Monthly Letter #03 - Bento
Are we in the good place ?
Writing is hard. Consistency is hard. And honestly, it already feels a little bit like a chore to write even just one thing every month. But I can't back down now. Note to myself : commit for at least 12 months, 12 editions to talk more about Bento, and then we'll see :)
Which of this TV show is the best symbol of entrepreneurship ? Or are we like Ted Danson, acting in a bit of both ?
It's frequent to romanticize what starting up a company really means. Or what product work comes down to. You end up wondering if you’re in the good place, or if the world of demons (Google & FB ads - where most of the VC rounds get spent) are just playing with you.
One reason why doing updates every month feels uninteresting is that a lot of what I've been doing every day is quite boring.
Fixing bugs. Responding to customer support. Deleting the account data for a lead who did a trial but doesn't want to continue. Receiving a phone call from a French customer from the public sector who wants their invoice in a very specific way (they found my cell number in the Stripe receipts). Doing calls with internship candidates. Writing and sharing with them a case study. Adjusting the css for an input field which has a border-radius while the other input files on the page don't. Paying taxes you don't understand (the administration seems to be launching new taxes once in a while, just to see if it sticks, like MVPs). Updating the Heroku stack of an app which gets deprecated. Following up failed payments to get the customer to update their Credit Card. Introducing a new bug. Telling the Google Search Console that you have fixed that error. Adding a negative keyword to a Google Ads campaign which isn't optimized yet. Testing a new SEO tool. A new email marketing tool. A new AI tool. A new analytics tool. A new tool for building new tools for building tools, no-code.
You still there ?
But that's also the reason why this newsletter has some sort of value - at least to me. Forcing myself to take a step back and see if in this ocean of repetitive tasks, we have found some value, some learnings.
Lesson #1 : Caring about design is always a good idea.
SurveyNuts is currently the best performing product in the portfolio. And the one who seems to benefit from having more efforts dedicated to it than in the past few years. Just the everyday attention to details, improvements, and care is little by little helping conversion rates increase, retention decrease, and hopefully shake things up a bit (the MRR evolution had been flat for a long while).
More specifically, we started updating the design, with the help of two freelancers (Alice for the design work - while she had a full-time job, so it took a few weeks, and Omar (young Egyptian developer found on Upwork) who helped me with HTML/CSS integration of the homepage).
And then I worked on more small UX and design improvements, overall it’s still work in progress. But I already see an uptick in some conversion rates and lead quality. So it’s very encouraging, and honestly more palpable as an impact than what you’ll see in Lesson #2. At least here, your customers are getting value out of it. We’re still far from perfect in terms of design and UX, but it’s worth doubling down on it.
Lesson #2 : Google Ads is such a pain.
So, I’ve made several tests with Google Ads in the past couple of months. Either myself or with help from a freelancer. And none of them are a clear “win”. It’s very easy to get impressions. It’s quite easy to get clicks. It’s hard to get conversions. It’s really hard to get new paying subscribers. It’s almost impossible to get paying subscribers at a CAC that’s significantly under the LTV of our customers - and this across 4 different products in the portfolio. In other words, SEO has proven itself, often times, to be much more effective and with a better ROI than paid ads.
For example, the results for Seasons campaign were pretty bad. It’s a software for professional nutrition coaches. But as soon as you target keywords in the nutrition space, CPCs are really high because a lot of B2C companies are bidding on them, trying to sell nutrition programs, nutrition apps, nutrition supplements or what not. Plus most of our existing customers are in the US and Canada, which is where clicks are the most expensive. The equation just doesn’t add up.
It doesn’t mean that Google Ads can’t work. But there’s no free lunch. Clearly you need to invest a lot, have a very high conversion rate in your product, and find clever niches or tips to get small campaigns to perform well (get away from the most expensive keywords, test new countries, optimize campaign every day, go in less competitive use cases for your product, improve your own product funnel etc.)
We’ll keep trying in December as some of the campaigns seem promising. But clearly, it can be a money pit, and at some point we can consider turning things off.
By the way, if you have real life experience where Google Ads is helping you acquire profitable leads for your SaaS, reach out, I’d love to listen to it :)
Lesson #3 : Hiring internationally is interesting
So I’ve opened 3 internship positions in the last month : Growth Marketing, Acquisitions, and Full-Stack developer.
At first, I had virtually zero candidates. Then, I posted these on LinkedIn, and used their paid offering to boost the visibility, and it made all the difference. The marketing internship especially has received many applications.
The Acquisitions one is more difficult, as many candidates do apply but the good ones often end up taking an internship in a VC fund or M&A firm.
The developer one is definitely more tricky. Some are looking for apprenticeship. Some are harder to evaluate or super junior. Just not a lot of great candidates.
In all of them, I’ve opened the role to the possibility of being remote/hybrid, and that has led to a lot of foreign candidates to apply. I’ve learned a lot through these interviews. Candidates from Poland, India, Turkey, Taiwan, Italy, all open to remote work, or already studying in France and interested in staying (Paris is still a great brand to attract talents).
I’ve been impressed by the maturity of some of these candidates, some of whom already have full-time job experience in their home country but doing a masters degree in France and wanting to go one step further in their career.
Since Bento’s products have 95%+ of their customers outside of France, I have no issue considering these applications - au contraire. And for others reading this and hiring : don’t limit yourself to a tiny pool of candidates, the playground for jobs is now international and there are a ton of opportunities if you open your roles to remote work. And you can use companies like Deel to help with admin / payroll.
Lesson #4 : Fintech keeps innovating
It used to be that start-ups had mostly one way of getting capital : raising investment rounds from angels or institutional VC funds. But there are a myriad of other options now. I’ve already talked about companies like Boopos or Revenue Based Financing. This month I’ve talked with two other potential partners which made me more confident in the ability to finance Bento’s growth without necessarily getting diluted.
One is : Les Nouveaux Propriétaires (thanks Xavier ;)). They basically make it possible to structure a deal where you can get some money out of real estate you already own (which is my situation as I own an apartment I bought 12 years ago), but without selling it (you’re still the owner). A few other companies are working on this same problem (such as one from Otium Capital) and it’s interesting to see innovation there. While it’s common in other countries such as the UK to refinance your mortgage to increase your debt level and get back some capital, there were little to no options in France for that.
The second one is more traditional : debt brokers. Banks can be a good partner for financing acquisitions when you can a reliable valuation for the assets you acquire. But you need to know your way around banks. And with my experience at Pretto, I know how hard that can be. So I’ve been talking with a couple brokers in that space, and they’ve been fairly optimistic about the possibility to get debt financing from banks on a deal-by-deal basis.
While I’m still focusing on the operational side of things for existing products, it’s great to know that we might be able to do more acquisition deals in 2023 thanks to options like these two !
I’ll leave you with some other words of wisdom from The Good Place :