How Raaft CEO Luke Chambers grew Raaft to $886.1K revenue and 12 customers in 2024.

hello everybody my guest today is luke chambers he's the founder and ceo of a company called raft he's got 15 years experience in sas as a software development leader most recently as cto of agreed.com he identified a gap in the toolkit for sas companies dealing with cancellations retention and feedback and started his current company raph because of that luke you're ready to take us to the top yeah absolutely all right so walk me through what the company does and where you're focused and kind of the sas customer life cycle yeah so raft is a tool to allow customers that are canceling a sas tool to provide feedback and get options to stay with the company so when i was working with as a cto at agree.com we were looking at our churn numbers and really i'm not understanding why people were leaving and there's a simple need to ask people questions and understand why they're leaving but it's actually not as as easy as it uh as it sounds and so during that time i built uh raft as a drop-in solution to connect with your payment processor and when somebody's exiting get understanding in terms of qualitative and quantitative feedback and then be able to respond to their objections in a way that allows them to stick around yeah um the hardest part about this is no one is motivated to answer your questions when they just want to cancel the plan so that are you introducing any game theory here to get the cancelling customer to take the time to respond well at this point it's kind of a uh we they're required to go through the uh the quick questions uh we try to really focus on respecting the customer's right to cancel and never trying to confuse anybody or or tool the system in a way to um you know confuse them but we just try to be real respectful and ask simple quick questions that'll allow us to get to the bottom of it okay i'm gonna give my audience a power nugget here since you're the guy with the data of if someone clicks they're canceling because they're too expensive you have a couple options move to a lower plan pause subscription get get a discount for three months ext or extend the trial really which of those are most effective which time which one of those gets clicked the most it really depends on the motivation of the customer the simple the simplest is certainly taking a discount that gets kind of the most response but really i mean that type of a thing you got to be real careful with it and use it as a way to re-engage the customer don't just leave it as a as a discount in and of itself but when you see that somebody's taking a discount to stick around for three months or something that's your opportunity as a leader to dig into why they're experiencing that pain that caused them to click that and then uh you know maybe re-onboard them maybe offer them some better customer service really re-engage them so they don't get there again all right let's let's talk about your pricing now so if i'm a sas company and i'm sick of my 10 logo churn per month i want to get it down to two or three percent a month what am i going to pay you to use your software yeah we're simple right now it's really early for us we're really dialing in the the pricing and the and the um the offering uh right now 49 bucks will get you unlimited um use for your single app okay so about 50 bucks a month is a good average for customers today when when did you launch the company uh companies we started work on it uh this time last year so just about a year ago uh actually launched the product in june okay now did you actually leave agree or you built this inside of a grid and spun it out i left okay you did leave well why so this is a big transition right for entrepreneurs people are always wondering is the grass greener on the other side i mean what gave you the confidence to finally say i'm giving up my safe secure salary maybe my benefits maybe health insurance i'm gonna go start this new thing yeah and well it certainly is a leap of faith uh you know sometimes you get to a point where it's just time to do something new and uh if you have uh the opportunity to to kind of jump off the cliff you do it uh this was just one of those times when i had the support and the opportunity to do it and uh is it greener on the other side man i tell you you look at your uh your hours of input to uh to reward and man you're putting in a lot of hours yeah yeah yeah very good no makes sense so so you're new to the market but what have you scaled to today in terms of total customers on the platform yeah so we uh still early still getting the marketing ramped up we we only have uh about 12 customers right now okay that's great well you got everyone starts at zero so you're at 12 that's great um what um why'd you decide to price around a flat fee versus like a percentage of what you helped recover yeah the reason that we did that is there are so many factors that go into retention um you know a customer can look at look at your cancellation experience and go multiple different ways without taking an action and so it's very difficult to actually pinpoint why someone decides to stick around and so it's difficult to to say absolutely that that raft was the the key ingredient that that's one point the other point is that raft is not just about offering discounts it's about getting feedback from people and understanding what's motivating them and using that information to reduce your your churn you know if we're just offering discounts and and you know slashing prices to keep people around there's a bigger problem and you don't want to be in that business but if you can learn from your customers understand why they are the motivated to even consider cancellation you can change that up higher in your in your product development cycle yep so and so how does this work when people install is this a javascript snippet on the cancellation page and they have to connect their stripe accounts or how does it work yeah that's correct we work with strike braintree and we're curly right now they authorize one of those services to work with with raft and then drop some javascript on their their page and then call a make a quick call when a customer wants to cancel interesting um okay and then have you bootstrapped this or raised total bootstrap that's great okay so complete you say that very quickly did you get burned by vc in the past uh no i've just uh i've been a cog in the wheel uh during uh you know acquisitions and such and i just wanted to try to do it in a different way yeah so so how are you funding it right now just putting your own money in basically yeah that's correct um what's the team today how many people myself myself and one other um uh designer marketer product guy okay so two of you guys both both in oregon that's right both in oregon very good um you know this is funny question here any churn that you've seen so far or no no no that's a good answer for us we do use our own product though so if you if you wanted to uh we get some feedback out of you yeah no this space is very interesting to me especially as a subscription economy grows i mean there are companies like netflix where when they added essentially the pause account button i mean they have recovered hundreds of millions of dollars worth of revenue um it just works well the question which you're bringing up which i think is an important one is you then have to use that piece of feedback though to figure out how to re-engage or reactivate why were they going to turn in the first place over that paused period and that's the hard part yeah it is yeah and so some of the some of the steps we're um we're working on right now is is using some [Music] natural language processing to understand why they're actually you know to evaluate large sets of uh feedback in order to pull out some insights and raise those up yeah what um if if someone listening right now wants to try you and they go click try for free what what process they have to go to do they have to connect their stripe account uh they do okay i mean you can get in there and and see the process without actually connecting but then once once you want to get it onto your site you would need to connect it that's because the way the raft works is if you're if you are off making offers to your customers we actually apply those directly so you don't have to write any code to offer a discount you don't have to write any code to uh put a customer on it's a stripe api call kind of thing yep all those yeah that's interesting do you run into any of these 12 customers you added to any of them say wait a second i don't want to i don't want to connect you to my stripe that's like a crazy data thing i don't know if i can trust you yet you're too small yeah we haven't had any of those problems um customer you know we connect through the standard stripe um connect off process so it's real clear what's happening and we can be disconnected at any time by the customer they hold the keys so it's pretty um pretty seamless i think people are becoming pretty uh um you know used to the the process of connecting these services what um how did you get the first 12 customers what's the growth channel look like in the early days it's been uh word of mouth uh connecting with people on linkedin talking to other uh bootstrapped founders and just...