Halp’s effortless and unique land and expand strategy that boosts retention.
Head of Product
Today on the show we have Fletcher Richman, co-founder of Halp who now serves as the head of Product after their recent acquisition by Atlassian.
In this episode, we talked about the role churn and retention rate when it comes to evaluating an investment opportunity. We then moved on to discuss what Halp is, the motivation behind building it, and how they made the decision to pivot from building an integration tool, to a standalone ticketing solution built on top of Slack and Microsoft teams.
We also discussed how keeping it simple helps Halp measure churn and retention, and then dove into their unique and effortless land and expand strategy. We also chatted about how starting with small teams makes their sales process easier and gives them more opportunity for expansion.
Welcome to the show.
Hey, great to be here.
Fletcher Richman: [00:01:39] It's great to have you for the listeners. Fletcher is the head of product for Halp. A conversational ticketing platform that was recently acquired by Atlassian prior to founding Halp.
Fletcher was the co-founder of catalyzed CU Colorado university startup accelerator program features also invest and partner in Kokopelli in investing in the Rocky mountain region. .
Andrew Michael: [00:01:59] So I'm excited to [00:02:00] have you on the show today. Obviously, like we first met out when I was out in Boulder, Colorado spent some time out there.
And at the time your head, your investor hat on, and you looking into different companies, looking into, invest into startups in the region. And I'm interested to, first of all, before we jump into Halp and what you're doing there now at the moment, but. When it comes to churn and retention how much did churn play an aspect or attention play an aspect in some of the investments you looked into and as an investor, what were some of the things that you were looking for within these companies?
Fletcher Richman: [00:02:34] Yeah, it's a good question. I think I, it was definitely something my, I always went to either I would look forward in, in the slide deck or I would ask entrepreneurs about their churn and. I think though, before starting how I really looked at it as purely just a number. And I didn't get into the nuances of the fact that churn.
I think typically one it's not just a number. These are actual customers, like there's stories behind [00:03:00] every single one of these events that's happening. And then two is that churn. I think. Is so nuanced because you have like old products. Sometimes it can be a good thing. You can have a bunch of customers from an old product that you're cutting off sometimes.
It really tells you a lot about who your best customers are. Like, there's so many different layers to it. And I don't think I actually ever really would dig in nearly enough to like, let's segment this out. Or what is this? What types of customers are turning the most? I never looked at it like that.
I just go, oh, you have. 10% churn that's bad. Okay. And then that's all, I would glean out of it. So
Andrew Michael: [00:03:36] that's actually a really interesting perspective as well. Like for entrepreneurs looking to raise capital and maybe just like sharing a little bit more insight into your numbers and the reasons behind it.
Cause definitely, as you say there could be reasons like. Turning out bad customers, that just aren't a good fit for you. Like it could be something strategic that the business is trying to move away from. And as a result has maybe impacted a specific segment, but if you have really got a good focus, a good strategy on like how you're going to be [00:04:00] improving that number, and this was maybe part of it that could end up putting you make BA like in a bad lens when viewing.
Top level numbers, but underneath that, once your segments and understand this there's really good a fit from there. Interesting as well, like obviously going into this there, now you decided at some point to launch Halp what was the motivation behind that? What made you say, okay I'm gonna take my investor hat off for a while now and get in the ring and start building my own company.
How did you go about deciding that.
Fletcher Richman: [00:04:29] Yeah, it was a natural thing, to be honest the venture fund that I was working for at the time reached its end of its fund and they weren't raising the next fund. And like I pretty much got, let go didn't have a job anymore. And so I was like, all right, what am I going to do next?
And at the time, so this was early 2017. I had been, I'm pretty obsessed with productivity tools in general. I'm just a really big fan of. Zapier Calendly or streak or any of these tools that just make my life better. And my little minutiae of tasks a little [00:05:00] bit less, if they can, I don't have to schedule meetings.
And if I don't have to like, Leave my inbox to use my CRM, those things all just save me a little bit of time. And so I'd always been a huge fan of slack. Slack was like this place. I could pump all of my data and information into, we used it at catalyzed. We used it really in the early days, like 20 15, 20 14 when it had just come out.
And so in 2017, slack was very clearly to me breaking out to the point where it was going to become this platform that people could build on top of It seems, obvious now, but they had four or 5 million weekly active users at the time Microsoft teams didn't exist at all in 2017.
Slack had just come out with threading and like the whole idea of a chat bots. I don't know if you remember like that whole era of chatbots that was on the tail end of it. Becoming clearly not the trend. And so I got really excited about the idea of building on top of slack, but really as an interface to, to create a product that would allow people to do some sort of a job inside of [00:06:00] slack without leading it.
And so honestly we just started building stuff on slack in 2017. Like initially it was going to be a CRM, but we just did the whole customer validation journey. And invalidated a lot of stuff really quickly, to be honest with you. And just trying to find that thing that was a true pain point for slack customers is where we started.
Andrew Michael: [00:06:19] That's awesome. And I hope to see I think it's interesting that yeah, essentially got, let go. And this is what led you down your like Korea now and in terms of like next steps and becoming an entrepreneur, and then also that, seeing that inflection point. Cause I think actually like Slack's biggest sort of like theory was becoming like the workplace operating system.
It wasn't really about ever becoming like a chat platform to do for teams to communicate. It was more about like this move towards becoming that operating system that. Different tools and services to build on top of, and that you had the foresight to think, to see that and get suddenly is definitely interesting.
So tell us a little bit about Halp. What is a confrontational ticketing platform? Like how do you help your customers? What was that insight that you found three [00:07:00] experimenting.
Fletcher Richman: [00:07:01] Yeah. So we got pulled pretty quickly into a ticketing Halp desk ticketing as a general space, which I honestly didn't even know that much about it's weird now because all I do all day every day is thinking about it.
But. I wasn't super clear on what that was and the different problems that it solved. The first product we built was actually purely just an integration between two services, integrated slack and Zendesk, and allowed people to manage different use cases around doing ticketing and sinking conversation between slack and Zendesk.
And that product was called bubble IQ. It's why I mentioned as well. This idea of like sometimes turning out customers is a good thing. That was our first product, where we got some early product market fit, early validation. We got our first kind of a hundred customers onto that product. And then.
We actually figured out there was a much bigger opportunity. And so the health product today, instead of just integrating between different tools, how is its [00:08:00] own standalone ticketing solution? It's primarily focused on internal teams. So most medium to large size companies have. Dedicated internal. It dedicated internal HR, operations facilities, all these different internal service organizations who they provide service to other employees.
And so we've, we found that those teams typically have like a. Slack channel or people just ask them questions and they don't have a way to track what they're doing. And they needed a dedicated tool to manage those requests and make sure that the ball wasn't getting dropped on all those things. And so after about a year and a half of building that bubble IQ product, that was purely just integrating with Zendesk.
We realized this big opportunity to actually build a brand new service desk product. And we built that out and we launched that in. Early 2019 and at that point raised money from Slack's venture fund and a bunch of other Colorado investors. And that's pretty much the product today.
It's a ticketing solution built into now, not just slack, but also into Microsoft [00:09:00] teams that helps people manage those internal requests across it. HR deal desk, all the different internal departments in a company.
Andrew Michael: [00:09:08] Very cool. And what was that sort of decision like the BME. So you started out ticketing, Halp desk connecting into Zendesk and so forth.
Like you realize there was this opportunity at that point, like you had some form of product market fit, but you saw a big opportunity, like. How did you and the team decide to make the decision? Like how quickly did you have to make it and how did the company then just make that pivot
Fletcher Richman: [00:09:33] essentially?
Yeah, totally. I was a pretty Tricky time in the business, for sure. Cause you, I think in the very early days when you don't have any paying customers, it's a lot easier to move around quickly. You're not letting anybody down. You're not dropping the ball for anybody. But like I said, we had like over a hundred paying customers who we had to figure out.
Whatever we did in our next thing, how would they come along with us or not come along with us? And we explored a bunch of different [00:10:00] avenues. Honestly, it was, I'd say a bit of a low point for the company where we were just struggling to figure out what to do. Next. We were going everywhere from building an internal directory product to building a customer success solution.
But what we ended up doing that worked super well is. Out of those a hundred customers, we went in and said, okay, who are the customers in this group that pay us the most money that loved the product the most, and that are closing the fastest, like you like coming in into our funnel and closing really quickly, as well as continuing to stay and expand with the product over time.
And we had this segment of customers, which was these internal teams, these it teams that were using it really well and just loving it. And we weren't even honestly targeting them that much. We were almost ignoring them. And so I just had a bunch of conversations with them and said, okay, Are you using the product?
Why are you using it this way? Why are you using Zendesk for this? Cause it's not really built for that. And okay. What if we were to build X for you? So having that base of [00:11:00] customers was, I'd say both a blessing and a curse because we were able to use them to navigate through that. That tricky path and say, okay, here's the product opportunity.
Then I'm hearing from all of my best customers. So it was okay if I fire this coupe of other customers that are actually really price sensitive and don't want to pay for this, and don't want me to do all this stuff and focus in on my like 20 or 30% of customers that are the best. And that ended up being obviously a really good decision when we did it.
Andrew Michael: [00:11:25] Absolutely. Let's talk about that a little bit more detail. So you did some analysis segmenting, trying to understand which customer base was the ideal customer from a few different angles. And obviously you mentioned like one of them, which was converting the fastest and who were the happiest.
And I'm interested when it comes to building products on top of platforms like slack how much does churn and retention come into it and how are you going about effectively measuring it essentially. Yeah. What are some of the key metrics that you're looking to try and understand when it comes to retention?
How are you measuring the engagement of your users through these services? [00:12:00] Because I would imagine it's not like a typical web app where you can instrument your own analytics and understand every action and every move that they're taking within the app. So how do you go about measuring general attention and just engagement in general?
Fletcher Richman: [00:12:13] Yeah, it's a great question. And you're right. So one of the core tenants of Halp is that. You don't ever have to leave slack to do your job both as the person who's asking for help, like opening up a ticket as well as, and this is a really unique part, the agent or the person who's actually managing the ticket, they can do that all from this special experience that we create for them inside of slack or Microsoft teams.
We do have a web application. So we do have some sort of your traditional, like you log into our web app, you can manage tickets there, you can do settings and things like that. But like you mentioned, people don't necessarily have to do that. And we do a couple things. I'll start with our top of funnel when people are coming in.
There's some unique aspects to let's talk about slack specifically when someone adds our apt to slack, that's how they actually start their trial. So we don't have like passwords. We don't have any other [00:13:00] way to sign in. You just. Add to slack. We get your email address from that. That's how you've started off your trial.
And then you set up your your create. Your first ticket is our big goal of what we're trying to get you to. So the thing that I like to, that I like to do when we're thinking about both activation initially, as well as retention, if you can boil it down to one. It's very valuable action that a customer is taking.
You could try and measure like all this other different stuff, but ideally if you can get it down to one thing, it's just simpler to understand what's going on. And so for us, it's very simple. Are they making tickets right? If you're not making tickets, you're probably not using your ticketing system very much.
And so what we found is that. During activation, if a customer makes two tickets, the first ticket being that sort of like test one in the onboarding, the second ticket being like now, they're actually really trying the system out. If they make two tickets, a chance of conversion actually triples when they, when, once they've made their second ticket.
So our whole [00:14:00] activation process is centered around. Let's just get to get them to make two tickets. Okay, great. That's top of funnel once they've. Converted. So we have a pretty standard two week trial. They go, they put a credit card in after that nice thing here is it's the exact same metric are they making tickets?
We can tell pretty easily if a customer makes zero tickets over the course of 30 days. They're pretty likely to churn, right? Because no one's using the product. And so we basically just built a bunch of very simple alerting systems. And I think people, once I get and people over architect, this stuff, I think the key here is simplicity.
If you can boil it down to as simple of a thing as possible, otherwise then your product changes and your pricing changes if something changes and like your whole retention strategy breaks. So we've kept it very simple. Did you make tickets in our system in the last 30 days? If you didn't, let's send an alert out saying here's a, here's the customers that haven't created tickets and then our customer success team, or even we can have automated marketing [00:15:00] emails that, which is what we've done as we scale that, send out and say, Hey, like government made a ticket and the last 30 days, can we help?
Do you want us to set up some time? Is something broken? Just very simple stuff. But the simplicity is the reason that it works. That's how we've done it in that because of the tickets live in the backend. It doesn't matter that
Andrew Michael: [00:15:17] from the API side and yeah, that's very interesting.
And then, you mentioned as well, like from an onboarding perspective. I think one of the things that it really sounds amazing and it's like the seamless nature of it by the sounds of it. And I'm just going to be paint the picture and you can tell me if you're wrong. It's as an end user, I go through the slack app store.
I see a whole bunch of apps there. I come across Halp. It looks interesting. I need an internal ticketing system while I do from there as the admin of. That slack channels, install, Halp and help automatically creates an account for me within Halp. So if I wanted to then maybe log into your WebEx, I'm assuming that maybe there would be a slack sign-in that would use my historical information and then I'd have access to the web app [00:16:00] as well.
But like you said, like most of the action that you having is pretty much going to be predominantly within slack and that's the goal. Yeah.
Fletcher Richman: [00:16:07] Hold on one another. Software tool. Like people want stuff that works within the tool they're already using and
Andrew Michael: [00:16:13] they wanted where they have it. Yeah. I like it.
This is something I firmly believe as well. Especially now I'm moving to like more and more companies moving remotes. Like it's important that we add more and more tools now emerging that people just don't want another tool in their stack. They just want to have the information they need, where they need it and be able to work from like their environment is also, I love the whole Idea as well behind helping getting started from the beginning.
So interesting as well. You mentioned something before the show, but I wanted to dive into a little bit more now, as well as in terms of like, when we think about net retention and expansion and growing accounts you mentioned something of the way that you're able to expand accounts and to add new users to it.
And you mentioned adding a user to a slack channel, which automatically adds them to your system. Can you talk us through this a [00:17:00] little bit? Like how does this work and where did the idea come from?
Fletcher Richman: [00:17:04] Yeah, totally. So there's, I think there's two points I want to make here that are really important.
The first is I think a lot of companies fall into the trap of trying to maximize the size of the account when they first land it. Based on incentive structures, based on they want to get. 50 or a hundred thousand dollars in MRR when they first closed the deal. And what we've done is we've actually done the reverse.
We want to get the deal as small as possible when it first starts, because then there's less procurement to deal with. There's less everything to deal with. And so I'm super happy if we land. Two, two seats at a giant company. And it's just the two people on the it team that want to use Halp, because what we know happens is Halp the way it works is you put it into this massive public channel.
That's like it Halp or ask. It is the very common channel that people typically set it up in first. And then everyone in the company sees it and is like, Oh, my God, that was a really, I [00:18:00] literally used an emoji to make a ticket. This is amazing. This was great. How do I get this for my team? So we know that there's that internal virality.
So starting with a smaller team makes your sales process easier and then gives you more opportunity to expand as opposed to trying to get the big sale. When you go in that's I think 0.1, I want to make, especially if you have a product that has a lot of internal visibility,
Andrew Michael: [00:18:20] I think this is
I'd love this for their land and expand strategy. I think that's how exactly they grew from the day one. And the show. Yeah. Sorry. Point two. Exactly.
Fletcher Richman: [00:18:29] Yeah. It allows you to just have that self-serve motion. And so yeah. Then 0.2 is trying to make it so that the the barrier to adding those new teams and to adding paid seats is as low as possible.
And yeah, we do this really cool thing that I haven't seen anyone else do, which is. There's that public request channel, which I mentioned asked it, which is all the users are in that. If you have a simple example, like a 200 person company, typically all 200 employees are going to be in that, ask it channel.
Cause they all need [00:19:00] laptops or zoom accounts provisioned or. Whatever stuff. There's also a separate slack channel, which we call a triage channel. This is a kind of a concept we created, but we created it by following what our users are already doing, which they had these private triage channels where the it team is a member of that triaged channel.
And what you do is you actually invite the Halp bot to that as well. And you link that to your queue and Halp, and you say, okay, this it triaged channel in slack is linked to the queue and Halp. And that's actually how we manage membership. So we don't have like our own provisioning system, our own invite system.
Any of that stuff, the members of that channel in slack are actually your paid seats inside of your Halp instance is what that means is that when you invite a new user to that slack, Channel. Okay. Our it team is five people. We support 200. We're going to add it. We hire a new employee. What's the first thing you do when you hire a new employee, you add them to a bunch of slack channels.
And so the second you add them into that, that [00:20:00] it channel. Boom, we charge you another 50 bucks for that additional agent and that there's not, you didn't have to invite, you didn't have to do we get their email, as soon as they joined the team channel and or if you create a second triaged channel, you say, Hey, we have triaged HR now, and we want to link back to the HRQ.
Great. We're going to charge you for those agents too. And so that's been honestly magical if we were really worried for a little bit, that customers would get like mad that when they add a new user to that, Channel, we just charge them, but we've just put a little additional messaging and said, Hey, just so you know, you're going to you're about to get a charge like this added to an agent.
And as long as you're clear and communicative, which is maybe like the third point that I'd say in general, in relation to retention is just be very clear with your customers about everything that's going on. Never try and sneak anything by them. But yeah, that's been a magical thing for us. That's a really unique aspect to our product and in what we do, but that has really driven a lot of that land and expand viral
Andrew Michael: [00:20:58] growth.
Super interesting. [00:21:00] And I love like how effortless it is as well. Like you said, like no need for invites emails to go out, like literally just join a channel and boom, you're there. I'm interested as well then, like in terms of the customer base, would you say it's 99% or maybe Nelson jet max teams, but everybody just using Halp through slack or Microsoft teams?
Not really. Do you have any customers actually using it's the standalone web app or. That's pretty much non-existent.
Fletcher Richman: [00:21:26] Yeah. So the different personas, right? So there were the, we call them are requester, which is the Halp seeker. That's actually getting Halp. They use the product 99% through slack. You can, you, you can submit tickets via email, but we th we consider it a slack first experience, the same way you build a mobile first product.
So the vast majority of our requests are coming through slack or Microsoft teams on the Halp seeker side. On the agent side. So if I'm someone answering tickets there, we see much more of a split. I'd say it's actually pretty [00:22:00] close to 50 50, where half the agents, like we get messages from agents that are like, I was like out with my friends.
Not as much anymore with COVID, but like I was out with my friends, like at the bar and I can't, I was answering a ticket on my phone. And they can do that right from slack. We don't need our separate mobile app or anything like that. So there's lots of times where it's very nice to quickly answer a question through slack.
But if you're trying to manage a queue and go through a bunch of tickets, it's nice to have a dedicated interface to do that. So that one's like half and half. And then for admins work exclusively, are our configuration experiences exclusively out of our web app that doesn't make sense as much to do from slack.
Andrew Michael: [00:22:36] Yeah. And then thinking through sort of retention and are you measuring then again, sort of retention for the different personas. So like you mentioned, like one is a creating tickets. Are you creating tickets? Yes. But the other one is, are you answering tickets as well on the other side? And then the other thing as well is Are you measuring this at the account level and I'm assuming that would be yes, as opposed to individual user level.
Cause I can imagine like within the [00:23:00] company, like not every individual is always going to be creating tickets, but as long as the company, as a whole is healthy and creating a decent volume of tickets, like it's a good indicator. So how are you breaking down that measurement? So when you came to tickets being created.
Fletcher Richman: [00:23:12] Yeah, it's by account, which matches to your slack workspace. So each slack workspace is one account. And we measure it on an account level. We actually don't worry too much about whether the agents are applying. What we've found is that if end users are using the product and opening tickets, then they're good.
Yeah, I like it. And if no, one's replying, that's like their problem. Not because we did anything wrong, it's because maybe they're understaffed or something like that. And we purely just look at. Tickets created by account. We don't look at I've never been like how many logins have we had in the last month?
I think that's a total vanity metric. People are answering and creating tickets. Great. They're using the product they're healthy. That's what really counts.
Andrew Michael: [00:23:53] Nice. Okay. Let's talk a little bit about acquisition then as well. When it comes to acquiring new customers and channels, like obviously I [00:24:00] think the slack apps channel being probably one of your biggest channels, do you acquire customers from anywhere else?
And then the next question to follow on to that was, do you see different retention rates depending on where customers come from?
Fletcher Richman: [00:24:12] Yeah, the slack app store is great. We see great conversion rates through it. Very high intent for our customers that are coming through the slack app store. Google's Google ads.
Google search is a great channel for us as well. People are looking for this. They're looking for make a ticket from slack. Create. Slack help desk. Like those sorts of terms are great. And then there were, we're in a couple of other marketplaces as well. So I'd say the two kind of major being marketplaces and search organic and paid search now.
And I'd say we don't have amazing data that, that follows you all the way down from like attribution to retention. That's a pretty hard one to tie all the way back together, to be honest with you. We do get a lot of referrals and I know that those are always the best customers. We have an AirPods referral program.
So if you're first a customer, we buy you a pair of AirPods, bro. And to me, [00:25:00] that's just always going to be worth it. Even if, once again, like people might say, oh, but what if it's only a $50 a month account? And I'm like, I don't care. Get me the $50 to two people on the it team. Cause I know it's going to expand and it's okay if a few of them lose money cause they know overall they're going to do well.
So we've pushed that referral program pretty hard. Yeah.
Andrew Michael: [00:25:19] And then the cost per acquisition cost is like one 50, whatever a pair of I-pads costs. And you're getting back to a hundred the first month. Like the payback is like a month and a half is. It's pretty good. Can you get these
Fletcher Richman: [00:25:29] customer advocates like the, that customer who referred you, who now has a pair of engraved AirPods, they just love you.
And that to me is almost priceless. You can ask them to do webinars with you. You can ask them to do a G2 crowd review or whatever, and they just are so much more engaged. So there's more value to it than just the additional customer you've got. I
Andrew Michael: [00:25:48] think. Absolutely. So I assume we're coming close on time now.
So I want to make sure I have a couple of questions that ask every guest recently changed this question, but typically what I ask every guest is let's imagine a [00:26:00] hypothetical scenario now that you're avid in your company and you've just got hired. And this year it comes to you and say, Fletcher general retention is really bad.
We need to turn things around. We need to do it fast. We have 90 days. My normal question would be, what would you do? But then typically everybody says that, that speak to customers and figure out what the problem is, and then go from there. I want you to answer maybe from past experience you have 90 days what would you do?
That's super tactical that would you believe would help reduce churn and you can talk to from a past experience that you've done.
Fletcher Richman: [00:26:31] Yeah. So I would go in, figure out. What the top 20% of customers are doing that are turning at all. So I would try to invite a segment of at least 20% of customers that have net negative churn, if not, app like literally zero turn in the last 24 months.
And then I would go through and systematically cut off. Everything from the top of funnel to the bottom of the funnel that [00:27:00] supports any customers that are in that persona. So let's say that persona is like this size company and this type of buyer, then I would say, okay, marketing team, we're only going to market to this group where no a lot were cut or killing all marketing that is bringing in people that aren't a part of this group.
Okay. Customer success team, if they're not part of this group, we're just not going to talk to them. We don't care. Like we want them to try and get them out of here quickly. Our turns are going to go way up for the next 90 days, and then it's going to be amazing after that. So yeah, it would be like basically cutting fat going through and just figuring out who are the customers that we're probably spending a ton of time.
On that wasted aren't
Andrew Michael: [00:27:38] worth our time. Yeah, absolutely. Yes. I'm on your ideal customer profile, deeply understanding who they are. And then, like I said, just stop spending money, stop wasting like an acquisition on success and support for customers that are just like chewing up time and ultimately going to churn, I probably
Fletcher Richman: [00:27:54] doubled prices too on the ideal customer profile because you're always undercharging.
Everyone's [00:28:00] always undercharging.
Andrew Michael: [00:28:01] Always always for sure. Next question I ask everyone is what's one thing that you know about trainer sension today that you wish you knew when you got started with your career.
Fletcher Richman: [00:28:09] I think in SAS it's that, the thing that's really fascinating to me is that there are businesses that look really good for the first.
Like zero to 3 million ARR and growth, because you can acquire a lot of customers and it's a market that like acquisition may be very cheap, but then those businesses end up flat-lining because the it's very hard to retain those customers. So there's this element of product market fit. That almost includes retention.
I don't know if you want to call it product market fit, whatever you want to call it. But. It's very hard to know that in the beginning of when you're getting going in, when you're you might get your first 20 customers and they seem great and they seem awesome. And you might still not have a good business.
Which is, I actually still don't know exactly how to solve [00:29:00] that, but I just know that it is a problem.
Andrew Michael: [00:29:02] So yeah, I think that's definitely like one of those things as an exercise, like trying to calculate your growth ceiling and understanding sort of your, because I think typically in early stage, like you said before, like up until 3 million you might have.
Growth masking the problem. So if you're growing faster than you seen customers turning that's like most by the growth that you're having, but slowly over time, you start to see like their growth declining and their turn rising, and then you get to the point where you hit your growth ceiling.
There are ways to calculate it earlier on in your business, but it's something that people don't really pay much attention to in the beginning because they are like, look, we're growing, whatever it is like 40, 50, a hundred percent month on month, like churn and retention is not really a concern at that point.
But eventually like when a channel starts to get saturated, like acquisition starts to go up, like you start to see these problems occurring and in some businesses sooner than others. But yeah, definitely it is an interesting concept and phenomenon and it is definitely one of those ones, most often overlooked as well when things are good in the early days.
So that's like the, oh, [00:30:00] shit moment. Like now we need to actually pay attention to turn our attention, but.
Fletcher Richman: [00:30:05] There's an actual mathematical ceiling that you have, right. Based on your growth rate and the number of new customers you get. So if you have a thousand customers and you're turning 50 of them a month and you're acquiring 50 customers a month, then you're just flat.
But at the beginning, you're like, wait, I'm acquiring 50 customers a month and you only have a hundred. So you're only turning out five. And so you're like, oh, this is fine. We're growing. But yeah. Yeah. Like combination of your turn into your act, your number of acquisition or top of funnel acquisition literally creates a ceiling.
You can't get above that number. It's crazy. Yeah.
Andrew Michael: [00:30:39] And that's when you need to do things like processing step change, like figuring out who the ideal customer is, like really doubling down and thing. But yeah, it's been great chatting with you today. Is there any sort of final thoughts you want to leave the listeners with anything they should be aware of with your work?
Fletcher Richman: [00:30:53] I don't think so. I guess all I would say is just SAS is a beautiful thing. It's an incredible time to build a SAS company.
Cost [00:31:00] has never been cheaper to do it. Long live subscriptions, I guess is all I would say. Oh, and also I have to give a quick shout out to the podcasts that Mike, my coworker and I have been doing which is called stanky talk which is just a fun, like a podcast about Stock investing. And we just joke around and have fun and teach people a little about the stock market.
So that's my little shell for the day.
Andrew Michael: [00:31:21] Thanks. We'll definitely make sure to leave that in the show notes as well for the listeners to have a listen. But yeah, obviously love to have you back again, sometime in the future is definitely going to be more topics to discuss, but really appreciate the time today.
It's been great chatting and catching up with you again. Yeah. You as well. Cheers.
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My name is Andrew Michael and I started CHURN.FM, as I was tired of hearing stories about some magical silver bullet that solved churn for company X.
In this podcast, you will hear from founders and subscription economy pros working in product, marketing, customer success, support, and operations roles across different stages of company growth, who are taking a systematic approach to increase retention and engagement within their organizations.