076: PJ Taei – Video Monetization & Handling Competition as a Bootstrapped SaaS Company

“PJ: One size does not fit all for all these different membership sites from different verticals and different features. All we had to do is take our product and improve it, improve it, improve it. That’s it, just focus on the product, listen to the customers, focus on the product, listen to the customers, focus on the product, and that was key.”

[EPISODE]

[0:00:25] NATHAN: In this episode, I talked to PJ Taei, who built Uscreen to 20 million a year in revenue. I found out in this episode that he bootstrapped to that level, which is really, really impressive for a video product. Because web hosting and video streaming is really expensive. This was a fun episode, because we got into like the creator economy, both of our companies serve creators. He talks a lot about how to handle competitors coming into your space through a big acquisition. We talked about different creators who we both know and how they’re building out like these private video memberships, what’s working to drive growth, and a bunch of other things. I’ll get out of the way as you enjoy the episode. Let’s dive in.

PJ, welcome to the show.

[0:01:07] PJ: All right. Thanks for having me. I appreciate it.

[0:01:09] NATHAN: I thought it’d be good for everyone listening to hear from you just a little bit about what Uscreen does, and who you focus on. Because we have a very similar, target customer in professional creators between ConvertKit and Uscreen. Maybe kick it off with that?

[0:01:25] PJ: Yes, that’s right. Actually, you’re right. You guys call them professional creators, right?

[0:01:29] NATHAN: We do.

[0:01:29] PJ: We’ve mentioned that term before, but we kind of mid to late-stage creators and someone who’s established, has an audience, has an email list, has gotten off the ground, created content, and is looking to actually build a business. So we have similar audiences in that aspect for sure.

[0:01:48] NATHAN: When did you start the company?

[0:01:49] PJ: So I started the company in late 2014. I came up with the idea. I think we kicked off Stripe in mid-2015.

[0:01:57] NATHAN: Okay. That was about – ConvertKit was founded in 2013, but honestly, we didn’t have meaningful traction until 2015. The market was changing a lot then.

[0:02:06] PJ: Yes, it was changing a lot. It’s still changing now. I think you being very transparent with your numbers and putting your story out there has really helped and it’s definitely pretty inspiring.

[0:02:18] NATHAN: So tell me a little bit about like how you position Uscreen in the market, and actually maybe more importantly, when a creator is signing up to use the product, what problem are they solving?

[0:02:27] PJ: Yes, the problem they’re solving is ultimately they’re bringing, organizing their content in one place, and launching a membership site. Oftentimes, creators will have courses, one-time sales. They’re really looking for the next level to launch recurring subscriptions. Uscreen combines courses and subscriptions together and ultimately gives you a membership site. It’s recurring payment for your content. So premium content with the ownership of the data and the brand and then the community aspect brings it all together. Then on top of that, I can get any creator to distribute upon all these different platforms so I can get all that content on Roku. I can get it in their mobile device, their own mobile app for iOS, and Android, Fire TV, you name it, so I can distribute within all these different platforms.

[0:03:19] NATHAN: We’ve got a mutual friend in Justin Rhodes. I’ve been on his podcast, and on his farm, and all of that. I know you’ve been to his farm as well. How does someone like Justin use Uscreen?

[0:03:31] PJ: Yes, that’s a great question. I’m a big fan of Justin, been to his farm, and actually, would love to own a farm sometime soon. I learned a lot from him, lots of respect for him. Justin came to Uscreen about two, two and a half years ago. He obviously has his YouTube channel where he’s teaching homesteading. He launched a membership site with premium content. His episodes, his vlogs, et cetera.

[0:03:54] NATHAN: That’s his Abundance Plus product, right?

[0:03:55] PJ: Yes. It’s called the Abundance Plus, exactly. It’s ultimately, think of the Netflix of homesteading. That’s his membership site on Uscreen, and then he has all the apps, so he has his own iOS and Android app. You can download on iOS, he has an Apple TV, et cetera.

[0:04:12] NATHAN: I actually didn’t realize a couple years ago, when I saw Abundance Plus come out. It’s 100% powered by Uscreen behind the scenes. Those apps are – if I were to sign up for Uscreen today, I would be able to have my own app for my own membership and all that, right?

[0:04:29] PJ: That’s right. What he brings is his content, his creativity, his thumbnails, his descriptions, but the whole platform back-end billing, it connects to his own Stripe, et cetera, it’s all Uscreen. So we’re the full tech.

[0:04:42] NATHAN: I love it. There’s so many [inaudible 0:04:45] creators and they’re like, “Oh, I want to get into this. Is video streaming hard?” I’m like, “Yes.” Then, “Hey, is membership hard?” “Yes, 100%.” There’s all these things were some of the, “Hey, I’m going to build my own platform” and they don’t realize how the individual pieces are insanely hard, and then you bundle it together, and it’s even harder. It’s cool that you’ve got that approach where it has the full platform, but it’s very white-labeled.

[0:05:12] PJ: Yes, it’s an all-in-one, all syncs together, you’re right. That’s the most difficult part, getting everything to be parity and within the same platform is not easy.

[0:05:21] NATHAN: Yes. When you started, where you’re solving your problem, or a problem for a particular just opportunities on the market or like a certain customer?

[0:05:29] PJ: Yes, that’s good question. I initially started because my previous company was web net hosting, a hosting company. I was helping all types of businesses sell physical goods, kind of before Shopify got really popular. Then, some of my customers had DVDs, and they wanted to stream those DVDs. I just looked around; I didn’t see anything good. I mean, there was Vimeo on demand, which is still around to share platform, you don’t get access to your customers. Then there was Gumroad, which is kind of like digital goods. It’s an easy way for checkout and payments.

But there wasn’t a real Netflix type catalog with apps, et cetera. There were a few solutions out there, but I was like, “Man, I could take this and really improve it.” I kind of did discovery with my customers, call them up. With a few of those folks, most of them were very scared of security. Are they going to steal my videos? Should I put it online? This is 2014. But then I got excited, I launched it, I used my own money from the previous company, and got it to market in 2015. The next few years were a bit of a struggle, because we were so early in the market. But by 2017 or so, things started to pick up.

[0:06:39] NATHAN: What do you think – what made that difference in 2017?

[0:06:42] PJ: Yes, that’s a good question. One of the biggest differences was Vimeo, VOD, one of the better platforms out there at the time in 2017, which was called VHX. It was a company we really look up to. They did a really good job building actually what a simpler version of what Uscreen is today, and we looked up to them. That was really the platform that existed, that we were like learning from, and Vimeo bought them. That made a big difference, because they used all their marketing money and big dollars, even though Vimeo is a big name and I was like scared for a day. They really used that leverage of their brand to educate the market. They’re like, “You need this, you’re a fitness professional, you’re a professional creator, you need this.” That helped because oftentimes, they make mistakes, and we pick up some of their customers like Yoga with Adriene.

That was initially a VHX customer, Vimeo bought them and then they migrated over. That was one of our biggest creators today. She’s probably top three, top five biggest by far yoga channel, maybe top 10 fitness channel on YouTube. That made a huge difference. Obviously, COVID had a significant impact on the business as well. But I would just say that adoption of this technology, and what it can do, and it exists, and your competitors are doing it is what really started to get everyone thinking about it.

[0:08:02] NATHAN: Yes. Okay, that’s super interesting. I think a lot of people, especially building a startup are thinking about what if a big competitor comes into the space, or someone else comes in. We had the experience where – I’m trying to think what it was. 2020, Facebook decides to enter the newsletter space with their bulletin product, Twitter bought Review, so takes a small email platform, and then it’s like, it’s promoted by Twitter. It’s got custom features that the rest of the email products, newsletter products can’t get access to, and all that. You have this immediate feeling of like, “Oh, no. All right. Facebook, Vimeo, all these companies have insanely deep pockets.” It’s just like, oh, this is going to be – maybe they’ll take the whole market, you’ll fight this big uphill battle. That’s almost never the case. It sounds like – yes, tell me more about the experience once Vimeo bought your competitor and came into the market.

[0:09:03] PJ: Yes, you make a great point. When it’s those big companies with big names, there’s a few things. First off, you’re right. It’s scary. The first little bit of time is scary. It could be a day, it could be a month, it could be three months. I guess what’s scary is, the fact that they have so much power and so much funding, like you can’t compare our balance sheets, and they have so much talent. But where it’s difficult for them is to really improve their product. In our case, when Vimeo bought VHX, VHX and Vimeo today, to this day, it’s called Vimeo OTT as the product, is super cookie cutter. Very basic. It’s like if one size fits all — and it doesn’t. One size does not fit all for all these different membership sites from different verticals and different features. All we had to do was take our product and improve it, improve it, improve it. That’s it. Just focus on the product, listen to the customers, focus on the product, listen to the customers focus on the product. That was key.

What I definitely think is more of a concern is the two people in the garage, two guys in the garage, that’s where they innovate and really can push forward. Those are the guys that come out and really, you have to be aware of. But of course, big companies as well can be feared for sure. But in our case, it was as simple as, “Okay, where is their product today, and by default, you should be aware that they’re not going to be able to innovate as fast as you want. Now, there are some really big companies that I think are very innovative, one of them is Canva.

[0:10:38] NATHAN: Yes. Oh, they are. The team there is amazing.

[0:10:42] PJ: Amazing. Really big company, but really actually – look at their SEO and different things. They execute on a really ground level, but most other companies are not big companies are not doing that. It just gets so much red tape and bureaucracy, et cetera. I mean, we even see that at Uscreen. We’re about 140 folks, and it’s harder to do things. There’s no doubt.

[0:11:01] NATHAN: Yes. We experienced the same thing at ConvertKit. We’re a little smaller at about 75 people, but yes, it’s not the same as it used to be. You bring up something interesting of, when to fear a competitor coming in? First, you should never ever underestimate a competitor. It’s a rookie move. Whether it’s someone up and coming, or a big company coming into the space, assume they’re going to be good. Then hopefully, be pleasantly surprised when it’s Facebook and their email product thing where they shut it down two years later. But it is interesting of like Canva entering a space, and they pull off great execution. Another example, right is Slack, one of the fastest-growing companies ever, like to a hundred million in ARR. I think they pulled it off probably faster than anyone else had done before.

Now, if you look at Slack versus Microsoft Teams adoption chart, Microsoft Teams is completely off the charts. Now, most companies I know still use Slack, just because of the space that we play in and startups and all that. But it turns out, when you have perfect distribution to hundreds of millions of company employees through Microsoft Office, it’s pretty easy to just roll out Teams.

Are there any things you notice? When did big competitors or even small competitors able to pull off this kind of disruption? Versus when is it like, ends up being something that you didn’t have to worry about? Any traits come to mind?

[0:12:27] PJ: Yes, that’s a great question. Vimeo was a tricky one, because I actually have a lot of respect for the Vimeo brand. When they first came out, you were like, “Well, there’s YouTube. Why do I need Vimeo?” But then they kind of like went away from just YouTube, and they were like, “We are the creator platform. We’re for the indie creators. That Vimeo brand is very strong, but now they’re public, and everyone has something different to say about them. The perception of the brand is different now. I had a lot that still to this day, a lot of respect for the Vimeo brand. That was scary, because it’s a very respected brand, and like you said, they’re engraved in people’s head, their brand is so strong.

I think what changed during that period for us was the fact that they were just, they didn’t focus on the product, they bought livestream.com, they bought all these other products, and they were like, “We’re going to integrate it” and they did so much. It is a cash cow.” I think one of the traits would be, if they’re trying to do too much, look at their current existing products. How are they? Are they really innovative? Do you really respect their platform? Or is it just – it’s a big company. I mean, Microsoft is an awesome company, right? In any way you look at their products, they kick butt. Apple for a period of time was like, “Man, Microsoft has no chance, but now you’re looking at their products.” You’re like, “Man, okay. It is Microsoft.”

I think, look at their products number one. What do they have out right now? How good is it? Because that’s one thing that I’ve learned is, when you think about innovation with these big companies, is don’t give yourself this imaginary thought that they’re this big company, and they have all this money. And “Oh my god, they’re going to do this.” No, where they are today with product, it takes time to make changes, especially with big user bases. You look at someone like Microsoft or Canva, they kicked butt, yes, they’re going to continue to improve. Vimeo has some great products too. But at the time when you looked at that product, and six months later, you didn’t see much change. It’s kind of like, “Okay. Maybe they are going to go slower than expected.

[0:14:29] NATHAN: Yes. Looking at that past performance, because chances are, they’ve moved into another market, before they’ve made an acquisition like what happened with it. Because you’re right, most acquisitions have some built-in value, but they don’t do a good job of expanding into the new space, or – yes, thinking about what companies should you fear. Canva comes in your market, Figma comes into your market, like you should be very afraid, you know. But some of these other companies, maybe not so much because they don’t have that track record and execution.

[0:15:01] PJ: Yes, that’s a really good point. One last comment there is, you really got to focus on yourself, focus on your business and what you do best. There’s definitely differences, right? Speaking to your customers as CEO, it’s gotten harder for me, to be honest. But I went right back into the driver’s seat of being in touch with my customers in the last few months. There was a time when the company grew, and there’s just so many processes, and different things you need to do, and you need to scale with that. I saw the smart people coming in the business, so I stopped speaking to as many customers, and there’s a disconnect. There really is a disconnect with the knowledge I had, and what was happening within the business. Staying close in touch with your customers, and listening to them directly will affect how you build product. I think when we’re in it, it’s kind of – you’ll forget how valuable it is. Being in touch, as a CEO with your customers, and being super close, and focusing there, and building awesome product is by far the biggest winner.

Competition, and all these things are important. Be absolutely aware of what’s happening, what they’re doing, but really focus on yourself and why your product is better than what exists, and where you want to go.

[0:16:14] NATHAN: Yep, I like that. One other thing that you brought up, that I’ve experienced as well is a competitor, especially the big marketing budget, like establishing the market, or like bringing awareness to it. For a while I hated – if you meet an Uber driver or something else, and people be like, “So, what do you do?” Because you’re like, “Oh, I’m in Chicago for a conference?” “Oh, what do you do?” “I run an email marketing company for creators.” “What’s email marketing?” “Do you know Mailchimp?” Then they’re like, “Yes, I know Mailchimp.” I didn’t like that I had to use a competitor in order to even introduce the category. Then after Intuit bought Mailchimp, they’ve started spending just incredible amounts of money on TV advertising, in a way that MailChimp never did before. Intuit stepped that up a lot.

I think what I realized is, now, there’s just a bunch more people seeing ads going, “Oh, I do need to do something in my small business with email. Yes, a good number of them will go to Mailchimp first, but a lot of them are like, “Yep, email. Okay, let me start researching what email product is the best, and then you come into that equation. It’s a little different than – there’s some halo effect, I guess, of all their advertising dollars, and they’re establishing the market that then we can compete on when it comes to actually making a buying decision of which tool to use. It sounds like you had some similar impact, or Vimeo had some similar impact for you.

[0:17:39] PJ: Yes, you’re exactly right. The massive budget that they have educates the market. There’s no doubt that as they’re educating the market, it’s helping you, because people will look around, and like a simple ‘your website better than theirs’, or ‘your features better than theirs’. But what also happens is the big companies make mistakes, and they’re also not as fluid, so they’re not building as many different things that you can build. They’re not as agile. So that definitely helps as well. I was definitely initially nervous about Vimeo coming into our space, especially because I wasn’t as mature either within the business, so I had to learn a lot. But I learned a lot.

[0:18:20] NATHAN: You as an individual or the business itself or both?

[0:18:24] PJ: Yes, for sure. But mature as an individual, the first few days or so, I was fearful. As you learn, you’re like, “Okay, I could see this happening again with other companies. We’re both in the creator economy, Nathan, and you see how many different solutions are coming up, but most don’t get off the ground. There’s a lot of noise, but most don’t even get off the ground. You just kind of – you have to just focus on yourself, and your business, and your core competency, and why people come to you, and then be aware of the competition, but don’t focus on it too much. That’s what I’ve learned.

[0:19:00] NATHAN: It’s a hard balance. But you’re right, the focusing on the on the customer how your product is serving the customer cuts through all that noise. Because to some extent, Justin Rhodes made up example. He doesn’t care that whatever happened in the market. He’s like, “I have these feature set. This is my expectations of my customers when they sign up for Abundance Plus.” I now get to tell them that they have an iOS app or all these other things. That’s ultimately what matters. I’m curious from your side, you talked about kind of – sounds of this arc of being very customer-focused. Then as CEO, building the team, working out all of these scale and structure things. What helped in getting back close to the customer? Maybe what was the trigger that made you realize you need to do that? Then also, how did you actually implement that as a system to get back close to the customer.

[0:20:00] PJ: Yes, for us, it was actually pretty simple. It was cutthroat in a way, it was kind of straight in my face. Obviously. COVID had caused us to have significant growth, and then post-COVID, just like you look at Peloton, and Netflix, and even YouTube viewership, and slowed down. We slowed down as well and so did our customers. As we slowed down, and we started to churn, a lot of the customers we gained during COVID, because it was not ideal ICP. When COVID happened, of course, it fast forward, and a lot of demand that pulled it forward, right? But what also happened is we got a lot of brick and mortars, and orchestras, and symphonies, which we would never get, prior to COVID.

They were not your professional creator, they were these in-person ticket sales, one-time events, but they had to reach their audience. They came running during COVID to sign up. The moment things opened up, they were like, “We’re leaving,” which made sense. That caused the slowdown in the business. When that happened, “Okay. Now, we got to reaccelerate the business, we got to grow the business. So we’ve hired all these folks to do these different things, and we’ve hired head of product, et cetera. We need to build product. But wait a second, I’ve for the last two years been more disconnected from the customers than I used to be. I used to take up most so many sales calls, and escalation calls, and customer success calls. But now, I’m more disconnected.

Where are we going? Where’s our roadmap? What’s our three-year roadmap? What’s our vision? All these things that was always kind of back of mind for me now needs to be implemented again, and I’m not that close to the customer. I need to start reconnecting myself too, because there’s no doubt, if you’re close to the customer, you’re hearing things. Every single call tells you something, right? You just read in between the lines and you find patterns. You hear 10 things or you hire – you hear three, four commonalities, and you connect the dots because business is a puzzle. If you disconnect yourself from that, I never have not yet fully learned, but I’ve gotten better at using others in the business, like my head of revenue, or my head of sales, et cetera, to give me that information. That helps us well, being able to leverage your team to acquire that info. But for me, when I’m, you know, hearing it from the horse’s mouth, it significantly helps me.

[0:22:28] NATHAN: Yes, I’ve done the same thing. where you just go through the cycle. Sometimes you’re so close to customers, even whether it be existing customers or a sales call, and understanding what’s happening in the market. Then, you get focused on building the core business and team, that – then you can get pretty far away from that. It’s a hard balance. One thing that’s helped us a lot is hiring a lot of our team members, our creators themselves, so like using the product themself. Because then, you get into things where someone even who builds a feature, then who goes to use it. Not as the person who built it, and is testing to make sure it works, and follows the spec, but they go to use it as a creator, and they’re like, “Oh, that was actually confusing. I’ve worked on this, so that helps a lot. One system that we’ve put in place inside of ConvertKit, we call it creative Fridays. We just do this every other month.

During that time, we take the day off of normal work, and you dive in, and you work on some creative side project using ConvertKit as a creator. So you might be spinning up a landing page, email sequence is something that already exists, or whatever else. But it’s been huge, like the number of times that people were like, “Okay, I’d seen that in a bug report, but I didn’t fully understand it.” I encountered it myself. I was like, “Okay. No, I know the problem here. I know how to redesign this so it’s more intuitive” and just like systematizing that part of it. Because otherwise, you get so disconnected.

[0:23:58] PJ: Yes, that’s a great point. Yes, I mean, pretty much eating your own dog food is ideal within the business, right? Getting your team to leverage the tool, understand it, it helps every aspect of the business, marketing, support, you name it. They’re doing it for a passion, they’re doing it on their side hustle, et cetera. Yes, eating your own dog food, leveraging that product is key. You’re lucky in the fact that you know that, and you’ve started, you did that early on, because it really does help.

[0:24:28] NATHAN: I want to jump into talking about the creator side, and like what’s working for creators growing their business? Just like what you’re seeing, hosting 20,000 plus creators on your platform. But before we do that, I’m curious as you’ve scaled, what’s something like the marketing channels that are working now for Uscreen? What’s something that maybe wasn’t working before and you made some tweaks in order to turn that into a marketing [inaudible 0:24:56] that’s actually consistently driving customers?

[0:24:57] PJ: Yes, that’s a great point. Well, Uscreen early on, we started content marketing. So that’s always been helpful for us. So just thought leadership, educational content, put it out there, and Google appreciates it. Well, your potential customers and customers. So that’s always been a good channel for us. We also have a little bit of virality, because on some of our customer sites, we are powered by Uscreen. A lot of customers just willingly will do that and that really does help too, and that’s been a channel that’s helped us. Because with tools such as ours, that virality component of sharing, and referrals, and talking to each other makes a huge difference. So that’s been helpful, and we’ve improved that to be able to share. Hey, I’m building with Uscreen, and check that out has been super helpful for us.

[0:25:50] NATHAN: Have you done that with like – are there specific things you’ve implemented in the app that raised that a lot. We’ve tried different aspects of it, and our traffic for powered by Lynx is continually climbing and that sort of thing. We’ve never had something that’s like, “Oh, this is really working to drive.” Because how it’s driving users, we’ve never gotten to the point where it’s driving a meaningful amount of revenue.

[0:26:15] PJ: Yes, that’s a good point. For us, it’s definitely helped. I wouldn’t say it’s top three or top five contributors, like content marketing is, but it’s been helpful. I think we have a lot more opportunity there. We’re also in the early stages of tweaking our pricing, kind of the way our pricing is now, is we have a really smart head of growth now, VP of growth, and we built that growth team out. But the way pricing is up to literally prior to hiring our head of growth was, it’s kind of like, I call it PJ pricing. By me speaking to the customers, and looking at the competitors, that price they’re offering. But then when you start to look at the analytics, and everything, you’re like, “Man, there’s a lot of room for improvements. We’re not charging here. We’re overcharging customers that are not successful, right? If they’re not making money, or we’re charging them a lot, they’re more due to churn, et cetera.”

So we have a lot of improvements for pricing moving forward as well. Pricing. You just got to test it, you got to play with it, and you just never know. The experiments are interesting. We’re very early stages of testing with our pricing, but we know we have a lot of room for improvement there as well. So that’s exciting.

[0:27:27] NATHAN: Pricing is a hard thing. We’ve definitely made some tweaks over the years, made our free plan more generous. We’ve launched a cheaper, like paid plan, launched a pro plan, just basically given more options in the pricing, making it easier for people to come in the door and more accessible. Then also, if you’re a professional-level customer giving you more things to pay for and increase the average revenue. But it’s hard to run like an AB test on pricing because it has all these downstream effects. Yes, I always I have a lot of respect for people to do it well because it’s a hard thing.

[0:27:59] PJ: Yes. It’s definitely a hard thing. That’s a great point. You need the right folks to do it, because as you reach a certain point, 1000 customers or more, pricing is just a headache, and it slows everyone down. Your success team, your sales team, everyone is now confused. You have all these different products. Last month, this cost this much, this month, it costs this much. So yes, unfortunately, it comes with a lot of headaches. But if you know that there’s issues or you have room for improvement, it could be worth running some tests and just asking some of the customers what they’re willing to pay, what are they struggling with, the ones that churn is in a pricing issue. It’s work over time, you can’t solve it overnight.

[0:28:43] NATHAN: Yes. How big of a role does a sales team play for you guys? Is that because you’ve got a lot of content marketing and that thought leadership? Probably driving a bunch of inbound leads? How do you think about like inbound versus outbound sales, and like turning leads into customers there?

[0:28:56] PJ: That’s a great question. Sales plays a big role in our business. The reason is, we’re a high-touch product. A lot of customers need to be educated on it. We speak to them and help them through the journey, but there’s another reason we’re so heavy in sales. It’s something we have not done well. We have not had a really good product-led growth.

[0:29:17] NATHAN: I’m glad you say that because everyone talks about, “Yes, I just have like – we just do product-led growth and it takes off just like Figma, or Notion. It’s hard.” We push for the same thing, but yes, it’s hard to drive that really well.

[0:29:32] PJ: Yes, it’s funny that you say that. Honestly, if we were speaking probably nine months ago before Joe or I had a growth join, I would tell you that I think we do product lead growth well. Oh, yes, 30%, 40% of our accounts are self-serve, but that’s actually not true. They are, but they churn a lot.

[0:29:50] NATHAN: Yes, they’re not getting activated, and fully set up.

[0:29:54] PJ: Yes, they don’t activate well. I looked at myself and the way that I launched this company, and just grew with it, is I never focused a lot on UX and activation, and then pricing or freemium, right? We actually did something interesting. Nathan, I don’t know if you knew this. We collect credit card, collected credit card when you sign up for Uscreen, up to about six months ago, eight months ago, but then we removed that.

Now, we don’t collect credit card anymore, and you come in, you play with a platform. But then, people come in, they’re like, “Oh my God, okay. What do I need to do?” It took me a while based on team’s research to understand people are really confused. They want to see the end state. They want to understand the templates. They want to play with them, et cetera.

Now that we’re focusing on that, I feel good about it. But yes, the truth is, we have not done a good job of product-led sales, that’s why we rely so much on the sales team. We do have an outbound team because you can identify professional creators. That’s a huge benefit. Hey, you’re using this. Have you thought about using this? Here’s what we do better. We definitely outbound. When the leads come inbound, we help and assist a lot of our sales are sales-touched, for sure. We have a really strong COO that has our revenue team, which has been very beneficial.

[0:31:13] NATHAN: You know what you’re saying about the credit card. When you ask for that, there’s so many equations in there. When I first started ConvertKit, there wasn’t even a trial, right? You just paid for ConvertKit on day one. Then over time, there was like a trial with a credit card required. Then we went to trial, no credit card. Then now, a free plan. And you go around these different options, and it’s hard because in some cases, you get way more people in the door, the more friction you remove. But then they don’t activate, they’re not invested, and they just move on. Finding that balance between getting enough investment from the Creator, so that they’re like, “Okay, let me actually spend some time to set this up,” versus not having too much friction. It’s pretty hard.

We got no credit card required, all that, but there are prompts throughout your trial to get you to add a credit card, and unlock a trial extension, or unlock some these other things that have worked well. Rather than just waiting until like day 14 and trying to remind someone who hasn’t come back very much. Like, “Hey, add your credit cards. Convert this trial.” Any other growth experiments or stuff that you’ve played with along those lines?

[0:32:21] PJ: Yes, that’s a great point. A few things to look at, right? Is the trial period the right period? For example, in our platform, since activation takes a while. That’s one thing. But also, you need to upload your videos or prep them, edit them. You need to come and see, “Oh, I need six different videos, because I want to set up my content like this. It takes a little bit education, and then I need to prepare my content, or create my thumbnails, or write my description, right? Whatever those things are, 14 days is not enough. That’s the truth, right?

But it could also mean someone, if they’ve done their research, they’re willing to pay right away. But in our case, most likely, 14 days is not enough. Trial period, the length of time I think is super important. There’s a reverse trial that you can take them into like a freemium plan. That’s something to investigate, and just kind of pay for usage as you go. There’s definitely some things to look at there. But the key is, what problem are you solving, and how long is the activation process for those customers? In our case, with the creators coming on board, it takes a while for them to make a decision, do their due diligence, and then build out their site. We want to give them that time to be able to do that.

[0:33:42] NATHAN: Yes, that can take quite a bit of time. You have like an activation team that will help people set up their sites? We do it. We call it concierge migrations, which is a fancy way of saying like, “Give us access to your Mailchimp account and your WordPress blog, and we’ll do the whole switch for you.

[0:33:59] PJ: I’m curious what you’ve done. I’m going to copy that. No, just kidding.

[0:34:02] NATHAN: Are you sure? It works really well.

[0:34:05] PJ: It works well. We call it onboarding team and it’s super helpful. We used to – actually, this is interesting. When we used to collect credit card, you had a calendar right away, you can book a call with an onboarding rep. But now that we remove the credit card, and a ton more people come, we don’t allow you to book a call unless you’ve paid. You put in a credit card, your trial expires, pros and cons there. If you have the money and you can staff it, being able to be there, and help those customers will significantly – I’m a huge advocate of speaking to customers and teaching them, but I’m a little bit more old school starting in 2014, ’15 where I did the onboarding. where I know how much help they need.

The truth is though, I’m also growing with the business. More and more people are savvy to be able to just come in and try it. Before, Nathan, it’d be like this, people would contact sales and say, “Oh, I’m also trialing.” Now, they go trial if they like it, “Oh, let me talk to someone. What does this cost? What does that cost?” People are lot more able to just right away go in and try before they buy.

[0:35:14] NATHAN: Yes, that’s good. One thing I was curious about is, video hosting is very expensive, as you know quite well. Since I imagine, it’s a giant line item on your P&L. You’ve bootstrapped this company, right. You haven’t raised any outside capital?

[0:35:27] PJ: Yes, just I think like yourself, right?

[0:35:30] NATHAN: Yes. How have you gone about – I mean, I’ve lived it firsthand, you know, building to meaningful revenue. Then, I’m just curious what you ran into and some of the philosophy behind bootstrapping versus raising capital, especially at a time with your COVID growth numbers and all of that. You could have probably gone out and raised just some ridiculous funding round. You’d be regretting right now as you’d be facing a down round. But what’s some of your thought behind it?

[0:35:55] PJ: Yes, interesting. You talk about the regret part, I’ll talk about that. Yes, I’ll kind of take you through the full journey. So yes, we’re bootstrap business. Why did I bootstrap? I think for me, honestly, it was just how I was raised in my immigrant mentality, like I didn’t believe in really borrowing money. Honestly, I was like that since a young age. My first web hosting company was bootstrap. This business is bootstrap. My brother also has a SaaS business, which is Bootstrapped. It was just my intuition to bootstrap it. I did have money from the previous company that I pumped into this company for the first two years, and it was over a million bucks to get to get it going. SaaS businesses are not cheap.

We became profitable very quickly. Within a year, 18 months, we were already starting to make some money. Then I started paying our lead engineer, et cetera. Then I took salary after three, four years. The reason for bootstrapping was just my intuition to do it. Then, it was interesting because up until probably just a year ago, it was seriously a constant uphill battle of saying no to investors. 

[0:37:02] NATHAN: Yes. Yep, I know that very well.

[0:37:03] PJ: Yes, you know that very well. “It’s like you’re doing it wrong, PJ.” That’s how it is. You should be raising fine. It’s a constant uphill battle. It’s like, you’re just going against the current. You’re constantly – it’s kind of annoying, to be honest, I started to – I just don’t even respond to investors now, but because I’m just like, Okay, it’s a profitable bootstrap business, we know where we’re going and we’re just going to continue to push through and figure it out. Because it’s kind of like a badge of honor too, and you start to appreciate that. During COVID, things happen so fast, and we could have raised funds. But still, for me, it wasn’t that attractive. I’m happy we didn’t, because we would have – there’s two arguments to it, right? You could have said we would have had a huge balance sheet. But then, the other side is we, we would have been spending so much money, and we would have run out of money, and it would have been a down round, et cetera.

I’m happy, I didn’t do that. Now that it’s post-COVID, and everyone’s kind of like, “Oh, we didn’t raise funds, and it was a good thing, and all the VC-backed companies are kind of regretting it or not, et cetera based on their balance sheet. I’m happy we made those decisions.”

[0:38:10] NATHAN: Yes. I know of a lot of companies that have raised at some 20, 30, 40 times revenue, and it’s going to take them a long time to grow into that valuation if they’ve been able to at all. It’s just funny how things change of like, “I don’t know like, I guess you and I probably felt like, we were old school of like, “Nope, we’re just going to do it the old-fashioned way of our customers, our investors. We’re going to fund it off of revenue and all that. It seemed crazy at the time, like in 2021, you could have raised around 20, or 30 times ARR. People are like, “Great. That makes sense, of course.” Right. That’s right. But then we would have spent all that money because it’s like, you’re supposed to deploy it in the business to grow faster. Then, we’d be in a really tough spot right now. It’s just interesting how things change.

In this case, we both made a decision that values and principles-based decision that turned out correctly. It could have gone the other way. Who knows, maybe money would have gotten even cheaper, and we would have been even crazier for not taking outside capital. But I’m just thankful that like, it’s come around to a place where this methodical, deliberate way of building a business is being rewarded.

[0:39:24] PJ: Yes. I love that you’re saying that. Because for the longest time, we didn’t feel appreciated. You’re absolutely right. It literally wasn’t till the last year, where we – it was just we were doing it wrong. I mean, there was a small percentage of investors, et cetera that would say, “Wait. Hey, congrats, but now you should raise to really grow –

[0:39:44] NATHAN: Yes, exactly.

[0:39:45] PJ: – to 100 million or a billion valuation, et cetera.” The other thing you said is true. During COVID, we could have raised that 20x, 30x from like Tiger and all these other investors. But now, those same companies are getting 4x, 5x, 6x. I mean, they were valued at a billion, two billion. It’s going to take a long time to reach that valuation, a long time. So now, reality has hit, it could take what? Half a decade, a decade to reach those numbers again. I don’t know. But luckily, we don’t have to deal with that.

[0:40:16] NATHAN: Like there’s these hype cycles that continually happen. You see it in the creative space, right? Someone’s jumping from Web3 to AI to, I don’t know what else. There’s all these different waves that people ride. On some ways, you can make a lot of money, both as a business or as a creator riding these waves. On the other hand, like they’re waves, they go away. So sticking with these things that are going to be long-term valued, I think that’s the case with a lot of your creators, right? Homesteading might be more popular after COVID than it was before. But like, Justin Rhodes is not in homesteading because he saw a business opportunity of a big spike of everyone being stuck at home and wanting to grow their own food. He’s just like, “No, I’m just doing this thing, and there happened to be this wave, and then it’ll settle back.” But I think that the businesses and the creators that can understand why they’re doing it, and it’s a lot more than what happens to be trendy right now, I think that’s really important. I’m sure that at home yoga, also saw this crazy spike, and attention, and interest. But Yoga with Adriene is not there because of a particular wave or spike, been there a lot more before that.

[0:41:32] PJ: Yes, that’s a great point. The way I also see it as, all our customers are bootstrapped as well, and they’re building – 99% of them, and they’re building from the ground up, and they have to acquire the same skills. They have to be resourceful, they have to become profitable, they have to make money. That’s one other thing I like, as well. We share that with our customers, and I think that’s a huge benefit, and they appreciate that as well.

[0:41:56] NATHAN: With those customers, I’m curious if you – maybe there’s a business or two that you kind of breakdown of how these creators are – are building their business. I don’t know if there’s someone that you’re able to share some of their numbers or to give a sense of what it looks like to take, you know, a YouTube, or following, or an email audience, or any of that and build it into. I mean, effectively your own personal streaming platform.

[0:42:21] PJ: Yes, yes, definitely. Yes. I visited Justin Rhodes’ Abundance Plus, and we talked about some of his numbers, so I’ll vaguely kind of go over some of the things that he shared. In his case, for example, he has about a million followers on YouTube, but you should also notice that he has true fans. His folks that really like what he does, and they follow him, and teach from, and learn from him, right? That’s important, the true fans is an important label to put on these YouTubers, or Instagramers, or TikTokers. Because if it was just funny cat videos, or entertainment in a way, like you might not be willing to pay for it, you’re probably just watching it in your car, et cetera. But in the case of Justin Rhodes, he has true fans, he has a million followers on YouTube. Then, he’s generating a solid way over 100k a month in recurring revenue with Abundance Plus.

So he’s taken a million of his YouTube following, and converted a few percent into paying subscribers with solid LTV, and retention there. That’s usually what we see, based on the content, and the true fans, or the loyalty of them to that content. You can easily convert a few percent to paying content. It again depends on the vertical that you’re offering. That’s why we call that membership sites, because we’re not just helping you gain content. We have a community mechanism of collaboration and discussions that happens within that membership site.

A subscription site like Netflix is not a community, you just subscribe. I pay, I watch, I’m done. But a community as I come within the community of Abundance Plus, I collaborate, I see that you’re in Boise, Idaho, and you also own a farm, and I connect with you, and we exchange certain things, and tools, et cetera. That community aspect is what creates that membership site, which is where our focus is now.

[0:44:24] NATHAN: Okay. That’s on the large side, of a million followers and all of that. Justin’s built just an incredible audience on YouTube. What’s kind of a threshold for a creator to be able to build out a community, or maybe with someone who’s done that really well. on the small side of, I don’t know, is that 10,000 followers on YouTube? Is it 100,000? What’s kind of the approach that you take?

[0:44:46] PJ: Great question. I was just kind of looking on our website to find a few creators I can name. Yes, you’d be surprised some of the smaller creators actually have a really loyal following. So it could be from anywhere from 5,000, 10,000 on YouTube that have really loyal followings will do extremely well. Like a company called Magic Stream, and it’s called Illusionist, where they’re teaching the Netflix of magic is interesting. Fader Pro teaches – music producers, et cetera are teaching audio, and mixing, et cetera.

[0:45:21] NATHAN: Yes. I’ve seen in that space like the music and the audio production space. I’ve seen so many creators do really, really well, because you can tell, modeling content, and access to training, and all of that. But then, you see people selling like beats, and presets, and so much production tools that goes into it as well. It’s a fun community.

[0:45:41] PJ: Yes, great point. The barometer there is, your true fans, loyalty of your fans to you and your content, and the value they get, rather than oftentimes the size, right? The size obviously helps, are really that first one, is the one that you engage, and then they’ll follow you anywhere. A good example of that is MrBeast, right? MrBeast comes out with chocolate bars, or MrBeast’s burger, and the whole mall like a whole city gets – because they follow him, they’re so into him. That’s true fans, that’s loyal fans. So he can monetize and put anything out there and be able to make tons of money from it. That’s what I think is the most important.

[0:46:24] NATHAN: You’ve got MrBeast on the site as a customer. What did it look like to get him as a customer and start working with him?

[0:46:31] PJ: That’s a good question. I would love to have MrBeast as a customer. He’s actually not a customer, he has a Vid Summit, the conference we sponsor, which he co-owns is a customer. We put him on the website to make it look like some impact there. But yes, MrBeast has not launched a membership website, but Vid Summit has with the replays, and their conferences. I’ve seen some of the large creators do membership sites, but I also think with that size, and oftentimes what happens with the big entertainment, creators like Airrack or MrBeast is, you know what they’re looking for. They’re looking for the next viral video and tons of viewership.

[0:47:13] NATHAN: Oh, yes.

[0:47:14] PJ: So they often don’t gate their content. Not all of them are like that, but they don’t gate their content. Versus an educational content creator is teaching, looking to monetize, make money. That’s why we want professional creators that come on board that are looking at launching a business and a livelihood. That’s what Uscreen does best, is let me help you make money long-term. Let me help you build a business long-term. Yes, you can create a course and do a one-off with all these other competitors, you’ll make 10, 20, 30, 40 grand, but it’s done. I can help you make 10, 20, 30, 40 grand a month for the next three, four, five years. I give you the tools and the analytics to be able to do that and sustain that long term.

[0:47:57] NATHAN: Would it be right to think that you’re targeting more that the educators than the entertainers? There’s probably some overlap, but yes.

[0:48:05] PJ: Yes, there’s definitely overlap. But I would say, educational content is the vast majority. There’s definitely entertainment as well. We have National Comedy Center, definitely comedians. We have films, movies, et cetera. Looking at our examples page, there’s a good at like pageants live, which is Miss Universe replays, all that stuff. But a lot of the stuff that you even see within entertainment has an educational component to it as well. That’s the majority.

[0:48:33] NATHAN: So if you’re talking to a creator, who’s – they’ve got their YouTube channel, I don’t know, maybe it’s got a couple 100,000 subscribers, and then they’re in education side of things. And they’re wanting to launch this private community, their own internal Netflix. What works well when they’re making that switch? Or not even a switch, because YouTube is still top of the funnel for you and all that. But what works well when you’re launching your own community, and then maybe what are some of those pitfalls that you see people run into where they think it’s going to work like this, and it actually doesn’t the way they liked.

[0:49:09] PJ: Yes, that’s a great question. Number one is, they don’t have a strategy to launch it, right? So they don’t have a funnel. Within Uscreen, we have some marketing tools that help you do that, like you do a free giveaway. You give one video away, and then nurture them in emails to get them to your paid content, your premium content. That’s a big one. There’s no strategy to do that. Sometimes, people will just put links in their YouTube et cetera. You’ll get some audience like that, but it won’t have the massive impact that you thought. Really getting a proper launch out, and getting them converted over time is key. You’d be surprised even the biggest YouTubers, they don’t know where to put this other brand. Are they putting it in the banner of their YouTube, are they like advertising the app on their videos, et cetera.

There’s definitely some ways and playbooks we offer to help you do that. That’s one. Second is, oftentimes, the creators don’t know what to offer as far as that gated content goes. What’s the next value play they’re offering? Is it like backstage scenes? Is it additional episodes? Is it – are you just selling courses, and now you’re bringing them under all one umbrella, so then it’s easy? You’re just doing more content? Oftentimes, they might not know what to paywall in that case, put a paywall on it. Those are probably the two most.

I would say actually, the third one is they don’t have a loyal following, so they don’t have that true fan base. That happens often. You’ll get YouTubers that have a good solid following, but they’re not within – they don’t have true fans. They just have people watching it, they’re not willing to pay for it. You have to test that, you have to ask, and you’ll know when you see the engagement, and the contents, and the way people follow you, et cetera. You’ll know where that fan base is?

[0:50:57] NATHAN: How would you go about testing that? Because it seems like that’d be something, you know – if I had 200,000 subscribers on YouTube, and I’m like, “I want to go do this, because I saw someone else do it.” The last thing you want is to launch something and then turn to that, find out later that you don’t have loyal fans, and it will be discouraging. So I’m curious what works best for testing it?

[0:51:17] PJ: Yes, I’ve seen that work super simple. You put a video out, it could be a teaser, or a small snippet of what you want to paywall. Then you put in the comment, “Hey, would you be willing to pay for this?” As simple as that, just asking your audience, surveying them, sending them an email. It’s that simple. Just kind of putting little feelers out there that you’re looking at launching a separated community. Would you be willing to join that? If people say yes, they’re oftentimes willing to pay for it. Because nowadays, we pay for all these types of subscription services. I think that barrier for pay is low, but the quality and the value that you offer is super important, so that they stick around.

[0:52:01] NATHAN: Yes. What have you seen on pricing? Because you could price this like $10 a month, hundreds of dollars a year, like – is it both on price point, and then should you be pushing annual, or quarterly, or monthly? What actually works well?

[0:52:15] PJ: Yes. Monthly and annually are the most popular. Man, I wish Nathan, people would listen more and just charge more. Netflix used to be 999. Now, I don’t know what it is.

[0:52:26] NATHAN: It’s like 18 to 20 now.

[0:52:29] PJ: Wow, it’s gone up significantly. That’s good because that’s what we tell our customers. Oftentimes, people are not charging enough. We have a Facebook insiders group, ‘and people often post in there, and they’re like, “What should I do better?” And you’ll see, our customers come in, and they’re like, “You should charge more.” I see anywhere from $10 to 30 or $50 a month if you have a loyal following. Like for example, I’ll name another yogi, her name is Sarah Beth Yoga. She launched a long time ago and actually goes to a lot of the conferences like Vid Summit and speaks. Awesome lady, started in YouTube probably 2012, ’13 or so. She charges, I think it might be $50 a month, it’s anywhere from $25 to $50. That’s where you make money. Because someone who’s willing to watch her content and is loyal to her is willing to pay 25, 30, 50 bucks. Don’t charge too little and we say that all the time to our customers.

[0:53:21] NATHAN: Because in that case, instead of making a comparison to like, “Oh, Netflix is X or Disney Plus is $10 a month.” And they have tons of movies that cost hundreds of millions or billions of dollars to make. How could I charge – that’s one comparison that you could make, and you go down a path and end up at like, “I should charge 99 cents a month or something.” That would be a terrible business idea. But really, like with the yoga example, you’re making a comparison to like, “Okay, I could join a yoga studio and be paying hundreds of dollars a month, or I could be paying for classes or instruction, right?”

So then, when you think that way towards the outcome, or like the comparison in the everyday world, then that’s like, I’d be paying – maybe the anchor changes from like a couple dollars a month to $300 a month is the anchor, and they’re like, “Oh.” All of a sudden, $50 a month for these virtual yoga classes and all of that is really quite inexpensive.

[0:54:22] PJ: Yes, that’s really a good point, to put value on it, exactly right. Because they’re offering a lot of content to their audience that is has that value. That’s where the value is important, because if they don’t, then the customers churn out. Another way to look at it is, yes, there’s tons and tons and tons of content on Netflix. But ultimately, a lot of our customers are gaining these subscribers because they have that loyal following. Is really no one to follow on Netflix, it’s just the content. If you get a Netflix look-alike, that has other films in India, et cetera, oftentimes, like indie films, they don’t do that well. It’s the professional creators that have built this following that do well.

[0:55:06] NATHAN: Yes, that’s fascinating. I mean, I love that there’s tools out there now, like what you’ve built with Uscreen, that allows creators to compete on that level of professionalism. Right? I’ve been inside Abundance Plus, and some of these other communities, and you’re just like, “It feels super, super high quality.” It’s fun that, like – I mean, you and I spend all of our time building tools so that creators can show up on that level and earn a living. I love it.

As we wrap up, I’m curious, where should people go to, maybe two things, one, learn more about Uscreen and then on the other side, if you guys have any training or memberships, that kind of content of like how – if you’re a professional creator and thinking about going down this path, like what you should focus on?

[0:55:51] PJ: Yeah, definitely. As far as training and tons of content we put out on our YouTube, check out our Uscreen YouTube channel. That’s super useful. We put a lot of stuff out lately around memberships, so I will check that out. Then if you want to find me, pj@uscreen.tv is my email. Feel free to reach out. Obviously, our website, uscreen.tv.

[0:56:14] NATHAN: Sounds good. PJ, thanks for coming on the show.

[0:56:16] PJ: Awesome. That was great. Thanks, Nathan.

[END]