The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:34:42 · Harry Stebbings, Luke Harries
[00:34:42] S0: Webinars. Yes. That's still a thing. It is a thing. It makes me think of, like, you know, the, like, kind of phones for you customer support with the microphone going on. Hello. This is Greg. You've reached your webinar. Yeah. [00:34:55] S1: So webinars do definitely work. The key issue with webinars is the name webinars. And so I would argue that what we're doing now is basically a webinar on growth. The only thing that actually we're probably missing is like, one, we're not live streaming it. Two, we're not doing email capture. Capture. But then you can then take this podcast, and then you can repurpose it and push it on all the different platforms. I think OpenAI did something quite smart recently where they called it OpenAI Academy, which is basically a webinar platform. They're putting on videos for businesses or videos for educators, and they're doing email capture. They're effectively doing webinars, but because you're calling it Academy and it's focused on giving value, I think it goes down a lot better. So, yeah, I think we'll be rebranding ElevenLabs webinars to something else soon. [00:35:38] S0: I'm gonna throw out some bold statements on topics we mentioned. You said cat to LTV. [00:35:43] S1: Yes. [00:35:43] S0: Does cat to LTV matter because it's so inaccurate and transient? Reason being, your cats go up and down very quickly over time, and your LTVs, as you expand product lines Yes. Can significantly expand. I come in as an entry product and suddenly I'm using four or five. Does it really matter and can it not mislead you?
00:35:43 · Harry Stebbings, Luke Harries
[00:35:43] S0: Does cat to LTV matter because it's so inaccurate and transient? Reason being, your cats go up and down very quickly over time, and your LTVs, as you expand product lines Yes. Can significantly expand. I come in as an entry product and suddenly I'm using four or five. Does it really matter and can it not mislead you? [00:36:02] S1: Actually, the day to day metric and ratio we're really thinking about is CAC to payback period rather than CAC to LTV. We set different payback periods depending on which product line and how aggressive we want to be, but these vary between, say, twelve months, twenty four, maybe even thirty six months for that payback period. [00:36:20] S0: And the thirty six would be for the heavy enterprise?
00:36:20 · Harry Stebbings, Luke Harries
[00:36:20] S0: And the thirty six would be for the heavy enterprise? [00:36:22] S1: Yes. Exactly. Where you know the customer is going to retain, then maybe even signing multiyear deals. And the way we set it up is each different channel has a marketing lead, and they're thinking about this ratio. And if it's positive, that basically means they should be putting their foot on the gas as quickly as possible. You're exactly right though that over time you may be able to increase your payback period sooner. So for example, you may layer in an enterprise product, and then you can sell your creators onto your enterprises. The way I would think about this for other companies and as well as for ElevenLabs is you set this goal. If you're above that ratio, if the ratio is looking great, you should absolutely be putting your foot on the pedal and be trying to grow as quickly as possible. Some people go, oh, we'll just raise our performance marketing spend by 20 a week. Well, no. Like, take advantage of the opportunity. Grow it as quick as you can. On the other side, if it's actually below, you could give yourself more freedom because maybe you've got a bet on the thesis of how it will play out, where still you're like, okay. Yes. We are losing money over the first two years for this product, but that's a bet we want to make. But, actually, if your marketing's going very well, which for lots of these great AI companies there are, then, actually, it's more just, like, clear permission to grow as quickly as you can.
00:37:34 · Harry Stebbings, Luke Harries
[00:37:34] S0: Do CACs go up or down over time? When you think about it being from Yeah. Different purviews that you've had, brand marketing becomes a thing, word-of-mouth, you can see virality in communities. One would think it goes down. But then also you saturate your core audience and you move to a less defined ICP, maybe it goes up. Yeah. What have been your observations on cat going up or down over time? [00:37:55] S1: So for specific channels, they do tend to go up. But when you look at it broadly and as you're adding new channels, when you're increasing the virality, when you're improving your activation rate, your conversion to paid, yes, you can kind of get that overall blended cat to hopefully even just stay flat. But exactly as you said before, because you're able to layer in, say, enterprise products you can upsell to, or we actually have done this funky move of we've layered in a consumer product, which enables us to get the CAC incredibly cheap, and then people may move up to Creator or even Enterprise. Is the future of Enterprise consumer entry? And what I mean by that [00:38:31] S0: is, to your point there, at the end of the day, we all forget that everyone is a consumer, that every big Enterprise user is a consumer at some point. Is the future of Enterprise consumer
00:38:31 · Harry Stebbings, Luke Harries
[00:38:31] S0: is, to your point there, at the end of the day, we all forget that everyone is a consumer, that every big Enterprise user is a consumer at some point. Is the future of Enterprise consumer [00:38:39] S1: I actually really hate the word enterprise in general. Bold. For for a while within ElevenLabs, there was this phrase of, like, we need to sell to enterprises, but who are the enterprises? And I was like, let's work together. Let's refine who exactly they are. And we basically worked out. They're normally, like, engineering managers or product leads at these larger companies. Sometimes the CIOs or CTOs are involved too. But first step is like, okay. Let's actually define who are we selling to. And then you do realize, okay. Wait. They have so much overlap with our developer audience and our developer marketing, and maybe it's not about doing long white papers and executive dinners. Maybe it's actually more about this bottoms up approach. But zooming out, the bit we've actually landed on at ElevenLabs is we want to grow super quickly. We want to try and get and work with all the best companies in the world. Why not do both? And so what we've done is spin up separate teams. So we have an enterprise marketing team, which is just focused on going in on the top. They're like, how do I get these SQLs, which are marketing sourced? They're doing executive dinners. They're doing the events. They're doing the webinars, which you love. [00:39:45] S0: So they're doing ABM, like personalized outreach, very tailored.
00:39:45 · Harry Stebbings, Luke Harries
[00:39:45] S0: So they're doing ABM, like personalized outreach, very tailored. [00:39:49] S1: Yes. Very tailored. And then on the other end, we have a developer's team, which is developer advocates, which are focused on this much kind of broad scale awareness. We're doing hackathons. We're doing different events from the bottoms up. And so they have completely different goals, but kind of work in tandem with these roughly overlapping audiences. [00:40:08] S0: You mentioned to push in billboards and in podcasts and all these. How do you think about when's the right time to do brand marketing? [00:40:14] S1: Ideally, you're doing it right from the start. If you're trying to build a massive company, you want people to join you for your mission. And now how that may look like over time they switch, but right at the start, I'd really be thinking about engaging with your community. Like you said earlier, you messaging every single person on Twitter that follows you. That's you building your brand. That's you as a person being related to. So, ideally, you have right at the start, and it comes from the founder of them putting themselves out there, being authentic, then building it. And then, yes, over time, you can scale that into different brand awareness campaigns. And I think you just need to choose that ratio of spend, which you're happy with. Maybe that's 20%, maybe that's 70%. I think it depends how well your other channels are working. [00:40:56] S0: You said there about kind of founder putting themselves out there. Yes. How important is founder brand today?