We’re happy to share our latest Secrets for Scaling interview with Josh Pigford at Baremetrics, a zero-setup subscription analytics and insights for Braintree, Stripe, and Recurly. Founded in 2013, Baremetrics first targeted an extremely niche market (only integrating with Stripe) to focus their growth efforts. They’ve now expanded their services to include all subscription companies and continue to increase revenue.
One of the things we love about Baremetrics is their passion for genuinely helping other startups and founders. In this interview, Josh shares what he’s learned as a founder, tips for tracking metrics, and secrets for scaling a company.
Baremetrics is an Open Startup. Can you explain what that means and why you chose to become an open startup?
Open startups are 100% transparent about their key metrics. This means anyone can pull up an open startup dashboard and see exactly how much revenue they’re generating and how many customers they have.
Initially, I stumbled into the world of ‘open startups’ out of laziness. When I was just launching Baremetrics, I needed a demo for our services but generating a dashboard with dummy data required more time than I wanted to invest. I thought why not make my own metrics public?
As Baremetrics has grown, we’ve continued to operate as an open startup because we realized how this transparency sets an example for other business and benefits founders as they grow their own companies.
What is the #1 goal for Baremetrics and what key metrics help you measure success?
Our current goal is to reach profitability, so the most important metric for Baremetrics is monthly recurring revenue (MRR). We’re also tracking a couple other supporting metrics which include new trials, trial conversion rate, and expansion revenue (additional revenue from existing customers).
How do those metrics and your overall goal impact your hiring strategy? What do you look for when hiring?
Hiring is basically the most expensive thing you can do as a startup. Since we’re focused on profitability, we’re very thoughtful and strategic about hiring.
We’re a remote first - actually a remote only - company so the first thing we look for is people who have experience working from home. I’ve personally worked remotely for over 10 years and honestly, it’s the only way I know to build teams.
The second thing we look for when hiring is entrepreneurial experience. This doesn’t mean everyone we hire has their own startup, but rather each person knows what it means to turn nothing into something. They know how important it is to go out and get customers. We want individuals who aren’t just a cog in the wheel.
My favorite tools for working with a remote team are Slack, Trello, Zoom, and Google Docs.
How would you describe Baremetrics’ culture?
We have a set of values and principles that support our higher mission of helping businesses. If you think of culture in terms of the people and personalities that make it up, we’re all driven entrepreneurial people who want to help businesses succeed.
The vibe at Baremetrics is fairly informal and interesting. Metrics are so often boring, so we make it our mission to spread bits of fun and cheer through all we do - including our software.
How does this helpful, fun culture impact your service?
Part of the experience of using Baremetrics depends on how a company’s metrics are performing. If a customer logs into Baremetrics and their MRR is increasing, everything is awesome. But if they open their dashboard, see their churn has skyrocketed and might lead to going out of business, Baremetrics becomes the bearer of bad news.
We try to help lift these dark clouds by being helpful at the right time. If a company’s churn increases above a certain threshold, the system will automatically show a message with tips for reducing churn and an offer to chat about how to improve this metric. Probably about 60% of our support is proactive helping customers before a need arises (in-app messages, emails, etc.) and the other 40% is reactive where we’re fixing bugs and responding to tickets.
Any tips for helping a remote team work better together, especially as a growing tech startup?
Start with hiring - make sure you hire people who are good fit for remote work (self-managed, can work by themselves, etc.). Remote work isn’t for everyone.
The second tip is to equip your team to be successful in remote work. This means making sure your team knows they don’t have to be available 24/7. Remote team members shouldn’t be working more than normal hours. Check up on them - not just on their work but how they’re doing working at home. It’s often important for remote team members to have hobbies outside of work to promote more work-life balance.
Baremetrics has traditionally served a very niche market - focusing only on Stripe, Recurly, and Braintree analytics. How has this targeted focus impacted your growth?
Early on, this singular focus was really helpful for launching Baremetrics (started with just Stripe API). It also made our first partnership (Stripe) really strong.
Over the last several months, we’ve expanded to Recurly and Braintree to reach a broader audience. We’re also launching a Subscription API that allows a developer to integrate any service with Baremetrics.
In hindsight, I wish we would have expanded our integrations sooner. But we’re doing that now and seeing positive growth as a result.
Your blog posts are relatable and down to earth. What is your process for creating really valuable content?
The content pieces that perform the best for us (not just visits and shares, but also engagement) are transparent here’s-what-we’re-learning posts. The specific metrics we use or how we do something always seem to resonate with our audience. So we focus on sharing lessons we learn.
As a matter of fact, writing blog posts is like founder therapy for me. It helps me work out my thoughts on a particular topic and along the way I get to help other founders who may have questions about the same topic. The blog is basically me figuring out how to build a business.
As a provider of metrics software, how have your own startup/growth challenges and lessons impacted your product?
Initially, my own needs as a founder helped us determine what to build. But over time, we’ve had dozens and dozens of calls with other founders that have influenced what and how we build certain features. Often, we’ll have an idea based on what we need - for example, trial metrics, and then we’ll see if that need resonates with other companies.
If there were three SaaS metrics a founder could track, what would you recommend?
I believe it is possible to start tracking metrics too early. If you’re a brand new startup (i.e. haven’t launched a product), don’t worry about the numbers. For example, if you only have five customers, you won’t have enough data to make decisions. Focus on building the product.
For startups focusing on growth, pick one to three metrics that you can affect. Focus on the metrics that are crucial to your business. I suggest tracking MRR, churn, and average revenue per account (ARPA).
Take churn for instance. We see businesses all the time that have 25% churn which means every four months they lose all their customers. In that scenario, you should care about nothing else except fixing churn. This is quite hard to do because usually high churn indicates a core problem with the product or business. People try to mask churn with growth, but eventually, growth plateaus and you’re stuck with high churn.
What advice do you have for founders of early or mid-stage companies looking to bring their company to the next level?
Pay attention to delinquent customers. If you’re growing really fast, you may not realize you’re leaking money via failing credit cards. Have a system in place to collect on those delinquent accounts automatically. If you try to do it manually, you won’t do it. Baremetrics actually has a tool called Dunning that automates collection on failed charges.
Figure out a way to get expansion revenue. Have a path for customers to naturally expand or upgrade. Don’t have a fixed price point. The longer you retain a customer, the more they should be paying presumably because they’re receiving more value as time progresses.
Delegate as much as you can. If you started as a solopreneur, it’s easy to get caught up doing lots of different things yourself and think that it’s not worth the money to pay someone else to do it. But it almost certainly is.
As a founder, you should be hiring out as much of your job as possible so you can focus on very few key things that you’re best at - for growing your business.
Do you have a story to tell?
Do you have a growth story to share? We’d love to talk. Let us know in the comments below!
If you want more scaling secrets, check out how Close.io reached millions in revenue by growing slow and smart!