G&T:01 - Sheet.Best
Sheet.best turns spreadsheets into REST APIs.
XO Capital, a company that buys and grows profitable SaaS companies, acquired Sheet.Best and is currently operating the platform.
The Farmer
My name is Danny Chu, and I'm based in Allen, TX, a suburb north of Dallas. I'm one of the cofounders at XO Capital. Prior, I founded and sold Noteninja, a sales conversation intelligence software. I also have worked at early-stage software companies building revenue and operations.
Check out a quick demo below:
The Pain
Improving the free-to-paid conversion rate.
Starting in June 2022, we started tracking the free-to-paid conversion because we noticed an extremely high volume of free account sign-ups. This is obviously big pain, and there are a lot of different experiments to try to improve this. We chose one of the lower hanging fruits.
The Play
Add a lower tier price to provide a more manageable bridge from the free to paid plans.
When we looked at the overall growth funnel, we were actually okay with the high volume, even if they were unqualified. Since we don't have a good understanding of a qualified lead, it was less risky to figure out a way to optimize further down the funnel.
After evaluating some feedback from churned users and looking at some of our competitors, we recognized a significant gap between the Free Account and the Personal Account both from an MRR and features perspective.
As a result, we introduced the Tiny Account.
Grow and Tell
Overall, the introduction of the Tiny Account did not improve the free-to-paid conversion rate. Since June 2022, the overall free-to-paid hovers around .7-.9%.
However, MRR for Sheet.Best since the introduction of the Tiny Account in June 2022 has grown by 17%. MRR at the end of January 2023 was $5,111 (up from $4356 in June 2022.
Despite the lack of improvement in the conversion rate, the MRR growth is 100% attributed to the introduction of the Tiny Account.
Tiny Account was the perfectly sized and perfectly priced plan for one of the largest ICPs (ideal customer profiles) of Sheet.Best.The Tiny Account provided the best fall-back to the users who needed a paid account but did not need or want the Personal Account. How do we know this? Let's go through some of the data:
- Up until the
Tiny Accountwas introduced, thePersonal Accountaccounted for more than 50% of the revenue.
2. During this time, LTV was $139 with an ARPU of $19.78 (ie. 7 months). Since the Tiny Account was introduced in June/July, LTV for the Personal Account is now $247 with an ARPU of $19.76 (12.5 months).
Our most popular plan now had a massive increase in LTV.
3. It almost felt like a 2-for-1 special because not only now were we get the most qualified customers on the Personal Account plan, but we were also now capturing the revenue for those users who otherwise may have churned.
Below you can see how quickly we were able to not only optimize the paying customers for the Personal Account, but grow revenue with the Tiny Account.
Seed for Thought
Price is often a scary lever to pull, but it often yields some of the quickest and best feedback.
If you're interested in checking out Sheet.best, they offer a free version here. All G&T readers also receive a small discount, so check them out below: