S7E9 – The B2B SaaS Nightmare? Growing Without Recurring Revenue with Ricardo Ghekiere

In the world of artificial intelligence and software as a service, companies are no longer just competing on features. In this episode of the Grow Your B2B SaaS podcast, Joran Hofman sits down with BetterPic founder Ricardo Ghekiere to discuss The B2B SaaS Nightmare and how SaaS founders can grow without recurring revenue. Companies today are also competing on how they price their products and how they scale. This episode highlights how one company made millions without using monthly subscriptions. Instead, they leveraged one-time payments, smart marketing, and simple but powerful strategies. You’ll learn how they managed costs, raised prices, and succeeded through alternative growth channels. This episode is a must-listen for anyone looking to build or grow an AI business without relying on monthly payments.

The Shock Factor: Explosive Growth Without Recurring Revenue

At SaaS events, BetterPick often surprises people. The company grew from roughly $360,000 to several million in just two years and is projected to hit about $3 million this year. The catch? None of it is recurring revenue.

Ricardo takes a practical view. Revenue is still revenue—it pays the bills, supports the team, and fuels growth. What’s different is the rhythm. Each month starts at zero, with no guaranteed renewals. Still, their model works because of their niche: AI-generated headshots. For most users, it’s a one-time need rather than a subscription service.

Why BetterPick Isn’t Recurring—At Least Not Yet

BetterPick serves both individual consumers and businesses. A user uploads a few selfies and receives professional AI headshots within about thirty minutes. It’s a simple one-time purchase, much like paying a photographer for a single shoot.

The team focused on mastering this one product rather than chasing every possible AI image transformation. Since professional headshots are not something people need every month, a subscription model didn’t make sense. Most competitors also operate on a similar one-time purchase model, starting each month from scratch.

Even so, BetterPick is now testing a new recurring revenue product. They launched a 45-day sprint to validate whether their next initiative can layer a subscription model on top of their existing business. Ricardo hopes to share soon whether that experiment succeeded or not.

The Emotional Ride: Starting From Zero Every Month

For founders, it can be emotionally challenging to start each month without any guaranteed income. But perspective matters. Compared to traditional SaaS, it feels riskier. Yet when compared to e-commerce, it feels freeing—there are no physical goods, shipping issues, or returns to worry about.

BetterPick operates with outstanding margins, around 90 percent, thanks to efficient AI infrastructure. With only about 10 percent in cost of goods, they maintain healthy cash flow that funds growth even without recurring revenue.

How BetterPick Achieved 90% Margins

BetterPick didn’t always have such strong margins. In the beginning, their costs were much higher—about 70 percent of every sale went to AI providers. To change that, the team built what Ricardo calls a “cost moat.” They optimized their entire AI infrastructure, connecting to GPU providers around the world and automatically routing to the best cost options.

As they reduced costs, they also improved product quality and increased pricing, which raised both revenue and profit margins. This flipped the usual SaaS playbook. Instead of chasing growth first and fixing margins later, BetterPick scaled both at the same time, giving them more control and freedom to invest back into marketing and innovation.

The AI Cost Paradox: Pricing, Models, and Margins

Many companies feel pressure to add AI features just to stay relevant. But those features often come with high costs, especially when using closed-source APIs. Ricardo explained that while these models can be powerful, they’re not always worth the extra expense.

He warned that many companies add AI tools without understanding the long-term economics. When usage grows, costs can skyrocket. At some point, the bill comes due, and teams realize they’re losing money on every customer. BetterPick avoided this trap by staying focused on efficiency and cost control from the start.

The Tsunami Risk: Competing With Giants

BetterPick is fully aware of the risks of competing in a fast-moving AI space. When Google’s Gemini recently added “Create your professional headshots” as a built-in feature, it was clear that the landscape could change overnight. The team had predicted a wave like this nearly a year earlier and started preparing by diversifying their product line.

After studying user behavior, they discovered that half of their users were using the platform for clothing changes. That insight inspired their next product, Better Studio—a new business built on the same technology but designed for recurring revenue and stronger defensibility. Better Studio launched in early 2025 and has already started generating subscription-based income.

Fundraising Without Recurring Revenue

Raising capital without predictable income is tough. Ricardo recalled pitching in Amsterdam while BetterPick was growing fast—from $19,000 to $33,000 per month—but still facing rejection because their revenue wasn’t recurring.

Even at $270,000 per month, many investors remained hesitant. The breakthrough came when they met investors who understood their vision. These backers saw the team’s ability to build and adapt, not just their current product. The investment valued both BetterPick’s proven revenue and the future potential of Better Studio.

Operating Without Predictable Income

In the early days, BetterPick’s average order value (AOV) was only $17, making paid acquisition nearly impossible. They relied on organic channels such as SEO and clever content strategies. Over time, as the product improved, the AOV climbed to $49, unlocking new opportunities for paid growth.

Once unit economics worked, BetterPick began investing in Google Ads and now spends around $40,000 a month profitably. Channel selection, Ricardo explained, is unlocked by strong economics. The higher the AOV and lifetime value, the more flexibility you have to test and scale new channels.

Affiliate Marketing: Proof and Cash Flow

Affiliate marketing became a key growth driver. When affiliates show their real headshot results, conversion rates jump significantly. BetterPick’s affiliate funnel converts around nine percent, far higher than typical e-commerce standards.

Their model also creates positive cash flow because customers pay upfront, while affiliates and AI providers are paid later. This timing fuels growth. Top affiliates earn substantial income, and BetterPick even rewards them with travel perks, such as flying their top partner to team events in Barcelona.

The added benefit of affiliate marketing is long-term visibility. Once reviews and articles appear online, they’re frequently copied and referenced in new posts and AI-generated listicles, creating what Ricardo calls a “waterfall effect” of continuous exposure.

The Hidden Advantages of Non-Recurring Revenue

While most founders see non-recurring revenue as a weakness, BetterPick has found several benefits. The sales process is simple—users pay once and see results within half an hour. Cash flow is immediate, and the team can adjust pricing or packaging quickly without worrying about existing subscribers.

This freedom allows fast experimentation. When a price change caused revenue to drop, they reversed it within a week. These quick feedback loops are impossible in traditional subscription models, where data takes months to surface.

Go-To-Market Lessons and Strategic Focus

Ricardo’s advice to founders is to always know your numbers—especially how much you can spend to acquire a customer—and to make two major channel bets each year. For BetterPick, Reddit and YouTube were the main focus this year, with Reddit becoming a surprisingly strong performer.

Interestingly, BetterPick has also seen self-serve behavior at the enterprise level. At one event, a buyer purchased $12,000 worth of headshots with a credit card on the spot, no sales calls required.

The Next Three Years: Becoming Truly AI-Native

Looking ahead, Ricardo believes every product will need to be AI-native to stay competitive. Buyers already factor AI capabilities into their purchase decisions. Companies that fail to optimize both their technology and their cost structure will struggle to keep up.

The winners, he says, will be those who don’t just add AI as a feature but integrate it deeply while maintaining strong margins.

Stage Advice: From Startup to Scale

For founders moving from zero to ten thousand in MRR, Ricardo advises focusing on a single growth channel and mastering it before expanding. As revenue scales toward millions, attention should shift toward expansion, activation, and retention—ensuring teams are aligned and metrics-driven at every stage.

BetterPick’s consumer business relies on online channels, but their enterprise product, Better Studio, uses an entirely different motion focused on partnerships and events. The team intentionally separates these strategies to match each market’s dynamics.

Operating Discipline and Monthly “Bingo”

Internally, BetterPick tracks its progress through a monthly “Bingo” board. They rate key metrics like revenue, margins, customer satisfaction, and time to value using a simple green, orange, or red system. This clear structure helps the team prioritize what to focus on next.

BetterPick’s journey challenges one of SaaS’s biggest assumptions—that you must have recurring revenue to build a great business. Their success shows what’s possible with sharp unit economics, lean operations, smart channel selection, and constant iteration.

Today, BetterPick’s one-time purchase model continues to thrive while the team builds out recurring products in Better Studio. The combination of quick cash flow and disciplined experimentation has become their superpower.

Ricardo’s final message to founders is simple yet powerful: track your metrics carefully, make bold but deliberate bets, and always prepare for an AI-native world—on both the value and cost side.

Key Timecodes

(00:00) – Cracking AI Pricing: LTV, AOV & Unlocking Paid Channels
(00:58) – $4M Without Subscriptions? BetterPic’s One-Time Revenue Model
(01:44) – “Wait, No MRR?” Reactions to Explosive Non-Recurring Growth
(02:18) – Revenue is Revenue: The SaaS Case for One-Off Cash Flow
(02:46) – Inside BetterPic: AI Headshots, B2B vs B2C, and Single-Purchase Strategy
(03:28) – Subscription Apps vs Specialized AI Headshots: Who Wins?
(03:51) – Why Headshots Don’t Need Recurring Revenue + 45-Day Sprint Strategy
(05:14) – Starting From Zero: The E-Commerce Mindset in SaaS
(06:07) – From 70% COGS to 90% Margins: The AI-Native Advantage
(06:44) – Building a Cost Moat: Raising Prices & Outspending Competitors
(07:47) – Cutting GPU/API Costs: Internal AI Infra & Multi-Provider Routing
(08:21) – The Recurring Revenue Goldmine in AI Infrastructure Optimization
(08:36) – AI-Native vs AI Features: Pricing Pains of OpenAI APIs
(09:36) – Why Buyers Choose AI-Native: QuickBooks vs Xero Example
(11:02) – Open Source vs Closed LLMs: Pricing, Quality & Competitive Moats
(11:52) – The Risk of No MRR: Surviving the Consumer AI Tsunami
(13:18) – Pivot to Better Studio: Turning AI Headshots Into Recurring B2B
(13:54) – Dual Engines: Scaling One-Time Sales While Building Recurring Revenue
(15:16) – Fundraising Without MRR: Convincing Investors to Bet on the Team
(17:10) – Startup Valuation: Group-Level Investment Across Two Brands
(17:42) – Budget Discipline: How Low AOV Shapes Channel Strategy
(18:57) – SEO & LinkedIn Hacks: From Fake Profiles to First Sales
(19:56) – The Affiliate Engine: 9% Conversions & 30-Day Payout Model
(20:42) – Stripe Upfront vs Net-30 Payments: Cash Flow Power Moves
(21:04) – Designing High-Converting Affiliate Programs With Real Incentives
(21:39) – Where the Affiliate Traffic Comes From: YouTube, Reddit, Display Ads
(22:30) – SEO Benefits of Affiliates: Backlinks, Listicles, and Rankings
(23:34) – LLM-Generated Listicles: Dominating Google & AI Discovery
(24:16) – How a $49 AOV Made Google Ads Profitable
(25:34) – Scaling Paid Channels: CAC, LTV, and AOV in Sync
(25:59) – Paid Channel Stacking: The Compounding Effect in Growth
(26:25) – No MRR? Fast Sales Cycles & Upfront Payments Explained
(28:17) – Speed to Value: AI Headshots Delivered in 30 Minutes
(28:58) – Pricing Agility: Changing Prices Without Legacy Contracts
(29:10) – Pushing to the Middle Tier: Packaging Strategy With Amplitude Data
(30:15) – Rapid Pricing Iteration: 7-Day Tests & Volume-Based Experiments
(31:32) – Fast Consumer Feedback vs Slow SaaS Trial Cycles
(32:07) – GTM Strategy: Make Two Big Bets a Year & Know CAC Limits
(33:04) – Pricing Drives Channel-Market Fit: SEO, Affiliates, YouTube
(33:45) – $12K Self-Serve Deals: Going Upmarket With Confidence
(34:25) – Automating Jobs-to-Be-Done: The AI-Native Future
(36:50) – How to Get to $10K MRR: Focus on One Channel First
(38:12) – Enterprise GTM Shift: Better Studio’s Move to Events & Partnerships
(39:14) – Scaling From $10K MRR to $10M ARR: Building Full-Funnel Teams
(40:37) – Recap: One-Off SaaS, AI Margins, SEO/Affiliate Flywheels
(42:54) – Reporting Rhythms: Monthly KPI Bingo & Health Metrics
(43:42) – Connect With Ricardo: LinkedIn, BetterPic & What’s Next

Transcription

– Ricardo

At some point, people will have to think about, How do I price this in the right way? How do I leverage the best cost of goods so I can actually offer really good AI-native features to my clients without actually losing money or charging them crazy amount of money just because you are paying crazy amount of money. As a founder, when you’re a little bit product-focused, that’s what your mind should be on. It’s like, How do I keep increasing my lifetime value or average order value? Because that will allow my marketing people to now spend on channels they wouldn’t be able to afford back in the days. Most companies are like, You have to do it. It’s like a must to do it. It’s like, If you don’t add AI to your product, you’re almost going to win the race or lose the race. Most people don’t know how to really help price it because the cost is actually quite high. If you connect with an open API or the API of Open AI, it’s actually quite expensive.

– Joran

Most SaaS founders change two things, recurring revenue and predictable growth. But what if your SaaS model doesn’t actually allow this? What if you have to start from zero every month again, so without guaranteed renewals? Is this a nightmare or is it actually not that bad? We’re going to find out today. My guest is Ricardo Ghekiere from BetterPic. They start every month at zero as they don’t have recurring revenue. They did grew, however, already to 4 million revenue in a year. We explore how Ricardo manage uncertainty, keep revenue flowing, and what lessons every founder can take away about their resilience, customer acquisition, and rethinking growth when renewals aren’t part of the revenue. Welcome to the show, Ricardo.

– Ricardo

Thank you very much, Joran. Looking forward to have this chat.

– Joran

We met a lot at events already. I know you’re attending a lot of SaaS events. Can you tell a story on how people react at SaaS events when you say you don’t actually have recurring revenue?

– Ricardo

Well, the first reaction to the explosive growth, go Going from 360K to about, I guess it’s going to be more 3 million this year. It goes like it’s quite explosive in the last two years. For everybody, it’s like, wow. But then you tell them it’s non-recurring, it’s like, oh. It’s like happiness. It’s like sadness at the same time.

– Ricardo

Now, of course, I always joke, revenue is revenue, money is money.

– Ricardo

It still comes into the bank and you can actually use it. But it’s not a traditional SaaS where every month you get the payments in and you’re very guaranteed that the payments are coming in, basically. It’s an interesting thing to every single month, see your balance on zero.

– Joran

I can imagine. Let’s dive a little deeper. Can you explain how big business model works and why you don’t have that recurring aspect right now?

– Ricardo

Betterpix has two models. We have a consumer base, we have a BTB base. As a consumer, you come in, you pay one time, and you get your headshots. People upload their selfies into the platform around a 6: 00 to 8: 00. They get professional headshots within 30 minutes, and that’s it. They have their headshots and they move on to something better in this world, basically. Because the action getting professional photos shoots, you don’t pay your professional photographer every single month. For us, that’s the same thing. You don’t need your professional photo every single minute or every single month. The action is a one-time thing. We charge you a one-time fee, basically.

– Ricardo

There are players out there in the market that is more like apps-based, I would say, where you pay $7 per month to get headshots.

– Ricardo

You can transform yourself into a dog, make kissing videos and all that. But we’ve been focused on doing one thing very well, AI headshots.

– Joran

I can imagine if people do it once, they’re not going to come back three months later to redo their photo, right? But have you tried it in the past?

– Ricardo

We have not tried in that sense because from a VC perspective, it’s like, I want to have recurring. If there’s no recurring, there’s no business, basically. From our side, it’s like if the action is just one time, so the action was doing a photoshoot, editing a photoshoot, and then leaving for the rest of your life, you can’t really make that recurring in our philosophy. Even in our competition, there’s nobody actually doing properly recurring a business model. They’re also starting from zero every month, which is quite interesting to see. Now, interestingly, we have a 45-day sprint which kicked off on Monday. We have less than 45 days now to figure out our first recurring revenue, basically. We even had our last workshop yesterday where we all aligned, Okay, this is the thing that we’re building to prove that we can actually build a recurring model on top of our business, basically. Probably we’ll have this conversation, and maybe when this podcast comes out, I will be able to tell you yes or no, basically. That’s the 45-day sprint we are in as of now.

– Joran

Nice. Before we really dive in, let’s talk about your emotions. I can imagine it’s a roller coaster. How does it feel to run a business where you start from zero every month again, where you have to re-earn your revenue every month again and again?

– Ricardo

It’s a good It’s a weird question. In the beginning, it freeps you out. But if you think about a traditional e-commerce company, you could technically say you’re the same thing, but higher margins, and you don’t have to deal with shipping and delivery and all that stuff. If you compare yourself to a SaaS, you feel sad. If you compare yourself to an e-commerce, you’re actually doing very well. They also start from zero, and they actually have the hassle of shipping, delivery, something breaks, returns, all of that stuff. I always said in the beginning, we’re not really a traditional SaaS. We’re actually an e-commerce store with very high margins. To give you a sense, our margins right now are about 90%, so 10% cost of goods and the rest is margin, basically. That leaves us with a lot of cash flow to do the cool stuff that we want to and also on the marketing side in that sense.

– Joran

That’s nice. I mean, you guys are AI native, right? You make AI headshots. This is not typically what you hear with costs rising from AI. What did you do or how did you build it up to have these margins?

– Ricardo

We started with about 36% margin, basically, so we would have cost of goods of about 70%. If people would pay us 50 bucks, 70% would go to the AI providers. I realized early on, I was like, if you have a certain moat that you can build in a company, and if the moat is not the recurring revenue, we need to have different moats, basically.

– Ricardo

So very early on, I think even one and a half years ago, maybe two years ago, we said, Okay, we need to have a cost moat, which is we need to be able to, at any point of time, if competition comes in, we need to be able to outspend them.

– Ricardo

And this is also why we started increasing our pricing, but also increasing our margin at the same time, basically. Which if you think about a typical SaaS company, they wouldn’t really care about cost in the beginning. They just care about the growth and the revenue and making sure you stack up. Then later on, maybe if you grow really big, you’re like, Okay, let’s optimize this cost because there’s something going wrong here. For us, we traditionally did it a little bit differently. We said, As we grow, we need to grow our margin as we go. If you think about, we had a cost of goods of 70%, now we have a cost of goods of 10%, and this allows us to be in a very comfortable position when we want to outspend competitors, when we want to do certain marketing tactics, when we want to give away free headshots to, for example, events. We’re like, We can do this because we’ve realized that.

– Ricardo

We’ve, without realizing, built something internally, which is super cool, which allows us to basically connect with every GPU provider in the world and do that at the cheapest cost possible at every single time. We have actually built something in-house, which is funny enough, something we’re thinking about building for other companies as well, which allows you to really drop down all the AI costs we have in your company, basically. We’re using our own case study of doing so. That could be the next thing that we might be building.

– Joran

There you can have recurring revenue, right? That’s nice if you’re going to ship it to companies. But I think this is the biggest problem AI native companies have is they aren’t able to have such low costs as you guys are having right now.

– Ricardo

100%. This is the battle these AI native companies will have. Either you go AI native, which is full AI, or you basically have a red it as a new add a little bit AI on top, basically. Some AI features, some AI stuff, and then it just becomes a little bit part of it. But what we realized that most companies are like, You have to do it. It’s like a must to do it. If you don’t add AI to your product, you’re almost going to win the race or lose the race. Most people don’t know how to price it because the cost is actually quite high. If you connect with an open API or the API of OpenAI, it’s actually quite expensive. If you start using it, and most users are now using it for bulk things, it can get quite expensive, and then you don’t really know how to price that inside your packages. I think at some point people realize that they want to offer it, but it has to be cost-beneficial as well. I think now we’re It’s on the raise of let’s just build out features so that people are like, Okay, these guys are doing something with AI, and probably it’s good.

– Ricardo

Even now, I remember choosing between accounting system in the US, and it was between Quickbooks and Xero. I could see if Quickbooks was really investing in this whole AI and making it AI native. The decision, one of the decision was, Okay, do we go with one or the other? Because of the AI nativeness, we actually went with Quickbooks, basically, which I still love. We made a good decision there. But I think at some point, companies will do the same thing. B2b buyers will do the same thing. It’s like, Are they investing in AI? Is this something that will automate most of my job or not, basically? That is, I think, the phase we’re in right now. People don’t really care about the cost. They just care about being competitive. But at some point, they will look at the bill and they will say, Wow, shit. We’re competitive, but we’re losing money on every single user. I think then is when people start thinking about the cost, a little bit what we’ve done two years ago in that sense.

– Joran

I organized a SaaS Talk Local at Miro’s office in Amsterdam, and Andrew, the founder and CEO, came and spoke as well. He said, You need to keep track of your margins. You need to grow a business even though you’re going to go AI native. Make sure you keep your margin in order to actually run a proper business, which is quite interesting. They’re so huge, and even there, they already care about early on. This is good advice you’re giving here.

– Ricardo

100%, and I think you need to start thinking about, do I go closed source or do I go open source? Do I use the open source models or the closed source models? I think there’s a big philosophy where closed source models, most people believe they’re 100 times better. They’re not. But they’re 100 times more expensive. That is there. I think at some point people have to think about, how do I price this in the right way? How do I leverage the best cost of good so I can actually offer really good AI-native features to my clients without actually losing money or charging them crazy amount of money just because you are paying crazy amount of money? I think that’s something that people in the coming two years will start realizing, how do I actually lower my cost so I can offer more features in the AI native way.

– Joran

When we go back to not having MR, you mentioned it already, you guys are doing good. You lowered your cost, so there’s really Very good margins here. Are there any risks, I guess, when you compare yourself towards, I guess, more traditional SaaS or I guess, a SaaS with MR? Are there any big risks you guys have compared to them right now?

– Ricardo

Yes and no. I mean, yes, I think we are in the most risky business that you could call it. The reason why… If you go to Gemini today, which is funny, basically, if you go to Gemini today and go to the home screen, on the home screen, you will get some quick actions just like you have at ChatGPT. On the home screen, it says, Create your professional Hatchels. That came out five days ago. It’s funny because we realized this nine months ago, maybe more, 10 to 12 months ago. We were like, Okay, we’re in a business where the AI tsunami is coming, and probably on the consumer base, we’re going to be hit like a tsunami, basically. We need to move really, really fast and think about alternative solutions to make it more sticky, How do we make it more recurring. This was 9-10 months ago. We were already thinking about how do we make it either recurring or how do we use the same technology stack and move into a different space, basically. This is where the new idea came in. It’s like, Okay, we need to use the same technology because we had some users in our…

– Ricardo

We have AI hedgeholds. People come in and then change clothing, change the background with our AI studio. We noticed that 50% of the users were actually using the AI studio for changing their It was the clothing thing that was really specific to them that they wanted to get right. We realized we were really good at that and we’re like, Okay, probably we can make a business out of this. We moved into the better studio business February 2025, where it’s like, Okay, this is our next big bet. This is where we’re going, and this is where the recurring revenue actually will come in. We’re making first revenues already, so that’s great, and it’s recurring.

– Joran

Nice.

– Ricardo

We knew that a tsunami would hit us. We just didn’t know when it was going to come, and it’s going to wipe out a lot A lot of companies like us. We need to be prepared for that.

– Joran

I think that’s one of the common things people think they might say. It’s just a ChatGPT or Gemini Rapper now where it could do the same thing, which isn’t the case. People might have that perception, so it’s great You’ve been thinking, what can we do with the technology we build and how can we make it a sustainable business?

– Ricardo

That’s the race right now. That’s an interesting race. It’s very funny because you’re still trying to operate a business that you probably know might die in the coming five years, but it’s making good money. At the same time, you’re also trying to operate and moving into a new space more protected from these geminiis in the world, basically. It’s an interesting race that we’re in. I’ve heard many stories with people starting off with one business model, killing it, moving to the next, and making that one really big. In this sense, it’s not this killing and then starting all over. It’s really like trying to build a new horse while still keeping the old horse. That’s an interesting challenge, I would say.

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– Joran

you raised money. I’m curious, how did the investment round go? How do investors look at their business? They know the same thing as you. At one point, the business might not go forward. Did they believe in the story of Studio or how did they look at the entire business before doing the investment?

– Ricardo

Yeah, good point. We have received a lot of nos, obviously, because of the verse. And funny enough, I flew to Amsterdam about a year ago. Looking at the metrics, and I was doing… This is August 2024. I flew into Amsterdam. We went from 19K to 33K, like July to August. We’re like, Oh, we’re on a boom. We went to Amsterdam and we were like, It was for a pitching competition that I tried to pitch to all of the VCs. All of them said no because Better Big had no recurring revenue. They were not interested in that. We tried it first last year and everybody said no. Then, of course, fast forward a year later, we’re making 270K per month. That was a different story. But then again, all of them were like, Yeah, but this is not recurring. The investors we have right now are really forward-thinking together with us as well. I’m really happy they have some right investors on board because they basically said, Look, guys, we know this better pick is going to die one day, but we believe in you as a team to execute the next big thing and the next big better Studio ID.

– Ricardo

Because you’ve proven that you can scale things, you’ve proven you can build a team, you’ve proven that you can do stuff. The next big thing is probably also going to work out, basically. That is basically the bet that they took on us. Just being honest with this business probably will die. Bet on the next big thing together with us in that sense.

– Joran

I don’t know if you can or want to give an answer on this, but did you raise based on the valuation on the revenue you had or on the future potential revenue with the studio?

– Ricardo

The investment happens on a group level, you would call it. We have a holding in the States. Our holding is a big one, but we have a company in the States which owns BetterPick and better. They invested in both companies in that sense. The evaluation, I would call it a combined valuation. It was a valuation on the potential of better studio plus the revenue that better pick was already generating in that sense.

– Joran

At the beginning, that wasn’t the case. How did you, for example, plan expenses and investments when you didn’t have predictable income?

– Ricardo

When starting out, 0-10 or whatever you want to call it. You try to, at least for us, you try to look at things that don’t cost too much. You have low margins. Our average cost, the average purchase was around $17 when we started out. There’s not a lot of marketing channels that you can activate with $17 number occurring. That’s the most horrible business you want to be in. The only thing you could do is invest in strong SEO and strong organic growth because you don’t have the margin to do anything else in that sense. Now, over time, we’re now at an average order value. I think last month, September, was $49. That means people buying consumer, but also B2B in that sense. Now that we have that $49, you can a lot more different things than when you started out, basically. When we started out, December 2023, my initial thesis was, We’re starting off, we’re investing very high on SEO. We actually made fake LinkedIn profiles. That LinkedIn profile would then post organically as articles, and it was rank up into Google. That’s how we actually got our first sales coming in, basically. We were doing all the hacky stuff that you can do just to grow organically.

– Ricardo

Then, of course, once our product got a little better, we We started investing a lot in affiliate marketing. I think the interesting thing about affiliate marketing is, for us at least, is that because we are a product that you come in, purchase, and then get the value, there’s two things that were important to us. One, if we tell If I tell you that we have a great product, you might not believe us. But if another person has tried the product, shows the result, and says, Hey, look what I got, basically, and then sends you to a website, your likely hitness to convert is much higher, basically. We had that issue where still people would have to pay upfront and then actually get the results later. You don’t have an aha moment until you actually pay. We invested a lot in affiliate marketing because of those two reasons. One, the first reason was the credibility that they have in sending to the website. We have an average conversion ratio of 9% for our affiliates. People coming in, they purchase something as 9%, which is really high. Average e-commerce is 2%. We’re at 9% with affiliate marketing.

– Ricardo

Affiliates were like, Wow, this is great. I’m making like, we We have people making 20K per month by just giving us business. We’re actually flying over our best affiliate. She’s from India. She’s flying over to Barcelona in two months on our team off-site because she’s making so much money. Really cool to see. The second thing about affiliate marketing, which was interesting for us, is if you pay us upfront, we get Stripe money in the bank and we would pay affiliate 30 days later. It now changed to 14 days later, but still, 30 days later, you get paid. Our providers, you also have to pay 30 days later. It’s a very good cash flow business. Now you can operate. You can start investing long term because you’re getting cash upfront and paying your suppliers 30 days later. Those two motions allow us to really grow in a cash-efficient way.

– Joran

Nice. I did not pick you as a guest to advocate on affiliate marketing, but it’s really nice to hear that it’s been working well. And 9% is indeed good. That’s nice. Is that something you also then have on your landing page for the affiliate program? If you give us extra amount of traffic, we know that it’s going to to 9%, which is going to convert into extra money revenue.

– Ricardo

100%. We have a cool campaign done by a cool marketing person in our team called Team. You build a whole new landing page. It’s like your next holiday paid by us, which is actually funny because We’re flying over the person to Barcelona, all expenses paid by us. Basically, that’s also what we’re doing. It’s like the best affiliate, we fly over to each of our offsites, and it’s a competition between affiliates in that sense. You also then have a scale, like how much traffic you want to send us. Okay, this is how much you could actually be earning with us in that sense. We do also have a calculator that you can calculate in that sense.

– Joran

Do you know where most of their traffic is coming from?

– Ricardo

It’s very diverse. To be honest, and I think that’s a good thing. We have a field that’s as strong as YouTube, so they make a lot of YouTube movies. We have people that are writers, so they have a big medium following, so they would write on medium. We have people that are Reddit hackers or Reddit people that have been on Reddit for 10 years. That is also coming in. It’s very diverse. We even have people running display outs. It’s very diverse people because the product is so multi-use case in that sense.

– Joran

What I always love about affiliate marketing is if you have people doing different things, it’s giving you backlinks on different channels and mentions on Reddit, YouTube videos, and as you mentioned, other things like you did LinkedIn yourself. It is going to help your organic channel as well.

– Ricardo

A hundred %. I think most people don’t realize the hidden impact of affiliates, I would call it. I mean, there’s dark sides to it. We had to block people from Vietnam, for example. We have an IP tracker. Vietnam, you’re not getting in. All the scammers work from there. Nothing against Vietnam. We have somebody from Vietnam working for us, but that was the real case. It has a lot of advantages from a way that you get seen a lot and people pick it up. It’s like the waterfall technique. If you type in AI headshots and you see the top 10 people writing about AI headshots, they would write something about it. Then the people that write a new article saying the top 20 AI headshots, they would just go to the first one. It’s like, Okay, I’m just going to steal these 10 and just copy it and just add five more, basically. There is a lot of these hidden things that you can’t really calculate, but you can sense it in your growth, basically. You can have a guesstimate that this is working out, basically. I think there’s a lot of hidden nuggets of doing affiliate marketing right because it will impact all the other channels as well.

– Joran

Yeah, and especially nowadays, because the LLMs learned from what is ranking high on Google. If your list of king from the affiliates rank high, then if people want to write a new listening article, they just ask, well, give me the 10 best headshot.

– Ricardo

That’s what they do. Most writers are quite lazy, I would say. Some people actually do really good copywriting and people really write in-depth articles and those rank very nicely. But most people, 99% of the people just take whatever is there. They just ask ChatGPT, saying, Hey, by the way, what’s the top 10? Give me some advantages, pros and cons, and then some screenshots, and that’s it, basically. But you get some articles and back then it’s back on that.

– Joran

We have the LinkedIn hacks at the beginning, organic focus on SEO, and you have affiliate marketing. Do you have any other acquisition channels which are important to you?

– Ricardo

Yeah, now I think Google Ads is a big one. We’re still very profitable on that channel as well. I think we’re spending about 40K per month on it, give or take. That’s a big channel for us, which is interesting because when we started out, we did Google Ads, and our average order value was too low to make it profitable. We could only get it profitable by making sure our product actually got more expensive, basically. We just didn’t make it more expensive because we wanted to make it more expensive. It just got better. We just have to match the quality that we’re giving versus the output in that sense. Once we were adapting pricing as we went, we could afford new channels. Google Ads came in, and then you see that spike of growth. I think it’s always adding new channels. Adds in revenue, average order value or lifetime value for a SaaS founder, you can now start thinking about adding new channels, basically. I think that as a founder, when you’re a little bit product-focused, that’s what your mind should be on. It’s like, How do I I keep increasing my lifetime value or average order value?

– Ricardo

Because that will allow my marketing people to now spend on channels they wouldn’t be able to afford back in the days, basically. Back in the days, we couldn’t afford Glass, we couldn’t afford Facebook ads, we couldn’t afford all these channels, which we now can because we started increasing our average order value.

– Joran

Yeah, I think that’s really nice. You started the hacky way and now you’ve figured things out, know your metrics, and you can actually start adding new channels. Exactly.

– Ricardo

When you When you do Google Ads, you will see that people are just writing articles and they’re like, Let me just take the first one. People sometimes don’t realize it’s a Google Ad, and they would click on it and it’s like, Oh, that’s probably the first one. It stacks on top of each other. That’s also why we saw a lot of explosive growth because we started activating new channels as we went, and those started stacking together as well. Yeah.

– Joran

Really nice. I guess we talk about the negative a lot regarding not having MR. Let’s turn it around. Are there any unexpected benefits of not having an MRR model?

– Ricardo

When you have to convince somebody to keep paying, it’s like, Hey, just pay me once, get your result and move on with your life. It’s an easier sell. I would say you don’t have this PLG and you have to figure out. I mean, we are very PLG movement, but we get paid upfront. The biggest thing for SaaS things, we’re now seeing that also with your company, is your payment delay is so long. People come in, have a 14-day trial, and then think about it or convert later on, or say, Okay, this was good, but I forgot about it. Then you would come back three months later because you’re just making comparisons, basically. You’re from I spend my money on people and ads to me getting actually revenue in the bank and then strike hold it for another few days, depending on how big you are and then take a margin. Your cash is screwed up. For us, the biggest benefit was the cash flow upfront that we get every single month to pay our people, pay our ads, be upfront, do big investments, think about the long term. Whereas for SaaS, it’s get paid later story.

– Ricardo

I think that’s a very tricky one in the early days for SaaS founders.

– Joran

I have to tell you. It’s super funny. If you’re watching the video, you can just see him smiling. He’s like, There’s That’s actually a good benefit towards this. It’s quite nice, right? You have 9% conversion rate. I guess, especially if people come in or in your site today, they will probably convert today. They don’t indeed have to sign up, wait 14 days to hit the trial, maybe then make a decision if they want to use your product or not.

– Ricardo

Yeah, your time to value is literally 30 minutes, basically. To most founders, your time to value is 30 minutes, plus you get paid upfront to get the value, basically. If you think about it from a reverse trial or whatever it is, you don’t have that. You need to work super hard to make sure they get the first 30 minutes or hopefully five minutes of the value of the product, and then they still have a free trial for the amount of time, and then they will convert. For us, we get paid upfront and your time to value 30 minutes. That’s a big advantage for channel choice, growth, and investments.

– Joran

Do you then not have to deal with the issues that you change pricing because you don’t have the recurring clients?

– Ricardo

Pricing whenever we want.

– Joran

Would you ever get any comments on it? Would you ever get any comments if there’s new features, if you change pricing, do big things? What is your response?

– Ricardo

Pricing-wise, we’ve changed our pricing in the early days. You change your pricing every single three months. Now, I wouldn’t say we change the price for the last six months, somewhere around that. The good thing is for consumers, they don’t care because they’ve already left, basically. So whoever we increase the price for is just for the new people, not for the old people. You could almost say that you’ve grandfather priced the older people and the newer people are just paying the new upsell price. You don’t really get comments, but you see it in the data. We have Amplitude. We have our data warehouse, ships it over to Amplitude, and then we can track which package people take and what percentages they take. We’ve experiment a lot with our pricing on how the structure pricing, how to make sure which package, because in the beginning, we had three packages, and 66% were taking the basic package, which was back in the day, I think it was $29 or something like that. We’re like, Wow, this sucks. Normally, if you go to a pick of popcorn, you always pick the middle package because it’s just 20 cents more, but you get a lot more.

– Ricardo

We’re like, We’re doing something wrong here. We’ve experimented a lot with packaging, and now I think 65% is taking the middle package, which is what you really want in that sense. We really were able to shift that around. For them, it was just $6 more. For us, $6 more is between break even or making or losing money. We’ve done quite well. We’re marketing by trade, so we know exactly how to track what to track. For pricing, we could change whenever we wanted. We had moments where we increased our pricing. The base package was $40 instead of $35. That’s where we saw the revenue really decline. We shifted within seven days, basically. We were like, Okay, this is not working. It’s plummeting. Shift it back up, and then you can see it back up. Because we have that volume, we can actually experiment quite at scale. That’s interesting about our business. You can experiment on a high scale level because you have a lot of people coming in at many times. I think that was an interesting insight, Alex and me.

– Joran

The thing I like is you can see results within seven days. You run an experiment and you know if it’s working or not. People either purchase right away or not. It’s nice. You don’t have to go through the onboarding, you don’t have to wait for 14 days, 30 days, or them to hit the threshold or the free plan. I think that’s really interesting.

– Ricardo

100%. If you change something in your pricing plan as a SaaS founder, depending on how long your trial is, you stick to that period, and then you look at the cohort of that period, and then you will make a decision. For us, we can make decisions on the fly, basically. I think that’s an interesting advantage of running a consumer-based focused business.

– Joran

If we could wrap this into advice for other SaaS founders, what could they learn from you? What advice would you give SaaS founders who are now focusing a lot on the recurring value, right? What advice would you give them, I guess, based on your learnings?

– Ricardo

For SaaS founders, specifically, I would say in the early days, know exactly how much you can actually spend to acquire a customer. I always say, Try We make two big bets per year. We try to think about two big channels that we want to go into every single year. For example, this year, this is YouTube and Reddit. We try to make these two big bets per year. Of course, you have these, Okay, what I just What do you guys have to do right now to get some revenue in, basically. That’s how we think about these motions. I would say make two bets per year, and then you figure it out. Some will work out, some not. Reddit, for example, paid off big time for us, for example. Meta or TikTok. Tiktok, for example, flushed completely. Try to make these big bets. Know how much you can actually spend for a customer, and that will decide which channels you go into. Because if you think about, most founders, they come to me, and this is a big advantage we have internally because As we’ve been doing go-to-market for the last 10 years, for us, it’s a very normal thinking.

– Ricardo

I realized that for founders, that is not the case. That depending on your pricing model, you can open or close channels people don’t think about like that. It’s like, why did you choose affiliate marketing for your first revenue stream? You’re like, what’s the obvious choice. There was no other choice. There’s only so much things you can do when you get $19 per person. You can go to events, you You can go outbound marketing, you can do all these things. But you can do that over time. Now that we have people at the event that we were both at, that evening we had a drink and we got a self-serve order, no demo calls, no nothing, $12,000 They just bought with their credit card $12,000 worth of headshots. No demos, no sales calls. Just like, I want to have headshots, basically. Now that you have that, you can now start thinking about, Okay, what other channels can I start activating because the $12,000 allows me to do that, basically. You can do that with consumer-based revenue of $19. As you grow up and as you start thinking about adding LTV to your product, you can start activating new channels.

– Ricardo

I think about those ahead of time in that sense. I think those were, from a go-to-market perspective, those would be the two advices I would give to SaaS founders.

– Joran

We’re going to start wrapping things up. Final three questions. What should What will the last founders prepare for in the next one, two, three years, in your opinion?

– Ricardo

Everybody will move into an AI native company or you will be destroyed by an AI native company. I think a lot more people will… Consumers buying B2B products, they will look at it like, is it AI company or not? Or is it like, do they have AI features or not? Basically, they will just expect it from you, basically. So either you build them or you’re out. This is mostly true for the non The AI native people like ourselves. But this will trickle down to an accountant, to the people on the street that don’t know what AI is, but then start realizing that, of course, I just want my team to be automated. I think people sell AI in a very, we’re AI. I was like, No, you just save a lot of time, more time than you would do. Instead of getting tickets from your accounting system, this little AI bot will do it automatically. It’s like, Oh, really? That does it? Really cool. Nice. Let’s do that. People People sell it as AI, but just sell it as an automated way of doing things that you don’t like. I believe GPU costs will be very, very scarce, and we will not be able to keep up with the demand of these GPU costs because they’re now building all these centers, but it’s too slow for the adoption that’s going to hit.

– Ricardo

The prices will just rack up, basically. I would also start thinking, how do I start lowering my cost when it comes to the AI infrastructure so that I can actually out-compete my competitors so that you’re not just offering AI AI features, but you’re making a loss at the same time. You also don’t want to do that. There’s an expectation, but the big winners will be the open AIs in the world that are just giving these APIs for a very expensive price. I think the winners are going to be able that are going to be the ones that are building an AI, but can also optimize their costs so that they can actually benefit or also from the AI features they’re building. I think that’s a big advice I would give for the coming founders.

– Joran

Nice. If we’re going to put it into revenue stages, we’re calling out this answer to our summary episodes at the end of the season. What advice would you give a SaaS founder who’s literally just starting out and growing from zero to 10K monthly recurring revenue. So this is going to be MRR-related.

– Ricardo

Yeah, zero to 10. Don’t spend anything on marketing, honestly. Spending on marketing, but you’re in the validation of one channel, basically. You only have to get one channel. Depending on what the hell you’re building, your channel will change or whatever you’re doing. So focus on one channel from zero to 10, one channel and one channel only, basically. That could be SEO, that could be affiliate marketing, that could be YouTube, could be whatever the hell is, but just focus on that one channel to grow your business and then ads stack up basically as you grow, basically. That would be my advice. Looking back also for a new company, the The only thing we’re doing is partner sales. For a better studio, we don’t run ads, we don’t have big things. Even if we’re heavily funded, we just do one thing, one channel very well. Now we’re adding things. Now that we’ve validated certain things, we’re adding stuff. We’re doing a big event next year, basically. We’re doing round tables next year as well. So now we’re just stacking things up, basically. In the beginning, it’s just one channel you want to nail moving forward.

– Joran

It’s interesting because you’re building your second product or maybe I guess maybe you had products before, but let’s say, second product, you already have money, you already have an investment, you already have revenue from better pick, but you’re still taking things step by step. One channel first, adding things on top.

– Ricardo

Exactly. I mean, this is why it’s like You could say that when building better studio, we’d say, Oh, let’s just do the same channels like Google Ads and Facebook marketing and the whole thing. And we’re like, No, because our product is enterprise, our entire channel choice changes. So there’s nothing we use from better pick side in order to operate better studio because we’re full enterprise. Enterprise is completely different, so our channel choice is very different, basically. We’re not doing big SEA campaigns. We’re focused on offline and we’re going into events. We’re actually doing all the enterprise channels versus lower-ticket channels. I don’t think a lot of founders realize that depending on the product you’re building in the CLTV, your channel choice It will completely be different.

– Joran

Yeah, interesting. Let’s now say we pass 10K MRR, and we’re going to make a huge step. I know we’re going to grow towards 10 million ARR on your journey yourself. What advice would you give SaaS founders?

– Ricardo

This is a stage where you can get to 10 million without doing a few things. From a product perspective, the only thing on your mind is expansion revenue. It’s like you have a base layer. How do I expand the current people? How do I really grow that as they like to call it, basically? How do I upsell my current users and get more people in? That’s basically the two categories that you’re playing in in that sense. Of course, making sure that your attention is also there. Then you chop it up into different stages. You have your activation or your acquisition phase. You have your upselling to retention build teams for these three layers, which is how do I get more people in and how do I build a team that just focus on that metric of people’s building out the value, making sure that activation is spot on. How do I build a team that really upsells people into, Okay, you have this feature, but why don’t you have this? That would be another one. Then a team focused on making sure that there is no leakage in the bucket. Basically, it’s making sure the retention rate is spot on thinking about those use case.

– Ricardo

I’m picking a big ballpark because you’re giving me a big ballpark. From 10K to 10 million, this is where you start building teams on different verticals in that sense and making sure each of those grow and talk to each other, of course.

– Joran

Exactly. Nice.

– Reditus AD

Cool. Let me try to summarize.

– Joran

If we take it all the way to the beginning, you can’t make everything recurring. If you are going to go without recurring revenue, explosive growth is actually possible. Think about a one-off SaaS as an e-commerce with high margins, so low cost can actually be your mode as an AI company in your case. One-offss are actually easier to sell. Instead of selling a recurring sub, they’re quicker sales as well. Then in the end, if you look at AI, AI is a race. A lot of companies will die. Ai native is going to be the future. Think about it as an automated way of doing things you don’t like. The jobs to be done framework is definitely a good one here to follow. The big winners are going to be people or companies who are going to leverage open source AI models to decrease cost and have better quality along the way. If you look at acquisition channels, make two bits, big bets per year, know how much you can actually spend per company, have your customer acquisition cost and all your other metrics in order. Your pricing determines which acquisition channels you actually have to go after for.

– Joran

Enterprise does require different acquisition channels, so definitely keep that in mind as well. When we look at go-to-market, early stage, focus on one channel. You even hack things on LinkedIn articles, creating profiles and creating backlinks to get your first choose up there. And then stack as you grow. Think about low acquisition channels like SEO as you guys did And for example, affiliate marketing, which has higher conversion as somebody actually recommends you, and then you would only pay them when they deliver you a paid client. You were able to get a 9% conversion rate, which is really high. Then I guess the other benefit you mentioned with a video marketing, cash up front, and you only have to pay them 30 days later, so you can actually invest that money into other things again to keep growing. Hint and benefit you mentioned, people are going to write listing articles, right? New listening articles are going to generated based on the current results. If you can get yourself in the articles, you will be automatically waterfouled into the articles which you’re going to fall after, which is a really nice hidden benefit. When you think about scaling, build that value, be able to upsell clients, focus on retentions.

– Joran

But overall, I guess, get your metrics in order. That’s the one thing I definitely got out of this call. And that’s it.

– Ricardo

Report internally. Even before we got investment, because now I have to report to investors. We were already doing that in our mindset every single month. We play Bingo, we have a Bingo port and we’re like, Okay, this is how much your revenue is. This is our margins. This is our customer success metrics. This is time to value, which is the moment you process in order to actually download things. We track that every single month. We play Bingo, and then it goes green, orange, or red. We know exactly where should we focus every single month, basically. That’s also what we do internally.

– Joran

Nice. For everybody, play Bingo at the end of the month. Rank your metrics with a Bingo card. Maybe you can take a Belgian beer while thinking about Ricardo. If people want to get in contact with you, what is the best way to do so?

– Ricardo

Just follow me on LinkedIn. I think that’s going to be the easiest way. I’ll be posting a lot about our metrics there and our website.

– Joran

Better pick. Maybe in 45 days from now, when the sprint is over, we’re going to see a new update with something happening.

– Ricardo

I think so, too. I’ll let you know how much we succeed or fail.

– Joran

Nice. All right. Thanks again for coming on. For people listening on Spotify, if you haven’t done so, leave us a review. Just a five-star review if you can, so we can boost the algorithms. It’s going to also waterfall later down the line. For all the other platforms, give us a thumbs up or whatever you can do on the platform. Again, thanks for coming on, Ricardo.

– Ricardo

Thank you very much. Cheers, Jörgen.

– Joran

Cheers.

– Reditus AD

Thank you for watching this show of the Grow Your B2B SaaS podcast. You made it till the end, so I think we can assume you liked this content. If you did, give us a thumbs up, subscribe to the channel. If you like this content, feel free to reach out if you want to sponsor the show. If you have a specific guest in mind, if you have a specific topic you want us to cover, reach out to me on LinkedIn. More than happy to take a look at it. If you want to know more about Reditus, feel free to reach out as well. But for now, have a great day and good luck growing your B2B SaaS.