Weekly Deep Dive
↓
I spent $12.5k on cold outbound over the last 45 days.
And today we’re shutting down the campaign. Here’s the results and here’s why 👇
1️⃣ Expense breakdown
- Outbound Consultant / Agency: $4,500 (Monthly)
- Smartlead (Bulk Email System): $94 (Monthly)
- Attio (CRM): $59 (Monthly)
- Clay (Data Enrichment): $699 (Monthly)
- ChatGPT (Data Enrichment): $100 (Monthly)
- Lead Purchase: $100 (Monthly)
- In-House Copywriter: $500 (Monthly)
- In-House Strategy / Coordination: $1,500 (Monthly)
- Builtwith (Data Enrichment): $295 (One-Time)
2️⃣ # of verified contacts: 12,248 This is the size of our initial list
3️⃣ Emails Sent: 20,704 This is how many emails we’ve sent so far including follow ups (2 weeks in to Month 1)
4️⃣ Delivery Rate: ~98%
5️⃣ Bounce Rate: 284 (~1%)
6️⃣ Positive Reply Rate: 3.01% These are people who replied and expressed interest in learning more
7️⃣ Goal for Q4: Between 5% and 7%
8️⃣ Conversion rate (emails sent → demos booked): .0002%
9️⃣ Activation rate (demo to onboarding): 100%
🔟 CAC: $7,000
1️⃣1️⃣ LTV: $3,600
1️⃣2️⃣LTV:CAC Ratio: 0.5142857143 Ratio of customer lifetime value to acquisition cost.
1️⃣3️⃣Payback Period (Months) 23.33 Months required to recover the acquisition cost.
1️⃣4️⃣Lead-to-Customer Conversion Rate (%): 20.00% Conversion rate from lead to customer.
1️⃣5️⃣Cost Per Lead (CPL): $1,400 Cost per lead generated through the campaign.
1️⃣6️⃣Return on Investment (ROI): -48.57% ROI = [(Total Revenue - Total Cost) / Total Cost] * 100
The $12.5k Cold Outbound Experiment That Taught Us We Didn't Have PMF 👇
Let me break down exactly how we discovered we didn't have Product-Market Fit and why our ICP was way too broad. This is the expensive lesson you get to learn from for free.
1. The Numbers That Revealed Our PMF Problem 📊
The Raw Data That Opened Our Eyes
- Real spend: $12.5k over 45 days
- 12,248 verified contacts
- 20,704 emails sent
- 98% delivery rate
- Only 1% bounce rate
- 3.01% positive reply rate (way below our 5-7% Q4 goal)
- 0.0002% conversion to demos
- 100% demo to customer conversion
The Math That Proved We Weren't Ready
- CAC: $7,000
- LTV: $3,600
- LTV:CAC: 0.51 (should be at least 3.0)
- 23.33 month payback period
- -48.57% ROI
- $1,400 cost per lead
2. Why These Numbers Scream "No PMF" 🚨
The Hidden Story in Our Funnel
-
The Paradox That Revealed Everything:
- 100% demo-to-customer conversion (people who see it, buy it)
- BUT 0.0002% email-to-demo conversion (nobody's getting there)
- Translation: Product works, but our market positioning doesn't
-
The ICP Problem We Discovered:
- Started too broad: tech founders, e-com founders, AND service providers
- Revenue range ($1M-$20M ARR) was trying to serve everyone
- Zendesk users ≠ qualified prospects
3. The New Game Plan 🎯
Immediate Changes We're Making:
-
Narrowing Our ICP:
- Focusing ONLY on tech founders from our list
- Using our Builtwith + Clay enriched data smarter
- Starting with the $1M-$20M ARR Zendesk users, but getting more specific
-
The PMF Journey:
- Not throwing out cold outbound completely
- Keeping our valuable list but using it differently
- Focusing on proving PMF before scaling again
4. What We'll Do Differently Next Time 📝
Approach to Finding PMF:
-
Testing & Validation:
- Smaller, focused experiments
- Clear success metrics before scaling
- Regular customer feedback loops
- Documented learnings from each iteration
-
ICP Constraint:
- Start with successful customer profiles only
- Deep dive interviews with current users
- Clear value proposition for each segment
- Proof of concept before full campaign
The Wake-Up Call Summary 🔔
This wasn't a failed experiment - it was an expensive discovery process that taught us two critical things:
-
PMF Reality:
- High demo conversion shows product potential
- Low funnel conversion shows positioning problems
- Need to nail product-market fit before mass outbound
-
ICP Clarity:
- Can't serve everyone from day one
- Starting with tech SaaS founders only
- Using our existing list but with laser focus
Moving Forward 🚀
We're not giving up on cold outbound - we're just doing it right this time:
- Keeping our valuable list
- Focusing on tech founders only
- Building from what we learned
- Waiting for PMF before going big again
For other founders: Start smaller, test faster, and make sure you have PMF before you scale. We spent $12.5k to learn this. While not a huge amount, when you're boostrapping, every dollar counts.
Remember: The problem wasn't cold outbound itself.
The problem was trying to scale before we had PMF and a clear ICP. Get those right first, then pour gas on the fire.
The TL;DR Look, we spent $12.5k to learn some expensive lessons.
The good news?
Our product works - everyone who saw it bought it.
The bad news? We were showing it to the wrong people, in the wrong way, at the wrong time.
For those about to run outbound - test small, validate everything, and constrain your ICP aggressively.
Scale what works, kill what doesn’t. And yeah, we’re coming back to outbound. But next time, we’re doing it right. 💪
P.S. If you’re going through something similar, hit me up - might as well learn from each other’s mistakes!
What we're doing about email outreach in the meantime:
For now, we still think there’s value in the list we created with Builtwith and enriched with Clay.
It consists of tech founders, e-com founders, and digital service providers making between $1M - $20M ARR and who use Zendesk.
We are taking that list, and focusing solely on tech founders.
The offer? Switched from outbound request for demo to requesting demo feedback in exchange for a $100 Amazon gift card.
Results so far?
- 10 positive responses over past 4 days
- vs 7 demos scheduled over the past 45 days with previous offer
- How much we are spending:
- $100 per call
- $97 a month with Instantly
