Chris Federspiel, who joins to talk about Grow from the past and Blackthorn.io, is the founder of Blackthorn.io.
Main Points
- Chris’ difficult childhood experience and how he deals with it
- Therapy for entrepreneurs
- Why did Chris want to start his company
- The products currently in Blackthorn.io
- How did Chris select products to focus on?
- Chris’ suggestions on what apps are good ideas
- The product pricing model
- The most difficult time in Blackthorn.io
Links
- Chris’ LinkedIn
- Blackthorn.io
- Chris’ medium page
- An interview article about Chris
- Madhavan Ramanujam’s pricing model video
Video Teaser
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Transcript
AI-generated, unedited.
[00:14] Hello everybody. This is Xi Xiao. This is yet a new episode of Salesforce Way podcast. Today I'm sitting with a new guest. His name is Chris. Chris, would you like to quickly introduce yourself? Yeah, cofounder CEO of Blackthorn.io. Been doing this for eight and a half years now. I guess I've been in the ecosystem since like January 2011, and I'm a Salesforce admin. I guess is how I would think of myself. Not quite a salesperson, not a dev, and we have a bunch of apps on the App Exchange. All right, you kind of like get into my radar because you post some information in the LinkedIn. You said you want to join some podcasts to share some information. You know, that's where I started to see. Ah, who is Chris? Who is this guy? And then I found it's really intriguing to me, not because your company, you know, like a hundred employee size of company. I really think you have a really open attitude with everything happened in your past and around you, both in your personal life and in the company. So I started to dig into the information, and then I found it's it's really interesting. So I kind of invited you to this show. Thanks for your time. Yeah, of course. Thanks for having me on here. First, I mean, before talking about how to do the business in Salesforce, which is the main topic, I really want to understand why do you share your personal life, especially
[01:44] a lot of negative things has happened in your childhood. I understand you have a really difficult background in the past with the parents' relationships. So those things, why do you want to share? I always, I always found it to have some comforting feeling. I don't know if that's the right word, but when I read something that has like a lateral understanding or experience to what I've gone through, it really helps. I think this probably applies to anyone in human nature. If you're having trouble with something, you read about. Or hear about someone else that's gone through something similar, is not necessarily business or family or anything. Is really like anything. Then you know I I think all these the the big move in like influencers with masterclasses is like a tip of the iceberg for it. There's a lot of Psychologists that have gotten pretty famous, like Gabor Mate, is pretty big, and there's a lot of people like this, and even TEDx's where they go deep into psychology. I think it's just not as common that someone running a company is more open. Maybe I think there's a lot of perceived risk. Around what can happen if you say if you expose yourself a bit more. My experience there hasn't been a negative consequence that's really impacted things. And to answer your
[03:14] question, when I was going through a lot of these things, I didn't have something like this to read. I mean, I'm 42, and the internet wasn't like quite as prominent when I was, you know, first learning about like having bipolar issues, or stuff with my parents and. I was kind of younger then, so it's it's been helpful to me to put this out because usually when I put something on Medium or LinkedIn, I get like one, two, three people direct messaging me saying I don't want to put this publicly, but it was really helpful to read what you went through, and then they'll go into like their story and. You know, I just I think it's helpful to people because it was what I always looked for, and many people have been through significantly worse things than I have. But it's a concept of like. There's a lot of wars happening in the world right now, but if you like stub your toe really hard, like that's the most painful thing in your world, right at the moment at least. So like everybody's had their own personal experience, and you know the stuff that's happened to me has been quite painful to me. Even though if you like made it on like an objective scale, like is not as painful as some other people have been through, but it's really quite subjective. I would say. I I read those things through. It really gives me the impression that you are real human beings. You know, a lot of like CEOs, they are just CEOs.
[04:44] They they just show that they they are strong. They have good visions. But from that angle, I really see. Yeah, I mean my my dad was abusive for years. He was very critical as well. Couldn't like control his emotions. He would like snap and hit me or scream at me or drool, and his face would turn red. And I was really scared of him. My mom was very critical. She used to hit me as well. And this is stuff their parents did to them. So it's not like they created this out of nowhere. So.
[05:16] You know, I I can't fault them, but at the same time, it's their fault, and so it's it's a very mixed mixed feeling, and it's driven a behavior in me. People that have been through, they refer to this as like chronic abuse, because there wasn't like one episode of like some immensely giant thing. I mean, I guess there were a lot, but chronic abuse leads to people typically being kind of edgy. And it's resulted in me being a bit snappy to a lot of people on our team, which has been really hard for me to adjust my behavior. Because initially, I was like publicly pretty snappy on people. Like somebody would, everybody makes mistakes with something, and. I would always pick these things out like publicly, in Slack or on meetings or whatever, and it really hurt the culture. And we were like ten people. Like people knew me pretty well, and they were like. You know, obviously it's not good, but it's like not the worst. But then when we got to like a hundred people, a lot of people don't don't really know me, and it came off like pretty bad. So that that's been been a a hard thing for me to for me to deal with. And I think reading stuff like this from other people is helpful to understand. Like, okay, like maybe I'm not the only person going through this, and maybe there's some tips that people have. Gotten on how to fix it. Like I, I don't drink alcohol, and that's been like a major improvement because I, I stay a lot more stable. I I go to sleep and wake up around the same time. You know, I'm in bed by 10, I wake up like 6:30. Not waking up. But waking up without an alarm is really helpful. Something about
[06:46] like getting woken up changes the the brain chemistry for me, at least. I will put some links of your articles or interviews about you to our show notes, just for our listeners who are interested to to check more around you. And I personally found that those things are really really positive to me because it shows me that you are constantly study and explore who you are yourself. Ah, thanks. I I found that myself and people don't really change unless the pain is great enough. I think it's a combination of going through something bad, but then also learning from whatever it was that was bad. I'm over a thousand sessions into therapy over the past like nine years. And that's been really helpful for me to better understand how to be better in relationship, not just with my wife, but like with everybody. How not to be taken advantage of, like what the value of of friendship means, like what loyalty means, and. How to read cues a bit better, like if someone doesn't respond or someone responds a certain way, like what that means, and I don't know. So, like, I'm I'm often asked like what's my favorite business book, and I think the best business book is is really like knowing myself better, and that's been through therapy, because if I come to know myself better, I'm going to make better decisions with the company, in how I treat people, how I think about where we're going, how to slow down a decision. And a lot of business books are rooted in psychology, unless there's something that's like
[08:16] tactical. Like if you're doing like a VC or debt deal, like you know, it helps to read a book about that kind of thing or like a blog post or something, right? So tactical things is obviously not from psychology. But the things that have helped the most have been through like having having a therapist. So if anyone's thinking about starting a company, I highly suggest getting a therapist at least like once a week to start like figuring out what's going to happen. Because when things get really hard, you're just mostly up against yourself. And like things will get hard. Like you'll get tight on cash, or an employee will quit, or like your software will go down, or like some deal will go bad, or like some bad PR. Like something will happen, and when things happen, there's an implication of how it brings back. However, you were raised, so whatever behavior you learned about how to deal with a problem is just going to get repeated. Therapy has been very helpful for me. Therapist to me is like it's like by pure luck. I don't know who is the good therapist. I just need to visit the multiple of them and see if that matches to me. So it's it's really hard. I don't know what's your experience. My experience is unique because my mom took me to see a therapist when I was ten, and I'm still seeing the same therapist now. I gapped like twenty years, but she's like eighty years old now. So I mean, I've known her for a long time. But the advice I give to people is try to see somebody older. Like you have to see a lot of scenarios. Like you're not going to work with a Salesforce architect that's been working with the platform for a year. Like you want to work with someone that's been using the platform for ten years. Like they've seen a lot of problems. So, if you work with a therapist that's been doing things for a year, like they're not going to be that good, right? Because they might have good insights,
[09:46] but not necessarily experience of what whatever they're going to say is going to have a result. So, my suggestion is like go with somebody that's been practicing at least like twenty years. You know, this like ten thousand hour concept to become a pro. I think it's a lot more than that, frankly. Especially with with with therapy, because you really got to see like scenarios, and then you have to interview them like you're interviewing like a person. So instead of like going with the first person that you meet, like interview at least five. At least like ten. It's kind of expensive to do that because they're all going to charge you. But if you're going to see somebody for 52 sessions a year, probably for five years. My therapist says like therapy takes like ten years to make like a real change, but also like get somebody culturally aligned. Like it helps. Like if you're Jewish, see someone Jewish. If you if you like if you have a certain religion, see see someone in that certain religion because they're going to understand like the the nuances of what what you went through most likely. Okay, you know, yesterday I was watching YouTube. There was a recommended video out of nowhere. Then it was an old man, like eighty years old. He was talking like ten minutes, exactly as as what you mentioned. He just shared some life experience and some wisdoms he had. He's eighty years old. He looks really really old in the in the video. And one of the sentences I remembered is that he said. I have buried my parents, buried my wife, buried my one of my kids, and my sisters. It's so powerful, you know the time.
[11:18] Yeah, exactly. Like if if someone was bootstrapping a Salesforce business today, I would be a very good person to talk to because I can tell all the things that we've done wrong. I can just say like, when you get to this point, here's what we tried and this was wrong. If you if you came to me for basically anything else, I'm the wrong person. So like that person would be really good to talk to if you've experienced a loss. Have you experienced like a a death to a immediate family member because they've experienced all of it? So like, it just helps. I got it. Okay, now let's talk a bit about your company Blackthorn.io and your your past journey. I know you are open with all these things. You said you are not a good employee. That's one of the reason you start to found your company, right? Yeah, my my CEO says I'm unemployable. Okay, was it really this reason, or is because you really find a good idea that you see it can be a product in the Salesforce ecosystem? I tried to start a company in high school. I have tried to. I tried to start a lot of companies along the way. Some had to do with computers, some didn't. And I can't explain why I've always wanted to start a company. I really don't know. Maybe because I'm the oldest of three boys. Maybe it's because my dad ran a hospital,
[12:49] or his dad like started a bar. Like maybe there's something about like leading something that I was exposed to. But I know I get very annoyed by a lot of things, and if I can't direct what it is that I want to do, I just get even further annoyed. I'd rather get something wrong. Myself from my own decision, than someone else telling me what I want to do. I also hated commuting, so I wanted to work somewhere remotely, and I wanted to just do things however I saw fit. So. I started work at in the Salesforce world at what is now Vokaso was Interact Creations and Chad and a bunch of us went to high school together and I started working for him in high school, and then I took a hiatus for a while and then came back and I learned a lot of Salesforce stuff when I was there being an admin, sales, marketing, hiring, working with Salesforce reps, doing architecture, all this stuff, and then I was there for two years and I went to Silverline was there for a year and a half. And then I ended up getting fired from there. At the time, like a lot of employees turned over; they either got fired or left. And I think there's a big cultural change when they got to around fifty people. And coming out of that, I had a lot of relationships with sales reps, and I knew how to do Salesforce admin stuff. So I figured I had like three months of savings, and I had a lot of relationships. So I just reached out to the reps I knew. I said, "Hey, like, give me all the small deals that none of the partners want. You know, I'll do anything that's like five K, ten K that your partners like won't even touch because it's too small, or that they would be quoting you thirty K, four for something that was really small. Because I'm just going to do it myself."
[14:19] I said, "Okay," and I got like a whole bunch of those, and that kicked off the ability to do services. And then I partnered with Nishad and. That company took on a few names and it's now Plaidiv. And Plaidiv, I sold my interest to Nasad, and then I went to start this thing with another guy, and ended up buying them out in 2018. And at the time, I saw some gaps around how to do payments on Salesforce. And there was Chargent and Linvio, and those apps out of the box didn't do a lot of things that I wanted apps at the time to do. I think they subsequently have built a lot of those stuff in. And I met the Linvio guys, and they sold their businesses like twice. And then I know David and Makaya charging pretty well. I like those guys, and they they've done a great job with their business. And you know, so but I saw that because they also had no Stripe integration at the time. So I thought, okay, we'll do Stripe integration. And then my cofounder at the time said, like, I have the same feeling about events. And he had used like Round Corners app. He did Fontiva's app, and there were like a bunch of things in there that like we wanted to do a bit differently. They both did a lot of things like really, really well, but there were some things that we wanted to do a bit differently, like making the setup be really fast. But it took us a while to like build functionality, like years. But that was the initial thesis of the company. I had no idea who the go to market would be. I didn't even know go to market was a real thing. I thought it was a made up, stupid like sales rep thing that like didn't exist. But it's very much a real thing. I've learned, and and it's probably our our biggest limiting factor now. Not even the technology. And so you had to you had to pick a lane. But we didn't know what to do. So I knew that there was a technology gap. And at the at the time, AppExchange was really good, in 2015,
[15:49] 2016, you had an app on there, like you're going to get a lot of leads. And now it's like impossible. There's like there's just too many. It's really hard to get attention on there. But at the time. We got a lot of interest from higher ed and nonprofit, so we just spun that around and that became our focus. And now there's a lot of like other types of organizations that have aligned to this pretty well. There's like healthcare is aligned pretty well, government, and then there's like a sprinkling of some other stuff like banking and whatnot. And then our field service alignment comes from our mobile payments application. But these things all happen like naturally. It just started with a technological, technological maybe that's a new word, thesis around doing payments and events better on the platform. So, what products do you currently do? Yeah, we have five apps. the The one that makes the most money for us is probably our events app. Probably because it has. The biggest appeal for the most niche group, so I hired some nonprofits to use the app almost identically, and pretty much all of them need this thing for our payments application. It's tricky because the way that organizations do payments is like wildly different from one to the next. They all want different automations. There's a start and end point that's different. They want to send a link. They want to do a payment like in Lightning. They have a desktop terminal. They're doing payments in the field, and like it's really hard to be an expert in all these things. And plus, there's a lot of pressure coming in from everywhere. The gateways have all made their own App Exchange apps. Salesforce has made a few forays into this. Like, you kind of still have to have Commerce Cloud. And I know like Michael Fronte wants
[17:19] to like make this platform wide, and maybe it'll get there, maybe won't. But I know that it, you know, they have some focuses there. So it's, it's a very crowded space. It's also a complicated space doing payments because it's usually something new to people. They're usually doing payments somewhere else, and then they come here with events. People usually start with something. They'll have like Eventbrite or Cvent, and they'll say like, "Hey, I'm looking for this other type of way to do it." And like, we have a lot of ways to do things that are separate from those apps. So that that's when we usually come over to us to do something. So there there's a budget there. There's like a company culture understanding of how to how to move from one to another rather than having to start processes from scratch, which is payments. And then from our work in higher ed nonprofit, they all said we want to sell courses. As part of continuing education, they call it like a lifelong learning, and they don't want to work with Commerce Cloud because it's hundreds of thousands to implement, or the platform itself is like you know three, four, five, six hundred thousand dollars a year or more, and it takes a very long time. So we said, okay, maybe there's like community colleges and mid market and smaller nonprofits that might have like fifty SKUs whose use cases are a lot simpler. And they also want to use the events app. So we launched a storefront application like two months ago, and the reception's been really well. Now we're just accelerating stuff in there. We have a app that does data detection, so Salesforce has this as part of Shield, but it's not configurable. So they have like four different patterns that they look for, and like a common one is like credit cards or social security numbers. Ours allows you to do that, but you can also configure
[18:50] the patterns that you want to look for. So if you're a hospital, you can look for like a patient ID number, for example. Or ours also does like file and image scanning. So if you're running customer service and someone sends you a PDF that has some PII in it, our app can query through the PDF and tell you if there's any matching patterns. Same thing with an image. If someone took a picture of something and sent it to you, we can query through that. So the app's a little bit different. And then I did a big survey to all of our customers a few years back, and they said that they all wanted text messaging. So they're either either using like Mogley or SMS Magic or like I don't know, just a few of them. I forgot to say, or they're using Marketing Cloud. Marketing Cloud happens to be like 50k a year, and a lot of companies don't necessarily want to pay for that if they're trying to to solve this. So they go with a lot of like the smaller applications, which start for a lot cheaper. And I looked at a bunch of the apps in the App Exchange, and I found Clint's app. Texty and I say hey like do you want to sell this thing and he's like yeah sure so I mean that's a short version of it but that became Blackberry messaging for us and it worked seamlessly with our other apps you don't have to do any integration work you just install the thing and then you can send text messages to event attendees and you can schedule them you can do one to one and it does short codes like more or less all the text messaging apps have the same functionality so. What I tell people is like the benefit of going with ours is like you get one security review, you get one technical stack, you get one support department to reach out to if you have any kind of issue. It's all done through the same onboarding, so like. I think our moat is that we offer a whole bunch of stuff to the same verticals, whereas a lot of these end up being like point solutions with different companies. So I,
[20:20] I think that's helped a lot with our messaging to customers. Okay. You know, you covered a lot of information just now. So I understand in the history of your company, you had other products, but along the journey, you killed them because maybe you want to streamline the products. That's one reason. Okay, I don't know. Maybe you just want to concentrate more on the more revenue generating. Well, that's another reason. We had nine apps, and I killed seven of them and brought it down to two. So in 2018, we almost went out of business, and I went to the launch accelerator, which is Jason Kalakani's accelerator. You you pitch. Investors for twelve weeks. So there's seven to ten investors in the room that you pitch in person. One group for every week for twelve weeks in San Francisco, and 100% of them said no. But in the time, what I did was every week I pitched a different product that we had. One week I pitched everything we had. People had no idea what we did. Another one I did events. Another one I did mobile payments. Another one I did like a hybrid of some stuff, and I learned a lot at the time of interesting stuff. So we had this like this portal where Google had this thing called App Maker at the time. It was really amazing. They ended up killing it. It was sort of like Experience Cloud, but it was contextual. If you piped in invoicing data from whatever system you had, we would normalize the data and turn it into like a visual display of an invoice. Whereas like Experience Cloud doesn't really have that. You just like put an object in and it shows
[21:50] it right. But we would. Put an object in and it would like format it into an invoice that you could pay and it would like look really nice, right? So, we thought it was cool, but no one needed it, so that thing got killed. We were working on a signatures application and there was a lot of nuance in that that we it never took off. We built a professional services automation app where we thought we could go against like Financial Force's PSA app because we were doing some PSA stuff and we had a pretty big data model, a fair bit of Apex built in. We had a Lightning component for doing a timer, and that thing never saw the light of day. We ended up killing that thing. We had a donations application that we, everybody wanted this thing. All the nonprofits, no one wanted to pay more than like 3K a year, and to have an app on the App Exchange where you charge like 3K a year, if it was entirely self-service and no one ever needed training or anything, then the model can work. Not the case with App Exchange apps where people have. Record types and these are nonprofit teams that have like seven people and no internal admin and they're really good at running their own cause and doing fundraising but they are they are not admins and it takes a while to get up to speed. Granted, there's outliers right there's some that were like. Immensely fast to to do this, but the adoption of the app like took a long time. So we ran the app for like four years and got up to like 80k ARR. And like this is not a business, so we killed that thing. We had a contextual UI, and that thing did invoices, it did orders, and like you could accept an order, and that's where
[23:20] we were going to build signatures into. We call that thing Document Link at the time, and that had its own separate app, and we were kind of up against Form Assembly, and I'm like, this is this thing would be its own business if we did, and there's already good apps out there, so we're just going to kill this thing. That thing we moved into our payments app, and that does like web-based invoices today. And that works really well. We had a PayLink application where it was like a layer on our payments app, and you send out a link and to take a payment. And I'm like, this isn't a separate thing. So we just like that now comes with our payments app, right? And then we had a billing application. We were working on this for a year. Sounds like you waste a lot of money. Ah, this is a nightmare going through all this stuff. So so that was every weekend for a year. We worked on this billing app. And then Stripe Billing launched their app. Accounting Seeds, Accounting app came along pretty far. Salesforce launched Salesforce Billing. And to do subscription logic takes really an immense amount of time to get it right, and you have to have like a pretty slick UI, and it was just way too much work. And so we killed that thing, and we moved some of the logic into our Salesforce app. And we built an integration to Stripe billing, which we subsequently have stopped like moving really fast on because we found that like we can't really get a deal bigger than like twenty k, and like everyone has a different way of using this application, like it's really hard. So we couldn't really build a business around that thing, and there were like two or three other smaller ones. So we stuck with like okay, payments has a lot of volume going through it. We're moving like hundreds of millions at this point, and learn okay we can do that thing. And then events was getting a lot of interest, but our events app sucked. So we're like, okay, so the
[24:50] thesis is there. There's a lot of interest, but now it's time to like triple down on this thing. So we put like all of our dev into the events app, and we just accelerated getting that thing going. And that turned out to be a gamble that worked. But like, it wasn't luck. Like we tried ten different things that all didn't work. So we just like looked at the evidence and went with what was working.
[25:09] If now somebody else start to found a company and start to analyze what products are going to build, are you able to give really good experience to shorten their mistakes? Yeah, it's a good question. I I would give guidelines. So I would say you know look at Salesforce industries and which ones are going the fastest. Look at their shared components and where they're putting their investment in. Because if if you build on Salesforce, you always run the risk that you're going to get crushed by something they make. We've gotten lucky that they haven't made an events app. You know, if they came out with a tomorrow, it would make selling our app kind of hard. Their events, their their app would stink from day one because it just it takes years to make this stuff. Like if you have. Two hundred check boxes on an RFP to do all events-related stuff. It just takes a long time, but it takes like a few weeks to make a a basic locked landing page that you take a registration from for free. Like that's quick, but like that's not what people really need, right? So it, you know, but. Salesforce hasn't made a document generation app, right? Like maybe you do something with PDF and and like Apex and Visual Force, but like it's not Conga, like it's not Nintex, right? These things like take a long time. And now, with large language models, you'll be able to generate a PDF really fast, and that will really hurt these other apps unless they like morph into these things. So you you also have to then look at, okay, what is AI currently doing, and where is it like not going, right? If you can do something that correlates with a physical product, your AI is not going to like
[26:39] touch that thing for a long time. If you do something with people's health, like like something that's entirely software based. That has a really shallow moat. You have to under. You have to just guess that someone like OpenAI or someone like Salesforce's Einstein AI thing, whatever they're gonna call that thing. How you can like create flows just by like typing in some words. Like stuff like this is really gonna hurt a lot of a lot of companies, right? And eventually, like all the software is just gonna get knocked out. But there is a difference between making software and making a business because an organization might use AI to just create an application that they want, but it's it's not gonna have customers. It's not gonna generate revenue. It's not gonna have a moat. Like think to make something that's valuable, it has to be filling a need of something that people really really want. And even if AI's can do this stuff pretty well. It's it's still going to take time to build nuanced stuff. You still have to kind of tell it what you want because it it won't necessarily know everything you're going to need. At least not for the next you know year or two, which is not like very long. So I would say in in short, try to find areas that you don't think Salesforce is going. And it doesn't necessarily matter if there's an app in the App Exchange already doing this stuff. In some ways, it kind of validates your idea, but just don't go after an app that you think is like unbelievable. If there's already like an app or two in the App Exchange that are like that are like pretty amazing. Do something different, but but if there's something that's not very good, you know you can go after it. But don't just go into the space because an app
[28:10] is expensive. The reality is everyone's app is cheap when they launch. Everyone, but what you'll quickly learn is you can't grow a business with a cheap app. It just doesn't work. If you charge like ten bucks as a user, it's think about paying your own salary and how much, how long it's going to take you to like make money from that. So, you know, when you say all these things, to my mind, is like you have a lot of check boxes. Maybe some mistakes you had in the past when you teach somebody else. It's like you share them this checkbox. Have you thought about this? Have you thought about that? You don't really like hand in hand to teach the other side, the other people what to do. But that's a tremendous good value that you brought in. You know. You know, there's there's something else too. Like there's a there's a misnomer that if you build a business, like maybe you could sell in like three years. You know, I don't think we'll be able to sell this thing until we're in it for at least ten years. Right now, I don't want to go public. I don't want to do this forever. So obviously, like there's there's some exit that like pretty much every business owner wants to do. Like you sell the thing at some point. Yeah, and once you get to it, like like a million ARR, someone's gonna want to buy it. But like your multiples gonna gonna kind of stink. You might not be profitable. You might get like a two x or something. Where like, you might think like getting two million dollars would be like incredibly revolutionary for yourself. Now, if you're a one person business. And you got the full two million. That's a lot, but the odds are probably not, right? You probably had a little bit of investment from somebody to start. You might have a few employees that have some equity, and then you have to deal with tax. So you know, if
[29:40] you if you had a two million exit, maybe you got four hundred k, right? And that's like. You know, if you are an admin right now getting one hundred twenty k a year or something, maybe like a pretty good admin in the U S. at least, then that's like three years of money. But like, you had to put in three years of basically not getting paid in order to do it. So like, it takes a while. Like, you really got to commit to like wanting to do this stuff for a while. And it's going to be very rare that you are going to launch an app that's going to move as fast as like Zoom Info or Slack or or like Open AI. Like. You can count it on like two hands the number of companies you see in the news. Like they, most companies just take a long time to make. So you just got to think about something that's going to be lasting for for quite some time. You know when we talk about the Salesforce AppExchange apps, usually it's not rocket science. You just find the customer needs, then you build some UI on top of that, some data model or something like that, right, to help the business. How do we really charge the customer? What's the pricing model? Because I have some friends who just started to really build the application apps, so the pricing model seems it's struggling for the newcomers. Yeah, it's very very not easy question to answer, but I can tell you all the things I've learned. Okay, in in the first. In the first four years of having our payments app, I worked through 938 prices. I looked in our Stripe history about a year ago and looked at how many different prices I
[31:10] charged people. Because it's not that I listed 938 prices. I probably listed you know 10 prices or something. But some people wanted to pay monthly, quarterly, semi-annually, annually. Some people wanted like two years upfront for some kind of discount. Some people wanted to pay by transaction, and maybe if you charge fifty cents a transaction, maybe some people wanted to charge. Two percent of their total volume. Maybe some people wanted ten full users, but they'll say like, "Oh, I had these fifty users who just need to see the data." Okay, so then you have to create some kind of light user. Now, in in the in ISV Force world, you can only have like a license, and you activate a license. You can't have like multiple license types. It just it just doesn't exist. So like you have to do something contractual if you the data, or you need a query service. And it's like this is really like a lot. There's this guy whose last name is Ramanujan. I forget his last name. I can send you the the link after this, but he gives a few talks. He's he's a pricing consultant, and he worked with Segment when they were figuring out their pricing. And what he what his advice was with Segment was just keep doubling your price until people say you're absolutely insane, and then you you've you found the right price. And it's not to gouge your customers. It's we have a hundred people, and when you pay for a hundred people, it's pretty expensive, unless everyone is in like a developing your country and you're paying them like under market, which you know is not the thesis of our company. Like we pay people in developing countries like three x what their market. Rate is just to like be more or less on par. Like, it's more expensive to live in some areas
[32:40] than others, so there is some adjustment there. But everyone's more or less on the same same boat. It just costs a lot of money to to have a staff that does this. So it's it's not about trying to like get as much from the customer as you can, it's about like trying to actually fuel the business because if you don't have enough money, like you can't you can't staff up. So when starting the company, there's a a lot of ways you can pay. You can you can charge by some kind of volume. So our events we have a registration model, but some people do paid and some people do free events. So sometimes we do a hybrid, sometimes we do one or the other. Some people are adamant about paying per user. They're like, we're not going to charge by volume. We have no idea what we're doing. Everything is by user, and we're not going to touch your volume. But like. Okay, so we so we we have like a light user, and we have like a full user. People that need like full access, or they're just like someone that needs to see like what's happening with the data. And then some people want a hybrid of the two of those. They want like registration, and they want like per user. Okay. Like okay, but that's like for our events app. With our payments app, we decided to go per user for core payments, and then we have our mobile payments app. That's like a pretty significant layer on payments. We have additional cost for that thing. For our storefront app, we have a base fee. Which covers basically everybody that wants a store that has like all free stuff, right? And then we have like a percent that we levy on any paid stuff that you're selling. So that way we have it upside, and they get to cover like some of their their
[34:10] concepts, and that ends up being pretty fair. With messaging, we have a per user and we have a per message that you send, and then there's other like miscellaneous fees, like if you buy a short code, we have an underlying cost for that. If you have an eight hundred number, like so, there's like a a few different things for this. So, you you first have to find out like what's the dynamic of how you want to charge, like how are people actually going to use and think about your application, like forget about the numbers, and then you have to think about like. At what kind of scale am I going to be able to at least pay myself a salary? And if you're a founder, like, do not think of your application as the amount of time it took you to make it. Okay, if it took you six months to make the app, don't do the math of how much six months of time costs. It's just it's not how it works. Companies want to be live like right away, and they don't have extra people sitting around. They want to like buy something off the shelf that works. So like, for these two things, automatically raise the price like a lot more because you're providing like a lot more value that people want. And then you had to deal with all this baloney like getting through security review, fixing all of your CRUD FLS issues that are like in the F L in the in the security review. You had to deal with like package dependencies and like dealing with support and documentation. There's all this stuff that goes into it. And then you have to deal with doing payroll and paying health insurance and like it's just it's a lot. So, whatever price you think it is, like go at least two x, maybe three x to start. And if you're in these conversations and you give someone a quote and they're signing the next day, your price is too low. Like they should they should. Talk to someone else about the price. They should go to purchasing.
[35:41] It'll have to go through someone else for approval. They'll say like, you know, I'm allowed to do up to this amount, but if it goes to this amount, here's the price. Okay, so what you can do is year one, here's your price, and year two, here's your higher price. And in your MSA, you should have something you can raise the price each year at least five percent, right? If inflation's two three percent, you don't want to lock them into the same price. And your costs are going to increase each year, so you want to have some kind of increased cost there too. For me, I learned all this product company versus consulting company. What does it mean to be an entrepreneur? Along the time, I mean, when I out of college, I never thought to setting up my own company. I just want just to work, you know. And then I start to learn more and try to see myself as well. What do I really want to do? And then I started to change a bit of my attitudes and my kind of journey. But still, there's a lot of courage for me to say I want to jump into the product company. I read your article. You mentioned you have seven k in the company account, and you don't know how to pay everything. And you go to all these competitors and kind of like hint them to buy your company out. It's like you are like desperate. I mean, when I saw that, I was a bit like laughing, but also I feel the sympathy. You know, if somebody can really put that out, that's such an awkward situation, right? You you go there, you can't say directly, say, hey, hey, buy
[37:11] my company. Yeah. So at the time, we had like. I forget it was like nine or eleven people, and then I let two people go that like they weren't core to keeping things running, and like I just I had to cut expenses somewhere. We had an 80k monthly outflow. And yeah, at the time we had seven k in the bank, and launch said, "Well, why are you a hundred k if you sign up with us?" And the terms like. It kind of stunk. Like they would for 100k, they were getting like six percent of the company. And you know, Y Combinator does like 100 or 150k for seven percent. But like people coming out of YC, like they get investment right out of this thing. I didn't know what the hell we were gonna. We just need 100k. So I just signed the thing. And the experience ended up being helpful, even though we never ended up raising. I needed to find a solution. So I was having lucid dreams of committing suicide, like constantly. I couldn't sleep. I was taking like. Five ten milligrams of melatonin on top of prescription, like I don't remember what kind of drugs it was. It was something my psychiatrist at the time gave me, but like it didn't work. I could not get to sleep, or I was waking up sweating, or waking up in a pool pool sweat and. I would try to get onto my bicycle and go for a ride. I remember one time I was riding my bike and I started crying. I just like lost it, and I was riding up Mount Tamalpais, like on the north side of SF, and it you're in like the the forest, and I just like it was just sad. It was it was brutal, and I had no idea what to do. I just felt miserable.
[38:41] I was flying back and forth between SF and New York, and I felt alone. I had a roommate, and he had a family, and he was there some of the time. But when I was alone, it was like it was really lonely. And so I reached out to to Jerry at Fontera, and I kind of hinted like, you know, do you want to buy us? Without really saying that, I reached out to an SI partner, and I kind of said like, do you want to buy us? And like somebody I knew at the time, and. And I I reached out to the charging guys and I was like kind of hinting like, do you want to like merge or buy somehow or something and like. So some of the stuff that came back, like the price, like really wasn't good. Like I knew we were worth more than what they were offering, so I was like, maybe there's another way, and or or they just outright didn't want to do anything, and it it was just brutal. So we we got a one customer to give us like 50k towards a project. I think that was like IEB in New York. They they've been really good partner to us. And there was a customer that prepaid. That was on monthly. They prepaid like six months. It helped. We had a free payments app. We converted our payments app to be paid. A lot of things just like fell into place that like really really helped. A lot of employees took voluntary pay cuts. I told them I'll I'll give you more stock options, and I'll pay you back, which we did. And.
[40:04] Yeah, it was just rough. I mean, I couldn't tell the. It's it's a really sticky situation because, as I hope you can hear, I try to be like straightforward with everything. But I couldn't tell the employees like we're gonna miss payroll next week unless we get three thousand dollars. Like obviously, I could tell them, but if you have a family and like you don't have a lot of savings, you're gonna go get another job. Like you can't like miss getting money for your family. You have a real problem. But if I told them that. I lose the company because I I wouldn't have anybody to fix core dev problems if something came up. Right, I wouldn't have anybody to to do support or or build anything, and I couldn't do all this myself.
[40:42] So you know it it it becomes a pretty sticky situation that doesn't really have a a good answer. So on on one hand I was I was lying and and on the other I was telling them as much as I could. Like they they knew we let go of people. They knew I asked for voluntary pay cuts. They knew we were running like really really tight. They could see I was stressed. I just didn't go over all the financials with them. And you know if I had to do it again I. I probably do the same thing. Charles, yeah. Thanks, Chris. I want to hear this story from you in person here. You know all this experience. Now you are on the other side of the tunnel. I can definitely see that it was such a brutal experience, especially when you ran out of money. So a lot of our listeners, when you listen to this, so think about these things in advance. Especially when you have a stable family, you have a lot of other responsibilities. Yeah, yeah. You you got to have some money on the side. Like you you got to have time to to find a job. In case things don't work, right? And you got to have the support from your significant other, because even if you never talk to them about any of this, they're going to see the disaster on your face. Like you're not going to be sleeping. You're going to be stressed. You're going to miss. Everything that they want to invite you to, if you want this thing to work, and and like things are are just going to go wrong. No matter what you think, no matter how good you're doing, things are going to go wrong. Like when we first started, I had a lot of ten ninety nines. None of them showed up. I had to like cancel a whole lot of things and do all the work. And like
[42:13] things just happen, and it's really not for everyone. You got to have it like baked in. If you are thinking about starting something, you'll either do it or you'll no, or you won't. You'll you'll just no. Thanks, Chris. Do you have something else you still want to share? Yeah, I mean we're we're pretty open with any of this stuff. I would say you know if anybody has any questions for me, you can email me. It's just Chris at Blackthorn.io. Do you really reply to all those emails? The only ones I don't reply to are like the six to seven spams I get per day. Of like people trying to sell me other products, of which like they're almost all the same thing. But everybody who individually emails me, I reply to every single person. I'm pretty fast with with email. I I enjoy hearing from people. I may not do everyone's meeting requests that they get. This is too many meetings. But but I'll I have some some stuff I've written up that I send to people that's helpful. And then I always answer their like individual questions. Some people that are having like a really really hard time, I usually do those meetings because like. It's not really about what I say. It's more about like empathizing with someone. I'm in a founders group and you get advice from people, but it's more about knowing that other people are having just as sucky a time as you. And it's like a mutual commiseration or something, so you know I don't know if that's helpful. So I I'm I'm not here to like push our company or something. I think just if someone's trying to start something and you want some advice or my take on something or what we did wrong, like feel free to email me. It's just Chris at Blackthorn.io or you can LinkedIn message me or something. If you randomly try to add me on LinkedIn, I'll probably
[43:43] just deny it. But if you say like. Something in the message, like hey, I have a question for you. I don't want to post publicly or something. Okay. Thank you, Chris. It was great talking to you. Yeah. Thanks for having me on. It's been great. Yeah. See you next time.
