The Art of the Paid Consumer Model | Alexa Hirschfeld | Skillshare

The Art of the Paid Consumer Model

Alexa Hirschfeld, Co-Founder, Paperless Post

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4 Lessons (47m)
    • 1. Lecture Part 1 (11:19)

      11:15
    • 2. Lecture Part II (9:23)

      9:23
    • 3. Lecture Part III (7:03)

      7:08
    • 4. Optional: Past Q&A Session

      19:43

About This Class

I've spent four years growing Paperless Post, a paid consumer service online that has delivered about 70M online invitations to about about 30M unique recipients since it launched in April 2009 - all with no ads. Along the way, I've learned what I believe to be a number of valuable insights worth sharing. 

This is an online class perfect for anyone interesting in learning about monetizing products for consumers. You'll leave this class with an understanding of where to start to figure out the right business model and cost structure for a product you've created or want to create. If you have an early stage startup, an idea for one,  or are just curious about the topic, you're an ideal candidate to enroll! 

In this class, I'll cover topics including the following: 

  • How to price according to what matters to your customers, rather than cost-based pricing
  • Determing a model that is internally logical to your customers
  • The difference between why people use your product vs. why they pay for it

This class is project-based: 

You can't decide on a pricing model until you've tested it with your potential customers. If they like your model, they'll buy it if they don't they won't.

Because of the variety of different offerings you may be considering, I will not prescribe how you should test this - in order to do that you'll need to present it to your potential customers either in a survey, in person, or at the register itself. This simple project is constructed to help you put together the basis of testing. Ideas in a lab are useless. When it comes to consumers, you'll be shocked and amazed by what you find in the wild.  

Using something as simple as a text editor and bullet points, or as fancy as photoshop if you are talented like that, write down your 3 best pitches, in clear simple language (and/or with a visually compelling presentation) to a consumer for what, why and how they'll need to pay you if they use your offering.

This is an online class. I'll share a lecture on the topics above and curate some helpful resources to give you a better understanding of the concepts.

Transcripts

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.