BSSA #76 - VALUE BOMB 🚀

Mat De Sousa
November 14, 2023

Heeey! How you doing?

I’m sorry… I didn’t send any email for the last 2 weeks. But to be honest, I was really busy.

I didn’t tweet that much because I traveled a lot and we have so much work with the team.

In today’s email:

The results of the new pricing test
We failed the launch of the new monthly plan
Spending a week with the team in the most exceptional house
How would I start again today
My talk and dinner in Bulgaria with many Shopify App Founders
How should you price your Shopify App?

Let’s go!

The results of the new pricing test

I’ve always been bad at pricing. This is one of my weaknesses and I want to change that.

If we look at all the biggest SaaS businesses, they crushed pricing.

Users can pay a lot (or they’re targeting the world) and it’s usually incremental. It means that you will always pay more as you grow.

And with my single plan at $18 per month, I feel behind. 🤔

Even if we look at the best Shopify Apps, the ones making more money, they have multiple plans, and usually, it’s incremental.

So for the end of this year and for the next one, I want to iterate a lot on it.

And that’s what I started to do a few weeks ago. If you remember, I said I was going to test incremental pricing.

I wanted people to pay more as they get more value from my app. And it makes sense!

So I changed the pricing for a week only. To get enough users on that new plan so I could follow them on their journey to monitor a few things:

What will be the impact on the installation rate?
What will be the impact on the number of installs?
What will be the impact on the conversion rate?
What will be the impact on the MRR?
What will be the impact on the churn?

Unfortunately, you’ll have to wait to get information about the conversion rate, the MRR, or the churn. Because these need time.

But for the installation rate, we went from a 32% to a 25%. 😖

It’s lower, and it was expected (even though it could’ve been even more)

But I look at it this way: If I get fewer installs but every user brings more revenue, then I win!

My fear was that the installation rate would be so low it didn’t make sense to pursue it. But it wasn’t the case. So it’s some good news!

We’ll review it until the end of the year and decide whether we should keep it next year or not.

We failed the launch of the new monthly plan

Last week, on Tuesday, we decided it was time.

I pressed the button to release the new plan and the new features we had worked on for the last months.

1… 2… 3… Nothing responds. What’s happening?

We look at the app on our test store. It doesn’t appear anymore. 😱

“Guys… I think the release just broke the app…”

And we didn’t have to wait as dozens of people started to send a message on support:

“What’s happening??”

“The app doesn’t work can you check??”

Me and the team had spent the last few weeks testing everything we could to avoid such situations.

But no matter how long you prepare for, things will always go wrong.

The database decided to leave us at that moment and we couldn’t show the app.

And when thousands of people rely on our app to make money, this has a huge impact!

We quickly rolled back and had to wait some time until the database went back to a normal state.

We didn’t know what went wrong.

For the last 7 days, the technical team only worked on that:

What happened exactly?
Why did it crash?
How can we fix it?

We made many assumptions and made more tests trying to replicate what we have on our app: same database, same number of requests, etc…

But none of the tests helped us understand what happened here.

So in the last 7 days, we tried to optimize everything we could, and we decided to try again… today.

But instead of pushing everything at once, we divided this new system into 4 steps. And we would release the next one only if the previous one worked successfully.

And as I’m writing this email, we didn’t do it yet. But when you’ll receive it, we would either have had one more stressful day OR a beautiful one.

Because as I told you earlier, we test pricing a lot. And this time, we’re trying to add one more plan: The Advanced Plan. ✨

More features and more expensive. We talked to our power customers in the last few months to understand what they wanted on the app.

We packed all of that into a plan and decided to release it.

Spending a week with the team in the most exceptional house

Before Black Friday I took the team to an incredible place. It was supposed to be a rest and slow work week with the new plan (but you know now that things didn’t go well).

And the team didn’t know anything about the place except that it was in Turkey.

We arrived on Saturday night, and they could enjoy this BIG house. But they couldn’t enjoy the view yet because it was so dark.

The house is so big we sometimes don’t know where a person is.

“Did you find Ogi?”

“I think he’s in his room?”

“I thought he was outside”

Those are the daily questions we have to ask 🤣

And then in the morning they finally discovered this amazing view

As a completely remote team, I don’t get to see the team a lot. And spending one week like this at least every year is amazing.

It creates better relationships
The team is amazed
We can work together
We can rest

And we usually do them at the end of the year so that we can review the past few months and prepare for the coming year.

How I would start again

I built WideBundle in May 2020 and we quickly grew to $25,000 MRR in less than a year using Facebook Groups.

But Facebook Groups today are a bit dead. So how would I start again?

I would:

Attend Shopify events in France
Spend time on the Shopify Slack Partners
Follow as many people in the Shopify Ecosystem on Linkedin & X
Share daily my progress on my research

The goal is to find problems. And this takes a looooot of time.

I can ask questions such as:

What problems do you have?
What apps did you try that could be improved?
What would you change if you could?

You shouldn't build the app immediately after that.

Did you understand the problem?
How badly do they need it?
Will they use it?

What would I do to validate it:

Build mockups
Contact every person I can
Show them and ask them if they would use it

I will try to find 10 people interested (It's like a magic number for the Shopify App Store)

I want to build the app in less than 2 weeks, a first version that includes what they wanted.

I will add a free trial + give people a discount.

I will quickly submit it to the App Store so I get approved fast.

Once it's live I put it unlisted to onboard only the people I want.

I will improve the app with them and contact every agency, influencer or person I know .

I'll ask them to share the app with their audience with 2-3 months for free

My goal is to get 10-15 people who will actually use the app. I need to talk to them constantly!

I will use an excel file to keep track. Constant feedback is the key here.

There are a few questions I would ask:

What would they add?
What would they change?
What price would they pay for it?

The app is unlisted for 2 reasons:

It’s not good enough to get random users
The moment you’ll go live, you’ll ask for reviews to get a huge boost in the algorithm

When they start telling you the app is good:

Go live
Ask for reviews from everyone

And then you can grow with different channels:

Improve your app listing and use the staircase strategy to grow on the app store
Start doing app partnerships
Increase word of mouth with excellent support and ask people to share it

I will then add Mixpanel and track everything now that I have some data to improve my metrics.

The next scaling phase would include:

Influencers - Price increase / more plans
A scaling channel (Blog, Youtube, Linkedin, etc)

My talk and dinner in Bulgaria with many Shopify App Founders

Last week I went to Sofia in Bulgaria to give a talk at the Sofia Ecom Meetup.

I talked about growing my Shopify Apps from 0 to $50K per month. The goal was to explain what I did for each step:

From 0 to $1K
From $1K to $10K
From $10K to $25K
From $25K to $50K

And I also shared a bonus on how I plan to grow to $100K (But I’m not sure about it yet)

There is a big Shopify community in Sofia and I didn’t expect it!

The next day I also had dinner with 10+ great minds where we could share what we thought of the future of e-commerce.

It was also a great time for people to ask me direct questions so I could share my point of view to grow a Shopify App.

How should you price your Shopify App?

I’m testing a lot on price. And I usually receive this question: How would you price a Shopify App? Should I add a free plan?

As I said, I’m not the best, but my insights may help someone else.

So here we go:

Should I add a free plan?

You should add a free plan if you want to grow on the Shopify App Store (free plan equals to more installs and more reviews) or if you want to get many users because you’re VC funded.

If you see the free plan just as a way to get quickly many users, forget about it. It’s a vanity metric.

Most Shopify Apps can use a Free Trial instead.

You can add a free plan also if your app needs time to get value (for example 2-3 months to see the results)

Should I make a complex pricing?

In the beginning, keep everything simple, don’t over engineer you can still change it in the beginning. The only rule is: get money asap!

Getting money will give you motivation and if you want to get the “perfect pricing” in the beginning you’ll wait for too long.

See it like that: I’m bad at pricing, I have a single plan, and I’m still making more than $50K per month.

Should I offer multiple plans?

If possible yes! But don’t make it complicated, you can start with only one.

You have 3 ways of doing it:

Shopify Plan based (price changed based on the plan)
Feature based (the more they pay, the more features they get)
Value based (the more value they receive, the more they’ll pay)

If you won’t have many big Shopify Plus, the first one doesn’t really make sense (we have mostly small merchants so using this won’t make us a lot of money)

Feature based is great if you don’t want to take any risk. Prepare 3 plans (to push the users to take the middle one)

And value based is the best. You should be working toward this pricing. And if it’s incremental it’s better (don’t stick to only 3 plans for example). so you can always have users spending more and more.

That’s it for today’s email!

I hope you enjoyed it! Feel free to share my newsletter with someone else: https://news.matdesousa.com/

And let me know what you want me to discuss in the next email!

See you next week,

Mat