XO Capital's Fund Stuff

In this episode, we're talking about usage-based pricing vs. recurring revenue.

Is it time to ditch your monthly subscription and start paying for what you use? We'll discuss the pros and cons of both pricing models, and explore how the economic environment is changing.

We'll also talk about some of the challenges of implementing usage-based pricing, and how to overcome them. And we'll share some of our favorite tools for tracking usage and managing payments.

So whether you're a startup founder or a seasoned SaaS exec, this episode is for you.

We'll keep it fun and informal, and we'll promise not to get too technical. So come join us for a lively discussion about the future of pricing.

Here are some things you'll learn in this episode:

We hope you enjoy the episode!

For this week, I decided to record our partner meeting as a video and a podcast. We've never done that before and I hope it gives you some insights into how we delegate tasks and work together as a team. I've gotten a few messages about this over the years and think perhaps listening to us chat through stuff might help you understand just how complimentary Danny and Henry are to my skill set (which is mostly just a fire starter).  

Announcing XO capital's acquisition of Growthbarseo.com! Our 10th and largest deal to date! Take a look behinds the scenes with us and watch one of our internal partners meeting to see how we think and work together.

In this week's episode, the host delves into an innovative investment strategy he refers to as a 'flip fund'. This strategy involves raising funds to purchase a single company with the objective of doubling its revenue within a short span of 12-24 months, and then selling it off.

The host discusses past experiences and challenges with fund-raising, such as potential investors' concerns about their investment duration and exit strategies. Unlike traditional venture commitments that can stretch over a decade, the flip fund concept offers a brief commitment period and clearer exit opportunities, thereby addressing several common investor objections.

However, there are limitations to this concept. One crucial point raised was that there would be no distributions or "mailbox money" during the investment period, as all earnings would be reinvested into the company for growth purposes.

The host brings up his successful track record, having employed a similar strategy on nine previous occasions. He also addresses risk mitigation, explaining that poorly performing companies are quickly sold to recoup investments.

Overall, while this flip fund concept is an idea in its infancy and not a fund that is currently being raised, the host presents it as a fun, potentially profitable venture. He wraps up the discussion by inviting feedback and thoughts on the concept from the listeners.

In this podcast episode, the host explores the value of patience in running and growing a business, particularly in the tech sector. The conversation begins with a critique of the "move fast and break things" approach, shifting the focus towards more sustainable, long-term thinking. He emphasizes the importance of patience when negotiating deals, outlining instances where an initially rejected offer becomes viable after other buyers fall through.

The host further shares how their company operates, elaborating on their strategy of acquiring cash-flow positive businesses and reinvesting profits to buy more companies. However, the team is conscious of their limitations, recognizing they can only take on so much, especially with their bootstrap approach. They are focused on growing organically, even if this means periods of inactivity in acquisitions.

In this week's episode, we share a surprise announcement about our recent acquisition of UserPing.io, a platform originally known as MailBoat that enables founders to send onboarding emails and drip campaigns. Discover why we decided to make this purchase and how we envision using the product in our portfolio.

We discuss the concept of a waitlist, its pros and cons, and how this applies to UserPing. Our host openly shares his personal distaste for the FOMO strategy, arguing for more direct and immediate product engagement.

In the episode, we also delve into the reason behind acquiring UserPing and the potential for cost savings, especially with our growing portfolio of nine companies. We also draw a comparison between UserPing and other email tools in the market, such as Loops, shedding light on the factors behind our decision.

As we explore the potential future of UserPing, the host discusses the idea of integrating in-app notifications to make user interactions more responsive. He also shares some of his struggles in defining the boundary between UserPing and a potential analytics product, and his desire to figure out the right feature set for a product-led growth analytics tool.

Tune in to hear more about our host's other ventures, such as Super Send, SaaS deals, and Support Guy, which are at various stages of development and growth. He also addresses the issue of zero MRR products, the challenges with lifetime deals, and the value of recurring revenue.

As the conversation wraps up, our host reflects on his experiences with cross-selling products and contemplates whether it would be beneficial to acquire tools catering to the same audience.

Listen in for an insightful episode full of strategic business discussions, acquisition revelations, and more. If you're interested in startup acquisitions, product development, and learning from hands-on experiences, this is the episode for you!