The SaaS Podcast
The Student Who Built a Million Dollar Software Business – with Fred Stutzman 
The Student Who Built a Million Dollar Software Business
Fred Stutzman is the co-founder and CEO of Eighty Percent Solutions, the company which builds the innovative productivity software Freedom.
Freedom helps you to get more focused and improve your productivity by blocking your access to websites and apps.
The product is used by over 450,000 people and its users report gaining an average of 2.5 hours of productive time each day.
Freedom was founded in 2011 and was bootstrapped for the first 4 years. The product has been featured in the New York Times, Wall Street Journal, NPR and other publications.
Previously, my guest was co-founder of ClaimID.com and a technology researcher at UNC-Chapel Hill and Carnegie Mellon University. He holds a Ph.D. in Information Science and is currently an adjunct professor at UNC's School of Information and Library science, where he teaches courses about privacy and social media.
This is a story about a college student who was wasting too much time on Facebook. He realized that he needed a solution to reduce the daily distractions and to help him focus. So he built a simple tool in a couple of hours which did the job.
He also shared the tool with a few people and it just took off from there. A year later with zero marketing, he had over half a million users – just through word of mouth.
When he started getting multiple feature requests a day from users and people offering him money to add features, he knew was onto a great business opportunity. So he took a week to improve the product and setup a website with a PayPal button.
Today his little tool has turned into a business doing over a million dollars a year.
[00:11] Welcome to another episode of The SaaS Podcast.
[00:16] I'm your host Omer Khan and this is the show where I interview proven founders and industry experts who share their strategies and insights to help you build launch and grow your SaaS business.
[00:27] This week's interview is a story about a college student who is wasting too much time on Facebook. He realized that he needed a solution to reduce the daily distractions and help him focus. So he built a simple tool in a couple of hours which did the job. He also shared the tool with a few people and it just took off from there. A year later with zero marketing he had over half a million users just through word of mouth. When he started getting multiple feature requests every day from users and people offering him money to add features he knew he was onto a great business opportunity. So he took a week to improve the product set up a website with a PayPal button. Today his little too has turned into a business doing over a million dollars a year. Again it's a great story.
01:19 Great interview. I hope you enjoy it. Before we get started if you need help building launching or growing your software business then check out SaaS Club. It's premium membership that I launched to help you get the insights motivations support you need to succeed. Registration for new members is closed right now but you can join the wait list and I will let you know when I start accepting new members again. Just go to saasclub.co to learn more and join the waitlist. OK let's get on with the interview. Alright.
[01:51] Today's guest is the co-founder and CEO of 80 Percent Solutions. The company which builds the innovative productivity software Freedom. Freedom helps you to get more focused and improve your productivity by blocking access to websites, social media, and apps. The product is used by over 450,000 people and its users report gaining an average of two and a half hours of productive time each day. Freedom was founded in 2011 and was bootstrapped for the first four years and the product has been featured in The New York Times, Wall Street Journal, NPR and many other publications. Previously my guest was a co-founder of ClaimID.com and a technology researcher at UNC Chapel Hill and Carnegie Mellon University. He holds a Ph.D. in information science and is currently adjunct professor at USC School of Information and library science where he teaches courses about privacy and social media. So today I'd like to welcome Fred Stutzman. Fred welcome to the show.
[03:02] Thank you for having me. Now
[03:04] I always like to break the ice by figuring out what drives my guests what gets them out of bed. So what is it for you. What what drives you to work on your business every day.
[03:14] Well it's a couple of things. Certainly the team that I have working with me you know to you know every day that you're going to be working with a bunch of great people just as exciting and motivating and knowing that we are working together to make a positive impact on people's lives you know that is that is you know goal in and of itself or having this company. And so you know just knowing that we are making that positive change in people's lives is truly motivating for me.
[03:46] Yeah I love that.
[03:47] There was a comment where I saw this but somewhere I think it said that you'd helped your users reclaim like 10 million hours in the last year. It's like wow. Absolutely.
[04:00] Yeah it's pretty amazing when you start running the numbers at scale. You know that the the change of taking a little bit of time away from distractions to really focus and and absolutely out. And you know we hear that just again and again from people. So that is I mean it really is motivating. You know there's a lot of reasons to start businesses and there's a lot of reasons to develop software. But I've always been and I know it's a really good shape but I've always been motivated to develop software that has positive change in people's lives. And you know it will keep you going through the ups and downs of the startup.
[04:37] Now before we talk about freedom the app I want to talk about your company 80 Percent Solutions. So first question is why is it called 80 percent instead of 100 percent.
[04:49] Yeah well it's it's kind of the [80:20] rule or the Pareto principle it's the it's this it's this kind of maxim that has a lot of outcomes are explained by a little amount of variance. So what we what I notice with freedom when I was building the first version of the software is how you make a small change turning off the internet can have really really big and positive profound impact on people's lives and it isn't perfect. You know like if you ask people how do you want to be productive. They might give you a whole litany of you know I want to turn off this this and this and I want to you know have software does this for me. What I really took from the very first version of our app which really did nothing more than turn off the internet for like 45 minutes is that simple act just had such profound change and it wasn't a 100% solution because you know there is a lot of people who had more complicated use cases there.
[05:50] But if you gave people this like pretty good solution you could get really great results and I think that's kind of a pattern that we continue to build into our software is that you know we can be all things to all people. But you know you take away or you walk or restrict the most important sites that are distracting to you. Yes there are other distracting sites out there or something along those lines. But you're going to have such a positive impact so it's those little changes that we kind of build as a design pattern that have really big effects. So that's where the name came from and I had to explain that to thousands of people. And so you know it's an esoteric name choice maybe not the best one. So entrepreneurs you know it may be better to just be clear. But you know that's the logic behind it.
[06:38] Yeah know I'm a big [80:20] fan so I I kind of guessed fairly quickly that it was something to do with that but I wanted to ask the question anyway for the people who get it it's like you know we immediately connect and yeah absolutely.
[06:56] So for people who aren't familiar with Freedom can you sort of give them a description of what the product does how it works. And basically who are your target customers.
[07:11] Sure. Absolutely. So we help people be more productive by blocking distractions. And that's that's pretty much as simple as it gets. We make a software product that works across all your devices. So Mac, Windows I always have an android partner, browser extensions. All those things that you interact with on a daily basis from your sort of technology stack. We we make products that allow you to choose when you're going to be able to be distracted by that stuff and your distractions can be anything from social media to email to news just sports. I mean what have you everybody's got a distraction. Everybody's got something that is competing for their attention. And we just make it super simple for you to turn that off when you want to focus.
[08:00] And so our target customer are people who need to do focused work which thankfully is like almost everybody. But you know we really go after people who are in the knowledge workers based people who are creatives,, students professionals of all types, accountants, attorneys, lawyers and anybody who realizes that their time is valuable and that's really what it boils down to because when you sit down at your computer to get stuff done you've got all these things that are competing for your attention everything from like you know notifications from Facebook to the endless stack of emails from your friends and coworkers and having all that competing for your attention just makes you less productive. It's scientific. It's validated. We didn't do that research other people do that research. It's absolutely the case. And so the more that you can turn off the noise and and and not be able to go and check you know it's like it's having having it turned off for you so that you're just going to be able to focus and think only about your work at hand is incredibly powerful.
[09:10] So that's what we do. And a couple of years ago people would say that's a crazy idea but I think as we just see where technology's evolving and see just how high fidelity distractions are and just how sort of constant they are.
[09:26] We make it easy for people to sort of get in that work state where there are no distractions and you know once you've done that and experienced it it's just so powerful. So that's that's what we do in a nutshell.
[09:39] So from a technical perspective what what's going on under the hood. Can you kind of give us a brief description of that.
[09:46] Yeah it's not it's not too different from a parental monitoring program. That would be doing content filtering. You know you would say I don't want my kids to get on YouTube. You're sort of saying I don't want to get on YouTube now. The key difference between Freedom and a parental monitoring program is you're turning it on for yourself versus you know you're turning it on for your kids. And so what we do is we have some hooks that make it quite difficult for you to disable or escape that from from you know when you make a commitment to being away from YouTube for 45 minutes or away from all distractions reported as we make it very tough for you escape that. And of course we have some options where you can write where you can escape so if you need to get back to your email you can but we allow people to kind of choose what level of restriction they want to have.
[10:39] And it's so it's not it's not different from that at all. We do all the walking locally on your computer or on your phone so it you know doesn't go to the cloud there's no privacy implications. We tried to keep it real tight and secure. But really it's it's a content filter not too much unlike any other software that you would use to filter your kids internet activity.
[11:03] Now at the basic level you can enable it for a certain amount of time and then if you need to get out of that there's a way to get out of that if you need to. But there's also you also have a locked mode right. Maybe for people like me who who need a little bit more discipline sometimes.
[11:21] Absolutely. So when you're when you're setting up your schedules or you're turning on a session you can choose how restrictive you want it to be. And locked mode is very power is very powerful is very popular and it is really tough. So if you turn a session on with locked mode yeah you are not going to escape. You know you're going to be off line until the timer runs out. You're going to be locked away from Facebook or YouTube until the time it runs out and you can reboot your computer. He can try it with the software but it's going to it's going to keep you on task. And so you know this is for people who just don't want to even have to think about distractions. They're going to be able to work completely at peace knowing that OK that stuff is a way I can't even be tempted by it. The software is taking care for me so I'm just going to get work done.
[12:14] And that's that's the purpose. That's right you know I realize that's not for everybody so you can't use the strength of your session before you set it. But you know once you've set it and your session is started you're locked in you've made a commitment to yourself and that that's really powerful as well. And being able to kind of set up and make a commitment.
[12:36] Your you're. I think it enhances productivity. You know you're you don't want to let yourself down. You want to hit that 30 minutes or an hour or two hours of time away from social.
[12:49] So we help you do that. But at the end of the two hours you can feel really good about knowing that you took that time away. The software helped but you did the work and you got your work done.
[13:02] So where did the idea come from. How did you come up with the idea for Freedom.
[13:07] So the origin story of Freedom goes back to when I was in graduate school and I was studying social media and my my dissertation work. I studied information science and human computer interaction. I was interested in how people use technology and the social impacts of technology. And when I was in graduate school it was the very early days of this piece of software called Facebook that nobody had heard about. I was studying it you studying college students using it. And I would use numbers you know the utilization of the software how much time they were spending on it was it was incredible just it was a phenomenon kind of like anything we've seen. So studying the software started using it you know as graduate school sort of continued. Facebook got more popular and I was realizing well I'm able to sort of claim Facebook as research time but really I'm kind of wasting a lot of time here as well.
[14:05] So I started going to a cafe to work in the cafe didn't have wireless and this was before you know everybody's phone was like LTE and Internet was everywhere. So I was like OK this is great this is a great way for me to get work done. I'm just away from connectivity and away from distractions. And I got a lot of my dissertation work done that way. And then one day that coffee shop opened up a Wi-Fi node and you know all of a sudden my productivity started taking. So I I basically said well if we're never going to be able to escape kind of activity then you know what can we do about this. And being a you know a software engineer I said OK well maybe I can build and offer to solve this problem and I built the first version of Freedom.
[14:55] You know in about an hour and all it did was you know you pressed a button and turned off your internet for I think it was 45 minutes and you were pretty much locked you know you're locked away. And I started using it and it made a pretty positive impact in my life. And you know I knew I knew how to escape it too.
[15:13] But I found that like once I committed to being online I followed through and I got my work done and I said wow there's something really powerful and positive going on here. So I started you know I said share it with some people and it just kind of took off from there. But yeah I mean it was literally just you know me in a coffee shop thinking about how how do I solve this problem that I think is going to become a bigger and bigger problem. And you know here we are. All these years later.
[15:44] Yeah. I mean the wireless thing is awesome to be able to have that connectivity everywhere but it's also a pain. And you know I've been in situations and you know I'm not embarrassed to admit this where I've gone to a coffee shop and I've spent 15 to 20 minutes trying to get connected to the Wi-Fi. And I wasn't even sure what I needed to be connected for but I was like I should be connected right. So the time you waste just getting connected and then once you're there obviously you're going to start if you're not disciplined it's very easy to stop looking at things that probably you know aren't relevant to what you're trying to do right then.
[16:24] And I mean when you think about the type of messages you're kind of the obligation the moment you get back on line you know you're you're now connected and you're reachable. All these people who may be emailing you or sending you messages or you know what have you. And it just puts you in a completely different state than when you're really offline. You're really just you know it's just you and your work. And I loved that story about spending 50 minutes trying to get connected because I have done that. I've completely done that. It's like I mean there's a Wi-Fi here I should figure out to get connected and like you know 10 minutes later you're signing up for some you know coffeeshop Wi-Fi service.
[17:07] Yeah it's a colossal waste of time so you built the first product in an hour but it was you presumably you weren't thinking about a product at that time you were just thinking about something that would help you get the job done. So at what point did it become a product for you.
[17:29] Yeah that was that was a couple of years. Let's see kind of how it worked is I made the first version. I think I put it on my academic web page I put a link to it. I think I sent a tweet about it and it just kind of took off completely organically and virally from there. I think within the first year we had a half million. You know I was able to kind of look at my logs and figure out a half million people downloaded the software. It had been written about and it was literally just as you know this little app that you know I had made and I made lots of little apps so you know I wasn't thinking too much about it in terms of a product. When the change when my thinking started changing around that was when I would get feature requests emails and at first I would get you know one a week and then it just kind of built until you know I'm getting multiple emails a day from people and people offering to pay me to like make this offer or do this.
[18:32] And I said OK this is getting kind of crazy. So I need to either invest some time into this and see what I can do with it or I don't know. So I actually talked with my graduate adviser at the time mostly in graduate school I said hey you know I've got this kind of thing going on. What do you think about me just taking a week and building a more robust version of this and spending some time on it and seeing you know what I can what I can do that. And he is OK with that. He thought it was an interesting idea. And so it took a week I'd built you know some newer version of product in the website and put a paypal link on there to take donations.
[19:13] And very quickly that turned into a business where I was. I said OK from the starting donations I'm going actually to start charging for the product because at that point people said well if you take donations you should save more it and OK well I'm just going to I'm just going to charge for the product. And so those more robust versions I once I started selling those. And you know they continue to grow organically.
[19:41] So you didn't know marketing it was just word of mouth.
[19:45] No I was I was completely word of mouth. I never I never did any marketing or in traditional sense. A little later after the product had been out for a while maybe 2012 I I put like at the end of your session you could tweet about recession which you was ironic what people would do it because for the most part the way this thing grew as people would tell each other about it at their dinner parties you know or they would read about it and some would you know we were on tour with the writers. So you know writers loved to write. So you would get written about and covered but we never did any. I never did any you know marketing of a traditional sense now.
[20:29] so at what point did you sort of see this as a bigger opportunity. And how did you sort of start building out that team that you talked about.
[20:45] Part of that was just looking at the numbers. So I was looking at not exponential growth but really strong growth. And you know kind of kind of forecast out and say OK well I had at that point I had fulltime job. I was either at I was at Carnegie Mellon as a post-doc and that's a very intense job. And I was doing faculty interviews for tenure track teaching positions. So I had this kind of interesting I don't know if it was a crisis but I had I had really enjoyed my time in academia and I really enjoyed being a researcher but I was not I was not feeling like going on the tenure track was the right path for me. I just it just everything in my body was saying this is not the right thing. I tried it and I really I didn't like it.
[21:40] So that created the the sort of questions around what next. Am I going to join a large technology company and sort of do research in one of those companies or or you know what. You know I'm like yeah I had to do some soul searching. And at the same point I had this idea that I was pretty interested and excited about it was starting to take off. And I had done a little bit of entrepreneurship before I'd started. One other company that we never tried to monetize but you know I had been I'd been through that process before. In terms of building a company and I said OK well you know the numbers kind of work that I will eventually be able to quit my job and support my family. And and I think there is a lot more we can do here because we're only you know we're only addressing like the tip of the iceberg of the problem here.
[22:32] And and I'd also kind of run out of like my ramp as a software developer like I'm OK but professional software developers are a lot better than me. So I said well you know with a team with the right people on board like we could turn this into something pretty exciting. And so that started the process in motion where I did eventually decide to go that route. I quit my job and started working on the product full time. I went into a well I went into an accelerator. So the that the university in the town had just created this incubator excel or to help companies get started. That was a huge move for me because I went in there really not knowing much about taking companies to the next level.
[23:21] I was able to work with people who were able to help me with that and start building out the team. And that was that was really the transition point where we put together the roadmap for the company. We won some we won a competitive grant to allow us to to make a higher or two and then really start building out the vision for the product. And you know from from there it was okay. We start building and we start seeing good things. Investors started you know being interested in what we were doing and you know it was it was always a little bit of a you know thinking back to that time. It was a little bit of a blur but you know we I was able to start growing the team and and building out this product and to the eventual point of you know building a team raising some money. And you know eventually watching the product in 2015 the next generation of Freedom.
[24:26] So what's the size of your team currently.
[24:30] So there's eight of us who work on the product right now. And we're trying to hire two more.
[24:35] Have you started doing any marketing or is it still growing organically for you.
[24:41] Definitely. Definitely So we have we have two great marketers on our team now and. How we think about marketing is still very much informed by how the company started and grew.
[24:55] So organic media coverage social is still a huge huge driver for us. But in terms of marketing we think of a couple of things. One is partnerships. Who can we partner with that makes sense for our customers and our funnel. And so we've done a lot of work building partnerships with other productivity tools and other tools that are you know direct competitors of ours who may not be monetizing their products. We also just like to sort of validate through putting out good content know we see the vision of freedom is more than just you know it's turned things off it's you know we've got a voice and we've got some thoughts around you know how technology should be developed. And so we certainly do a lot of our own content production. And you know partner and support things like the time well spent movement that are pushing for more just and equitable and technology that respects, respects our attention and really respects people. And you know we do some you know we do our marketing tests in terms of we do AB testing and funnel testing looking at how we can better engage with people who are customers who are in our funnel and a lot of that is just trying to get people to understand how to use the product and how to how to best take advantage of the product.
[26:28] But you know at this point we're we're not a big you know page search or Facebook advertiser that stuff doesn't work as well for us as the organic. And the word of mouth. And so you know we we certainly are using that that is all part of the marketing tool kit but we're probably not using the standard.
[26:51] How do you do it how do you do a partnership with a direct competitor.
[26:57] How does that work. I mean it's interesting. So. Our space is full of people and products that that resemble what my company was you know five years ago. So somebody who thought you know I'm going to I'm going to solve this problem and I'm going to you know make a little piece of software and it gets popular. And then all of a sudden this person is now supporting a large user base they're most likely not monetizing on it and there but they don't want to they want to have positive outcomes whether you know it's making a little money or you develop a good piece of software. So what we do is we'll go out and partner with them will say okay and basically just do affiliate partnerships where you build your product out make it great make it wonderful how can we help you know how can we integrate and support you.
[27:56] But we do love we think your customers would would also like to see oh you know you've got a great chrome plugin but we can walk on across all browsers. We can walk on you know your phone and tablet. We've got more advanced functionality. This is a great upset for them. So that's kind of how it works. You know it's it's almost like treating competitors and I say competitive.
[28:17] We're not talking really one to one competitors like these are small kind of you know mom and pop apps that have been been successful in a segment but they're you know they're not monetizing and they don't have the sort of the powerful features that our product has. But
[28:33] you know their customers are a great fit for for our product. And so we will partner and do affiliate deals with them.
[28:41] The you said these on one to one sort of direct competitors but you also told me that initially you built the first version of the product in an hour for yourself and I'm sure over the years the product has got a lot more sophisticated and a lot more robust. But how do you deal with sort of copycat products and people trying to come to market with something very similar. Do you spend a lot of time looking at that and tracking what's going on. Or is that just not something you'd spend a lot of time or energy on.
[29:25] It's not something we spend a lot of time and energy on. I think I'm kind of going back to like some advice I got pretty early on in my career. Is like you know you've got to just pick the things you want to focus on. And I know a lot of people who are getting started in entrepreneurship do focus on competitors and you know get really anxious about you know somebody who's entered this space. I guess I've been doing this long enough and I've seen competitors to the pleasure of seeing competitors come and go. I mean I've seen people come and enter the market with like you know a really robust technical vision and you know to make it work is it's easy to put on a pitch deck. It is extremely hard to execute. The the technology behind the scenes we try and make it as easy as possible for our users. But the technology behind the scenes is even more complicated than I would like. I
[30:18] mean it is extremely complicated so you know if somebody did come in and you know and try to replicate this they would you know I would I would have to you know tip my hat to them. They
[30:30] would just be kind of replicating work but it would be a lot of work to do. That being said you know we do keep an eye on who's out there who's doing what. But our goal you know when we when we design our product and we think about what are the features we're going to roll and what's our goal on the roadmap. It's totally driven by our customers and making them happy and that's something that every day you know we hear from our customers you know we do hear good feedback but we also get the feedback like here's here's what we need and we've been able to boil it down to something that's pretty cohesive. So we focus entirely on that and kind of know that if we hit if we hit that if we make our customers happy if we keep our satisfaction up then we're going to be viable and sustainable.
[31:17] And and and you know I mean I think that's the risk of doing you know being in any business is there are going to be people who are going to compete in. We think we're lucky enough to be in a marketplace that is so potentially big that even if there were some really good competitors of ours you know the market would support it. There's just so many people struggling with this problem that you know it would be great to be the only solution for them. But you know it's potentially rational to say having a few in the marketplace is a good thing because you know from the standpoint of a customer getting their needs met but also for us to look and see you know what's working and what's not working and if we are the only person you know innovating or working in the space then I know that might be kind of hard and challenging.
[32:06] So and you know being in the space that people who build for the most part I mean there are some people who are just like straight up copycats trying to I mean they like even steal our copy from our own page. Like that or. Yeah. I mean it's it's it's interesting but the people who are trying to innovate in this space we absolutely make a point of becoming friends with them like they are absolutely the people that we want to network with and engage with. And if they have a competitor product that is totally fine. We we want to we want to be around more people who are thinking about how to solve this problem.
[32:47] I think some of the most successful entrepreneurs that I've met have this mind this sort of growth mindset in terms of you know it's not like there's a fixed pie and you use you if you take something you're taking away from somebody else but that the pie can continue to grow and there's plenty of opportunity there for their business as well as competitors and that's completely fine with it.
[33:14] Exactly. And that's I mean we've seen that we've seen it in our data. So you know I feel I'm very comfortable there.
[33:22] So one thing I'm curious about is it's clear from from from listening to you that you've strived to take a lot of complexity and really present it in a very simple way and you kind of made the comparison with parental controls software. And as a parent I've gone through a long list of parental control software. There are so many issues I still haven't found something that actually works well and some of it is kind of around understanding the scenarios where I sometimes wonder are the people who are building this product, parents themselves because they're not necessarily sort of thinking about that as deeply as I think it needs to be. And in other cases it's just the technology doesn't necessarily always do a great job with doing what it's supposed to do. You know a very simple example with my kids I have parental control software and I've used on the Mac the built in parental controls I used third party software. The other day I found my son playing Minecraft.
[34:39] And I was like I'm pretty sure that you've been on there a lot longer than you're supposed to. And he had figured out that if he put the Minecraft app into full screen the parental control software wasn't actually doing a good job of tracking what was going on and so was just letting him playing like endlessly. Yeah. So.
[35:01] So I think that you know I look at that and say OK well they need to have this they need to have this to really make it first of all make sure you do the basics well if if you if you're blocking an app or you're blocking a website. Make sure you're actually blocking it. And if you're putting in time restrictions make sure they work but then as I start to think about well here's what I need to be now I've got two kids to think about I need this scenario resolved. And so I'm sure you also are in a situation where you're getting people who are discovering the product.
[35:31] They start using it and then you get a barrage of feature requests and and 100 things they really need in freedom for it to be the perfect product for them. And there's this becomes this tension between keeping focused on what really matters and driving towards simplicity versus turning it into a product with a gazillion features that really doesn't do anything one thing well.
[35:59] So how do you deal with that. And is that it first of all is that an issue for you as well in terms of people asking for more and more in there. And if so then how do you deal with that.
[36:10] Absolutely. And I almost think you've been reading or customer support here because it's very much like that you know and I love the I love the emails. I
[36:19] mean our product is not expensive or parental programs or you know an arbitrarily expensive product we try to keep it from low price. And you get emails from customers you know if you add these seven features I will become a subscriber. OK. But now we do get that quite a bit. And and we do take all the feedback and to the point where we've heard a lot of it over and over again and how we how we think about it. Is it kind of goes back to our core user or so. We know we were not a big company that can be all things to all people. We know the limits of our just our capacity. And so what we focus on is you know addressing the core user that knowledge worker who just needs to sit down on their computer and you know not be distracted by their phone and just can't get you know get a couple of hours of work done.
[37:18] We focus in on that customer because there's a lot of those customers and they're the ones we know and choose to support and focus on. So a lot of more work is aligned around hitting that persona and we know that there are lots of other types of customers that we yes we can build an enterprise version.
[37:39] Yes we can make this for parents and parents to use our product. But yeah you also get the, here's the 10 things I need kind of feedback from parents because I know how complicated the marketplaces and the solutions are or was going to go with this is you know we have the question about simplicity is interesting.
[38:00] So a lot of our work actually goes on behind the scenes in making the products more robust. So you don't have to think about or run into the edge cases where it's not working or you know you've got a VPN on and it's getting around the software.
[38:18] We we we we try not to introduce too much complexity into the UI. We just try and build the product so it can kind of handle everything for you.
[38:31] And that that gets us to a really robust place where I think you know if we hit those goals. Having a very robust you know well working product then we can probably potentially jump into other markets or start exploring other markets. You know we're a small team. We know the limits of our size. We know our core customer. You know we're not an enterprise company. We are you have no background I mean a bunch of us are parents like I know I call myself an expert on the printing space you know. And so we focus on what we're good at. And you know to a degree where you know we do our roadmap meetings we say does this is this movement we're in the right direction. You know we have lots of ideas but we're just going to focus then kind can always focus on getting getting that product done.
[39:21] And it's always a work in progress because you know it's not just rolling new features it's the fact that the operating systems are constantly changing underneath the software the you know the distractions are changing as well. So it's a lot of work. It's a lot of you know kind of always hitting a moving target and it's very technically challenging but that's you know we really try and at the end they just say okay. Are we remaking that core customer happy and can we see you know, meaningful improvement in their you know, net promoter score and we see meaningful improvement in their usage. That drags a lot of our decision around.
[40:03] Yeah I think that's really smart. I mean the number of times I've had a conversation with my wife where I've been moaning about parental control software and doesn't do this or this. This is suck so whatever. And she said to me Well why don't you go and build something better. And I did then because I understand the technical complexity behind that. I was like no you don't understand how complicated this is like I moan about it but it's also a very difficult problem to go and solve.
[40:33] Now I'm not looking at pricing. You don't charge that much for Freedom.
[40:40] I think it's about 29 bucks a year for the products and at the same time you have built this into a seven figure business which is also an I guess one question for you I have is for people who may be listening to this who've maybe been told you know you can't build a viable business if you're only charging you know five bucks a month for a product and you doing even less than that what would you say to them. How how would you help them maybe think differently or see the opportunity differently.
[41:19] OK so when we were thinking about how we were going to price our product and engage with customers you know we thought about what does it's mark going to look like. So we were able to leverage the data that we had already and and use that to make some good assumptions about what our funnel was going to look like.
[41:36] You know our pricing for you know for for most every user that we have you know if you use Freedom for an hour a year if you use it for two hours or three hours a year you're coming out positive you know if you get a couple hours of good work done with Freedom you're you've come out positive you've you've made money on that deal.
[41:59] So we know that you know you can possibly charge more. But you know our goal is to bring lots of customers in the funnel learn from them. Support them you know build a business with them. So we wanted to keep our pricing really accessible. And you know and I would agree there's you know it's also we're not doing things that are so technically complex that allow us that require us to have large infrastructure costs. Like I said before all our blocking is not on the computer we're not passing stuff around a network. So you know we also kind of built a business in a way that kept some costs low and we're able to pass that under the savings on to the customer. But you know we we tested we AB tested pricing. We did a lot of experiments sort of going into deciding what the final price were, ran various economic model or econometric models to sort of see what we think things are going to work out with.
[43:07] And and that's that's where we are now. So it was a lot of data but I mean we're a we're a pretty data intensive team and and testing. And then of course just some gut. Right. Or does this does number look good. Okay I”l explain, all right, okay fine. Let's go with that. So there's always going to be some of that and it may be couple of viable. You know if you know your customer just just roll with that you know and you've got to realize that like as you mature your business those price points are going to change. But you know you really have to think about the price sort of from a fully loaded standpoint.
[43:45] You may want to charge your customer 100 hours a month but you know to get those first couple of customers in what would you be paying for customer acquisition anyway. And then you know if the price is going to bring them in you just factor that discount in into your customer acquisition costs. And you know so you know we get people I think they really do kind of think of pricing as precious. But you know the companies that I you know most have Bthat we engage with and use. Yeah they change their pricing yearly or you know sometimes more than that not that I like that but if they're doing a good job if they're hitting their goals and if they have a good logic for why their pricing is going to increase you can you can bring that pricing up.
[44:30] And there's also a lot to support that you know when you bring the pricing up and you've got a robust product you're going to open yourself up to a new customer base as well. So you know I think when you think of pricing as a journey not really as a as a fixed thing when you get started.
[44:46] All right. It's time for our Lightning Round. I'm going to ask you seven questions just try to answer them as quickly as you can.
[44:53] Read even OK that's good.
[44:55] What's the best piece of business advice that you've ever received?
[45:02] I think it was one of my advisors and said these things take a lot of time. Startups just take longer than you think.
[45:09] What book would you recommend to our audience and why?
[45:12] I'm sure it's been recommended before but I am going to recommend Crossing the Chasm by Geoffrey Moore.
[45:18] What's why attribute or characteristic in your mind of a successful entrepreneur?
[45:26] It's resilient. It's you know just being able to roll with the punches keep a level head and focus on the things that matter every single day. That's that's what it is.
[45:33] OK. This is a tough question to ask you. What's your favorite personal productivity tool or habit?
[45:42] Well let's just say have it. But really it's it is 45 minutes just offline away from distractions do that a couple of times a day and you change your life and that's it. That was the first pattern of freedom and that is still the pattern that works for me. It may work differently for other people but that's that's what I keep going back to burst out like I just go off line for 45 minutes and work away and I get so much done.
[46:10] But what's new or interesting business idea you love to pursue if you had the extra time?
[46:20] That I just I never stopped talking about is there is this one ice cream store up in my hometown of Albany, New York and I'm I'm always just interested in transplanting it down to where I am in North Carolina because it would just make a million dollars like just a cellar. So you know I when I have all the free time do started an ice cream store I think that's a natural thing once you've done a couple of technology businesses get into retail. Yeah that's the that's the thing I dream about. I was just running an ice cream store
[46:47] What's an interesting or fun fact about you that most people don't know?
[46:53] A bike racer a cyclist and so I have I watch the Tour de France and dream about being in there. That will never be the case. I'm way too old and past that point but I do I'm a competitive cyclist. And I love doing that also.
[47:14] And finally what is one of your most important passions outside of your work?
[47:21] It is my boys and my wife.
[47:25] Good answer. All right. So Fred. Thank you. I really appreciate you making the time to join me and share your story while I love this story. I love how you know as we said you've taken something that was just a personal point you know frustration for you and and turned it into a business. I think it's also kind of funny that you know you're you know you're a professor, teaching courses on social media where these products social media products are designed to do exactly the opposite in terms of getting people to you know spend more time and more frequently go in and get sucked into this stuff. And at the same time you've built a business by offering a product which does the complete opposite. And you and your you're improving people's lives as a result of taking away their functionality.
[48:25] It's also true that in the long run a whole dissertation on Facebook and yeah. But you know it is the circuitous and interesting journey of life. Yeah.
48:36 Now if people want to check out Freedom for themselves they can go to freedom.to and if they want to get in touch with you what's the best way for them to do that.
48:48 Yeah I'm at Stutzman so as to UTC. I mean at Twitter or you can drop me an email [email protected]
[48:58] Wonderful, Fred. Been a pleasure. Wish you all the best.
[49:01] Well Omer thanks for having me. This was a lot of fun.
[49:02] It was a pleasure. Cheers.
49:04 All right thanks for listening. I hope you enjoyed this interview. You can get to the show notes by going to thesaaspodcast.com and if you need help building launching or growing your SaaS business. Don't forget to check out SaaS Club at saasclub.co and finally if you want to show your support for the show then consider leaving a review on iTunes. I love to read those reviews and it really does make a difference both in terms of the show getting discovered by more people and inspiring me to keep creating this free content for you. If you don't already in iTunes just go to conversionaid.com/itunes and that will get you to the right place and I choose to leave a review on so next time take care.
- “Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers” by Geoffrey A. Moore