From Consultancy to $10M in ARR — Vince Mayfield, TalkingParents

David Barnard:

Welcome to the Sub Club Podcast, a show dedicated to the best practices for building and growing app businesses. We sit down with the entrepreneurs, investors, and builders behind the most successful apps in the world to learn from their successes and failures. Sub Club is brought to you by RevenueCat. Thousands of the world's best apps trust RevenueCat to power in-app purchases, manage customers, and grow revenue across iOS, Android, and the web. You can learn more at revenuecat.com. Let's get into the show.

David Barnard:

Hello, I'm your host, David Barnard, and with me today RevenueCat CEO Jacob Eiting. Our guest today is Vince Mayfield, co-founder and CEO of TalkingParents, an app that helps divorced or separated parents better manage communication and share responsibilities. On the podcast, we talk with Vince about the right way to raise prices, the painful lessons from picking the wrong tools, and why you should respond to every single app review. Vince, thank you so much for joining us on the podcast today. I can't wait to chat.

Vince Mayfield:

I'm so honored to be here. I'm a longtime listener of the podcast. I'm a huge fan. So, it's amazing that I get to sit here and be on the cast with you.

David Barnard:

Awesome. Jacob, freshly shorn. You look like a baby without your three-foot beard.

Jacob Eiting:

Nobody respects me now because I'm cleanly shaven. I look like I'm 13, but I'll take it. I'll take it. It's nice to be back, everybody.

Jacob Eiting:

I'm the same person. Today, somebody on the street stopped me, I don't even know, and she was like, "Oh, you shaved." I was like, "Who are you?" That's pretty good for the small town life.

David Barnard:

For those listening to the audio podcast, you'll have to check out YouTube and see the new and improved Jacob. Yeah, he showed up on a company call with a suit the other day.

Jacob Eiting:

I should've come to the podcast in a suit. That would've really thrown the whole thing off. Next time. I got to wait another three years till I grow it back and then I'll also open a suit shaved for the podcast.

David Barnard:

All right. Vince, I wanted to kick things off talking about the story of TalkingParents and how you went from a consultancy where you were grinding for that next client and always doing work for other people, always billing hourly or project. And the way you told it to me when we were chatting before the podcast is that, you wanted to make money while you slept and it's pretty great that you went from a consultancy where you were grinding for those next clients to a $10 million a year, ARR business, which is incredible. Start me off with what was that motivation and how did you start that process of going from an agency to being a product company?

Vince Mayfield:

My business partner, Louis Erickson and I, we've been best friends since middle school. So, we've known each other a long time. We both were in the military and when we got out we worked as defense contractors. We decided we wanted to go off and start doing custom software development and so we developed this professional services organization. We were cruising along, doing pretty well, and our first year about year nine, we made Inc. 5,000 list. We realized that we had a business now, we didn't have a hobby anymore and that we really needed to think differently. Decided to go back to school, get an MBA at the same time while I'm trying to run the company.

Vince Mayfield:

And then, we met this guy named Stephen Nixon and Steven had graduated from law school and was a private practice as an attorney. He'd been a prosecutor. He'd been a defense attorney and he was in this practice with his brother and his brother was a family law attorney. Steven shows up into court after his brother gets tapped to be a magistrate and there are two co-parents and they're going back and forth over this record of communications, which one's got text messages in one hand, a Facebook post and emails, and they're going back and forth and the judge is annoyed and both attorneys are racking up the hours. The judge finally throws it back and says, "Okay, you guys go off on you all's and you guys work this out and then come back to me." So, Stephen came up with this idea to build this app. He hired some guy working out of his house and had him build it and then got about a thousand people using it.

Vince Mayfield:

He realized, "Hey, this is on servers inside of this guy's house and when I call him, he's not always responsive." Stephen's an attorney, he doesn't know technology. So, he starts to get worried because judges are ordering people onto this software and he is afraid that it's going to come tumbling down or something. He'd heard about us and he stops into the Bank of America building where we're at and says, "Hey, I want you to take a look at this app." Being professional software engineers, we go in and we look at this app and we come back and we say, "Hey man, this wasn't built to scale. It's kind of held together with bailing wire and duct tape. But, we think the idea is really cool. What would you think about us forming a whole new company and let's rebuild this thing so that it will scale. We'll bring you in, we'll pay you a salary. Stephen, your job will be to go out and talk to judges and all that kind of stuff and then we'll go from there."

Vince Mayfield:

It was sort of a match made in heaven because Louis and I were in professional services trading dollars for hours, and Stephen was a practicing attorney with a cool idea and he wants to get away from the daily grind. And so, we came together and started figure out how do we use the professional services to mutually support the app and then build the app up and take it from there.

David Barnard:

How did that go transitioning from thinking like a hired gun to, now we've got this product. I think there are a lot of agencies out there who try and make the jump, but it really is a different skillset. How did that part of the transition go for the bit Wizards now talking parrot's crew?

Vince Mayfield:

It's a difficult transition and I will tell you for the first couple of years we didn't have the app monetized. We thought we were going to make money off of advertising through Google AdSense. As far as a product, we were thinking about when you build custom software, you're building things and getting them done and you're pulling in pieces and putting it together. It may or may not need to scale to the level that this app did. And so, when we started bringing in third party components and stuff like that, we really hadn't thought through all the things in the very beginning. That created some technical debt and really got us to start reworking things that we had already done before, as we were trying to get that right product market fit. I think the other thing that was different for us was, we didn't understand really who our customer was in the beginning.

David Barnard:

You're an agency, you're used to having a customer who tells you what to do. You're not as deep in the product, you're not having to think, who's our customer.

Jacob Eiting:

It's like, you know your customer's the person who's short on software development, right?

David Barnard:

Yeah.

Jacob Eiting:

That's ultimately, your customer. Surely you need to align your goals with theirs. But, even the best person who wants to do the best by everybody is going to follow their most direct incentive, which is very different. I was wondering before you had this opportunity land in your lap, was this a goal for you to bring in to own your own product and this was an opportunity. It was right time, right moment, let's do this. Or had you tried to do this transition? Was this a strategic thing or something opportunistic?

Vince Mayfield:

When you're in a custom software business, everybody comes to you and says, "Hey, I got an idea and we want you to build it for us, but we don't have any money. So, you build it and we'll give you a piece of it. We quickly learned that our job was to be software engineers and not figure out somebody's business model or how they were going to work." But, we did have a couple of things that we had attempted. One of them was a product where we became the sole reseller of it online. We built the website and did the stuff, but it was an actual physical product that had to be shipped. It was called Tailgater Carrier. We did that for a couple of years. We invested and it didn't work out. We had to basically shut it down, working with another group of guys and we knew we were looking for that right thing that seemed like it made the right fit and that we could take and make money while we're sleeping.

Jacob Eiting:

I don't know the details, but when it came to you and it says this thing's getting out of control, I can't handle the demand. That's probably already product market fit at that point. Right?

Vince Mayfield:

Yeah.

Jacob Eiting:

People always ask me how do I know I have product market fit? There are varying levels. There are different definitions of market and how well the fit is in there. But, that moment when the product is growing despite all of the problems, that's usually the definition that there's something there. So, whether you consciously knew it or not, that was the right moment. It sounds like there was probably a natural limit to where this would go without your expertise, without some real engineering. I think it's really hard. This echoes against advice I've gotten and heard from investors in my world and stuff about, it's really hard to own a product and build a product without in-house engineering. Without being somebody in the driver's seat who's technical enough to drive the product forward. This is a good example of where somebody was short on that expertise and probably would've been limited in how far they could take it.

Vince Mayfield:

Yeah. I think besides just the product market fit and understanding and having somebody that could do the software engineering and work right there with you. I think another side of it was is that Louis and I had already taken a lot of risk. Our business had been in business for 10 years at that point. Now we're at 25 years for Bit Wizards and Stephen came from the law arena, where they're all in the risk mitigation business. And so, you had a couple of entrepreneurs and people that understood that aspect of it and what it meant to take risks. We were able to work with Stephen and sort of get him outside his comfort zone so that we could scale this and make it go well. It was really mutually beneficial. We really all fit together well, but I will tell you we thought we understood who our customer was in the beginning, but we really didn't.

Vince Mayfield:

That's a good segue because we thought our customer was the court system.

David Barnard:

Good luck selling SaaS to the court system.

Jacob Eiting:

Well, at least you know where they are. But if you go knocking on their door, they don't look kindly upon that, I guess, is probably also true.

Vince Mayfield:

Well, and they also only want to talk to other people in their profession. It's like a lot of regulated industries. They've got older technology and things like that. But we knew that they were a channel, or an influencer. So, initially we made the application free and Stephen thought we were going to monetize through Google AdSense. We came to the conclusion pretty quickly. I said, "Hey, look, everybody in that courtroom's making money. We've got to make money to scale this thing, so that we can fuel it and build the features and functions that the customers want. But, our customer isn't the court system." So, we changed and decided to monetize based upon the apps and get a subscription model going. When we did that and put the focus in the customer and the people that were actually giving us money, in fact, I had a professor at Notre Dame that told me. He said, strategically, "You know who it is. They're the person that gives you money. They're the ones that are in the driver's seat."

Jacob Eiting:

It's amazing how we sometimes we have to go learn these lessons from fancy professors when it's like-

Vince Mayfield:

Absolutely.

Jacob Eiting:

It's right in front of you. When you say customers, you're talking about the parents, right? The folks that are in a co-parenting arrangement.

Vince Mayfield:

That's absolutely correct.

David Barnard:

In those early days when you introduce a subscription, you still did use a freemium model. Tell me about your decision making around, "Okay, this is never going to scale big enough to make meaningful money on ads. We're going to use subscriptions, but we need some hook." So how did you think about freemium early and then I'd actually want to go through the different phases of your freemium strategy as well.

Vince Mayfield:

Well, Steven thought that the basic messaging part of what we were doing was the core item and we were already giving that away for free through the freemium model. When we decided to monetize, you got to remember this is '09, '10, '11 and apps are coming out. We're like, "Okay, so we're going to build some apps." And apps have notifications, which you didn't really have them very well over the web.

Jacob Eiting:

So it started as a web app?

Vince Mayfield:

Yes.

Jacob Eiting:

It was a full web experience before. Okay.

Vince Mayfield:

Exactly. We said, "Okay, now we're going to give the mobile apps." And the incentive is going to be, "Well, if you want to use mobile apps, then we're going to charge you for that on a subscription basis." There was some discussion that went back and forth about whether going to charge a one-time fee and what the price point was.

Jacob Eiting:

At that point in time it was the market was not really there for charging consumer subscriptions on mobile. I don't even think that technically had any subscriptions on the apps store until '11 or '12 till everybody was able to use it.

Vince Mayfield:

Yeah. And so, we went through a lot of argument back and forth about how to do that. Then, when we finally did get it monetized and get it on a subscription, it was closer to 2015 when we finally got that working the way it needed to work. So, we probably burned through close to a million dollars revamping the app, starting to market. We were literally sending Stephen out around the country on an airplane to talk to judges and clerks of court and stuff.

Jacob Eiting:

Were you not monetizing at all through that period?

Vince Mayfield:

No, not really. All we were doing then... We didn't really start monetizing till the end of 2015, beginning of 2016, other than through the Google AdSense revenue.

Jacob Eiting:

So, you did have a little bit of that. Normally AdSense as a strategy or ads as a strategy doesn't really work unless you're mass mass market. But then I was thinking this could be mass, mass market. There's got to be millions of people in this arrangement that could potentially use a co-parenting app.

Vince Mayfield:

They weren't necessarily divorced.

Jacob Eiting:

Sure.

Vince Mayfield:

They could have had a kid together and never been married.

Jacob Eiting:

It's got to be a bigger market than. Everybody could probably take more than two hands to name people they know in this situation, which is a larger addressable market than a lot of apps we talked to. Right? So, you had that going for you. I don't think it was totally crazy. But you guys were pouring R&D budget into this thing. Were you pouring effort into the app for those five years, as you were building that functionality?

Vince Mayfield:

No.

Jacob Eiting:

Was it on the back burner or how were you approaching it?

Vince Mayfield:

We first revamped the web app and then we went in and started doing the mobile apps on the latter part, after a lot of discussion. Some of the things that we did early on that were really important, we started asking customers at least surveying them and saying, "Okay, what do you want? What would you pay for? What features or functions do you. How can you know this be better for you?" It was pretty rudimentary. Nothing like what's available today. It was simply a couple of software engineers and a legal guy sitting in a room saying, "Okay, what kind of questions do we want to ask our customers?" We started to get that survey data back and figure out and solidify what we wanted.

Vince Mayfield:

When we released the first app, I personally felt like we were charging too little for it, which caused some problems later on. Because, as we started to add more value and more functionality and figure out how to build out our tiers and give customers a compelling reason to, not only utilize the app but stay on, we had to deal with some of that legacy stuff that we were doing from before. When your app is free, now you're charging $4.99 and then later on you want to charge them $9.99. Now we have two tiers where it's $9.99 and $24.99. So, how do you manage customer expectations? How do you deliver the value to them so that they feel like that they're getting something unique and that they're willing to continue to pay for and stick with you?

David Barnard:

When the app had fewer features and didn't have as big an audience and product market fit, do you not think maybe it was the right option to start at a lower price? You're talking about tech debt in that the price was lower and having to transition to a higher price. It's a combination of tech debt, because you have to manage the subscriptions and business debt of, we used to be a different app now we've added all these features. But do you think maybe that was actually a better staging of the app to start low and then move forward, versus do you think you could have gotten $25 a month in those early days? Is the regret that you should have been charging $25 from the beginning? Do you think you really could have done that?

Vince Mayfield:

I think we could have monetized sooner. I'd like to tell you that what we did was genius and it all worked out the way we wanted it to work out.

Jacob Eiting:

You're supposed to, that's what you do when you're taking your victory lap. That it was all clear the whole time, through your genius.

Vince Mayfield:

But the reality is that we stumbled through it. We made mistakes and there was a lot of argument and discussion and back and forth, and there were some lean times. I had to tell Stephen at one point, I said, "Hey, I can't continue to pay you a salary right now. Times are lean in the professional services realm, so monetization has to be a strategy and has to be something important that we're doing." I would say that from '09 to probably '15, although we rebuilt the web app, we dabbled. It really wasn't until '15 that we got things monetized and really started getting them going. Then, we started adding in more features and that type of stuff. It was stressful. They got better as we made money. They say money can solve problems. When you're pulling up by your bootstraps, it does. The smart use of that money and making the right bets is what's important

Jacob Eiting:

On the point of starting low and going high versus starting high and going low, the advice I always give is start high. Because, the worst case scenario is nobody buys it and then, you're giving people a discount. Versus the flip side is you give everybody some price that's way under the true value. You've now set the expectation that, "Hey, this is only worth $4.99 a month," which I would imagine is a fairly high retention user base like yours. For some apps that are churn and burn, I use the word churn and burn with love. Apps that maybe don't focus on super long-term retention. You can more freely experiment with prices. Your customers are cycling in and out. But for an app where the expectation might be that somebody uses you for 18 years or some really long period of time, setting that expectation matters, right? Because, you're going to have that customer relationship for a while.

Jacob Eiting:

Yeah, normally I am like, "Oh, respect your existing users, but feel free to mess around. But in a case where you might have a longer term base, you might want to be more careful." I find it's always easier to make things cheaper. Nobody gets mad at you, right? You're going to have the same amount of tech debt and business debt by reducing a price. You're going to lose money potentially from existing users if you bring them down, but at least the emotional labor is less, right?

Vince Mayfield:

Absolutely.

Jacob Eiting:

You're lowering the price and you're still trying to find that optimum. You're still solving the same problem. You're coming from a different starting point on the curve.

David Barnard:

But when you have really deep product market fit and you've built out all those features, then you do actually have very few people who complain when you raise the price. That's the next part of the story I wanted to get to, is that you did end up raising the price on all of your existing subscribers. Tell me about how you planned that and then, how did it go?

Vince Mayfield:

Again, at the beginning we didn't have a lot of instrumentation and we weren't really sure. To Jacob's point, the people that are with us are predominantly court ordered. Raising prices when it's already low is tricky, because they're already mad because they're typically in a co-parenting relationship. Not all. But, some of them are. So, it's very delicate matter to raise prices and go forward. We were actually surprised. We said, "Okay, well if we lose half of our customers as we raise the price from $4.99 to $9.99, what is that going to do to our revenue? What's going to happen?" I'd been to some pricing seminars and stuff like that and talked to some different people and I said, "There's no way that's going to happen." We planned that we would lose at least half. What we were pleasantly surprised is that we got a few complaints, but actually people understood that when we rolled it out, we added additional value.

Vince Mayfield:

When we first rolled it out, our $9.99 plan, we added in what we call accountable calling, which allowed people to be able to make phone calls and have it be transcribed and made a part of the record. So, it was more than the messaging that was going back and forth over, or keying it in. And so, every time we've raised prices, or every time we've busted out to tiers, we've made sure that we've bundled that with a group of value that somebody would get that the customers had asked for from us surveying them. So we could say, "Hey, look. Yes, we're raising prices. But we're bringing you new features and functions that you asked us for, and we're listening to what you're having to say, and we're making sure that it's of value to you.

Vince Mayfield:

So turns out, we maybe lost a quarter or so and maybe some of that was transitional while they were mad and then they came back. Because some of them, and I would probably venture to say it's probably about a 60/40 split, about 60% are court ordered about 40% or not. But, we always offered a free version. If you wanted to use the web version, you could get it for free. So we said, "Okay, if you don't want to pay for the extra features here, you can always go back to the free version and you can use that."

Jacob Eiting:

That satisfies core orders in most cases.

Vince Mayfield:

Yes, sir.

David Barnard:

That's a huge lesson right there though that I think a lot of subscription apps, now that you can more easily raise prices are not heeding. If you're Netflix, you can increase the price 25% because you're Netflix and people are going to stay subscribed. But bundling any price raise with clear additional value, I think was super smart and probably a big...

Jacob Eiting:

That's good product marketing. It's like, you probably already shipped some of this stuff.

David Barnard:

But, there are a lot of apps that are raising prices and not doing that. I

Jacob Eiting:

It goes back to something we've been thinking about, our revenue cut a lot recently. It's negotiation tactics. And as we're closing deals, how do we create non-controversial interactions with customers as we're trying to come to a partnership agreement? There's certain ways you can present. It's pricing. It's all pricing, right? It's like presentation of pricing. It's so psychological already. You have as an app developer, a lot of surface area to influence that psychological experience. If you say increased price. An increased price with an increase in delivered value is not actually a net loss for people. They can opt out on a liquidity basis. That's surplus value for me. I do not need, and they can choose to opt out. But in most cases, if you're surveying users and what you think of is good, then what you're building is hitting their needs. That's not going to be the case. When were you all doing this? I guess, was it recently?

Vince Mayfield:

We've made some additional changes when we went to the $24.99 tier. That happened at the end of 2022.

Jacob Eiting:

Okay.

Vince Mayfield:

So, we've now been doing it right about a year and about six months or so.

David Barnard:

But, that's a second tier. You have the $9.99 tier. You doubled the price from $4.99 to $9.99. But now, you have the option in the app to get the $9.99 tier or the $24.99 tier, correct?

Vince Mayfield:

That's correct.

Jacob Eiting:

Can you talk a little bit about what did you bundle into that? What are you targeting with that tier?

Vince Mayfield:

The way the free tier worked is that we have the record. And so, when you want to go to court, then you buy a copy of the record from us, we will either give you a digital copy or you can download it as a PDF, which a lot of courts won't take. And then, the other option is to do a printed copy. So, we would actually print them out, bind them, do an affidavit, and then ship them to them. When we went to the $9.99 tier from the $4.99 tier, we basically structured it so that you got a deeper discount on printed records. Because printed records cost us a significant amount of labor and effort to go and do it. But, we also added in calling, and then, when we went to our $24.99 tier, we added in video calling.

Vince Mayfield:

It's not just calling there. You got to keep in mind that what we're doing is, we're recording the call, we're transcribing it, we're making it a part of the record. We're breaking apart the channels, so that you can see all of them. And then, it's put in a format that if you do go to court, the court can actually see how it's all broken down by dates and conversations. So, what somebody said, if you call your spouse out or a former spouse out in there, and say something ugly, well the court's going to see that, right? So, the idea is that it's reinforcing people to be civil. We carefully picked each one of those items. Video calling is expensive for us because you've got to store that video and you've got to store that audio. So, we made it so that they got a bundle of minutes and a bundle of time that made really sense and then, we could take it up each level as we went forward.

Jacob Eiting:

So, that was the primary. Again, it was adding and creating value. Right?

Vince Mayfield:

Yes.

Jacob Eiting:

And then pricing that value, actually capturing that created value, which is five times what your original price point was, now for that new service. But depending on the situation that you're in, if you think about a tool that's going to allow you if you're in a contentious co-parenting situation or whatever, that freedom to video communicate. Makes a lot of sense. And so, how has that been? I find we have multiple pricing tiers here and old ones and new ones. I find it to be super hard to wrap my head around. How did adding tiering make your lives better or worse, potentially more complicated.

Vince Mayfield:

I don't know that it made it more complicated. I think what it organized our customers around people that understood what we were doing and got the value and were willing to pay the higher price point to it. We cater to all the customers. But we added other features in too. I didn't mention this one, but we actually have accountable payments, so they can make payments for child support or alimony. And it's all tracked and it's all part of the system. You're at the $9.99. We charge less for that, because there is some per transaction charges for us. And then, we charge even less when you're at the $24.99 tier. So, I don't know that it created a big problem for us. I think the bigger problem for us was trying to extricate the old $4.99 customers and get them up to the new level. It's like you always said, it's harder to charge people more money than it is to reduce the cost, right?

Jacob Eiting:

Yeah. That $20 gap is massive for that $5 user. If you're staring and being like, "Well, I get this for $5." It may not be five times the value, but it still might be worth it, if that makes sense to them.

Vince Mayfield:

Interestingly, what we found out was is that most of our Apple users were on the higher tier. If you think about it, you pay a thousand or almost two grand now for an iPhone with all the stuff on it. We found that we had more customers over in that realm and we could see where certain customers were more price conscious.

David Barnard:

Vince, when you were talking about the pricing in $25 a month on the premium tier and how much value you're having to deliver, it's reminding me how much opportunity there still is for subscription apps to deliver a ton of value and charge for that value. I think of Speechify, the Texas speech app, they charge $120 a year. A couple of years back I was like, "Holy crap, that's really expensive." But, it delivers a ton of value. For those of you listening to the podcast, there are a lot of nuances in TalkingParents' business. It's not going to apply to your specific business, but you should be looking for these opportunities to layer on deeper and deeper value. Because there is still so much opportunity to increase the value you're delivering and then, actually charge for it. Because 25 bucks a month for a consumer subscription app, but you're delivering that kind of value. You're delivering sophisticated video, audio, transcriptions, all that kind of stuff.

Jacob Eiting:

Core affidavits. One thing I wanted to ask you, Vince, if one parent has a subscription, does the other one get access to features, or is it all for one side of the match?

Vince Mayfield:

It's one side, but it gives the other parent a reason or incentive to maybe want to go to the next level. So, if they're at the $9.99 tier, they'll get calling, but they have to be at the $24.99 tier if they want to get video. So one parent may have video and the other one may not, or maybe they want to have a video chat with their kid where the other parent doesn't necessarily have that capability. We're trying to reinforce where that value is and get them to move up the chain there and subscribe at that particular level. But if they can't afford it and it's not at their level, they can get the features at the level that they are in. So even at the free level, there are ways for a premium person to talk to somebody at the free level. Some of the things that we're talking about doing is, figuring out a way to let one co-parent pay for the other co-parent.

Jacob Eiting:

Which is complicated.

Vince Mayfield:

It is.

Jacob Eiting:

Outdoor land. Yeah.

David Barnard:

Yeah.

Vince Mayfield:

Because some people think that... Well, first of all, the parents don't want to be controlled by the other co-parent, right? So, there are some nuances about what we have to do, to help navigate this. But I want to make one point about what David was talking about with value, and that's, one of the things that we found about people is that they like to compartmentalize elements of their life and they don't want to have a million apps. And so, co-parenting is a very important aspect. You're shepherding young lives between two people and you're trying to keep that harmonious and keep yourself out of court. The value that TalkingParents brings there is its accountability across all those communication mediums into a record that can be utilized in court. And so at each level, the parents can pick and choose the features or the values that matter the most to them and then, that they're willing to pay for in order to help them manage this.

Vince Mayfield:

Like I said, we noticed that some of our less price conscious customers, typically on Apple, we got two co-parents, one on each side paying $24.99 for it. But, I would also say it also costs us a lot of money to deliver that, right? There are consumables there that I have to pay for in my unit and in my economic cost. And so, it's priced in a way that allows us to deliver that premium experience for them at a price point that they're willing to pay for and that I can cover the cost and still make money.

David Barnard:

You were talking about nudging those parents who aren't paying to pay and now you need both parents involved. I imagine there's a lot to understanding the usage of the app. How do you instrument that? How do you figure out what your customers need?

Vince Mayfield:

Initially I told you we did it, it's pretty rudimentary. We did surveying and SurveyMonkey and that type of thing. There was a lot of discussion about what we thought and we kept telling ourselves, and especially when I hired my new director of marketing, Heather Ruiz. She came in from the business to consumer field, and that's different obviously from B2B. It's a different mindset and a different way that you market. She really solidified that we had to get back some instrumentation and really truly instrument the app and understand the customer journey, not over instrument it, but basically have the things. And so, we understood what that was. We started with Adjust, but the problem with the Adjust is that it's centered around that app download. That isn't a conversion point from us. They can download the app, but it's not effective until they match with a co-parent and they're talking.

Vince Mayfield:

We put Firebase in place and then, we started looking at and sort of did a fly off to see what do we need for a platform. We looked around and we saw that everybody's using Segment. We kept hearing Segment over and over again. And when my software engineers looked at it, they're like, "Hooray. It's a giant database that stores a bunch of stuff in it and we can aggregate it and make it anything we want." My marketers went, "Time out. We don't want to be building UIs and having to integrate with Tableau or Power BI or something like that. We need a more accurate picture across all the platforms." So, we ended up boiling it down between Segment and a product called Bloomreach.

Vince Mayfield:

Bloomreach is a customer data platform, which is a little bit different because we're having these problems that are happening right now with privacy and with third party. And so, this allows us to have basically first party data. We believe that first party data is king and it allows us to map what's going on with the people that come to our website and then, track our customers as they go through that journey.

Vince Mayfield:

So, we did all that instrumentation in the last two years and it's really paying dividends and helping us understand how our customers think and what they do. In addition to that, we've also created a community where we're giving back something more than just the app. Some of the things that we're doing is our Coffee & Co-parenting. We're bringing in experts like Dr. Ramani or Mark Pearson who's a renowned negotiator and counselor and an influencer like Caroline Kelley and brought them in to provide that value to our customers through our coffee and co-parenting, so that they felt like they were getting something more.

Jacob Eiting:

Is that a video series, or what's Coffee & Co-parenting?

Vince Mayfield:

Coffee & Co-parenting is webinars that we offer periodically. We bring these experts in and provide that. They'll take over our social media or take over the blogs and bring stuff in and interact with the customers.

David Barnard:

You were mentioning that in relation to Bloomreach. So is that something you're actually tracking in Bloomreach to understand the impact of that community-based marketing basically?

Vince Mayfield:

Absolutely. It's tied into our social media, it's tied into all of our advertising. All somebody has to do is come to our site once or one of our landing pages, and we can track their history and what they're doing over time. And then, we know when they convert and what that journey looks like for them.

David Barnard:

Deciding on Bloomreach and doing a bake off can be a challenging prospect with engineering, battling with marketing, battling with the business team and got pricing and who's going to lead and all that kind of stuff. How has that gone as you've evolved the tooling, going from one tool to another and figuring out what's actually going to work best for your business?

Vince Mayfield:

We've made some mistakes as we've gone through this. Being software engineers and having an attorney as part of the company, being a little more risk averse on things, we always looked at what was the cheapest and what was the easiest to integrate from a software engineering perspective and cost. There are a couple instances where that burned us. One of the is that we have an audio translation service and the company that we use now is called AssemblyAI. But we had a previous one that was a startup company, and we didn't pay particular attention to the unit economics there, and we didn't pay particular attention to how it might scale. So, what ended up happening is that we started having problems with transcription and we started having disconnections from their service and we had to go back and we found that cheaper isn't always better.

Vince Mayfield:

So, we actually made this transition to Assembly, we cut our cost in half and we got more features and functionality out of it because instead of they would charge us for each channel that we were transcribing. Whereas under the new system, it charged us under dual channel and allowed us to go through. The learning from that is to make sure that you understand clearly what the unit economics are, what it's going to do to your cost of goods sold. And to make sure that you're not, from a software standpoint, it sounds cool that we're going to hook up with another startup company. But if they can't scale when you're scaling, you've added a problem to your scaling. We've had to go back and re-engineer as a result of that. It's happened in more than one occasion.

Jacob Eiting:

This AssemblyAI sounds like it's probably new. I'd imagine the costs are going to come down on transcription and stuff right now, because there is so much innovation in AI, audio video stuff right now.

Vince Mayfield:

There is, plus it handles multi-language, which is another feature and function that we want to put in. But, I have to put some props in there. RevenueCat was the first tooling that we integrated to basically help us manage our subscriptions. We tried to build that ourself and it was a huge mistake and it was a debacle. We were running around chasing our tail. Every time Apple would change something or every time Google would change something, it was a nightmare.

Jacob Eiting:

Now we chase our tails for you. That's how it works.

Vince Mayfield:

Exactly.

Jacob Eiting:

And the price doesn't go up when that happens. So, that's the benefit to be risked.

Vince Mayfield:

Exactly. Well, you scale with us as we scale. So, that's what I'm talking about. Paying attention to how that works. That was the first, and then I mentioned AssemblyAI. The other one was when we had another startup that we worked with to help us with our video when we're doing our calling. It was our flagship feature. We underestimated a little bit what the cost was going to be to store the video over the long haul. We have some unique things with the co-parents that we want to mask location and that type of thing and mask the phone numbers. We have issues of trying to mux all that together.

Vince Mayfield:

And so, we went this other company and they were great, they're really nice. But we started having problems with our flagship feature and we had compared them to Twilio and we decided we're going to go back with this new startup and we're going to help them out. We're going to work with us and go forward. But the reality is ,they couldn't scale with us. And so, we ended up making the transition to Twilio. The advantage there is now I've got a global network at scale that I can actually integrate in with.

Vince Mayfield:

I would tell other founders, if you're a software engineer by trade, your tendency is, "I want to build it myself." And the answer is, "Don't try to build it yourself. You find the best in class. Don't chintz on the money and make sure you pay particular attention to the unit economics." The other thing that I would say that it's really important is, I tell my engineers all the time, "Why are you spending your heels on that? Call RevenueCat or call Twilio. This is why we pay for support. These are the guys who are the experts in their product. Let's utilize that." I don't mind paying some extra money to be able to have that because if I do that, then my engineers are off developing new features or functions for my customers.

Jacob Eiting:

That have a higher ROI. I think this is something that I'm glad it sounds like you guys have made that transition. I see a lot of companies that are, I don't want to describe it, they're somewhat dogmatic about it, right? About never taking things from the outside and there are legal reasons, there are risks you identified there, but folks always ignore... They over index on the risk of the startup that goes out of business, which can be mitigated with a couple easy checks. I'll say this for folks evaluating RevenueCat or any tool, if the company's not public... If they're public, you can just look at their financial position, you can see how much cash they have. You can understand their solvency. If they're private, if it's a startup, ask. And if the salesperson won't tell you, say, let me talk to your founder. I want to know how much money you guys have.

Jacob Eiting:

We do fewer of those conversations now. But in the early days I had to get on a lot of phone calls and be like, "Listen, I only have $700,000 in the bank, but here's my plan." We're settled. If we needed to lean back, we'd be profitable. The business is... Which hasn't always been the case for a lot of dev tools. It's really good to hear that you've opened up to that, because I think a lot of people do themselves a disservice. The whole economy, since the Middle Ages is based on... Not even pre-Middle Ages, since basically the agrarian revolution has been based on specialization. We've entered into this period where with software it can happen at a different way. Specialized craftspeople can be trading information in real time and then metering and exchanging that. That's what caused the explosion in value creation that we've seen over the last 2,000 or 10,000 years.

Jacob Eiting:

So to deny that and be like, "Oh, we're going to build everything in-house," denies something that's been working really well. Again, conditioned on the risks, conditioned on doing what's right for your business. And then also you learn how to do good vendor integration where you're defending yourself a little bit. You're being like, "Yeah, we're going to put this in. We're going to isolate it a little bit." So that, we have that optionality. If this vendor doesn't work out for us, we can easily switch over to another or we can bring it if we have to, and stuff like that. Your R&D dollars should be going into IP, which beats the market, which is creating extra margin and extra value for your customers. Because just solving the base needs of the business, probably isn't going to bring a big return for that dollars.

Vince Mayfield:

Absolutely, and I have a lot of scars to prove. It took me a long time to learn that.

David Barnard:

One of the frustrating things though about the subscription app industry specifically, you said you should go with best in class tooling. But, so many of the best in class toolings that I would generally recommend to folks starting out, you've got to start off with a $30,000, $50,000 a year enterprise plan to even start integrating the tool. I wish some of these bigger, best in class companies like Arable and Braze on the customer journey and customer data platform side and even some of the bigger MMPs and other things like that. I wish there were more companies open to that. "Let us start with you and grow with you," instead of you can't even implement the solution-

Jacob Eiting:

Oh, I never. I did. I do not want to. If we lose money on our long tail, don't tell me. Because I do it out of a moral imperative. I have the belief that long term it will net out. But a lot of these companies, they... Because typically those 50K and up those enterprise contracts, you can build a go to market motion around that and it's typically pretty efficient and relatively easy to grow, compared to a bottoms-up motion might take forever and be very costly.

David Barnard:

Yeah. Twilio is a good example though of there are still tools out there that charge on unit economics that can work if you're delivering value, making it. You scale with them. You don't have to sign a $60,000 plan to get started. But yeah, I wish everybody could start with best in class tools. So, it's a trade off.

Jacob Eiting:

Mission for us, David.

David Barnard:

When you're really early on, you can't always start with best in class tools. But it's cool to hear that you're actually still using Firebase. That's something a lot of folks start out with and then eventually move on to a mixed panel, an Amplitude, a Segment or something like that. But at least there are tools like Firebase where maybe, they're not best in class at everything, but they're good enough to take TalkingParents to $10 million in ARR.

Vince Mayfield:

Absolutely. I think the key thing there for those that can't necessarily get the best in class in the beginning, because you can't afford to do it... It is follow good software engineering techniques in the way that you can actually pull stuff out as you go. Because the app you are when you're in your first year, versus your second or third year, you're going to iterate several times. If I had a dollar for every time we changed around technology or did something... I think that was the benefit of us going back and re-engineering it in the first place was, it allowed us to do that quicker.

Vince Mayfield:

I'm not saying it's not problematic. It is. There's certain paradigms that we haven't been able to pull out. But we were able to integrate certain things in and then switch them out, because we designed them properly, so that if we had to go from one transcription service to another, we could. If we went from one video provider to another, we could. What some founders do is, they get in a big hurry. It's hurry up and get it to market as quickly as I can, which I understand. But at our point we already knew that we had a market and a fit. And I think as we were going through, we were making sure that what we could do would scale and that we could change things out as we moved along.

David Barnard:

We do need to start wrapping up, but I wanted to do a quick lightning round, because I think you have some really insightful points here. With TalkingParents, I know customer service is super important and I don't think enough apps take that super seriously. Give us the 90-second, why do you care about support and then, how does that actually translate into how you run your business and how your customers respond?

Vince Mayfield:

Well, I'll say first and foremost that I think that every experience that somebody has with your brand sets a mental image of who you are in it. And so, if I'm going to charge a premium price, then they need to have premium support. One of the things that we've done that I think is absolutely important to us... And we didn't do it in the beginning and we've only been doing it in the last year and a half, is that on app reviews, we go in and reply to every app review with a human response. Even if somebody's complaining just to complain or they're complaining about their co-parent relationship or something. It has nothing to do with the app, but I want my people... I have my marketing team meets once a week with my customer experience team and they respond to all of those.

Vince Mayfield:

Obviously, Google gives us less characters than say Apple does. But people then feel like they're heard and you're not writing it to answer just that person. You're writing it for everybody that comes behind it. And if you've got a thoughtful, reasonable answer that empathizes with that particular person, then there's more of a chance that they're going to come back and they're going to think highly of your app. I would say we do the same thing with our app. It's email support only right now. But one of the things that we're thinking about doing for our higher tiers is giving a phone support. If we do that, we will add that in and treat it with the same care. So, our thing is about radical focus on the customer. Because again, as I said before, they're the ones that are paying us for the service. And so, if they feel like they're heard and that we're listening to them, they're going to continue to stay on subscription with this and we're going to have great retention rates.

Jacob Eiting:

It's amazing. David, this is the whole point of this whole project, people making software that helps people and then paying for it. It's the dream. That's all we want. It goes back to the, "Your customer is who pays you." It's true. Reflecting on what you said, Vince, about our own support, we provide email support to anybody. You just signed up, you'll never make us a dollar, all the way up to our biggest customers. Obviously, there are some gradations there and we adjust resourcing depending. But, we always want to get back to people within a few hours, no matter if they're lost and trying to figure out how to do it.

Jacob Eiting:

The reason being is, because it goes back to what you said, it builds that brand, right? It's like we're establishing a relationship with a community of users and how you react to them and how you're able to treat them, whether it's visible or not, or whatever, they'll tell their friends. Really matters and really compounds, especially when you're serving, like you guys, a somewhat niche community. You have to maintain that. People have to have a high NPS of TalkingParents if you want your business to take off in a community where people are probably exchanging information a lot. So, it's why I don't look at the unit economics. I don't want to know. Right?

David Barnard:

Yeah, you were talking earlier, Vince, about making sure on tooling that unit economics. Again, I think too many apps sleep on how important customer success can be to building a great app business. I think it's really great. That's a huge focus for TalkingParents. And even if it is a "money loser" in the hour by hour unit economics, it's not a money loser in the long run. So, it's really cool that you're focused on that.

Vince Mayfield:

Yeah. I consider it table stakes, if you're going to-

Jacob Eiting:

Cost of doing business, right?

Vince Mayfield:

Yeah. It's a cost of doing business. When we hire people, we try to look for people that have a lot of empathy. Because, it's a tough job to answer-

Jacob Eiting:

I can imagine-

Vince Mayfield:

To the general public...

Jacob Eiting:

We complain about iOS developers sometimes being cantankerous and whatnot. I can't imagine people already potentially where they're coming from, why they ended up in that app. And then, they're having a frustrating moment. I've got to imagine your customer experience team has to be a very special kind of person.

Vince Mayfield:

Yeah. I think there's an altruistic nature to all of us here because a lot of the people in the company are co-parents, and so they understand what it's like to be in that environment. We want to make co-parenting better. We want to make people's lives better. There's an altruistic notion to this. Obviously we want to make money, we got to do that to stay in business, but we also believe that our app is delivering value that makes people's lives better.

Jacob Eiting:

Ultimately helping kids, right? In a potentially tough situation.

Jacob Eiting:

You made me want to, you guys have any jobs open?

Jacob Eiting:

I'm excited. It's a good mission.

David Barnard:

Yeah. Speaking of that, actually, do you have any jobs open? We need to wrap and if there's anything else you wanted to share as we wrap up?

Vince Mayfield:

Well, we're always hiring. I have a thing that I'll always be hiring, looking for good talent, good people. So, I would love for people to come check us out at talkingparents.com. We try to find a spot for good folks, if we can make it work and from the economic standpoint.

David Barnard:

Awesome. Well, Vince, thanks so much for joining us. It was a fascinating conversation. Fascinating business. I got to talk to you for an hour and a half before the podcast and just such a fascinating business. Really great, all the insights that you shared today. So, thank you.

Vince Mayfield:

Thank you. I appreciate both of you having me on today. I'm honored. Like I said, I'm a long time podcast follower. I hope when I get to go back and listen to this podcast with me on it, I don't go, "Man, I sound like an idiot or something."

Jacob Eiting:

Well, at least the audio quality is perfect. So, you've got that nailed.

Vince Mayfield:

Good.

Jacob Eiting:

I can't guarantee that, right? What you'll think of what you said. But, the audio sounds great.

Vince Mayfield:

Awesome.

Vince Mayfield:

Thank you, Jacob. Thank you. Thanks David.

Jacob Eiting:

Thanks

David Barnard:

Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by chat.subclub.com to join our private community.