting on billboards or on TV or other places to make sure it's brand consistent, right. Um, or products might say, you know, we need, we need copy approval on what marketing is saying to make sure it's managing people's expectations correctly as they come into the app. Uh, and each one of those things is like one cut, you know, on the body of marketing that, that kinda in aggregate leads to death or at least stagnation. Um, and so, so we've really sort of isolated marketing. They have their own office, they have their own, we've given them their own data resources. We try to give them their own engineering resources, um, so that they can really operate at their own pace as independently as possible. And I think that's been just a massive, massive advantage for us.
Speaker 2 00:39:55 Yeah. I've got, I got to assume that the, um, desire to put more controls in place as you, as you grow, it's, it's important to, to kind of, uh, keep everything working and you, you sort of need some, some rules around there that were in the early days when you're tiny, you don't need that, but, um, but how they can definitely stifle a stifle creativity and all the things that you mentioned from a marketing perspective, whether it's brand controls or budget controls, or, you know, approval processes. And those are all things that take away from that creative problem solving. Are there any other kind of, uh, challenges in terms of, you know, keeping, keeping the, the, that creative culture as you're growing and, and, uh, trying to, trying to make sure that you're not, um, you're not stifling some of that innovation that's been important to get where you are.
Speaker 4 00:40:46 Yeah. Beyond that. I think it's just, it's just allowing people to feel empowered at an individual level. Right. Um, and it's also including people on the creative process. So for instance, um, you know, let's take a role, like a visual designer or a video editor. Right. Um, you know, there's, you can approach that like, okay, here's, here's the video, here's how we want to edit it, go do it. And that person has sort of a cog in the machine, or you can sort of hire people that have vision, and you say, you know what, like, you know, more about video editing than I do. Like here's the assets make it something awesome. Right. And those are two different roles that, and two different types of people that, that will ultimately succeed at that. Right. And so the more you can sort of skew towards the ladder, which, which gets difficult to do at scale. Um, but the more you can sort of try to push in that direction. I think, I think the better off you are.
Speaker 2 00:41:38 So speaking of marketing that you, you mentioned having, having that San Francisco based organization, where you're trying to try to keep them creative and, and take away some of the things that would, uh, interrupt that creativity, um, when you actually then look at how most new people discover a true bill, is it, is it primarily through those marketing efforts or is maybe referral really important in there? What, what does the, was that discovery process?
Speaker 4 00:42:06 Yeah, it's definitely primarily driven through paid advertising, um, you know, 18 months ago that would have meant a lot of Facebook and Instagram followed by some other social channels today. That's, that's diversified quite a bit. So you mentioned you see truly commercials on comedy central now. Um, we have quite a bit of out of home, so that means, you know, subway ads or buses or the tops of taxis in addition to things like TV, influencer podcast. And then of course, all the traditional, you know, online and digital channels, um, referral is something that, you know, has never really been super successful for us, um, which is kind of surprising. And, you know, the only thing that, that sort of I've been able to come up with is that, um, people's finances, not in all cases, but in a lot of cases are sort of unpleasant or potentially even shameful. Right. And so at least
Speaker 2 00:42:57 Very private
Speaker 4 00:42:58 Or the very least very private. Right. And so it just doesn't seem to be something that lends itself well to people telling others about it or sharing it with others.
Speaker 2 00:43:09 Oh, that makes sense. Um, and then, uh, we just, one quick follow-up on, on the, um, some of the activities you talked about, obviously the online stuff's pretty easy to track. Um, how, how do you guys know that some of those like influencer or even the TV ads are, are, um, how, how are you kind of tracking ROI on that and, uh, in a brief way, where are you and you, or do you, do you just take it on
Speaker 4 00:43:36 No, we're already like a relentless performance driven shop. Um, and so it's, it's taken some, some time to get comfortable with those types of spend, but, um, you know, the, the technology to track it has actually come a long way in a short amount of time. So for instance, uh, with things like, um, buses or subway, uh, let's take subway as for instance, right? You can actually look at performance, uh, in, you know, a one mile radius of those ads versus performance on the other side of the city. And you look at pre-campaign and post-campaign performance, you can measure it that way. Um, TV, you can look at, um, let's say you run a, uh, TV commercial in Austin, Texas, right? You can look at installs in Austin from the five minute period before the ad ran and insults in the five minute period after the ad ran and get some, at least immediate lifts. Right. Um, but then from there, TV tends to have a longer actual delay from impression to conversion than, than say digital. So you, you start working with other technology to try to understand what that, what that tail looks like.
Speaker 2 00:44:34 Um, yeah, we had a whole episode on, on tracking TV, not too long ago with a company called tuttare,
Speaker 4 00:44:40 So we used to target there. Fantastic. Okay, cool. Yeah. And then, um, and of course you've got your survey, right? Where, where people sort of self-report how they, how they learned about true bell. Um, and so you sort of combine what tuttare tells you with, with what, you know, your third party measuring partner tells you with what the survey tells you, and you try to put it together and
Speaker 2 00:45:00 Triangulate a bit on it. It's just
Speaker 4 00:45:02 Something that you feel confident putting hundreds of thousands of millions of dollars behind.
Speaker 2 00:45:06 Yeah. But, you know, in aggregate that the whole thing, you know, that's, that's the CAC LTV ratios that you talked about, you know, that an aggregate that's working well, and as much of the granular picture as you can, you're managing that. But, uh, but at the end of the day, the aggregate has to work well for the business to be sustainable.
Speaker 4 00:45:24 Great. And there are moments where like, um, you know, you spend a bunch on TV this month and the, um, four TVN and out of home and the metrics attached to those look pretty dismal, but you get to the end of the month and your, you know, your aggregate Roaz or blended LTV, CAC looks good. And you're like, okay, well, like something worked, um, you know, and then, and then you're sort of sorta like looking backward to try to figure out where did we underestimate and how do we iterate and tune the model to be more accurate.
Speaker 2 00:45:54 Yeah. And that's where your, your surveys though, are not saying that people are finding out through word of mouth. So that's, that's often the answer when it, when it works well, but, uh, yeah. Interesting, but I'm sure we could do, we could do a lot more questions in that area, but we'd better. Move on. Go ahead.
Speaker 3 00:46:08 Yeah. I just want to, you know, we've, we've, we've gone through activation in your aha moments quite a bit here, but I was just curious, knowing that referral's a challenge for you. Um, it seems, it seems like that whole process so much depends on building trust. And I'm curious, especially earlier on when you didn't have the, you know, the, the brand built on TV and, and other places, if it was, if you found it difficult to give users a sense of trust in the product, through that activation process. And did you have to evolve that a lot during, you know, over the over time?
Speaker 4 00:46:40 You know, I think, um, you know, we're at a disadvantage in that, you know, finance doesn't necessarily lend itself well to referral, but it does lend itself well to trust specifically, if you can save someone money, um, they will trust you with their kids. So, um, you know, we, we do things like we, we automatically cancel subscriptions or recurring charges. You don't want, we will identify that you're being, you're overpaying for maybe your cable or your cell phone, and we will negotiate a better grade on that bill for you we'll even, um, you know, if we see that you're about to overdraft, we'll advance, you know, up to a hundred dollars ahead of your next paycheck with no interest, no fees, no credit check on the honor system, uh, just to sort of help, help bridge that gap. Right. So there's a lot of individual features within our product that, um, if, if a user actually makes use of give us a really high degree of trust very quickly.
Speaker 3 00:47:35 Okay. Gotcha. Yeah. And I wonder if, if maybe there is even more people talking about a true bill, maybe not direct referral, but more people just talking about it that helps build trust. I know, uh, I worked on a product called robo killer and a lot of, um, it, for me, it was always interesting that like a lot of our, I think our referral was people sharing their experience with it, but it wasn't about, you know, instantly going to the app and, and making a purchase. So it was hard to necessarily track that. Um, but I do think it was a, it was a big factor in things. So, yeah, it's really interesting. I'm curious also once you've activated those user, what, what do you think is the difference between users who stick with true bill and, and become long-term engaged, retained users, versus those who don't, don't stick around?
Speaker 4 00:48:26 You know, part of it is, is their initial intent, um, and, and just their personality, just how different people sort of like different levels of control or, or visibility into their finances. Another is, um, you know, there, there's a few sort of psychographic vectors that we've mapped out that, that identify how suited someone is for the app. Uh, for instance, uh, one trait would be how many different institutions they bank with or how many different types of accounts they have. So if someone, you know, if we're talking about an app that helps you keep track of your finances, if you just have a debit account and nothing else, your finances are probably pretty straight forward. Whereas if you have a checking account, a savings account, investment account, an IRA, and two or three credit cards, plus a PayPal and a Venmo account, well, that's a lot harder to keep track of. Right. So tribals, just fundamentally going to be more useful to you. Um, and then of course, uh, you know, the other side, those, those are things that, that sort of happened at the top of funnel, right? And so we, we obviously feed that into our marketing machine to target the right types of users at the top of the funnel. Um, and then within the product there's activation, right. Which is sort of identifying what type of person or what type of psychographic profile someone is, but then trying to craft the right experience for them.
Speaker 2 00:49:44 And then what, you know, one of the things I've noticed over time is kind of an evolution in my own experience, which you build, where it, uh, where, you know, sometimes I'll get like an email that outlines, um, my expenses or something that I'm paying too much on. And then other times it'll just be, you have five notifications in true bill. Um, what's the, what's sort of the, the testing that's gone into that. And then what, yeah. How, how do you think about the role of say it? Can people continue to get a lot of value if they don't log into the app, but just get, get this information through email, for example.
Speaker 4 00:50:23 Yep. Um, so you have two questions in there. Let me, let me take on the first one in terms the role in testing there, it actually has evolved over the, over the last couple of years, right? Because in the beginning, when you don't have robust data resources, you sorta create one of these emails or pushing notification and you say, okay, are people clicking it great? Is it getting people into the app? Great. It's a whim. Right. Um, and then what happens is you get a little bit more sophisticated. You say, okay, you know what? This one actually brought people into the app, but some of them canceled their premium, so it's bad. Right. Cause we sort of poked the bear. Right. Um, and then you get, so that opens up the question like, okay, do we want to not message users? If we think it's going to make them churn or not.
Speaker 4 00:51:02 Right. And there's a whole debate beyond that. We actually said, no, like we're not going to not message people for that reason, but then ultimately, um, where you sort of want to end up is actually like, okay, how does this sending versus holding out this message increase actual, like long-term engagement and long-term retention. Right. And so it's not like, so you might, you might create an email and you say, okay, you know what? Like every time we send us like X number of people end up canceling your subscription. But, um, those who don't actually end up staying around for longer. Right. And it takes, it takes a reasonable amount of data sophistication for that. And then on top of that, you start looking at, okay, like maybe we don't have to treat everyone the same way. Like maybe Sean only wants us, you know, once every two months, whereas Ethan wants it every two weeks or something. Right. Um, or, or it's just more relevant for Ethan because his finances are more volatile than Sean's. Um, so, so, you know, as, as you kind of acquire more resources within your company, but the layers of sophistication with which you make those decisions get, get progressively more complex. Yeah. And then, um, I lost her second question. What was it?
Speaker 2 00:52:09 You got me. Oh, I know what it was. It was, it was the, the question between, um, like, uh, can they get value in the email versus, um, versus sharing a log back into the app to get value?
Speaker 4 00:52:22 Yeah. There's, there's a number of ways people get value without having to open the app. And I think that that continues to increase over time. So for instance, we have an automated savings account, which sets aside a few dollars every, every week or every few days towards goal, like rainy day fund or a vacation, right. That, that works in the background, whether you open the app or not. Right. We have transaction monitoring. So if, if something happens that you're not expecting, it's going to flag it for you, um, which is kind of like insurance, right. Hopefully you haven't had to use your car insurance in the last couple of years, but it's there if you need it. Right. And then, and then beyond that, I think just the, the aggregation gets more valuable over time. So for me, you know, I've had trouble for a few years now and just being able to jump back three years to see, to see about the purchase I did two years ago, or, or, you know, how things have been trending over multiple years, whether that's my credit score or my net worth or something else, I think, um, that history becomes valuable and worth keeping.
Speaker 2 00:53:21 Yeah. And I, I, it just reminds me a little bit of, uh, when I was growth hackers and, and, um, you know, our, our expectation of the value people got with the product was you're coming in, contributing in the community and, and just, you know, logging into the website a lot. And then I would go out to events and people would come up to me and say, I love the top 10 email every week. I'd looked so forward to those stories that kind of threw all of that, um, community engagement. It sort of curated this top 10 most important growth stories. And, and so the email had a lot more value in it than I thought it did. And so that's why, like, when I look at, um, at true bill, I probably personally have gotten more value from the emails than from logging into the app because it's sort of pushing to me, you know, I spent this much on Amazon.
Speaker 2 00:54:11 I spent this much in, in different areas, but I noticed, um, six months ago, I used to get those emails a lot more. And, uh, and then more recently I get the, you have six unread notifications in the app. And, um, and I just personally, you know, get too busy to log in and see what those notifications are. And so probably the pull for me personally into the app becomes less valuable because I'm not taking action on it, where, where the push of information was more valuable, but it doesn't mean that, you know, my, my case necessarily represents all people. And, and when you think about kind of mission and how you deliver on that mission versus like, you know, app engagement may not be the overall mission of the business. The mission is to give people that visibility and control over their money or whatever, however you state state the mission. And so that's, that's kind of a little bit more on that lining of questioning as well as, you know, Ken, could this be a fully email, uh, driven experience and still be really valuable for people, for example.
Speaker 4 00:55:11 Yeah. I mean, you know, I think there's no, there's no one type of user, right? So for some people, absolutely it could write for others. They want the app for others, they care about more of the build negotiation of subscription cancellation and those types of things than they do just the, the visibility. Right. So, you know, there's, I can't think of many products that have just one, one type of user. And so, you know, I think if you're, if you're doing a drag, you have, you know, four, six different personas and you're trying to make sure that you fit all of them under the umbrella. Um, without having 30%, isn't trying to build something for everyone. Right.
Speaker 2 00:55:49 So finding that balance. Okay.
Speaker 3 00:55:51 Yeah, I think we could probably go on all day, but, uh, I think, uh, just, uh, out of respect for your time. Yeah. We'll uh, just one last question before we wrap up, it's when we like to ask all of our guests, what do you feel like you understand about growth now that maybe you didn't understand as well? A couple of years ago?
Speaker 4 00:56:09 Oh man. Uh, everything it's, it's, it's been a learning curve. Um, if I had to say one thing, um, I think it's actually about creative, you know, coming into this, I knew we had to have smart ad buying and smart targeting and good data. What I underestimated was the importance of, of creative, of a cohesive creative strategy and of, of really investing in, in producing creative, that's going to perform. Um, and with it, it, it unlocks all sorts of things that you did not think you'd be able to do. And without it, it actually makes literally all of the data you're getting worthless. Right. Um, you're, you're, you're testing different channels or different audiences with that creative making determinations about those things. When, you know, they never had a chance to succeed in the first place. So, um,
Speaker 3 00:57:04 It's interesting you say that, uh, and it, I think it speaks back to your, uh, internal tweaking, a comment earlier, I think when it comes to creative, uh, it's a never ending process. And I learned that early, uh, Sean can tell you when we first started working together, uh, he hired me into a role that was specifically to test a hundred new banner ads every month. Um, and to just keep that process going, because it was just never ending, uh, process. It was a never ending cycle of trying to just get better at what we did through creative. So, um, it's interesting that you, you picked that as such a key, a key point and a, um, I think I've, I think we, Sean and I both continue to see that, uh, in a lot of places.
Speaker 2 00:57:44 Yeah. Well, one of my key takeaways from this conversation is, um, is, is really that pivot point of when you felt like you dialed in product market fit. I very few people, when they think about product market fit, think about the role of business model in, in getting there. And, um, I think you, you really laid out a great, um, insight where it wasn't just getting the business model. Right. But it was once you got the business model, right. It allowed you to focus on a different experience for the users that, that ultimately meant they were getting a lot more value. And so that, that was probably my biggest takeaway from this conversation, but I'm sure when I go back and listen to it, I'll, I'll, I'll get many more, but, um, really, really great stuff and congrats on all the success since, since we last spoke and, and, uh, and obviously you were already on a, on a good path at that point since you've been at it for, for, um, how had you said about five years, six years. Yeah. Um, that's, that's awesome. So, um, keep it up
Speaker 4 00:58:46 Really appreciate it. It's it's been a really fun ride, but thank you.
Speaker 3 00:58:50 Thank you.
Speaker 1 00:58:57 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.