How Paddle CEO Christian Owens grew Paddle to $90.9M revenue and 2K customers in 2024.

Intro all right guys so uh I'm Steven I am not a Founder so I am head of Parts Market at paddled so my role basically is to connect with information streams between the technical expertise and the ux knowledge of the products team as well as you know the communication abilities and the skills of the marketing team and so the real things we think about are you know number one how do we who do we sell to how do we talk about that product and how do we price and package by product um and so paddle Larry all-in-one you know payments billing and subscription management tax management solution but I actually come over to paddle from the acquisition of a company called profile last year which went for 200 million dollars we have uh free substitution Analytics tool we also have tools for uh automated your retention and optimizing the pricing strategy so a lot of today's presentation is going to focus on you know what I've learned in products marketing but also our work helping other companies with their pricing strategies themselves um and so over the next 20 minutes we're going to talk about number one process how do you actually get momentum on a pricing decision and who do you put in charge of it strategy how do you think about pricing what are the fundamentals when you're evaluating your products roadmap and your current project and maybe some quick hit tactics um hopefully we'll have time there's a lot to cover here but you can hopefully win so you can start getting momentum with York so you know I mentioned that we have this subscription analytics product we have 30 000 subscription companies a lot of them are SAS 20 to 25 of a SAS Market depending on how you count it so we have a pretty good macroeconomic view um into you know how people spending their time and how these different companies are growing and you know I have good news The bad news and bad news it's probably not a surprise so let's start with the bad news is the Market's not doing great right now right so we actually constructed an aggregated subscription index of how these different companies are growing segmented based off of you know how each vertical is going and we basically saw that um you know growth in the BBC Market basically flat lines starting late last year um Stanley this month the state is three months out of date um but when you look at the B2B side you know b2c is often very much a leading indicator for B2B so if you're assuming that bad trend is going to apply to B2B at some point then that's pretty worrying um and what's interesting is that you know starting stage lie August last year we actually started to see growth um slow down a lot on B2B space I've seen the uh an early cut of the fresh data we actually saw a bit of an uptick in this in January and February of this year but this is all below before all the Silicon Valley Bank stuff so who knows what that's going to impact things so how can The good news we go after this right and you know the good news is there's some fundamentals that you can focus on but we'll set you up for Success both right now but also will enable you to iterate much more quickly in the future ideally when your product improves or when marketing conditions improve so let's talk about those fundamentals How to think about pricing so how do you think about your pricing right and the first thing I want you to know is this is not a one-time deal you do not look at this once and then move on it's a process it's iterative and you keep doing it a lot of you probably already talked to customers and have some pricing out there but what I'm going to take you through is a systematic approach of thinking about it and hopefully if you can implement this you guys can actually get some you know low hang fruit at the beginning of this process so we've you know we get access to all this data and we've talked to thousands of Founders in our time and whenever we ask you know Founders what their like main focus is for increasing top line revenue are they generally fall in like three different um kind of levers this customer acquisition sales and marketing getting new customers in the door there's pressing and packaging figuring out what you're going to sell to your customers and how much you're going to get from them for that and then there's expansion Revenue selling them more products or you know the flip side which is obviously churn and inevitably we hear about people spending almost all the time on that sales and marketing stuff especially at the founder stage right spending all that almost all their time they mostly guest on the pricing work and they're not really working to gather Why is this bad data on it and why is this bad well like I said we gather data on what we're spending time on and we basically found that um you know there's way more impact on spending a bit more time on monetization a bit more time on retention compared to spending time on acquisition so you can imagine this basically as a Founder you know spend a couple more hours what's the impact of spending a couple more hours on a month on your pricing it's going to be enormous a lot of people leave retention on the table as well that's going to be pretty big so what I'm basically suggesting to you is just take a couple hours out of a week shift that from working with your BDO team or your marketing team and ship it over to thinking about your pricing and how much value your users are getting out of your product Create a pricing committee so how do we do this internally one thing we recommend is create a pricing committee um and you know we often see that this is a big barrier because if you know no one owns pricing then you never get any momentum and if everyone owns pricing everyone has complaints everyone gets into arguments you never get any momentum out of it so not having a pricing Committee of designated people to work on this is an enormous barrier who should be on this pricing committee well it should be leaders who can kind of surface feedback from different parts of your organization uh and also see kind of a force of a trees get an overlay of the land so someone product someone from sales someone from marketing probably someone from Finance in a capital allocation budgeting role as well and a lot of time we also suggest that you add someone as a project manager on this you know obviously you know Founders time is you know pretty precious so if you have you know obviously me from products marketing I'm biased I think someone product marketing could hold this since um this is traditionally a remit but if you have a product manager this is a very good idea for them to hold as well since obviously Bay Nova product Vision over Persona and obviously you know hitting deadlines of project management is part of a remit um and lastly you know you should have a main decision maker someone who you know puts their foot down and then decides what the group is going to go towards to break a time very often it's going to be CEO or CTO so you know um talked a little bit about this but you know what is this uh you know pricing coordinator look like well they should be you know housing all the data and all Version Control and all the documentation around the decisions made they should be you know taking that feedback and pushing through the politics navigating that and obviously they should be focusing on the project management making sure deadlines are actually set and hid Establish a research process um so you know next is what we I mentioned is establish a research process I'm going to get into the strategy a bit here but at a high level what this basically means is talk to the customer but I imagine you guys are already doing that but specifically set up a system for not just photograph customers but asking a well-defined set of questions knowing what hypotheses you're looking to test and collecting this data systematically so let's talk about the actual strategy here right so when I think about pricing I actually break this down to kind of almost three constituent players here number one is map your time or buyer segments and personas know who you're selling to it's match these people to the parts of a product that they value most so you can actually figure out how much value you're beginning and then lastly of course actually measure the value and you'll notice that like pricing is literally one-third of us two-thirds of this is just the legwork to get there I'm going to focus a lot about legwork because if you get that stuff right then hitting a pricing Point becomes easier and it's some becomes something that you can iterate upon over time Buyer personas and segments so talk about talking about buyer personas and segments buyers obviously have essential tenant of your business and many of you probably have a bunch of different personas a bunch of different um you know Target segments and so like I said the task is to figure out can we get enough information on these folks such that we can actually match into different parts of a product that they like and figure out how much value they're getting so you can price based off of that value and so when we construct personas we Customer personas don't just focus on the qualitative right um you know you've probably have a Persona that looks like this very qualitative what is this person's age very Graphics what um you know the seniority stuff like that I'm sure all of you probably have something that's at this level but it's not enough and the reason is it's all qualitative and certainly qualitative is necessary but you need to have more so what we normally do and what we actually do it price intelligently with our pricing software is um we...