In 2012, Patrick Campbell cashed out his 401(k) to start ProfitWell, a software company that helps subscription businesses reduce cancellations and optimize pricing.
Not too long ago, he sold it for over $200 million.
He recently got on Reddit for an “ask me anything” (AMA) session.
He shared several incredible lessons from his experience.
Here are our favorites:
Acquire your first customers
Patrick used a mix of content marketing and cold outreach.
He did the following:
- Wrote an ebook.
- Created blog posts to get traffic to get ebook downloads.
- Reached out to people that downloaded the ebook and offered a free pricing audit.
- Once the prospect realized they could do better, and how, he went for the sale.
Build an audience
ProfitWell created a media strategy.
They created a newsletter, a blog, and a strong presence on social media.
And they treated each channel differently.
When you have an audience, scaling your revenue and income is easy if your product is good.
Use a tangential freemium model
Creating a free product that is better than your competitors’ paid offers will attract your ideal buyers.
Then you monetize those free users by selling them different products.
Moreover, earning free subscribers helped ProfitWell in different ways:
- Their product became excellent because the data from the free product trained their algorithms for the paid products.
- They were forced to create an extremely efficient infrastructure to keep costs low. This effort compounded over time.
- It made their products easier to learn. Since they had a large base to talk to, they were able to improve customer experiences at a quicker rate than their competitors.
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