How Hop Online CEO Paris Childress grew Hop Online to $4.1M revenue and 100K customers in 2025.

hello everyone my guest today is paris childress since 2009 he's founded and run hop online which is pivot in recent years to focus entirely on sas growth marketing services include seo content marketing paid search paid social cro data analytics and creative parish you're ready to take us to the top absolutely let's do it i never have services people on my show how the heck did you give me agree to have you on i don't know how i squeaked in nathan i figured i wasn't going to raise any alarm bells but yeah we're an agency it's because you buy it's because you buy the magazine you buy the data you buy all my stuff so i said i got to have paris on right that's how it works that's probably what happened yeah all right well let's here's what i'm going to try and do today instead of focusing only on your business model i'm going to try and dig into a case study or two where you work with a b2b sas company so that our listeners can take some of those things away for free and maybe execute them sound good yeah perfect all right so now why are you qualified to help sas businesses do this did you have your own sas company that you grew and sold or what got you into sas well we no i did not have a sas business before this but we have worked with sas companies for years and through that experience we've really learned a lot about the metrics that the marketing metrics that really drive these valuations and outcomes for sas so what really helped us determine that we wanted to focus only on sas was the success of some of our current clients and the the realization can you name it can you name one or two of those sure output.com okay is one of our one of our largest sas customers they recently raised 45 million dollars from summit partners about a month and a half ago and help me understand this is their their develop innovating software and gear for musicians composers and producers now what percent of the revenue is true software versus margin on a hardware sale right now i'd say probably 70 of their revenue is sas oh great okay so are you when they hire you are you focused exclusively on the sas side or do you focus on the gear sales side as well on both when we started working with output.com they were only traditional software and we were they we helped them pivot and launch their sas product about 18 months ago and basically got them from zero to 100 000 customers in about 16 months okay so let's this is a fascinating story so let's break this down so they engage with you 18 months ago they had no sas product at the time they launched sas with you 18 months ago correct and they passed a hundred thousand paying subscribers musicians on that sas product now today yes okay so how did they do that how did you get the first hundred customers well the first 100 customers was through paid search and we we max we thought we had maximized paid search but then we got into facebook and into youtube and there were some breakthrough moments um one was switching to data-driven attribution which really unlocked the value of youtube and the other was facebook ads basically leveraging all the great creative content that they were producing to drive acquisition through facebook so in a month what will they spend on paid through you high six figures okay and about how many keywords are you covering hundreds of thousands hundreds of thousands okay so let's talk about the first hundred grand and spend how did you decide which keywords to go target the first keywords are the branded and competitive terms because this is a product that's a new category it's basically a loop synthesizer so people aren't really looking for this so we went after competitors terms platforms that are selling loops and samples that musicians use to make music and we wanted to basically catch that adjacent search intent after that we we started going after other types of keywords that had slightly less intent but we were just moving further away from the the bull's-eye so to speak mm-hmm um and we we continued to do this even now building out more and more keywords around the digital audio workstations and other popular brands that music producers are familiar with so that we know we have the audience so how do you work through economics so i'm looking at the top search terms there was almost none a year ago call it a hundred today i mean you're ranking you know in terms of ahrefs and what they see for over 5 500 keywords i'm sure when you do all the adjacent categories it probably gets up to hundreds of thousands but your most popular ones are studio desk right and the second one is output arcade and when i go to arcade product on output it says ten dollars a month 30 days free it looks like this is the digital product that's driving most of their revenue is that accurate yeah that's it yeah so so let's now because you can't talk too much about them because i'm sure you have ndas but let's just talk about a sas product like arcade charging ten dollars per month what sort of unit economics are you looking for is you spend your first 10 20 hundred thousand dollars in ads well right now we are optimizing for a cost per acquisition uh in the high 20s let's say 27 28 and the the trial conversion rate is about 60 so they have a they have a pretty good understanding of the maximum customer acquisition cost right sorry twenty percent convert to paid no about sixty percent oh sixty percent convert to paid okay got it so just to be clear there you can you can go spend uh you can go spend let's just say to get 100 100 clicks right you can go spend 2 800 28 cost per click and then what you're saying is to get those hundred clicks uh how many of them will actually sign up for the free trial version of arcade oh the conversion rates are about between five to seven percent from click okay so of a hundred clicks let's say let's give you a benefit about seven let's just do ten ten of them convert to a paid account or sorry a 30-day trial and 60 so six of them convert to a new 10 a month account so 68 dollars a month or 60 a month in revenue something like that yes so how with all that funnel built out how do you back into effectively a 30 cost per click as being effective because a 30 it's not 30 cost per click it's cost per acquisition it's cost per free trial oh i think it's in cpc okay uh i'm sorry i meant cpa cost per acquisition which is in our definition that's a free trial i see okay got it so let me take that math back then if you spend three thousand dollars right so it's 28 cost per trial times 100 right you're getting a hundred new trials for about three grand of those 100 trials 60 of them will convert to a 10 a month plan or about 600 a month in revenue so your effective payback there is between three and four months that's correct people stick that long they stick much longer what we see is that the cohorts once people make that first payment there's about 60 percent of that starting cohort that will stick for many many months so there's a big drop off in the first few months so the cohort sheds about 30 and then it and then it flattens out and then it lifetime value from that point on is very steady got it so you lose you have about 30 tournament in the first six months but then after that i really flattened valentine's stick for a very long period of time right right so we get to the most loyal cohort after four to five months after they start the the first payment super effective so so let's take a step back now when they go out and obviously raise a bunch of capital right 45 million is not a small number how much of that deck says just look our paid spend math makes sense we're gonna plow a bunch of this stuff into paid spend i think most of it is relying on that on that logic we were brought into the investor due diligence process and we had to answer these types of questions what is a question that an investor asked you that i haven't asked you yet the investor asks you're doing uh so right now we're doing a thousand new trials a day what would it take to make that three thousand or five thousand and could you preserve the unit economics if we wanted to triple this and how do you ask them the answer is yes um we can because we still felt like there were certain ways that we could continue optimizing we hadn't exploited international expansion to the fullest degree possible there are some analytics solutions as well we haven't implemented where we think we can improve and eliminate a lot of wasted spend and the product itself will evolve so right now the product is really geared towards professional music makers and i believe that the founders and the team's vision is to move downstream and eventually make this tool accessible to uh hobbyists and even people that are brand new to making music so it's right now it's basically like the adobe of music making but in the future it could be the instagram of and if that happens then our addressable audience gets massive this is a mistake like monday went through this exact thing they were killing it with keywords early on i had roy on it was called the pulse back then they were just plowing money to paid spend and they had to keep inventing new channels right to you know to define the same economics and ultimately with unlimited money the economics will get worse because you're plowing more money and the question is how long until they get worse and the way you can measure that is things like you know your current volume on...