Finding Product-Market Fit To Hit $15m+ ARR (w/ Adam Robinson, Retention.com)

Author's avatar Metrics & Chill Podcast Mar 22, 2023 3 minutes read

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    Learn how Adam Robinson found product-market fit and bootstrapped Retention.com from $0 to $15m+ ARR.

    How They Move The Needle

    Adam was working to build Robly, his email marketing app, and was up against heavy competition. At that time, he heard it was possible to resolve a website visitor to an email address, even if they weren’t logged in to the platform.

    So he learned how to do it, built the first version, and launched it as a new feature in Robly hoping it would help differentiate them from larger brands like MailChimp. But what he found was that customers started seeking out Robly just for that feature. They’d use Robly just to get a list of emails, and then export that list to their other email provider. He even had customers email him to tell him how awesome the feature was but saw that they weren’t using other parts of Robly as much.

    So he spun it out as a separate product called “GetEmails”, set the price at $19/mo, and let customers use a self-serve model to start learning how they’d use it. He quickly got it to $10k/mo, and since the product was so young, there was no initial churn. He found a way to use Facebook Ads to accelerate the growth and was able to scale to $50k in annual recurring revenue (ARR) in just 4 months. 

    But then he hit a few roadblocks. First, he found that customers they acquired from Facebook ended up churning at a much higher rate, and saw his churn rise to around 20%. He also found that after Covid hit, customers stopped spending as much and his ARR went to $25k.

    Adam realized that the customers coming from Facebook just weren’t their best customers, so he stopped running ads and saw churn drop to 6%~ almost immediately. From there, he focused almost exclusively on e-commerce brands, from small to large. This focus helped him scale to $4m in ARR, but they still didn’t have product-market fit. His churn rate fluctuated between 6% and 8%, and he had customers paying anywhere from $19/mo up to $50,000/mo. 

    Then the breakthrough occurred. After looking at their data and customer behavior, they realized there was a certain segment of their customers that almost never churned, raved about the product, and happily referred their friends. This segment was Shopify Plus brands: large (not small, not enterprise) e-commerce companies that were currently spending about $7,500/mo on the product.

    So Adam’s team made three core changes: 

    First, refined their ideal customer profile (ICP) to Shopify Plus companies. They focused all their energy and messaging around serving this niche.

    Second, they cut the price of the product by about two-thirds (from $7,500/mo to $2,500/mo) and moved to only selling annual contracts.

    Third, they worked to double the value of the product for their newfound target customer by adding new products and features.

    By lowering the price, doubling the value, and changing to annual payments, they were able to scale even further to over $15m ARR in just 2.5~ years from the time Adam started. Their average deal size is $30k, they have a sales cycle of just 7 days, and boast a 90% close rate.

    What’s more, they’re currently on track to hit $50m ARR in the next year or so, and Adam has a very public goal of building a unicorn (a company valued at $1b) in the next couple years.

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    Jeremiah Rizzo

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