What up XO fam. I've had plenty of caffeine this morning so I'm going to be firing from the hip on this one. Example:
Guys (and gals). Listen. buying MRR is lovely. Here's proof (and 13 people agreed). If you haven't tried it. You should.
We're in the process of selling one of the companies. If we get a market price for it, it will effectively have paid back all the $ the 3 of us have put into XO. What does that mean? Basically we will have a portfolio that makes $200k ARR (and growing) that we bought for $0. That's insane. We'll obviously roll that cash back in to other acquisitions, but it's a cool concept. Of course it's not sold yet but we're assuming a pretty unremarkable multiple. Even if it doesn't sell, we currently have a portfolio that grosses more than we put into XO every year. Yes XO is still small but 7 acquisitions in, the experiment has been a success and we can't wait to acquire more. Not to mention the economic uncertainty makes playing the game now much more favorable than it has been over the past few years. Sellers are getting more realistic, and acquire.com has truly opened up the floodgates on supply and demand in what used to be an extremely niche area.
Join the fun.
By The Numbers
Here are a few PLG experiments that didn't turn out like we expected. I think you'll find them interesting.
Sending Emails to push people through a funnel.
Most people assume that they need to set up some kind of onboarding. That onboarding usually involves sending emails when people sign up or take actions in the app.
Turns out our experiment in this area across 3 port cos didn't have a significant impact.
- segment users by usage (for screenshotapi it's # screenshots, for sheetbest it's # of api calls)
- send drip emails to those users trying to push them past the free tier to convert. Helpful articles, seeing if they need help, etc. High quality, wasn't spammy or annoying (relative).
Why didn't this work? Intent.
Intent is the biggest unknown and hardest to measure PLG metric. At face value we look at all
signups as the same. That is 1,000% false. Not all users are the same. Some people want to check out a thing their friend sent them (high intent). Some accidently clicked your google ad because they fat fingered a search query, are then mildly curious and sign up, then their phone rings and they forget you ever existed and move on with their life.
Based on our little experiment, people with high intent will probably convert with or without emails pushing them along a funnel or through a series of steps. People with low intent will probably never convert with or without emails. The entire PLG community is trying to figure this problem out. We've tried a ton of tools out there and don't have a good answer yet.
So the next question, is how to discover and measure intent. And that experiemnt we'll leave for another day.
I say all this while we're actively setting up a new system to send emails to new users to push them along a funnel. Feels weird not to have it, but it certainly hasn't had the impact I think most people assume it does!
As a user, free tiers are amazing. I get to use the product below some threshold of usage and I don't have to pay anything. Bless!
As a business owner, free users suck the lifeblood out of an org. They often are the biggest pain in the ass on support, and most never ever ever pay you $1 but will complain as if you stole their life partner and killed their dog at the same time.
In Feb, we removed the free tier on screenshot and added a free trial. The result? Our best month since 2021. People rig free tiers by having multiple accounts. This is hard to prevent. But if you only get a time limited free trial, it's hard to keep those shenanigans up.
Sheet Best uses google ads to grow. We turned those off for Feb just to see what would happen. The result?
- 3,000 fewer signups (lower)
- 3x the conversion from free to paid (higher)
- Growth was lower.
Google ads are low intent. Their conversion sucks. And they're expensive. All that being said, growth was lower. It's not quite profitable for us to run them but we may turn them on next month after another month of them being off. This one probably isn't that surprising.
- Cold DM grew 50% last month. Fastest product to 100+ users we've ever had.
- Nearly done with the Inlytics rewrite. Yes rewrite. Will go into more detail once it's live.
If you or someone you know is interested in selling a company, please ping us, here's our criteria:
- < $1M purchase price
- Must have revenue
- B2B SaaS only
- Freemium / PLG business model (or something that can have a product led growth motion vs a sales motion)