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Pivot City! How we pivoted 6 times

Blackthorn's CEO on dropping unclear products, buying instead of building, defining an ICP and selling a clear customer benefit

Chris Federspiel · Blackthorn

Published March 15, 2023
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What you’ll learn

The speaker describes how Blackthorn reached focus through repeated pivots: abandoning unclear products, buying where integration made more sense than building, reinforcing culture, defining an ICP, and selling a clear customer benefit.

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Key moments

Find the ideas you need and go straight to the source.

Drop unclear products

“we looked at all the leads that were coming in and we saw most of them were from higher ed and non-profit at the time we had no go to market and I thought go to market was like this baloney term but it's a real thing for sales and marketing teams to really focus on so what we did was that we flipped it over and we ended up focusing on higher ed and non-profit so with Salesforce I asked hey you know what are your metrics on higher ed and nonprofit you can see some of them are quite small but a lot of them are quite big so we”
Watch at 01:27

Buy instead of build

“because there's a lot of things that I hate doing in the business I really don't like selling and marketing and accounting and uh Cs and I I don't really like doing any of these things so I I really like doing product and Engineering so what I did is I changed our org around and I have just two people that report to me which is going to be a third once we find our CTO so if you know someone we're hiring but it's just going to be our CEO our director of product and our CTO and the reason I wanted to do this is because I don't”
Watch at 04:20

Strengthen the culture

“wanted to integrate us to say hey we're on Salesforce but they weren't going to bring us anything so we didn't do them a lot of events applications they they have there's so many things you can do with events they all want to integrate none of them wanted to bring us business so we ended up not doing any of those and then a lot of people they all want to have contracts and conversations and Technical Integrations and it never became anything so the original thesis was to make a payment app on the Salesforce app exchange that could integrate with stripe at the time no one integrated with stripe now just everybody knows stripe but we said hey”
Watch at 07:45

Define the ideal customer

“whatsoever then you know that you found your price and that's sort of what we did um what we what just to give you some examples our payments app is now two and a half times more expensive but the biggest customer we had for the longest time was 100K a year we recently sold one that's a million a year for a really really big deployment doing uh mobile payments uh our Events app is now four times more expensive but our average error was about 12K for the longest time uh it's now up around 45k because we”
Watch at 11:10

Sell the customer benefit

“Porter sells off did some LinkedIn post about having a line that was making six to seven million ARR a year and that's that's like a lot of people's businesses I was our business for a long time and he just killed it saying I wanted to focus on this other thing I was doing really really well so we've killed a whole bunch of stuff that was at 80k 100K 150k ARR to focus on where stuff really mattered and now it's really working uh you have to try stuff I never would have bought the um taxi company if I hadn't bought pci-fi because it was”
Watch at 14:04

2017, Hotel Lobby

“Too big an app to build at the time”
Read slide 7

Don't be afraid to increase prices

“Don't be afraid to increase prices”
Read slide 18

Why I bought PCIFY and Textey

“Why I bought PCIFY and Textey”
Read slide 23

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  • Pivot City! How we pivoted 6 times on our way to $20m in revenue slide deck

About the speaker
Chris Federspiel

Chris Federspiel

CEO · Blackthorn

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Chris Federspiel is the CEO and Co-founder of Blackthorn. He is a graduate of the George Washington University. He loves cycling and lives to make things easier, including, as he says, “I get annoyed by squeaky doors that need WD-40.” He has a simple philosophy regarding what he does — “If we can build something that’s remarkably easier to use, while delivering far more value to customers, that’s a great thing. We’ll love it, customers will love it, and we’ll all benefit.”

Company revenue
$16M
Team size
88

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Each slide with a short explanation of what it shows. Open the slide text for its exact wording.

24 passages

Pivot City and Blackthorn growth

  1. Slide 1Open deck
    Slide text

    SaaSOpen, March 2023 Pivot City! How we pivoted 6 times on our way to $20m in revenue Chris Federspiel CEO of Blackthorn.io Credit: Wifey

  2. Slide 2Open deck

    Growth without outside capital

    Blackthorn’s revenue chart rises from $0 to more than $14,000,000 over 7.5 years. The slide pairs that growth with 105 staff, $14M ARR, an $18M debt facility, no board or VC, and a break-even target at the end of 2023.

    Slide text

    Our Revenue Growth $0 - $14,000,000+ 7.5 years 105 staff $14M ARR $18M Debt Facility No Board No VC Break-even end ‘23

The pivot themes

  1. Slide 3Open deck

    Three themes frame the talk

    The talk moves from finding product-market fit to expanding the product range, then increasing average contract value. Its agenda covers focus, deciding what to stop, acquisitions and partnerships, customer feedback, pricing, packaging, and positioning.

    Slide text

    Play with packaging Over the next 20 minutes I’m going to show you PMF TAM: Find focus Multi-Product, too soon GOING WIDER Why I bought PCIFY and Textey Customers will tell you what to build GROWING ACV Increase prices Tell a story, weave it together Kill what doesn't work Not all partnerships bear fruit

Finding focus

  1. Slide 4Open deck

    Find focus before expanding

    A focused market and willingness to stop work that does not fit support product-market fit. The slide cautions against treating everyone as the target market or adding multiple products too early.

    Slide text

    Your TAM is not everyone Don’t be afraid to let go Multi-Product too soon Product-Market Fit I’m going to show you FINDING FOCUS KILL FOCUS

  2. Slide 5Open deck

    Higher education as a target market

    The higher education example breaks the market into institution types, from primary and secondary schools through community colleges and universities. The segmentation pairs customer groups with different account executive coverage.

    Slide text

    TAM FOCUS: Higher Education

  3. Slide 6Open deck

    Nonprofits span distinct segments

    The nonprofit example separates emerging small businesses, small and midsize organizations, and larger field-sales accounts. Its customer and sales coverage figures show how Blackthorn divided this broad market into workable tiers.

    Slide text

    TAM FOCUS: Non-profits

  4. Slide 7Open deck

    Four years of product decisions

    The table compares product ideas with competitors and the outcome of each effort. Blackthorn killed accounting and ecommerce projects that demanded too much focus, partially merged its portal, and folded the form builder into payments.

    Slide text

    2017, Hotel Lobby What Competition Killed Too big an app to build at the time (pre-acquisition) Simple eCommerce on Salesforce Far too much work, would need to be our company’s only focus Killed Accounting, native to Salesforce Airtable and Notion do some of this, would need to be company’s focus, solving a problem people didn’t have Partial-merged Declarative Portal Merged Form builder Here’s what we didoverfour years Merged into our Payments app for web-based invoice payments

  5. Slide 8Open deck

    Revenue shifts toward events and payments

    The revenue mix table shows events and payments becoming the dominant category over time, while professional services falls from most of revenue in early years to almost none. Messaging and credit card detection appear as later additions.

    Slide text

    Revenue Composition

  6. Slide 9Open deck

    A broad organization by function

    The org chart groups teams under product, finance and operations, customer success, engineering, and revenue. It lays out how the company divided leadership and specialist roles across those functions.

    Slide text

    Org Chart

  7. Slide 10Open deck

    The org chart build emphasizes leadership

    This build zooms into the top of the organization chart, adding names and leadership assignments around the CEO, Salesforce, platform, product, and operations roles.

    Slide text

    Org Chart

Growing IP and buying products

  1. Slide 11Open deck

    Three ways to reinforce product fit

    The product-market-fit recap emphasizes growing intellectual property, staying focused, and listening to customers. The earlier acquisition discussion sits under product development, while the other two themes address strategic discipline and customer input.

    Slide text

    Why I bought PCIFY and Textey Be weary of partnerships Customers will tell you what to build Double Down on PMF I’m going to show you GROW IP FOCUS LISTEN

  2. Slide 12Open deck

    PCIFY extended payments compliance

    The slide says Blackthorn bought PCIFY because its owner was known and its PCI checks complemented the payments app. Buying instead of partnering avoided integration work, added a product to sell, and used a 2.5-year payment term.

    Slide text

    Why I bought PCIFY PCIFY I knew the owner PCI checks complimented our Payments app Instead of partnering More product to sell We did a 2.5 year payment term

  3. Slide 13Open deck

    Textey deal terms and rationale

    The slide lists a $3.25M price, described as 6x $550K ARR, with a $1.2M down payment and $2M paid quarterly over 24 months. The acquisition was debt-funded without dilution, and customer demand for SMS supported the decision.

    Slide text

    Deal Terms $3.25M, a 6x multiple on $550K ARR $1.2M Down payment $2M over 24 months, paid quarterly Funded via debt, no dilution High Level Reasons Surveyed customers wanted SMS Buy instead of build, no integration work I reached out to Clint The revenue helped NRR Why I bought Textey

Partnership lessons

  1. Slide 14Open deck

    Keep partnerships focused

    Many payment and event integration discussions created too many contracts and technical commitments. The slide says only two partnership areas worked: Stripe payments and system integrators, which supplied most leads.

    Slide text

    We tried many Payments: Integrated to two apps Payments: Many payment gateways reached out. Events: Many discussions with vendors to integrate. Revenue shares with un-tried sources: Too many contracts, conversations, and technical integrations. Be weary of Partnerships Only two worked We focused on two areas. Payments: Our Stripe partnership System Integrators: The bulk of our leads come from SI partners.

  2. Slide 15Open deck

    Stripe Climate ties revenue to giving

    Blackthorn contributes 1% of revenue to Stripe Climate and reports more than $120,000 donated to date. The slide connects the partnership to environmental impact and the company’s culture.

    Slide text

    Stripe Climate 1% of revenue $120,000+ donated to date The world benefits Their first customer! Partnerships of personal interest & company culture

  3. Slide 16Open deck

    Watsi partnership funds surgeries

    The slide says Blackthorn contributes $3,000 per month to Watsi, which funds surgeries in developing countries. Patient stories make the partnership’s impact visible and relatable.

    Slide text

    Watsi.org $3,000 per month Funds surgeries in developing countries Everyone can relate Partnerships of personal interest & company culture

  4. Slide 17Open deck

    Customer feedback guides the roadmap

    A feedback board organizes requested features by hierarchy and compares their user-impact scores across higher education and nonprofit segments. It shows how product requests can be sorted by customer value and audience.

    Slide text

    Customers Will Tell you What to BuildHow do we do it?

Growing ACV

  1. Slide 18Open deck

    Tell a story around value and fit

    The slide frames packaging and positioning around three linked ideas: communicate value, identify the ideal customer profile, and sell the larger vision. It follows the earlier advice to increase prices and bundle products around a thesis.

    Slide text

    Don't be afraid to increase prices Bundle products lending to your thesis Tell a story, weave it together Tell The Story I’m going to show you VALUE ICP SELL THE VISION

  2. Slide 19Open deck

    Raise prices and keep testing

    The speaker says payments became 2.5x more expensive, events 4x more expensive, and the company tested 930 prices in three years. The slide argues founders can underprice products because they fear losing a deal.

    Slide text

    Pricing Don’t be afraid to raise your prices Payments: 2.5x more expensive. Events: 4x more expensive. We’ve had 930 prices in three years. Founders undervalue their products. “It only took me four months to make.” Fear of losing a deal, so I discounted. Keep raising prices. Video Here. Madhavan Ramanujam. Madhavan Ramanujam

  3. Slide 20Open deck

    Bundle products for a clear market

    Three separate products were hard to explain and sell, so Blackthorn focused its story on higher education and nonprofits. The slide shows event products packaged with payments or messaging for those target verticals.

    Slide text

    Bundle products lending to your thesis Play with packaging Identify the ICP Payments, PayLink, and DocumentLink were three products. Hard to explain and sell. Target verticals: Higher Ed and Nonprofit, so we changed our story. Events + Payments, Events + Messaging, etc.

  4. Slide 21Open deck

    Sell a journey across products

    A road links events, payments, compliance, and messaging as stages in a broader product journey. The diagram also points to additional products planned along that route.

    Slide text

    Tell a StorySell a Journey

Key takeaways

  1. Slide 22Open deck

    Decide, listen, and keep learning

    The closing advice is to make a decision, end weak product lines, experiment with acquisitions, pricing, and partnerships, listen to customers, and sell the journey. The accompanying phone graphic highlights 630 customers, $3 billion processed, and 31M messages sent.

    Slide text

    Key Takeaways A decision is better than no decision. Kill weak product lines. Try stuff! Buy a company, hike pricing, try at least one partnership to learn Listen to your customers Sell the journey

  2. Slide 23Open deck

    The story moves from focus to growth

    The recap links finding focus and removing weak products with expanding through acquisitions and customer input, then moving upmarket through pricing, bundles, and a coherent story. It summarizes the path from a broad product set back to a focused one.

    Slide text

    Over the last 20 minutes I showed you Finding focus Multi-Product Too Soon Kill what doesn't work Why I bought PCIFY and Textey Be weary of technical partnerships Customers Will Tell You What To Build GOING UPMARKET: GROWING ACV Increase prices Bundle products Tell a story, weave it together GOING WIDER WITH FOCUS KNOW THYSELF: FROM 2 TO 9 & BACK TO 2 APPS

  3. Slide 24Open deck

    Thank you from the speaker

    The speaker closes by thanking the audience and identifying himself as Blackthorn’s CEO.

    Slide text

    SaaSOpen, March 2023 Thank you! [redacted email] Chris Federspiel CEO of Blackthorn.io