Episode Transcript
Hello, it's Andrew from XO capital. And this week Danny is going to take over. So I'm going to be playing a video that, uh, Danny did of the first 90 days of owning growth bar. The first 30 days with the best month of the product ever the next 30 days where, uh, immediate ruin, we were basically on life support. And then we're coming out of the third 30 days that the end of the 90 day period and things are kind of stabilizing. I can, but it's a really in-depth look at product led growth and what went wrong. Uh, so please enjoy.
Hey, uh, Danny here with XO. So, um, I wanted to do a recap of sort of full circle, uh, what we did with growth bar, essentially within the first 90 days of owning the business, uh, growth bar is our largest acquisition to date. It is a, uh, kind of AI focused, um, SEO content writing tool for. In house writers, content agencies, um, marketing departments, et cetera.
Awesome product, uh, love the founders, um, that we acquired the business from. And, uh, with all of our portfolio companies, um, they're, you know, they've all been product led with some free trial or freemium model. Uh, so generally what we like to do is we come in and we do. Um, we tweak an experiment with that funnel, um, ideally to increase revenue or increase lead volume.
Um, we sort of thought, you know, there was an opportunity actually to do both. The, uh, free trial, uh, previously when we acquired the business was, um, credit card was required. Um, there was, it was only a five day trial. And there were some restrictions on IP addresses around the world. We removed all of those things in one swoop.
That may have been probably our first mistake, but we removed the credit card, we actually extended the trial to 14 days, um, and then we added all of the restricted IP addresses back. Um, and today, or not today actually, Friday, September 23rd, was sort of, uh, essentially, um, 90 days of kind of going through this, uh, sorry, 60 days of, or 90 days of going through this cycle.
Can't do my math for six first 30 days, you know, business as usual, we own the business first month, the acquisition, you can see, sort of see here what sort of the activity was like. Volume was really good. It was actually one of the best, uh, revenue months, uh, of growth bars history. Which was great. Um, literally as soon as we adjusted this, we removed credit card, updated 14 day, added India IP addresses back.
Uh, we felt like we like it immediately ruined the entire business. We felt like we were on life support. MRR went from, this is according to Stripe, from 38, 000. Minus 12, 000 in Amara growth, we lost 127 active subscribers, um, and we only grew by 31 new subscribers. And again, this is from Stripe, if you all know, active subscriptions doesn't necessarily mean paying customers, right?
Active subscribers could mean somebody who... You know, got, you know, the first, first month off because, you know, they had a really bad customer experience and their first month was discounted. Um, there's still technically, uh, an active subscriber because they have an active subscription in a strike, but doesn't mean, you know, cash was collected.
So pretty nuts there. Um, Significant decrease and you know, and then we essentially added everything back in slightly a bit of a panic and slightly, you know, we just first 30 days were like, man, we can't go on sort of testing or validating if this is going to work. Um, it isn't working. So we added everything back.
So August 23rd added credit card back. Um, we kept the trial at seven days instead of five days. And then we kept the, um, IP addresses back. We're sort of now seeing a slight uptick. Um, you know, strong MRR growth. Um, in comparison, um, not what it was in June to July. Um, active subscriber count, you know, everything is sort of trending upwards.
And what's really interesting, and I don't know the answer to this right now, is that churn is significantly down, um, in, in September, from August to September. Again, I'm not sure exactly what that is, um, why that is, but it's, but it's pretty interesting. Um, so I'm just going to go through that story and, and just me digging through to figure out why, what might've happened, some learnings, because this is sort of the first time that We did something like this to an acquired business and it, it's, we sort of fell on our faces and we were sort of scrambling.
Um, so it's just some lessons learned here and, you know, we're sort of on the uptick here, which is great. We'll kind of see how things, you know, through the rest of the year kind of trend to see if it goes back to this. Maybe it was sort of this perfect storm where, you know, July was, you know, was going to be a crazy churn month.
As you can see, uh, you know, how much churn there was. And on top of that. You know, opening the floodgates and, you know, nobody needing to pay for it. Who knows? Um, so, um, just going into sort of what we saw a little bit more on the growth side, this is from ProfitWell, um, which is what we use, uh, you can just sort of immediately see like new MRR, you know, this, this requirement of a credit card, it significantly just, just affected our ability to get new.
New customers and new paying customers and you can sort of see that obviously by how many new customers we actually acquired in that period of time, you know, it's, you know, less than half. Of what we acquired this past month, um, and the month prior, the first month of acquisition. Um, what I thought was really interesting, um, was, I tried to do an analysis, and for me it's this question of quality over quantity.
So, you can see right away, there's just an insane increase in quality of new users. So, you know, we nearly 4x'ed the number of users. Um, percentage wise, like, I thought maybe we'd get a ton of spam. A ton of people who weren't using the dang thing, but you know, if you look at the percentage of personal email addresses, it's not, you know, the most accurate indicator, but something that I can use based off of the information I have, you know, only 7 percent more in terms of people who signed up with a Google, Hotmail, Yahoo, or Outlook address.
Um, so nothing, you know, that significant and, um, And even, you know, I guess, and, and sort of this is where it becomes a little bit interesting is that, you know, the, the people who signed up that didn't use the product was, was very significant. Right? And I guess, um, without having really, you know, thought this through in terms of, you know, what I'm going to say in this video, the quality, I guess, is significantly less despite the percentage here.
Personal email addresses being, you know, somewhat the same, then the usage is pretty drastic where these are accounts where they didn't do any of the things that we track, um, inside the product, a number of blog posts generated, number of, uh, paragraphs written with AI, number of keywords tracked. Those are certain things that.
Um, we do in track in terms of usage, um, 840, you know, 50 percent of the ones that signed up in July to August did literally didn't do a single thing like in our database that that field is completely blank, um, which, you know, speaks to, you know, the quality, um, you know, but I guess, you know, what's, what's interesting and you know, what kind of coincides with that, I guess, is that, yeah.
The people that actually did do something, uh, whether you're in the trial with a credit card or whether you weren't, um, was that, you know, there's just the dispersion of usage and the quality of usage, uh, was, you know, relatively the same, um, this past month, August to September is sort of, you know, the kind of the most interesting where, you know, there's a pretty high number here in terms of.
Um, AI paragraphs used, um, you know, there's 56%, uh, of the users, you know, generated more than 10 plus, uh, paragraphs, um, so that kind of stuff is pretty interesting, but you know, 73, 50, 48, you know, 16, 46, 42, like if you just look at, you know, sort of where we're at, uh, from this month where we added the credit card back and, um, the month where we removed it, you know, it's not like.
You know, people were not using the product, um, when they were actually using it, you know, there's some semblance of, of synergy, uh, between people who were using the trial, um, with a credit card and without, I think the most interesting thing, um, is the fact that, you know, the people were using the product, at least the ones that, um, you know, came through.
So out of the 840, let's just say, you know, 800 of them. Uh, you know, use the product to some degree, uh, you know, 46 percent of them, uh, were, were average in terms of content generated. Uh, and then, you know, let's say about 26 percent and, you know, you can see the dispersion being pretty good in terms of the number of AI paragraphs written in the blog posts.
Um, you know, we're, we're generally pretty good to me, like off the cuff. It's like, Hey, it's like, you know, these guys weren't bots. They were using the product. Um, you know, why was the number of signups so low? And to me, it's, it's just, it's a really hard question and, um, something that I'm, I'll need to continue to figure out.
And this is a silly graph and sorry for the marketers out there who might see this. Um, you know, and this might be a really bad reflection of any sort of funnel, but you know, what we did there, the credit card removal, adding the restricted IPs back, um, you know, playing around with a number of days in the free trial.
I consider that, you know, messing with this stage, the free trial signups, you know, you get, you're driving people to your website, you know, to, you know, do something on your website. Ideally you want them to sign up for a free trial in our case. Um, and then what they do, you know, how. And what you do to get them to sign up, um, you know, is, is the factor sort of that we played with, um, to me, at least it, it, the result is that, you know, this, uh, as much as this was a, um, Failure in terms of removing these things, I don't, I wouldn't say that that was the root problem.
Right. And I'm not sure how else to really say that, but, um, I don't think this, you know, removing the credit card was the reason why we suddenly lost a bunch of customers. Um, you know, I think there's some part in terms of the market and what people are used to in that, you know, a lot of our competitors require a credit card.
And so, you know, once an AI is. By nature and chat GPT by nature is somewhat a commodity because the source is often from the same, same place. And so, um, is this, is it more psychological where, Hey, you know, you signed up for something and you put your credit card in, you know, you're going to get charged, might as well stick with it because, you know, uh, competitor a, b, c, and d are somewhat similar, somewhat priced similarly.
And. You know, I'm already, I already put my credit card here. So why not stick around maybe? And that's sort of, I think our initial justification or response to this. But I think the more difficult one is this question of, you know, who our ideal customer is. I think if, you know, we were having an issue with activating people without essentially forcing them to input their credit card, you know.
Is it a question of the product not being valuable or the product's value and the people who are actually signing up not matching? And that's really where, uh, you know, we're trying to put some of our focus, um, in a couple of ways. So it's this question of, hey, are the website visitors from our marketing efforts, are they as quality as they can be?
One thing that we can do in sort of this free trial Process is get some more information and obviously, uh, Miro and, you know, uh, a bunch of awesome product led growth companies, um, do this really, really well, um, Canva, all those guys where they try to collect some information about, you know, the user that's signing up to see if they're, you know, over time is a pattern with, Hey, is your role, you know, One of these and is that attributing to a higher conversion or are you a X type of company?
And is that you know, does that seem to fit the core? product that the core value of the product with you know, the industry or you know, The level of expertise around SEO or you know, what exactly somebody is interested in within growth bar So this is something that we added Um, we'll continue to test that we don't have enough data yet, um, to be a part of this conversation, but it's something that I'm looking into, uh, but that's something, you know, super interesting that we can do that.
We don't have data for today, um, that will help us make some better decisions. The other thing too, is, you know, a question of, uh, what's driving the most for us, you know, as an SEO company, SEO and kind of organic traffic from content is, you know, our biggest Uh, channel for, um, for traffic. And so, uh, when, when we looked at our, you know, our Google search console and, you know, our Google analytics, um, it's this question of, Hey, like, are, is this strategy of, you know, building a bunch of like AI free tools, which is a really great strategy of, of, you know, driving traffic.
Is that working for us if, uh, we're. A little weaker on the AI features, but stronger with against our competitors. When it comes to our SEO features, AI being so sexy, sexy drives, a lot of traffic gets a lot of eyeballs, a lot of searches. I think it's great low hanging fruit to go capture, but over time is that the place that we should be, you know, spending time to get the highest quality of leads and I'm not sure.
Um, and that's a question that we'll continue to answer by. Um, Tweaking a little bit of the type of content, you know, we develop the type of keywords that we're tracking and trying to rank for, et cetera. And, you know, that's an ongoing process and then sort of this, like, I think the ace of the hole, or, uh, I don't know what the exact term is, the ace up our sleeve, I guess, is how we do activation of the free trials.
Well, so we, you know, for us, like as, you know, um, a portfolio of SAS companies, like time to value is like a huge thing for us. That's like a huge thing for most product led growth companies, and so I would say you know with growth bar The time to value I think is it's a little It's a little muddied it growth bar the way that it's built.
It's sort of a buffet of Small tools and small widgets. There's you know, keyword research tool. There's a keyword ranking tool. There's a site inspector There's a content generator, which is the core value There's a bunch of AI tools that you can use and it's sort of a buffet And so if you're coming in and you want to prescribe the user in five seven days to get the most value There needs to be a path and I think that's something we're also a bit unclear about and being able to Track that a little bit better with product product analytics tools with mix panel that will help But it'll also help to you know push people down a specific user experience and customer experience rather than them signing up and then then then walking into a buffet with you know a You know with an empty plate, uh, that's more difficult than, you know, us driving and having a plan from the top to the bottom where we say, hey, we're going after SEO agencies, you know, free trial signups, we know that that, you know, hasn't had a huge effect, but we know that, you know, SEO agencies are Or SEO people, um, really value Google search console, for example.
So the first thing they're going to do and be asked to do is connect their Google search console. And so right away, there's some sort of value that they get that aligns with the type of customer we're targeting. And that's sort of like synergy or that sort of, I think, path, which I think is important in product led growth companies.
And to be honest, in all companies, that's something that we, um, Discovered to be maybe missing and, you know, a part of this, uh, problem or a part of this, um, puzzle of trying to, you know, increase revenue and, you know, increase free to free to paid conversion that, you know, some of these little things, um, credit card removals, extending the trial, those things bar have bar are barring, you know, less Um, effect, uh, and, you know, might be something a bit broader and a bit bigger and something a bit hairier.
And so, you know, that's where we sit today, um, in terms of kind of where a growth bar is and this initial experiment that we did for the first 90 days, um, more to come on the analysis of all of this, but, um, have a good one.
