SaaS Interviews with CEOs, Startups, Founders
How He increased ARPU from $50/mo to $800/mo with one simple change
05 Aug 2022
Chapter 1: What is the main topic discussed in this episode?
And so when you look at the total revenue mix today, I mean, look, if you have 65% of your revenue is B2B and your current B2C or your lower ARPA model is 1.82 million revenue, that means you've got another 2 million on the B2B side. So are you guys sort of around like a 4 million run rate today, something like that?
Yeah, we're around like 4.2-ish.
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Chapter 2: What is Crystal and how does it function?
It's like a big Excel sheet for all these podcast interviews. Check it out right now at GetLatka.com. Hey folks, my guest today is Drew D'Agostino. He's the founder and CEO of Crystal, specifically CrystalKnows.com since 2015. Backed by Salesforce, HubSpot, and other investors, he was Forbes 30 under 30 in enterprise tech.
He's author of Predicting Personality, How to Use AI to Understand People and Win More Business. He's a classically trained pianist, pilot, and distance runner. Drew, you ready to take us to the top?
Yeah, let's go.
All right. So what is Crystal Nose for folks that are not familiar?
Crystal is an adaptive selling platform. So we use personality data and other behavioral insights to help people connect better with their customers and communicate more effectively. So yeah, we've been around about seven years now.
Are you selling to an e-commerce brand trying to identify consumers or like a B2B brand that's looking to identify new business customers?
We've got customers all over the place, but
primarily b2b and if it is consumer it's consumer like very high ticket consumer items really high touch sales processes which are like very relational so not so much transactional or e-commerce or anything like that so should we think of this like i mean it's not cookie oriented data or maybe it is it's more like first party more like a bombora sort of style tool
Yeah, in that lens, it's adjacent. It's not competing with tools like that. So Crystal is dealing with behavioral data and specifically like predicted behavioral data. Give me an example. So there's a lot of information out there about people.
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Chapter 3: How does Crystal use personality data for sales?
Yeah, so there's a difference between self-service customers and Crystal's free user base. We've got a massive free user base. It's about 30,000 to 40,000 people, depending on the month, who sign up monthly for our product. And they go through the motion of filling out personality assessments, downloading trials of our tools. There's a lot of things you can do in Crystal for free.
That's still the main funnel for our enterprise business. But there is a segment of those who have signed up for... different types of paid subscriptions we've had over the years. And I mean, if you were to add them all up, there's probably been something like 18 to 20,000 of those paid customers for some crystal product. Some of those have been recurring.
We've also had non-recurring products in the past. So of those, that's kind of like the low hanging fruit for us. So we can either look at the current customers, also revisit the ones who have had a, you know, individual subscription in the past and start rolling out in like a marketing qualified lead flow to find out opportunities. So we're kind of going at it
The good thing we have is seven years of experience and seven years of a giant funnel into Crystal. What we're not so good at is really efficiently identifying those opportunities. So that's one of our big priorities this year.
Andrew, so how many folks are still paying today for that self-service tool? You know, 600 bucks a year sort of deal.
I'd have to get the updated count, but it's definitely more than 3,000. So it's more than 10x the enterprise customer base in terms of just number of users.
So that's still, I mean, 3,000 times 600. What is that? That's like $2 million of ARR right there, right?
It's still a big chunk.
Yeah. So how do you... I mean, you mentioned you shut it off and now B2B is 65%. What does shut off mean? Do you stop servicing them? Let them turn off? What does that mean?
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Chapter 4: What shift did Crystal make towards B2B sales?
What should people expect to see in your slide deck?
Yeah, I've always thought that you shouldn't go speak in an event unless you have something to say. So I wanted to actually, I'm glad we actually had an interesting insight from the last couple of years.
Chapter 5: How has the average customer payment changed over time?
I think the most helpful thing for me was getting out of my security blanket, which was our self-service business. and leaning on a sales team and letting my sales and customer success teams do what they do well. And ultimately figuring out that we could increase our LTV from around roughly 500 to 2000 total. And that's across the whole customer base.
That's because the LTV between our two businesses are vastly, vastly different. that's, um, that was the main insight. So being able to in 18 months or so, or maybe a little more than that, it might be, it might span a two year technically span, but going total L total LTV from like 500 to 2000 has been a really big insight for us. And that's just going to keep improving.
I'm trying to accelerate that by just making sure most of our new customers are all coming in this like 8,000 and upside. And, um, we're kind of continuing to just let the self-service business sit in its current form.
Guys, don't miss Drew's presentation. Don't miss his presentation. It'll be on Friday, September 2nd on the main stage at 2 p.m. And the title is Life After Freemium, How They Killed Their First Business Model and Built a New One from Scratch and Increased LTE by 400%. It'll be a good one. Drew, let's wrap up here with the famous five. Number one, favorite business book.
How to Win Friends and Influence People is probably still, yeah.
Number two, is there a CEO you're following or studying?
A CEO I'm following or studying? I think, I mean, I read Jeff Bezos' investor letters, probably trite at this point, but I read his investor letters pretty frequently, so I'd have to say him.
Number three, what's your favorite online tool for building crystal? it's google apps yeah yeah me too number four how many hours of sleep to get every night try to get eight okay and situation married single kids single okay okay no kids and how old are you 32 32 last question something you wish you knew when you were 20 i wish i knew
I wish I knew that I was actually capable of being technical and also learning classical music. I used to think of myself as a total creative and I just was not capable of learning technical skills. And I learned that I am, so.
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