[00:00:27] Jay: Hi everyone. Welcome to The First Customer podcast. My name is Jay Aigner today. I am lucky enough to be joined by Baird Hall. He is the co founder of Churnkey and a bunch of other stuff that we'll, go through and, some successful. And he's even maybe got some failure stories that would be great for people to hear, cause you can learn from that.

So Baird, thanks for being on buddy. How are you?

[00:00:45] Baird: Yeah. Thanks for having me. I'm excited today. It's 76 and sunny here in Charleston, South Carolina, which for late January is about as good as it gets. So excited about that. And also most of the podcasts that I do, I'm talking like revenue operations and demand gen strategies. And when my real passion is, Building companies.

And you know, there's nothing closer to the heart of building a new company. And you're trying to get those first customers up in there many times. The first 10 are the hardest. So, excited to talk about it.

[00:01:13] Jay: beautiful, man. I love that. yeah. So where did you grow up and was there kind of any influence on you being an entrepreneur, later in life?

[00:01:21] Baird: I'm actually fifth generation entrepreneur goes all the way back to a, pharmacy owner in Pineville, Kentucky. And, my dad, mom was actually a golf pro and has built a lot of different products and companies over the years, different training tools and consulting. So it definitely was.

Influenced on me early on. I've always seen my parents and grandparents, building companies successfully and unsuccessfully. It's just going through lots of different seasons in life. I was slow to it though, because I had school really slowed me down. I was so focused trying to do the right thing at school and going through that kind of general career path.

And so 27 when I started my first company, which I guess is still pretty young in the grand scheme of things. But in hindsight, I probably should have, Started earlier,

[00:02:06] Jay: I mean, I think that's plenty young enough, or old enough or whatever. Right. That's it doesn't, there's no formula for it, which I'm sure, you know, so, Walk me through, you know, what's the kind of condensed version of those five startups. You started the successful ones and then the not so successful ones.

And why were the ones, that weren't successful, unsuccessful?

[00:02:25] Baird: So the first product we tried to build was a social audio network. A lot of you all might know of clubhouse is kind of, this is the most recent version of this, which is, it's just live chat rooms where you can, actually, sorry, not live, but,we did just, Chat rooms with audio recordings where people could talk.

This was for sports fans. So the idea was to take the concept of arguing about sports in a bar and put it into a digital, mobile first interface. And this was definitely my idea as big sports radio fan. I wanted a way to engage with other listeners. And, I convinced one of my wife's, Husbands, sorry, one of my wife's friends, husbands to who was an engineer to help me build this first version, lost 30, 000 in savings.

Two years of time, we built a fun product. our users loved it. We had a really passionate thousands, tens of thousands of users that loved it, but we never sold, we never made a dollar. And it's because I created my idea and I put it out into the world and Yes, people loved it. And we had marketing and we had engineering teams and we actually never raised much money and we had all of these things that looked like a business, but it was a hobby because we didn't have customers and we made a critical mistake of building the thing first and then trying to reformat it into an industry.

So we tried to sell it to radio stations. Didn't work. We tried to sell it to a couple other audio groups. Didn't work. And to wrap up a long story is, we actually solved the problem of sharing audio on social media because we had this huge platform of audio content. You're not how to share it to social media.

Podcasters started seeing our audio sharing and they said, your app is dumb. I don't want it. How did you post this audio clip to Instagram? And that became our first successful business was a marketing tool for sharing audio to social media. So it was a really painful, first failure, but it led to our first successful company.

[00:04:20] Jay: That's beautiful. I love that. I mean, that's the pivot in a nutshell. what was the next one?

[00:04:25] Baird: We, so we built that to seven figures, recurring revenue. And, along the way, a lot of our podcasters that were posting clips of their show on Instagram, using our software, they wanted video captions included and every time we spec'd it out, it was too expensive. This was 2017 back when this was not a normal.

normal concept. So we decided, well, let's build a separate product where any video creator can caption their video easily. And then we'll use the API to power our other products. So it was a basically a standalone product to solve the problem for our customers. and that one turned out to be really successful too.

We, we grew that one to seven figures recurring monthly, or sorry, seven figures, annual recurring revenue as well. And they were kind of separate companies. But really similar, a lot of overlap, but different customers. those businesses were really high volume. We've got really good at inbound marketing and freemium driven growth, which meant that we had high churn all the time.

So now our latest company is a product to help subscription businesses reduce churn. So that's probably the quickest way. So there were a lot of zigs and zags in there. We actually had two other companies that didn't work out throughout that, but, that's probably the quickest way to sum it all up.

[00:05:31] Jay: Beautiful. And you were, you were like pre yeah. Pre like captioning being kind of the standard and like, I mean, descript I think is taken over a lot of that now with, and I mean, just the way you can edit video, with transcription is pretty. Pretty cool. So it sounds like you guys were a little bit ahead of the curve there.

So, who was your first customer at Churnkey?

[00:05:53] Baird: First customer at Churnkey were our other two businesses, which,

[00:05:57] Jay: That's beautiful. I mean, that's fair, man. I think for a serial entrepreneur, I've heard that before. how about the third customer?

[00:06:03] Baird: the 3rd customer was, a very similar. We knew the founder and it was a very similar business to the other 2. So it was in the social media content creation space product. and we went to them and just show them our results and said, Hey, look, here's what we built. And that was our first sale. So, you know, for all of these companies, honestly, my first sales were to acquaintances and friends and family, you know, not family, but friends, people I knew in whatever space I was working in because they were the, you know, they're the easiest to approach and you can be really honest with them and say like, Hey, I've got this thing.

It might be valuable. It might not. Can you help me out? Can you walk? Can I walk you through it and get your feedback? and a lot of our first customers have come through that. Yeah. like legitimately the first couple of customers. Now we quickly then start testing cold email strategies to people we don't know, because that's the real first test, right?

Your friends might be buying it because they like you and want to help you out. so then we quickly pivot to direct cold email strategies is how we've always validated our first few sales for these businesses.

[00:07:10] Jay: I love that. And do you guys, what do we, what tools do you guys use for that?

[00:07:13] Baird: Just good old gmail. I do. I prefer very manual process of research, hand selecting a list of, you know, 100, 150 companies, and then doing each one very personalized, very, very well researched and making sure that it doesn't come across as you just don't want to sound. You can't sound like a BDR, right?

Of like getting, it needs to be very authentic and, needs to be laid out in a way that, generates a conversation, not generates a sale. Cause that's really where you want to get to first early on. It's great if somebody buys your product, but the best insights you get that early in the company stage is through sales conversations.

The other thing that we had to learn for the previous companies that we weren't so good at is we would have sales conversations and it would just be like, Yeah, this is great. Awesome. Call it happy years in sales. It's just all you hear is the happy stuff. and we were never asking, okay, well, if you like it, can we put your credit?

Can we get your credit card info and get you up and running? If you don't ask that question. You're not getting true feedback from these prospects. Like you have to ask for the sale because that's when the real objections come up of why somebody would or wouldn't use this. So, it's a little intimidating and also it can be intimidating when you're selling something that might not fully exist yet.

Like you may have a very early version of it. hopefully you haven't built too much of it because chances are if you're not Building based on customer feedback, you might be making some mistakes. but we always called it the term of selling the ghost of safe. We're selling you a product that might not fully exist yet, but we're going to deliver it one way or another, whether it's the service or a tech enabled service, or we're just going to build it as a custom version that we can then resell.

so it can be a little intimidating asking for a sale, maybe when you're not quite ready to take it, but you have to do it. It's kind of painful because that's, you know, Where you get to the good stuff,

[00:09:06] Jay: Yeah, no, I love that too. so tell me what is Churnkey in a nutshell? And, Is the customer today, the same kind of persona and same, you know, target that it was when you guys first started.

[00:09:21] Baird: excuse me. So, yeah, Churnkey is a, retention platform for high volume subscription businesses. The easiest example is if you've ever gone to cancel a subscription, like an eCommerce box subscription or Netflix, something like that, they generally ask you a couple of questions. And then somehow they know.

Exactly what offer to give you to try to get you to stay for more month could be a pause or discount. That's our flagship product is cancellation flows. They're driven by AI and machine learning to make sure that we're collecting customer data. So subscribers data so that when they go to cancel, we ask a couple questions and we try to predict what's the best offer to save that customer.

We also do failed payment recovery and reactivation campaigns and a few other ways. But in general, we're all about helping subscription businesses keep their customers. As opposed to, letting them churn out. So, yeah, that's the product. The, the customer has changed drastically since we started. We sold to what we were a boot.

Our previous companies were bootstrap subscription businesses. So generally have 1 or 2 owners, smaller teams, which generally means smaller businesses. And we spent about a year and a half trying to sell to them first. And the price points were really low. The cost of service was very high. The feedback wasn't great.

And, now we are, excuse me, much higher up market. We generally serve businesses that are doing anywhere from close to a million dollars a year in revenue up to tens of millions a month in revenue. so, you know, for Turkey to be successful, It seems obvious in hindsight. But what we have found now is we have to be it.

We work best at scale because we help fine tune very specific details around the cancellation process and recovery process that the larger the customer generally the better. But if they're too big, they have a team that can do this themselves. So we're kind of in that small to medium, lower enterprise range where they still need us to do the bulk of the work.

[00:11:19] Jay: Yeah, it's that would be my first thought is your biggest competition would be, you know, an in house team doing just that knows the product and the developers that know the, you know, the ecosystem and everything like that, how do you guys compete? How do you compete? I mean, what's your message to say, go with us.

We know what we're doing versus, you know, some conglomeration of hobbled together pieces from your team.

[00:11:42] Baird: the first is, you can definitely build it yourself and probably build it yourself pretty cheap, cheaper than what we are. But what you can't do and what gets really expensive is reporting on the results of what you build and iterating on what you build quickly. So yes, you're going to have an okay first three months, but then you're going to realize, well, how many people went through the flow?

What offers did we give them? Did you test any offers against each other? And so it's at that point, that's when engineers are like, Whoa, I have just built you a cancel flow. I'm not here to like, build you a reporting dashboard and, you know, testing engine and things like that. So that's, we try to explain the customer like, when you get to that point, you're going to run into these issues all over again.

You're going to need some help getting it done. So,it's the reporting and then the ability to iterate in real time as data is coming in because product teams need to move fast. They can't wait for engineering cycles. So that's kind of the pitch that we usually go with.

[00:12:34] Jay: That makes sense. Yeah, that makes sense. Alright, I'm gonna try something new that I recently started doing. love it, hate it, haven't tried it. And I wanna see for inbound, outbound, and maybe a couple others, for marketing. So, inbound, paid ads. Love it. Hate it. Haven't tried it.

[00:12:52] Baird: used to love it. It's getting harder and harder now. It's more competitive. ever since Apple changed their tracking, they increased their privacy. It's been much harder to, to deliver the right ads, to people in the right places. So I would say it's, used to love it. Don't quite hate it yet, but need a better alternative before I totally drop it.

[00:13:10] Jay: All right. SEO.

[00:13:11] Baird: Love it. Got to do it. The best, there's nothing better than capturing existing demand. Generating demand is way much harder, is very much harder than just serving the existing demand. a lot of opportunity, evergreen as well. That's another reason I love it. it's can always be there. I've got blog posts from 2014 that are still getting views.

So love it.

[00:13:33] Jay: let's go outbound, LinkedIn, direct outreach.

[00:13:38] Baird: Beginning to love it. I have always not been a huge fan of any type of automated outreach. I've always liked it to be very personal, but of course, you have to scale at some point. LinkedIn, I think is, I see, I have big hopes for LinkedIn. It's becoming, I think, much more of an organic place for content.

And, I think there's a lot of great conversations happening there. I think the PR most people doing it aren't doing it right. But if you do it right, you can love it.

[00:14:03] Jay: I agree. A hundred percent agree. you already mentioned it, but I'll say it again. how about this? We'll do it a different way. Instead of just cold email, let's do, Bulk cold email, right? At scale, scaled, cold email. Love it. Hate it. Haven't tried it.

[00:14:20] Baird: Love hate relationships at an option.

[00:14:22] Jay: Yeah, sure. These are all made up.

[00:14:24] Baird: We actually hired, yeah, we hired our first BDR at Churnkey, late October. And so what we had found is that we love it when it's hyper, hyper targeted. Like it has to be so clear. Here's explain, here's why we're sending you this message. Here's why we think you're going to love it.

And here's what you should do. And there cannot be any type of ambiguity in the email itself. So it has to be well, well targeted, small. So, you know, You can scale it out, but it has to be in a ton of small little targeted batches. then a lot

[00:14:55] Jay: I like that. all right, let's go to more kind of traditional, conferences. Love it. Hate it.

[00:15:02] Baird: of haven't tried it.

[00:15:03] Jay: I haven't tried it. Fair enough. And why not? Just not a fit.

[00:15:06] Baird: expense, you know, we always just, you know, we, you run up generally you want to sponsor it or have a booth. So, you know, you're talking thousands, tens of thousands of dollars, and then the travel and then, you know, going solo is tough. So now you're talking travel for two, three people. And then you're looking at a bill and like, gosh, I could, you know, I could run a lot of campaigns.

For that amount of money. But we're getting to the point now where our customers are large enough to where it makes sense to go. So I do think, you know, it's a, you gotta have a big LTV to be able to support that type, those types of expenses, which we're starting to get there now.

[00:15:42] Jay: business groups.

[00:15:45] Baird: I hate it. I hate it.

[00:15:47] Jay: Okay. Fair enough. wouldn't even have to dig into it. upselling

[00:15:51] Baird: in the right ones

[00:15:52] Jay: that's fine. Upselling existing clients.

[00:15:55] Baird: Love it. If you can do it, I mean, so we have a net negative churn, which means that our retention is positive overall. So if we didn't make a sale tomorrow, our customer base will grow in value, which if you can find that, it just makes the rest of your life so much easier. It takes a lot of work to retain customers and do it the right way.

but being able to upsell existing customers, the trust is already there. Great. And I love it.

[00:16:24] Jay: great answer. Great answer on all those. I think we're, I think we're done with those.how do you keep track? Of your leads. Do you guys use HubSpot, do you use a tool, like, and how did you kind of establish a framework for what the right cadence was to talk to people and not be annoying? Like, how did you guys kind of originally install that?

What do you guys use today?

[00:16:45] Baird: We use Apollo for outbound campaigns and we'll do a three to four emails and then we shut it off. they're very hyper targeted. Good example is, we serve a lot of AI companies. They're growing extremely fast and, we have some of the larger AI businesses and, they've also have high churn, 20, 30 percent sometimes, which is a lot on a multi million dollar business.

But, so a good example of how we do it as Transcribed We use Apollo to send very targeted email campaigns to the right personas. We split them out by personas at these companies. We send them an email and we say, look, here are the customers that we're working with. They took actions X, Y, and Z with us.

And here's exactly how much money they saved in the results. Can I send you more info? And then we follow up twice, kind of change the angle on it a little bit. And then, you know, just let it sit. A lot of times these emails, it takes a couple of months to get a response. And then when they're marked as interested in Apollo with the response, they're then moved over to HubSpot and opportunities created.

[00:17:41] Jay: And then a salesperson will go qualify that lead, to market as a qualified opportunity. And then, The sales process kicks off within HubSpot. So that's how we have it set up. it kind of took us a long time to figure all that out. No, it's a lot. It seems simple, but then you get into all the details and you're like, man, there's just so much. What do you guys do with those leads that sit and, you know, if you cut off the campaign after the fourth one, if that was a lead you wanted to, you know, somebody sizable and it seems like a good fit, what would you guys do then?

[00:18:10] Baird: that's a good question. We haven't been doing anything just because of bandwidth, but ideally we would like to have. More of a enterprise level, which we're getting to that point to have an enterprise level, outbound rep, a rep that could be much more selective. The issue with those customers generally that are like, you know, we call them dream customers.

We'll have a list of, you know, a hundred dream customers. They generally take multiple points of attack. You generally aren't going to, you know, just hit up their retention specialists and just close a deal. We have to, you know, we've got to talk to head of growth. We got to talk to CFO. There's lots of different ways that we have to go about it.

So, we are kind of. For that, I would say right now, that's next phase for us.

[00:18:50] Jay: fair. all right. A couple more questions. if you were starting the business over again tomorrow with everything you've learned, give me three steps to kick off a business, the same business But in a better way, maybe we're an improved way than you did initially.

[00:19:03] Baird: I would start it as a service. I would have built us. Yep. I would have started as a service and, taught people how to do this and help them, and learn all of this while getting paid versus learning it all on our own dime, because you have to go through this stuff. You know, to really learn the industries and the practices and strategies inside and out.

Now, we did a lot of this beforehand in our previous companies, so that did help jumpstart us. But I think I would have rather worked with larger customers and done a services engagement, rather than we went very bottom up. So it took us a long time to get to the right customer. So that's one thing I would have done.

I would have charged a lot more. We For some reason, us founders are very emotional, a lot of pricing. We generally don't see, we know our products valuable, but we have seen it go through so many phases that we don't really see the true value. So we just, we undercharged for two years and, we, it brought the wrong customers.

We were not structuring contracts the right way because at a hundred dollars a month, you don't really have to. so that was another big mistake. that has taken us a long time to figure out. And then the other thing we did was we pushed off true B2B sales as long as we could. We tried to do inbound.

We tried to do product led growth. Those things for us didn't work out because our customer are very much B2B style customers. so we were trying to run playbooks from our old companies and as opposed to this business, what's really worked has been true account management sales. B2B sales. So those three things would have saved us probably two years.

I

[00:20:48] Jay: Time is money, right? all right. Last question, non business related. if you could do anything on earth and you knew you couldn't fail, what would it be?

think I'd want to be the general manager of a sports professional sports franchise. one? I mean, what's your team?

[00:21:05] Baird: probably so Cincinnati Reds favorite baseball team. and, Charlotte Hornets, NBA basketball team. I think if I could get the Hornets to the, you know, that would probably be, if I knew I wasn't going to fail, we're going to win it all.

If I could be the first person to take the Hornets to the, you know, championship, but my

[00:21:23] Jay: the big starter jacket for the Hornets when I

[00:21:25] Baird: nice. Oh

[00:21:25] Jay: I was from Virginia. So it

[00:21:27] Baird: those were the glory days.

[00:21:28] Jay: teal, I think, back then.

[00:21:30] Baird: But my favorite thing to study is decision making, which to be honest. I think it's really the only way to study entrepreneurship because that's really what you're doing as an entrepreneur is you're just making decisions over and over again.

so I really like studying mental models and decision making and I think there's, it would be fun to take a lot of traditional decision making studying and take it into like managing a sports team and trading and free, you know, signing free agents, whatever the case may be. So I think that's what I would do.

It'd be fun.

[00:21:59] Jay: That's my, that's the first general man. I mean, people said be in the NBA and all sorts of stuff, obviously. But, GM is a very specific. I like, I can see how you're tying those two things together. All right. If you want to find out more about you, Baird, or about Churnkey, how do they do that?

[00:22:12] Baird: go to LinkedIn as I checked two weeks ago, and I'm the only Baird Hall that shows up when you search on LinkedIn. So I still own that, distribution channel. go find us there. Also, Churnkey, we're easy to find on LinkedIn. feel free if anybody wants to talk about retention or I love talking. I wish.

I could help more people, you know, in the early stages of startups. I don't really advertise that a lot, but this is, one place where it makes sense to do so. I would love to chat to anybody that's trying to get up and going for the first time, because, I was there and it's fun and challenging.

[00:22:45] Jay: You've got a great story. I love the failures and the successes. And it's just like a very. Steady, you know, progression to success. So, congrats on all your success, man. It's really cool. Like I do a services business. I've been in product roles, you know, throughout my career. And I know a lot of those pitfalls and how hard it is.

And just, you stuck it out and, pretty cool product and hope people check you out and, be good, man. Have a great weekend and we'll talk to you again soon. All right. Thanks, man. See you,

[00:23:11] Baird: Thanks. 

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