Stripe Analytics Founder Josh Pigford Shares Story Behind Baremetrics

Success Harbor: Hi everyone this is George Meszaros with Success Harbor and I have Josh Pigford with me. Josh is a serial maker of things. He designs and builds things like Baremetrics, which is analytics for your Stripe account; he also created Temper and Pop Survey. Josh had solved, designed and developed INAUDIBLE for companies like Adobe, AOL, Dell and even a U.S. presidential candidate. Welcome.

Josh Pigford: Thanks for having me on

Success Harbor: Thanks for being here Josh. How did you end up working with companies like Adobe, AOL and Dell?

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Josh Pigford: So there was a period of time where I focused almost completely on consulting and client work like that. And it was always just word of mouth stuff. So a friend of a friend… I was doing a ton of projects and I ended up working with a lot of different people and then over the course of a couple of years, they would move into different roles and so… through word of mouth really.

Success Harbor: And then you were a freelance designer or programmer?

Josh Pigford: Yeah, I went to school for graphic design and while I was in college, I kind of picked up the programming side of things out of necessity. And so I would usually do UI work…that’s what it started off as and then on the tail end of when I doing consulting work, it kind of morphed into this full stack: I’ll design the front end and the back-end, sort of thing.

Success Harbor: So from college you went into a freelancer/consultant role immediately?

Josh Pigford: Correct. There was a seven week period where I was employed for an interactive design firm in Denver Colorado. I was newlywed. I’m from Mississippi, my wife and I went to school there. We got married one week, the next week we moved out to Colorado. The next week I got this job at an interactive firm and then 7 weeks later, I quit it.

Success Harbor: Why did you quit?

Josh Pigford: Well the pay was awful, I was getting paid like maybe $30,000 and I knew spending a couple of hours in stop and go traffic plus making 30 grand a year, it just wasn’t worth it. I didn’t have any ownership in that and that was kind of a big deal to me. Owning something I build… that kind of stuff just wasn’t doing it for me.

Success Harbor: So it took you a whole 7 weeks to say “this is not for me” and were you worried at all when you quit? Did you quit with having some clients already or was it just, you know, “I can’t live like this and I don’t care what’s going to happen, I’m not going to work for these guys?”

Josh Pigford: Well in college I was doing…I had already started some kind of freelance work and a lot of that stuff, I played in bands in college, so I had work from record labels and things like that so that was a lot of what my first clients were…they were in the music industry.

Success Harbor: Pretty much word of mouth or did you do anything else to market yourself?

Josh Pigford: No, 100-percent word of mouth and just like making connections with people. You know, friends would end up at…and lot of it really did kind of funnel through the music industry, which was kind of interesting. Just people in bands I would be buddies with and they would end getting signed to some labels and those labels would hire me and those people from those labels would go to other labels and it was just all word of mouth

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Success Harbor: Are you a musician?

Josh Pigford: I would not call myself a musician now. But there was probably a 10 year period where, yeah, I was dedicating a lot of time to music.

Success Harbor: Ok, ok. So, how long were you working as a freelancer/consultant before you started to think about some product ideas like Temper or Pop Survey?

Josh Pigford: Sure, so, I think, historically, I’ve always been kind of, or had this sort of entrepreneurial mindset. Even as a kid, going to hustle and cut yards for neighbors or baking stuff and selling it; always trying to find ways to sell something. And then in college, I was already doing web design stuff and programming stuff. My first real taste of “oh I could make some money doing something other than just making stuff for other people,” like building something I would build sites. So like, ad revenue, you used to be able to make a ton of money of ads with relatively little work. So this would have been like early 2000.

Success Harbor: So give me an example, what kind of site would you put together?

Josh Pigford: So the first kind of site that actually made some money, at least for college kid which was worth something, I had a site called reallyfunarcade.com and another site called reallydumbstuff.com.

Success Harbor: Sounds like great stuff to me —

Josh Pigford: So, high quality stuff here. And another site called Tutorial Outpost. So, all three of these sites were ultimately me creating things. So like really fun arcade was like these flash arcade games, which were huge in early 2000s. This was so far before an iPhone or anything like that. So I would curate, find all these different games to play, put them in different categories, you could comment on the games you were playing and I would put ads next to all this stuff. And I think at one point, at the height of it, I was probably pulling in anywhere from $3 to $5,000 a month.

Success Harbor: Not bad for college.

Josh Pigford: No, it’s great for college. So I have virtually no expenses. So it was awesome. And that’s when it hit me. And I think that was the big reason I had no problem leaving this job in Denver after only 7 weeks. I’m killing it. Doing only ad revenue, which requires almost no work, so why would I work a 9 to 5?

Success Harbor: So even when you were working that seven weeks, you were generating ad revenue from these sites?

Josh Pigford: Yes and that was sort of…shortly thereafter, I had an inkling that the ad revenue stuff wasn’t going to stick around a long time. I figured its sort of a bubble, this won’t keep up forever.

Success Harbor: And was it a bubble?

Josh Pigford: Oh yeah and that was in 2005 was when I had that job for a few weeks and by 2006 or 2007, things had really kind of hitting the fan. And I forgot…I have so many different random sites..so there was this one other site, called theappleblog.com, and this was like my foray into journalism. But still I wasn’t doing any of the writing, I had convinced people to write for me. Same thing, it was ad revenue based. But ultimately, sites like reallyfunarcade and Tutorial Outpost, I ultimately sold those for, I don’t know, maybe under 10 grand a piece. But then The Apple Blog got acquired by a big type publication called GigaOM.

Success Harbor: Yeah I saw that in your angel list profile.

Josh Pigford: And they acquired Apple Blog in… 2008 and I think at that point this was a major turning point for me. Okay.. .So this is legit I can build a business

Success Harbor: First of all, how did you find writers? You mentioned you convinced some people to write? How did that happen?

Josh Pigford: So I think it’s somewhat unique to the Apple industry as a whole. People who love Apple are kind of Apple fanatics. Saying, I’ll get you free stuff to review in exchange for you writing, um, was an easy way to get started. Now these weren’t all product reviews. But like, as a sort of payment they were happy to write about Apple, they already loved Apple and that they could get some free cool tech gear, that was enough payoff for them. Eventually it moved into…like I was cutting checks for these people. To start off, I probably had about a dozen people writing for me with zero overhead as far as me having to pay them goes.

Success Harbor: And so selling The Apple Blog, did you actually reach out to somebody or did this company just find you basically?

Josh Pigford: They knew about me. The Apple Blog started gaining pretty good steam. It was one of the bigger Apple related sites at the time. They were familiar with it already. And we had a mutual friend who ultimately made the intro. And then within a few weeks of that intro, it was a done deal.

Success Harbor: And what happened when you sold it? Did you stop doing stuff for a while? Or did you continue? What was the impact on your life?

Josh Pigford: So as part of that sale, I was on board for a couple of years and sort of helping build it …while still building other products at the same time and still doing a little bit of random consulting work. I was juggling a bunch of different stuff at the time; it wasn’t taking up all my time.

Success Harbor: So when did you actually start to build products? And why? How did you get into that whole thing?

Josh Pigford: So my first product, what i would call a web service sort of thing, was back in, we’ll say 2006 or 2007 and I had another business called Fugitive Toys. It was an e-commerce site my wife and I ran. We sold actual toys; these are collectible art toys. We sold these out of our house. We had a basement full of collectible toys. And As part of that, I was always ordering products from overseas and so, I wanted to track all of those packages to figure out where they were. So, I built this package tracking application, I was going to keep it internal and then ultimately, decided to just put it out there and see if anybody wanted it. So this is called Track the Pack and so I built that for myself and let other people start signing up for it and then eventually I turned it into this sort of commercial thing so that other ecommerce thing could offer package tracking on their site. So instead of sending someone to UPS or FedEx or something like that, they could just give the package tracking information directly to their customers on their site. And that didn’t do great from a business perspective, but that was one of those…sort of my, first taste as far as an actual software as a service kind of thing.

Success Harbor: And how many people or businesses end up using it approximately? Was it 10, 100, 1,000, approximately?

Josh Pigford: Well there was two different sides to it. There were personal, this would be like a consumer focus thing. And then there was a commercial side, like a b-to-b kind of thing. On the consumer side, there were like, 20 or 30,000 free users. These were people just not paying anything. And there might have been a couple hundred who were paying like 25 bucks a year. And then on the commercial side, I think the most I ever had were a couple dozen paying anywhere from 10 bucks a month to a 100 bucks a month. It wasn’t making anything significant, so ultimately, I shut it down a couple of years back.

Success Harbor: And when did you start or get the idea for Pop Survey?

Josh Pigford: So Pop Survey is an interesting story. I was actually consulting at the time, this was 2010 I think. Ultimately, came on board with Pop Survey as like the developer on it. So I was getting the guys who initially had the idea, I was getting paid as a freelance developer and then by the time we launched it, I had moved into this co-founder/CEO role. So I did that. And in 2011, I officially moved into the co-founder, CEO role. And then Temper was an offshoot of Pop Survey that we kind of came up with about a year and a half ago. It’s part of the same company.

Success Harbor: What I really like about Temper is that it has that smiley face. I don’t know, maybe you can describe it quickly so those people in the audience who don’t know and then I’ll talk about that. But how does Temper work?

Josh Pigford: So Temper is a way to track customer satisfaction across your business. So you have this three smiley face system that you can put in e-mails or a pop up tab on websites or embed it on any page in your website and with any interaction you have with your customer, you can include those smileys and then have them rate it. What that does is gives you this graph that shows you a trend of customer satisfaction over time. So that’s the basic gist of it.

Success Harbor: I really like that it’s kind of a gut reaction outlet. Because you know, a lot of times, you don’t want to take the time to take a survey. You can just say, happy face, or green or red, and it gives you a kind of quick gut reaction as opposed to ‘I don’t to take 5 or 10 minutes to take a survey.’

Josh Pigford: Right, totally.

Success Harbor: I wish every site would have it and every phone call would have it so at the end, you could give a quick response to your experience.

Josh Pigford: Sure.

Success Harbor: So where did the idea for Temper come from?

Josh Pigford: So Temper, so Pop Survey, at the end of the day is ultimately a traditional survey system. Like you think of Survey Monkey or any other survey platform. It’s got some unique stuff about it, as far as the way you take the surveys. But the initial thing is, the survey industry has a ton of turnover because people don’t send a bunch of surveys. Most people would send a survey once or twice a year, so churn is super high for that industry. So the first thought was, we’ve got to come up with a way to keep people around longer. We can’t build a business with this much churn. We need something people can use on a daily basis. So that was the initial idea. And we found that …so Pop Survey uses these smiley faces for rating scale stuff. And typically you would say, hey rate this from 0 to 5 or 0 to 10, and instead of using numbers, we used smiley faces just cuz its sort of easier for people to relate to that than a number. So we decided to pull that out into Temper and pull it off into its own product and go from there.

Success Harbor: And so how did you come up with the whole idea of the smiley face? Did you see it somewhere or was it an experiment?

Josh Pigford: Well that was one of those things that was part of Pop Survey early on. Almost from day one. I don’t remember exactly how we settled on using smileys instead of numbers but that was core to Pop Survey really early on.

Success Harbor: Yeah. Yeah, it’s a really unique way of dealing with it I think. So let’s talk about Baremetrics. How did you come up with the idea for Baremetrics?

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Josh Pigford: So Pop Survey and Temper both use Stripe for handling payment stuff. And I had needed, for a long time, a way to get those sort of business metrics from Pop Survey and Temper, so, monthly recurring revenue lifetime value, churn, all these things. And I knew how to calculate them, you could load all this stuff up in a spreadsheet and manually do it or I could hook up any other number of custom analytic platforms. But the problem I always had with all of those was that it required so much work on my part to either a) set up… which was the perfect opportunity for me to screw it up and throw all my numbers off or b) it took up so much time to annually calculate all these things in spreadsheets and have to constantly keep it updated and all that stuff. I knew that Stripe pretty much had all the data I needed and it was a matter of me just pulling it out of Stripe. So one day in October of this past year, I decided I was just going to build something for myself and a month later, launched it.

Success Harbor: So basically, from idea to validation to product, it took about a month?

Josh Pigford: There was no validation, except I turned on the site and people started giving me money. I didn’t try to validate anything; I was going to build it regardless, because I needed it.

Success Harbor: Kind of a scratch your own itch type of thing?

Josh Pigford: 100-percent that. Totally. Like a week before I launched it, I was very close to not launching it at all because I was talking to my wife before I launched it and was saying, I don’t need a third SAS product to manage. I don’t need any more stuff on my plate. But ultimately after I started talking to some other buddies who also had SAS businesses and used Stripe, they were saying, ‘oh, I want this.’ So I decided to go ahead and push it out the door. And it hit a nerve.

Success Harbor: So let’s talk about marketing and building a customer base for Baremetrics and Pop Survey and Temper. I wonder if you could compare the two. Was the experience the same? Did you have the same experience marketing strategy? How are the two experiences different?

Josh Pigford: Well they’re very, very different. Pop Survey and Temper – Pop Survey’s market is super competitive. When you say online surveys to anyone, what do you think of? You think of Survey Monkey and that’s an extremely hard market to compete it. And then the Temper thing, the problem there is it’s a solution looking for a problem. There aren’t people who are looking for customer satisfaction tracking tools. When people see that, they say, ‘oh ok cool, I’d love to that info.’ But it’s not solving some major pain for them. And so, those are very hard products to sell. Whereas Baremetrics is an instant sell for most people. If you use Stripe, you know Stripe doesn’t have great analytics in their dashboard as it is. So you see you can click one button and get all these metrics: ‘yeah, absolutely I’ll pay for that.’ And so, I don’t have to do so much work to try and convince people that they should sign up or pay for it. That’s the major difference.

Success Harbor: You know it’s funny, because I interviewed the CEO of (INAUDIBLE) and he told me the same thing that if the product doesn’t sell itself, then there’s something wrong with the product. And not 100-percent itself, but he says, it has to pull itself forward and it sounds like Baremetrics is doing that as opposed to Pop Survey — is all about you guys have to sell it in and compete in a super highly competitive area.

Josh Pigford: And the market is really different too. Pop Survey is super-focused on the marketer person or the researcher within a company. Whereas — and a lot of time they have to get permission to spend the money that they need to for Pop Survey. Whereas Baremetrics is targeted at the business owner and they need this information desperately and a lot of them are already spending a lot of time doing it manually or doing it themselves. So the prospect of being able to get this stuff with no work is a huge selling point.

Success Harbor: And how many people are using your products, starting with Baremetrics, today?

Josh Pigford: Sure, so Baremetrics, current customer count is 220 or something like that and that’s all pay. We don’t have a free plan, so that’s all paying customers.

Success Harbor: Why no free plan? How did you decide that?

Josh Pigford: It comes down to value, right? The reason for a premium sort of business model or pricing plan set up is that you need to use that for people to realize the value that they’re getting. So, let them sort of see the tool, try it out and hopefully they’ll eventually upgrade to a paying plan. For Baremetrics, it’s kind of instant. There’s this small window of time where we have to pull in all of your Stripe data and generate it for the first time but for all practical purposes its instant. There’s not this setup period where you have to do a lot work. That’s another reason for people to have free plans. A lot of times there’s a lot of setup work involved to get people on board. But with Baremetrics, it’s not that, its instant value. For me, if your business is offering another business value, there’s no reason why someone shouldn’t be paying for it. But legit businesses, businesses that you want for customers, don’t have a problem paying for things that solve problems for them.

Success Harbor: And some would not even want it free. I’ve even heard people say if it’s free, I don’t want it because you’ll either go out of business or there’s something wrong with it.

Josh Pigford: And well, again, it’s like positioning the value that you’re offering. So if you position yourself as the free product, then like if it’s free, then it’s probably not doing a lot. If something is worth something, then you charge for it. And not everybody has that mind-set. And people who are early on in their businesses and aren’t making much money, tend to have this…sort of.., oh, I’m not going to pay for that. Well it’s just cuz they don’t have any money. So businesses that have money have no problem paying for things.

Success Harbor: Yeah and you know it saves them time and that’s what it does, Baremetrics. I think I heard somebody say they loved this product so much they want to kiss you on the mouth. I forgot the name of this person. And when you hear that, that’s a really good sign.

Josh Pigford: Totally, totally.

Success Harbor: So how about Pop Survey and Temper, how many users are using those apps?

Josh Pigford: I don’t know of the top of my head honestly. Both of those products we’re in the process of selling. Both of those products are on autopilot at this point and I’m 100 percent focused on Baremetrics. So I honestly don’t even know off the top of my head on those products.

Success Harbor: Ok, ok. Let’s talk about challenges running a SAS business. So you know it sounds great for a lot of people who are web designers and consultants out there. I think they all want a SaaS project. But there has to be some challenges around that. So let’s talk about that. What are some of the biggest challenges running Baremetrics?

Josh Pigford: Biggest challenge is probably, I think right now, the biggest problem we have, this is sort of unique to a metrics, analytics world, is helping people know what to do with their metrics or what the metrics mean. Like you tell them what the lifetime value of a customer is, but what do they do with that? How does that have an impact on their business? Having knowledge of what the LTV is? So, we’ve doing a lot of educating people. So I started this SAS metrics academy thing to help people know what to do with the metrics and how they can improve them. There’s so much, so much stuff work that we have to do in that regard.

Success Harbor: So you like tell them, if the lifetime value of the customer is $1,000, then you can spend this much to acquire a new customer and this is why, sort of thing?

Josh Pigford: Yes totally, totally. It’s that kind of stuff. (AUDIO CUT OUT) LTV is so important because it basically determines how much you can spend on customer acquisition. And there’s all sorts of that kind of stuff to help them know what to do with it better. And so that’s a unique problem to us and I think a lot of SAS business in general have some common problems and I think a lot of it has to do with, 1) most SAS products aren’t solving real problems and that’s why most of them fail. But then at the same time, even if they are solving a real problem, most people are really bad at selling things or marketing those things. So they’re not good at conveying what pain is actually being solved and I think that actually ends up being the downfall of a lot of products.

Success Harbor: What about churn? Has that been an issue for you with Baremetrics?

Josh Pigford: Yeah, so there’s user churn and revenue churn. The user churn doesn’t bother me, that much. The number of customers we have isn’t that huge. So there’s not this big sample set. So a couple of people cancel and it throws the percentage off a lot. So the user churn doesn’t bother me. I don’t pay attention to it that much. Revenue churn bothers me some because that’s what affects how much….or if I’ve got a lot of revenue churn, or if revenue churn outpaces MMR growth, then you end up losing money. And it’s higher than I want it to be now, but at the same time the business is only 7 or 8 months old. We spend a lot of time trying to figure out what customers want long-term and I think we’re on the right track in that regard.

Success Harbor: So you have a product — you’ve tried other products, you’ve mentioned several of them and it looks like Baremetrics is different. It’s a little bit easier, it takes off a little more easily than these others. How long do you think we should, if somebody has a similar product, how long before you should say, it’s time for me to try something else?

Josh Pigford: Sure, well actually, I gave a talk about the like four signs that you’re business is dying, I think it was called. And so I gave a few different metrics there that I think kind of help drive…or should be an indicator of when things aren’t looking so hot and you should move onto something else. And I’m trying to think what some of those are off the top of my head…So like, if you’re a year in and your monthly recurring revenue is less than $2,000. So for a lot of people you don’t even know what’s a normal number? What’s a normal, like, after a year, how much money should I be making? And that varies a lot from person to person, obviously. But, at the same time, take that $2,000 in recurring revenue after a year and if you’re not able to make more than that, after that much time, chances are you’re not solving a big enough problem. And so, I think those kinds of things, like checking out or checking into your metrics and knowing, okay, these things, you can’t overcome them. Things like if the average revenue per user is less than 20 bucks, you’re not making much money on a per customer basis and if you can’t get that higher, you’re going to have a really hard time building a business. Because if you’re only making a few bucks per customer, you have to have so many customers to be able to make a legitimate business. Like if you have really hard churn, like if it’s over 25 percent, then you’re bleeding out a quarter of your customers every month and you can’t possibly grow fast enough to overcome that. So just looking over your metrics and being honest with yourself that there are easier things to tackle, more profitable ideas than what you’re currently working and you have to get out of the tunnel vision you currently have.

Success Harbor: And it’s a good thing to move on too, right? It’s a bad thing to just grab onto stuff as you’re going down with it. It’s actually a good thing and you say, I’m a year in, these are the metrics and it’s not working and I need to look elsewhere?

Josh Pigford: Totally and in some cases you just might not be the right person for the job. Like with Pop Survey and Temper, in the process of working on selling those, it’s not that those are inherently bad businesses, it’s that I don’t personally have the right expertise to keep running them and grow them. There’s somebody else who would likely have more interest in that or have certain skill sets that I don’t have for those kind of industries or those kind of businesses. It’s not that those need to necessarily be shut down, it’s that somebody else might be better for it. And I think each person brings a certain skill set to the table and so working into things that kind of play into your skill set is also a big deal.

Success Harbor: Yeah I mean I actually sold a business that is running fine now. But it just was not the right business for me and it’s a successful business today. I just had to say, you know what, this is not for me, I hate it. Here take it. I sold it and it’s all good, you know? I think instead of trying to be something you’re not, it’s a good thing to do. So we’re like at 30 minutes or so, I have two more questions, you have time for that?

Josh Pigford: Absolutely, go ahead.

Success Harbor: I have a few entrepreneurial questions – what is the most important for an entrepreneur to do during the first months of being in business in your opinion?

Josh Pigford: Shipping something. Most people get caught up in building a product or trying to do this weird validation thing, trying to figure out if anyone will pay for their product before they have a product and I think people spend too much time trying to mitigate risk. And the fact is, being an entrepreneur is just risky. And the sooner you can get something out the door and actually get a feel if someone will pay for it, the sooner you can either say yea, this is a great idea or no, let me move on. And I think in those first few months, people get misled by things like having this landing page that collects e-mail addresses and they get a 1,000 e-mail addresses and they somehow convinced themselves that validates their business idea. But nobody ever gave them an idea. They get misled, they go down the wrong path by some weird bad validation technique and they waste their time. I think it’s extremely important to ship a product that people will pay for and figure out if they will pay for it. If they won’t, you should keep trying something else.

Success Harbor: So we’re still talking about the first year. What should they not focus on? What should entrepreneurs not spend their time on that you see they’re spending their time on from your own experience or people who you know in business?

Josh Pigford: This might go against what I’m building here, but Baremetrics, I think people can get too obsessed with certain metrics or the wrong metrics. So I think early on people start worrying about the lifetime value of a customer or churn rates when they don’t have any customers. I’ll have people who sign up and they have ten customers and they’re like, “my churn rate is super high” or “one person cancelled and my churn rate just went up 10 percent.” And it’s like, well, yeah you’ve got 10 customers, so of course. So they focus on these numbers at this stage of their business that do not matter one bit, so at Baremetrics, the focus the first few months, was 100 percent on MMR, the monthly recurring revenue, that’s the only thing I worried about for the metrics standpoint. That’s what let me stay in business

Success Harbor: Yeah, if you could teach just one thing about being a successful entrepreneur, based on all your entrepreneurial adventures? What would that one thing be?

Josh Pigford: Get good at selling. I think most people are really bad at being salespeople. And they’re scared to talk to people about the product or convince people why they should pay for stuff. And it’s not just talking about getting on the phone with people and that translates to the kind of copy you write for your marketing site. I think people are just really bad sales and I’m not some great guy at it, but I think I’ve gotten a lot better and that’s something a lot of new entrepreneurs lack is the ability to sell stuff.

Success Harbor: Josh, thank you very much for coming on Success Harbor today to share your story . how can people find out more about Baremetrics. Or connect with you perhaps?

Josh Pigford: Sure, Baremetrics, you can find it at Baremetrics.io or if you want to get in touch, shoot me an e-mail at [email protected] or find me on twitter @shpigford.

Success Harbor: Well thank you very much Josh and everybody check out Baremetrics, I’m going to have a link to your site in the show notes. Thank you

Josh Pigford: All right, thanks for having me George.