For the final episode of Secrets for Scaling, we spoke with Josh Pigford, Founder & CEO of Baremetrics. Baremetrics is a zero-set up subscription analytics tool providing ‘metrics you can act on’ from Stripe, Braintree, Recurly, Chargify, and more. Here’s a quick snapshot of where the company is today:
- Founder experience: 8 years
- Team size: 8 team members
- Customers / Revenue: $1 million in ARR and ~780 customers
- Company founded: 2013 (4 years old)
We spoke with Josh once before about hiring, culture, open startups, and running a remote business. This time - now that they’re profitable as a company - we wanted to learn what that journey has been like. He shared his lessons in goal setting and focus as a founder, patience, sustainable growth, branding, and what’s next for Baremetrics. Listen to the full episode here:
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Steady growth is frustrating but worth it. Josh described Baremetrics’ early growth as “an easy bike ride up a hill” and frustrating. Like most founders, he wanted to see their revenue line shoot straight up and to the right. However, because they “just wouldn’t die” they became profitable. They didn’t give up. It also helped that they didn’t try anything so insane that it put them out of business. Persistence is key. They showed up and kept focused on their goal.
Profitability gives you freedom to do what you want. Meaning, Baremetrics can now focus on building and shipping features that’ll have the biggest long-term impact. And they can build them the way they want. There’s no pressure to build something that’ll generate quick revenue then fizzle. They can build things they’re uniquely equipped to solve and interested in that might be a little risky.
Sometimes the entire team has to make sacrifices as a business. A year ago, Baremetrics had to make pay cuts across the company to reach profitability before they ran out of money. Josh assessed his options to keep the company afloat (including layoffs) and identified pay cuts as the least worst option. When he presented the news to the team, they were onboard because they knew how close they were to reaching their goal. They could see the opportunities for the team and company ahead. As a result, they reached profitability and received their full salaries again, and then some.
Context is key when analyzing data. Baremetrics is less interested in showing you a number and more interested in helping you know what to do with it. You need to be able to see why things shift - why customers leave, for example.
The “crushing it” mentality skews perception for other founders. It’s common to see startups skewing numbers to demonstrate growth that isn’t that real. For example, a chart may show 500,000 new users, but really 450,000 of those users never came back to use the app. It’s natural for people to compare their own success to others and think that they’re not making it. But in reality, founders need to define their own goals and success for what they want to build.
Figure out what you want for your company first. Maybe it’s a big exit, maybe it isn’t. The end outcome you want for your company will drive what metrics you track as a business. For example, profitability was Baremetrics’ goal, so monthly recurring revenue (MRR) and net revenue were their most important metrics to focus on.
Focus on low churn. For SaaS companies, Josh suggests focusing on maintaining a low revenue churn because it implies you have something customers love and that you’re solving an actual business problem for them. Focusing on churn is a cheaper way to grow your business’ revenue. It’s much less expensive to offer more value to current customers than it is to acquire new ones.
Focus on making tangible improvements to your company and product. It’s easy to get wrapped up in startup world and what other people are doing. Rather, Josh suggests focusing on building your business and helping your customers. Do things that directly impact your customers instead of “playing the game and hoping it trickles down to them.”
How you communicate as a brand can pay off exponentially…but it’s a long game. Similar to content marketing, you won’t see an immediate financial return on being a “transparent” company or “open startup” (much like Baremetrics). But, by building respect and credibility as a business, people will remember you and will use you when they have a need.
Focus on your finances. Don’t push your numbers (i.e. profit margins) to the side. As a founder, being focused on those things sooner than later is important. Josh says especially when hiring because it’s one of the most expensive thing you’ll do as a business. Think about the long-term impact of hiring including benefits, raises, etc. before pulling the trigger.
- Most startups are not crushing it
- How we went from weeks of cash left in the bank to profitable in 8 months
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