profit

Transcript

Intro: Hey, everybody. Welcome to episode 126 of How I Built It. Today my guest is ProfitWell co-founder and CEO Patrick Campbell. ProfitWell, formerly Price Intelligently, has worked with all sorts of companies, including big commerce WPEngine and MasterClass, and they focus on doing things figuring out the best pricing for subscriptions. As a matter of fact, Patrick talks about how he became obsessed with subscription growth. He wanted to figure it out and share that information with people, so we talk about how he built ProfitWell, and we also talked about what he’s learned as far as pricing goes. I enjoyed this interview because it’s something that I always wrestle with, I’m sure a lot of you out there also wrestle with it. So sit back, relax, and enjoy this conversation with Patrick Campbell of ProfitWell after a word from our sponsors.

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Joe Casabona: Hey, everybody. Welcome to another episode of How I Built It, the podcast that asks, “How did you build that?” Today my guest is Patrick Campbell, the co-founder, and CEO of ProfitWell. Patrick, how are you today?

Patrick Campbell: I’m doing well. Excited to talk about building and all the fun stuff that comes with growth.

Joe: Yeah, absolutely. Thanks so much for coming on the show. For the audience, why don’t you let us know a little bit about who you are and what you do, and what ProfitWell is?

Patrick: Yeah, totally. That’s always the question because I could talk for an hour or I could say a small missive of who I am, etc. I guess I’ll give the boring version with a little bit of spice to it here. So I’m from Wisconsin originally, we’re based in Boston though. My background is in econometrics and math. I started my career working in the US intelligence community in DC, and then I moved to Boston to work at Google. Basically, I was in big bureaucratic organizations, Google and the US government, so I wanted to jump out and jumped into the startup community here. About six years ago, I got the bug and started what was then called Price Intelligently, and we changed our name to ProfitWell. Basically, we are obsessed with understanding subscription or recurring revenue growth. Our big mantra is, “We want to understand subscription growth better than anyone else, and then share that knowledge and then imbue that within our products.” The products that we offer, we have a free subscription financial metrics product. You plug in your billing system, Stripe, Braintree, Zuora or whatever you’re using, and you get access to your MRR, your churn, etc. Then the way that we make money is once you log into that free product, you’ll see “This is a problem, this is a problem, this is good.” When there’s problems, we have a couple products. One that helps reduce your churn by attacking your delinquencies, and another that helps with your pricing, which was the Price Intelligently product. So we’re pretty obsessed with the subscription world, and that’s hopefully a good little background with some nice highlights.

Joe: Yeah, that’s perfect. So you’re from Wisconsin, but you’re based in Boston. Are you a Boston sports fan?

Patrick: I have to say yes, or I’ll get attacked. I’m definitely a Wisconsin sports fan still. Green Bay Packers especially, and I love the Bucs and the Brewers, but it’s hard to love those teams because the Packers have been doing well for a while, but it’s hard to love the other teams that haven’t done as well. But in Boston, it’s super tough because everyone– I feel that we’re so spoiled out here with all the championships and such that’s creating terrible fans. People who are like “We didn’t make the finals this year, and it’s a terrible season, everyone should be fired.” I don’t know, when the Brewers went over 500 and didn’t make the playoffs, it was a great season. It’s just a funny thing. I don’t know, and I like the whole “Championship or bust” mentality out here. I think it’s interesting, and I think it’s helpful.

Joe: Yeah, absolutely. I was born and raised in New York, so I am a New York sports fan. I have the same mentality with the Yankees. It’s like “The Yankees didn’t make it to the playoffs, it was a wasted season.” That said, Mets fans are a little bit different, they’re grateful to make the playoffs. It’s always fun to see the expectations of different fandoms, but we’re not here to talk about sports even though I initiated and I could talk about that all day. I just had to know, as a New Yorker, if you were a Red Sox fan.

Patrick: I mean, I will say I hate the Yankees, to add some fire here.

Joe: That’s fair. So, you worked in the US intelligence agency and then Google, and you mentioned that those are large bureaucratic agencies, and you wanted to jump into the startup community. What was maybe the biggest bureaucratic headache that you– Or, what was maybe a common headache that you saw due to big bureaucracy?

Patrick: That’s a really good question. I think the common one and the biggest one are a little bit different. The biggest one which you’re annoyed at, but you also realize why it’s important. When I worked in the intel community at one of the agencies, it would take three to four forms to change a print cartridge in a printer. Now you sit there, and you’re like “Oh my God, that seems ridiculous.” Then again, you’re like “OK, if you think about being in an intelligence community, printers are places that you can have attacks, or you can have people collecting information and such. So having logs on logs does make sense, but it’s also like ‘Maybe it shouldn’t have been four forms, maybe two forms would’ve been OK.’  “That’s kind of how everything is, so when you’re a young, I don’t know, arrogant kid, trying to take over the world and do really– Just hungry. The bureaucracies, that’s tiresome. I think the bigger, more persistent and/or common thing that I think was frustrating was this whole concept of “Communication management.” If you’ve ever worked in a large organization, you spend a lot of your time– It’s not quite politicking, but it’s “I have to make sure that I am being presented in the best light when I do this presentation,” and then there’s “I have to take on this extra project, because that’s how I get promoted.” There’s just a lot of this stuff that’s outside of the core work and also makes it complicated, because all of a sudden you say something that is not even inappropriate but mildly rubs someone the wrong way and so now you have to go apologize. There’s just a lot of stuff that comes with a large organization, so when building an organization of ProfitWell, and we’re now about 60 people, that becomes one of those things where “How do I, with the knowledge of not wanting that inside an organization, how do I make sure that I cannot snuff that out because some of that stuff’s important, but make sure that it’s efficient and it’s the type of conversations?”

Joe: Yeah, absolutely. That’s a great point. I think a lot of people probably start their own companies because they see something that they didn’t like in their full-time employment or in the traditional job market, and being cognizant to not make that part of your company culture is then a big challenge. Especially because these giant companies have been able to scale and maybe that’s part of scaling. I totally understand that. I worked in higher-ed, and I was never really good at the politics stuff. Again, being a New York Italian, I always spoke my mind, and that got me into trouble because I always told my superiors the things that they didn’t want to hear, but I knew were right. Luckily I’m self-employed now, though.

Patrick: There you go. That’s how you– That’s how you cut all those things, you cut through them all, go full self-employment.

Joe: Yeah, absolutely. What gave you the idea to start Price Intelligently, now ProfitWell? Because I love this idea, and as more and more people get into thinking about subscriptions and monthly recurring revenue, I feel like it’s easier than ever to get into that now. But doing it right is hard to do, things like find the right pricing and prevent churn. So what gave you the idea for this business?

Patrick: Yeah, it’s a good question. I think there were two vectors in starting the business, and the first one was I would say that young hubris that I was referencing before. The “I can do better.” All this other stuff and being frustrated in larger organizations, and so that made me jump out of the larger organizations, and then even at a smaller organization, I worked at this company called [Jim Vara] between Google and starting Price Intelligently. But even in that smaller organization, which was about 100 people, I still felt that hubris and so I don’t know if that was– Then I’ve grown out of that in a good way. But I’m thankful that I was a little bit of a gruff, early 20-year-old millennial if you will, back in the day. Because I think that pushed me to not just settle for a traditional 9-5. The “This is an idea,” where it came from– I was tasked, I was a strategic initiatives person where basically I would find little problems here and there. “The support people need training, or the order management system needs a product manager,” just little stuff like that. The one thing I got tasked with was pricing. So there was just– They gave a kid, basically a young middle 20s person this whole pricing thing, which was all of a sudden something where I had a little bit of a playground where I would see changes we would make would either have giant wins in terms of revenue or have giant losses. So that was one of these things where I was like “Interesting. This is fascinating.” Especially when it came to most companies and most businesses, we put so much sweat and so much effort into building something. Then, when it comes time to price it, we’re kind of like “I don’t know, just put a nine at the end and put the most expensive tier on the left and we’ll call it a day.” There should be some more science here, so this got me fascinated with digging deeper and deeper on a problem. Then what we discovered was that pricing is not just the number, it’s your packaging, your positioning, who you choose as a customer. That opened up the entire vision for where we’re going in terms of this whole subscription growth, subscription science element. So, yeah. That’s the mild origin story or the ideation story if you will.

Joe: I like that. You said there should be more science here, which I mean, definitely. I feel like more often not, I’m just picking a price that I think people will pay and then seeing if people will pay it. But you’re right. You said, “It’s not just pricing, it’s packaging, it’s positioning, it’s knowing the customer.” I’m actually really curious about the research aspect of it. I always ask, “What kind of research did you do?” But in this case, it sounds like your product offers a large amount of information presented with the research around it for maybe psychologically what pricing works, and stuff like that. Would you be able to explain that a little bit?

Patrick: Yeah, definitely. Let me pick a depth here, and if you want me to go deeper, or if I go too far, then you can always cut it. It’s like, “How do you price?” In that sense, there’s a short version, and then there’s a medium version, and there’s a long version. I think that it comes down to if you think about what a price is. Your price is, the phrase I like to say is, “It’s the exchange rate on the value that you’re providing.” So, what that means is that you’ve put all this effort into whatever you’re doing and then all of a sudden you’re like “I created this much value and because we don’t barter things anymore, or at least formally, I’m going to put a number on that so that you can give me some cash equivalent for whatever that product is.” When you start to use that mental model, everything in your business from your sales and your marketing, all the way down to your product and finance, starts to become either driving someone to a point of conversion or justifying the price for the product that you’re offering. So, all that means is that you need to measure that precipice. There’s a bunch of models you can use in different ways that you can collect data. Everything from using souped-up conjoint analysis, which is expensive and takes a ton of time, all the way to just having qualitative conversations with your customers in the right way. This is all under “Customer development,” as it’s called. All of those things, what you’re trying to get at is measuring for the right customer and determining the right customer. What is their perception of that value? Because that perception is reality. Then using different value propositions in order to figure out, “Does this value proposition move the value this much, or does this value proposition move that much?” To give you a little bit of practical advice, if you and I were having a conversation on the phone here and I was trying to understand research about the computer that I’m conferencing in on here. What I would do is I would go, “OK. The computer has a bunch of benefits for you. It can make you more efficient, and it can give you a bunch of entertainment. It can help you with research, and there’s probably a bunch of other stuff. But out of those three, what’s the most important and what’s the least important?” You might say, “The productivity efficiency is the most important one. I don’t know, I need the research element and the entertainment I’m going to use, but it’s probably the least important.” Just with that data across 30 people, all off a sudden I start to have some semblance of “OK, for this computer, it’s an efficiency device. It’s the bicycle for the mind as Steve Jobs once said.” Then I might ask you, “OK cool, so that’s awesome. This is something that’s important for your efficiency, your productivity, and all that fun stuff. At what point is this so expensive, you wouldn’t purchase it?” You might struggle with giving an answer, and you might be like, “Probably $1,500.” OK, cool. Then I’d say, “At what point is it such a good deal you’ll buy it right now?” You might go, “$500 bucks” for a MacBook Pro or something like that. Then all of a sudden, I have again across 30 people, I might have a really good understanding of “OK, we’re somewhere around $800 to $1,000.” People think about this as efficiency. Entertainment is the least important, and it doesn’t mean it’s unimportant, it just means it’s the least important relative to the other stuff. I start to have a mental model of my packaging, my positioning, as well as my pricing. If you’re doing this in a more formalized manner– I’m using some extra statistical juice, if you will, to do this at a  scale. But that’s really what pricing comes down to, is understanding that buyer and measuring that understanding. You don’t always have to agree with them, but you want to understand what they think in order to make sure that your positioning and just boosting that value.

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Joe: I probably consistently underpriced some of my courses, because I’m not sure what people are willing to pay. Even though I’m providing them the value of– For $200 I’m going to teach you a skill where you can turn around and then make $1,000. That should be a no-brainer. But on the same token, I was having a conversation with my dad over the weekend, because there’s this pen that I want that is $250, and he can’t possibly fathom why I would pay that much money for a pen. I said, “People pay $100 for a haircut, or highlights or a massage that lasts an hour and this pen is something that I would use every day for the rest of my life.” So it’s really, “What is the value of the thing that you’re offering, and what are people willing to pay for it?”

Patrick: The value changes too. So, the other example I love to give is if I asked you– This is how we think about value as human beings as a spectrum. So if I asked you, “This computer versus this water bottle in front of me, what’s more valuable?” It’s pretty easy for you, all things being equal to go “This computer.” But if I put you in the desert, don’t give you water for five to seven days, or whatever the maximum you can survive is, all of a sudden you’re like “Eff this computer, give me the water.” That’s what’s interesting too because that $250 pen– I don’t know anything about your family, but maybe your dad they scraped by every penny, etc. The idea of something that you could theoretically get for free, or for a dollar and paying $250 for it, for any reason seems preposterous. Whereas you might appreciate the finer things, that kind of thing. Or you appreciate  stuff, and normally if you’re more dev-oriented, that’s what you do. So yeah, it’s super fascinating.

Joe: Yeah. That’s again, a really good point about the value changes. My car needs a repair, but I don’t need to repair the car right now, because I don’t rely on it for work. I work from home. But if I had to drive every day to work, I would make sure my car was fixed immediately because that’s my means for making money. So, you covered a lot of really great stuff and understanding the buyer and why that impacts price. As I get to the title question, “How did you build that?” or “How did you build it?” Maybe we could talk a little bit about the technology because a lot of technical people listen to the show. But also, how did you build the mechanisms to help a user like me understand my customers?

Patrick: Yeah. It’s actually a really fascinating question, because I think that there ‘s– If we were starting, and this is the irony of building a company or building a product, if we were starting Price Intelligently today with the knowledge that we had from the past six years we probably would build it very differently. That’s why we’re doing a bunch of different things on that product to change it. The reason is because we’re a bootstrap company, so we haven’t raised any outside venture, or any capital at all. It’s funny when people say “Outside,” I’m always like, “Did you raise inside?” It’s interesting wordplay. No outside, no capital in general. Just me in a room, busting my butt for 18 hours a day for nine months to get the thing off the ground. But we used to have a pure software product, so it was just essentially a survey tool. We baked our algorithm into the survey tool, and then you could send out this survey, and you could get the answers, and then it would do the number crunching for you. What we found is that one, the reason that we do it this way is because to sell something on the pricing front, you run into a bunch of problems because you do need to measure that perception. But measuring that perception through A/B testing or measuring it through any other market signal is just not accurate and not great. So A/B testing, most of us, we could build a product for A/B testing for very high traffic consumer sites. Amazon can do an A/B test in 30 seconds, basically on price. The problem was that all of those companies typically build that themselves because they have a big stack that they want to imbue that into. For all of the rest of us, we have to go do this research. The problem we ran into was basically people– They didn’t want to do the work to get the data. So we didn’t solve that problem completely, but we solved a lot of that problem for people. Then all of a sudden, it was like “I have the data now, and I’m smart,” they didn’t say this, but they’re smart people and intelligent, “But I don’t know what to do,” because they don’t trust themselves because they’ve never worked on pricing before. They’ve never worked on anything come to pricing. They may have taken one course if they got their MBA, but then it was all theoretical. What we had to do is basically, from a user perspective, we started getting people asking us, “Can we just pay you to help us?” And we’re like, “We don’t want to do services.” Services are bad when it comes to software, that’s what everyone says. But what we noticed is the margins were really good because literally, all we were doing was giving them support, unlike the data and just answering questions. Then it evolved further from there, but it moved into what’s called a “Tech-enabled service,” where basically you can’t buy our software without buying us, you can’t buy us without our software. Now we basically run the software for our customers, and what that’s done is it’s basically just opened up the ability for us to have that trust factor with our customers and also help them implement quickly. The reason I said we wouldn’t build the exact same product today that we built over the past six years is because we started realizing– We’ve realized this for a while, and this is what spurred us building ProfitWell and ProfitWell Retain, and some of our other products. Is that we either need a product where it’s heavy usage, heavy workflow and that’s what’s going on with Price Intelligently and how we flow through with our customers, or we need to build a product that just absolutely does it for them. That with pricing is something that’s hard to do. I think we found out how to do that and that’s what we’re building right now, but it’s one of those things where that was a huge realization that we found to understand how to deploy this understanding and this science if you will.

Joe: Gotcha. That’s interesting. To summarize what you said, your initial product was essentially a survey tool where you could gather information. I signed up, and I could then survey my customers or people that looked like my customers and get information. But a lot of people, forgive me if I’m confusing this now, but a lot of people already had their own way of doing that, and they didn’t know how to process the information. Is that accurate?

Patrick: Yeah, it’s like if I– You’re an engineer correct?

Joe: Yes.

Patrick: I don’t know the first time you learned whatever language you’re super proficient in, or maybe this is a better metaphor– You’re coding in Python or something like that, and you all of a sudden are given a fresh language that you’ve never used before. It’s not that you’re not smart and can’t figure it out, and any engineer can use another language and the building blocks and figure it out. But you still probably want to ask someone some questions, or go into some communities and ask them questions, because you’re not entirely confident. You can guess and check because you can do that with code well and do some tests. But when it comes to your pricing, you can’t guess and check, because you can’t just put a bunch of stuff out there constantly, and you want someone to help you “Is this the right thing to do? Should we do this? What do you think?” That’s where we came into play.

Joe: Gotcha. Yeah, that makes a lot of sense. I have the knowledge of programming, but I’m good at this one language. If you give me a different language it’s going to take me some time to figure it out, and if you are already launched and you have people potentially ready to buy your product and if you don’t have the right price, you’re losing money every minute that your pricing is wrong or that people are ignoring you because your price is too low or too high, or whatever. That’s the value there is that you helped me find the right price faster.

Patrick: Yeah, 100%. Then the other aspects around pricing, your packaging, who your buyers should be, all that fun stuff.

Joe: Gotcha. That’s great. That’s super interesting. So, are you familiar at all with the tech stack? Can I ask you what programming language or what platform you’re built on, or is that a different team member?

Patrick: So, I’m definitely not the head of engineering or head of product anymore. And even when I was it wasn’t– To give me that title would be because no one else had it. So, I’m more of a data science than anything. Basically what I’m saying is, early days I could debug things and figure it out. Now it’s way beyond my scope. It’s a Python stack, and we use a modified Django framework. Basically, in order to take advantage of a lot of the modules and things like that are made for Python and data. That was particularly important when we get into some of our other products. ProfitWell, which is a metrics product, because accuracy is the number one thing. That product, just as a refresher, is bringing in data from a billing system and then spitting out your MRR, your churn, all that fun stuff. Anyone who’s built analytics in a product knows that 100% accuracy is– 100% anything, but a 100% accuracy for metrics is incredibly difficult. For us, we had to instead of pulling from the invoice object, which is in every billing system, we had to go down to the event object, which is the most granular piece of all these billing systems. Basically, build all of these metrics from scratch, and it was honestly just a game of Whack-a-Mole for a year. I think the Stripe ingestion, we have 1,500 edge cases that we account for because everyone uses Stripe a little bit differently. Yeah, it was just something that’s pretty intense, and long story short, that ‘s– There’s some things I know more about our stack I would say, but I don’t know if they’re going to be helpful or would probably be embarrassing to me. To say something like “MVC framework, blah blah.” People are like, “That’s not what it’s called.” “OK, sorry.”

Joe: No, that’s great. I’m just always interested. I mean, Python generally is a very good language, especially for processing datasets. I’ve come to learn, at least, is what people tell me. I’m a PHP guy myself.

Patrick: Old school. I like it.

Joe: Yeah.

Patrick: I know the mild digs to give with different languages and such, but yeah.

Joe: Keeping it, old school.

Patrick: Instead of those Ruby guys.

Joe: Yeah, those Ruby on Rails guys. But apparently, JavaScript is this new up and coming thing that I should learn.

Patrick: JavaScript– Just the people– We had a couple developers come in, and they’re from IBM, and it was a big JavaScript shop, and we converted them to Python, and one of them was like “Yeah whatever, it’s fine. I can code in any language.” The other one was like, “We should switch everything to JavaScript.” They’re ironically more fervent than the Ruby on Rails folks, I found. Which is kind of interesting.

Joe: Yeah. For me, I know enough JavaScript to be less dangerous or whatever. But for me I feel like every other day it’s like “Have you seen this new JavaScript framework? You should learn that.” And I’m like, “Should I?” Because I learned Angular, and then React came out. Then Vue came out, and now something else is out. I want to write code.

Patrick: Yeah, refactoring for React, that was a fun project for us.

Joe: I heard the heavy sarcasm in your voice there.

Patrick: It’s just funny. The funny thing that I find, especially as a non-engineer, is basically looking at– That’s also, there’s a couple side notes. One side note, it’s funny whenever you ask– I used to run this founder meet-up in Boston, and whenever you would ask, it was for people who didn’t have founders, looking for founders or co-founders I should say. Whenever you ask a technical founder, “Are you a technical founder or more of a business founder?” They’re very clear, “I am a technical founder.” Whenever you ask a business founder, “Are you a technical founder, or a business founder?” They’ll go, “It’s a little bit of both.” No one stays in their lane, and I’m just like “No, I’m not a technical founder. I know I’m not. I know enough to be dangerous but dangerous in both directions. Helpful and terrible.” It’s interesting. I can’t even remember the other tangent, which I think was more relevant for what we were talking about, but yeah. Oh, React. The thing that comes up is, as a non-technical founder, it’s estimation, “When is this going to be ready?” That’s not the right question. But you do need to know when it’s going to be ready, or roughly when it’s going to be ready. So with React, it was like “Yeah, we’re going to refactor it.” I think it was something like five weeks, and it just took so much longer. It was just one of those things where it just kept coming up.

Joe: Yeah, absolutely. Whenever I come up with an estimation, I always double it no matter what. “How long do you think this will take?” I think it’ll take four weeks, so it’ll take eight weeks.

Patrick: Yeah, that’s what I’ve started to do in the back of my mind, whenever I hear something. Which I think is fine, because I think we’ve determined you can either have a deadline on– If you have a new feature, let’s say. You can have a deadline on when the feature is going to be ready, or when the launch is going to take place. We’ve chosen “We’re not going to have a deadline on when the feature is going to be ready.” That means when it’s ready, we have to tamper down engineering a little bit and be like “It’s not going to go out right away.” It’s going to go out within a reasonable amount of time, but you can’t expect everything to be dropped. It’s just fascinating. Especially when you start getting to a certain scale, and we’re not even that crazy scale yet. How that interaction plays out.

Joe: Yeah, absolutely. I think that’s a very good point. I lost my train of thought there.

Patrick: It’s all good.

Joe: Here, I’ll clap my hands. Joel, if you could edit that part out. I’ll start at “That’s a good point” again. I think that’s a really good point, and I’ve read a lot of things from the BaseCamp guys about when they plan launches or features and things like that, and it depends on how your company works. But I think that, in general, human beings are optimists and that’s why we always get the short estimate. I think that nothing is going to go wrong when I do this, and therefore it’ll take me four weeks, but then two weeks in and you’re like “Oh my God. I have no idea how React works.”

Patrick: Yeah. We also spend– We don’t spend nearly enough time estimating, right? If we spent three weeks to estimate something that was going to take three weeks, you might be completely accurate, but you’re like “If it’s going to take five weeks, it’s better that I just started working on it.”

Joe: Yeah, absolutely. That’s a really good point too. As we wrap up here, I always like to ask, “What are your plans for the future?” I know you touched on this a little bit and ProfitWell has changed over time, but what’s some big thing that you’re working on coming down the pike that you’re, of course, willing to announce? I don’t want you to give your roadmap and then be held to it.

Patrick: No, it’s OK. You never give out your roadmap, or you never give dates of your roadmap. I think we– We’re pulling on this thread as the whole subscription science “Search for truth” concepts. I think that really where we’re at right now is just combining our brands, trying to get the right story to be told to combine the different products that we’ve built and then going deeper on everything that we’ve been doing. So if you think about any business, but especially subscription or recurring revenue businesses, you acquire a customer, you monetize that customer, and then you retain that customer. We want pure end to end deliverability– Or, excuse me, we want pure end to end basically analytics on everything from top of the funnel, all the way through your engagement. So we came out with our first version of engagement data that’s connected to your financial data last year, and we’re going to continue to pull on that thread and then also add top of the funnel data as well. We want it to be turnkey, not “You have to spin up a bunch of APIs and do a bunch of stuff,” but “It automatically does it for you.” Then with that, all of that data combined, it’s going to make our paid products which focus on basically solving some of these problems just that much deeper. That’s the non-specific answer, but the specific answer is we’re just going to keep going down this rabbit hole. Some specific things we’re coming out with that I’m excited about, there’s a whole talk that we could have about our approach to content. We’re focused very much on this whole media strategy. There’s a lot of video, and there’s a lot of blog, there’s just a ton of stuff that we’re coming out with. We’re basically going to be launching a bit of a network in the next couple of months here that you can access, and it’s going to have a bunch of different shows around subscription growth and things like that. That’s something we’re excited about when we think about content as a product, and so I feel it’s OK to throw that in the product roadmap discussion.

Joe: Yeah, that’s fantastic. I think it makes a lot of sense. People have been saying “Content is king” forever, and it’s still the case. Good content is what drives organic traffic and trust and things like that. So as we wrap up here, I do want to ask you my favorite question. I’m excited for your answer, and that is, do you have any trade secrets for us?

Patrick: Trade secrets. We’re pretty open with a lot of our secrets. We’re pretty open with everything we find out, so we have this show that we publish every week called “The ProfitWell Report,” which is just benchmarking data that we’ve discovered on different stuff. Everything from “Is it important that you sleep, in terms of growth?” All the way to “How do you optimize your annual subscriptions?” Things like that. I think– OK. So here’s two things, I don’t know if I’d call them trade secrets, but two things I think are super important that I feel are definitely going to be true based on the data. For one, I think in the next couple of decades there is going to be a need for every product to have some free element. It might not necessarily be a totally free tier, but it might be a side product that has a pricing greater or a marketing greater, things like that. Some of the businesses have already come out with it, and the reason for that is because content is getting so dense, we’re in this market where it’s like “Let’s make content better and better,” and good content will probably always be relevant. But we’re heading into this world where it’s getting harder to acquire customers, and so the best way to do it is to nurture them through some free product. We’ve seen that people who convert from a free product to a paid product typically have better NPS, better retention, better expansion revenue, etc. I think that the unit economics are going to continue to play out and you’re going to need some free element. This is why we gave away ProfitWell for free. Just because we saw that it wasn’t a great monetized feature product, I should say. Now we’re expanding on it, that’s the most trade secret I can give, and I’m more than happy to share the data for the show notes on that.

Joe: I think that’s fantastic advice because I think another way to put what you said is we’re very much in a trust economy or the beginnings of a trust economy. Traditional advertising doesn’t work for people, and people want to trust the people that they’re giving money to and the best way to develop that trust is by showing them you do good work by giving away part of it for free. In my case, I might create a free course to show people I know what I’m talking about. Then they start to trust me as an instructor and then they’re willing to buy my paid course because they like how I teach.

Patrick: 100%. Absolutely, 100%.

Joe: That’s great. Patrick, thank you so much for that piece of advice and for joining me today. Where can people find you?

Patrick: I am @patticus on Twitter. I’m also really active on LinkedIn, so just Patrick Campbell on LinkedIn.

Joe: Alright. I will add both of them to the show notes. Is @patticus, is that an homage to Atticus Finch, by chance?

Patrick: You know, it’s funny. Sort of. I think that’s the rationalization. It was in my sixth-grade chemistry– No, not chemistry. It couldn’t have been sixth grade then. Yeah, sixth-grade science class. There was this band called Atticus.

Joe: Oh, my God, yeah. I used to listen to Atticus, yeah.

Patrick: Yeah. I wasn’t a huge listener or fan or something that. But one of my classmate’s friends basically listened to them, and he was just like “It’s Patticus. It’s Atticus, but Patrick.” So that’s where it took off. It just was a childhood nickname and it never really fully caught on, but I’ve just embraced it. It’s one of those things where you’re trying to find a Twitter handle and having a pretty common name like Patrick Campbell pushed me to that.

Joe: Yeah, absolutely. That’s great. I will include links to all of that. Including a link to Atticus, the band, in the show notes. Which you can find over at HowIBuilt.it. Patrick, thanks so much for joining me today. I appreciate you taking the time.

Patrick: Absolutely, thanks for having me.

Outro: Thanks so much to Patrick for joining me today. I enjoyed a bunch of aspects of this story. How he was a bootstrapped company, how he recognizes that the way he built it when they first started is not necessarily the way they built it now, and so they’re changing a few things. He talks about the dangers of estimation for time and cost, of course. I like his advice about never giving dates on your roadmap, and his trade secrets about them being open about what they find out is great too. It falls into the same credo as the WordPress base, which is primarily where I’m from. So, thanks again to Patrick for joining us. My question of the week for you is, “How has this conversation shaped your view of pricing? Are you going to change your pricing model at all?” Let me know by emailing me, Joe@HowIBuilt.it or on Twitter @jcasabona. Thanks so much to our sponsors for this episode. Castos, Plesk, and Pantheon. If you liked this episode, go ahead and share it with somebody you think will also like it. I think there’s a lot for a lot of people here, so feel free to tweet it out or email it to a friend or a colleague who you think will benefit from listening to this episode. Until next time, get out there and build something.