Patrick Campbell is the Co-Founder and Chief Executive Officer of ProfitWell, the industry-standard software that assists organizations in minimizing cancellations, optimizing pricing, and obtaining accurate revenue reporting. It has helped organizations such as Atlassian, Meetup, Lyft, and Autodesk, with their monetization (through Pricing Intelligently) and retention strategies. ProfitWell also offers a turnkey solution that supports the subscription financial metrics for over 8,000 subscription businesses. Within 10 years, Patrick and his team have grown Profitwell to 8-figures in ARR.
This article discusses Patrick’s background, how he started and grew Profitwell, his background in competitive intelligence, becoming a young millionaire, and plans for the future.
Being a Wisconsin Kid
Patrick revealed that he grew up in Wisconsin and milked cows as a kid. He had a difficult upbringing. Today, the things that occurred to him would be considered abuse, but back then, they were considered normal. This made him insecure as he grew older. Fortunately, he had mentors who helped him channel his anxiety in a positive way. During high school, he took interest in debate and became a national champion. He also did forensics. These experiences have shaped his thought process. For 40 hours a week in four years, he was synthesizing information, structuring arguments, and getting to the root cause of things.
Over the course of four years, he spent 40 hours per week synthesizing information, organizing arguments, and getting to the bottom of things. Although he never envisioned himself as a businessman, these experiences benefited him a great deal because their early marketing strategy consisted of blog posts, which he could write fairly swiftly.
After graduating from high school, he moved to Washington, D.C., where he worked in US intelligence, then later oversaw Strategic Initiatives at Boston-based Gemvara, and worked as an Economist for Google and the United States Intelligence community.
Profitwell in a Nutshell
Profitwell, formerly known as Price Intelligently, was originally a pricing software that evolved into a pricing software and service. Patrick constructed this metrics tool and recently sold it to Paddle, a payments infrastructure product with a $200 million headline price.
As a bootstrapped company, Patrick owned 100 percent of it. It exists to manage and grow subscription businesses automatically by connecting Profitwell to any subscription business, such as Stripe, Chargebee, or Zuora, and then automatically acquiring all metrics for free. Profitwell automatically optimizes pricing and decreases customer attrition. In the meantime, Paddle handles taxes and chargebacks automatically.
While it currently serves as a pricing service, Patrick and his colleagues hoped to transform it into a more streamlined piece of software that could assist a business with its IPO. They then realized they had been drastically miscalculating MRR and churn. Putting these two pieces of information together, they set out to create an analytics product that would allow subscription and SaaS businesses to obtain comprehensive financial data. At the time, they were up against thirty rivals, so they did their due diligence and found that either it would be a terrible business idea and they should cease doing it, or they could go the free way and bootstrap. Finally, they were able to attract 30,000 businesses to Profitwell, and that number is steadily increasing every day.
Patrick disclosed that with $20 to $30 billion in yearly recurring income, Profitwell has the biggest subscription finance library in the world.
He claims that his company's success can be attributed to its regular examination of aggregate data, which is used to refine its algorithms for attrition reduction. Another is producing a great deal of related content. Profitwell's content helps SaaS businesses with questions like, "What should our churn be?" and "What should this look like?" The other thing Something else is emerging as a key enabler of transaction flow for many VCs, though they may not realize it.
Campbell Methodology: Using Spy Secrets to Get Competitive Intel
Patrick's first employment after graduation was as an NSA intelligence analyst which required him to undergo training in weapons and defense. He said it was the greatest commencement to his career. This motivated him to implement a competitive intelligence program at Profitwell. He would send shadow NPS surveys and product research surveys to each competitor, partner, and customer on his shadow lists. These are the types of details that companies typically overlook when gathering competitive intelligence.
He had two main sources of information: moles and mass data. Moles are qualitative, almost like customer development product conversations. He did this through former employees, those he met through conferences. They took out the competitor’s name, someone he wanted to be a better phrase target and have a conversation with. Although he wasn't going to obtain a great deal of information, his objective was to accumulate various points.
Then, he spoke with an investor considering investing in the company and some customers who were officially churning the product. Suddenly, he was able to start putting everything together, and these conversations guide his analysis because, as an analyst, he was attempting to predict what's going to happen or what they're going to do, which aids in companies' messaging or marketing strategy, and helps him respond to and prepare for whatever they're going to do.
Additionally, he conducted NPS surveys for three months. They feed their pricing software with surveys that may have reached 10 million by this point. Some surveys would last between 30 and 60 seconds, while others would comprise of between three and five NPS-standard inquiries. With these details, he was able to discern the trend of what companies are constructing, as well as their plans for the next quarter or month.
Patrick also remarked that firms with competitive initiatives typically have significantly higher retention and reduced CAC (Customer Acquisition Cost). Without competitive intelligence in the early stages of the metrics product, it is difficult to obtain accurate metrics. Metrics cannot be 100 percent accurate, unlike marketing metrics that can be five percent off or financial metrics with concrete data.
Profitwell's primary marketing strategy is supported by the totality of this information. Due to this strategy, some companies and individuals would reach out, express an interest in investing, and request his expert opinion. However, instead of responding directly, he would show them presentations of data and all the information they have about the individual or company they are considering investing in.
How It Feels to Get Very Rich Very Young
When asked if he has changed after becoming a millionaire, Patrick insisted he has not. But being a millionaire at 33 brings out the best and worst in him. He initially believed that being wealthy would encourage him to take better care of his health by allowing him to hire a personal trainer and nutritionist to yell at him about his food. He added that he can now visit dangerous locations whenever he wants. On the other hand, he was able to put more resources into the causes he cared about.
Young CEO’s Future Plans
Patrick disclosed his intentions to purchase people's debt for "pennies on the dollar," as he termed it. Since he has not yet entirely adapted to his current financial situation, he paid off his mortgage first, anticipating that everything might change in six months. He observed how vast the debt market is and how much debt there is, and in an effort to comprehend how the system operates and do some good in the world, he explored the possibility of purchasing debts.
He also expressed his desire to fix democracy, the country's defense system, and other issues that, in his opinion, prevent the country and its people from achieving success.
In addition, he did not want to pass over Profitwell because he felt he was not yet finished. He wishes to observe a company undergoing an initial public offering in order to determine whether to go big or tone down.
Patrick, referencing Teddy Roosevelt's address "The Strenuous Life," said that it is one's responsibility to work hard, dig deeper, and take large swings if one has been granted anything, be it a middle-class life or an upper-class life. His parting words of wisdom for those planning to venture in startups, whether it’s bootstrapping: “Start high and then come down. It's a lot easier than starting cheap and then going back up.”
This article is a summary of the My First Million podcast with Patrick Campbell. See the full Podcast on Youtube below.