From professional football to leading sales teams at Just Eat to founding Class-ify, a platform that helps personal trainers to grow and manage their businesses. In this episode with Dan Stott, we dig deep into the importance of an audience-first approach and how to balance the right level of technical development.
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Episode Transcript
Matthew Todd
My name is Matthew Todd, and welcome to Inside the ScaleUp. This is the podcast for founders, executives in tech, looking to make an impact and learn from their peers in the tech business, we lift the lid on tech businesses, interview leaders and following their journey from startup to scale up and beyond covering everything from developing product market fit, funding and fundraising models to value proposition structure and growth marketing. We learned from that journey so that you can understand how they really work, the failures, the success the lessons along the way, so that you can take their learnings and apply them within your own startup or scale up and join the ever growing list of high growth UK SaaS businesses.
Hey, and welcome back to the podcast. I’m really pleased to be joined today by Dan Stott from Class-ify. Good morning, Dan, great to have you on the podcast.
Daniel Stott
Good morning, Matt. How are you?
Matthew Todd
Doing well. Thank you. It’s good to have you here. Looking forward to the conversation and finding out a little bit more about your background about the business and how it’s evolved to where it is today.
Daniel Stott
Sure, really looking forward to it.
Matthew Todd
I was like guest to introduce themselves rather than me talking on their behalf. So do want to kick things off and give a little bit of a bio if you’d like, introduce yourself and Class-ify.
Daniel Stott
Yeah, sure. I’ll try and keep this as short and sweet as I can. I guess my background started out in professional sports. So from leaving school, I was fortunate enough to be one of that tiny percentage of people who goes into professional sport so I went into football in the UK or soccer if you’re in the US and was really lucky to have a few years as a professional football player. And relatively short left if I you know, as a as a career and ultimately, it didn’t work out. I was playing for a Premier League football time, the football side at the time there now I think they’re now in Ligue one a League Two. I always say that, I think it’s after I left to be honest.
So I did that for a few years and, and then I went to university in the states to do a soccer scholarship, and lived in New York and then California. And after doing that, came back to the UK and started my career in sales. First started off selling vegan, halal and vegetarian and kosher Haribo sweets. Yeah, that was quite an interesting experience, knocking on cash and carry doors at 21 years old, trying to try to and also trying to sign up Tesco and Asda in places like that.
So that was that was pretty good up year and a half really caught my teeth, because it was quite a small company in got to know all about the sales process and fell in love with sales. And then was fortunate enough to land a role at what was then a tiny little company called Just Eat.
I think there was maybe like, 100 or so maybe 150 people in the company, very early days, 2010. And, to be completely honest, just I got such a good vibe from the guys that were doing the interview process that even though there were a couple of other jobs that paid a little bit more at the time, I just thought this company seems like a cool company.
And boy, am I glad I took that role because I started there on field sales. And then over the next six years, it was really lucky to have advanced my career there into sales management, sales leadership. And then by the IPO, every time they went into a new market internationally, they would ship me in there to either work with the existing sales team and get them to sort of UK standards, if you will.
Or if there was no team there. Build the team from scratch. And so my last year at Just Eat in 2016. We just acquired a business out in Australia and I was building the field based sales team from scratch. So a team of 12 across Australia and New Zealand. So that was a really fun project. So that was that was quite good.
And then in 2016, I’d spent six years with Just Eat and ready for a new challenge. Kind of had the startup bug just had gone through an IPO at that point. So it was quite it was getting towards that corporate world. And I took the plunge move from Australia back to London to a tiny little health tech company called elder and where I was employee number six, I think to head up the sales team. I say head of the sales team. There was no sales team. I was the sales team and we have nothing in place, I mean, it was just spreadsheets, we’ve raised a little bit of money.
And yeah, we I spent four and a half years at elder and we built that from six people to I think, like 110 people by the time that I left, a couple of years ago. And that was a really cool and exciting journey from angel funding through to Series B. So it was good to be part of but a lot closer to what was happening with the founder and investment. And I guess that experience gave me the confidence then, a couple of years ago to start Class-ify with my best pal, Tristan, who we’d live together in London, and always had the idea of starting a business. And when we decided on the business that we wanted to build, realize that we want to build a tech business, but we don’t have any technical experience, because his background was in finance, corporate finance.
So I reached out to an old colleague of mine from Just Eat, Jim, who then became our third co founder, our technical co founder and two years ago Class-ify was born.
Matthew Todd
Amazing sounds like quite a journey. And sounds like you got some good insights of startups and startup success than in that previous experience as well.
Daniel Stott
Yeah, I think and seeing you know, what to do, and then what not to do for a startup in a business and a culture perspective, I think, so many lessons along the way that were incredibly valuable in when we started Class-ify, I already had an idea in my mind, exactly the type of business that we wanted to build based on those experiences.
Matthew Todd
So what was the trigger, the idea behind Class-ify?
Daniel Stott
As is often the case, with the startup stories, it’s, it wasn’t the it wasn’t what it is today. So when we first started, it was the middle of a lockdown. And during the during that first lockdown period, I got really into doing online classes through Instagram Live, and sometimes I would pay for a Zoom link to be sent to me and which kind of saw the rise of that, for the first time acknowledging the individuals that are in these fitness facilities.
And they started to during lockdown, they, the realization for me at that time was that I didn’t realize they were all self employed. And up until that point, you just assume that people in a gym, they’re all employed, whether they’re teaching classes or their personal trainers. And when we when I realized these are self employed people, the kind of the idea came around to think well, right now they don’t have a tech solution to deliver these classes. You know, it’s like Instagram Live, it’s sending Zoom links, incredibly professional.
So not really scalable. So the original concept was well, wouldn’t it be great to create a b2c platform, so sort of like a Just Eat, to find these fitness instructors, if you will. And me and Tristan sat down and did a whiteboard session in my living room, and we looked at the whole landscape, and we thought, well hang on a minute. It’s quite a lot of b2c players out there, whether it’s fit or peloton. It’s quite a crowded space. But no one’s actually helping these people generate leads and make viable businesses. So we instead of doing a b2c solution, we flipped to b2b, very small B but still B to B.
And that’s kind of the nucleus of the first iteration of our products was we built an MVP that allowed yoga teachers, Pilates teachers, and HIT instructors to generate revenue and run their own business. And we took a revenue share of the business that they generated during those lockdowns. And we went to market we did our MVP, we got it launched. We got it live, it worked, which was always a nice feeling.
And then over the last two years, we’ve pivoted the business multiple times. And the business we have today is very, very different than the business we had in the past. So it’s been quite a journey.
Matthew Todd
Sounds really interesting. I can definitely recognize a lot of the things that you talked about with those lockdowns. There were so many businesses just working out how to take what they’ve done, you know, in the kind of the physical space and take that online and take that to an audience as well. I think it probably did force many of them into a position where they suddenly did have to get better at a lot of those activities that they probably weren’t great at before, but they could kind of make do because of the physical environment they’re in, you know, gave them enough lead flow, etc.
Daniel Stott
You hit the nail on the head. And, you know, that realization during the lockdown period that all this self employed life, we need to generate leads, we need to have a sales pipeline and professionalize their business in a way where they’re not reliant on the fitness facility, giving them giving them lead, you’re not on with the lead flow element. And I think more than anything the world over the last couple of years is got so much smaller because of social media and everything is sort of online. And, you know, you can if you’re a personal trainer, if you really do well at this, you can have hundreds of clients all around the world. And we know examples of people who we work with who make 50, 60,000 pounds per month.
And yet the vast majority of personal trainers, they’re not able to tap into that, because they’ve not figured out these, what will you think we’re sort of basic building blocks for a business, you know, marketing, sales, retention, payment functionality? So we try and shortcut that process for them.
Matthew Todd
What was it that gave you the confidence to go out and try and create a solution around that, that you you knew would be able to deliver what it was that they were looking for, you know, beyond just a a tech platform and simplifying that choice for them?
Daniel Stott
We originally thought the technology would be enough. So we started the process of, well, if we can create the tech that will help them do this. That will be that will be enough.
It was quite naive, really, because what we did was we gave them the an out, we’ve changed our revenue model now. But I’m quite grateful that we went through a period of time, the first year we had in business, we did a revenue share model. And the thing about revenue share is it’s great when things are going well. But it’s not that great things are not going well. And we realize that we actually need to really help these guys and girls generate leads, we really need to help them.
Because if they don’t generate leads and get clients then we don’t get paid so. So if we were sort of forced into the world of playbooks tactics, strategies and blueprints and making sure that we figured out well, what are the key components to a successful solopreneur business? What did they have to do every day, to make sure that they’re constantly getting new clients, and it took us a while to figure it out.
But when we figured it out, we then codified it and wove it into the platform. So when a personal trainer signs up now, they’re now getting decades of marketing and sales experience when they opened the door. It’s not just tech, it’s tech stacked full of tactics and strategies that have been custom built for them. So they don’t need to think about a lead nurture sequence, you know, what should I write? It’s all written out for them. They just, they just need to turn it on. So we’ve tried to make it as easy as possible in that sense.
Matthew Todd
Yeah, that makes sense. And I think I can see how you were forced into that. Because if your revenue model is, is aligned to their success as well, then you don’t just need to sell them on the platform, get them on board, you then also need them to become successful.
Daniel Stott
Exactly. And that’s been a bit of a superpower and a real differentiator for us. Now we do a SaaS model. So it’s a subscription service. But, like anything, if they’re not feeling like they’re getting value from it, if they’re not generating leads, then they wouldn’t stay with the platform. So all of that experience and time that went into creating all of those strategies and tactics was time well spent. Because now it means that the platform works really well. And it’s not just downloaded and or like, you know, signed into and then never used again, it’s, it actually works for them.
Matthew Todd
Absolutely. I can see that makes a lot of sense and certainly would give urgency to making those early versions as good as they could possibly be for your your client base.
Daniel Stott
It’s interesting, because, you know, when we talk about the world of personal training, and personal trainers have this challenge that they have. I was, I was on a call a couple of months ago talking about our solution ad we had someone fixing our bathroom is a guy’s a plumber.
And he popped his head around the door. And he said, just explain to me what you do again. And I said, Well, we help people solo helped solopreneurs generate leads market themselves, better price themselves better in the market generate more consistent revenue. And he just looked to me said, can I join? And, and the realization at that point was, wow, there are so many verticals where this is the same problem. If you want to grow a business as a solopreneur, you are going to have to market yourself, you’re going to have to sell your services, you’re going to have to nurture your prospects, you’re going to have to understand how to take payments. So it’s, it’s the same in a lot of verticals and down the future for us, we’ll definitely look to explore different verticals.
Matthew Todd
I think that would definitely ring true for a lot of different sectors. And I think it’s an interesting thing, like the development of tech platforms, and Instagram, and everything else, online and information being more accessible. And also, as you said, with, you know, some of your clients kind of customers being more accessible, so you can serve people all over the world, it creates a lot more opportunity and potential, but at the same time, almost mandates that in order to be successful, you now got to do a lot of things to compete on a national or global scale that you otherwise wouldn’t have had to do even like, 10 years ago or more.
Daniel Stott
Exactly. What happens immediately is it’s feast or famine out there. You can see this with so many different things, people who do it well, just, you know, they it’s a bit like musicians, you know, there are a very small percentage of musicians who hit the big time. And the vast majority are, you know, busking on tube stations. And you know that with, because of social media, that’s exactly what happens. And what we’re trying to do is stop that from happening and spread the wealth.
So instead of having most personal trainers, terrified of social media, but let’s give them social media, daily, updated, trending content. So they are on a level playing field, and they’re actually picked because of the services that they deliver, and not because they haven’t posted on Instagram for three weeks, you know, so we’re trying to level that playing field as much as we can.
Matthew Todd
That’s really interesting. And what are the kinds of features then. You mentioned, the email, templates, the nurture sequences and things, you know, what are examples of other features that have helped to kind of level that out for them.
Daniel Stott
So I’d say from a business development perspective, it typically falls into a few different categories. So social media is really important. So Facebook, Instagram, and Tiktok, typically, the primary three, we will eventually get to LinkedIn, because that’s where all of their customers are. But it is a very different way to market yourself that we’ve not quite mastered yet. But Instagram, Facebook and Tik Tok is we create what we call the content factory. And the content factory is a, it’s updated every day, and it’s two weeks in advance. And it’s a trending calendar of social media templates and content that they can drag and drop into their own social media channels.
So maybe, if I had a look at today, maybe today is a transformation Thursday, and there’s like a before and after template, and then there’s a caption that we’ve pre written for them, which is really important to every single bit of social media content needs to have a hook to try and get people to engage with their content to sort of generate that lead. So all of that is templated in in the in the calendar.
And then if there’s a real there’s always a real idea. And that’s usually set to a trending audio. So you know, we keep them relevant. So on that side of things, they don’t have to spend hours and hours and hours and panicking about what do I post on social media. It’s there, drag it, drop it, then what sits alongside that are sort of funnels. So that’s everything from a website with like lead magnets that we create for them. So we stylize them and create them, they just need to give us their brand colors and you know the content and then what we do is we start to create that for them.
And then that sort of ties into funnels as well. So we make sure they’ve got landing pages to give more information about their services to potential clients. So a really nice digital funnel that they can have. And then the third thing is email strategy. So when they’re collecting leads, you know, which most personal trainers have a long list of email addresses, but they’re not know how to nurture them. So creating nurture sequences that will generate appointments, bring back old leads into the fore and so they’re sort of like three areas in marketing that we sort of help them with and they have access to a platform that when they log in, all of these things are there. So they just open the tab, they can see what they need to do if they want to change their website that they can. They want to change their landing pages if they want to change their email sequences. So it’s all in one place, which stops them from needing to sort of figure out and try and remember all these things.
Matthew Todd
Yeah, absolutely. I can see that. Yeah, certainly anyone trying to piece that together, themselves. So there’s a massive amount of information that they need to take on board and know and expertise that they don’t have, as well as the different tech platforms to then put all that together. So I can definitely see the value proposition in, in what you’re talking about.
From a technical perspective then as a non technical founder, how did you bridge that gap, so then work at a was this possible. And then secondly, make sure that you could build enough of a platform that delivered that initial value.
Daniel Stott
Early on, we really learned our lesson where building software from scratch, and building an entire product always takes longer than you’d expect, always more expensive than you’d expect. And when you’re a startup, and you’re trying to get proof of concept, and you’re trying to understand product market fit, it slowed us down far too much.
Daniel Stott
We’ve been on a journey with this. So when my technical co founder, Jim, so Jim, and I worked together at juste, he was responsible for building out the international product and engineering team, so he knows his stuff. And so I’m fortunate to have a co founder who has the expertise, but we don’t, we never have had 10s of millions of pounds in the bank to just go build into like Jim’s budget, Just Eat was astronomical. Whereas you know, when he’s in a startup, it’s not. So the first MVP we launched, we basically just kind of wove together, Zoom, I think we, I’m trying to remember the website builder we used it was either it wasn’t, let’s just say Wix as an example. It wasn’t export will say Wix. So wove together things that already existed, and turned it into something that looked unique. It had all of the all of the trainers, logos, and everything on it was their domain name. So it felt like it was theirs.
But what we’ve done is we’ve taken three different things that already existed and brought them together, we got that to market worked really well. Then we raised some money. And then we did a business pivot, and we moved into this more personal trainer, sort of like business management space, what we started to do is build everything ourselves.
That was just a terrible idea. So early on, we really learned our lesson where building software from scratch, and building an entire product always takes longer than you’d expect, always more expensive than you’d expect. And when you’re a startup, and you’re trying to get proof of concept, and you’re trying to understand product market fit, it slowed us down far too much.
So after about five months of going down that path, we made a very, very painful but necessary decision to just cut our losses, throw away all the tech that we built so far, because we needed to learn and we needed to learn fast. So we went back to our original way of doing things which was to pull together lots of things that already exist and then create a thin layer of something that we have that either sits between those pieces of software, or sits over the top of those pieces of software.
That’s where we are right now in our current iteration is that we brought together lots of things that already exist, we’ve built a little bit white labeled a bit reconfigured a bit, borrowed a bit and sort of created this solution to test out and understand what which features work for a personal trainer, what are the things that they love, what works for them, and then when we raise our next round of funding, which we plan to do, within the next six months, we’ll do our first institutional round, that’s when we’ll put shovels back in the ground and build original IP that’s that will replace a lot of the things that we sort of put together at the moment.
Matthew Todd
That’s a really smart way of doing it. And yeah, I can imagine it must have been a painful decision. But I see so many startups, just really kind of a bit of ego really just, you know, they want to be building their own thing.
And, you know, there’s a lot of talk about product growth and all those kind of things. And I think a lot of founders can be two products solution-focused and not problem-focused enough. So I think it sounds like a really, really intelligent approach to recognize that actually you can deliver the same if not more value quicker to your audience in order to prove out the business model in the first place, build that customer base get some traction.
Daniel Stott
The temptation is to build it, you know, and we’ve had lots of conversations. And I think we did go down that path. And, you know, it’s the fallacy of sunk costs, isn’t it when you’ve started to invest time and energy and money into developing something that your inherent human nature wants to see it through to the end. And, you know, we literally had to just down tools, because we were gonna run out of money. That was the that was the reality, if we carried on down that path, it was, you know, we were going to drive off a cliff.
So it was, what do we do here? Do we really think that by reinventing the wheel and creating things that already exist in the market? Like, is that what our customer base wants? Or do they want us to spend our time focusing on the things that power these pieces of software, so and that that was a real big change for us in psychology and that lean methodology of trying to test and figure out you know, what, one of the things that comes native with what we have, as an example, is a sales pipeline system. So it’s bit like Salesforce or HubSpot, and you every time a lead is generated from one of your funnels, or through social media is automatically populated into your deal flow.
And then you can move them around from sort of cold to nurture to presented to closed, and, you know, for me as a, you know, 15 years in sales, you know, this is a dream for me, it’s great. You know, the reality is that they don’t care. They don’t care. It’s not, they just don’t use it at all. And we wouldn’t have known that. And we might have actually gone ahead and built that. Because how important is it to manage your sales pipeline? And the reality is, what they really want is to know, do I need to send this person a message today or not? And what should that message say?
So the next iteration of our products when we go and build it, that’s exactly what we’ll do. So when we launched the app, which is what this which is what the format will be, it won’t be a pipeline system, it’ll be just a touch button that says, You got three leads yesterday? Would you like to send them a message? Yes. Here’s a template, would you like to use it? Yes. And we wouldn’t have got there had we tried to sort of try to guess what they would want, you know, so this is actually helped us by being a lot leaner.
Matthew Todd
I think that’s really interesting. Because, you know, we hear people talking all the time about how you shouldn’t make assumptions about the solution, or the problems that that your audience faces. But then there’s also the kind of the counter perspective of, you know, having deep experience in a particular area, and like you say, you know, sales inside and out. So therefore, you know, what the sales process pipeline looks like, therefore, you think it could be entirely logical to assume that, oh, I know exactly what’s going to give them the most value here and how they should be managing it. But as you say, they don’t care.
Daniel Stott
I was so excited about the pipeline feature, I was like, this is going to change the game for these guys and girls, like, you know, and it just, it just doesn’t, and you can take a horse to water you can try and, you know, I think I’m reading a lot at the moment about creativity, it I think it’s create, creating a solution and trying to find the problem. Yeah, you know, and that’s effectively sort of like what we try and as best we can not to do, and it’s okay to do that. If you’re not spending money, you know, it, you know, create a solution that you think will will solve one of the problems, if you’ve not spent very much money doing it, and you can figure out fast that actually, that problem is not big enough, then Gray, it’s the challenge comes when you go and spend 250,000 pounds building the solution to this problem, the problem is not there, and then you spend another 250,000 pounds trying to find a way to make that problem more prevalent or find enough people to make it a viable option.
Matthew Todd
I’ve got the solution. I really desperately need to find a problem because there must be one because the solution is so good. Right?
Daniel Stott
Exactly. And I think we’re kind of lucky that we’re you know. Myself. You know, I’m I’m pure startup, you know, 15 years in startup world. And my co founder and pal Tristan, corporate big corporate finance, and then Jim technical so yeah, we’ve got this really nice, I wouldn’t say we fight but we disagree alot and we disagree strongly with each other. And we always come to a real nice consensus, but we really challenge each other and sort of, we won’t just do something.
Like Jim, because you know, he’s a technical guy wants to build a solution trust and and I will say, I will challenge him and just say, well, can we do this for 100 pounds instead of 10,000 pounds, you know, and the same thing, he will challenge me on something when it comes to the way we market our business. And, you know, I typically look after the business development teams and trying to grow the revenue. And you know, Jim will message me and say, I’ve noticed that our social media channels looking a little bit x, y, and Zed. And I love that because we can challenge each other.
Matthew Todd
Sounds like a very kind of positive form of of challenge that really must be a good environment to work in assuming that you are all obviously aligned to the same vision and goal.
Daniel Stott
It’s one of those things where we are, but it’s changed. So it’s so funny, the journey of a startup, you go through these ebbs and flows on, you know, if you’d have asked the three of us six months ago, where do we see the business in five years? And how do we want to build it, we’ll probably have all given you a different answer than we would give you now.
The three of us are all going on our individual journeys, but with the way we see things, but we’re doing it together and conjoined. And, like, that’s the important thing, I think. So, you know, two years ago, when we first launched, we wanted to build the quickest growing unicorn, tons of tech, you know, like it was just going to be the next juste, that’s what we wanted, and get get to an IPL faster than just eating, you know, two months and things were flying, because it was still a lockdown. And loads of people wanted what we were doing, we raise money. I’ll be honest, I started to think about what you’re buying.
And that was the mentality we had. Then a year later, when we were going through our darkest days, going through our second business pivot, like, really challenging cash flow situation. We had to lay off half of the team we had to lay off and that moment there, it was all about survival. And the three of us are in this sort of, like, how can we keep the lights on? But also figure out where we take this business next. And you know, having this sort of going from picking our yachts to that moment, you know, you just you go on this journey. And I think now we’ve had enough ups and downs and battle scars where we’re a little bit more stoic I think in our future planning.
But we make sure that we’re always aligned on what is the goal here? Do we want to raise a large round of funding? Yes or no. We all need to be aligned on that? Or do we want to be a bit more bootstrapping and scrappy? Do we want to build IP? Do we not want to build IP? Do we want to open up new growth channels, we make these decisions together? It’s really important that we’re always in lockstep when we do.
Matthew Todd
It sounds like when you do get those challenging situations, there’s kind of two ways you can go with it, you know, broadly, there’s double down on the solution that you’ve gotten that you’ve built, or double down on the audience you’ve got and, and serving them in the best possible way. So you’ve either got to find new audience for what you’ve got to you’ve got to double down on serving the existing audience that you’ve managed to acquire. So how did you come to a decision I wish to do? Because I see so many people know that they’ve got to do that but still try and do a bit of both and not really commit to one approach or the other?
Daniel Stott
I think we had to be super logical when it comes to important decisions. Retention and growth are two things. If you do those things, and you do them, and you do them, well, then you’ll grow the business. But like you said, when you limited resources and limited, you kind of have to be really kept. So what we did was we just looked at the we looked at the ways that we were growing and the money and time we’d invested into things that weren’t quite working as we would want.
We just stripped all of that back. What we knew worked for us is if you hire a salesperson that salesperson can generate X amount of new customers, things like paid ads, social media, SEO, all of these things that were exciting for us, we weren’t seeing a quick enough return on the investment so we just shut down everything that wasn’t given an immediate investment. Only did things that we knew worked and the same thing on retention was that we we wanted to wrap our arms around our customers and make sure that they stayed and had a really good experience.
What happened during that time was the number of referrals that we started to get, started to increase. So then came the realization that well hang on a minute, if we just do this even better, and we spend more time with our customers, giving them a much better experience, and then give them a mechanism to refer their friends because they all have trainers who follow them, then we solve some of this growth problem that we have over here. So we accidentally landed on this situation whereby focusing on our existing customers and doing a really good job with them, we then started to subsidize the growth as well.
Matthew Todd
That’s really interesting to hear that kind of analytical approach and then see the you’re able to kind of identify those signals. And I think you can send out as many NPS surveys as you like, but I think the proof is in whether people actually are referring you new business, right, that’s a, obviously the best sign that you’re doing something right.
Daniel Stott
Exactly. It’s now our second biggest growth lever that we have, that we’re incredibly proud of. One of the things that we try and do as much as we can is, those small moments, we’re trying our best to sort of make sure that our customers are celebrated in these small, tiny windows where they have a disproportionately big win.
So maybe it’s their first clients into working with us, you know, maybe they hit a financial milestone, maybe they’ve reached the end of a portion of their learning with us. So when they sign up, we send them a cake, a little cupcake in the past, and on the cupcake, it says building a business isn’t a piece of cake. So here’s a piece of cake. And what they do is they screenshot it, they share it on social media, they love it. And then what happens is all the people who follow them get notified that they’re now working with this company, what do they do? And then we get these organic inbound leads. So it’s been a really nice thing to really focus on our existing customers.
Matthew Todd
I think celebrating those existing customers, by the time they’re celebrating their wins, making them although you’ve, you mentioned, you kind of changed the revenue model, but it sounds like you’re still very, very attached to those kind of customer outcomes and making sure that their experience really is, you know, an enjoyable one as well as a profitable one.
Daniel Stott
Exactly. I think we right at the core of everything that we do, we have a we have a real passion for these guys and girls having successful businesses and growing their businesses. And we do track that. So on average, a personal trainer who works with us will grow their revenue by 49% in the first six months of working, whether it’s like that, we have, so we have a channel, a Slack channel, which is Coach feedback. And every time we get these positive feedback, we share it with a wider company. And you know, the impact we have on them, a 50% increase in revenue for someone who’s making 2000, 2500 pounds a month is a material amount.
We absolutely love that, it’s what drives our business. On a Friday, we have a wrap up call and a Friday, where we all do our wins of the week. And almost all almost every single time 50% of the wins of the week are associated with personal trainers that are getting fantastic results in their business. So you know, and it helps, you know, the guys in the tech team gets to see the impact of what it is that they’re building.
Matthew Todd
I think that’s so important. I’ve seen so many tech teams where they’re quite even startups where you think it shouldn’t be the case, but especially as they start to scale away, they can be quite siloed and disconnected and can often end up just optimizing for being busy and doing as much producing as much output as possible without, you know, a great deal of connection to to those and customers and consumers and, you know, some telltale signs, you know, I kind of hate to hear but here too often are those teams talking about their business as a separate entity. I always say, Well, you know, what, what does it say in your payslip? I’m pretty sure it’s the same as the people you’re talking to. If you think about the other parts of the business in that way, then you’re certainly not thinking about the customers and the customer experience that way. So it sounds like you’ve managed to, to really kind of break that down and build a great culture around celebrating those customer successes.
Daniel Stott
I saw this firsthand in my last company where you had an engineering team that just didn’t have any connection with a customer. If you’d have asked some of them, I don’t think they’d have been able to told you what the actual service was that we were delivering every day. What happened there was we built all the wrong things. We spent a lot of money in building things that didn’t actually work for customers, because the disconnect was so fast.
And then like you said, you kind of get these silos and you know, hiring. And that, that’s another thing that comes down with who you hire and personalities and why it’s important. So, you know, there’s a school of thought that when you think about engineers, and people in tech, that you sort of have have to put up with a great engineer that’s gonna want to do what they want to do, and not really care about, though, you know, and they’re gonna, they’re gonna have demands. That’s what I’d heard all throughout the time I was at my last business, and it was like, you know, if you really want good engineers, you have to, we have to let them build stuff that they want to build. And,
What I love about my co founder, Jim, he doesn’t buy into that at all. So it’s just not the way that his mind works. Like, he’s so emotionally connected to our customer, that when we bring in people to help us build our products, we don’t have those people. And I think it stemmed from my previous business, it was the, you know, the CTO, that was his mindset. It’s just really refreshing to be working with someone whose mindset is not like that, his is more of an inclusive mindset of, if we’re building anything, we need to immediately get feedback and not get feedback from an NPS survey, but actually sit on a zoom call and understand how this is impacting someone’s life.
When you can do that, it means that you can be so much more emotionally invested in what you’re actually building.
Matthew Todd
It’s so important to remember that the people that you’ve got as customers, it’s not just, you know, numbers and growth rates, and whatever it may be, these are real people that you’re building your platform for, and building your business around.
Daniel Stott
There’s a human element that’s really important to us. And, you know, you can sometimes be guilty of, you know, and again, not not to always talk about my former business, but you know, you would you do a budget at the beginning of the year, and the budget would have lots of numbers in it. And if the numbers didn’t match what the requirement was, then you would go back and the numbers would all need to be tweaked. And as you were tweaking those numbers, there was very little thought into what does this actually mean on the ground, because when we increase the salespersons target on this sheet from 15, to 20, without increasing the number of leads they get, what does that mean for that person’s health as a salesperson, meaning they’re probably going to be consistently missing target, or if we reduce the budget in this particular area, that means that we can’t spend that on these customers that are paying us. But we now need to increase the price because that’s another sale that we changed on the sheet and you know it, you’ve changed the entire landscape of just not just the internal team, but the customer experience, because trying to move things around on an Excel sheet. That is something we just never want to do is let the experiences and the team drive what goes on to the Excel.
If we need to change things to make things better, then we need to go back to the experience and figure out what are the important things to change, not just let’s change this cell, because if we change this cell, it makes everything work. And then we’ll figure out how it works afterwards.
Matthew Todd
It’s that whole kind of input output leading and lagging thing as well, isn’t it? But it’s, yeah, if you’re not careful, you can certainly incentivize some things that might seem like quick wins, but could actually be quite disruptive in terms of the direction it might lead you in.
Daniel Stott
I remember being at Just Eat, you know, hand on heart, love, just still do. The majority of our investment has come from ex Just Eat people. And I remember when the commission that a restaurant pays, went from 11% to 12%. For the people on the road people in our restaurants or it was so difficult that whole period. I think what, when it comes to why was that decision made and what drove it I think as the time went on, it became much more driven by investors and external pressures, rather than, actually, we’re now delivering a much service. I think in the early days, it was we’re actually delivering a much better service. So we’re going to charge a little bit more. But then, you know, when we went from 11, to 12, 12, to 13, 13, to 15, it was quite clear that actually, what’s happening now is, we’re now being pulled by the market. And that that was the disconnect there.
It’s a challenging one when you try to juggle investors and, you know, external influences in customer experience, but I think that just comes down to the strength of your resolve of making sure the customer comes first.
Matthew Todd
There can definitely be a lot of pressures, especially as, as you start to get investors involved. And as you start to kind of ramp up those rounds of investments, as well, you know, at some point, those have got to be paid back with a return, right, so the investors might be optimizing for a different timescale than you might be. And I think that is always a source of conflict that can sometimes not always, but sometimes lead people into losing that kind of audience driven approach.
Daniel Stott
When you when you hear about Jeff Bezos at Amazon, and you hear about how customer centric he is in, you know, that does have a negative effect on the way he is with businesses and all the other things that sit around the edges, but by putting the customer front and center trying to make it cheaper, easier, slicker, smoother all the time, they’ve generated more and more and more revenue.
So I think there’s sometimes an expectation that if you – I think sometimes you have people think they have to pick between you have to be financially more astute and, you know, and that’s either a detriment of the customer experience, or if you focus on the customer experience, then that’s gonna take a hit on your margins. And I actually think that if you focus on the customer experience in the right ways, and generates referrals, that get generates good testament, all of those things, then that just drives the growth of the business too. So it kind of like, you know, it has, it has a very different effect.
Matthew Todd
Yeah. You get to make a choice on which one you’re trying to use to drive the other. Right, you. So you talked about the spreadsheet, driving the behavior and the experience, but, you know, the opposite can also be done, you can also focus on my experience in the referrals and the allowing you to push up the price point and the value point, to then have that impact that you’re looking to achieve on the financials as well.
Daniel Stott
Yeah. I don’t think you have to pick between the two, I just, I think you just need to be smart, I think, you know, doing things are expensive, and are not going to actually move the needle or just, you know, like, you raise around the funding, and you put a slide in the office, or you get a gold statue or so, you know, there are examples where you can sort of, you can waste money. But I think if you invest in the right parts of the customer experience, and you know, I firmly believe that that will always help there’s a net positive on the growth of the business too.
Matthew Todd
I completely agree. I’m quite conscious of time as well. But I think that’s a really great summary actually have, what we’ve been talking about the people, you know, I hope we’ll take away from this is that you don’t actually have to choose between the two that, you know, there’s nothing wrong with building a financially successful business. And actually, if you’re truly serving your audience and customer base, while and as you say, do it in a smart way choosing where to allocate that money as well, then you certainly see some some positive outcomes because of that approach. So just before we do wrap up and how to ask what’s next for, for Class-ify, then you mentioned, you know, kind of investment looking to build a bit more of that platform in house, but what is the what’s the roadmap looking like, and what is your ambition?
Daniel Stott
So, whenever I’m talking to investors, at the moment, I’ll say, you know, at the current subscription rate we have with about 40,000 personal trainers, which is still a small percentage of the total number of personal trainers around the world, we would have enough revenue to be considered that in that unicorn category, but to us, this b2b solution that we’ve created is just phase one, you know, phase two for us is transactions of payments. So we’ll be implementing a payment functionality for all personal trainers where it gives them a better experience and we can also take transaction fees as well.
Then there’s the b2c side. So we really want to get into this world of if we’ve got the largest database of personal trainers in the world. Why would we hold that back from the public? You know, we should flip that around and say, Hey, if you want to find an amazing personal trainer come to us. So yeah, b2c marketplace definitely.
Then as I mentioned earlier, on the other verticals, you know, there’s nutritionists, wellness coaches, life coaches, they all have the same challenges so we would love to open up different verticals that potentially even overlap with each other personal trainers and nutritionists. I mean, they are perfectly overlaped. So if we can bring those together, underneath the same umbrella. So that’s the longer term goal. So we’ll take every step as it is, but you know, hopefully, in the future, we’ll, we’ll have hit some of those objectives.
Matthew Todd
Fantastic. Sounds like a great vision with so much potential and opportunity. I really the way you describe those learnings of you know, starting from from b2c, but realizing your way you could add value in that b2b space. Then, still having that vision then for what you could potentially achieve? You know, once you do get that, that volume of personal trainers on the platform, so yeah, thank you for for sharing that story with us as well.
I hope we do have a round two and get to hear how the how things have developed in there in the meantime, as well.
Daniel Stott
Amazing, really, really appreciate the invite and love loved having this conversation.
Matthew Todd
No worries. I’ll make sure we include links to Class-ify as well in the notes. I’d encourage anyone regardless of whether they are on early on in the in the PT space or not to go and take a look because I think even just from a website perspective, I think every entrepreneur startup founder take a look at it because it it speaks to high quality, but I think it really reinforces everything that you just talked to, which is understanding that audience so well and, and really being committed to serving, you know what it is that they’re trying to do. So, yeah, and encourage people to take a look. Tthank you again for taking the time.
Daniel Stott
Appreciate it. Thank you very much.
Matthew Todd
Thank you for joining me on this episode of Inside the ScaleUp Remember for the show notes and in depth resources from today’s guest. You can find these on the website insidethescaleup.com. You can also leave feedback on today’s episode, as well as suggest guests and companies you’d like to hear from. Thank you for listening.