Be embarrassed by what you produce. Too many of us are perfectionists and there’s this desire to get everything just right before we share it with the world. Do the opposite: get it out there even if it’s just an idea or a mockup on paper. And when you actually start to build your app or SaaS tool, give yourself a launch deadline and start sharing it early, even if you’re embarrassed by how it looks or works. It’s actually far better to get feedback early and save time by only fixing the things people care about or doubling down on the things they love. You’ll move much faster this way. When we first started we didn’t even have a SaaS app.
As part of my series about the “5 Lessons I Learned When I Created My App or SAAS”, I had the pleasure of interviewing Greg Smith. Greg’s original career path was not trending towards entrepreneurship. With a law degree and a promising career at one of the largest law firms in Canada, quitting to start something new seemed a little crazy. However, when Greg’s side gig of tutoring students on ‘how to take the LSAT’ turned into a successful online course that started generating more revenue than his legal career, Greg cut the golden handcuffs and took the leap into full-time entrepreneurship. He created Thinkific, an online course platform, with his brother Matt, in response to the overwhelming demands of other people who also wanted to create their own online courses. Thinkific now powers more than 36,000 education websites, allowing entrepreneurs and businesses with a passion, skill or expertise to share it with the world. To date, Thinkific has empowered course creators to teach more than 10 million students online and earn more than $150 million each year from their skills. You can create your own online course or membership site for free at https://www.thinkific.com/
Thank you so much for joining us! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I’ve always been interested in entrepreneurship and starting new ventures. I got started in online courses when I was in law school by creating my own online course to help my LSAT students prepare for the Law School Admissions Test. The course slowly grew and reached thousands of students and I just loved the ability to help people around the world learn and achieve their goals. Eventually I left my career as a lawyer and went full time into online courses.
I just love the impact you can have by helping someone else achieve their dreams and to me that’s what teaching is. When I took my course online and went from reaching 10 people a month to thousands, and started getting emails from students in other countries thanking me for changing their life, I knew I’d hit my dream job. From there, all I wanted to do was help others experience that feeling. This continues to be the experience we hear from our Thinkific course creators, and it’s what continues to drive me every day! I feel so fortunate to have built a company that helps entrepreneurs build remarkable businesses and makes an impact for so many students around the world.
What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?
My aha moment was when I started receiving calls from people who had a passion, expertise or business they wanted to grow, and wanted to create their own online course to share with the world. It was seeing this desire to take what you know, what you’ve experienced or you’re really good at and share it with others while building a business around it that got me really excited. It meant you could have a positive impact on the world while building a great business. So we started creating Thinkific to help others teach online.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
For the first few years I would constantly look at our bank account and calculate how long we had until we went bankrupt, assuming we didn’t make any new sales. It was often as short at two weeks and rarely longer than six months. We had a lot of interest from potential customers, but we really hadn’t found “product market fit” — that point when the market really starts to pull you in the right direction. That meant that my brother, who was also my co-founder, and I were often arguing over which direction to go in or what to build next or even what type of customer we should be working with. When you’re not sure where you’re going and you’re running out of cash and not paying yourself, it makes everything much harder and more stressful. I remember a couple times us breaking out in a heated debate — entrepreneur speak for yelling at each other — about whether it was even worth continuing.
So, how are things going today? How did your grit and resilience lead to your eventual success?
Eventually we hit “product market fit,” and it was this palpable feeling of pull as customers grabbed us by the shirt and pulled us in the right direction clamouring for our product and making it very clear what we needed to do next. At one point we ran our first online webinar teaching people how to create their own courses and the response was amazing — over 80% of people on the event signed up and paid that day. I have no idea why that was the thing, but it was prompted by this huge release of stress that we’d finally hit on something that people truly cared about. From there on things weren’t easy, but they certainly took off fast. We had sustained periods where we grew 30% and 40% a month, tripling our revenues every three months. Now we’re on a steady growth path with a team of over 100 amazing people, hiring six a month and generating great success for our clients with more than $150 million in course sales a year and that’s more than doubling each year. I’ll never forget those early periods of stress, exhilaration, fear, excitement and uncertainty. What a rush!
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
At Thinkific, we always do team retreats to get away and have some fun together. One of the first members of our team had to miss one of these retreats and he called me up to explain why, as he was dealing with a difficult personal matter. At the end of the call he said something to me and I misheard him and thought he told me he loved me. I replied “I love you too.” He immediately called me out saying, “Thank you Greg but that’s not what I said.” We laughed hard about that then, and he still teases me about it today. As awkward as it was in the moment, I think it took a tough situation and made it a little better. Humor tends to do that. I’ve made a few of these faux pas over the years and the team never fails to remind me of them for a laugh.
It’s also a good reminder that regardless of industry it all comes down to people. One of our annual goals always relates to people first above all else, and I’ve found that helps us in all things as it’s the people around you and the ones you choose to work with that will determine your future and help drive who you and your business become. From those early customers pulling us in the right direction, to the amazing team and clients we have today, we’re defined by the people we serve.
What do you think makes your company stand out? Can you share a story?
There’s a guy named John who is one of our earliest customers. He was working for a big company in London and found that his co-workers would always come to him for help with something he was really good at — Microsoft Excel. He created an online course to help them with Excel and shared it internally and outside the company. People started purchasing the course and revenues slowly grew. Eventually he found us and moved his course to Thinkific. It was then that course sales took off and he was selling over $20,000 a month. Even better than the revenue, he was helping thousands of people learn and grow, and they loved him for it. He picked up and moved to his dream town on the beach, took his family and went full time as an entrepreneur. Hearing this story from him and how we had helped in a small way to make it happen still gives me goosebumps. Now I get to hear stories like this every day with tens of thousands of people teaching everything from yoga and hula hooping to corporate finance and encaustic painting. It’s these stories that get me out of bed early and excited every day.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Persistence is the key to survive and even thrive as an entrepreneur. The ability to persist and focus with discipline on a plan or idea for sustained periods allows you to move past setbacks and criticism which inevitably come to anyone trying to start something new. This also allows you to maintain an odd paradox, of recognizing the brutal facts facing your idea at any time, while still being optimistic enough to proceed regardless of the apparent dangers ahead.
I find that to generate this ability to persist no matter what, as a SaaS founder, you really need a driving force that’s bigger than just revenue or business success. If that’s all that’s getting you up you’ll likely burn out early or change course too often to sustain great results. When you look at the most successful entrepreneurs, they are driven by a core purpose to effect positive change — find yours and use it as your rocketfuel to drive your business forward through any adversity and to set a clear vision as you build a team.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
One of the coolest moments for me was finding out that someone else had built a whole business on our business. There was a guy in our Facebook group, Rob Galvin, and he was offering help to our customers to set up their online course sites. He was so prolific in the group that I eventually reached out to him to chat and found out he’d hired a team of six people and all they did was help our clients. He’d even named his company, Themeific, as an homage to ours. That was a huge moment and made us realize that our impact was going beyond even what we knew about to help create and support others’ dreams of building a business.
I think this highlights a real opportunity for so many SaaS companies that we’re seeing as a growing trend and that’s partnering and working with people outside your company to add value to your core product. You see this clearly succeeding with companies like Shopify and Salesforce as their partner community is hundreds of times larger than the companies themselves. It’s like having this massive army around you to support your growth.
Ok thank you for all that. Now let’s shift to the main focus of this interview. Approximately how many users or subscribers does your app or software currently have? Can you share with our readers three of the main steps you’ve taken to build such a large community?
We measure this in a few ways. We have about 40,000 course creators each with their own custom website. Together they have delivered learning experiences to over 10 million students, and generated over $150 million a year — and that’s all doubling each year.
From the very beginning of Thinkific we’ve been obsessed with being helpful to our customers and have focused entirely on seeing them succeed. We’ve often done this even for nothing in return just to see people succeed. I think this has been the central theme of our growth. When those we help are successful, they tell others who come join our community, get help, see success and tell their friends in this wonderful viral loop.
Initially we did lots of non-scaleable things like setting up courses for people, even filming their videos or selling their courses for them. This really helped excite and delight our customers and of course that meant they shared Thinkific with their friends. Now that we’re a bit larger we’ve even figured out how to do some of these “non-scaleable” things at scale. In fact, I’d encourage anyone in SaaS to start with non-scalable things and continue to try them even at scale as you launch or consider new ideas. It’s a great way to move fast and validate new ideas.
We help boost this word of mouth with an amazing support team to help our clients along the way. We’ve always invested heavily in support as building a business is not easy and we want to be there for people whenever they need help or guidance.
We also have a welcoming and helpful Facebook community to help course creators share ideas as well as interact with our team. This keeps us in the loop with what our clients are looking for and gives another place to help and support them.
What is your monetization model? How do you monetize your community of users? Have you considered other monetization options? Why did you not use those?
We have a freemium offering, so people can create their own courses with Thinkific for free and then as they see success we offer more powerful features for a monthly fee. Currently that’s usually $99/month, although we have a few price points. This does present a challenge and opportunity in that many of our customers are generating hundreds of thousands or millions in revenue and still only pay us $99 a month. This is a huge win for us in that we’re able to provide so much value, and also a possible future opportunity to offer more services or products for additional revenues.
In the early days we took a percent of sales but we found this attracted less successful customers, as the really big thinkers and course creators didn’t want to share a percent of their success. By offering a flat fee their cost is predictable and their wins are their own.
Based on your experience and success, what are the five most important things one should know before one wants to start an app or a SAAS? Please share a story or an example for each.
1. SaaS founders should seriously consider using product led growth. This just means you’re driving growth through product usage, and it’s exceptionally powerful as a growth channel, lowering customer acquisition costs and increasing customer lifetime value (two critical metrics for any SaaS business). Historically software was evaluated and purchased by a CIO or executive, but now that power has shifted to the end user. We see this with Slack and hundreds of other apps that are adopted by the end users first and then spread through the organization until purchase becomes inevitable. It also works in SaaS that sells to SMBs or even consumers. Another good example of this is Later.com, where anyone can sign up for free to schedule Instagram posts and then as they see value from the product and scale to become more of a “power-user” they can choose to pay for some of those advanced features they are using. I see this product led growth trend being implemented across the majority of successful SaaS companies and it’s definitely something you should try for your app or SaaS business.
2. Start with product-market fit. Without it you’re toast from the start. Too often I see people charging ahead without product-market fit doing scaleable things like running ads or big marketing efforts. There’s no point in trying to grow if you don’t have something that solving a big problem for people, or saving them a ton of time, or doing something for them that they really need or want. Product market fit can be a hard thing to describe but you’ll know it when you get there as you’ll go from trying to get people to work with you to a feeling that you can’t move fast enough to keep up with what your customers want from you. Until you hit this point, keep iterating and talking to users and taking their feedback, looking for a common thread that leads you to an important problem to solve for them. You don’t need it to be for thousands of people initially — a big problem for a small identifiable group of people is a great way to start!
In our early days we actually failed to do this a few times. In one case we found one customer that was willing to buy from us at a price larger than any customer we had worked with before. We thought, great, this is our ideal customer, let’s focus on them and we got to work. Unfortunately, we only had the one and no strong indications that others of this type would jump on board. So we invested a ton of effort trying to sell to more customers like this one only to find that although they were interested, the sales cycle was far too long and the budget was too small. So we wasted months building product for, and calling customers that were not a good fit for us.
3. Use data! There’s a good quote from W. Edwards Deming, an American engineer, statistician, professor, author, lecturer, and management consultant, “In God we trust, all others must bring data.” Increasingly the ability to make decisions and choices based on data and empirical evidence is fundamental in the life of an entrepreneur. People look at leaders like Steve Jobs or Bill Gates and think they pulled great ideas from thin air but in fact they were fanatic about looking for evidence to inform and support their creativity. Experiment frequently to test your ideas and look to the data to validate your next big move. However, you also need to balance this with the stage you’re at. We currently have a team of data scientists helping us make better informed decisions, but when we started out we have only a few key data points we looked at each day. You should start looking at product usage data very early on and customer feedback data even before you start building anything, but don’t get obsessed with building more than a few key metrics until you start seeing some real results. A good guideline is to setup and watch 3–5 core metrics for the company and 3–5 for the product. Look at those data points daily or weekly and don’t add too many more until you have enough revenue to pay for 30% of someone’s time to focus on data. You can grow and expand from there.
4. Be embarrassed by what you produce. Too many of us are perfectionists and there’s this desire to get everything just right before we share it with the world. Do the opposite: get it out there even if it’s just an idea or a mockup on paper. And when you actually start to build your app or SaaS tool, give yourself a launch deadline and start sharing it early, even if you’re embarrassed by how it looks or works. It’s actually far better to get feedback early and save time by only fixing the things people care about or doubling down on the things they love. You’ll move much faster this way. When we first started we didn’t even have a SaaS app. We would call customers up, show them a demo of what it would look like, ask them to send us their content via Dropbox and then we’d build them their own custom course and website and send it back to them. If they liked it we’d ask them to pay us, by any means they wanted. These days all that’s automated. But by doing it manually before we had much built we learned so much about what people actually wanted that we moved ten times faster than if we’d waited to launch a more “perfect” product. If you’re not at least a little embarrassed by some of the first things you launch you’re probably moving too slow.
5. People first, above all else. If you’re building a company around your app or SaaS, you’ll need people. There’s really nothing more important that picking amazing people to join you. They’ll make everything easier or much harder depending on who you choose. We got lucky with some of our earliest hires as they were willing to roll up their sleeves and work on anything that needed to get done anytime it needed doing. And in the early days that’s exactly what you want — Jacks or Jills or people of all trades. Later on you’ll start to hire for specialized roles, but to start, you need swiss army knives. Even our first developer, now CTO, was able and willing to hop into a conversation with a customer and help them solve problems or build a course. If you’re looking for help on how to hire amazing people I’d recommend the books “Topgrading” by B. Smart or “Who” by G. Smart & R. Street.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
My dream is for everyone and every company to share what they are passionate about, and what they have special skills or knowledge in with the world. This one simple thing could really end everything from war to famine. There’s so much amazing knowledge out there and if we get it into the hands of the right people at the right time the results are magical. Think about how you can share what you know or what you’re good at with the world, you can make a huge impact if you do.
How can our readers follow you on social media?
Instagram — https://instagram.com/thinkific/
Instagram — https://www.instagram.com/gregariousgames/
LinkedIn — https://www.linkedin.com/in/gregsmithlawyer
This was very inspiring. Thank you so much for joining us!