Growth August 19, 2020

5 ways I'm slowing down my growth on purpose

Jon Yongfook @yongfook

Here are some things I’m doing to grow more slowly, but into a stronger and more resilient business. Most of these are just common sense, customer-friendly policies that in turn forces me to build a product that delivers consistent, long-term value. Not rocket science.

  1. Pricing my product at a level where it must be delivering value. The average price my customers pay is $60 per month. At this level the tool must be delivering value otherwise people churn fast. This forces me to build the right features for the right kind of long term customers. I've said this multiple times before but I think the tendency for engineers to charge "$9 a month" kills indie businesses before they even get started. I think one of the reasons we shy away from charging more is because we are uncomfortable with confronting the reality that our product may not be delivering enough value. I say address this issue head on and price at a level where you must demonstrate value. It's a form of forced evolution.

  2. Emails on every payment. Some businesses disable their payment notifications as they don’t want to “remind” customers that they are paying for something they aren’t using. Not me. If my customers aren’t using my product then my business is broken, I’d rather they cancel so I can learn why.

  3. Four failed charges auto cancels and shuts down the account. Ongoing delinquent churn messes up my MRR numbers and makes it hard to understand what’s happening in my business. I give customers a fair warning, 4 notifications, then I get the account off my books if there’s no response. There is a fraction of my MRR numbers on IH that I actually never see due to delinquent churn, and I'd guess it's the same story for a lot of people here. This is dangerous as it can lull you into a false sense of security, thinking you've got a $10k MRR business... when actually you've only got a $5k MRR business!

  4. Focus on Monthly plans. I’m moving to monthly only. Everyone tells you to offer yearly-discounted plans but the few yearly plans I’ve sold have become inactive users. It’s nice to have the money but I can’t learn anything from customers who don’t use the app and it also just feels weird. Anyone with similar experience?

  5. Cancel at any time, in one click. There’s no mandatory exit survey, there’s no number to call, there’s no delay - you just hit a big red button and I stop billing you.

I’m probably forgetting a few things but all of this falls under the umbrella philosophy of being as customer-friendly as possible. Treat people how you want to be treated. It will mean that I grow slower, but I’m investing in the long term and will hopefully have a much more resilient business because of it.

  1. 7

    From a business perspective monthly plans are really annoying, it means someone has to find the receipt and allocate the cost for accounting purposes every single month.

    I choose annual plans over monthly nearly every single time because of this.

    1. 1

      I wish I had customers like you but I think I’m a little before that stage. If a monthly customer wants to migrate to yearly because they are getting value from my product I am more than happy to do so, and will start by offering my best monthly customers a yearly option.

  2. 3

    These should be default positions of Indiehackers. They build trust, and become part of the brand.

    I go even further and cancel a subscription on one missed payment attempt. They can easily sign back up if they want to. If they don't want to, they don't have to!

    I would probably keep the annual billing around. But other than that, it's exactly what I do.

  3. 2

    Good for you, Jon! You have my respect 👏

    It’s a sad sad world we live in if this is seen as uncommon, surprising, or bold. I’d just call it ethical design choices and customer-friendly approach.

  4. 2

    your approaches are very bold. I would say, take it a little easy. Especially on ' cancel at any time, in one click'. Because people change their minds many times a day.

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      The counter argument would be that if your product hangs in such delicate balance in the mind of your customer, then something is broken and you need to address it. Out of all the SaaS products that I pay for long term, I don’t think there has ever been a point where I thought “should I cancel this or not?”. I just need them. That’s the same space I want to be in, with my customers.

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        Alright. I am interested in what your product is. If you don't mind, could you list one or two saas you pay for long term. I would like to help make an educated guess if they fall in the same category for your customers.

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          I’m not sure you understood my post. I’m not saying I’m in the “indispensable” category. I’m saying these are actions I’m taking to force me to evolve my product in that direction 👍🏻

          As for what my product is, just click on my username.

  5. 1

    Credit to you on this approach. Many of the SaaS businesses I've worked with have around 50% of their revenue come from inactive users.

    Particularly when you're dealing with corporations it's often more effort for the account owner to cancel a $20 a month subscription for the month, then when they want to sign back up they need to re-source the company card and get it signed off. This results in a lot of subscriptions rolling over and inactive revenue.

    I appreciate your approach doesn't stop that happening, but something to consider.

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      Also, exit surveys. So many good insights come from here. Would definitely look at making it optional if mandatory isn't something you want to do!

  6. 1

    Some points are actually quite bold, not chasing the immediate return is not an easy decision.

    Since you went against yearly plan based on engagements, why not offer them with a nice discount to your most active customers only ? It could be nice for your cashflow and give you a good opportunity to chat with them

    1. 1

      I think this is a perfect middle ground - I'm more than happy to extend a yearly offer to monthly customers who are active, getting regular value and want to commit long term in exchange for some savings.

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        For most of my annual plan customers annual is just less headache and paperwork. I think everyone wins from annual plans

  7. 1

    Good on you. This is the approach I will want to take. You never know someone might churn but they found the starting and exit experience so nice they still recommend you. Whereas I’ve had gym memberships where yes they extracted more $ by force but 10 years later I would actively tell people to avoid them.

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