Matt Wensing - Summit

Matt and Chris talk about Matt's 2nd startup Summit, and then a bit about pricing on Chipper CI.

**Chris:** All right, we are recording. So I'm talking to Matt Wensing, how you pronounce it? Yes, it is. All right, well, hello. How are you doing? Hey, I'm killing it. Thanks for having me. Thanks for coming on. As of this recording, I haven't released any episodes yet, so I appreciate you coming on. So who knows if this podcast is any good early on, hopefully this.

So you're working on summit right now, right? Do you want to tell me quickly how you think of summit right now? Which I think Liz has kind of changed over time.

**Matt:** Yeah, it definitely has. So some of it's my second startup, uh, I've been, I've been building sites and coding for the last probably 20 years or so.

Um, and so skipping over the first one, I started working on summit in 2019. Full-time have raised a little bit of seed money to keep it going along the way and really have been pursuing the opportunity to build a better tool for modeling. And so what I mean by modeling is, um, think of. Like financial models, customer acquisition, growth cashflow, maybe inventory, if you're in e-commerce or even calculators like a mortgage calculator, personal financial calculator, retirement planner.

So essentially things where if you're putting it into a spreadsheet, you'd be putting time in the columns along the X axis. Right. So think about that as a model, um, a time oriented model and summit is a flexible environment for building those it's really no cost. And visual, and that's where I'm at today.

We've got, um, we do have revenue and, uh, we're focusing this year essentially on finishing some of the most, uh, critical customer requests, kind of finishing the product, if you will, and then really turning our attention to how do we scale this?

**Chris:** Cool. And then you've pivoted a few times, right? So we're kind of, that's like the current, right.

But you started off as something similar about exactly.

**Matt:** Yeah, it started out as, um, well I had this need and the, the shape of the need was a financial planning product or app, you know, I just, I needed something to put in my numbers, hit a button and get answers back. And so I kind of called it the like a vending machine for a financial forecast.

Basically. I want to just put in some numbers, hit a button and I get a financial forecast and I started out there and really the journey from 2019 to now has. Just abstracting it more and more because I realized the users needed more flexibility to the point where now summit is actually really it's powered by a language, which we created called summit of that language.

And th that was really the only way to give users total flexibility is to give them the ability to essentially author their own models from scratch. Um, so it, it was, it's been a journey, but mostly responding to the market, telling me that. You know, people, people are used to just tons of flexibility. And if you build a product like that before where, you know, you have a choice, like a fork in the road, you can either keep building feature after feature, after feature, and you build this bloatware basically, or you focus on flexibility and give the user their own ability to express these, you know, this long tail of needs.

**Chris:** Do you see. Uh, like a common use case for it right now with your users right now? Or is this just kind of all over the place?

**Matt:** Yeah. Yeah. I mean, uh, it's a good one. I think mostly it's people working with dollars and cents wanting to get that into something it's the same job to be done, that you might reach for a spreadsheet and say, Hey, I'm going to, I'm going to think through our personal finances or I'm going to think through my business runway, or I'm going to think through.

And so. Um, out of our, roughly 450 active monthly users, I'd say the majority are founders. Um, a lot of them are technical, some non-technical and I think it's just where they go to think through their business models. Really.

**Chris:** Yeah. That makes sense. I've opened up a summit account. My outage has been trying to hack away at it too.

Um, and on the free tier, because I know like, you know, I have the straight data which I can pull into. Right. It seems like I haven't tried that out. Yeah, I have this weird thing and I think Peter's going to run into this too, where I have a freemium model on a chipper CAI. And then like, I'm not sure how to model that yet because the stock one for solving for growth.

There's one I played with, um, has free trials in there and I'm like, it's not really trials. It's kind of like, you just count on the free.

**Matt:** You could definitely do that. I should build a, uh, build a little freemium, uh, template or example as we call it and show you how to do that. But that is actually one of the things that is so fun about summit, uh, or others.

I mean, say is fun, is that when you're dealing with, so it's a simulation on the backend and simulations are really nice. Um, uh, it's a nice approach when. Wrestling with something like freemium. Why? Because freemium is really, uh, there's two kinds of freemium. One is like a river of freemium where people can sign up for free, use it for free, and then they kind of go through a customer journey that fits.

And the re you know, the river, so to speak you, to leads them to upgrade, or they fall out, right. They basically go back into the ocean. It's like catch and release kind of thing. Or you have freemium this more like a pool, which is just like this endlessly growing base of free users who will use it from time to time.

It's like DocuSign or something like that. And like, event of course, cause they're always going to need to sign something. There's no end to that. And then eventually they upgrade and we think about modeling, something like that in Excel or spread. It kind of, I don't know, it divided by zero in my mind because you're like, well, how do I, how do I express the fact that these people are like moving through this, like these pipelines or this plumbing right.

Of my business. And that's where if you're dealing with cues, uh, if you're dealing with pipelines or flows or quantities of things like inventory, that's where simulation is just a much better approach because. Kind of see the flow of things going through that as opposed to kind of discreetly dealing with just these grids and rows and columns where things are so discrete and kind of inanimate, right.

A static. So,

**Chris:** yeah, that's neat. So like, um, so in this example I have, like, it has the months in the bottom after I run the simulation March, April, may, June, and they can kind of see how have numbers change or grow or shrink over time, which I kind of seems like what she mean there. Right? Exactly. Like it's going through the pipeline season.

How it reacts to your changes, I guess. Right. So if you say, like, if you adjust your pricing, you can see how, how much MRR might go up or down,

**Matt:** yeah, and this might be a, it might be a good segue to, um, to chipper RCI because I think the, the benefit.

Of the way this is, this is this capturing things is yes, there are numbers and they're going up, but what's really happening behind the scenes is those numbers are being treated as a, as a volume, as a quantity, as a, what we call a stock internally. So what it means is there's like a finite number of those dollars, right.

Or those numbers, there's a finite number of users. Right. And so you can very easily get to. Um, representation of constraints, like what is constraining my business, because, you know, there's a finite amount of stuff in the model. And if you move it through the model in a certain way, you can find these bottlenecks, right.

Or these constraints where you just can't. More revenue. You can't increase your top line for some reason, no matter how much you pour in the top, you can't get your top line to go up. And it's because you're, you're leaking, you know, these, these subscribers out. And that's like, obviously that's how our business actually behaves in the real world.

And if you read posts by venture capitalists, like Tom Tonga's of red point, um, and others, like, is this really awesome question? And it might be a good one for you here at chippers. I'm just gonna throw it out. It's like, you know, at any given point in time, There some agent, some reactants, if you will, that's limiting your growth.

Like that's the limiting factor, right? And it's almost like nothing else. Certainly nothing else matters as much, but to some extent, nothing else really matters. Especially if you have a limited amount of time to focus. The business. So, you know, I really, I really enjoy this, this approach over a spreadsheet because it does, it gives you the ability to enforce those constraints and say, wow, yeah, this, this is the limiting factor.

Like if this, if this doesn't increase the whole rest of the thing, doesn't work. Right. And it, um, kind of keep you honest. Right?

**Chris:** Neat. Also scary facing that.

**Matt:** Yeah.

**Chris:** Scary. It's scary of like, you know, what's going on with the business.

**Matt:** Totally, totally. I think what, as they say, you know, give somebody a spreadsheet and enough time and they'll come out with whatever numbers they, they want, you know?

Um, and, and you can, you can do that with summit, but it definitely, you know, like with any programming language, You know, if you're using Pearl, you're going to be drawn towards reg Xs. If you're using Python, you're going to be drawn towards string find and replace. Right. And I think, um, summit is trying to steer people by having an opinion on these things as trying to steer people towards that kind of intellectual honesty about constraints and limiting factors, so that you can know where to prioritize your attention.

**Chris:** Yeah. Yeah. Good. I have one kind of random question randomly. I saw a recent tweet of yours where you said, um, you think you finally found an exciting intersection of what the market wants summit to be and what you want to build. And I didn't know if you said you didn't, you're building a marketing page towards that idea right now.

Is that right? Yeah. What's the idea there? What are you discovered?

**Matt:** Yeah, so, um, Thanks. That's that's good. Good, fine, man. That's I appreciate you being ready. Uh, loving that one. So we, as, as you know, cause you've been listening to the alpha beta podcast where I've been just sharing this rollercoaster and hopefully there's a condensed version at some point, but the two year version getting to the place where, okay, so we built this really flexible.

What's the use of a flexible thing like in the world, like what can, what can be done with that? And what we discovered is that we're never going to be able to convince speed. So, because it is a language because it's a development environment, um, we're never going to be able to convince most people to learn that language, right?

Just like most people aren't going to choose a program language you invent tomorrow. It's going to take a very, very long time for that to happen. What else can we do? And what we found is that even though not everybody wants to necessarily learn the language, a lot of people want to use the models and apps that people can build with the language.

So you may not want to build your own model from scratch, but like a mortgage calculator or a startup runway calculator. Those are existing models. And you may want to just come in and use those, right? You may want to use it personally, or you may want to use it professionally. As a part of maybe a marketing site or even a part of your own software.

Right? So what we discovered is, okay, when people come to summit, really what we need to do is help them decide or help them raise their hand and say, you know, this is the one I am. Are you here to learn how to build models in summit? Right? Like to hack, as you said earlier, or are you here because you want to use a model that somebody else has already built?

And that's almost like coming to say Zillow or Airbnb. And you're like, I'm either here to host my place or to become a host or I'm here to find a place to stay in. Right. And those are very different goals, but Airbnb Zillow and we hope summit can serve both. And I think about something maybe more on the technical side, like get hub, like you may be a good hub to host your own code, but you might be there because you're browsing packages and you're looking to get code that you can use, you know, in Europe.

Software. So we think that's what the market wants is that yes, some tiny percentage of people will actually take it on themselves to learn the language. And we want to educate all of those folks to become experts. We then want to help those experts build, share, and publish models in the forms of templates, apps, and microservices that then other people can come along and browse and see.

Oh, this is cool. Like I want to, I have an e-commerce SAS, so I have a SAS product for e-commerce companies. I would love to have like an inventory simulator or a scenario planning feature inside my own products. But like building that from scratch, it's not easy. Like I need to build a simulation. I need to like manage all these cues and numbers.

And basically, what are you doing? You're building a. That really is a modeling space. And so what we realized is, wait a minute, you know, just like you can go to open-source software and find a package for that, for some things. Why can't you find a model right on summit for you to have a calculator on your marketing site or build a feature in your SAS product, or just play with and use as a, do I have enough money for.

There's a ton of models out there for that, you know, just come to summit and pick one and just use it, right. You don't have to, you don't have to be the builder. And so we basically realized, duh, you know, this is a, this is a place where some people want to create and some people want to use. And let's just like any of these other spaces on the internet where most people go to YouTube to watch videos, not to create videos, you know, and we're going to.

Serve both. Um, and I think in doing so, that's just a much bigger opportunity than trying to get, you know, not trying to turn everybody into, you know, a summit expert, you know? Um, but we think that the whole world can benefit from using summit models and that's going to be our strategy sort of our platform strategy.

**Chris:** Right. I was trying to think of what side of that equation I would be on. Like I, I dove into one of the pre-built templates to like, to try to figure out if I could get something, leave some information out of it for after Jeffery. Which is neat. So I I'm definitely like dove into the prebuilt template space there.

Also . Learning . SEL SEL. Sounds fun to me. Of course, I'm a programmer. So maybe it would say, yeah, we think there's

**Matt:** going to be some bleed. You know, I think there'll be some bleed over like, you know, just, I, I do think that if you use the things. Sort of on the road to wanting to learn how they work.

You know, it's like if I can use an app or if I can use an open source, if I use a product where the code is sort of open source and you can take it apart and figure out how it works, that's sort of a step in the journey of learning something and also can inspire you to go, well, this is really cool. I want to learn how to make these things.

Um, yeah. And so I think, yeah, some people are going to dive in and say like, I want to live. X and other people, like you said, are gonna come in and say like, I'll let me see the benefits. Like, is this really better? Like, what can you build with this? That's you know, that's different. Right. Um, so yeah, I think this is, uh, taking us a long time to figure this out.

It sounds so basic, but it's like when you're, when you're in your own forest, you really don't. Yeah, you get all these conflicting signals. You like to get half the people telling you they don't want to learn this thing. And the other half telling you how excited they are to learn this thing. And you're like, ah, what's going on?

Are we like failing or succeeding? You know, it's like, so, and you're like, Those are just different modes. Oh, okay. You know which one we're going to serve, you know? And then it's like, do we pick one and focus and that's classic startup challenge. Right. Of, you know, all these hard questions.

**Chris:** It almost sounds like a two-sided marketplace, but I don't know if that really fits in with, with what this is.

Yeah. It's two, two segments, but like, not necessarily like polar opposites, like. Like one isn't providing for the other, I guess kind of one is providing for the other. If one is building the templates and the other people are consuming them.

**Matt:** Yeah. I like the Airbnb example because you can travel and use other people's spaces, but you can also become a host and it's at the same time and that's software, right?

It's like, you can put your own code on, get hub and you can use other people's code on get hub. And there's, there's not really a, um, I think that's the nice part is that if those were super different, You're either buying on eBay or selling on eBay, but nobody ever does both. Right. I think that those kinds of marketplaces get constrained really easily because you don't get that cross over, but I'm optimistic that we will get crossover and ours by serving both sides.


**Chris:** Right. And it makes sense for that type of usage. I think like I would, I would probably try to do both if I was going to like really dive in there and play with it.

**Matt:** I'll trade traded most advice. Right. Most advice is like, you can't do to always focus, pick one. Right.

**Chris:** Okay. But you have to find what fits for your business, I guess, which is always the interesting challenge.

**Matt:** Yeah. Yeah, exactly.

**Chris:** Okay. So if you don't mind, I would love some advice on some stuff related to chipper, which kind of like relates to this also. All right, so let's take continuous integration app. Right? So I have a, um, I guess I have an audience in the larval space, which is why this came about.

So it's, it's tailored to Laravel. So in a sense, it is niche down way in a place that might be too small, but I don't know. It's still a big community. Like the number one language in the world is still like, well, it's still PHV . I believe, um, right. It's big either way anyway. Yeah. Forever, the pricing is just 1 39 bucks a month.

And then the only other way you could pay more is through expansion revenue, through, paying for more concurrent builds. So like if you have three projects and four developers and they all pushing, you don't want people waiting for one project to finish building before the next one starts. So you basically multiply that 39 bucks a month.

Each time you want, like I'm another concurrent. Which is a model I basically ripped off of other continuous integration apps. You know, in 2019 when I was building it, looking at their pricing, it's, I guess I'm talking about pricing, but I have a bunch of issues. Like the real issue is top of funnel.

Right? I want more people to know about this thing. so the strategy I've been doing there, I'm just going to back up for a second. The strategy I've been doing to get more people into the app is to focus more on ways that more people could just come around and seeing the applicant. So, , if you think about a lot of continuous H integration apps have a Yammel file in the repository, to define the build steps of what happens, like, you know, build your static assets, run your tests, deploy somewhere.

We never had that, which was kind of our aim of simplicity, but I've changed that I've added that in the last few months, because I also want people to see that that file exists and just see like, oh, this application exists, like as a, as a way to get visibility to the application at the same time, I'm also doing more features towards open source.

So people could, , set their project as public, which means like the build results get shown on a public page so people can see it's not hidden behind a login. So the results being like this is the build output for your tests and that kind of thing. And then the next step of that is like the, let people apply, apply as an open-source project.

So if I approve you, which I think I need an approval process at first, then you can get unlimited builds for, for free on the free tier, basically for a specific project rather than your whole team. Cause the whole thing has kind of team-based. Okay. So that's my idea of growth that I'm, I have worked towards

so I'm hoping to get more top of funnel there as well. You know, just to see, you know, just get more visibility into the project. In addition to talking about it on Twitter and, you know, doing some . Content stuff. The next step, there is my ideas for extra features and extra features leading into different prices.

So I have the $39 dollars a month plan. And that's really it other, unless you are one of the few people who pay for concurrent requests and our concurrent builds. And I say a few, it's like, it's definitely, it's a, it's an okay amount of people, but it could be more, but also I think the pricing, you know, being this huge lever, I have to increase MMR potentially.

It's something I haven't given enough thought of until kind of re. I've seen tweets before you, before we have ideas about how pricing strategy could really help you out, which is why this question exists. Uh, why I thought of talking to you about it. Yeah. So one other thought of this. So others, you know, we can kind of dive into like what pricing ideas I have if you want.

And they're like, what features might make sense for that. But, the other interesting aspect of the larval world specifically is kind of. Downward price pressure because Taylor, well, who made the rebel has his own offerings? Like, are you, I don't know how familiar you are with like kind of the layer bell community.

I know you're I am true.

**Matt:** Yeah. I am through osmosis because Peter sume is a very close I think to the community. So, um, yeah, it just through him and then PHB was the first language that I, that I learned, but, um, it's been a long time. Yeah. Yeah.

**Chris:** So Taylor outlaw made the framework. You know, has all the open-source stuff, but he also has paid things, a layer of affords, which like sets a service for you and, and makes it very easy to manage servers and then level vapor, which is like a server list version of that.

Yeah. And other things also, , like things that are one-off purchases to provide functionality to your applications, all sorts of stuff. , the prices for those tend to be low. There's kind of a lower price pressure in the layer of a world for feet, for applications. Recognizing that maybe think, I wonder if I actually want a low tier price point somewhere.

And then also, obviously I have opportunities to increase to like more like 50 bucks a month and then a hundred bucks a month. Plus for, you know, depending on what kind of features there are, or paying for larger servers. , and I didn't know if that set off like alarms in your head or if like, I don't know if that's even enough detail to give you a good idea, but I don't know if that made sense as a, as a strategy.

Like it's kind of more of a volume play at the, at that level, but also room to grow to larger plans.

**Matt:** Sure. So I can, I I'll start peppering you with questions. Uh, Triangulate something here. So, uh, are you freemium now or is it free trial? It's freemium. I believe,

**Chris:** yes. It was a free trial, like the first few months.

So then we switched to freemium a lot of it's just because every, you continuously integrate in every CIA application, like just does that and it makes sense to get developers in the door and then get started and get integrated. And then, you know, with the hit limits, the pay

**Matt:** for it. Can I, uh, Yeah. I don't know how much I want to ask you.

Well, you already shared revenue, so you probably pretty comfortable some of the I'll just ask what what's the ratio roughly of like free to paid in terms of your starter versus standard tiers,

tuck a 99 to one or something else.

**Chris:** It's so hard to answer this question. And the reason is because of time, because I don't know if I should think about this in terms of cohorts. This also gets into the question of what's my conversion ratio of a free to paid, but I don't know how to measure that because it's freemium.

So people might be around for six months before they pay, or they might be ready for. Yeah. And if it,

**Matt:** I don't know if this is, might be like freemiums freemium, freemium companies anonymous or something confession, but like, I don't really know our conversion rate either. I'd have a ratio. I have a rough, we sort of back into it from a ratio of like, okay, this is how many active users we have.

This is how many paying customers we have. If that ratio holds that we're converting active users. And we feel good about that. If that ratio doesn't hold, then. Failing at like converting people who are active in the product or, or if the ratio goes too high, you're like, wow. A hundred percent of our active users are paying customers.

It could be because your active user pool is too small and your problem is activation not conversion. Right. So,

**Chris:** yes. Which I I'm hoping as part of the case. So as you might imagine, the ratio from free to paid, it is a high or low. I don't, you know, there's many, few less patients.

**Matt:** Yes.

I mean, I think that not to go back to square zero, but I think the first thing to do, if you haven't already, and maybe this is more for our listeners is like, make sure you have your numbers there.

You're measuring them consistently. And you feel good about what they mean, even if they're not industry standard, like, you know what they mean so that you can get a good view. Yeah. The the river, the pool, the pipeline in your own mind. So with that said, how do you feel about your sort of activate. To conversion rate.

**Chris:** I'm going to put that. Yeah. Yeah. I'm making queries.

**Matt:** Cool. Cool. While you do that, I think that what we're driving towards here is like, you start about pricing. We didn't even talk about retention. I'm assuming if somebody is using chipper, CIA in a production sense or setting, it's probably pretty sticky.

Like they don't want to, if it works and they're happy, they don't want to get rid of it. So you don't have a leaky bucket problem. Yes, but you might have a, this is what problems might you have top of funnel maybe, but your freemium. So if people aren't signing up, you know, that's an interesting optimization thing, but usually when you have freemium, it's like a lot of people who come to your homepage don't have any reason to not sign up.

You might have a, wow. That's a lot of active users who aren't converting. Problem, uh, or you might have a, that's a lot of people who click the button, sign up and then don't become active. Right. So, uh, I guess what I'm saying is, before you focus on very top of funnel, you know, you might have a lump somewhere in your, in your snake here.

That's, you know, it just needs to work through.

**Chris:** Okay. That makes a lot of sense. So, uh, let's see. I can see, we get. In the twenties of people signing up per week. So monthly, that ends up being in sixties. Okay. Variable a bit. The there's like there's just under a hundred, I guess. I'll just say this just under a hundred paying customers of various, MRRs mostly at the lowest MRR, 39 a month.

Some higher because they pay for more concurrency. There's like over 2000 users in it. 2200. And these users are ones I'm counting because you can add invite team members. So these are not people who are invited into teams. They're actually like the people who first sign up. Does that make sense? Yeah, so I'm not including all the team members in there I'm ex excluding them.

So I don't get a number. That's not, I don't get the number as wacky, so hopefully that's a more accurate representation. So. That is what, like 4% am I thinking of that number? Right? 97 divided by 2200.

**Matt:** Uh, yeah. Uh, cause, uh, out of 2000, are we talking about, so it's a ratio, so we basically a hundred to 2000.

So for four or 5%.

**Chris:** Yeah. So, , that's what that is. And I. We get it's like consistent sign-ups I recently put in a thing of like, how did you hear about us? So a lot of it is like we're mentioned in the Laravel documentation, or we saw me tweet about it. So like the avenues that, that I have tried to get into, including like getting into like Blairsville documentation for things is like, it's kind of like, and I can, I want to do a lot more of that.

So the top of the funnel can keep going, but then I think what you, I hope, but I should do more investigation here, but what I hope is that you're correct. You hit the nail on the head when you said like the activation is kind of the thing you have, like a lot of people coming in, but only a few activate.

And that's kind of where I'm at with the pricing tier stuff and like features I want to build, but then also adjusting, you know, currently what we have now, like you get 50 free builds a month, which might be too high. And then the pricing strategy around that gets into like, well, how to, what's optimal to like give people value immediately, admit they'll wanna get out of the . Free tier.

, yeah. Why are people hesitant to pay if, if they're hitting free tier limits and that kind of thing. Um, and it is like you said, the site is very sticky. The churn is like super low and low single digits. Like even as low as 1% sometimes. It's a matter of activation. I think,

**Matt:** I think so. Well, yeah, it'd be.

So if we dice that up a little bit before we get to activation, so when 20 people a week or so sign up, they go into that 2000 bucket, correct. Or that pool of 2000 and then, um, and then. Some of them may just leave and never come back. And some of them become sort of your definition of an active user.

Right? What is your definition of what, uh, an active user I imagine is just some let's let's for a second. The simplest definition would be like, they actually use the products on a. Free often enough basis. Right? So monthly, weekly it's like setting


**Chris:** a project is definitely a thing because otherwise they've done nothing.

, and then whenever they push code to get, then it kicks off a build. , so like actually seeing builds happen as a thing, you know, assuming they're actually pushing code to their repositories.

**Matt:** Do you have a number on like roughly how many of those 2000 are doing work, uh, with the tool on any given basis?

Per anything. So uniques per something, which that is going to be the sort of a washing machine where like, well, this personally does it every other day, this person does it every day. So it's like, it, it becomes an ambulance. Yeah.

**Chris:** I don't have it broken out by like by team or customer there. So, but I do have graphs of like how many builds are happening and that kind of thing per day, but that's not okay.

Like I said, it's not tied back to a specific.

**Matt:** I would be interested if I were you I'd be interested in that because we failure to truly activate, like, become an active user. Um, like how many of those 2000 are becoming those cause that, that, that is the group that may upgrade your really your upgrade candidates are just the set of people who use the tool, um, as intended.

**Chris:** So I actually have some metrics in my head of what makes sense for that. Like, , setting up a project obviously is one, , if they've, if they've created notifications, so they actually know the result of ability is another big one. Like if, if they don't care about the results, then like, what are they doing here?

, and then there's some other things that like, those are kind of easy to track. I can like make queries for that. And there's other things that aren't necessarily as easy, but like, do they deploy from this? Like if, if they run tests, but then nothing happens and there's no deployment. Then, you know, and there's a mix of people doing, doing that or not.

Some people do to play from it and kickoff to deploy from it. Some do not. , so setting project, oh, if they invite members is another clue, but like, you know, so I have all these things that I have actually have thought of and planned on making veterans for, but I haven't gotten to that step yet.

, and those are those seem like, kind of. Clues or things like where people might actually convert to pay it if they were doing all of these things.

**Matt:** Yeah, I do. So taking a step back, like I, you don't have a leaky funnel, but you might be leaving value on the table. And I, I do think I like to build bottoms up.

Meaning retention is the first thing to solve. Like if nobody sticks around and uses the product regularly, You don't have a foundation, so you don't have that problem, but you have the problem of getting them to that state where they are sticky, like the product is sticky for them. Um, but then the question is like a, uh, a strong pricing model that sort of has this inevitable tractor beam on it, of like conversion conversion.

Like people like whether it's six months or six weeks or six hours, people convert almost inevitably. Succeed with the product. That's the pricing model you want to have. And so I wanted to sh like, sort of hold out the lantern and see how much, how dark and murky your understanding of like the pipeline is before this.

And it sounds like you could improve your understanding of it. The, what you can do though, to work in your pricing models, you don't have to understand all that. You can at least look at the people who are active and say like, is my capture. Fair sort of relative to their journey. And the thing is maybe on the top end, you're maybe on the top end, you know, it's, it's work.

There's two ways to look at this. Are they paying me more as they succeed and have more success with the product and get more value out of it? The other thing that though is say, like starting at 39 and having that initial hurdle. You may not be capturing the value underneath that part of the curve, which is like all of the, you know, all the $5 a month Roku bills that you know, or, you know, to use those cheap examples of like, yeah, 39 is a pretty decent initial hurdle.

And, you know, I think a strong pricing model is better than higher prices. Meaning if you can figure out how to get, you know, $9 a month. More of those 2000 times, whatever percent is active, right. Then, then you're going to feel better about focusing on the rest of your pipeline and just saying like awesome.

You know, people go from $0 to $5 or $9 a month pretty soon and pretty inevitably, and you're not like waiting for them to have this trip wire down the road, which, who knows like the percentage of people that actually hit. Hit that wire, you know, if it's too high, you could be missing out on just like a lot of no brainer value.

Like the person's totally willing to give it to you, but you're just not asking for it. And that could be silly stuff like, you know, by, by silly, I mean, you're in the pricing zone for like F you know, four or five, nine, $12 a month, $50 a month, whatever it is like. Uh, this isn't relevant to chipper CEI, but this is the zone of like, oh, you want to color things a different color, or you want to put your logo on something, or you want like a, you want a, uh, whatever domain name, your own custom domain.

Like those are $9 a month features, right? And they're often vanity features what I'm trying to say, because, uh, it's such a small amount of money that all you have to do is just give somebody a justifiable reason that appeals to. Either, you know, pride, ego, just the way they like to work. You know, I like to have a black background, so I'm worth it.

You know, like that's not a, it's a no brainer for them because there's almost this, um, yes, there's utility value and you can get into like AWS utility value pricing, but I'm almost talking about like for you, don't just think about utility value. Think about like, what are just little things, rough edges that.

That are fair to be there in the free version, but if you pay anything at all, you can like, not ha you can customize that or change this or whatever. So, yeah, I think that's a pretty exciting opportunity, especially since whatever that is, isn't going to cannibalize the $39 version. I'm guessing. Cause it'll be such a baby step.

It's such a baby step above free, you know, um, Yeah, it's the, I actually want to pay for this thing and I don't need much of a reason because it's so cheap, but for you, it adds up because, you know, 500 times, whatever that number is, is like maybe double your current revenue. Right. Um, so that's, that feels like a pretty good opportunity.

If you can find

**Chris:** that's exciting. I'm excited. I think there's features I have to actually add in features. I have plans that dovetail nicely in with your idea. Cause I. I haven't said it to myself so succinctly, but what you're saying is definitely aligned with how I've, I've started thinking about it in the last month or so.

, and there's some features I have planned that really kind of, like I said, it kind of dovetails in with that like kind of smaller step, like okay. Like maybe allowing like one build step to be run concurrent. So you could do like your no JS assets at the same time as a unit or as the same time as like your PHP dependencies.

So you save time and your overall build by like running, you know, it's like not huge, but the thing like that, , and then there's always the option of like, Hey, I want more Ram and more CPU, which could be maybe a theme that you can do in any pricing tier, I don't know, or maybe at a higher pricing tiers, a higher one.

Like I have to kind of think through that some more. Those are the variables. Like, , if you have a limited number of bills per month or not, concurrent bills, which is the thing I said, that how you can do expansion revenue right now, you can multiply your current current balance, but there's also concurrent build steps where you might do two things at the same time within one.

Like, I just had the note JSS assets at the same time as your PHP dependencies. And there's some other stuff, like if I support, if I let you use Docker or not, which has like a real cost, because I have extra servers that are related to that and the usage of secrets or managing secrets for your application.

And there's like all sorts of ideas I have, like, I don't know if I'm getting it, all these ideas, but, um, I've actually built some of them. And then I can, I can price that though, you know? Yeah.

**Matt:** I think if you just had a little basket, think of it as like a gift basket where something. Delightful like unexpected little nice things that, wow, that's cool.

And then other things are like real friction removers, because there's going to be probably three or four of these little trip wires that you need to put in place to bound a free user. And everyone's got like a different situation or, or work environment where. This is the thing that matters to them.

Like, I need to have this instead of one, or I want to be able to do this, or I want that concurrency. Cause I do have the assets thing, but if you can create like maybe three or four of these, then you know, it doesn't really matter to you, which one causes them to do it. It could be the superficial one, or it could be the, you know, the one that has real, you know, cogs and utility about it.

Right. But that feels really good. And then you get to keep all that. When you go to the bigger. But then yeah. Then, then you can just focus on. Okay. Since I don't end up just, I, I'm not starving for revenue until they hit this larger hurdle, you can then focus on the funnel upstream with a lot more focus because you're not like, well, even if I get them active, like, are they going to convert ever?

You know, like just, you can feel confident about that focus. And it, you know, if you think about it actually given your numbers and your revenue, this little, this little tear could be, you know, it could be some, it could be some substantial lift, right? Yeah, yeah. It could be. And the fact that it's cheap, you know, lines up well with what you said earlier about, um, you know, uh, Taylor Atwell and his offerings, or, you know, Kind of the dev community or especially dev ops, like there's this expectation that the ramp, I like to say the ramp goes all the way to the floor.

You know, it's like zero to $1, like whatever. However, it's like a skateboard rate. However, then you can get that wedge. Like that's what people expect and, you know, um, which is why credit cards on file and $0 and usage based pricing is so popular because it's like, You know, everyone's gotten an S3 bill or a lot of people have gotten S3 bill for like 52 cents.

And you just kind of laugh at Amazon is the one that's laughing. Cause they're like, exactly. But Amazon, the one that's laughing. Cause they're like, yeah. But you know, a lot of those 14 cents become $14 and then $1,400 in like, you'd be surprised once you have that card on file, like what starts to happen.

So, yeah. Um, if you know, that's the other thing you're doing too, is like you're having them give you their credit. Yeah. When the gravity of the decision is just a lot less, and that makes expansion revenue just so much easier because if you don't have to take out your credit card to expand. You're just much more likely to click the button and not worry about it because you know, it's already a bill you're already paying for it.

Why you sort of made that decision already to become a paying customer of this thing, you know, what's another $30 a month. Well, like for you, it's like triple it's, like tripling the revenue for them. It's actually like, not as stressful, uh, as it would be if they weren't paying you a few bucks already. So yeah.


**Chris:** Yeah, cool. That's exciting. And I am glad to have a little bit of validation of that idea because I've always been like, well, I just need to target tomorrow. Just raise a 39 to 49 or something. And I'm just like, it doesn't feel successful. Traditional.

**Matt:** Yeah, I do. I do think that's the, unfortunately that's like the superficial interpretation of the charge more philosophy is like, it should really be capture more.

Have higher numbers, you know, like a better pricing model is, is way better. What we're basically saying is you've got a lot of zeros that you could lift to non-zero right. That's where the opportunity lies instead of, you know, zero to 10 is a lot better for you than 39 to 49, because then you can keep the 39 as well.

Um, plus I think like tradition would say. More than one pricing plan is just good for psychology and consumer psychology. And yeah, people may,

**Chris:** because right now it's just 0 39 or enterprise, which literally no one has ever asked me about.

**Matt:** Yeah. I mean, in a weirdly weird way, this may draw attention to the 39 and half people go like.

You know, that makes sense. Yeah, the tent's fine, but why not just, you know, if I'm going to pay for this thing, you know, um, it's funny. I mean, that's the, that's the, uh, waiter who comes to you and tells you like, well, yes, this is our standard offering, but the, the special of the day is I wasn't, I wasn't thinking.

Spending that or getting that, but like, now that you've anchored me, you know,

**Chris:** that I'm going to spend, sorry. That's okay. But this one over here is a little better. It was like an extra 12 hours or something.

**Matt:** Exactly. Exactly. It's like the large popcorn is only 50 cents. The more you're like it is like nine times bigger, like, dang.

Yeah, it's good. So you can start to have fun. Um, but yeah, uh, I don't know if that that was fun to chat about. I'd like to hear how it goes, if you dive into some of these things. Sure.

**Chris:** I, yeah, for sure. Um, man, that's exciting. So I, on my side, I, what I'm hearing is I need to get some feature development done, which is what I've always known.

I've actually just got some freelance help from someone and we're gonna see, , they just, they just started, so we'll see how it works out, but it looks really good so far, , which will really free up some time for me, potentially for. Stuff. Right. Because I actually do have a job that I have to do for sure.

Well, I trying to grab this thing, the two kids. Um, my kids are four and two. So like the, um, the podcast you did with Aaron Francis on his podcast, like really resonated with me. It was just how hard it is to like balance kids and hope the family happy. Make sure my

**Matt:** wife, I was not very impressed by the floor behind you.

It's so cool. Like either the toys are all to the right or left.

**Chris:** Yeah. But they're all there. They're

**Matt:** all there out. Yeah,

**Chris:** exactly. I can turn this more. You'd see the kids like iPads and junk on this desk. Right, right.

**Matt:** Of course. Yeah. Yeah. I, uh, yeah, we have four who are pretty grown up now. Our youngest are 12.

We have 12 to 12 year olds twins, a 14 year old. Sorry. 11 to 11 year old is about to turn 12, uh, 14 year old and a 17 year old and a boy that four to stage, you know, we're just con you know, they get harder because like, when they're really, really. It's like, are they fed? Have they had had an app? Do they need anything?

Then they just, okay. Put him in the crib, they'll play the whatever. But like two and four, man, there's no containment it's

**Chris:** destined. And everyone says terrible twos. I do not understand our terrible twos became the knee because three and four is like a whole another level. Like,

**Matt:** yeah. Terrible twos is clear, invented by people who, uh, who only had that level to deal with.

Right, right. Um, yeah, I mean, Kids are not terrible, but this just, I feel for you, man, there's a lot of activity going on. So I'm excited.

**Chris:** Entry, energy, outpaces, yours so much by such a. And I started having kids in my thirties. I'm 37. Yeah. Just like, I wish I did that in my twenties.

**Matt:** Yeah. Well, we were, it was, uh, it was funny.

We were around other folks who had kids young. Um, and uh, now being an Austin, not as much, uh, most people seem to wait, but like, you know, I'm 40 and our youngest are 11, so. You know, we, we did, and our oldest is 17. So we were 22 when we, when she was born. And I cannot imagine not, you know, I said, you boxes of whatever your favorite Kathryn to think is because it's, it's see.

But, you know, we missed out on like a lot of the standard 20 year old, 20 somethings experiences. I feel like, like we didn't travel a lot and without a lot of conferences like that, wasn't a thing. Hopefully we get to do that now. It's like, you know, we'll be 44. We can do it on the

**Chris:** backend, but you're definitely a benefit of having the kids early.

Like all of a sudden you're 40. Well, I can do this stuff now versus like, like the trade-off

**Matt:** that was

**Chris:** totally turned off. Yeah, exactly. Like, I don't know. Yeah. All right. I don't know. We'll see how it goes for us, but like being in your fifties and sixties with your kids, leave the house. It feels a little worse.

**Matt:** It's all true. It's all. Trade-offs right. That's the funny part. Uh, w w it's always, whether it's this or that, it's all just like, yeah. What are you, what are you choosing to accept? Trade-off with, so anyway, I, um, yeah, I'd love to hear how it evolves and, um, yeah. Happy to talk about more.

**Chris:** All right. Thanks. I appreciate it.

Yeah, that'd be great. , I'll definitely let you know about it. I don't know. I sort of have this idea in my head that I could have like a revolving group of guests on the podcast instead of just like trying to find more people. So I dunno if that'd be interesting someday in the future, but we'll see how it goes.

**Matt:** Yeah. I think that's a cool idea. Uh, certainly it works for a late night TV. So for, for podcast, exactly.

**Chris:** I may compare myself to late nineties. Yeah, yeah,

**Matt:** yeah. Hi, hi ambitions there, but, um, yeah. Thanks again, man. Really? Uh, we'll get a chat with Chris, right? Thanks you

**Chris:** You too!

Matt Wensing - Summit
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