Scaling Without a Marketing Budget — Mike Overell, ClassDojo

[00:00:00] **David:** Hello, I’m your host, David Barnard. With me today is RevenueCat CEO, Jacob Eiting. Our guest today is Mike Overell, Revenue Lead at ClassDojo. Having founded his own company, as well as working at McKinsey and Lyft, Mike is now using that experience to help every kid on earth get an education they love, with ClassDojo. On the podcast we talk with Mike about building a principled, mission driven app, keeping product development focused on the right customers, and how ClassDojo scaled to tens of millions of downloads without a marketing budget. Hey, Mike, thanks for being on the podcast with us today. I want to kick things off with a short description of what ClassDojo is, and then maybe even a little bit about your story of how you joined. [00:01:05] **Mike:** Thanks David and Jacob. Great to be here. Big fans and happy customers of what you’re building a RevenueCat. [00:01:12] **David:** Thanks. [00:01:13] **Mike:** The simplest explanation is ClassDojo serves as a communication platform that connects teachers, families, and kids. Teachers anywhere in the world can download ClassDojo, start communicating with families, and use it during the day to do things like give positive feedback to kids, share photos, and they can do all of that entirely for free. For families it gives much better visibility of what’s happening with their kids during the school day. For kids this usually shows up as a monster avatar, which is often project projected on the wall of the classroom. That just makes parts of the classroom experience more fun and engaging for kids. That’s the functional explanation of ClassDojo. It doesn’t really explain the growth and insane love that we see from people who use the products all over the world. [00:01:58] **David:** Yeah, I’m I’m I’ll interrupt here. And Sam I’m one of those insane love people. I, my son was at some at, at another preschool with a terrible app. Just abysmal to use. And we moved preschools and not because of the technology, but for other uses and his new preschool uses class soda. And it was seriously like a breath of fresh air. That was one of the reasons I was so excited to have you on the podcast. It is like, it is genuinely a fantastic app. Would you just don’t expect in the education space? So yeah, I can see why you have fans. I’m personally a huge fan of. Excited to talk more about why that is and why the product is so great, but that, yeah, I’d love to hear more about the business. Like ClassDojo is kind of one of those things, like people who don’t know don’t realize what a big, great business it is. It’s like, you don’t know if you don’t [00:02:49] **Jacob:** Long it’s been around. I mean, I think it’s a decade now that Costco has been since founding or something like [00:02:55] **Mike:** Thereabouts. Yeah, the founders went through YC. she’s a good idol. Nine. but yeah, so I, David grateful, always, always great to meet happy users and grateful to your preschool teacher who had adopted a ClassDojo there. I mean it might help to step back the vision of the companies to, to give every kid on earth, an education they love. There’s been a deficiency in state one since the founders went through YC. the vision has never been something like to be the world’s best communication platform for schools. And so one way we think about that in the team is for the first six or seven years of the company is really about earning the rights to play for the first part of that vision, which is to, was to build a network that had the potential to reach every kid on earth. so if you fast forward today, you know, just seeing this insane growth we’re in the presence of 95% of us school. it’s almost entirely driven by word of mouth zero marketing spend. Costco is a brand that’s loved by kids and teachers all over the world. We’re in 180 something countries, all organically to so far today. And there’s something like 50 million odd kids who are active in some way on the platform. So when folks learned about some of those stats and they hear that the team is only a hundred people, it often raises a few. [00:04:11] **David:** Yeah, absolutely. And I was curious, cause I’ve seen that stat, I think, on the ClassDojo site, how do you measure the 95% penetration in us schools? [00:04:22] **Mike:** Yeah, that those are, schools in which we, we have at least, or we know at least one teacher is, has adopted and is using. Yeah, I think that’s probably one of the defining differences with ClassDojo versus many other products in this category, which is, you know, we’ve taken an entirely, consumer focused growth approach. So all of the growth has been user led bottom. typically a teacher will adopt the product and it will spread or expand within the school compared to the more traditional B2B enterprise SAS approach for many other companies in the space, which is to try to sell in at the school level or even the school district level. [00:05:02] **David:** Yeah. So how do you balance that tension? You do need to kind of appease administrators that, you know, there’s security and that, you know, there’s not privacy issues or whatever, but then you need to like actually build for, I guess the parents and the teachers, but then also, like there are features for the kids. So it’s like, you’ve got a lot of like stakeholders. You’re kind of like juggling competing interests. How do you. Think about that from a product standpoint. And then again, like getting back to like, it’s just a fantastic product. How did you build such a fantastic product? Like having to like appease so many people using the app? [00:05:42] **Mike:** Brian. Yeah. I think from day one, the team sort of like, as on who’s the user of the product and who’s the customer of education. And I think we just took a philosophical belief that the customer and end-users of education, our kids and their families, it’s not schools that the school system. So I like there were a few implications of that approach. The product was entirely free and remains free for teachers anywhere in the world to use. we’ve we’ve said and continue to say it’s, it’s completely free products for schools. So there was literally zero monetization for the first six or seven years of the company’s existence. and then product teams and the entire company, your gutter out, how do we bring to lives to end-users like in day-to-day parts of their journey using the product? So there’s like a lot more nuance in terms of how we balance those competing user needs. But I think the main principle is that we see the users and the customer has kids and teachers and families, not as the administrators who are very important stakeholders for us, but not the primary. [00:06:48] **Jacob:** I would say, even though, even just those two stakeholders, so parents and kids, right. Uh that’s that’s got to make it an interesting challenge for your product teams and, maybe even so go to market, but it seems like your, your primary in terms of monetization, like your buyers, then the parent, right. It’s not the teacher necessarily, right. [00:07:06] **Mike:** Correct? Yeah. Yeah. That’s this like iCore, one of our core revenue principles is, you know, consumer over enterprise. So the Friday’s is trade-offs. But very much trying to build a consumer led, products and a business on top of it. [00:07:22] **Jacob:** Yeah. I mean, I think the, the of mentioning before the call a little bit, but like, I think that probably plays into a lot of the, the quality of the product, if you will. Like, if you look at. It sounds a bit in reverse, but if you’re, if you’re having to win, not just. Administrators approval. Right? When buyer’s approval, you have to try a lot harder. The product has to be better, or because you need to win thousands of people’s approval. Right. And like retain them and like get teachers to like tell their friends about it. Right. You have to try a lot harder than if you have. I’m sure. The preschool software that David was referencing at the top of the call had a really great sales team and an okay. Products and they made it happen. Right. And then they only had to convince one person to sign and send the check and do the fulfillment and all that stuff. and then you just have this, like buying processes, misaligned with the consumers of the software, which obviously the kids are not the buyers. Right. But they’re. Acting in their agency, right. Or age as agents for them. which we generally, as society has accepted. Right. So way, to, give agency to kids, but like, but yeah, I, I very, it feels like this is very related things right through the product ended up, I ended up good. And also because you brought it into the people using it, not necessarily to the people who would buy in a traditional environment, [00:08:37] **Mike:** Yeah, a hundred percent. And I think the product is It needs to be good in order to continue to earn the right to serve as end-users. so I think probably that is an outcome of the, you know, the design choice we took very early on in deciding who we were building for. [00:08:54] **David:** I’m curious, you know, having used the product myself, like you pretty much daily, it’s fun getting to ask like more specific product questions, you know, don’t always get to, but, there are kids features in the app and I actually wasn’t as aware of those until recently. I’m just, I’m curious, like how those have gone again. Cause it’s like you really, as an app kind of tackling a lot, like there’s kid focus, features, there’s teacher experiencers, parent experience, I’m curious, kind of the thought process and even how things have gone with the more kid focused portion of the. [00:09:32] **Mike:** Yeah, that’s, it’s something that most of our product teams are thinking pretty actively about in one way or another. if you go back to our vision, the only of those user groups, there’ll be mentioned in the visual these kids to give every kid on earth, an education they love. and I think frankly for the first few years, while we were building the network, Were probably doing the least to serve kids directly. We were trying to access and serve kids by, building presence and serving the teachers who were leading the kids and serving the families who supported the kids. Yeah. so there, there are a handful of kid focused features. There is a student login section of the app, probably the most like fun and engaging part of it. And it’s where we see kids building strong emotional attachment with ClassDojo, because I mentioned every kid is represented with. Like the cute little monster avatar. and they constantly, there has a monster it’s called the it’s called mojo mojo shows up in the product in a bunch of different ways, but every kid user can create their own monster and customize parts of their monster to represent their own identity. And you obviously see these sorts of behaviors and loops happening on kid-focused platforms everywhere across the internet. We see it very actively and why one reason it’s so powerful for kids is it gives them a sense of agency and identity. And many kids are sort of making their own choices within ClassDojo around how they want to show up in class. And then if they’ve made a change that changed the eyes or the face or the costume upon their mind, And they show up to school the next day that’s then projected on the wall in the classroom had. And so there’s this really interesting sort of it’s a virtual product loop, but it shows up in the real world in the place where kids are spending, you know, six, seven hours of the day. So it creates this really interesting sort of emotional attachment, from kids with their own avatar. and honestly just makes it a really fun place to work. I’ve got two young kids. We don’t use ClassDojo with them, but they can come and see what I’m doing in the morning. And, daddy’s friends at work, create monsters and that’s just like, you know, a fun sort of, it’s a fun way to how it shows up at home. [00:11:43] **David:** Yeah, that’s really great. when you were kind of first kicking off this parent monetization strategy, I imagine there, there was a lot of thought that went behind it. Maybe even some testing. What did that look like? Like how did you. Launched that strategy. So I came on, you know, just in the last nine months, I think it was the fall, this past fall 2021 when my son went into the kindergarten. And so that was already fairly fleshed out from what I saw coming into the app. so I didn’t see the kind of before and after, but at sub, but I’m curious now, you know, having had such a good experience, like what product thinking and what experiments led you to building such a great experience for the parent around monitoring. [00:12:28] **Mike:** And so we’ve had about, I think we’re in about our third year of monetization with the demonetization journey as a company. the experiment started before I joined up with ClassDojo, about two years. I think philosophically the first, our first revenue product was always going to be some flavor of a freemium subscription. I know the team explored a handful of other sort of paid products, downloadable content, you know, one-off purchases and the like, but given the size of our network and, you know, I think our products, philosophies of, you know, continue not doing anything that would impede, continued growth of that network. There’s always going to be some flavored fruit, new subscription, but probably in the second or third iteration of that subscription. So today it’s called ClassDojo plus, that the main value that it provides, parents sees, it gives an upgraded experience on, on the core cost dojo, which we sort of gives them better insight and visibility into what’s happening with their kids through the school day. Previous flavors or iterations were a little bit more focused on, less on that sort of home to school connection. And maybe like the philosophy philosophically, the teams were looking to find ways to give parents tools that might help them raise good kids at home. so that’s still a part of the product, but it’s probably a secondary part now to the ClassDojo plus David, that you sound like you’ve exceeded. [00:13:53] **David:** Yeah, well, funny enough, I, my wife paid for the premium and uses it and I’m just on [00:13:58] **Mike:** Thank you. I’m great. I’m great. I’m grateful. [00:14:01] **David:** I see that there’s like a family sharing feature in there and I need to just go like connect our accounts or whatever, but I just haven’t gotten around [00:14:08] **Jacob:** David, don’t be cheap. Just give him another 10 bucks a month, whatever. Come on. You know, it’s worth [00:14:14] **David:** No it’s, I mean, this is something I appreciate about the product though. It’s like, it’s built in family sharing, which makes sense. Like if my wife is paying for our, our one child at this one preschool, like we shouldn’t both have to have a subscription. And so there’s a built in like ClassDojo, a specific family sharing feature. I just haven’t, my point was going to be though that I haven’t enabled it because. Premium and experience the free experience is so good. Like I haven’t. [00:14:44] **Jacob:** The last thing you want to hear a customer say? [00:14:46] **David:** Yet? [00:14:47] **Jacob:** Well, [00:14:49] **David:** No, I mean, that’s the thing [00:14:50] **Mike:** Yeah. [00:14:51] **Jacob:** Yeah. [00:14:51] **David:** I was going to say too, that, you know, all of this discussion too far about like building a fantastic product about monetizing that product or anything else. I haven’t heard a lot of talk of like AB tests and like, you know, that kind of stuff. It sounds like there is a little bit more kind of. Philosophy behind the decisions and like product thinking, DGL do AB tested. Do you run that kind of, those kinds of experiments to kind of validate some of your product thinking or? Yeah, what’s the process there? [00:15:22] **Mike:** Yeah, that’s a, that’s a really fun question. I think I can make a general statement is where a fairly try to be fairly principled in the way that we work both within product and elsewhere. So it’s often. Vision Doxil specs. We’ll start with what are the principles by which, where what’s the starting point here? As a product team, I came from lifts, which was, you know, a live marketplace it’s it was a heavily quite data-driven sort of products environment just by virtue of scale. I think one big surprise and learning for me at their ClassDojo is just how much more user-focused we were in our product discovery process. There’s a really healthy rigor from some PMs and designers of putting something in front of users multiple times a week, you know, shipping prototypes, getting feedback on designs, et cetera. but on the growth teams, I would say, very, quite driven by the data, what we learn in be to add other types of tests, working to ship at a very high velocity of experimentation, looking to find the winners and then scale them up now. Which is like, it was like a maturity on experimentation that was sort of pleasantly surprising to me. coming into the team that two years ago it was 50 people or a hundred people today, did like a really incredible sort of data and data engineering team. It’s enabled some with that philosophy. We can not put our teams [00:16:45] **David:** And on that topic, like how, how do you think about. Even talked about the specifics of, of what’s paywall and what’s not, but I’d love to hear what is paywalls and what’s not. And how you think, how the thinking behind building it out that way. [00:17:01] **Mike:** Hm. you’ll get sick of me saying the principle, but I think one thing we would, we would, we would never do is, I think we believe that the core sort of use cases of ClassDojo should always remain free, but with both for teachers here, We never want to pay walls or the business objectives to get in the way of core value that that all users are getting from the products or putting up, barriers that would prevent some users from, proceeding that value just because they don’t want to pay for premium products. So there’s probably one God rail is there’s like some core set of experiences that we would, we would never look to block or monetize [00:17:40] **Jacob:** Which is a, it’s a limitation that a lot of, I wouldn’t say your peers and certainly in the subscription consumer land, but, you know, I don’t know if you make whatever your app, if you can’t afford it. And it’s not all that serious. Right. But in this case, like if somebody can’t afford some feature that you put on the paywall, like that’s hurting people, right. So it’s, it’s definitely starting with one kind of one hand tied behind your back a little bit. [00:18:03] **Mike:** Yeah, so, so we’ve experimented with a lot. We’ve experimented, adding premium features. We’ve expanded. Sort of introducing some friction to the free experience that we think wouldn’t harm sort of too much, too much of the core experience. it’s a really fun sort of ongoing debate instead of experiments. We feel good about the mix of where we are today and, and we sort of hear that from users sort of qual and quantum, some of the sort of sentiment surveys that we’ve set up. but it is a really fun area of, you know, ongoing experimentation. [00:18:34] **David:** Yeah. I mean, it’s even kind of funny. I mean, we talked about this a few times already, but the fact that I love the app so much, and I’m a free user and my wife loves the app so much and she paid and, and like, you know, I’m assuming she, she experiences it slightly different than me, but it’s just really unique to have a product that.Is so loved even without having to pay. So [00:18:59] **Jacob:** W a very long time. I mean, he said monetization only started in the last few years. Right? Like it was, it was, which creates its own challenges. Right. When you are an app that has set the expectation that like, you know, this is a lot of people probably didn’t even think you were a business. Right. That was probably a shock. And now to like, try to introduce that, yeah, it’s definitely a challenge. Most apps don’t have to deal with. [00:19:21] **Mike:** That has been a really fun. And, I won’t say challenging, but like a very, we’ve tried to be thoughtful about the ways that we’ve introduced those, the concepts of monetization to our teacher audience. Yeah, teach it. And we really we’ve grown to the scale that we have because, you know, teachers start using dojo, they refer it to their colleagues and they keep using it year after year. So we need to be sensitive to never do anything that would breach that trust or that brand, you know, relationship. so I think there’s, there’s things we could have done a lot better over the last couple of years there, but it’s, you know, the teacher community is one that we do spend a lot of time, listening to. [00:20:02] **Jacob:** Yeah. I mean that there just has to be a lot of ‘em. So use the overused term leverage there, right? If you’re marketing or communicating or investing in teachers, right. They’re the ones that are going to then bring you to 20, 30 whole households or whatever it is. But I can also on the flip side of that, imagine that if you do something that causes a teacher to catch. Which they already catch all the time from teeth from parents. Right. that could be a moment that really flips. I mean, it goes back to the conversation at the beginning. It’s just like how having all these different stakeholders and like very different kinds. you know, for early for teachers, admins, parents, and kids. Right. And all have very different needs. And with some, some with like asymmetric risk. Right. if you, if you alienate them, but, but yeah, I’m curious, like what, like what do you, when you’re thinking about growth, right. And with, especially with that teacher community, like, how do you, how do you build a growth engine that works with them or like leverages that advantage you have. [00:21:01] **Mike:** Yeah, one of our, one of the big areas of investment for us at cost, the companies, what we’re thinking of as network growth is continuing to find ways to build that and drive that growth engine. and by that, I mean, like use it user growth and engagement, not monetization. the few big leavers that we’re focused on, one is international. We’ve had almost no deliberate focus on international. there’ll be something like 30% of our users are outside the us today. [00:21:31] **Jacob:** Does your, is your, do you have like content localized and stuff or, [00:21:35] **Mike:** We do have, translations, in parts of the core products experience, had a huge unlock for us. even within the U S was, you know, as a communication app, we can now we run, or messages and communications through a translation. Yeah. so there’s like a not uncommon experience in parts of the U S with it, you know, that there are parents who don’t speak English or they don’t speak another language with the teachers. And that’s a huge blockage to them understanding what’s happening with their kids in class, how they can best support their kids’ growth. Yeah, so it was like a very, very powerful and [00:22:08] **Jacob:** That that has to make you feel pretty good. Cause imagine that the outcomes for those kids if, the parents, the teachers, I mean, that’s, I mean, I’m just speculating, but if there’s a lack of shared language, teen educators and parents, like, there’s just gonna be. Probably, I mean, in my case is my parents can talk to my teachers that probably would have been better, but like, but I imagined her most kids, it’s probably a benefit, to have them be able to communicate. Right. Like, I can’t imagine that hurts outcomes. Right. That’s pretty fascinating. That’s just computers are great. Right. Isn’t that awesome. Sorry. I just have a moment. [00:22:37] **Mike:** Well, it takes a village and, you know, I think that’s a big part of what we would love for Diageo to be common in the lives of these users, these sort of the virtual village that brings together all of the stakeholders centered around. [00:22:48] **David:** Right. So you mentioned that the outset, that ClassDojo doesn’t spend a lot on marketing or anything, I think is what you said. So how do you, how do you leverage that teacher network? How do teachers discover the app? If, if you’re not specifically targeting them with. [00:23:07] **Mike:** Yeah, we, our marketing team is a pretty new addition. only in the last couple of years since I’ve been at the company. Right. so I think if you ask the question, you know, a couple of years ago, Most of the team would have said, the product experience is what drives growth. And we tried to craft parts of that experience with growth loops in mind, whether those were, you know, word of mouth loops or referral loops, but it probably started with the product experience. The, the one other big sort of pillar or sort of marketing area that has been really powerful for the team has been community. So we have really active groups, of, of that teacher community. we have mentors that sort of like a super tier of teacher who, who take on some responsibility to sort of train and support other users within the school. And then we have disciplined teacher communities, sort of in the plus a hundred thousand number, on Facebook. And if you jump on Twitter and search, there’s just like a bunch of love and, and sort of support the teachers share with each other. [00:24:19] **David:** So now that you do have a marketing team, w what, what are, what are their, what’s their focus to kind of start taking things to the next level? [00:24:27] **Mike:** Yeah, probably the two or three areas. one is classically called growth marketing. you know, and goals are around, you know, growing the size of the network. One of the key leavers there, we believe is, helping to accelerate the expansion of cost dojo within schools, where we already have one. So we count, we count it. We count our school is active if there’s one teacher, but the class size, your experience is so much better. If, if all teachers in the school are using it. And we see that show up in all the sorts of engagement, metrics and plan retention. so that’s a big one. we’re making big investments in brand. Brand is important. It’s been a, it’s been a really strong driver of growth for us, and we’re starting to be a lot more deliberate in terms of how, where. Telling the brand story and then driving some growth there. I had already mentioned it to national, but that’ll be a big, big focus for, for the marketing team. [00:25:20] **David:** When, when you’re your market is everything. Parent student and teacher in the us brand marketing actually starts to make a lot more sense. I mean, you know, brand marketing kind of gets, dragged on, you know, within the app growth community as being, you know, unmeasurable wasted spend sometimes, or, you know, wishful thinking. But actually it makes a lot of sense here. You’ve got a, a heck of a market to be, messaging to. So I imagine that’s a, a fun challenge to, to think about. [00:25:52] **Mike:** And I would say even, yes, and even more than that, the opportunity to build the defining consumer brand in education. Is is something that motivates us and we think is within reach. [00:26:05] **Jacob:** Finally, I feel like, [00:26:07] **Mike:** It does, there’s a brand. Does any come to mind? Yeah. [00:26:09] **Jacob:** Yeah. I mean, this has been the, the, you know, there’s been people trying to do this and ed, I mean, I elevate the combination to work. I previously was in ed tech as well. And like, I know how hard it is. Right? Like it’s, it’s because of some of the structural challenges with buyers, some of the just, I dunno, I think also just, yeah, all kinds of structural challenges in building in this space. So, but it’s, it’s kind of all things and consumer software and I would just say software in general. It’s that like, it’s not. If it’s when. Right. and maybe the, the moment for like a truly great, not, I mean, when you were talking about branding, I was just like imagining what the brand name for this, unnamed, crappy, management software from, the other preschool David’s referencing, but it’s probably called like learn SIS or something. And it’s like, you know, just like just the worst logo in the world. And then you think. You think about ClassDojo, you got this fun monster. Now you got monsters, whatever, and it’s, it’s yellow. It’s just like a school bus. Like it’s got this like very, you know, greens. Like the colors are very, you know, I, I I’m with David and it matters and it matters because you have this like balk to market into. Right. and, and, and you’re riding this wave. I mean, I don’t know. I’m, I’m not a big fan of, I mean, even in revenue, cat, I think like moving into an enterprise software sale has been a bit of a dry, like bit of a challenge for me to like, get excited about. Cause it’s just like, I like when, you know, people can pick tools and move really quickly. Right. And I think that’s what class does or does. Right. and maybe that’s, you know, probably a number of different things right. That are coming together to allow that to happen. But, yeah, I think it’s a really. It’s exciting time to, to finally see it happening. Right. Especially after, yeah, I looked it up winter 2012 was a ClassDojo is NYC. So coming up on 10 [00:27:51] **Mike:** Coming up on 10 [00:27:52] **David:** Wow. [00:27:53] **Mike:** Yeah. [00:27:53] **Jacob:** Yeah. [00:27:54] **David:** So with all these different stakeholders and, and, and growing among the teacher community, I was originally going to ask you a question about, and I still will about churn among parents and students where like, you, you have this, it’s kind of like Tinder if like the app is successful, like they’re going to turn out. But it dawned on me in this conversation that you’re really forming that kind of bulkhead amongst the teachers, more so than the parents and students individually. So how do you think about. revenue being dependent on parents who are going to naturally churn. but then kind of your bulkhead being amongst the teachers who, who might, you know, generally you’re going to teach for 40, 50 years or whatever that is. [00:28:41] **Mike:** Yeah, it’s a really fun and interesting question. Especially when we try to dig into some of our retention and renewal metrics to try to [00:28:49] **Jacob:** Your growth model is completely different from any other consumer app. Yeah. [00:28:53] **Mike:** I I’ve maybe. Yeah. Yeah. And on the teacher side, this was news to me, but, there is a surprisingly high turnover of teachers in and out of the industry. it’s something in the high teens of percent fact check me on this, probably wrong, but it was a surprisingly high number. And then on top of that, there’s some surprisingly high percentage of teachers who are shifting from one school to another from, from year. Which has a pro and a con for us, it’s a pro it’s sort of like a natural seeding of ClassDojo into new school environments. the con is often we lose that sort of one node in that school network with a teacher was previously in, [00:29:33] **David:** Right. [00:29:34] **Mike:** On the parents side, it’s really interesting. Cause you know, kids, kids get. And we have a sweet spot today. It’s under thirties under 13. It’s probably like four to five through to 13 is really our sweet spot demographic. And, you know, once kids age out, often what happens is they age into classes where the teacher’s not using class surgery, or maybe it’s just like less valuable because there are different needs that happen in the classroom. Like workflows, the ability to like download and upload the assignment as what exactly. So it’s funny, we haven’t found great ways to strip that sort of natural churn out of our subscription retention metrics. but we see we’re sort of surprisingly pleased even two or three years into my monetization journey, sort of what we’re seeing there and a sort of like 12 month renewal rates in sort of the 30, 40% range, before we account for a sort of what’s the natural channel of families, you know, off the platform. [00:30:31] **Jacob:** Yeah. I mean, if you think about it, like, I most likely there. You know, oh, not tens of years, but you know, upwards of 10 years of need from a customer that you can convince once. Right? So like you divide that out by what a typical consumer app churn is, might not have actually the natural churn is not going to be all that. Big in the equation necessarily, it will be a component and it’s probably more than some other apps might have, but, but you more than make up for it on just the stickiness and the fact that it’s, it’s a network to begin with. Right. Anything that has network effects, like where you’re communicating with other people is going to push in your direction. Right. Like, that’s going to help you. It’s going to just, I’m sure with your usage retention, it helps as well. Right. And so this typically correlate. and so how do you, I imagine that, Maybe more so than like the longterm of natural churn. I imagine, seasonality plays a big part in your Oh, yeah, like how do you live in that environment? [00:31:28] **Mike:** This has been true for the life of the company. This. This is mythical time of the year called back to school. And it, it starts around mid August and it goes through to roughly end of October. So it’s this two and a half, three month period that we have to start gearing up for in the middle of summer break. So there’s, there’s just folklore within the company of sort of the old ideas that the engineering team would be pulling just to keep the lights on. When we see these huge spikes. new user acquisition. well, before we even had revenue products, it’s probably when we saw 90%, well there, their bouts of without user growth in that very defined period. Finally COVID had was, was a real boost to us there. I don’t know if you remember, but all in a bit over two years ago, exactly. There was this weekend in late February, early March, where the world shut down over a weekend. [00:32:20] **Jacob:** Vaguely remember something. [00:32:24] **David:** I mean having four kids who are all in school at the time, I remember it. Wasn’t a speed bump [00:32:29] **Mike:** I’m S I’m sorry. [00:32:30] **David:** Lives dramatically. [00:32:33] **Mike:** And schools like click their fingers and went from in-person to remote overnight. And the schools weren’t equipped, certainly families and teachers weren’t equipped. but we just saw this, this enormous influx of user acquisition spikes in engagement, and it forced the team to, again, there were like mythical stories around just what our engine in for team sort of achieved in that period and just all hats off to them. But now forced them in some ways to scale up parts of our system that we wouldn’t think we’d have to do a do for 2, 3, 4 years. And so the couple of back to school spikes we’ve seen since then have been, they’ve been much fewer sort of late nights and cold sweats because we had to go through that scale-up experience. [00:33:17] **Jacob:** I mean, it’s a classic. I mean, you can just understand people talked about the COVID experience or like the COVID effects on markets and technology adoption is as not necessarily being like a spike, but more like an acceleration, right? Like you can, you can. Imagine the teacher or the school that like was scrambling, obviously didn’t not going to have time to go through some like, oh, we need a remote learning tool buying process. Right. And they’re like, Hey, like this app go to the app store teachers like, try it out. You know, sh I I’m not, I don’t know if that happened, but you can imagine. I mean, it goes back to. Just why this is a better way to buy software in general. Right? It’s like when the users can pick it up, it’s off the shelf. It’s like, let the computers be free. I mean, there’s, there’s reasons software gets bought at the enterprise level. for sure, but I don’t know if they’re necessarily a good reason. They’re just some way it is. Right. [00:34:07] **David:** Yeah. I mean, so many of the great SAS products of the last decade have been bottoms up, like, you know, Dropbox, slack nappy, or like a lot of these it’s like it came from one employee being able to adopt it, see the power and then push it up the stack. Yeah. [00:34:24] **Mike:** Big believers in, in bottom of bottoms up growth. you know, we, we, we still have companies like slack still have to solve the, you know, challenges like data security and privacy and some really complicated, hairy areas. and that’s true with this space, maybe even more true. given the sort of the age brackets we’re working with. [00:34:41] **Jacob:** Yeah. I mean, the, having the one to one advantage that cost soldier has, I think that does not like, is not true for most other like random consumer. Well, I mean, if you talk to some of those examples, like a slack, right? Like that’s something where yeah. Some, one person brings it in and then it has a network effect. Right. and I actually wonder if. app, you know, random app developers should consider, like, do you have a network effect? Is there something you can build? And like, it’s, I mean, having make, share cards or something is not really what I’m talking about, but like, is there some way to really create connection within your app? Cause I mean, the fact that. Well, the fact that you haven’t, you know, when somebody says I haven’t had to spend a ton on marketing, it’s like, well, you have a really great products. And you’re like probably in some sort of market that you have some sort of market dynamic that allows you to not have to do that. Right. but those are often the. The best ones to have. Right. Rather than having to dump millions of dollars into like buy churn and then replace like, figure out like what’s, you know, in your case, it was like getting a teacher to make this, that make their lives easier so that they spread it too. And then of course there’s like the network of spreading within the school buildings. But yeah, it lets you sidestep this entire, you know, and now, now mentioned prince being principled. And I think that sometimes also is a luxury of a team that has like great product and a good market. Right. And like, you’ve earned it. Right. You’ve been around and lived it a long time. But, I, and I think like this will be my last like philosophical point promise, but, I mean, I think that’s actually kind of where we’re going with consumer subscription in general. Right? Is it, it does, like if we’re building apps that are truly value adding for people, right. And like, we’re truly, we’re not just like trying to get them in and turn them out, actually building something people want to use for a long time and allows you to be principled. Right. Because you can then like take a really long view. You can really think about, you can go back to that vision of like, Hey, like we’re doing this. To improve the lives of kids, right? Like, or we’re to improve education. Like we can have this very like long vision and you figure out the monetization and get it aligned just enough. and, and your, your necessarily, your whole company doesn’t necessarily have to be, become about like the growth part. Right. which I think actually is it’s important, but in balance. So then with my philosophy, [00:36:53] **David:** Well, I’m going to jump in here as a, as a user, but also because I think it’s especially interesting given everything we’ve discussed. We’re where does Classico dojo go from here? Especially product-wise like, what are you? I know you probably can’t share a ton, but I just love to hear, you know, what, what y’all are thinking and what direction you want. [00:37:12] **Mike:** Yeah. Yeah. I, you know, I mentioned that the F you know, the first spot six seventies of the company were about sort of the first part of the vision, which is building a network that had the potential to reach every kid on earth. then we talked about how kids, you know, of course the division is probably the audience that we have. Built the least for, up to now. so as we look ahead, I think one thing that we’re super energized by is, you know, starting, starting to deliver more on the second part of the vision, which is giving kids an education they love. And, you know, we’re not looking to replace the classroom, but, you know, we are seeing more and more of kids’ lives and our lives go, you know, virtual or hybrid virtual and, When we think about like, what are the limitations on kids’ education today? A big part of it is zip code. And what part of the world or the country, or the city that you were born in, or you live. And we were really excited about like the power of the internet and networks. Democratize and remove some of those barriers. And so starting to build more, learning experiences, you know, fun, online experiences, you know, hybrid, you know, learning that educational experiences, social experiences for kids. That’s sort of the broad thrust of the direction that we’re moving in from here. and it’s just a lot of excitement on the team to, be able to talk more about what we’re doing that. [00:38:32] **Jacob:** Have you, no, not to derail, but have you found. device access to be a limiting factor for kids. Like, I don’t know what the status quo is now. You know, parents obviously are going to have a phone. Teachers are going to have a phone, but to get to kit. And especially in that age bracket, it might be, you know, spotty and, they might have a school issue thing or something like that. What is, how does cost as you think about that problem [00:38:53] **Mike:** Yeah. So I don’t think we’re experts yet, but, you know, it seems like phones. That’s sort of coming in. It keeps getting younger each year, but it’s sort of like the ten, eleven, twelve, where phones really sort of start to spike the scary. they’d been tablets and iPads, have, have really come down in age and it’s maybe not that your average two or three year old has their own tablet device, but they tend to have access to a device. And it’s somewhere around those age brackets. I know for our kids, it was probably around two that we started to give them access to. But it was an iPad that was very carefully curated in terms of what contents, what apps, what experiences, but right. [00:39:33] **David:** You’re you’re, you’re probably just starting to experience this Jacob with your, your daughter’s age, but my four year old. Uses my wife’s phone a ton, which kind of drives me nuts. Cause he like rearranging stuff has randomly texted a few people, but like she doesn’t care. So like there is, you know, parents will pass off their device to the kids, even if they don’t have access, even if the kid doesn’t have direct access to their own device. So there, there is some level of access. but yeah, all my kids now have a mild, the old iPads that, that I did [00:40:06] **Jacob:** Sure. [00:40:06] **David:** Keep passing them down on to them. [00:40:08] **Jacob:** It goes back to those trends, right. It’s talking about like, why now? Right. And that’s another one of the things feeding this is that, that there’s been enough generations of phones and tablets that there’s hand me downs. Right. but, but I mean, we are going back to your question about zip code. I was thinking like, oh, well this is great. Like, you know, software’s very cheap and you can push it into, you know, regardless of the socioeconomic. Condition of a certain zip code. You can push it in, but device access might be, there might be other limitations, right? But like, those are problems. Like you can continually solve it. Like as you move further and further and, and achieving the mission, right. Once you have this platform and frankly revenue engine, right. To, to achieve those things, it’s, it’s pretty exciting. [00:40:47] **David:** And it’s crazy though, too, that that hardware has traditionally been a bigger limiting factor, but exactly to your point, like a decent Android phone that can run ClassDojo, well is like 50 bucks, a hundred bucks. Now it’s like the fire tablets are pretty good little devices for kids and they’re dirt cheap. So like, I mean, you know, for, for. Certain communities that might still be a barrier, but it’s just less of a barrier than It’s ever been. Was this pretty [00:41:15] **Jacob:** It’s going down and it’ll continue to go down, right? Like it’s not these devices that aren’t getting more expensive in the [00:41:20] **David:** Yeah. [00:41:20] **Jacob:** Most likely, unless we run out of the Tesla, uses all the [00:41:23] **Mike:** Yeah. I think not to get on the soapbox, but I think some, one thing we think about a little bit. I think we’ll evolve that thinking of, of, you know, binary screen time, good or bad as like a knit construct. And I think for some parents as much more nuance now there’s good times, good screen time or less good screen time. And there’s almost like a spectrum and it’s probably a few dimensions to that spectrum of outlet. How good you feel about your kids spending certain amounts of time, doing certain things on screens. and that’s certainly something that we’re thinking a lot about. Not so much like a screens good or bad, but what makes for quality productive time, engaging with a, [00:42:05] **Jacob:** Yeah. I mean, that’s probably a good, broader question for society at large as more and more of us just spend time in front of screens, but yeah, I mean I’ve yeah, the amount of. I mean, w w my daughter’s not the ClassDojo age certainly yet, but, there’s a lot of great apps at her age that are amazing. And again, I have no qualms. Like she learns all kinds of words, like all of a sudden, like, you know, I don’t know, right? Like this nuance take and sort of, also probably waiting on more research to come out and things like this is probably somewhat important as well, but, I’ll say anecdotally, like, there’s no, there’s no, there’s no stopping it right at this point. Like this, this, this technology and these devices are so powerful and cheap and everywhere that, you know, we should just expect and we need people to put, like, there’s so much garbage on these devices, right? Like, we need people to be building like ClassDojo and others to be building good content experiences, to like ideally have have choices because like, Yeah, you’re up against a lot of, folks who are, let’s say less principled that’s I think been talking a lot about principals, right. competing for kids, like attention on the devices. Right. [00:43:25] **Mike:** Yeah, well, Jacob, I mean, it sounds like you’re talking about almost like those single-player experiences and there’s like a spectrum of them that you are sort of more or less happy about, but once you introduce like the social or the interactive element with users at. Strangers on the internet, that’s like a whole other vector. And it’s one that we’re [00:43:44] **Jacob:** Oh, yeah, [00:43:44] **Mike:** Of time thinking about. [00:43:46] **Jacob:** Good. I got the internet when I was like 10 and like, mm, mm. Not looking forward to it. My daughter’s got a device with it already. She’s too. I mean, she didn’t own it, but she might as well. [00:44:00] **David:** As as you keep talking about like all the principal positions and how Princeton. You know, clusters or thinks about these things. I keep thinking, like, it’s great to have the Watchers on the wall. Like, like, I mean, seriously, like as you’ve described, ClassDojo is like thought process behind building this software. It makes me feel better as a parent, that there are companies out here, out there. Thinking in this way about the products, because exactly like take upset. It’s like, I see just so many apps that are more focused on, more focused on monetization, more focused on like, experiences that aren’t beneficial to kids, more focused on just other things. And, and aren’t very principled about how they approach those things. So it’s really encouraging. Here, how ClassDojo thinks about these things. So, thanks. Thanks for sharing that with us. I did, before we wrap up, I do want to shift focus just a tiny bit. so you ran a recruiting, I guess a recruiting platform for awhile where you worked with a ton of recruiters. And in the insane, hiring a frenzy that’s going on right now? I think a lot of our listeners are, you know, have funding and are trying to hire. So I just didn’t want to end the podcast without getting your thoughts on like how to hire right now and imagine you’re hiring, you know, you’ve hired a lot in the [00:45:21] **Jacob:** Your secrets. So that’s the thing, David, you get everybody’s, everybody’s clawing for alpha right now. So Mike, you should, you should, [00:45:29] **David:** Can you [00:45:29] **Jacob:** Bad advice. That’s that’s what you [00:45:32] **Mike:** Th this, this microphone that was playing out earlier. I think it’s just about to introduce a bunch of static. no, I mean, while it is a crazy market, for, for context, you know, probably spend 80% of my time this year on hiring and talent in one full. you know, w we’re a hundred people, but we’re aiming to be 200 within 12 months. I think two things, I mean, two things I think we’re seeing in the current market, it almost is like a competing dynamic. It’s exceptionally competitive for great people. and we’re also seeing a bunch of big companies that are in some ways, struggling in public markets and share prices are depressed. And so we are seeing movement from folk in much bigger companies. Who’ve maybe, you know, not feeling great about the future. to maybe to generalize takeaways, which I don’t think he’s giving away any super secret here, but For the people we talk to, this is almost number one reason or thing they caring about is alignment with mission, with purpose, with, with culture of the. And I saw this lift, like lift is a fairly mission forward company, especially compared to its main competitors. at Costco, that’s absolutely true. And with the mission individually going after it’s, it’s not hard to get people excited about the real world impact there. and the other maybe obvious one with everyone now working remotely or from a home office is geographic barriers or just spam. Within reason. you know, we’re a completely remote team, but we do limit limit within time zones because we think that sort of overlap within the working day and the ability to collaborate synchronously, even though video is still very important to build a great products and experiences. And. Solving hard problems. So we hire almost everywhere in us time zones. we have focused Europe is like, Europe is harder for us until we have, enough of a presence there. but if someone’s in the bay area or they’re in Boise or they’re in Peru, which is where some recent highs of ours came from, it almost makes no difference. [00:47:31] **Jacob:** Yeah. The, the, I love the, the mission and values and culture aspect of it. I think for anybody recruiting, I mean, we don’t, if, if, if somebody at this stage, if you have to go beyond, I mean, you should get your compensation and asset figured out, but if you have to go beyond the mission and values and culture, like. Especially if you’re a startup, like don’t push it too. You know, if somebody is not excited about this, I’m like, if that’s not enough to sell them, like, that’s probably a good sign that maybe this isn’t optimal. Right. because you know, and when you, I mean, and that’s going back to principles and just having, you know, have a purpose to your company. Right. Cause as you were alluding to other, some other large rideshare companies that I’m sure I can imagine, if, you know, you feel like your primary driver is. Or whatever, like, you know, it’s not going to be, why are you there? Right. Like you’re going to lose who you are really fast. So, anyway, it’s hard. Hiring is hard. [00:48:25] **David:** Do you have any active roles that you’re hiring for right now, Mike? I mean, it sounds like a fantastic company to work for. [00:48:33] **Mike:** I would not be doing my job if I didn’t give a plug, but we’re hiring leaders across almost every function, especially in engineering. We have a few hiring principals, but one of them is we tend to hire for talent over roles. We tend not to create a square shaped hole and then look for square shapes people to fit that hole. We tend to have some softer attributes and values that we really care about and the people we work with through a small team, small but mighty team. For the engineers listening, almost any metric sliced per employee would raise eyebrows. I’m sure we can leave some contact details in the show notes somewhere. We’re looking for amazing world class people across every function. [00:49:21] **David:** Yeah, we’ll leave links to your Twitter, LinkedIn, and then ClassDojo and the ClassDojo jobs page in the show notes. So, if you’re looking for that go to the show notes. Mike, it was so much fun talking today. And, again, spread the word inside ClassDojo that you have a huge fan in me. It’s genuinely such a breath of fresh air to use ClassDojo after the many painful experiences I’ve had with previous educational software. So, thank you for what you do, and thank you for being a guest today. [00:49:57] **Mike:** Thanks for having me, David, Jacob. It’s been a lot of fun.