The SaaS Podcast: Founder Interviews - Page 9

Jordan Gal, Rally

Tripling SaaS Prices Cut Churn from 15% to 2%

Jordan Gal is the co-founder of Rally, a headless checkout that gives e-commerce merchants more control over their checkout experience. In 2014, after running his own e-commerce business for years, Jordan launched a simple abandoned cart app which eventually became a customizable checkout for Shopify merchants. He landed his first customers through cold email and a no-brainer pricing offer: pay 10% of recovered revenue, capped at $99 per month. Within two years, CartHook was processing hundreds of millions in GMV and pulling in 400 free trial signups per month. But underneath the growth, Jordan spotted a serious problem. Monthly churn was stuck between 10% and 15%, and the company was attracting the wrong merchants. His SaaS pricing instinct told him the fix was counterintuitive: raise prices, not lower them. Jordan tripled the price from $100 to $300, switched from self-serve to required demos, and positioned CartHook as the premium checkout for serious merchants. Demand barely changed. Then he raised SaaS pricing again to $500 per month plus a 0.5% transaction fee - and even increased prices on existing customers. The result was dramatic. Monthly churn dropped to 1-2%, MRR doubled from $250K to $500K in one year, and the entire team was happier working with better-fit customers. By 2020, CartHook had processed $2.5 billion in total GMV, with $300 million coming from post-purchase upsells alone - a 12% revenue lift that merchants could not get from Shopify's native checkout. Jordan and his co-founder had found product-market fit, built a product people loved, and were generating about $6M in ARR. And then everything fell apart. Shopify decided CartHook had grown too large and was processing too much revenue outside their ecosystem. CartHook was forced to stop taking new checkout customers and pivot to a post-purchase upsell app that worked inside Shopify's checkout. Jordan lost his appetite for building on someone else's platform, put a new CEO in place, and left to start Rally with his CTO.

Ryan Fyfe, Workpuls

He Couldn't Get 10 SaaS Customers to Pay

Ryan Fyfe is the co-founder and COO of Workpuls, an employee monitoring and time tracking software. Previously, he founded Humanity, an employee scheduling software product. In 2010, Ryan set out to build better employee scheduling software. Early in his career, he had worked in the service industry and experienced the pains of scheduling shifts both as an employee and manager. He believed there was an opportunity to build an easier solution. He targeted the lower end of the market and quickly built a basic scheduling solution. He didn't do customer interviews or much market research. Instead, he trusted his gut that based on his experience, there was a need for his solution. But getting early traction was disheartening. He went from being excited about how his product was going to help hundreds or maybe even thousands of small businesses to struggling to get even 10 customers. People seemed interested in his product but always seemed to have an excuse for why they couldn't or weren't ready to pay for it. And things got worse when Ryan realized that it wasn't working out with his co-founder and decided to buy him out. Suddenly he became a solo founder of a product that he believed in, but one that was clearly struggling to get traction. And now Ryan had to do everything from product, marketing, and sales on his own. But after a lot of persistence and hard work, he figured out how to sell his product. He went from having a struggling product that nobody wanted to bootstrapping it to $100K ARR. And then after raising VC funding, he went on to grow the business to over $12M ARR, 150 employees, and 40,000 customers including companies such as Nike, CNN, and Lyft. Eventually, Ryan recognized that he was better at building than operating and handed off the CEO role to someone who had grown up within the company. The business was later acquired. Now Ryan is applying every lesson he learned to his current startup, Workpuls - starting with customer segmentation, pricing confidence, and early traction strategies he wishes he'd used the first time.