Andrew Michael: Hi, Nick. Welcome to the show. 

Nick Fogle: [00:01:25] Hey, thanks for having me.

Andrew Michael: [00:01:26] It's a pleasure for the listeners. Nick is a lawyer turned SaaS founder, and the co-founder of Churnkey a sauce cancellation flow builder. To help you retain more customers prior to chunky. Nick was the co-founder of wave. And my first question for you today, Nick is what is it about being a lawyer that you hated so much? You decided to take a job as a shuttle driver. 

Nick Fogle: [00:01:47] You do the same thing pretty much every day. You're gonna go in and I was doing transactional law and Specifically residential home purchases.

And you are literally doing the same contracts, the same drafts, [00:02:00] dealing with the same arguments every single day. The other thing about it is you, when you create something, I love being creative, you creating a contract there's not much room for creativity there, you create something and you only ever see the value of what you've done.

If things blow up and later. Your contractual language, save somebody. Yeah. I moved to being a shuttle driver because I'd always been this computer nerd never really thought about making money from it. And I really wanted to create something of my own. And as soon as I started working in code and learning how to write computer code, I realized I could create something right there and immediately get feedback.

So that the biggest difference is the feedback loop. You get, you create something. Something new that people can use and you can immediately get feedback rather than in law. You may never get feedback. And there's also not much room for creativity. 

Andrew Michael: [00:02:52] And everything's pretty defined cookie cutter model.

Like you're just going with the most. 

Nick Fogle: [00:02:57] Exactly. And if you get too creative, you're [00:03:00] opening yourself to risk and opening the firm to risk. Exactly. 

Andrew Michael: [00:03:03] Yeah. I see. I could see how that for specifically, for an entrepreneur being in like the bane of existence, just doing the same thing. Yeah. So you mentioned something before the show I thought was really interesting as well.

It's like between shuttle drives, you would pull out your laptop from a DSC and just start learning to code and learning to program. What was that like in the early days? 

Nick Fogle: [00:03:19] Yeah, it was stressful just for background. We it was really the only job I could find at the time. This was 2012.

We had, I decided I didn't want to do law. So I did a housing one at ad on Craigslist because we couldn't afford our rent. And we moved out to a rural area where we found this house, there was a decent rent with utilities included. The only job anywhere nearby was a shuttle driver at a resort. I was trying to teach myself to code, but I was having to work long hours and I realized that I could pull my laptop out, get on code Academy between pickups.

And sometimes it could has 15 to 20 minutes to learn something. And I just, when you're, when you go from. Being a lawyer and having this, financial potential in front of you to [00:04:00] making minimum wage and are moving backwards. It's an incredible incentive to force you to learn and to change and acquire a new skill set.

So it was a very stressful time, but I'd say I was probably doing that for six to nine months. And in that time I became. Good enough to get a job at a at a software company as a intern. 

Andrew Michael: [00:04:19] Yeah. It's interesting that you said that. I think a lot of people say don't become an entrepreneur to get rich.

Like you got to do it for the love, because it's typically is the case. If you look at the opportunity cost of what you would be able to earn and learning power, like it's specific jobs like I look at myself now as a farmer, earning, not even a 10th of what to where before like starting a business and probably that's going to be the same situation for the next five to 10 years.

But if you add it up in the end, probably you would have ended up making more money on the one side, or at least the guarantee is probably a lot higher there, but. Just having the freedom and flexibility to like the things you said as well. Like being able to build something, to be able to get creative, to put your energy into something, seeing that feedback loop and be able to think, I think [00:05:00] that's probably the most rewarding thing.

At least for me is like having that energy and excitement on a daily basis to see. Okay. Like you had an idea of a way you could solve a problem. You quickly put together a solution and you actually saw that come to fruition. I think It isn't but then it definitely is a big motivator, like trying to get that back, seeing okay.

What you would have had then where you want to be. 

Nick Fogle: [00:05:17] Yeah. I love that mentality. One of my favorite quotes is this quote that it goes people tend to overestimate what they can do in one year and underestimate what they can do in a decade. And I was like really depressed and down on my luck back in 2012, like starting over from scratch with $200,000 in student loans that 8% interest occurring, like $50 a day.

Didn't know what I was going to do. And I started listening to these old ones. I Tony Robbins, if you're listening to this, please don't Sue me. But I was I pirated some Tony Robbins, like inspirational DVDs and that quote on there, and a lot of other like positivity quotes. And I just tried to change my mindset and focus on okay.

If I start building this foundation, where could I be in 10 years? And I'm almost [00:06:00] 10 years from there. And. It's amazing. I definitely have my tenure income has exceeded what I would've made as an attorney. And I'm finally starting to see the dividends from that five years ago, actually making nothing.

Yeah. Yeah. 

Andrew Michael: [00:06:14] It's that reminded me as well of another quote that one of my friends used to push back at, we used to, he still does is when you people say that life is short and they have this mentality, but then the flip side of it, it's also the longest thing you'll ever have. So when you flip the coin and your viewpoint on it, it really gets you thinking a little bit.

Okay. What can you do with this time that you have and stop thinking like short-term all the time and just having that balance between yes. Being spontaneous. Yes. Doing things and like being creative and going out there, but then also thinking of care, what does the future look like? Where do I want to go and planning for that effectively, like really helps you set you on the right path now.

Nick Fogle: [00:06:49] Yeah. When you think of something like that, like going to Mars, I hate always using Elon Musk as an example. Cause he's so overused in entrepreneurship, but if you're looking long-term, I mean that vision to go to Mars, that's a 10, 20, 30 year [00:07:00] vision. And most people they're like, Oh, life is short. I that's not possible in my lifetime, so I'm not going to go for it.

Andrew Michael: [00:07:05] Yeah, for sure. But then when you hit it, it's like it's really meaningful, impactful. Cool. So let's dive into a little bit about the experience now. Fast forward, you've learned not to code you've experimented, that ideas, you starting to build a business and you launch wave maybe talk us through a little bit about Wavve what it is, what you were doing there, what you still do there.

Nick Fogle: [00:07:26] Yeah. So our initial vision was we're going to be this big social media company. This was 2015 when we first launched. And we were like, Oh yeah, we're going to be like the next Twitter or the next Reddit. Basically our initial product was to be an audio version of Reddit. It's actually now that clubhouse is out, it's actually what we built with similar to clubhouse.

I think we were just too early, but anyway we tried the venture thing. I probably spent a thousand hours of dev time. We were never able to raise money. Me and Baird, my co-founder were working side gigs and burning through savings. And I had, $200,000 in loans that I was [00:08:00] not paying. And they were, it ended up getting up to 250,000 over the two years that I was trying to build this first version of wave.

We actually called it in Utah. That product was what's called Utah. We got a trademark infringement, a letter, and then we had to change to, we changed it away, which is a much better name. And we ended up selling off the assets this this other product and in the final days of that startup, before we just threw in the towel and raise the bite flag, we were like, ah, let's try one more hail Mary.

So I pulled an all-nighter and I found this good hub project. That was, I think it was w mic. They were creating an, a tool that lets you convert audio into video. This was the original audio gram and nobody had commercialized it yet or made it user-friendly. So I was what the hell let's give this thing a shot, and we're going to do this to promote our communities content in an effort to like, seed more interest.

And it didn't work, [00:09:00] but we got a lot of people saying, Hey, how do you make those? How do you make these, how do you turn your podcast and the video and We were like, Hey, maybe there's something here. So my co-founder, who's the marketing sales side of the business Baird. He went out and started selling it.

And within about six months we were doing, I think, about a thousand in MRR. And we gradually bootstrap of this thing. We were like, this isn't venture fundable. Our goal was to pay our mortgages. And over time we continued to grow that within about a year we were doing 5,000 and by year two, we were doing about 25,000 MRR.

And suddenly we realized we had a big problem. We were on a collision course with our growth ceiling due to extremely high churn. 

Andrew Michael: [00:09:41] Yeah. Talk us through that, the growth ceiling. Cause this is definitely something we talked about on the show, but it's always good to recap. Like how did you figure out you're hitting that grade ceiling?

Like what was the realization? What was that moment like? 

Nick Fogle: [00:09:53] We'd had a few good months of growth. Our market for wave was it wave is mostly pod-casters. So we [00:10:00] call it like a prosumer market. It's not fully B to C. Definitely not B2B. We do have some businesses, but this type of market has a naturally high rate of churn.

Although ours is like somewhat 15, 17%, like really high. And we realized, okay, next month, starting off. We're going to have to do a lot of work to offset that, and we're going to have to increase sales like crazy. And we calculated out, I don't know if it was, I don't think it was your total. It might've been like another rudimentary tool before, before you had yours up on your website.

But it was like telling us that the turn ceiling or our growth ceiling was. 35,000. And until that point, we hadn't really thought about churn. Churn is not a fun thing to think about as a founder. It's depressing about, it's your high school girlfriend breaks up with you.

You get 10 breakups a day. That's, if you're looking at that you tend to avoid that. And we've been avoiding it and focusing on acquisition channels and growth and closing more sales and all that stuff. And then we realized. We're going to have to figure out churn and, find some ways to lower it.

Andrew Michael: [00:10:58] So at that point, she [00:11:00] figured out, okay, we're going to have to do a lot to keep this current growth. We've hitting a ceiling point. Now, what are some of the first things you looked in to try and do? What was your initial reaction? Like, how are we going to fix this? 

Nick Fogle: [00:11:11] The first thing was, it was pretty simple and it's ubiquitous these days.

Most startups and companies will just throw a little form up and it's probably the most simple thing you can do is have a feedback forum to figure out why are people leaving make that required and you'll get some insight. And the thing that blew us away, we were expecting people to be like, Oh, I hate your product.

Or it's so buggy or, kinda expected the worst. But on the contrary, people were like, We love the product, but I'm not. My podcast season is over and it doesn't start for another two to three months. So we use that feedback to realize, Oh, maybe we can offer a pause option for these users. And within a month we built this new part of the flow that would allow these users to pause.

And suddenly our turn dropped from 13, 14% down to about [00:12:00] 11%. Revenue turn with pause can still be high because temporarily you're losing that revenue, but the user turned dropped significantly. And that was our first realization that, okay. Like maybe there's a way that we can just like you optimize your onboarding flow for conversions.

Maybe there's a way we can optimize this onboarding flow or this cancellation flow for retention. And it's worth noting that so we did pause and. Okay. We're chugging along at 11, 12%, still not great by any standard. And that freed us up a little bit. We were like, okay, like with this, we can get to 55,000 before we hit our ceiling.

And now we're at 145,000 a month. And our whole journey has been like, okay, what else can we do to optimize? 

Andrew Michael: [00:12:40] Yeah, it's different. That's like from 14 to 11, that's quite a big step change though in itself as well. It's not an easy feat. And I think the one thing as well, that you mentioned having the churn exit survey, Another interesting point, I think is also allows you to understand what's within your control and what's not.

You mentioned for example pausing the accounts, but other things like going out of [00:13:00] business or just not having the finances, that's not something that you could really do. You could maybe pause them again and just give them a free, but then that's like giving away the business for free.

It's not really what need be doing right. But having that signal allows you to see, okay, what's within your control to change and what's not as well. So this is something, as I think a lot of times companies make mistakes on it's like they take a look at their turn numbers and they say, okay, we want to do reduce it 50%.

But without knowing Hey, what's causing the churn, what's within our control to actually change. And what's not, what's totally out of it. So doing like an excels, like that really helped. So this sounds obviously then like natural progression into. Turnkey you decided okay, this was working for us.

Maybe we can productize and build this for others. Why did you decide to go ahead and start Churnkey when you had a way of now it's done at a point you're doing a run 125 K MRR. Like you figuring things out as you go and you're getting to the next step. What was it that motivated you then to go and launch Churnkey?

Nick Fogle: [00:13:57] So we know that a lot of other [00:14:00] companies have similar problems for a while. We were doing the open start-ups thing on indie hackers and a lot of other bootstrap businesses, they don't really have the resources to devote engineering time to optimizing this cancel flow. We knew how much time we'd spend on it.

And when you're a small bootstrap team, Anytime you take away from your core product development. It's not good for your business. You need to be focused on what you do well and specialize on that. And we realized that, if this product had existed, the one that, that we wanted, where you have a lot of these these new capabilities that allow you to capture some of the users that are leaving for whatever reason, and you can satisfy them and keep them around We realized that would be of high value to other companies, particularly if it's a, if we have a no-code builder, a lot of times you've got a customer you might have somebody who's more in charge of customer care or retention.

Even at small companies, you might have a marketing person who is using that as a dual role. They don't have time to work with the engineering team to optimize this cancel flow. [00:15:00] But if we could productize this and make it a 15 minute install, that's super simple. That has a no-code builder so that anybody can create the optimal flow for you.

Then that seemed like something that a lot of people would want to take advantage of. 

Andrew Michael: [00:15:15] Absolutely. And talk us through a little bit, because I was challenging you a bit before we got to recording the show that there's quite a lot of these tools now are out in the markets. And we were talking about some of the areas that you feel that you really differentiate.

And I think like one of those we were talking about was not just having this exit flow, but more about psych. The next step, like what happens after you find the reason and maybe share some of the unique ways that you think your solution is really adding value to you. 

Nick Fogle: [00:15:43] Sure. Yeah. And I can talk a little bit about some other solutions we tried before. So first off we're a bear ma wave is a bare metrics customer. And as we were building out these tools, we were like, Oh, they've got this cancellation insights tool, which is a solid tool. But it was only giving us insights. And after a while you get the [00:16:00] insights and why people are canceling, but you're powerless.

We tried, they've have an automated email flow, so it can automatically trigger emails based on cancel reasons. But nobody, once they cancel and in a subscriber's mind, they've canceled. It's in the story. If you send them an email afterwards, I think we might've had one person ever get back to us out of maybe a thousand with one of those emails.

So we realized okay there's something here we need to build. And we dove into to these cancellation flows and started thinking like, okay, there are some tools that give you feedback, but there also, this is a critical point psychologically, when a customer is making a decision, do I break up?

Which tends to be more permanent or, is there something that could keep me around. It's I think everybody has had this experience where you're ticked off and you call Comcast or whoever your internet provider is, your Internet's out. And you get on the phone with somebody who's really helpful, like a really helpful agent.

And suddenly you're at ease and you feel [00:17:00] great about being a customer. Our thought was like, okay, if this works, in, in a real sense, were you able to recover these people? And they're not only. Recovered, but they become more of an advocate. If we can appeal to that, maybe there is something here.

So we took that approach where we were trying to meet the customer where they are, for instance, a lot of times I'd say the most typical cancel flow that you'll see these days is like, doesn't meet my budget. I stopped using the product technical bug reason or too confusing. I can't figure it out.

Those last two technical issue or too confusing, I need help type thing. Those can be addressed immediately and many companies use Intercom or drift or some of these other support widgets. And we realized one thing we could do with our off-boarding flow is if somebody clicks that we can automatically pre-fill that chat bubble and get them in touch instantly with the customer support advocate.

And if that person can respond within a minute or two, it really wows the customer who is [00:18:00] probably a little upset or frustrated. And in, in many cases that can totally recover the customer. And not only are you recovering them from that original lifetime value, they'll be more of an advocate after that.

And they're likely to stay longer and even extend that typical LTV. That's just one example of some of the things that you can do. Just real quick, I'll give you another example when COVID hit. I'd say March is when people really started to get a little nervous, the market crashed. So a lot of our customers and I know many other pro-sumer tools and C tools, they were experiencing a huge uptick in churn because people were budget sensitive.

They were worried and trying to cut anything they could. And we realized pretty quickly, like these customers are all citing budgetary reasons as the rationale for canceling. So we figured, okay, like this is hard, a hard time for everybody. If people are canceling and they're setting a budgetary reason for canceling, why don't we give them a discount?

We're not going to lose money by giving them a discount. Like we still get something and the customer gets a lot too. So we said, okay [00:19:00] maybe this financial, COVID thing lasts for six months, let's do a six month, 30% off. Deal for them. And that tended to work really well.

And I think customers were deeply grateful for that too, because they realized like this company is willing to go out of their way to make sure that their service is a little less expensive if I'm having financial issues. Yeah. 

Andrew Michael: [00:19:20] And I'm interested though, in this, these sort of things, like what sort of.

Percentage rates. Are you seeing on people actually taking up the offers or having their conversation with support? Do you see a good number? Because in my mind, as, or typically when it comes to retention and churn has said, someone's actively making that decision, like they just want to get it over with and done with there's not much time to think about taking up your up and an offer or to speak to support.

Cause you're pretty frustrated, what are some of the things you're thinking around this in terms of like how to increase the conversion rates for people actually taking these offers up and spending time?

Nick Fogle: [00:19:54] I'll say it w we have numbers that are pretty average across the board, across all customers.

Right [00:20:00] now, overall, a customer who enters the the cancellation flow. We retain 30% more customers total than you would before the cancellation flow. So across the board in the aggregate that's the big figure. As you get down to some of the different reasons, pause is one of the biggest that's one of the biggest ones.

I think it's, there's a very high rate of people that look at pause. We have a dashboard that gives you as your particular business. That'll give you the breakdown of each offer and what percent they fall into. After Paul's the a discounted subscription tends to work very well, particularly right now, I think people are still anxious and worry.

We see a good many people who decide, all right, I'm going to go through the flow. I'm going to pick a reason. If they're presented with that pause option about 25 to 35% of people, except the Except the discount option. So yeah, it varies based on customers. If you had a product that was more technically difficult or that might require a little more effort.

I think you would probably see a higher ratio of those people being retained [00:21:00] through a engaged customer support rep. Yeah, 

Andrew Michael: [00:21:03] very interesting. And then where are we at now? With the business. How have, like how long have you been running turnkey? Maybe give us a little bit of information, obviously with a wave now you've sure 

Nick Fogle: [00:21:14] what's happening.

Yeah. We've continued. Turnkey as it exists today, this where it's more holistic flow that has a lot more functionality. I also mentioned there session recordings that you can, I know some people are really concerned about privacy. You can turn it on or turn it off, but we have it on so we can actually go in and see if somebody hovers over a.

The customers leaving and they have the discount offer and it's 20% and they hover, you can see them wait and think about it. And if they click cancel anyway maybe that's a reason to bump it. So we've had a lot of these session recording and other tools inside wave in this turnkey prototype, if you will, that we've been using for about a year.

And last summer we were like, okay let's go ahead and break this thing out and turn it into its own product. We've got some other companies Baird and another partner of mine have created one called subtitle. It's a [00:22:00] very similar market to wave where it's  closed captioning tool for video.

They had similar high turnover and we were like, okay, like this is gonna work really well for them. So in the fall we did this private beta where we. Onboarding a few companies that we knew through this either personally or through the indie hackers community. And they were all seeing really good rates.

And we were originally going to do this a big public launch in April or may of this year. And we went ahead and bumped it up to February and just brought on a lot of people and went out of private beta because there wasn't really a reason to do private beta anymore. The product is it's fully cooked.

It's we're a Stripe partner. We've got everything we need. To start saving people money. And I think that was the big realization we had was, why are we waiting around to do the typical DC startup thing where you do the superhuman invite only private beta. These companies are actually losing money every day.

They're not using turnkey, so let's get as many people hooked up with it as possible. And we're, starting out the price point. Pretty low. It's lower than it'll probably be six months from now, but just a hundred dollars to start off with [00:23:00] the deal that I've made publicly on Twitter is I'll give you double your money back if you don't get ROI, because we're so confident that people are going to save money on this approach.

And remind me to in the show notes. So I'll share a promo code to, so people get a first month off for free. Yeah. Thanks. 

Andrew Michael: [00:23:15] That'd be great. I know the public statement as well, like you'll double your money back. If you get a positive ROI, it's definitely a powerful position to be in specifically for a product like where you can actually measure the direct impact and from churn perspective, I think it's probably the ultimate position to be in.

From your perspective from your side. Nice. Let's see, we're running up on time. I want to save for a couple of questions, ask every guest to join the show. Let's imagine a hypothetical scenario. Now. You arrive at a new company general. Attention's not doing great. The CEO comes to you and says, Hey, Nick we need to turn things around.

We have 90 days to do it. You're in charge. What do you do? 

Nick Fogle: [00:23:49] First I'm going to do is look at the market. Are they B to C? Are they B2B? What's the price point? What's LTV. Then I'm going to ask, have you guys been collecting feedback from these customers who are leaving? If not [00:24:00] day one, we need to get feedback and figure out, where, why are these people leaving?

And are they leaving for an alternative product? Are they leaving because of price? Are they leaving because they're not using it? That's going to be the most important thing. If this is a This is a consumer market price. Sensitivity is going to be a big one. And the ability to pause is also going to be a big thing.

Those both affect the customer's wallet. And we know for a fact that customers are going to respond to monetary incentives and you'll be able to to retain them longer. If it's B, then we are going to lean more into customer education and making sure that. The customer is onboarded properly and making sure that they're, they know how to take advantage of the product.

And then in terms of recovery with B2B and enterprise, it may not make sense to pause because if they pause and they're not using the product regularly, they may just forget all about it. That's going to be one where we want to get even more data, maybe even get a customer on the phone and get a sense of, where are things going wrong in the pipeline.

And how can we. No prevent them from ever having cancellation intent. [00:25:00] And once they get that cancellation and Tanner are thinking they don't need the product anymore, how do we offer them something that will get them to stay so that we get another chance to really please that customer. 

Andrew Michael: [00:25:13] Very nice.

And then last question, what's the one thing you know about general tension today that you wish you knew when you got started with your career? 

Nick Fogle: [00:25:22] Interest is a big just the nature of compound growth. I'd say, in everything this is gonna be a slightly longer response than a quick one, but it's worth mentioning.

I had $250,000 in student debt because I did get, I was a smart guy. I finished with a degree in economics and I became a lawyer. But compound interest is it's hard to wrap your mind around. And I went from, borrowing 150,000 to having 250,000 outstanding in student debt because I didn't get the, that recurring impact of compound of compounding over time.

And that is directly applicable to turn, I'd say like [00:26:00] I'm a personal finance nerd now and a numbers nerd after a lot of what I've gone through. And that's why I am so interested in insurance because. That same compounding is a force that you'll see in your business. And if you can recover, 2% more customers over time, it's going to be hundreds of thousands.

If not millions of dollars in additional revenue that you can recover. Absolutely. I 

Andrew Michael: [00:26:21] think that's like, when you think about the levers for growth, it's like reducing churn and pricing and packaging lucky because of the compounding nature of both. If you make a change to increase our power, that compounds for the lifetime of your business, and likewise with retaining customers for longer every month, they're with you like in every code that comes in spending more time, like it just.

It's an unbelievable force of growth. Cool. So yeah, it's been a pleasure having you today, Nick. Hey, is there any final thoughts you want to leave the listeners with that? Can you think they should be aware of obviously we'll have 

Nick Fogle: [00:26:50] notes. I was just going to mention, yeah, that there's this promo we're doing where, any listener who used the term turn FM will leave in the show notes, turn FM promo code [00:27:00] that will get you a first month free.

It takes 15 minutes to set it up. You can email me or reach out on Twitter. My emails, nick@turnkey.co or just Nick Fogel, F O G L E on Twitter. I'd be happy to help you get set up in about 10 or 15 minutes. It's a quick install and it's going to save you tens of thousands, hundreds of thousands depends on your business, but it'll save your business a lot of money.

Very nice. 

Andrew Michael: [00:27:20] Yeah. Thanks. Definitely if if you're listening, check the show notes, you'll be able to find that otherwise turnkey.com and you said churn FM. It's nice. I like that little touch that you added is, or cool. Thanks so much, Nick. It's been a pleasure having you on the show today.

We should be best of luck. 

Nick Fogle: [00:27:36] Thanks for having me, Andrew. 

Andrew Michael: [00:27:37] Cheers.

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