Why We Downsized R!.com by 40% // LIVE EVENT: Inside RB2B's Thought Leadership Ad Account

Hey RB2Bers!

For everybody following from home, here are this week’s highlights:

• Live Metrics, because we all wanna know what happened

  • Summary: Growth is great, churn sucks, how long can we grow until the ceiling forms?!?!

• Tate is finally getting around to implementing Churnkey (hope it helps)

• Started posting UGC content from our “Leaders” in my feed 1x/week

• Understory 2x’d LinkedIn ad spend from $10k/mo to $20k/mo

• Had Robb Clarke explain our robot support on our show (recording)

• I was on Latka’s monthly webinar (and 9 other guest slots)

• We gathered 10 beta testers for our Traffic Insights feature

  • Thank you to all who responded to last week’s request!

• And some guy on LinkedIn claims to have better hair than me

On the other side of the house, we made a big decision … the type of decision which is always the hardest one to make.

This is tough to write.

Last Friday we let go of 40% of Retention.com's ecommerce business unit (15 people) and shifted our focus from ARR growth to efficiency.

Here’s a breakdown of what happened:

Before I start, I want to express my deepest gratitude to our team members that we let go on Friday. This is the worst part of the game we are all in.

I want to express my thanks to our managers, who had to carry out an order and let go of team members they had deep relationships with, with basically zero warning.

Thank you for being such incredible leaders, and understanding what had to be done, even when it hurt so badly to do it.

Here’s why we decided to switch gears from focusing on ARR growth to efficiency:

1/ Our TAM is way different than we thought.

18mo ago, we thought we could make the top 50k Shopify stores successful. We dropped that to 10k last year, now it’s 1,400, plus a few hundred mid-market omnichannel retailers. Our team was still at peak size, while pipeline and throughput continued to decrease since making that decision.

2/ We thought we were going to be able to fix our churn.

I thought honing in on a super-tight ICP would create metrics that looked like Klaviyo’s. Instead, we realized we are in a high churn product category with a high churn buyer persona.

3/ Market dynamics changed completely, our product-market fit weakened.

We won the Shopify market we were going after, and our product still provides MAJOR value for our ICP, but once our TAM shrunk, competitors showed up, our market penetration got very high, our churn didn’t improve, and everybody started buying less SaaS … Well … Nothing worked as well.

4/ We scaled way too fast in 2023, and didn’t instill operational excellence.

Before rolling out EOS with a coach, we hired way too fast and had no processes. It created chaos, lack of focus, and lots of waste. We are becoming far more focused and efficient.

5/ I held onto the idea of ARR growth for way too long.

It’s clear when you’re in a growth environment, and it’s clear when for whatever reason it’s stopped. I should have been able to see the very clear signs last fall that we were losing PMF, and course corrected to focus on efficiency and profitability.

TAKEAWAY

Is R!.com a business in peril?

Absolutely not.

You see every month how much it’s growing or shrinking in my monthly updates.

It’s a bootstrapped, highly profitable business (even more so now), with a credible plan to move upmarket.

When we figure that out, that itself will do wonders in helping the churn issue we’ve struggled with.

But …

We haven’t figured that motion out yet.

18mo ago, we could see that everything we did REALLY worked.

Now when we look at it, many things we’re doing just aren’t.

What do you do as a CEO when most things aren’t working but a few things are?

I think you can only do three things:

1/ Get as small as possible
2/ Focus on what IS working
3/ Find a new Product-Market Fit

You live to fight another day.

And you just keep building.

LIVE EVENT: RB2B LinkedIn Thought Leadership Ad Account Teardown

When: Tuesday, August 20, 3pm EDT

Join host Pete Crowley (RB2B Head of Growth) and Ali and Alex from Understory as they reveal everything inside the RB2B LinkedIn Ad Account.

They’ll show you:

• The posts we’re boosting

• The segments we’re targeting

• All of our metrics - CPC, cost-per-free-signup, etc.

They’ll talk about what’s working and what’s not, and how you can get started with your first Thought Leadership ad.

You won’t want to miss this week!

Click here to sign up.

If you made it this far, thanks for reading!

As always, if you want to make my day, write me back and tell me you made it this far.

And give me some feedback if you have any.

And by the way - I’m gone next week.

Santosh and I are going to sit in the woods on a solo hike in Colorado and dream up our next big product idea.

Have a great weekend, and as always …

Keep building!

Adam