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Your guided tour of the world of growth, performance marketing, customer acquisition, paid media, and affiliate marketing.
We talk with industry experts and discuss experiments and their learnings in growth, marketing, and life.
Time to nerd out, check your biases at the door, and have some fun talking about data-driven growth and lessons learned!
Welcome to another edition of the Always Be Testing podcast with your
host, Ty De Grange. Get a guided tour of the world of growth, performance
marketing, customer acquisition, paid media, and affiliate marketing.
We talk with industry experts and discuss experiments and their learnings in growth,
marketing, and life. Time to nerd out, check your biases at the door, and
have some fun talking about data driven growth and lessons learned.
Hello. Hello. Hello. Welcome to the Always Be Testing podcast. I'm your host, Ty DeGrange,
and I'm thrilled today to have Adam Robinson. What's up, man? Hey,
Ty. How are you? Thanks for having me. I'm good. I'm good. I am excited
to dive in with you and talk about all the things retention and,
business and life. We, we dive into some learnings here, and it's usually a lot of fun. And
let's, let's roll in and do it. Let's do it. Yeah. So so Adam Robinson, for
those of you don't know in the audience, he's the CEO of Retention dot com. He's had some
awesome learnings in various areas in business. He's made some really
great build in public kind of comments and and candor and his experiences in in
building and really excited to dive into it. He's a prominent d
two c e comm, personality and business person in marketing in in the,
Austin area. It's nice to be here in the same area with you. So let's let's let's jump in.
And as we were just talking about, if you were a DDC person in the Austin area and you wanna
get involved in if a listener is and you wanna get involved in my direct
consumer wake surf club, I do it once a month in the evening on Wednesdays,
Email me adam at retention dot com. I would love to invite you. There you go. It's a
good call to action. Right? Let's let's let's get people involved right
away. Yeah. Just right off the bat. Beautiful. So, Adam, tell us about your
background. How did you get into all this stuff? I was a trader. I lived in New
York. I trade I worked at Lehman Brothers and traded credit default swaps for ten years. They made a movie about that
called The Big Short. When I showed up in New York, my roommate started Vimeo, the
video sharing website, in my apartment. I watched that whole thing happen, and it made me think that I
wanted to be like him. And I did. So That's amazing. After
the financial crisis, I quit. And I'm like, I've saved some
money. I could spend it on business school, or I could spend it trying to make myself an
entrepreneur. So I I opted for the latter, and it just started
this five year, like, bare knuckle brawl.
It was horrible trying to get my first company to sustainable.
And it happened to be that it ended up being in the email marketing space. I don't particularly
care about email. I know a lot about it now. But, like, it wasn't like, follow your passion.
Okay. Email marketing. Right? Like, it just, I was working on five different things, and it happened to
work. So ten years later, I end up knowing a shitload about email. And that
company was a really good lifestyle business, but it was in in competition with Mailchimp and Klaviyo,
which is just like a it's a horrible space to be in. Like, into it's like I like to say it's like
selling cola against Coke and Pepsi. It's, like, super mature. The products
are very undifferentiated. Like, it's all brand, and they're spending billions of dollars on
marketing. It's just impossible to compete. So Yep. I was always trying to figure out how to
break out of this ceiling. Like, I was just stuck. And, I was trying to do
stuff Mailchimp wasn't doing because it was just such a hard offer to compete with. Like, how are you gonna
be more free than Mailchimp? You're not? You know?
Came across this identity stuff, and it was so intriguing to me. You know, the idea that you could
get an email address out of a person who didn't fill out who didn't give it to you. Right? Like,
somebody could hit your site, and you could just know who this person is. Captivating,
right, to somebody who's never heard of it before. It's like sounds like magic. So Mailchimp definitely wasn't doing
that, and they never would. So I set off on this, like, year and a half journey of
trying to figure out how to do it. Finally figured it out. My idea was that it would be what
differentiated my email app from the rest. Launched the feature.
Everybody used the feature. Nobody wanted to use the rest of the platform. So it became clear to me that it
was a bad product if it was inside of my bad ESP. It was a
great product, probably. You know, every indication is that would be if I spun it out,
connected it to everything, and then launch it on its own. And that was, like, twenty twenty,
basically, November twenty nineteen. About a year and a half ago, it became clear to us that big
Shopify stores were, like, our power users. Like, never churned, paid
us way more than nobody else, bought faster than nobody else, never submitted a single support ticket and referred
all of their friends. And we're like, okay. That's the audience we should focus on. We
built some more features for them, like product cart, checkout abandonment, audience
expansion. And here we are today, and we're
about to so, like, kinda one of the problems now is we can really only sell to
stores. Like, our products amplify whatever throughput is going
through a Shopify store. So if there is a lot going through, there's a lot we can amplify, and the product
looks really good. The lower that revenue number gets and the lower those abandonment Yeah.
Emails flow revenue gets, the harder it is for us to actually show return on what we're getting paid.
Because, like, below a certain point, it doesn't even make sense for us to, like, onboard people.
I'm really excited that we're about to launch a sixty dollar a month product
for everybody. And the problem that it is solving is
massive. So I call it the signal gap problem. There's all of this
stuff happening on your Shopify site. Apple is ratcheting down every day
on the events that can actually make it to Meta and Klaviyo. On
April twenty third this year, they ratcheted Meta and Klaviyo back to
seven days for tracking people, which is a massive fucking problem. Like, if
somebody clicks through an ad Yeah. That it used to track them for a year. Right? Six
months, whatever. Now if they click through and they come back eight days later, Facebook has no idea who they are,
which you're like, okay. Who cares? Well, the reason Facebook works so well is because
they knew who that person was looking at a product, and they showed them an ad. Now
all Facebook sees is an anonymous user. So our sixty dollar product we'll track
that person for six months to twelve months or something like that, depending on whatever. Pretty compelling
case. And for the Klaviyo flows, it's the same problem. Right? If somebody puts something in the
cart and leaves eight days later after they bought something, no nobody. Like, it's
nobody to Klaviyo. So I'm really excited. There's some other vendors
who solve this problem through a different solution. One's called Elevar. One is
called BlotOut. One is called BlackRock AI. They're doing tag management. It's like a much
it's like a super heavy install installation, and it's very difficult to understand from what's written on
their website what it actually is and why you would need it. I'm doing a
done for you. Literally, you just, like, sign up on a type form, give us Shopify and Clavier
permissions, and we'll just start emailing you the money we make you for fifty nine dollars a month.
This is, like, I've never been so excited about a product. That's awesome, man. It's normally,
like, you kinda go the other way. You, like, start at a really low dollar price in SaaS, and you go up. Like,
we started at this twenty k ACV, and now it's, like, very clear to me that
there's such a like, this is as big of a problem for a
smaller guy. It's just Yeah. If If you have to support your business with the Salesforce, like, you can't you know, these
these other Yeah. Solutions are too complicated to sell
to someone at at that price. Right? Like Yeah. You're basically going to, hey. We're our
customers are Shopify ecom consumer fifty million minimum
a year, right, revenue to almost everybody. Is that is that kind of the
Well, right now, it's three million and up. But still, that's only,
like, six to ten thousand stores depending on what dataset you look at. Yep. It's
not a lot. There's two two point five million active Shopify stores. So I
think this new product is probably for, like, a hundred grand to three million
of GMV, and I think there's, like, two hundred thousand stores in that
band rather than, like, ten thousand. Right? And they they should all be able to to
see value off of it, but, like, this is the the remaining question is, like,
how small is small to where either they don't see value or they just are like, I don't even
care. This is a hobby. Yeah. Do they know it's a problem or they want to address
it? Yeah. Do they even it's like, yo. I can make you a hundred and eighty bucks on a
sixty buck investment. It's like, I don't care. But I have other stuff that's way more pressing than
that. Mhmm. That's amazing. So we'll see. Wow. That's really cool.
For the brands that are already engaged in the retention product and we I wanna dive into the new product too. But,
like, what are some of the big, like, outcomes you've seen with
retention, with with some of the chain the core product? So the core product,
like I said before, it's like True Classic and Doctor.
Squash are two of our biggest customers. They both make over five
hundred thousand dollars every month, and they pay us, like, ten to twenty grand. That is not
indicative of a normal store. So, like, the dynamic with our
product, like I said, is, like, the more volume that's going through, the more we can
capture and amplify, And our pricing doesn't increase like that. Like, we just couldn't
charge doctor Squatch two million dollars a year to, like, use our product. It just doesn't pricing
doesn't work like that. Yeah. So it's a little unrepresentative
of what a normal outcome would be for somebody who has, like, a five million dollar store or, like, a three million dollar
store. We do like to beat other channels on a twelve month basis very comfortably.
So if, like, people are looking for two to three x, it's, like, I think four to five x over the course of twelve
months. Like, given the the holiday, it will kick up, and then it will calm down afterwards for for a lot of d to
c. At the smaller end, which is like a three million, like, that's what we're trying to do, be
at least five x over twelve months. You know? Yeah. And that efficiency is awesome to
be able to say, hey. You're gonna add something that's significantly more efficient
than a lot of other levers you can pull is is huge. Yeah. That's amazing.
It's a high bar. You know, I've questioned whether that's even the right sales strategy because
kind of a problem we have, we have we have a right now, this is our deal structured. I don't know if it's gonna be like this
forever, but we have a sixty day opt out. And, basically, it's like a twelve month deal
with sixty day opt out. And, basically, the performance
kind of accumulates over the course of the year because, like, one of the products is we're just selling the the
the people list of emails. And these emails, they come back and they repeat purchase. And kind
of the only way to look at how that list performed over the course of the year is look at how many
purchases there were over the course of the year. I think the only way to test it is do a holdout test.
You hold out five percent, don't mail them. You mail the other ones, and then you see what the incremental would
be that way. But, like, when you're talking about ROI of a list, it's just gonna
go up over the course of a year as these emails buy, and we give you more emails.
But then we're, like, holding this gun to our head saying, if you don't see what you want in sixty
days, just quit. It's it's confusing to me whether we're doing the right thing or not
with pricing. Yeah. I think a lot of businesses in in our world struggle with
that a little bit to determine, like, how do we offer a ton of value but don't
undercut ourselves or go too far. You know? Yeah. Yeah. Or just set expectations in the wrong
way Mhmm. Which I think is a large a large part of it. Absolutely.
It's like you wanna move fast, but if you move too fast, then you're not explaining
it well enough. It might be a good, segue in a little bit.
You've talked a little bit about, like, lessons learned. What are what are some of those big lessons you've learned
this year? Oh, god. For background
on this year, in October of last year, and it's currently
July twenty seventh. In October of last year, we had six employees, and
we were at thirteen million ARR. We hired like fifty
in sixty days because we identified the Shopify audience
as our perfect candidate. And then
I didn't really we didn't know a lot about the universe. So, like, we sort of overestimated
the size of the market. And then we were also being a bit
we were overselling people, like, just because of how it all played out. You know? It
was like Mhmm. So the overselling people and
overestimating the size of the market made us think that the TAM was actually much I thought there was fifty thousand
stores that we could sell to. And it turns out there's, like, six to ten. Right? And I thought we were doing a thirty
thousand dollar deal, and it turns out we're doing a sixteen or eighteen thousand dollar deal. So, like, this opportunity
set's just, like, way different than I thought. Mhmm. So, like, we hired too many people. You
know? I, like, I had this vision of in the beginning, like,
let's have a lot of people creating demand out there with these partner channels and agencies and events and everything else, and then
we'll have just, like, a few AEs who are just flooded with all this demand. And I thought, culturally, that's,
like, a great thing for an org. Mhmm. Like, a salesperson's on the phone, and they're like, if you don't buy this right now,
yep. I have, like, four other calls today. Like, it's just a good mindset to be in.
Yep. Creates scarcity and demand. It's like overestimating the TAM and
overselling people. It's like, I've made this crazy goal to get to fifty million ARR by
the end of the year. And we were at fifteen at the end of last year. And
it just we hired too many people. Then all of a sudden, it's like, well, we like these
people. And and by the way, like, in April first, like, everything stopped for for people selling
into these stores that we sell into. Like, for whatever reason, it was just this weird slowdown.
So we kinda pivoted the org to be like hunters.
And then last week, which, like, it's just a different feel.
Right? Like, everyone's calendar's twenty percent full rather than, like, a few people's calendars a hundred and
twenty percent full. Mhmm. And then our VP sales, he has his reasons.
You just had a kid. He resigned last week, and then we decided, do we
replace this guy, or should we just take our sales team from fifteen to four and go
back to, you know, what we had intended originally before all this happened? So that was like
something happened in sales work. Wow. We're hiring for five roles right now. It's not like we're
Yeah. Sort of, oh my god. Like, the walls are on fire. Like, I think we're gonna generate,
like, three hundred and fifty grand of free cash this month. Like, it's not a, oh my god. We're,
like, we need to get smaller. We need to get smaller for Yeah. So, like,
things that I learned, I felt like there was this land grab that that needed to
happen, and I was, like, very desperate. It was like a FOMO feeling, almost like
buying crypto at the highs. You know? Very similar. Like, and
it's just not who our, like, our team is as a company. It's
not there's this saying, what got you here won't get you there. But, like, I don't
think that the fundamental elements of what I deem an excellent business or
what I would look at and be like, that is the best business, which is, like, in many
ways what I had before we did this. Like, to me, it's like, I love in SaaS super high
revenue per employee, super high capital efficiency. I like profitable
companies with strong growth. I like kind of this paradigm. It's not necessarily
an inbound sales model, but this paradigm where Mhmm. It kinda always feels like it's
busting at the seams as it's growing. Mhmm. And that's because, like, product's getting pulled out of
you. You're at the you're at the right size to where it feels like the market's pulling product out of
you. And any company, you can fuck that dynamic up by just, like, having three times as many
people in the department as there should be. Right? So Yeah. There's just a lot of lessons in
there. I also felt very desperate to get our brand out there, and I just sponsored anything and everything,
newsletters, podcasts, this, that, the other. And, like, the other lesson is when you're doing that and
you're living that way and you're hiring people and they're spending money too, it just sets a horrible,
cancerous sort of literally like a death.
Like, we would have never been profitable no matter how much money we made if I
kept living like that. Yeah. So, like, another great lesson was just, like, if you don't
run and by the way, we were running we were paying dividends before. Right? So, like, when you're, like
our executive team's all getting these huge checks. It's like, you're really thinking about, like, okay. Do I
wanna spend fifty grand sponsoring this event, or do I wanna, like, pay myself
thirty grand and my two cofounders twenty grand? Right? Like, thirty grand's pretty nice.
Extra. Right? Yeah. It'll add some. So it's not it's not that you don't do that stuff. It you you just have
to really want it when it's, like, cash in your pocket or
but when it turns into this thing where it's like, we need to be everywhere. You know? It it felt like a venture backed product, and and
there's no accountability for, like, budget or, like, the value of money or anything. It just it goes
off the rails so fast. So that was another massive lesson that I learned. Just like if you
don't run a tight ship, especially when you have a lot of people spending money, like, you
will never be profitable ever. The only reason we weren't unprofitable is because I didn't have
any money in the bank account when we started hiring people. Like, we had six hundred grand of
free cash flow, but we were distributing it out. There was only a couple hundred grand in the bank account. So, like, we
couldn't burn. It just got to the point where it's like, alright. Now we have to stop spending money. And by the way, this is
terrifying. Like, we have to, like, fix this problem somehow.
So that's another huge lesson lesson that I hope no one has to learn because it's it's
just brutal. I feel you, and I I've been through similar kind of evolutions as an
entrepreneur and a business leader, and you learn. You have to sometimes go through those lessons.
And I think in the last couple years, not it's not like a lot of entrepreneurs
didn't have a good financial rigor internally or a good finance
person or I just think people have sometimes you do have to legitimately
learn those hard hard lessons, and then you kind of recalibrate and apply. And
and and it's not always that you're chasing for the wrong reasons. You're an entrepreneur because you are trying to take
a swing for the fence and make something happen and take care of your people and your customers.
And so it's, it's understandable stuff, and it's not easy black and white or else
everyone would do it. Like like you said earlier, you you don't just go to business school and plug in and expect to make
a make a unicorn. You there's a lot of things that have to go right, a lot of decisions that you've you've had to
have made along the way just to get to where you are. It's impressive. Yeah.
Many more wrongs than rights. But, like, the idea is that you get,
like, eight wrongs in, like, two rights. One of them's okay, and one of them's great. That's
what I've observed. I love it. You've talked a bit about bringing in the
right people as a company. We've felt it and learned it and lived it and bringing
making sure that right person's in the right seat. When you think about talent and and
those concepts, how how do you approach it, and how do you kinda get it right more than get
it wrong? Oh, man. Well, it's so hard. So, like, I have a
lot to say about I mean, we just had a VP sales that quit. Like, he fucking we didn't fire him. He
just quit. He just was like, I'm not I can't take it. Yeah. Strangely,
we added two people to our executive team last October,
and it literally felt like a family. You know, like, it
cultural it felt like they had both been there for ten years. Amazing. We have, like,
identical values. And think about business in the same way and, like, are, you know,
principled in the same way and, like, whatever. On February first, we hired,
like, seven directors and VPs. One remains.
Wow. Like, it's that level it it's like, and, look,
part of it was there were just a lot of things that happened since February in this market
that we're in. And, like, this guy this VP sales leaving. Like, we weren't gonna downsize the
sales team if he's was managing them and stay he just decided he wasn't the guy. And
it's like, well, I'm not gonna go find another VP sales right now when, like, Diana
can just go from the CRO role, do it, manage four people, figure out a b to b product for you know,
it's like Mhmm. The answer is I don't know how to hire peep this
attempt, I would consider that a fail. I I would hope that the
next time we do that like, maybe we hire VP marketing at some point. Like
Mhmm. Man, it's just so hard. Like, we hired this incredible VP partnerships
who was the right guy at the right time. I thought the agency thing was gonna be everything
for us. And when it played out, the agency
motion that worked for us looked a lot like an affiliate or influencer motion. It was
like not the agency owner being the gatekeeper of our technology because our
technology is perceived as somewhat risky, and it's just not in the incentive of an
agency to direct attention of their employees to deploy this. Almost in any
circumstance, there's a certain type of agency that will. But, like, the thousand dollar, five hundred dollar a month commission
is just, like, not even to jeopardize a twenty k customer for that, it doesn't make sense.
Right? And, yeah, I mean, we combined our teams,
our partnership teams, because they were basically doing the same thing. And there was, like, territory conflict and all this. And then
this guy, we all voted that the guy on the other side was the right
one to run the whole team. And then you're in a situation where it's like, okay. This guy's making, like, you know,
three times as much as the guy that's gonna be his boss, and he's VP partners from the other guy's director of affiliate.
Like, it doesn't work. Right? So, like, I don't know how I would have ever
foreseen that, but this guy is incredible. Yeah. It it's almost
like it's like a butterfly effect in a weird way where, yeah, you could
have gone out and reinvented the wheel and hired a new VP of sales, but you weren't going
to. And not to say that if folks coming in are leaving
dictate your moves as an organization, but it does make a material impact.
And it's it's a bit of a butterfly effect, three d chess where it's like, okay. This person
leaves. Someone, you know, your CRO can absorb Yeah. To manage those four people.
And we're off to the races in a similar approach, but it it kind of had puts a little bit
of a fingerprint on the organization and changes how you, address it.
I had wanted an excuse to get way more lean anyway, and that was just like the catalyst.
Like, I've been something I'd felt wrong about how that team was operating
relative to, like, how I had dreamed that it would operate. Then, yeah, it was just the perfect
catalyst. Yeah. Are there not to give the whole financial model to people,
but is there some, you know, get lean things that you think about? I mean, I
think there's some, you know, good best practice out there in SaaS and in sales and marketing, and we can
talk about those. But is there anything that kind of hit you recently in the last couple years where you're
like, man, I really need to be hitting this? I I have I certainly been much more
cognizant of that in the last few years myself and, focused on it.
I had just always loved running businesses that generated cash. Especially in SaaS,
you have to operate a it's crazy. No one does that. Like, if your breakeven are a little
profitable, it's, like, amazing. But, like, I was running this business. It was, like,
fifty percent total margin or something like that. So, like, there's just a way you behave
when that's the case. And I don't know. I should think about, like, how to articulate it, but
it's kind of like Mhmm. You just are, like, really scrappy.
And, like, what Yeah. Everyone else pays fifty grand for, you try to figure out a way to pay two point
five grand for. Yeah. And it can be done. You can create
incredible experiences for people and be very impactful for, like, very
small amounts of cash if you're just willing to be creative. That's such a great reminder. Yeah.
You you touched on values a little bit, and it's kinda like the core of the leadership team, and
you guys were really clicking. Can you elaborate on on those values a bit
and, like, what what kind of you hold dear and what kind of seem to having you guys sing the same
song? Yeah. So I think we're all this, like, bootstrapping scrappy
mentality, like, first and foremost. Really kind of old school in the way that we
think about the value of a dollar and how precious it is as the lifeblood of your
business. Mhmm. You know, people are very straightforward. We're
excellent at communicating with each other. I don't know that sometimes people outside of our
circle would probably say that we're not good at communicating with them, but
it's very fluid in this executive team. Yep. And look, they're all just super high
integrity individuals that have very similar motivation. Yeah. It's it's a
lot of the it's just a really good business partnership. I love
it. What's something that's kind of like a life hack or a thing that you're
you're doing personally that's kind of helped you get through all this stuff and and succeed
in as much as you have? I try to just do the basic stuff. Exercise
at least five days a week. Eat well. I quit drinking a few years ago.
Major life hack. Get good sleep. All of that. Look at the
sun. Like, go outside during the middle of the day and just, like Yeah. Look at the
blue sky and, like, let the sun hit my skin. Like, all of the stuff that you
can't really measure, but I just think it's, like, the core, like,
community, spend a lot of time with family. I have a ten month old daughter. So, like,
just really Nice. There's not really much else. But, like, when I'm not here,
I'm trying to do stuff that is very basic human needs, time tested happiness
stuff. Yeah. That's amazing. Couldn't have said it better. What do
leaders need to do more of? What do they need to do less of? So I'll tell you what I'm
trying to do. I am trying to do more focusing on
like, list that's, like, two things or three things maybe. And until
those are done, I'm not going to my sub list that I am constantly adding stuff
to. That's what I think I should be doing more of. I love
it. This is awesome, man. I could go on for hours. I know you
got your your surfing. I wanna be respectful of your time because I think
this has been a good thirty minutes of juicy bits, and,
we can all you know, we can always pick up more in the future and excited to venture
out into the surf world with you and hopefully see it at a little gathering tonight. But, yeah, I
just just wanna thank you for coming on. It's been awesome to chat with you, Adam. Well, thanks,
Ty. I know we can go deep on a lot of things and and nerd out on other stuff
too, I'm sure, and, hopefully, get together in person soon. So Rock and
roll. We'll take care. Appreciate you, Adam. Thanks for coming on.