Patrick Campbell is the CEO of ProfitWell (now Paddle), which he bootstrapped to a $200M exit. The software helps subscription companies with their monetization and retention strategies. Prior to ProfitWell, Patrick lead Strategic Initiatives for Boston based Gemvara and was an Economist at Google and the US Intelligence community.
On this episode of DTC Pod, Patrick joins Blaine & Ramon to talk about frameworks for building successful businesses. We talk about his background, taking the leap to start, evaluating risk, bootstrapping SaaS, developing an MVP, taking a product to market, how customers think about pricing, willingness to pay, pricing strategies, scaling, navigating an exit, and much more.
His Lightbulb Moment To Become A Founder (5:00)
And then all of a sudden just jumped in and was like, I'm gonna start a company. This was the hardest thing I realized I could always find a job. Like, I had so much insecurity about that, but then I was like, Wait a minute, this doesn't make sense. Worst case, like I'm living poor, I can go get a job as a barista. I can go get a job on a construction crew. Like I, I can find those skills. and that gave me the confidence to be like, Well, let's try this for nine months and see what happens.
The Secret To Pricing (8:00)
Like what is value based pricing? Oh, it's like figuring out what your customer's willing to pay and then charging that rather than, like most eCommerce people do is they look at their costs and they're like, well the VC said I gotta get to 40% margin, let's just slap 40% margin on top of it, right? And it's like, yeah, but if your customer's only willing to pay like less than your cost, you're don't force it like you have a problem, you have a wrong customer, a wrong product, like something right or bad cost depending on what it is.
This Business Sold for $200 MILLION (13:15)
Basically started with a little app that you could send a survey to your target customers, your email list, your current customers. And we would say, Great for this group that you surveyed, your price should be a hundred dollars and here's kind of your curve. So if your price went up, like here's how many people you'd expect to lose if your price went down, here's how many people you'd expect to win or lose, and so on and so forth. And that was the mvp. And then we eventually put service on top of it.
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