How Castos Approaches Self-Serve (with CEO Craig Hewitt)

Do not index

Craig and Yohann chat about how the Self-Serve system at Castos continues to evolve as the company grows into year six with tens of thousands of active customers. Craig talks about optimizing conversions, experimenting with Enterprise Sales, and using user value as a compass to make better decisions.

Sections

(02:11) Growing Volume vs. Optimizing Conversions

Craig’s two main focus areas to improve Castos’ revenue:

Pulling more people into the Castos ecosystem and

Getting more people to stay there until they’re ready to pay

Most companies would label both areas “Acquisition” and have a single team own them, but Craig sees the value of making a distinction. With different teams owning each area, they can make incremental improvements to both systems in parallel.

Most of our growth thus far has come from content marketing and SEO. And I think that’s a place where we can always do 1% or 5% or 10% better every month or quarter. I would put [those efforts] in the marketing bucket. And I’m starting to think about the Marketing bucket and the Growth bucket as different. Growth [would be] the experiments that we run to find ways to make quick incremental improvements to what's already happening in terms of conversions.

Of course, this distinction is only possible when you hit a certain volume in new users:

I think [this approach] is appropriate if you already have traffic. I see many people trying to optimize their funnel when they have 2000 website visitors a month — it's just not worth optimizing that much then. The goal at that point should be getting a whole bunch more eyeballs and growing traffic to a point where optimizing the funnel becomes important.

(06:08) Experimenting with Enterprise Sales

Many Self-Serve founders consider a hybrid approach to sales (a mix of Self-Serve and salespeople) to overcome growth plateaus. The trade-off, Craig says he’s learned, is that Enterprise needs are unique. This impacts both the product (which customers do you prioritize?) and the sales process (a Self-Serve sales process doesn’t translate to a human-led sales process and vice versa).

if you're running a Self-Serve SaaS business to introduce what is essentially Enterprise Sales, is essentially like starting another business inside your existing one. And so, you have to be sure of the number of leads you can get, your ability to convert them, your ability to service those customers from a support and success perspective, and your ability be able to scale that by hiring salespeople before you dive into it.

(09:07) How Castos' Self-Serve System Evolved

Castos is a relatively mature company and its Self-Serve process has come a long way since it was just a simple signup form six years ago. One big change: Using Castos doesn’t require entering your card information before the trial.

We started examining potential growth levers and thought removing the credit card option could be one of those because, for me, when you have the credit card wall up at signup, you're putting the onus or the burden of conversion on the marketing website. You have to convince someone that your tool is the tool they should use before they put in their credit card information. You’re asking users to say, “this is the product for me unless something goes totally sideways” before they’ve used it.

(15:50) Using User Value as a Compass

Craig’s guiding star, since day one, has been getting users to value. Why? Because he understands that Castos becomes valuable only when users get to the outcomes that it facilitates.

Getting to, "Oh my God, I have a podcast, and it's out there in the world," is way more valuable to the customer than them paying us for the tool. They pay us money because they have experienced that moment of value. That’s all we're optimizing for — how can we get a customer to create a podcast, publish an episode, and submit it to Apple Podcasts and Spotify as easily and quickly as possible.

(18:02) Aligning User and Business Value

Designing for user value means having to figure out how business value fits into the equation.

There are many valuable user outcomes that your product facilitates, so:

One, how do you identify what those user outcomes are?

Two, how do you figure out which ones make the most sense for the business to pursue?

Castos is still in the process of answering question two, but they answer question one by having users self-select into pre-defined outcomes:

The very first screen you see when you get to our product is, “How do you want to use Castos? Where are you coming from?” The options are "I'm brand new to podcasting and want to try Castos," "I have an existing podcast and I want to import it," or "I need to connect my WordPress site to Castos so I can start publishing my podcast from WordPress.” New users all kind of know which of those they are. We start dissecting product activation by those choices Because those are three very different types of use cases. And then from there, depending on the path they go down, things like creating their first podcast, publishing their first episode, or submitting their podcast to Spotify are how we define activation.

(23:39) The Limitations of User Value-based Cohorts

Even with an outcome-oriented activation metric, aligning user and business value is complex unless you can quantify how each cohort contributes to revenue. In Castos’ case, two cohorts (the “I already have a podcast” and the “I’m using WordPress” cohorts) are stick around for longer because they get to value faster and easier. The “I’m brand new to podcasting” cohort, on the other hand, is bigger. Without a direct connection to revenue to inform the decision, Craig is currently trying to navigate how balance supporting the needs of each cohort:

Is a customer of one of those cohorts more valuable than the others? I think so. In terms of stickiness or Lifetime Value and churn, if you already have a podcast, you are over this hump of what gear do I get, and how does distribution work, and how do I know if this is working and so on. These customers are already bought in. They just want to know: does Castos work better than the tool they’re using now? We also think that our WordPress customers are stickier because, just intuitively, like, they're paying for Bluehost or SiteGround or whatever, they probably have more going on with their brand and their business than just, "Hey, I'm gonna start a podcast to talk about my favorite sports team or anime or whatever. And so that's a little unfair to the last group of "I'm new to podcasting," they’re the biggest group by far. We don't do a ton there to understand, like, any further kind of cohort segmentation and maybe we should.”

Transcript

✏️

Want to read along?

Toggle Transcript

Yohann: Hi, I'm Yohann, and this is the Value Paths Podcast. Today's episode is another in our interview series — we talk to Self-Serve founders about their approach to self-serve, their goals and how they plan to achieve them, and the ups and downs of getting a self-serve company off the ground. Today's guest is Craig Hewitt. The CEO of Castos. Castos is an all-in-one podcast publishing tool. They've got tens of thousands of active customers, and they're fully remote, the team of 11 is scattered around the world. Craig has a sales background so he sees the advantages and the challenges of the self-serve sales model with crystal clear clarity. I hope you find it insightful, here's our conversation.

Thanks so much for joining us, Craig. How are you doing?

Craig: I'm doing great, Yohann. How are you doing?

Yohann: I'm doing great as well and I'm excited to chat. Castos is... tell me a little bit about how you've set things up. Is it fully Self-Serve?

Craig: Yeah. In terms the business, we're a team of 11 people. Like you mentioned, we are mostly like a Self-Serve SaaS. We're a podcast hosting an analytics platform. I think we do have a bit of a dual funnel going where we do have a bit of enterprise kinda leads and business coming in.

But the majority of the business and most of our focus is around folks coming to the website, and signing up for a self-service, like a 14 day trial. And then hopefully along the way, converting into being a paying customer.

Yohann: Okay. Okay, fantastic. So with that context in place... how much do you want to grow your Self-Serve revenue over the next year?

Craig: Yeah, we'd love to double our revenue in the next year, which I think in the current economic climate could be challenging, but that's the goal.

Yohann: Okay, fantastic. I was hoping to set the stage with that anchor so that we could dig into the "how," and everything you've got planned to get there.

Craig: Yep. Sounds good.

Growing Volume vs. Optimizing Conversions

Yohann: With doubling Self-Serve revenue, what do you see, as the biggest levers to, to help you get there?

Craig: Yeah, I mean, that's the question I think really, right? So we're like a relatively mature company. We've been around for five and a half years. And like you mentioned, have, tens of thousands podcasting customers. And so I think that our growth will come from two places: one will be just doing better at the things we already do. Most of our growth thus far has come from content marketing and SEO. So, just a bunch of website traffic for people who are interested in podcasting. They either sign up for a trial on the site or remember us when they're ready to start a podcast because some of our content sticks in their minds, or sign up for lead capture or a nurture sequence and convert down the line somewhere there.

And I think that's just a place where we can always do 1% or 5% or 10% better every month or quarter. And so that's definitely a pretty big part of it. You know, it's interesting, I am starting to think about like Marketing and Growth as different things. And so I would put that in the marketing bucket, right? That's continuing to publish more content, continuing to grow our YouTube channel, continue to publish our podcast and grow brand there, and website traffic. And then Growth are experiments that we run to optimize the funnel. And just find ways to make quick incremental improvements to what's already happening in terms of conversions, I guess, is the way I think about it. Marketing to grow volume. Growth to increase conversions.

Yohann: Tell me a little bit about how you came up with this number? Did you forecast it?

Craig: No. It's just... I picked a number and then, like you said, doing the work of working backwards to figure out how to make it happen.

Yohann: So there's no real split in mind between how much of this new revenue has to come in from new customers versus existing customers. That's just something you'll figure out down the line.

Craig: Yep. Yeah, but that's a very good point. With the kind of size of business we are, a good percentage of the growth should come from existing customers and us delivering more value to them and them paying us more money because of it.

Yohann: Okay, okay. Uh, when you talk about the Growth funnel, you're talking about what happens after people sign up, so you're talking about that space between signup and the first payment.

Craig: Yeah, I would consider... like for me, Growth is more from when they land on the website to when they become a customer. And also, like, upselling existing customers, yeah. When someone's in our world, I would consider that Growth. And then Marketing to me is, a lot of brand and content to get people into our world.

Yohann: So before we dive into the nitty gritty of these levers and — I have a bunch of growth and marketing questions both — let's travel back in time a little bit. How did Self-Serve come to be your monetization strategy of choice? Was that something you always had in mind?

Craig: Yeah, absolutely. The goal all along was for this to be a low-touch product. Partly because that's just what I wanted, and like, I come from a sales background and know that enterprise sales and the typical B2B SaaS has a really long sales process, and it takes a long time to ramp up. The deal sizes are huge, but the uncertainty and the time that an effort that it takes to land a deal is enormous. And that's just challenging and not really something I wanted to optimize for. It did happen to us, and so we adopted, or adapted I should say, our business model a little bit to, to accommodate for that.

But the goal all along was to have a pretty low friction self-service signup process. The other part is just our price point, right? Like we started $19 a month and it's really hard to have a high touch sales process at $19 a month from a n economics perspective. And so it had to be something that people could come to the site, sign up for a trial, credit card or not, which is something we could talk about maybe, and then and then go forth from there.

Experimenting with Enterprise Sales

Yohann: So that happened recently, right? The experiment with Sales. Walk me through what you were going through at that time after choosing to go Self-Serve because of the price point and Self-Serve being your main strategy from the beginning. What caused the desire to experiment?

Craig: Customers came to us and said, "Hey, we're looking for more than, your regular plans offer. What can we do?"

An entrepreneur never being one to say no to customers and revenue, I said, "yeah, sure, we can do that." And so very much figured it out as we went. And at this point, have a definite process for how sales happen and how implementing the thing that we sell happens because it is a little bit different than our regular product that we sell. So yeah, it just came about because the demand was there.

Yohann: Okay. In your podcast, you talked about this a little bit and you mentioned that with the introduction of Sales, it was almost like going after a new kind of customer?

Craig: Yeah, totally.

Yohann: How did you see the difference between that kind of customer and the customers you were getting this whole time? Did it make you want to double down on Self-Serve?

Craig: Yeah so I've learned a lot, and like, yeah, if you listen to my podcast — which is called Seeking Scale with Andy Baldacci — we talk about this kind of stuff a lot, but yeah, I mean, I think the lesson, and I always try to abstract away the things that I learned for, kind of, anybody, is that if you're running a Self-Serve SaaS business to introduce what is essentially Enterprise Sales, is essentially like starting another business inside your existing one. And so, you have to be really sure that the number of leads you're getting, your ability to convert them, your ability to service those customers, just from a support and success perspective, and be able to scale that by hiring salespeople is all there before you really dive into it.

And if I'm honest, I was a little bit arrogant in saying, "oh, we got two of these. Surely we can get five a month." And that's not entirely been the case. Like we've had more success with a sales team than we would've without it. But it's not been the kind of panacea that I thought it would be.

And I think the lesson for me there is we didn't have a repeatable way to increase the amount of leads we had. When we have leads, we're able to convert them at a good rate, but we're not able to go find a bunch of new leads in a scalable way. And I think, and this is in the weeds, but I think it's because we've gathered most of our mindshare in the market from content marketing and SEO.

What we sell on an enterprise level is not something that people are searching for a lot. And the way that we acquire like Marketing Qualified Leads, to use a sales term, doesn't work with like the Enterprise path that we want customers to take. So I think that's where it's fallen down a little bit.

Yohann: So there was a repeatable Self-Serve acquisition engine and the transition to Sales, it just didn't work the same way. You couldn't just take that engine and apply it to something entirely new.

Craig: Yep, exactly.

How Castos' Self-Serve System Evolved

Yohann: Tell me a little bit about how you set the repeatable engine of Self-Serve up. What was it like in the beginning? How did you pull it together?

Craig: Yeah, so I, I think it's been pretty conventional. We've been blogging about podcasting forever, right? All the way back to my previous business. And so we've always had, quite a bit of website traffic and just, when we launched the very first version of the SaaS product, we just put up the, sign up for a trial here.

At the beginning we did offer credit card. We took it away after about two years. Yeah, we just launched the product. It had a paywall, and that was it. Interestingly, like the whole genesis story of the company is when we acquired a WordPress plugin called Seriously Simple Podcasting. And so we acquired this WordPress plugin, which was entirely free, still is, and then, the only way you could use the product in the beginning was to connect your WordPress site via this plugin to our hosting platform. So you would publish your podcasting WordPress, but the files would be hosted and distributed from our platform. So it offloads all the work of being a podcast hosting platform from your website, which is great cuz if you get a bunch of downloads or something, it would overload conventional WordPress hosting platforms. Plus we give a bunch of analytics and things like that. Yeah, that's how it started. And then about nine months after that, we open it up to where now anyone can use Castos, whether you're using WordPress or not. Come sign up, create your podcast, if you connect it to WordPress, that's fine. If you don't, use it just like you would any other, hosting platform. Yeah, but that's been how the Self-Serve has gone over time.

Yohann: Did you always have this split between Marketing and Growth in mind, or is that a recent development? Because going back in time when you tell me about how it started, it sounds like you had this marketing engine in place and especially after the acquisition of the WordPress plugin, user streaming in, they just converted themselves.

Craig: Yeah, absolutely. Absolutely. I I think that for me, differentiating Marketing and Growth activities has, it's been a very new thing, like just in the last couple of weeks, so you're getting me at a good time. But I think it's always been there a little bit.

Maybe you would call it all Marketing, like, that's fine. But I think that it's important to, to differentiate the activities that you think about between getting people to the website, call that what you want. And then converting them to being, converting them to a trial, converting the trial to it being a paying customer, converting the customer to being an advocate for you or a champion, referring more people and stuff like that.

To me, maybe they're just different steps in this whole process of customer acquisition, but I do think it's important to, to differentiate a little bit, yeah.

Yohann: Right, so that's how the strategy has evolved. It's gone from just acquisition heavy to figuring out the rest of the funnel.

Craig: Yeah, and I think just as an aside, I think that's appropriate if you already have traffic. Like I see a lot of people trying to optimize their funnel when they have 2000 website visitors a month and like, it's just not worth optimizing that much then. The goal, at that point, is just getting a whole bunch more eyeballs and there's probably a number we could come up with to where growing traffic is not as important as optimizing your funnel. I don't know what that number is but I think that's just something for folks to consider is the most important lever to pull or the highest value thing to work on sometimes is traffic and sometimes it's optimizing your funnel.

Yohann: Let's dig into the Growth engine a little bit. We've got the repeatable Marketing engine going. People are coming into the Growth engine. You mentioned credit card upfront. Was- did I get that right?

Craig: Yeah, at the very

Yohann: beginning.

At the very beginning. Okay. So tell me a little bit about that. How did how did the timeline of events along the funnel evolve?

Craig: I think I know what you mean, but could you clarify just a bit to make sure I answer best I can?

Yohann: So in the beginning, what was the timeline like, and where did you see it breaking? Where did you think, damn, we need to fix that.

Craig: Gotcha. Okay. Yeah. In terms of the duration of the trial, it's always been 14 days. And I picked that because, some, Ahrefs, have a seven day trial, some like Basecamp have a 30 day trial. And for me, the logic I use there is, I understand a 30 day trial for a product like Basecamp where there's a lot of work you need to do in the product before you can start gaining value, a tool like Ahrefs or ChartMogul or something like that, less because you just plug it in and it starts working, right. So, like, there's less need for a long trial there. Also as you probably know, like the longer the trial, the longer that feedback loop of " hey, when we changed this thing, here's the result in, in, trial-to-paid conversion ratio. So we wanted that feedback loop to be as tight as we could. So had always settled on 14 days. It's pretty standard for our kind of tool.

We started examining potential growth levers and thought removing the credit card option could be one of those because, for me, like when you have the credit card wall, up at signup, what you're doing is putting the onus or the burden of conversion on the marketing website, right? You have to basically convince someone that your tool is the tool they should use before they put in their credit card information. Because like to me, it's almost like a pre-purchasing signal when you have credit card up front. " Hey, unless something totally goes sideways, I'm gonna use this product."

Whereas, if you don't have a credit card, like we do now, you're letting the product do the work. And we joked a little bit beforehand about Product-Led Growth to me being like a poor term for a lot of things in Self-Service SaaS. But I guess I would say that like removing credit card does move you more towards a Product-Led Growth where the product does the selling of your product for you instead of the website and marketing copy and all these kinds of things. We thought that would be good because our, we thought our product was really great. The other part is, going back to, like, the Enterprise-y side of things is when you have a credit card requirement to open an account and start a trial and let people experience your product, you're basically saying no to all of those corporate clients, right?

Because nobody, not many people, in like small to medium sized businesses have a corporate credit card that they can play around with. We had a lot of folks coming to us and saying, like, "Hey, I just want to get inside and see what's going on here. Can I get like a trial without a credit card?" And we didn't have a mechanism for that.

I'm sure we could figure that out, but that was to me like the biggest indicator of, " I just want people to experience what we have." And then I think more people will see how awesome it is. And we can, we can grow the business faster that way. That was the hypothesis. In reality, like it made very little difference, right?

Like the gross revenue increase each month was about the same. So while the hypothesis, I think was sound and today we're still no credit card upfront, because I think it's just how people should experience a product. So that's why we still have it this way.

Using User Value as a Compass

Yohann: Okay. So it, it sounds like both of these decisions were driven by value and what it means to find value in Castos.

Craig: Yep, absolutely.

Yohann: Okay. So has the timeline evolved since then? Like, when you think about value today, what are the levers that you're thinking about now as opposed to back then when the levers were trial length and credit card upfront or not?

Craig: Yeah, good. Good question. I think something that's been really surprising is the amount of continuous refinement that is necessary, or that we do, whether it's necessary or not, I don't know. But the amount of continuous refinement that we do on the product and the business and how we work over time, five and a half years into this, we're still ripping out, onboarding and putting a whole new onboarding process in there. Like, as recently as a few months ago.

Yohann: We're always so happy to hear that.

Craig: Yeah. Yeah. And Samuel just took a tour of it a couple weeks ago and, gave us quite like a few kudos, which I was really proud of. And our head of product was like, "oh man, I was really stressed, to watch the video. But but it was like really nice to hear the positive feedback."

But because yeah, I think like you mentioned at the beginning, you don't know anything, right? And so you're just like, okay, 14 days credit card or no, whatever. At this point, like, we have enough data to know that some of these decisions were right or justified and validated, and now it's all about product activation instead of trial conversion, right? Because as like Hiten Shah says, getting to that Aha moment, right? Getting to, "oh my God, I have a podcast and it's out there in the world," is way more valuable to the customer than them paying us money, right? Like they pay us money because they have already experienced that Aha moment and that moment of value.

And that's all we're optimizing for now is how can we get a customer to create a podcast, publish an episode, and submit it to Apple Podcasts and Spotify as easily and as quickly as possible.

Yohann: So I'm understanding from the beginning and even now you've used user value as your compass to tweak the Growth engine of of the Self-Serve, the larger Self-Serve engine.

Craig: Yep.

Aligning User and Business Value

Yohann: So my next question is a doozy. It's a doozy because we think about this stuff a lot as well, and it's difficult. How do you see the connection between user value and a business goal, like doubling revenue?

Craig: That is a doozy. I think... so, so the kind of maybe naive optimist in me says that if the product is twice as good, then the business goals will come. I think we can double the revenue of the company with the product and the user experience and the value creation that we already have. But if we do that, it means we have to basically double the traffic to the website, right?

Assume everything else is the same, double the traffic to the website and we double the growth rate of the business. Or you can say, we're gonna grow the traffic to the website by 65% and we're gonna increase value of people using the product i.e., trial-to-paid conversion ratio, in the end, by 20%, and we'll get to the same number.

Those are just rough estimates, but I think something like that would work out. And so, it's a little bit of both, right? It's a little bit of demand gen right on the Marketing side, and it's a little bit of product/user experience once folks have raised their hand and signed up for free trial, started using the product. If we can make that part better, then it just makes all of the traffic we're bring to the site more valuable.

Yohann: So you've got signups by which you judge the Marketing engine and trial-to-paid conversion by which you judge the Growth engine. And these two metrics together give you the knobs you need to fiddle with to it to connect user value to business value.

Craig: Yep, that's exactly it.

Yohann: Other than these metrics, are there any others that you look at to calibrate the Self-Serve engine?

Craig: Yeah, I mean I think that the others are later in the life cycle of a customer and there are things like ARPU or ARPA, whatever, however you wanna call it, like average revenue per user, Customer Lifetime Value and Churn, all those kind of being related. For us, we're very fortunate that we have quite a sticky product and none of those metrics have ever been the big, ugly thing that we wanna work on. You know, we've always had really low churn for a relatively low- priced product. Really high LTV, or relatively high LTV for kind of our space. We have tried to increase LTV and ARPA over time. But I think we live in a pretty price sensitive market, and so believe that the biggest lever we can pull is not that. Of course we could charge $50 a month, but I think that it would be worse for the business than trying to just get more people in the door, deliver more value to them more quickly, which are the Marketing and Growth parts that we talked about.

Yohann: So those are more like health metrics, unlike conversion, which you actively design for.

Craig: Yep, a hundred percent.

Yohann: Okay. Okay. So when it comes to designing for something like conversion how do you do that? I I know it's a very open-ended question and I would love to get more specific, but I don't want to ask too leading a question just yet.

Craig: Yeah. So from a data perspective, we use we use FullStory in the product. So we're able to see like how customers interact with the product, and we use Amplitude for product metrics. FullStory is a fantastic place to waste a whole bunch of time and so like we use it only when we feel like we need to. Actually, our customer support team uses FullStory a lot more than myself or our Head of Product use it. But I think, I do think it's good to see, " Ooh, we had a really interesting customer experience. Let's go see what actually happened in the product." It's just helped us make the product a lot better, which hopefully moves the needle in terms of product activation and thus conversion. Amplitude, we use a lot more on a cohort basis to understand how different groups of people who take certain product actions behave in the end in the app.

And so, the very first screen you get to when you come into our product is, like, how do you want to use Castos? Where are you coming from, maybe? So the options are "I'm, like, brand new to podcasting and I just wanna use Castos." "I have an existing podcast and I want to import it here." Those are super high value customers to us, right? Because they already have a podcast. They already believe in this, and they just need us to move their stuff over, which we do like in a totally kind of automated way. Or, I mentioned like our WordPress plugin: "hey, I'm using WordPress. I just need to connect my WordPress site to Castos so I can start publishing my podcast from WordPress, but have all the sites hosted here and you collect analytics and everything."

And so, like, that's the first decision that, that people have and, and they all kind of know which of those personas they are. But we start dissecting product activation by those decisions, right? Because those are three very different types of use cases. And then from there, things like, depending on the path they go down, things like, creating their first podcast, publishing their first episode, submitting their podcast to Spotify, which is the best kind of roundabout, surrogate metric we have for their podcast is live, right? Places like Apple Podcast or Stitcher, all these other podcasting directories where people listen to your podcast like you may or may not submit them to. We have a direct, like, API integration to Spotify, so it's an easy place — you click a button in the dashboard, it sends us data back. So we just literally, that's the only place we have that data about.

So yeah, we feel if you've created a podcast, if you've published an episode, and if you've sent your podcast to Spotify, you're pretty well activated. Those are like the three big ones.

Yohann: Wow. There's so much to dig into there, I think. But my most pressing question is how did you identify that these were your best performing cohorts?

The Limitations of User Value-based Cohorts

Craig: Yeah. This is where I get embarrassed. And I don't, I would love your perspective on this. These are just things that we know you need to do to be successful, right? To have a podcast, you have to do these things. And I think the question you're asking is, not what we did, which is did you look at your cohort of converting customers and find a common path that they took within your product to, to be successful?

And the answer is no. We said, we know you have to have these four things to have a podcast and we're gonna try to help you, achieve those like steps along the way.

Yohann: As proxies go, it's pretty good because if you know that you have to buy ice skates to go ice skating,

Craig: Yeah.

Yohann: Someone buying ice skates is a pretty good indicator.

Craig: Yeah. And I think part of it comes down to just like... Amplitude is an amazing, and whether it's Amplitude or MixPanel or Heap or whatever, it's an amazing tool, but it is quite complicated to say, "okay, take all the people that converted and then do some kind of backwards path analysis and find like the common things that they did. I would suppose that if we did it, these three big steps would also come out as common traits anyhow.

Yohann: But that point of success that you're working backward from is not something like conversion, it's activation.

Craig: Yeah.

Yohann: Okay so how do you see the difference between those two metrics? Why not work backward from conversion?

Craig: Yeah, that's a good question. I guess the answer is I think of them as one and the same to a large extent. Or that like conversion is, and maybe this is me just virtually throwing my hands up, conversion is something we have a little less control over than activation from a product perspective, right?

Like from a product perspective we can make it a beautiful, easy experience to do all these things. And then we say, if we've done this, of course people will want to pay us money to keep their podcast going.

Yohann: So why do you say something like conversion is out of your control as opposed to activation?

Craig: Yeah, that's a good question. I guess it's because hope, hopefully the only step that people have to take is to pull out their credit card and put the details in because they've already gotten success with the product because they've taken the steps that, that we all know need to happen for them to be successful with the product.

And I guess with our tool, or a lot of tools, again, whether it's ChartMogul or Basecamp or whatever, you're getting value. You've done the work to set things up, information's coming back to you, or your podcast is out there, you're getting feedback about it, and then it's just, from the customer perspective, they just want to keep that train going, right?

Because they've done all this work to get over the hump and for all, I think most/all companies, it's like, cool, I want to keep this going. And that's the thing that we message a lot is like, "Hey, let's keep the momentum where it is. Let's not let this stop. Because if you don't put in your credit card information, then like your podcast goes away, and that's a bummer."

So that's just how we think about it. I would love to talk about this kind of backward path of best customers in a product like Amplitude. We don't do any of it, but I'd love to hear how you guys think about it, if you do at all.

Yohann: Yeah, absolutely. We call it the Critical Pathway. What we do is we go all the way to conversion so that screen that users see after they have paid you, the success screen that says, "yay, you've made your first payment." If we take that as an ending point, the find value bit of the critical pathway is messy because there are multiple paths that people could take through the product, especially when you have different segments, it gets really complicated, like different types of users and different kinds of value. But if you look at the default experience or if you look at your most profitable experience and you just look at the necessary screens that users have to see in order to get to that final payment screen, we lay out each touchpoint one after the other, ignoring all of the ones that are not absolutely necessary, and then we look at the drop-off from screen to screen. That's how we approach it at a high level. Rather than think about it in an abstract way. So, with activation, you kind of have to create a model. You're creating steps. And steps can sometimes be groups of screens that users have to complete, so the model gets abstract the more you go away from what users are actually experiencing, touchpoint to touchpoint. The difference in our approaches is we stay closer to what users are actually experiencing, and we go further into the timeline so we can diagnose step drop-offs from screen to screen, which is easier than diagnosing step completion at an abstract level, which might involve a bunch of different screens, you know what I mean?

Craig: Yeah I think I do. So instead of starting at, when they register a trial and say, okay, then they do this, and then they do this, and they do this, and we see the drop-off or the completion rate. You're saying don't start at the beginning, start at the end, and work backwards to... yeah, that's interesting. Do you have to then compare, say go backwards two steps, do you compare that number versus the people that don't complete the trial successfully? Or do you just say, this is the number and you intuitively know it's good or-

Yohann: Let me just make one small correction so we're both on the same page. We don't work backwards necessarily, we define both the point A and the point B

Craig: Yep.

Yohann: And these user milestones, if they're attached to certain screens, we analyze how many people made it to that screen.

Craig: Yep. Gotcha.

Yohann: Analyzing the step drop off becomes a question of... if you look at two consecutive steps and you see a 30% drop-off, rather than diagnosing an abstract milestone that users fail to arrive at, you're saying what happened between this screen and this screen, which is a much simpler question to answer.

Craig: ... and then the question is yeah what happened? Not did they get from this screen to this screen, but like why? Yeah. Interesting. Cool.

Yeah.

Yohann: Why? And that's where this whole definition of best customers and what user value really is, and what user value is most profitable to you comes in.

Craig: Mm-hmm. .

Yohann: So how do you balance the needs that each of these groups of people have... is the Critical Pathway the same for the three segments you mentioned as being your most profitable customers?

Craig: No, it's entirely different.

Yohann: So from a product and a UX perspective, how do you think about value in that case?

Craig: Yeah, I mean, I, yeah, I shouldn't say it's entirely different because... I don't know, I don't know, maybe... like, in the end they want a podcast, right? And whether they're starting a brand new one and they're just using Castos, whether they're using WordPress, or if they already have a podcast and they just wanna host it with us for the number of wonderful reasons that, that we offer, like the end result should be they want to podcast. So I guess, yes, but the way they get there will be really different. So is a customer of one of those kind of cohorts more valuable than the others? I think so I, I think valuable in terms of stickiness or like Lifetime Value and churn because if you already have a podcast, you are over this hump of what gear do I get, and how does distribution work, and how do I know if this is working or whatever. If you already have a podcast and you're gonna move it from Anchor, because it's free and crappy to Castos because we have all these wonderful tools like you get the whole thing, right? So, like, those customers are already bought in. It's just, does my product work better than the one you're using now? We also think that our WordPress customers are stickier because, just intuitively, like, they're paying for Bluehost or SiteGround or whatever, they probably have more going on with their brand and their business that they're associating the podcast with than just, "Hey, I'm gonna start a podcast. And it's just of this thing that I'm gonna be talking about my favorite sports team or anime or whatever."

And so that's a little unfair to the last group of like, "I'm just using Casto by itself," because maybe your marketing site is on Webflow and, you know, there's no kind of direct integration there or whatever. But that's a clear distinction that we try to draw from a product perspective, and so from, like, a cohort analysis perspective, we do draw those lines. From there, the biggest group by far is, I'm using Castos by itself, and then how can we dissect that to understand how people are differently using our product. And we don't do a ton there to understand, like, any further kind of cohort segmentation and maybe we should.

Yohann: This is so interesting because it sounds like the largest number of customers belong to a segment that's different from the ones that will stick with Castos the most and provide most revenue in the long run.

Craig: Potentially, yeah.

Yohann: How would you go about digging into, like, how would you go about getting answers to these kind of questions?

Craig: That's the question... I don't know. Yeah, I, it's a fantastic question, something we ask ourselves a lot and I don't have a great answer. And because I think from just a product activation perspective, for us, and maybe we're different than a lot of other folks, you're just starting a podcast and you want to use Castos by itself is the biggest hurdle that people have. There's a lot of stuff that has to happen before you get to the start line even. And so we think, yeah, the other two segments just have a different path. But this is the most number of trial starts is in the Castos-only segment, and they're probably less experienced maybe, or maybe less podcast-savvy than some of the other ones. And we put a lot of thought into how do we get them to that product activation and value step the quickest and easiest.

Yohann: This is why we need a playbook. Product-Led Growth doesn't answer these questions. The Sales playbook doesn't answer these questions and-

Craig: yeah.

Yohann: -you're kinda left having to figure it all out for yourself. I'm hoping that one of the things talking to Self-Serve founders like you will surface is how different founders are grappling with questions like these.

Craig: Yeah. It definitely is a place where there's not answers, like you said there, there's a B2B sales playbook, right? It's cold outreach and LinkedIn and all this kind of stuff and do a demo and present the proposal and that like, but I think Self-Service SaaS as opposed to Product-Led Growth, self-service is so different for every company that like, yeah, there can't be, there can't be a definitive one-size-fits-all playbook, but a set of guidelines and best practices maybe, that we can all take and adopt to our unique situations and use cases.

Yohann: Let me try and wrap things up with a final question here. Do you have any advice for founders who are just starting out, they want to build a Self-Serve product and they're just starting out, what would you say to them?

Craig: I would say, be really intentional about building the product and the company that you want and don't get distracted by, for us, like getting pulled in the Enterprise direction. Joel from Buffer talked about this recently, that they did the same thing — they got pulled in the Enterprise direction and they started kind of neglecting their base to their detriment. And so, I'd say at the same time, stay true to who you are and who you want to be as a person and a founder and a company. But also, listen to your customers. And so maybe I'm talking out of both sides of my mouth, but like a hundred percent listen to your customers and building the product and the experience that they want is hands down the best way to win.

And I would just say at the same time, filter that with, if you wanna build a self-service product and company, you're gonna have to say no to, to the Enterprise and the real B2B experience. And that's fine, but just know that you're gonna have to do that.

Yohann: Solid advice.

Craig: Yep. Learned the hard way.

Yohann: Oh gosh, yes. That's another reason we need the playbook, right?

Craig: Yep, that's it.

Yohann: Thanks so much for joining us today, Craig. It was such a pleasure to have you on.

Craig: My pleasure. Thanks so much.

Episode Discussion

Have thoughts to share? Join the episode discussion here.

How Castos Approaches Self-Serve (with CEO Craig Hewitt)

Sections

(02:11) Growing Volume vs. Optimizing Conversions

(06:08) Experimenting with Enterprise Sales