Thanks for being along for the journey y'all! If you want more content, I've been making videos over on the Stan channel! Check it out here: www.youtube.com/@stanforcreators
Great timing LOL! I sent you an email the other day checking in on you & Stan because I hadn’t seen any recent content. Glad you’re back but sorry things have slowed down. This will be a great test of the times for Stan, you got this
Thank you so much Josh! Honestly starting to feel pretty emotional about it after seeing your comment for some reason. The weight of it all is truly starting to hit me.
Love this reflection, thanks for sharing John! Once critical feedback point though: in the beginning you mention the leaky bucket/classic user churn analogy. But then in the end it sounds like your solution is to just increase the size of the faucet (and the bucket?) by increasing reach? Yes it helps to get out of your bubble, but wouldn't the more logical conclusion be to on one side invest more in growth marketing, but on the other side also work more on product retention loops & better user onboarding before you turn the faucet up even more?
Was going to say this -- why wouldn't the focus be on customer retention (i.e., identifying/defining the "best" customers during the onboarding process who are less likely to churn out, while also growing reach)? Since it is mentioned that Stan has grown its customer base to date primarily through word of mouth, it seems ramping marketing initiatives would present another issue of higher customer acquisition costs... I have no experience to draw from when a start up is in its growth phase, but how would potentially not investing resources in customers that are likely to leave the platform in a few months for the sake of improving retention and "same store" growth affect the business at this stage? Reading earlier comments, it seems like this could be a soft spot you didn't feel like addressing, which is understandable. In any case, thanks for sharing more of your journey!
I think we need to recall two points he makes. The first one (at 6:14): the majority of influencers just aren't going to make it. So why would Stan want to invest in retaining these users if they're just going to stop generating revenue? Seen this way, investing in what sounds from other videos like very high-touch user retention efforts (e.g., great customer support and customer success) would not only be expensive; they would also have to scale with growth. The second point he makes that responds to your criticism (at 8:58): 5% of the market has heard of Stan and the remaining 95% of the market has not. If this is the case, then even if Stan improves user retention by an impressive 50%, ARR could still go down because the user growth rate is negative. On the other hand, if he focuses on growth, then ARR will likely accelerate based on the structure of the influencer market that he theorizes (at 8:28): many separate neighborhoods of influencers that will not quickly evangelize Stan into other neighborhoods. If this is the market structure, then it makes sense to ramp up paid and direct social media marketing to supplement organic growth. As he said, this will seed other neighborhoods in the influencer market with user evangelists who will each begin growing Stan organically within their respective neighborhoods. In this scenario, assuming the user retention rate is constant while Stan saturates the remaining 95% of the market, Stan will grow 20-fold by the time (1) growth stops and (2) it finally makes more sense to focus on user retention and revenue per user over user growth. I'm confident that John and Stan have an accurate understanding of their business/market and will be back to accelerating ARR soon. It's been a pleasure and a great learning experience to follow along for the Stan journey. We have been able to listen to the real story of Stan's growth as it unfolds, straight from the mouth of its founder and CEO. And this story has been told with such rare a rare combination of humility, candor, and level-headedness. John, serious fan of you and the work you're doing at Stan!
@@kinewma650 correct. he hasnt got two things figured out: a) who is the 'right customer' b) retention. until those 2 are done spending money on marketing is just.... SMH lol. Yes you will grow top of funnel but the leakage will be insane.
Thanks for the update Jay. Really insightful to hear about the company's incredible growth and story so far. It's a testament for how much value the product brings. Are you guys considering another raise based on the current burn rate?
Nope! We're very profitable fortunately! We've actually underinvested in growth so far (that's on me), so before we even think about raising we should probably invest more ourselves!
@@jayhoovy Wow margins must be super high! Guessing Operating Margin like 60%ish. Profitable in the sense of bottom line? or CFFO less CapEx? If so, very impressive for an early stage company like Stan. usually early stage companies are burning up to a million a month (from what I've seen in banking), but congrats on the progress!
Hey John! Absolutely loved the video, and best of luck with solving the churn issue. As I was watching I thought about insurance, because that’s probably the “subscription” type business model with the least churn. I don’t know how that could help, but thought I’d share nonetheless
Hey this is really interesting! Having similar challenges with scale. Love the idea you have on driving signups with more influencers. Hopefully you'll be to able to achieve a similar trial to paid conversion with that colder traffic. Good luck!
Hey Jay - really love your content. I can really resonate with the leaky bucket analogy. Something confused me in your video though... Question: Isn't adding more marketing and increasing reach to your TAM just adding more water to your bucket? I thought you might address more core components of STAN, not trying to increase your water flow. Just curious!
Spot on yes - we need to both add more water / get a bigger bucket, while also patching up the leak at the same time (move the needle on success / retention). We're focused on both!
@@jayhoovy amazing - good to hear! Did you have specific areas within STAN you were looking at to decrease churn? I wonder if what you mentioned with "users don't know the capabilities of STAN" could be addressed with onboarding. Perhaps even existing users don't know the full extent of STAN. Maybe this would help prevent downstream churn from application confusion. Just a thought! Thanks for the reply :)
@jayhoovy love what you’re doing currently always providing insightful information! Can you do a video about company valuation and the best effective type to valuate a company?
For a company his stage and growth rate it’s usually a revenue multiple. The multiple will be compared to other companies in his market and based on the cos growth rate
Please just be careful when you are going to dump a lot of money into less proven channels. You have a profitable growing company, if it doesn't become that rocket ship, your investors don't make a 10x+, but who cares you are set for life. Be careful when you are jeopardizing that to grow at all costs.
Hi, I am currently working on a saas and followed all your advice. Built a quick mvp and got two paying customers already in two days (that are outside my network and through referrals). I believe the idea is scalable and the market is big enough for it to become venture backed since I can't afford to invest personally to achieve $1m MRR. However, was wondering when would it be a great time to start fundraising.
Sounds like the strategy is to not only get more customers through increasing reach, but also by qualifying customers and working with entrepreneurs that have a solid audience and are more likely to succeed?
Hi Jay. I'm starting an agency as a cashflow biz because it feels like an easier biz model to get into as a first biz, maybe gyms or an influencer agency for ecom brands to connect with celebs actors etc. What I'm struggling with is how do I meet people. It will be mainly remote, I can get myself into a coworking spot a couple days a week which will help. But, I'm obviously using it as a cashflow biz and I dont wanna be doing this 3 years from now. What are your thoughts?
Love the channel but not sure I understand. If churn is the hole in the bucket, isn’t increasing brand awareness and marketing just going to increase the rate of the faucet? I.e. your solution doesn’t seem to address the problem stated in the video and with your analogy
If the problem is stalled growth, your solution makes sense on the surface but would be unsustainable, right? Once growth stops, churn will lead to sales contraction
Super spot on the nose @TheHawkingPost -- we have to solve both to be clear -- I didn't feel like I had the space to cover both prongs of the strategy properly (growth and retention). But retention / driving more success is key if we're to cover up more of the leaky bucket.
Why do you need to build a $1B business? Is this a vanity metric that youve adopted from other people or does it fulfil another purpose? Yes you can say that more money shows more impact but curious on your reasons. As it sounds very buzzy
Do you guys have a referral bonus, like a discounted month if you refer someone or something, if your main channel has been through organic referrals it may be worth investing in pumping those numbers as well. not only will you get referrals from everyman to everyman, but those partnerships with bigger creators your planning may also happen semi-organically (I am a literal nobody 1st year uni student doing marketing tell me why I'm wrong I probably am this seems way to simple)
Thanks for being along for the journey y'all! If you want more content, I've been making videos over on the Stan channel! Check it out here: www.youtube.com/@stanforcreators
You're amazing for being SO transparent and open-minded to share your true startup story
Great timing LOL! I sent you an email the other day checking in on you & Stan because I hadn’t seen any recent content. Glad you’re back but sorry things have slowed down. This will be a great test of the times for Stan, you got this
I’ve always admired your transparency and always-learning attitude. Thanks for educating us along the way. Rooting for you + your team!!
I love the transparency and how you're just openly sharing what it's actually like to run a business. Keep it going
I love the transparency and the bucket analogy here! Best of luck for Q4, Jay.
Please do not stop this!
Great videos man! Working at a startup, it really puts into perspective what we are experiencing and how we can deal with it.
This is awesome, practical advice both in the corporate and startup world. Amazing that in 2024 content like this is free!
please make more videos like the hiring on other things that business owners need to know to run a business 🙏🏾
Congrats on 100K!! So well deserved
Thank you so much Josh! Honestly starting to feel pretty emotional about it after seeing your comment for some reason.
The weight of it all is truly starting to hit me.
Amazing stuff! Love that you’re building in public and being very candid about updates
Partially the economy. This is the worst period ever for my tech company founded in 1997.
Hey sir how can I contact you??
Love this reflection, thanks for sharing John!
Once critical feedback point though: in the beginning you mention the leaky bucket/classic user churn analogy. But then in the end it sounds like your solution is to just increase the size of the faucet (and the bucket?) by increasing reach? Yes it helps to get out of your bubble, but wouldn't the more logical conclusion be to on one side invest more in growth marketing, but on the other side also work more on product retention loops & better user onboarding before you turn the faucet up even more?
Was going to say this -- why wouldn't the focus be on customer retention (i.e., identifying/defining the "best" customers during the onboarding process who are less likely to churn out, while also growing reach)? Since it is mentioned that Stan has grown its customer base to date primarily through word of mouth, it seems ramping marketing initiatives would present another issue of higher customer acquisition costs... I have no experience to draw from when a start up is in its growth phase, but how would potentially not investing resources in customers that are likely to leave the platform in a few months for the sake of improving retention and "same store" growth affect the business at this stage? Reading earlier comments, it seems like this could be a soft spot you didn't feel like addressing, which is understandable. In any case, thanks for sharing more of your journey!
I think we need to recall two points he makes.
The first one (at 6:14): the majority of influencers just aren't going to make it. So why would Stan want to invest in retaining these users if they're just going to stop generating revenue? Seen this way, investing in what sounds from other videos like very high-touch user retention efforts (e.g., great customer support and customer success) would not only be expensive; they would also have to scale with growth.
The second point he makes that responds to your criticism (at 8:58): 5% of the market has heard of Stan and the remaining 95% of the market has not. If this is the case, then even if Stan improves user retention by an impressive 50%, ARR could still go down because the user growth rate is negative. On the other hand, if he focuses on growth, then ARR will likely accelerate based on the structure of the influencer market that he theorizes (at 8:28): many separate neighborhoods of influencers that will not quickly evangelize Stan into other neighborhoods. If this is the market structure, then it makes sense to ramp up paid and direct social media marketing to supplement organic growth. As he said, this will seed other neighborhoods in the influencer market with user evangelists who will each begin growing Stan organically within their respective neighborhoods. In this scenario, assuming the user retention rate is constant while Stan saturates the remaining 95% of the market, Stan will grow 20-fold by the time (1) growth stops and (2) it finally makes more sense to focus on user retention and revenue per user over user growth.
I'm confident that John and Stan have an accurate understanding of their business/market and will be back to accelerating ARR soon. It's been a pleasure and a great learning experience to follow along for the Stan journey. We have been able to listen to the real story of Stan's growth as it unfolds, straight from the mouth of its founder and CEO. And this story has been told with such rare a rare combination of humility, candor, and level-headedness. John, serious fan of you and the work you're doing at Stan!
@@kinewma650 correct. he hasnt got two things figured out: a) who is the 'right customer' b) retention. until those 2 are done spending money on marketing is just.... SMH lol. Yes you will grow top of funnel but the leakage will be insane.
That level of transparency and storytelling easily deserves 500k subs
Thank you so so so much for sharing your story and insights! Learning so much.
Great video man, kudos for authenticity 👍
You are a legend. Love the vulnerability
LOVE THIS. Such a fun update! Very inspired by how you're building in public.
yoo ty for the update jay
Thank YOU for watching :)
I believe in you Jay, you're a natural born change maker
actually hugely helpful video
Your amazing! Glad I found you
Thanks for the update Jay. Really insightful to hear about the company's incredible growth and story so far. It's a testament for how much value the product brings. Are you guys considering another raise based on the current burn rate?
Nope! We're very profitable fortunately! We've actually underinvested in growth so far (that's on me), so before we even think about raising we should probably invest more ourselves!
@@jayhoovy Wow margins must be super high! Guessing Operating Margin like 60%ish. Profitable in the sense of bottom line? or CFFO less CapEx? If so, very impressive for an early stage company like Stan. usually early stage companies are burning up to a million a month (from what I've seen in banking), but congrats on the progress!
3:31 love the analogy-- invest in CS! Also congrats on 100k subs 🎉
Cheers Brennan! Thank you so much for the support! Truly thank you!
Almost at 100k subs, congrats!
Thank you so much Owen!! Appreciate you being here for the journey :)
Hey John! Absolutely loved the video, and best of luck with solving the churn issue. As I was watching I thought about insurance, because that’s probably the “subscription” type business model with the least churn. I don’t know how that could help, but thought I’d share nonetheless
Yo Jay, waiting for your kpi, commission, compensation videos for teams in growing my biz ^^
cant wait. fans of store too =)
Hey this is really interesting! Having similar challenges with scale. Love the idea you have on driving signups with more influencers.
Hopefully you'll be to able to achieve a similar trial to paid conversion with that colder traffic. Good luck!
Hey Jay - really love your content. I can really resonate with the leaky bucket analogy. Something confused me in your video though...
Question: Isn't adding more marketing and increasing reach to your TAM just adding more water to your bucket?
I thought you might address more core components of STAN, not trying to increase your water flow. Just curious!
Spot on yes - we need to both add more water / get a bigger bucket, while also patching up the leak at the same time (move the needle on success / retention).
We're focused on both!
@@jayhoovy amazing - good to hear! Did you have specific areas within STAN you were looking at to decrease churn?
I wonder if what you mentioned with "users don't know the capabilities of STAN" could be addressed with onboarding. Perhaps even existing users don't know the full extent of STAN. Maybe this would help prevent downstream churn from application confusion.
Just a thought! Thanks for the reply :)
I hope you make it big
@jayhoovy love what you’re doing currently always providing insightful information! Can you do a video about company valuation and the best effective type to valuate a company?
For a company his stage and growth rate it’s usually a revenue multiple. The multiple will be compared to other companies in his market and based on the cos growth rate
Loved this one!
Awesome content as always. And congrats on 100k subs 🎉.
Please just be careful when you are going to dump a lot of money into less proven channels. You have a profitable growing company, if it doesn't become that rocket ship, your investors don't make a 10x+, but who cares you are set for life. Be careful when you are jeopardizing that to grow at all costs.
Fantastic content!
Great content. I’m really learning a lot from you.
Wondering if you could make a video on networking from the bottom up.
Appreciate your support! Filming this one soon! Stay tuned :)
@@jayhoovy Will do and thank you!
Hi, I am currently working on a saas and followed all your advice. Built a quick mvp and got two paying customers already in two days (that are outside my network and through referrals). I believe the idea is scalable and the market is big enough for it to become venture backed since I can't afford to invest personally to achieve $1m MRR. However, was wondering when would it be a great time to start fundraising.
Sounds like the strategy is to not only get more customers through increasing reach, but also by qualifying customers and working with entrepreneurs that have a solid audience and are more likely to succeed?
Hi Jay.
I'm starting an agency as a cashflow biz because it feels like an easier biz model to get into as a first biz, maybe gyms or an influencer agency for ecom brands to connect with celebs actors etc. What I'm struggling with is how do I meet people. It will be mainly remote, I can get myself into a coworking spot a couple days a week which will help. But, I'm obviously using it as a cashflow biz and I dont wanna be doing this 3 years from now. What are your thoughts?
love the insights you shared here. this is random but he popped up on my feed, how do you feel about jacky li talking bad about your company?
Please write a book STANFORD Business school MBA for Startups and Online Business.
Just wanted to ask - is the business model subscriptions from creators + a cut of their transactions / sales to their community via the platform?
No fees/cuts! Just subscriptions :)
Love the channel but not sure I understand. If churn is the hole in the bucket, isn’t increasing brand awareness and marketing just going to increase the rate of the faucet? I.e. your solution doesn’t seem to address the problem stated in the video and with your analogy
If the problem is stalled growth, your solution makes sense on the surface but would be unsustainable, right? Once growth stops, churn will lead to sales contraction
Super spot on the nose @TheHawkingPost -- we have to solve both to be clear -- I didn't feel like I had the space to cover both prongs of the strategy properly (growth and retention). But retention / driving more success is key if we're to cover up more of the leaky bucket.
I'm curious, do your vcs like these videos?
Real nuts
Why do you need to build a $1B business? Is this a vanity metric that youve adopted from other people or does it fulfil another purpose? Yes you can say that more money shows more impact but curious on your reasons. As it sounds very buzzy
I can't believe you haven't spent a dollar in marketing. Usually marketing would be like 10-20% of your costs
my SaaS is flatlining at 0 total users, $ -40 usd monthly 😢
W bro
i watched this entire video. i'll save you all time, you can sum it up in 1 sentence - "need to spend on marketing"
Please activate Arabic subtitles on the video
Just activated :)
Merge with Beehiiv
Carpe Diem
Do you guys have a referral bonus, like a discounted month if you refer someone or something, if your main channel has been through organic referrals it may be worth investing in pumping those numbers as well. not only will you get referrals from everyman to everyman, but those partnerships with bigger creators your planning may also happen semi-organically (I am a literal nobody 1st year uni student doing marketing tell me why I'm wrong I probably am this seems way to simple)
not trying to act smart, it's just a question born out of genuine curiosity
💡 🦾