1. Lecture Part 1 (11:19): - Basically, - what I'm gonna do is I'm gonna go through the most important things that that I learned - about pricing, - and I'm gonna describe those things through the experiences that I've had and threw reading - that I've done learning that I've done talking to people over the last four years just to - describe what paperless post is. - It is a it visible. - Basically, - it's ah, - it's a service that allows users to go on the Web and design invitations or holiday cards - or announcements that look a lot look exactly like what they would have I ordered, - you know, - five years ago offline, - but it's delivered all online, - so it's using the efficiency of the Web but bringing the customization and beauty and - expression that users were able to have with offline stationary, - which sounds like a really niche idea. - Um, - and it was, - But that was sort of what the power of it was when we started, - and since then, - we've sent 80 million invitations and save the dates and announcements. - One of the reasons that paper was supposed is different from invite or, - you know, - any of the other online invitation services is that there are no ads It's very different - from Facebook and says that Facebook would be more like a distribution platform for us. - And it's different from Levite because we're all about design and it's time for me. - But because there's no ads and it's it was what we set out to do was make it really about - the invitation and the design, - which is what it turned out. - Users responded to as well, - so basically describe what it looks like to receive a paperless post. - You got one before, - but this is essentially what it looks like for a receiver. - So basically they receive an invitation and then they reply, - um, - and submit posted on the host tracks it. - That's what it looks like on the receiver side, - and the first thing that's really, - really important that I learned. - So I'm just gonna go into lessons now, - and I'm gonna explain how I learned these things is that before you can actually think - about pricing, - you have to think about something else, - which is what your core usage is like, - who your user is and what the core usages. - So basically, - there's this quote by Ronald Bigger, - who is a former c p. - A and wrote this really wonderful book called Pricing on Purpose. - And basically he has lots of wonderful quotes in it. - And one of them is this one, - for from the guy who one of the people in the Neiman Marcus suddenly and it. - But you're not really business. - Make a profit, - your business to render service That's so good that people are willing to pay a profit in - recognition of what you're doing for them. - So essentially you're creating value that's in excess of what the customers pain. - And that's why the customers happy to pay. - And so the question to start with instead of what's your pricing model is what's what's - your value? - What is the value that you offer to customers and also your customers? - And basically, - early on, - it's, - You know, - it's it's hard with you don't have any customers yet, - So instead of looking at, - you know, - trying presently that you can't find, - I would recommend looking at core core usage or users so outside what I mean by that, - But it's sort of like if you get once when you get something off the ground, - um, - and you see people using it, - who's using it away that is really driving with what you want offer to the market and also - who's the easiest and most excited. - It's a lot of energy and five seen energy and do some research based on that. - So the question is, - who are your four users? - What are they doing? - This is This is a picture from Spinal Tap. - It's a funny scene where the lead singer in Spinal Tap is talking about the Druids from - Stonehenge. - And he's like, - Who are they and what are they? - You know who were then what were they doing? - And that's sort of the question early on that a lot of people need to answer for us. - It waas not what we thought which was interesting are we came to the market, - Think with this we were really anxious to get a prototype off the ground, - and we got it off the ground, - and we were also really anxious to have ah, - revenue model. - So we said, - Okay, - well, - we need to do something that's gonna that's gonna have a revenue model would be a viable - business. - So, - unfortunately, - consumers don't pay for things online, - so we're gonna have to take this idea which the core of it was to create this customization - tool, - which is what the user uses to create the invitation that I showed you, - which is actually, - you know, - that's actually most of what we work on is the tool to make the invitation. - And we said, - That's the core idea and that's great. - But our users gonna be small to mid size five a one C three nonprofit organizations, - and we're gonna let them sell tickets through a sort of like event, - right, - And we're gonna take a cut of each ticket sold. - And the reason for that is that we know it's working for other people and they're gonna get - it because people are gonna The customer is gonna understand because the customer is gonna - know that they're making money through us. - So to give us a cut of it isn't shouldn't be a big deal. - And they're gonna like it because they could save money on invitations and their non - profits that they shouldn't be spending on an imitation. - Was this whole? - You know, - this whole, - this whole theory that we had So we had this product for for five a one c three nonprofits - , - otherwise known as you know organization. - So not that different from businesses businesses could use it to. - And then we had this simpler model, - which was it was free at the time it was for consumers. - A funny thing happened when we launched, - which was that we were able to serve organizations. - And also consumers were coming on as a result of the organizational sending and will be, - you know, - basically the consumer for sending also, - and the consumers were a lot easier. - There are more of them, - and their reputations were a lot more viral and they're really excited. - And the non profits were on the phone with us constantly, - who had to convince them to use us in a lot of cases, - or if we if they did use us, - they would be sort of annoyed by our lack of extra functionality options. - We only had, - like, - a couple of types of tickets you could sell, - and they wanted to be able to also collect money for donations. - And they didn't really want to use our design tool because they had their logo and they - wanted toe like us to upload and reimagine their pdf. - So after you know after a while. - And after implementing this, - you know, - we implemented this ticketing model and we're actually making money from it. - We did like, - 1/4 of a $1,000,000 passed the revenue before we ever raised capital from venture - capitalists. - But something was wrong because and, - I mean, - we raise money on that on that traction. - Um, - and on a business model that was based on ticket revenues out through, - like 2014. - But once we raised money on, - we had the time and space to really think about how we were gonna become a big company. - It became clear to us that our core user waas not five a one c three. - It was basically a consumer. - It was the people who was coming on and sending for free, - which was annoying because we're trying to make a We're trying to build a company that - would be viable. - This is the core user who these were the people that will so excited that we existed. - They're mostly women. - The senders They use us personally like 90% professionally. - 10%. - They're like ages 25 to 64. - Anyway, - they were really tolerant of us. - Is a young company, - and they were the kind of people that we wanted to build for and what they liked about us - was the ability to customize their design and to express themselves and to be able to use - this new medium for a type of communication that they really liked. - The core usage in the usage it was making sense was the consumer usage, - which is in out sending on their own Onley, - calling us if there's an issue or above, - and being really excited and highly engaged about the activity they were doing. - They get really excited when they would, - um, - get responses from from receivers. - That was a really big deal. - And so also with organizations, - we didn't capitalize on that excitement that consumers had once they sent out there - paperless post. - And they got these comments back from people who are coming to the party, - and they're super excited about that. - So that was another reason why we were just like such were really good consumer company and - not that good. - It several businesses. - So the core value that we determined, - um, - the core usage and from our core users, - waas you know, - it was the reason they liked us was it was a combination of mass customization and good - content, - so and that's what we were good at. - We're good at creating the design tool and at creating the content, - which it's funny because at the time, - you know it's not. - It's not content, - like monolithic pieces of design that you can't customise. - It's that we give them the assets and the formats, - and they, - you know, - in turn change the fonts and the motifs, - and everything is very changeable. - Note cards look the same, - but that's what users liked about us. - So, - yeah, - what is it? - These are just examples of things we learned. - So, - you know, - good content makes people want to design. - Um and the multiplication of it is really cool. - When they design, - they create something totally their own. - Like I do not know what keep comin chop on means or king common make sausages because I - didn't make them cause user did. - But that's the kind of energy you know we'd see, - like we just go in and look at it. - If we're going to help someone for support requesting, - you go in and see what they make their like Super proud of it. - And it's really inspiring, - actually, - to create a product where and then find a user for that product where there's a lot of - energy above and beyond what you've created. - And that's that's like, - sort of where you want to look first in terms of finding monetization model. - So, - yes, - this is the design tool. - It's really easy to use. - It's like one of things that we did early on was the first thing that my co founder, - James and I was the first thing that we did was designed the design tool and the content, - so it resonated with us. - What resonated with the users resonated with us, - and we've always spent, - like all our money on this design tool, - which is like unnecessarily interactive it. - When you, - when you size taxed or current text or change lions, - basing it updates automatically and like animates on the rights, - you can see what you're doing. - It's kind of like it's a entertainment. - It's like an entertaining process and, - like have a glass of wine and designed the paperless post. - Probably some people do because it's fun. - They want to do it so they sit there and design and, - you know, - see whether they're eyeing and see whether they like it and then ultimately, - that create something that's very much the users. - That's why after creating one, - people would send them out to, - like, - 200 the most bored people to them, - and that energy was there even before we ever started charging. 2. Lecture Part II (9:23): - once you have found sort of your core usage and your core user, - then you start thinking about monetization. - You can Onley monetize with a model that's internally logical to the customer. - This is something I really believe in. - This theory called value based pricing instead of cost based pricing. - And the basic tenet of it is that it's not what the cost is to the company that matters in - term. - When you decide what you're gonna price and what the price points gonna be, - what matters is what the value is to the to the consumer of what you've created. - So to give an example, - you know, - it's really easy to Teoh think that you need to You need to do something like, - you know, - you use it, - do something like we originally did where we had we built something where the user could - see the commission model so that they could understand why we're charging them. - Because, - of course, - it costs us money to make the money. - Another example would be pricing, - you know, - pricing T shirts that you cell based on how much the cotton cost you, - and then how much the design cost you to get created and how much it costs to ship you. - And then, - you know, - you add, - however much on to it for your commission that that you think that people will really - appreciate that and understand that and that that's how they're thinking about buying your - T shirt. - But in fact, - probably as long as is within a range of reasonable, - um, - probably consumers think about your T shirt in terms of how it makes them look when they - wear it and what other people think of them when they wear it, - and whether it fits them nicely or makes them look better than they would otherwise. - If it costs you two cents and you charge them $20 if it makes them look really great, - it it's really, - really doesn't matter. - Another thing was basically that I'm you know, - what makes sense. - We wanted to charge for it in so many different ways, - and we started doing these surveys and asking them, - Would you pay, - you know, - x prize per invitation per event that you send out like birthday party wedding, - whatever it is like if you had a flat fee and then if there was a flat fee, - what about $5.10 dollars, - $12. - And then we had another survey that ran. - It was like, - and these air for users that are using us and like, - Well, - what about a subscription like, - would you pay? - You know, - would you pay $5 a month to use this service or when you pay $10 or $12? - Um and we wrote, - you know, - we had already rolled out ads because they weren't gonna monetized a product like we had - very well cause our product is transactional. - It's not an immersive product where somebody is looking, - you know, - you're reading for a long time, - like an article on CNN or Yahoo. - And here you're sitting in for 15 minutes and you might click an ad for us. - It had to be something direct. - We knew it had to be a direct payment. - So basically there's a lot of things we learned from doing those surveys. - But one of them was that people really didn't like the idea of flat fees because who had to - use us for, - like, - thank you notes or or an invitation. - These aren't product that we had either, - by the way, - but it was like this overwhelming, - overwhelming sort of cry for thank you notes and also all these other things. - And we were like, - Oh, - my God, - we just need to figure out a monetization model in them will. - Then we'll we'll build all this stuff and, - um, - so flat fees were out. - Um, - subscriptions were, - like very much out because people don't user. - So the reason why flat fees were out was because of volume, - because it didn't make sense because they had differing volumes. - They shouldn't be payments in amount. - It's interesting that subscriptions were out because people didn't use it frequently enough - , - so didn't make sense. - Have recurring a recurring payment. - Um, - but then we came up with this other idea, - which was something that was taken from it was about being internally logical because I had - an advisor that told me You're pricing needs to be internally logical. - There's one thing I know that I've learned in my career. - It's that has to make sense why they're paying for what they're paying for. - So we thought about some things that we've heard about what people felt sounded logical, - and what was logical was paying on a unit basis. - So if you pay If you were toe. - If if you were to send, - you know one card, - then it would be that would be one unit and then if you were to send 20 it would be 20 - units and then 505 100 units. - And that's not exactly how our cost breaks down. - But it is actually how the value to the user broke down because it was a combination of - this really pretty, - um, - custom item that they created that they're proud of times the number of people that would - see that privately and respond to it that they could track. - And the social value, - basically of sharing this custom product was a hugely important determinant and the amount - of value that the user saw in our in our in our products. - So we were We were like, - OK, - well, - you know, - we ransom surveys and, - um and basically we started with this. - We started with this product, - which was, - you know, - this formal. - It was like formal content. - This is sort of an extreme example. - But there was this type of formal content and we found that when we deployed it work. - But we had to get creative were like, - Well, - okay, - fine. - We need this unit. - We need to think about how to make it make sense the way we did that Waas By thinking about - what exists to the real world and what existed with stamps. - We built the payment processor we like integrated with brand tree, - which is who we use. - And, - um and we even created the model for these units and determined that the units would need - to be bought in packages because if you were to send 50 but then you want to add to people - , - it wouldn't be cost effective for us to process the cost of two more units for you, - just like, - you know, - through the payment processor. - So he realized we're gonna have these units, - and they're going to be bought in packages. - And we actually ultimately were like, - you can also you you get 25 for free when you sign up and you can buy inviting friends, - you can earn them. - And so last minute, - basically before we deployed, - Then we realized that sounded a lot like stamps in the real world. - So you created this icon? - Um, - actually was already our logo. - It was a stamp. - So we're like, - Oh, - my God, - it's fate we're gonna use We're gonna sell her logo, - That's what That's what our That's what our destiny is. - We're gonna sell stamps and our logo stamps. - Actually, - it's really this is, - like, - crazy. - And the funny thing is that it worked, - so it was really simple to explain. - It was like basically, - stamp sends an invitation to a person. - You get 25 free when you sign up. - Um, - you can earn stamped by inviting friends packages common, - you know, - basically like starting at $5 for maybe $5 for 30 and then going all the way up to, - like, - 1000 stamps. - I think that was probably, - like, - $50 range or something like that. - Um, - and and so people got it. - And they got it because, - as I was saying, - it's like the more guests that you had, - the more value that you got out of the design that you designed. - So that was really big. - And I think another week, - another point, - which is that I mean so basically it worked. - We deployed it on April 20th 2009 and people started buying and There are some people that - were, - you know, - in shock and awe, - but they got over it quickly, - and they were earning stamps, - inviting friends. - But to talk about price for a second, - we we settled on $5 as an initial price because what in all of our service, - when we talk about flat fees or, - like, - subscriptions have like that? - For whatever reason, - no matter what we were asking about $5 is this theme that people seemed comfortable with. - It's like what you go by yourself fancy coffee with in the morning, - and it didn't seem like such a big deal. - So we decided to go with that as the base price. - And one of the other things I've learned is that if you a good price is one where there's a - little bit of grumbling. - But, - you know, - if if there's no grumbling at all than you might, - you might have underpriced your product. - So we anchored it like it was about, - you know, - 15 or 20 cents a stamp, - I guess, - initially and then the more the bigger package you bought, - the less each one each unit costs. - That also made sense to people and made them by things that had a time so that they could - get a better price, - and then that would make them use it again because it's sticky because you purchase - something that's in the system. - That was really interesting. - All we knew was that it worked and people were buying them and it was really exciting. - So because because we acquire people from people sending. - So if you acquire people from people sending and then some of those people convert to - senders and those centers converted payers, - if they send over 25 because they had 25 3 steps, - then here, - basically you have a model that is both, - you know, - viral in the sense that you acquire user for free, - and then it's also paid, - so that's, - you know, - that's really great. 3. Lecture Part III (7:03): - the final point that I'm gonna make is something that really is like the next step after - you have been able to determine what you what, - you who your customers and what what model of payment makes sense to them? - Um, - is this question of Okay, - so it's working. - People are buying stamps from you where they're buying whatever it is that you're selling - from you, - but what are they actually paying for? - And this is a really hard question, - and it sounds really simple, - but I think a lot of people don't get it. - And we learned over time. - But now, - in retrospect, - I know that the biggest question that we could have been asking was Okay, - Great. - They're buying stamps. - But why? - The fact was that people they were buying paperless post stamps to send people supposed not - because it wasn't just because of the amount of people that were sending it to us because - of the quality of the design that they had created. - If you were to add other things that were fancy or that like the customization options, - that they would pay for that too, - and that they would pay for that on a volume basis also. - So basically, - we ended up making it so that it would cost more per card if you added, - like a custom and blow blender or a customer like a colored envelope. - This graph back here is like watching our average unit price go up as we introduce new - design options. - I was really set on expanding the site functionally and, - you know, - letting people send, - like, - thousands of invitations at a time and responding to their requests to send all these other - functions of of of correspondents so, - like announcements and say the dates. - And that was cool holiday guards. - I was really big, - and we did do that. - But James who? - We have different roles, - and I do like the you and you exercise, - and he does the card and content and brand design. - He was really focused on on envelope liners and I was like, - You gotta be kidding me. - I mean, - is that really cost a member of Blender? - Is that really what we need to build next? - And yet we were getting all these emails from users asking for things like that. - They're like, - because we have this solid like maroon like envelope liner and they're like, - Listen, - I really like your service, - but that, - like that, - that liner just doesn't go with my card. - My card, - periwinkle. - And I'm gonna need to make this work for me if I'm gonna if I'm gonna use it, - Of course they'd use it anyway, - and they were excited to, - but James is listening to that. - And that wasn't the only thing people were asking for like that. - But basically, - he understood they liked us for design. - So we added custom envelope planners and like, - doubled our revenue in the first A couple months after we added it. - And I was like, - Oh, - okay, - um, - James is right and people were really happy. - And then we're like, - Okay, - so one of the things like that are they asking for Let's listen to those types of requests - . - And, - uh, - it was things like logos, - for example, - for organizations that people could add. - So organizations could add logo the way that a user would add a motif. - But it would be a paid motif like this moment one we also added, - like custom envelopes and a lot of other things like that. - It was like uber paperless post was like If you used us to look differentiated, - then and and make something unique, - this made it like even more unique and more differentiated. - So is like saying that we came by quite honestly, - but it still took us a long time to realize that that's what people were paying for with us - . - And we only realized it once. - Um, - we then, - you know, - basically, - last year we were thinking about our growth model and thinking about what about creating a - premium product so that it wouldn't all be paid. - And the thing that we always just ask ourselves is, - what can we build that users will pay for? - And then the question became to ask ourselves was, - What can we What should we take away and still have people pay? - And it's sort of two sides of the same question. - It forces you to really surgically think about what it is that people are actually paying - for. - What we realized. - That, - then, - was that if we had simpler, - more, - Teoh cut through lots of learning processes. - It was that if you have a simpler, - more pared down version of what we dio, - which means less design up cells. - But still the same designed tool that's very flexible. - It allows you to express yourself, - but maybe it's more focused on, - like photo based backgrounds or casual content. - No envelope, - no logo. - None of the things that people were buying discretionary up sells. - For that, - you could create a product that the people who wanted to send for free would send for free - . - And the people who wanted to pay would pay as much as they were willing. - Teoh. - It was really scary to try it out, - but it completely worked. - And there was a lot of There's a lot of other things you tried like having like taking away - the element of privacy who thought privacy was why people paid. - So we had an option to have a share a bowl card where you could register and would be so - you could send out an invitation that wouldn't be personalized. - People could register through, - but people like the privacy part of using us. - They like they didn't want that to not be there. - They just sometimes 1% privately for free. - That was extremely eye opening and really exciting. - Um, - and we've taken that to its logical extension now, - realize that because our design designs and our design tool are what people pay for with us - , - that the delivery mechanism is actually sort of we could be sort of agnostic of delivery - mechanism. - So, - you know, - in the future we could distribute on other platforms other than email. - And what the 1st 1 that we tried out just a couple months ago is another huge user request - , - which is like, - I want a print. - We'll keep sake. - I want to print 20 for the people in my family, - don't have emails or I want to print my holiday cards or I want to use you for my wedding. - But I want to send them off line. - And so we decided to do a test of that and named this brand paper. - Paper by paper was supposed, - and the cool thing about it is that it is. - It's like the first time we've built something that we were where we understood what our - valued in the world was and where we understood what the value was that our customers saw - in us. - And it's it's doing really well, - and it's like a much higher price point. - But it's doing well because It's really straight, - like Dow up the middle of what it is that we do well and what it is that our users think - that we do Well, - those are the three things that I've learned. - Um, - so it's basically to find your core user two built to use a model that makes sense to that - core user for that product. - And then to ask yourself, - once you've found something that makes sense that works that they're using, - why are they actually using it? - Because you can create a lot of interesting levers when you can surgically understand what - it is about basically, - what it is they're paying for when they pay you and what it is that they're not paying for - when they pay you. - So, - yeah, - those are my three takeaways. - Thank you for coming so much 4. Optional: Past Q&A Session: - So you guys. - So the 1st 1 is I heard live a free product that will be monetizing soon. - Um would love your thoughts and how to announce that without pissing users off. - So in terms of, - um, - not pissing users off, - I mean, - depends on I mean, - it depends on how many users you think you are gonna piss off. - You could always you could always roll out. - What? - You're what you're planning on monetizing to just a small number of people. - And I mean, - maybe you can't technically, - very easily, - But But one option would be Teoh to to roll it out to only a few people and estimate or - Teoh do that basically by time. - So to say, - you know, - you're gonna turn on this feature of being paid for, - like, - five days or two days, - and if it persisted, - lost, - log in or visit, - then he'll roll it back to test into the, - you know, - because I'm all of your users. - But basically, - my point is kind of like the people of you. - If you don't, - it is not everybody. - And there are people who want to pay or people who get really even if they move. - Get really angry who don't want to pay. - You probably don't want those people as long as it's not the vast majority of your users. - And you were incorrectness. - Do you have any users? - Uh, - do you want me? - Then you actually might be making your life a lot better by knowing who these air star who - have no intention of pain. - Those just probably aren't the people that use building for anyway, - Um, - that's helpful. - So Okay. - Um okay, - So pricing for value and making it affordable could be difficult. - Your thoughts so pressing rebellion me. - Okay, - that is true. - Although if you're pricing for value and you are pricing too high, - then you should just price lower. - But the issue is, - if the cost is so high to you that you can't price it above the costs and without it being - unaffordable, - then that's that. - That probably that's a bad sign. - But I think I'm pricing for value when I say it. - I mean, - above and beyond the cost. - But not so far above the cost that you're going, - Teoh, - that you're gonna alienate users. - You obviously want to hit the maximum Occur where your when you get volume of transactions - and the large one of the highest average price per trends actually possible. - So, - yes, - when I say value, - you don't need toe, - you want to maximize. - Ultimately, - you want to maximize the profit for you. - So you measure how you price or the way that you determine pricing of different products is - based on value. - But that doesn't mean it needs to be. - You know, - it. - That's the scale you're using. - It doesn't need perfectly. - It's charged people exactly what the what the value is that, - in fact, - we should always charge them a little less because then they'll actually buy it because - they'll feel like they're getting a deal. - Um, - okay, - how did you develop the relationship with designers? - And what is it exactly? - Um, - the relationship we develop with designers was only a product of, - and I think I assume you mean outside designers. - It was a product of building a platform that could serve our own designs and our own - formats and then enabling them to use our formats the with the way that they were enabling - them to use our infrastructure and tool the way that we use it ourselves. - So I think we use our We have an in house design team, - and we I guess you could say we like crime the tool with our own designs. - And we reverse engineer our own designs to build the tool. - And then we, - you know, - once we acquired users from our own designs in our own tool, - we had a platform that was interesting enough for other designers to want to use it as well - and our agreement to them very based on their size. - Um, - this is the size of the designer. - Um how did you develop the relationship with designers? - Okay, - Sorry. - Yes, - I asked that, - by the way, - I'm not getting the questions live. - So I'm getting them from an email that I'm going back and for us with Abigail on, - um, - want to know more about your survey process? - Surveys are love, - hate things that how did you approach your users together? - The info you needed without pushing users off. - So I think we definitely we definitely, - you know, - suffered in a way, - we'll be gave something's up. - When we decided Teoh, - she'll run surveys regularly. - We tended to do them on pages where we knew people were highly engaged so we could have - done other. - We could have given them other calls to action those pages. - But it was It was after ascending transaction had occurred or after receiving reply, - reply transaction occurred, - so we weren't getting in the way of something that someone was doing. - But once they just sent out 200 invitations that there's a button that after will take a - servant, - they don't have to take it. - So we found that because people it was a good side because people were engaged at that - moment, - you know, - instead of doing something else, - they took a survey service, - were never, - never too long and generally had some easy questions. - And, - um, - we're pretty relevant to the things that the person had just done. - So while we didn't, - it's true that we certainly it's not the most perfect statistical data. - And we certainly didn't capture everybody that Sen and we probably captured people several - times to sent many times for the course of a serving. - It was still super interesting to hear breakaway patterns from senders and receivers. - Uh, - if you were under in the market now when you enter, - is it paid to start as paid to start, - are always free and then moved to paid or when you start with free and then moved. - Paid well, - Yeah. - I mean, - I don't know. - I think I made this clear, - but I'm not sure did. - But in our private data, - we were free. - And then we switched to paid. - So I think I would always enter with in a product like arms initially, - which had very little variable costs but a lot of fixed costs. - I will probably, - you know, - probably again. - Not always gonna get next time. - I'd probably start with free as well, - just to see free. - But like within a controlled environment, - because it was a private beta. - So it wasn't like everybody in the world could use us for free. - It was, - in its way, - are really Was it sort of like a free test? - Most the big things to do. - More tests, - the free tests. - We did a freemium test. - We did a print test, - and then we Then we go on, - like, - really build the big thing. - Once we are once you feel comfortable in the data that we've gathered. - So yeah, - I would have I would always do free, - but with in a controlled environment Do you know any other companies that have botched - their consumer models what they get wrong? - Um hmm. - I think that I can't think off the top of my head of really good examples of people that - have watched their models. - I mean, - I know that we we were We botched our model when we thought that a good free product would - be a like a We thought a good free product would be a product that was like a public event - . - That was something without for Well, - well, - first with that, - it was gonna be a consumer men and that businesses would pay it would pay. - And then that I was like, - early on. - And then we realized that wasn't the case. - And then we thought a free product would be a product that wasn't like free Teoh, - that the brilliant couldn't sent links privately, - but that a publicly could be free if he said that publicly. - What we found was that that was incorrect. - Basically, - private private communication was a core. - We learned this resurvey in like a free form into the private communication was a core - tenet of of what they liked about us. - So So they were like, - what we know. - We're like, - Well, - would you like free? - And we do, - like, - three in private. - We do, - like, - paid in private or free in public. - And they're like, - you want free, - private, - And then we're Then we That's when we learned that we were, - like, - trying to create price price slide front, - like a sliding price scale, - the wrong access. - It wasn't about privacy, - it was about the design. - So, - yes, - I'd say that if I were toe imagine a company that botched there. - They're pricing model, - probably even not understanding what part of the product people pay for. - Because people use a product for certain reasons, - but they pay for it for other reasons. - And what you want to create is a very, - very robust free products so that it gets used a lot, - but it doesn't cannibalize things it would have paid for. - So you want to sort of make a surgical cut between what they pay for and what they use you - for. - Um, - how long did it take three to earn a living on the site? - Was it months or years? - Um, - well, - if That's a hard question, - because you we could have it could have been It could have been months. - It could have been months. - It could have been a year commit tears, - but instead of just constantly reinvested in the company and raise money and reinvest in - the company. - So while we had, - you know, - quarters of being in the black, - that's not how we operate. - Although this, - you know, - other week we at we're at the point. - So take years. - So we're at the point now where we can still reinvest and and, - you know, - Dr, - you know, - profit out of the company, - but without without compromising growth. - But, - um, - you know, - you get once you start doing well, - you wanna grow more and do better. - Um, - so, - yeah, - I think you want Ask yourself how big of a company you want to be. - And we decided, - I guess we decided. - As we started seeing more success, - we decided we wanted to be a figure company, - and it was definitely the right call for us because we are consumer web application and - that, - you know, - it's sort of like a everybody wants to own a category, - and that is that that's very important part of our success, - problems included. - We didn't know we were just starting out to always ask yourself where you are and where you - want to go in terms of the size of the company and the user base is very important and - knowing how long it's gonna take you to be completely independent. - Um, - designer has customer but high lexical cost metals more about the designer as customer - business model and how the pricing is handled in that instance. - So I'm not sure I understand the question here. - Um, - I think I think it's about our I think it's about our design partners again and the - business model. - The pricing is not basically it's that we share some of the price who share some of the - what the consumer pays with the other designer. - That's how it works. - So it's basically the way that the real stationary companies work that many real big - stationary companies work, - which is that did the customer, - you know, - is paying both for the processing of the states, - where itself in the infrastructure that it's on, - but also the added designed value of the of the partner. - So I'm sure, - um but they had nothing else I've ever met. - Right now, - Um, - what are your thoughts? - And raising prices over time is an early platform. - Need to start with low price and raise over time. - I don't think that's the right direction. - I think that it's I don't know if I said this in my in my talk, - But this this this accountant that wrote the book that I really love by Ronald Baker, - his internal, - bigger beef said that the right price is one that people grumble about on, - and I think that that's probably true. - If if it's so incredibly palatable to people that nobody ever rumbles, - then you're probably underpriced. - Um, - and if you find that as you raise prices that you have fewer transactions than he probably - air hitting a breaking point with that curve I was talking about with, - you know, - the number of transactions in the average transaction price that you're able to drive for a - certain product. - I think it's always people say this and it's so you know, - it seems cliche, - but you can always reduce prices, - but it's harder to, - you know, - market Lee increase prices over time. - Um okay. - Are you the publisher, - distributor and our licensure. - Perhaps the author or co author of the designs were outside designers. - Um, - it depends on the designers that we're working with. - If you want to ask me more specifically, - I'm happy to, - but it sounds like maybe you have remorse, - maybe of a specific business model that I could help. - You know that I can help. - I'm trying to figure out with you, - but it's a little bit complicated to go into for General Kun. - A, - uh, - as you've launched new features and capabilities like paper. - How do you know when you hit critical mass to continue to explore something that your use - is suggesting? - So that's a good question. - Basically, - how do you know when a test is taking off? - Um, - basically, - you know, - when a test is taking off by the rate at which its usage is growing and their rate at which - your general revenue is growing or numbers of transactions is growing over time. - So, - like certain things, - I mean, - you know, - it's not always like it's always the next day that something kicks off and makes a lot of - money for you. - But you can tell why what percentage depending on the product. - You know, - if it's a product, - that's it. - The If it's a product that requires a full life cycle of an event Teoh actually actually be - paid for, - then it's getting a little longer. - The product that just led to add something to an existing event, - probably gonna be a little faster and expect faster. - But it's the rate of ramp, - either with usage or revenue that lets you know whether you've created something that's - gonna work. - And I mean initially with initial hundreds of papers, - because we knew that it was something we knew that the rate, - the rate was really exciting, - and we obviously at that time knew a lot less why it was exciting that we do now. - But we now know we have, - like you can compare the rates of growth of those metrics for different things that we've - launched and you know you could is it's a remark. - It's and credit like an order. - Sometimes it's an order of magnitude more. - The rate is an order of magnitude higher in terms of the ramp over time than another - feature that would watching. - We also learned Teoh understand backwards, - one of the qualities of products that make your revenue or your usage ran rates ramp like - that. - So we now build. - Look for those types of qualities in new products that we offer, - um, - etc. - Launch new features. - The one when you mentioned when you mentioned a great the agreement varies according to the - size of the designer. - By size, - you mean the volume of business the designer generates, - or something else? - Um, - it's something. - It's it's It's more on a need. - It's more than I am. - It is on a It is not unnecessarily. - It's not miss that we don't have any. - We don't have money for many of these agreements, - which is why I'm not really. - I don't really want to get into the details of them. - And I'd rather talk about it offline because it's basically on a case by case basis and - their legal agreements that we have with different centers we don't have, - like we're not like a we don't have like a user, - you know, - you completely free and user generated design, - monetize design system. - But again, - it would be happy to speak off learning about specific questions that you have, - Um, - just refreshing for it having those questions? - No, - - not - sure they were questioned. - Sorry. - It is a I'm not seeing any more questions for anyone. - I'm saying it goes well. - Okay. - So, - yeah. - So I am. - I think there's no question. - So if you guys want to ask me more, - you can ask them the class discussions. - And I will look for your questions there. - But thank you so much. - Thank you so much for taking the class. - And, - um, - I look forward to doing it again. - Hopefully, - in any feedback that you have for me personally, - um, - I would love to hear and so that I could make it more, - I guess, - actionable the next time around. - Uh, - make it a better experience as a viewer. - So thanks so much and hope to meet you in person or do this again and offer more knowledge - and advice. - Thanks.