Grasshopper Lessons Learned
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We have done a lot of cool things at Grasshopper, made a huge pricing mistake with Chargify, and shut down Spreadable (a website growing and making money) - here is what we learned from all those experiences!
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Grasshopper Lessons Learned
- 1. I’m Jonathan Kay Hi. @JonathanCkay
- 2. Lessons Learned #Success #Failure @JonathanCKay | #StartupRiot | @Grasshopper
- 3. The Entrepreneurs Phone System
- 4. 8+ years in the business @JonathanCKay | #StartupRiot | @Grasshopper
- 5. 50 employees @JonathanCKay | #StartupRiot | @Grasshopper
- 6. 100,000+ entrepreneurs served @JonathanCKay | #StartupRiot | @Grasshopper
- 7. $15+ million revenue @JonathanCKay | #StartupRiot | @Grasshopper
- 8. 2003 2010 Who we are TODAY:
- 9. Sell Experiences not features @JonathanCKay | #StartupRiot | @Grasshopper
- 12. Buzz WORKS @JonathanCKay | #StartupRiot | @Grasshopper
- 13. Buzz WORKS @JonathanCKay | #StartupRiot | @Grasshopper
- 14. WORKS Word of Mouth @JonathanCKay | #StartupRiot | @Grasshopper
- 15. Everyone’s Press
- 16. Traditional marketing had companies speak to many to reach one. Today we speak to one to reach many. - Andy Sernovitz
- 17. Recurring Billing for Badasses
- 18. Pricing #FAIL @JonathanCKay | #StartupRiot | @Grasshopper
- 19. Original Current
- 20. 200+ Comments
- 21. Why? 0.9% paying customers Free = high support costs Paying customers needed features Our hypothesis was wrong
- 22. What Did We Learn? @JonathanCKay | #StartupRiot | @Grasshopper
- 23. Communicate early & often # 1 @JonathanCKay | #StartupRiot | @Grasshopper
- 24. # 2 matters Perception
- 25. Free Time Too much, you have. A real job, you must find… # 3 @JonathanCKay | #StartupRiot | @Grasshopper
- 26. Grandfather Grandfather, grandfather # 4 @JonathanCKay | #StartupRiot | @Grasshopper
- 27. VIRTUAL PHONE SYSTEM RECURRING BILLING
- 28. VIRTUAL PHONE SYSTEM RECURRING BILLING REFERRAL MARKETING
- 29. Its hard to ask Difficult to measure Not easy to build @JonathanCKay | #StartupRiot | @Grasshopper THE PROBLEM
- 31. 22% CONVERSION RATE 75% LOWER CPA $100,000
- 33. But WHY @JonathanCKay | #StartupRiot | @Grasshopper
- 34. Opportunity Cost Product was best sold in a way that is not a core strength at Grasshopper CPA and Customer payback were too high to scale
- 35. One Year Over $500,000 May 2010 - April 2011
- 36. Lessons LEARNED @JonathanCKay | #StartupRiot | @Grasshopper
- 37. What works for you , wont always work for them #1
- 38. Don’t be embarrassed # 2 Launch early @JonathanCKay | #StartupRiot | @Grasshopper
- 39. # 3 Marketing Launch = Product Launch
- 40. One Leader One Vision
- 41. Your early team is very important Keep it small product technical # 5
- 42. More developers on a product is GOOD
- 43. More developers on a product is GOOD More developers can simply lead you down the wrong path FASTER
- 44. Fake it till you Make it # 6 @JonathanCKay | #StartupRiot | @Grasshopper
- 47. Investment in = Investment in
- 48. “ Grasshopper spreadable case study”
Editor's Notes
- Mention - encourage you to use phones / tweet / technology - that is the day & age we live in its not rude. Ask a lot of questions - its better for you and more fun for me. Send them via Chat and Jason will moderate
- It’s the reason the buzz department is Community, Events, Customers, and Press right? Susie Jones may have a blog with 750 followers who are all passionate entrepreneurs….its worth us meeting susie and learning about her, seeing how we can help. Its part of the reason we do Manager Engagement calls. Its why we do care if we are wowing a customer, because that person probably knows 10 other people who could use our product. Might not be a bad time to loop back to original quote about traditional marketing vs now.
- Freemium Sucks – was joking around with a buddy and told him I could make more off selling a shirt that said freemium sucks, than he cool giving away his product for free
- Why shut down a product which is making money, growing every day, and got significant coverage in the press.
- Why shut down a product which was making money, growing every day, and got significant coverage in the press.
- Incentivize person getting referred, not the person referring (DirectTV model)
- -Did not cust dev for V1 -Learned customers needed to have a certain # of customers to have successful program (gh had high volume of traffic relative to price point) -People really wanted the ability to reward referrals (because we didnt ask / listen we didnt know this, wasted time building things people didnt want) -V1 did not solve the real problem (as a result of not listening)
- - Built V1, and scrapped it because we were embarrassed (wasted 3 months) - get out of the building - because we were embarrassed we didnt learn anything, spend time building the wrong thing (trying to make it perfect) *****Could have learned more if people told us it sucked - at least then we could have asked “why”******
- -Got tons of press for a product that wasnt ready to scale - huge beta list, but couldnt let people in as app as unstable -Marketing launch party too early (before product / market fit) - Missed opportunity to get paying customers (could not even accept credit cards) - Product launch and marketing launch 2 different things - wait for marketing launch until ready to start growing, launch quietly with early vangelists - artificial deadlines for development team (must get feature out before launch)...could have just shown screen shots
- 1 leader, with one message. This leader needs to be in the trenches, and inspire the team with that one big vision. Founder needs to not only make key decisions, but be involved. This is actually a great example as the Brain was super smart, but he just ordered pinky around – he could have potentially taken over the world had he helped pinky execute. -Design by committee - bad idea ( final decision) -no founder, and hence no real financial constraints (were not acting like a startup) -very little market validation - someone needs to be accountable multiple people w different intuition
- The entire goal of a start up in early stages is to create a hypothesis and prove or disprove that hypothesis (over and over again until you have a market that you have evidence to believe is profitable…you know how to target that market, and you know what they are willing to pay for). Before you have that, having a bigger team will simply consume resources faster, add more pressure, and make communication even harder. Didn’t even know enough about what we were building to know WHAT technical talent we needed to hire? (in this case we didn’t know how much front end design we needed)
- These were the people that ended up being the most passionate about it...you wanted to help build their idea...you care about their input - Anchor pricing - setting the anchor on $199 - with hopes people would sign up for grow and start. - Throttling - identifying the right key activity across the plan mix (referrals) - People instinctively choose a plan where they thought they would not have to worry about “going over” - as even one referral was worth the $25 increase in plans
- Happy to answer question about this, other things, now later, etc.