📶 Confluence.VC 2024 Year in Review

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Good morning 👋

I’ve made the deliberate decision to document the entire journey of starting and scaling this business.

IMO, building in public is an asymmetric bet, and the point of doing all of this has been to a) write things down in order to think more clearly, b) share what has worked / not worked so that this audience can benefit from what I’ve learned, and c) to do things differently than the standard path.

Our previous annual reviews are below:

Below is our 2024 review along with how I’m thinking about the business heading into year five.

Thank you again for following along on the journey.

P.S. 📌 We’re hiring.

These are contract-to-hire roles, and the goal is to find talented people who a) get what we’re all about, b) can solve problems on their own, c) are obsessed with this role, and d) can grow incredibly fast.

If that’s you, here are the roles we’re looking to fill ASAP:

Paid acquisition is above average (not great - yet). We’ve written about this enough, so no need to beat a dead horse. The TL;DR going forward is that we’ll pay for ads on the places we don’t want to create content (LinkedIn, Facebook, IG), and we’ll invest in creating content to win free eyeballs from the places where we can / want to build a following (Twitter / YouTube).

Fixed signup flow = more revenue. No more traffic drop off + more sales opportunities + more predictable conversions = more recurring revenue. That means more time spent improving the subscribe page, the upgrade page, and the thank you page so that we convert more sales opportunities.

2.2 MILLION impressions through the newsletter. Media is a volume game - if you’re not productizing your media production, somebody else is, and they will beat you due to volume alone. If you’re interested in seeing the SOPs we’ve put in place to productize the production of this newsletter, let me know.

207 posts written. We switched from writing posts 1x / week to 5x / week in June. Looking back, this was a massive change, but it has been one of the better decisions we’ve made. Most business problems can be solved with more volume. If you’re new and are curious about what you’ve missed, here the full repository.

One-off tripwires ➡️ recurring tripwires. A tripwire is an offer somebody sees immediately after signing up for your product / service (like an upgrade page after signing up for a free product). Up until the past ~two months, we missed opportunities to convert free subscribers to recurring paid subscribers at signup. Instead, we were capturing emails and routing new readers to either buy a one-off product or recommending they subscribe to other similar newsletters (where we would get paid if they did so). This worked at driving revenue, but it became a volume game, and it also incentivized us to prioritize short-term revenue (one-off product sales) over long-term profit (maximizing LTV through recurring purchases). Painful lesson to learn but one that had to happen.

25 deal flow reports written (80 companies evaluated with notes shared to Pro subscribers). We look at hundreds of companies every month, and naturally we evaluate each and think of ways to improve. Ones that really stand out, get added to a shortlist where we spend more time evaluating and thinking through investment. Pro subscribers get access to a database of these companies along with our thoughts on them. This has forced us to create pipeline, it has improved our writing, and it has given us more reference on what makes a great pre-seed / seed opportunity. You can find all deal flow reports here.

Ramped up guest posts and investor interviews. We set out to do more of these in 2024, and we (kinda) accomplished this goal with five guests posts shared over the year. After testing formats, we found that investor / GP interviews are the most interesting to you all, and we’re doubling down on this in 2025 with a handful of the smartest GPs we know scheduled to come and give their two cents on the world.

Introduced market maps. This helps us a) get smarter about certain sectors we plan to invest in, b) start meeting with founders in that sector, and c) create another asset for our paid subscribers. The plan is to do at least five more of these over the next two quarters.

Determined most-effective marketing channel + outbound GTM motion. Spoiler alert … it’s LinkedIn. We’ve hit capacity in terms of cold outbound through personal accounts. Now it’s time to do paid advertising.

Created scoring system to convert higher rate of SQLs into paying customers. Whenever a new lead indicates interest, they get a popup message before closing the window. If they don’t convert from there, we’re in their inbox within the next hour. Small changes like this have been an easy way to grow MRR.

Redesigned onboarding flow to minimize drop-off. Onboarding drop-off loses money. Our old onboarding flow took up to a week to finish - somebody would apply, we would wait to review in bulk, we would approve, then they would get all of the onboarding emails. This was dumb, and it took us too long to realize that people like speed. Now, somebody applies, they are either approved or denied based on their application (shoutout technology for removing the middleman), they are shown the checkout page immediately if they are approved, and they then see the pricing page if they checkout (before they decide which plan to choose). A process that used to take ~a week now takes a few seconds.

Redesigned pricing page ➡️ 25% higher free-to-paid conversion. Small tweaks make big changes, and this was an example of that. The new pricing page for our community is shown above.

Using all unsold ad inventory to market memberships. Being reliant on new sponsors is a business risk, and the larger percentage of our revenue that comes through subscriptions, the more sustainable our business becomes. If we had 2.2m impressions and ~25% of newsletters had a title sponsor, that means that 1.65m eyeballs could be going back to owned products like our private investor community. If you’re interested in finding ways to work together, I’ve linked our sponsorship page here.

Determined most-effective channels for recruiting new community members. This was a massive data cleaning project, but the breakdown of where our members come from is shown below. >1/3 come from other members, and a big project for us in 2025 is turning our existing member base into sales advocates.

Landed one new recruiting client. Convincing a GP that we can find better investor talent than they can is a long game. We knew that when we started the search business, but it’s now starting to pay off with one client fulfilled and more on the way.

Audience quality > quantity has attracted more sponsorship interest. Our growth has been intentional, and our CAC for new readers is high because the readers of this newsletter are hard-to-reach people. The majority are private investors and venture-backed founders (more linked here). Keeping the reader quality high has made our brand more lucrative to brands looking to work with us, and it has also given us pricing power. Our pricing floor keeps getting higher each year in relation to the size and value of this audience.

Introduced new company “deep dives” sponsorship option that lets us talk about the companies we’re a customer of (and get paid for it). I use 20+ pieces of software to run this business, and I pay for dozens of other products to improve my life outside of business. If I pay for it myself, I feel comfortable promoting it to others, and these deep dives have given me a new channel to do that.

Recruiting business is underperforming (in terms of opportunities). Anybody that tells you that running a recruiting business is easy is a liar. Anybody telling you to start a venture recruiting business during a fundraising drought is an idiot. We ignored warning signs, and we’re now two years in running our search business. New leads has been by FAR the biggest bottleneck, and this is mainly a byproduct of less new funds being raised. That said, we can help funds even if they’re not actively hiring yet. If that’s you and you’re not hiring yet (but plan to soon), we’d love to talk.

Missed on memes. We love asymmetric bets (part of why we love venture), and memes are an asymmetric content bet; they take a few minutes to create, and they can go viral if done right and seen by the right audience. Up until this point, we have not given memes the attention they deserve, and there have been weeks where we don’t put anything out. This will be a bigger part of the content strategy in 2025, and we have a new tool and workflow we’re using to put out more memes each week.

YouTube has been a missed opportunity. Another year has gone by where we haven’t prioritized this platform. This has been a huge regret, but frankly, I don’t have time. If you’re up for managing our channel, creating content, and helping us grow, please let me know. I’m about to put out a JD but would rather hire directly from our readers.

Abandoned syndicate business. Growing the syndicate business was a priority at the beginning of the year, but things have changed, and we’re pursuing a different path going into 2025. The biggest lessons from managing a syndicate were a) attracting new LPs is not easy, b) getting those LPs to invest with you instead of the 30+ other syndicates they’re backing is even harder, and c) not having committed capital made it harder to communicate with founders to get clarity on how much we wanted to invest. Not to say that running syndicates is a bad idea (there are a lot of SPV leads who have proven that it works), but we’re trying to play a different game over the next few decades.

We said last year there are three pillars that grow this business: audience, income, and equity.

Nothing has changed except the ways we’re going after these goals.

At a high-level:

Here’s a more detailed look into how we are investing in each of our core pillars in 2025.

At the end of the day, for 99% of businesses, growing an owned audience (emails, not followers) means scaling up paid advertising.

You can try to hack together growth through posting more organic content, but you won’t have the same results as you would if you start pouring fuel on the customer acquisition fire.

But you don’t want to burn cash without a plan to recoup the investment - you need to create negative churn by making LTV higher than CAC.

Our goal is 50k subscribers by this time next year.

Even if we assume no subscriber churn, that’s:

For now, we’re planning on splitting advertising for the newsletter evenly across beehiiv and Meta.

Over the past year, here’s what our average CAC has been on each:

We wouldn’t be able to hit our audience goals through beehiiv alone, so we need to fix our CAC through Meta. We’re doing that by creating all ads in-house, keeping audience targeting broad across the US, and upping the volume of creatives we test every month.

For some math on how small CAC changes make big differences:

Spending between $2-3 for a new subscriber is a good deal for our business. Over than and it starts to get dicey.

Our income growth is relatively flat compared to last year, so we’ve gone back to the drawing board. Not considering our recurring revenue products, there are three main income drivers for the business: sponsorships, recruiting placement fees, and digital product sales.

Here’s what has actually worked and where we’re spending more time focusing for each of our main revenue channels.

Community (SaaS):

Showing the ability to upgrade IMMEDIATELY after a prospect signs up for a lead magnet. Time-to-offer matters, and having an upgrade page shown immediately after a person signs up a) makes the prospect aware of your paid offer faster and b) turns your lead magnets into revenue. The more lead magnets you have, the more you make.

Recommended tiers. Nudging works. Slight adjustments to pricing cards with a callout for why one plan is the most popular option make a big difference.

Testimonials on the pricing page. Proof sells. Logos are proof. Customer names are proof. Customer faces are proof.

Price anchoring. We have one service that is WAY higher than the other options. This anchors people to that higher tier, making it easier to justify spending on one of the other options on the pricing page.

Lead qualification. Before any customer signs up for our community product, we ask them seven qualification questions. Based on how they answer those questions, our team knows a) who is serious about buying and b) where we should allocate our resources in order to convert those most-interested in becoming a customer.

Free trials to SQLs. Offering free trials to everybody is a waste of time, and it dilutes the perceived value of your product. Instead, we’ve found that trials work if they are given to sales-qualified buyers only after they show some type of buying intent.

Product demos on the home page. Showing > telling. If you can condense a demo to a ~2 minute Loom video, do it, and include it on your pricing / upgrade page. It will qualify prospects for you, and it creates product-led growth if done right.

Re-investing more in the first 5-7 touch points. Most customers buy within the first week of engagement. If you have drip campaigns running for a month or longer, you get forgotten, and customers don’t convert at the rate you hoped. Knowing this, we reinvented all of our funnels and front-loaded our first 5-7 touch points with the most value.

Recruiting:

Reducing time-to-lead. Most new venture roles are not advertised; the ones that are typically the hardest to convince you can help. We have a massive database of new funds being raised that we can pull from to proactively reach out to when we think they are about to raise new funds (and look for new talent). We also have a Claytable that automatically updates with new venture roles and enriched contact data for roles posted that match our criteria of where we can help.

Reaching out to multiple people on hiring team. Not hearing back is not the same thing as a “no”. We’ve had multiple conversations either get routed to a different person on the team or picked up again simply because we talked to more than one person on the hiring team.

Sending over a shortlist of names before hopping on a call. Reciprocity works. With recruiting, the biggest objection we hear is from funds that believe they can either do the job better or simply share the role on LinkedIn and expect elite candidates to line up (spoiler: it doesn’t work like that). Instead of us telling them we can do better, we now start with showing them a mini database of candidates along with a Loom recording of our process. It has worked wonders so far.

Sponsorships:

Selling bundles (not individual slots). Allowing companies to advertise one-off campaigns with you does not work. It puts more pressure on your ability to work as a direct response marketer, and if a company doesn’t see immediate value after one campaign, they won’t recommit. Instead of selling one-off testing campaigns, require a commitment of 6+ campaigns so you can align better and keep testing to get better results.

Teasing audience value through a media kit. Selling distribution requires storytelling, and it’s hard for anybody to see the value of advertising without supporting slides. We took that advice earlier in the fall, created a full media kit, and we’ve shared this with interested advertisers.

Flexible advertising options. Only offering standard placements banners is boring, and the best advertising doesn’t look or feel like advertising. We have taken this approach with new brands which has allowed us to create new types of reader-requested content with the help of these advertisers.

Trigger-based reach outs. Reaching out to companies with fresh capital is low-hanging fruit. Finding new marketing promotions within those accounts has been the next iteration of that approach.

If we execute on all of the steps above, the equity value of Confluence should grow.

But, at the end of the day, the most-interesting aspect of this business is the access created to other interesting companies.

Those have come in the form of:

These companies are growing, we’ve found ways to work with them, but we want equity.

We’ve spun up some SPVs, but that didn’t seem like a sustainable option for a number of reasons.

We’ve found the best pre-seed and seed opportunities need committed capital and quick decisions, and this requires a fund of dedicated capital.

That may or may not hint at where I’m spending most of my focus going into Q1 of 2025.

We’re not able to meet with each of our subscribers, but we’re trying to do a better job of helping each person who reads this newsletter.

In order to do that, could you spend 15 seconds telling us a little more about who you are, what type of content you’re looking for, and anything else we can do to help?

It would mean a lot 🙌

Thanks for reading this far and giving us a little bit of your attention this week.

Feel free to unsubscribe whenever this stops becoming valuable to you.

- Clay