In this episode of The Game w/ Alex Hormozi, Hormozi examines Night Vision Creative, a company that publishes Dungeons & Dragons content through collaboration with its community. He delves into Night Vision Creative's customer avatars, financial performance, and challenges with crowdfunding and customer acquisition strategies.
Hormozi offers insights on optimizing the marketing and sales funnel, such as introducing a self-liquidating offer funnel and leveraging influencer content for ads. He also discusses Night Vision Creative's SaaS platform, Creed's Codex, and its potential to drive revenue through conversion tools and gameplay features, emphasizing the importance of customer lifetime value.
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Night Vision Creative is a collaborative force in TTRPG publishing, catering to the $1.7 billion market of Dungeons & Dragons players. Their model integrates the community into content creation, and product offerings include hardcover books, PDFs, and the SaaS platform Creed's Codex.
The cost-conscious hobbyist buys digital PDFs, professionals choose books or PDFs based on preference, and collectors value a bookshelf of products. Hormozi notes that the caller previously made $34,000 in profit from a $5,000 investment.
Revenue and profit fluctuated, declining in 2024 due to crowdfunding issues, increased ad spend, and inventory costs. Meanwhile, customer acquisition cost rose from $5 to $12 and returning customer percentage dropped.
Switching from Kickstarter to Backerkit lowered conversion rates. Meta ads struggled to convert leads despite large audiences. The company paid influencers but hasn't used their content for ads.
Hormozi suggests a self-liquidating offer funnel with a $5 intro product to upsell higher bundles, offsetting ad costs. He advises expanding from 2 to 14 emails highlighting features, and whitelisting influencers' content to improve ad performance.
Creed's Codex SaaS platform achieved a 2% monthly churn rate. While not directly revenue-focused, the platform offers conversion tools like searchable content libraries and gameplay tools. Hormozi advises focusing on conversions and customer lifetime value.
1-Page Summary
Night Vision Creative has emerged as a collaborative force in the TTRPG publishing world, focusing on creating content that embodies the community’s influence and caters to the growing market of Dungeons and Dragons players.
The TTRPG market, part of the broader board game industry, boasts a valuation of $1.7 billion with a healthy growth rate of approximately 12% each year. Dungeons and Dragons (D&D) is identified as the largest TTRPG, synonymous with the genre for many enthusiasts. Alex Hormozi notes that this massive market includes 50 million participants, with millions more in lookalike audiences ripe for targeting.
Night Vision Creative takes advantage of this expanding market by producing books, PDFs, and offering a unique SaaS platform, Creed's Codex. Their model involves integrating the community at various stages of content creation, such as selecting concept art, generating character names, and even featuring community members’ names within their books.
Their approach to product offerings is multifaceted: hardcover books are available for $70 (including a digital version), a digital-only version for $40, and the SaaS platform Creed'sCodex.com, a subscription service at $19.99 per four weeks that also grants credits for book purchases.
Night Vision Creative’s customer base is segmented into three primary avatars defined by their buying behavior.
The first avatar is the cost-conscious hobbyist, who typically opts for digital PDFs of TTRPG content. This savvy customer often seeks the best deal, purchasing all-digital products and frequently adding another PDF to their cart at a discounted ...
Ttrpg Publishing and Night Vision Creative's Model
Night Vision Creative, a company known for printing books, has experienced fluctuations in its financial performance, including changes in revenue and profit, as well as in essential business metrics such as customer acquisition costs and return customer percentages.
The financial landscape for Night Vision Creative has seen variances over the past two years, marked by both significant growth and declines in revenue and profit.
A caller mentions that 2023 was their biggest year, generating $142,000 in revenue with a profit of $34,000. The cost of goods sold (COGS) for printing the books is approximately $8 and, when considering additional costs such as technical editors and artists, it rounds up to about $24. However, the caller notes that these costs could decrease with economies of scale. Furthermore, Alex Hormozi points out that the caller made an impressive return from an investment of $5,000, indicating a robust financial year for the company.
Moving into 2024, the company faced challenges, including a decline in revenue and profit which was attributed to issues surrounding crowdfunding campaigns, increased advertising expenditures, and inventory costs. Before launching a campaign in 2024, they spent $12,000 on advertising, more than double the previous year's amount, and an additional $5,000 while the campaign was live.
Several key metrics critical to the business's health have shifted in recent years, particularly around customer acquisition and retention.
The company's customer acquisition cost (CAC) substantially rose from $5 in 2022 to $12 in 2023 due to increased spending on advertising. The caller indicates that although the ads led to leads, they did not efficiently convert into cus ...
The Company's Financial Performance and Key Metrics
Anecdotal evidence and lower traffic rates point to conversion issues after the company moved away from Kickstarter to Backerkit for their product launches. The third project they launched on Backerkit only saw a conversion rate of about 1.5%, a drop from the previous 12% on Kickstarter. The platform change seems to be a significant factor in this decline.
The caller illustrates that the switch from Kickstarter to Backerkit resulted in a disconnect with customers leading to decreased conversions and lower traffic. Additionally, the use of a Late Pledge store typically increased profits by about 5-10% from the campaign, however, adding a SaaS product to Kickstarter raised questions about pricing and value addition as it was uncommon in the crowdfunding scene.
The platforms themselves presented challenges. For instance, Backerkit's conversion rates paled in comparison to Kickstarter, and running simultaneous campaigns on multiple platforms often isn't allowed or successful. The caller also considered using GameFound as an alternative or returning to Kickstarter due to these issues. Alex Hormozi later notes that Kickstarter provided 30% of the customers, underlining the loss incurred from platform switching.
Meta ads have been a leading driver in customer acquisition, accounting for 50% of the influx. However, despite strong lead magnets and visually appealing ads, the expected conversion rates were not met. Surprisingly, purely aesthetic images didn't perform as anticipated, and videos consistently underperformed. The target audiences' size varied widely, w ...
Challenges With Crowdfunding and Customer Acquisition Strategies
The conversation with Alex Hormozi and a caller reveals strategies for improving the marketing and sales funnel, focusing on self-liquidating offers for customer acquisition and cash flow, boosting conversion through effective email marketing, and leveraging customer base and influencer relations to improve advertisement performance.
Alex Hormozi introduces a self-liquidating offer funnel, which serves as a strategy to incentivize customers to make an introductory purchase and then entice them to buy higher-value bundles.
The $5 intro product is a discounted offer designed to entice customers to enter the sales funnel. This initial purchase is heavily discounted, with a supplemental PDF normally priced at $25 offered for $5. This discount serves as a powerful selling conversion piece and acts as a "tripwire" for upselling customers to higher-value bundles. The upsell strategy discussed suggests that following the $5 introductory offer, customers are presented with the opportunity to purchase a book plus its PDF for a total of $75 plus shipping.
Hormozi underscores the importance of this type of funnel in offsetting advertising costs and boosting cash flow. The self-liquidating offer allows businesses to allocate significant amounts to advertising, knowing that these costs will be recouped through the offer. The funnel aims for a 30-50% recovery rate of the capital spent on advertisements, with a focus on scaling by maximizing the take rate for the upsell. Even if the funnel does not recover 100% of the ad spend initially, achieving even 50% to 70% back can dramatically increase the advertising budget.
Expanding the email follow-up strategy from two to a 14 email sequence is advised to increase conversion rates.
The caller’s initial strategy included an email with a PDF followed by a survey for additional free PDFs. Hormozi suggests increasing this sequence to 14 emails to encourage reconsideration and reinforce the benefits of the product.
Hormozi also recommends using descriptive emails to focus on specific product features, such as a spell from a book, to entice the customer. This technique leverages the appeal of the product's features and bene ...
Opportunities to Optimize the Marketing and Sales Funnel
As businesses look for innovative ways to drive revenue, Software as a Service (SaaS) platforms like Creed's Codex provide excellent examples of how digital products can create sustainable income with low churn rates and strong customer value.
Creed's Codex, a recently launched SaaS application, has achieved noteworthy early success reflected by a low 2% monthly churn rate. The platform appeals to users with a searchable TTRPG content library and gameplay tools, becoming a go-to repository for these particular digital needs.
The company made a significant capital expenditure to develop this system, which allows for the incorporation of content easily by the team and offers a stable, recurring revenue model.
Within two months of its launch, Creed’s Codex has implemented pricing strategies that supercharge its offers, granting years of access as part of bundle deals. Their pricing points are attractively hit with a founder tier at $9.99, a general offering at $19.99 every four weeks, and a premium tier at $1,000 a month featuring custom illustrations. Additionally, they offer an annual option available at a 20% discount.
The low churn rate of 2% monthly indicates that customers tend to stay with the service for an average of four years. This longevity suggests a substantial Lifetime Value (LTV) of customers, calculated to be approximately $500.
Despite most users initially only expected to use free credits, the platform surprisingly generated tangible revenue. Creed's Codex also experienced success with its cost structure. For just around $100 a month and an annual larger payment, the platform's maintenance is relatively low considering its revenue potential.
The platform gives immediate access to digital tools that help customers search and filter content, along with work-in-progress manuscripts. This approach to content availability contrasts with services like those provided by Wizards of the Coast, which give access to digital books without ownership. Creed’s Codex intends to provide temporary but complete access to content through this SaaS platform, including both hardcovers and digital items.
The speaker's goal is to expand fro ...
Incorporating SaaS Product to Drive Revenue
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