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How to Reduce Churn With Strategic Pricing

Peter spoke with Sean Tepper, Founder and CEO of Tykr. Tykr is an all-in-one stock screener and educational platform, created to empower investors at every level. Whether you’re a beginner or an advanced investor, Tykr simplifies the investment process, making it accessible and confident for all.

Expect to hear:

  • The evolution of Tykr, highlighting its shift from a traditional business model to a successful SaaS platform.

  • Key lessons on pricing strategies for SaaS businesses, emphasizing the importance of multiple pricing tiers and the magic of the $99 yearly price point.

  • The significance of customer feedback in shaping and refining a SaaS product.

  • Introduction

    Peter Loving: I’m here today with Sean Tepper from Tykr.com. Sean, thanks for joining me today. Could you take a moment to introduce yourself? Tell us a bit about who you are and what you do?

    Sean Tepper: So first off, Peter, thanks for the invite, really appreciate it. My background is about 20 years in business. I’ve had some successes and probably more failures than a success. But going back to the 2000s, my first business was, was an agency model, essentially building websites and software. Even did some video services for small and mid sized businesses. Did that for four years. Went through a merger in 2010. And it wasn’t like, hey, here’s a million dollar cheque. You can ride off and do whatever you want. It was none of that. It was all debts and liabilities wiped clean. So it was a fresh start. And I knew at that moment the business I wanted to create next, which was SaaS. So I was looking at like Salesforce and Mailchimp and Netflix and I’m like, I want that. However, I didn’t have any good SaaS ideas that really had a wide moat. In other words, see really a strong competitive advantage. So, path of least resistance. I decided to go do corporate contracting for some large companies and I planned to do that two years. That turned into twelve years. Takes a little longer to come up with a business and actually execute and make money at it.

    Sean Tepper: But in parallel to that, I got into investing. And long story short, I’ll keep this really short. I tried angel investing, which is investing in private companies, and made some money, lost some money, but it was like five years break even. I’m like, I could be doing this 30 years and make no traction. This is stupid. So I decided, let’s flip to the public market, stock market. And I was able to, with a little help from like Warren Buffett, Charlie Munger, even a guy by the name of Phil Town, created an excel sheet because I wanted to wait. Think of it like a green light, red light decision making process with buying stocks. There’s so much noise out there on YouTube and Twitter and Reddit. Everybody’s talking about this stock or that stock and it’s like, you have no idea what truly is a wise investment. So I’m like, I want to cut through the clutter and just get rid of all the noise. So created an Excel sheet, started making returns in the market between 15 and 50%. It was actually closer to that. Did that for four years. I’m like, I’m going to be the guinea pig on this Excel sheet and use my own money.

    Sean Tepper: Not just one year, but multiple years. So I did it. Four years brings us to 2019. And I started sharing this in Excel sheet with a few other people, retail investors like myself, also some institutions, and everybody was like, hey, you should consider turning this into a software. So it’s essentially a ten year journey. Nine years where it took me to come up with a SaaS idea that actually has some product market fit from a theory perspective at least. So it took about a first year to build the platform. We went live in 2020 and then it took six months to get the first paying customer. You guys know in SaaS like you’re never going to get your first paying customer. So I knew that. I just went out there seeking about 100 customers for free. You get to use the platform for free, however, I want your feedback and I want it fast. We’re not going to sit on this forever. So let’s talk through it. So yeah, we went live in 2020 and then today we have a little over 8000 retail investors in about 50 countries.

    What is Tykr?

    Peter Loving: Fantastic, Sean. So Tykr is say an investment research platform to help private and institutional investors make sound decisions for their investment portfolio.

    Sean Tepper: Yeah, the model, the simplified, is a screener and educational platform all in one. So it’s like if you’re looking at Tesla or Apple or Microsoft, Nvidia, you will know in seconds is that a strong business? And then you’ll know the why. Paired with that is like how to invest. Like how do you invest your 1st $100 or when do you buy, when do you sell, how do you reduce risk? It kind of walks you through the process. We kind of phrase it this way. You want to be using your broker to buy and sell stocks like in the states, like popular brokers are TD Ameritrade and Robinhood. Think of your broker as the car. TYkr is the gas or if you drive electric, it’s the electric. So you need to put them together to be a strong investor.

    Journey of building Tykr

    Peter Loving: Yeah, that sounds great. So hey, I’m interested in your journey building Tykr and one of the things that you mentioned was how you go through the process of defining and building what that product is. What have you learned along the way in your journey of defining and building the product?

    Sean Tepper: Yeah, so this goes back to my experience working for large companies. You don’t have to be like the smartest person in the room and come up with a great idea like Facebook or Netflix, you know you could go down the list, you need to put that weight on your customers in a good way. So you go to your customers and I learned you have to be talking to them. And then like getting emails and using emails, going back and forth, that’s fine, but that’s really not good enough because you want to be jumping on calls. Now, thankfully, in today’s day and age, you have Zoom or Google or Teams. You can efficiently do multiple meetings per day. So I told myself when I was launching Tykr, I need to be talking to somebody every day. I can’t skip a day. It’s going to be every day. And I wasn’t always able to do that. But Zoom calls understanding what is the why. And you guys out there, you maybe read the mum test. There’s a few other books that are in the same vein of this. Don’t ask questions such as, do you like my company? Because your mum is going to be like, well, yeah, I like your company right.

    Sean Tepper: What you want to do is ask what platforms are you using and paying for? And why do you keep paying for those? Like if you can drill down to that field back to any and understand that, then you can incorporate those features into your business to make it sticky. So again, you’re putting the weight on your customers in a good way.

    Advice for starting your own business

    Peter Loving: Yeah, that sounds a really great way to get the insights to help you build that product. And then I also heard you talk about how startups, particularly things like building tech, are not necessarily for everyone. So did you have any advice on that for people considering building their own SaaS or starting their own company?

    Sean Tepper: Yeah. So in the tech world, I’ve built other businesses and again, I’ve had some failures. And anybody out there can really start a service, business or agency, and that’s fine. Do it because you love it and it’s a lot easier. You don’t need as many customers and you don’t need a site selling for you or platform selling for you, which means you have to be good with copywriting like it’s you like, hey, I can do this landscaping for you, I can shoot this video for you, I can build this website. That’s a lot easier. Tech is a different animal and you got to be hypersensitive to human emotions, especially if you’re B to C, which is what we are, B to B is like, there’s got to be some conversion with copy and you don’t need as many customers, but B to C, you really, because of the price point, you need a lot. And with that, it’s hard work. It’s using data, it’s using logic, but it’s also relying on business experience. And I found that you’re going to go three to six months with, if you have partners in your business and you’re going to find out if they truly have what it takes.

    Sean Tepper: So my recommendation is always this, go at least a year and don’t sign any contracts. You will establish a business, one of the two of you, to run the financials through that business. But it’s a handshake agreement, profit sharing, to really determine who has what it takes. Because in most cases, I’d say 90% of the time, your other partners, and I’ve seen this, I’ve been in business a long time, 90% of the time, they’re not going to have what it takes. Building a SaaS or tech business, it is work, and you’re going to go probably longer than you expect to even make money.

    Defining the best pricing strategy

    Peter Loving: Yeah. Okay. So it’s good to know. Good for people to know that at the outset. And then one of the other things that’s difficult when you get your product working and you’ve got your features in there and you’ve validated it. Sean, I know you’ve had an interesting journey on pricing. So have you defined your pricing strategy to find the right fit?

    Sean Tepper: So a lesson learned. I’ll share this with you guys. We originally launched with one pricing tier was either monthly or yearly. We’re looking at headspace, for example, like, it’s a low touch B to C. SaaS remove the decision fatigue. But the problem there is, if you have a business where you’re adding more third party features that customers really want, you’ve pretty much coded yourself into a corner, which means now you don’t have any way to scale, and you’re going to be incurring a lot of costs to put everybody into the same tier. So I highly recommend this. Whether you’re B to B or B to C, SaaS create three pricing tiers. Keep it really simple. And just some lessons learned here. And I have to thank a guy out there by the name of Jason Cohen. You can look him up, but he did a lot of research on SaaS, especially B to C, and this can apply to B to B as well. But where do you start with your first pricing tier? And there’s some magic moment. With a price of 99 a year, most people will pay that and they won’t churn out.

    Sean Tepper: We had prices that was like 250 and 199. And when we went from that price down to 99 a year, our churn almost overnight went from like 11% per month to like 6%. And now we’re about 5%. Those people will pay it B to C platform, even low touch B to B start at 99 a year, which should be about a three month discount off your monthly. And then you want to create a second tier that push the envelope, make it a bit more expensive. I think it’s 15 a month or 99 a year. We go up to $50 a month. That’s sizable jump. And then go a really big jump for the third tier, a price that you think nobody will pay, but just do it because watch, you’re going to get super fans that want it, they’re going to take it, they’re going to support you. So we’re $200 a month at that third tier. Guess what? People are paying it. You’d be surprised. So don’t be afraid to really charge a lot. But that first tier, make it low touch. 99 a year seems to be a really sweet spot. If you’re ever in question, like, what do I charge?

    Sean Tepper: Seriously, the guy’s done his research. Jason Cohen, that price works.

    How to follow Sean and Tykr

    Peter Loving: That’s really good to know. I know that people struggle with pricing and adjusting different prices and knowing where that should sit. So that’s really good tips. Sean, thanks so much for sharing your journey and experience and insight with us. Is there anything people can do to follow you or more about Tykr or try out even?

    Sean Tepper: Yeah, Tykr. So you could try this out for 14 days. No credit card, just get in. Test drive. We like to say, like, test drive the car, see if it’s for you. So you can go to Tykr.com. You can also go to my YouTube channel. I’ve got a bunch of free content. People can learn about investing and stock reviews and stuff like that. And then I have to say this. I always say this. I could talk about Tykr all day, but don’t ever take my word for it. Don’t even listen to me. I always say, go to our trust pilots and see what our customers have to say. We’re really proud to say we’ve got a 4.9 out of five. We’re the highest in the fintech industry.

    Peter Loving: Oh, fantastic. I know it takes a lot of work to get that, so that’s quite an achievement. Hey, great. So thanks so much, Sean. Great to speak with you and thanks for being here with us.

    Sean Tepper: Yeah, thanks for the invite. Appreciate it.

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