How Creator Economy Platform Stan Increased ARR Over 8x in a Year

Introduction

Stan is an all-in-one, social media-based e-commerce platform that empowers creators to easily monetize their audience.  Co-founder and CEO John Hu (jayhoovy on YouTube and TikTok) was a business student at Stanford University when he started documenting his journey starting a business. The explosive growth and popularity of his TikTok channel gave him the idea to create Stan.

In 2021 he got a $5M investment from Forerunner Ventures as he continued to share his journey publicly. 

At the beginning of 2023, Stan’s annual recurring revenue (ARR) was $1.7M. By the end of the year, it was $14.7M — an 8.6x increase.

How did he do it?

We’re going to look at how Hu started the business and how his initial work gained him attention and funding. Then we’ll focus on what choices the company made in 2023 that resulted in that phenomenal hockey stick. Finally, we’ll look at the future of this startup and whether it will achieve its big goals or succumb to its biggest threats in the year to come.

John Hu — entrepreneurial creator and CEO

Hu attained a Bachelor’s degree in finance and computer science before entering the financial world. While he landed a major position with Goldman Sachs, he left after a year and a half, feeling dissatisfied and under-utilized. Moving on, he gained valuable experience with venture capital firm Norwest Venture Partners, but still felt he had more to offer. That led him to enter an MBA program at Stanford, and while studying, he started creating content to help people get their first great jobs.

Through that experience, he became acutely aware of the challenges creators face and realized there was a gap in the market and a way to fill it. To seize this opportunity, he dropped out of his program at Stanford to start Stan and hasn’t looked back since.

What is Stan?

Hu started making videos on YouTube and TikTok but wanted a way to monetize his work. After all, he was putting a lot of time and effort into his videos, and they were resonating with a growing audience. However, to do this, he found that he needed to subscribe to services for managing email lists and newsletters, building courses, scheduling, and invites, social media template design, audience analytics, and more.

Hu realized that in addition to the efforts of producing content, creators also had to manage all of these challenges. For most, it was just too much effort, and many were simply burning out or giving up. Hu wanted to give creators the support they needed to let them focus on creating content.

That’s what gave him the idea for Stan.

Stan provides a platform combining all the tools creators need to monetize their creativity. Centralizing their needs to a single subscription empowers anyone who wants to be a full-time creator to be able to work for themselves.

Hu’s background in venture capital led him to aim for “the best cap table of all time.” He sought out investment from Forerunner Ventures, which had a strong background in building brands. He also aimed at angel investors like Michael Ovitz and Kevin Hart, who gave them financial support and access to Hollywood and Silicon Valley connections. 

Hu was already becoming a hit on platforms like YouTube and TikTok for his straightforward, informative, and totally transparent advice for landing dream jobs. So, it was only natural that he’d document the process of creating a product and transforming that product into his company.

What drove Stan’s accelerated ARR growth in 2023?

True to Hu’s style, he’s continuing to be completely transparent and post all the major steps his team is taking toward the massive goal of one day becoming a billion-dollar company — even to the point of sharing financial figures. Earlier this year, he broke down his investor letter highlighting the growth in ARR the company was able to achieve. It’s a great watch and a testament to his confidence in Stan and its ability to execute and compete effectively, despite literally sharing his “secrets” with competitors. We encourage you to watch it, but we’ve also summarized the major learnings below.

At the start of 2023, Stan was in real trouble, and Hu knew that he had to do something new. It obviously worked as the company’s annual recurring revenue increased 8.6x over the year. Here are some of the areas they focused on to help seriously turn things around.

Change of mindset

Hu’s biggest revelation was that he needed to seriously change how he managed the company. While he had been extremely hands-on at the beginning, working non-stop and offering personal service to all new clients, he knew this was an unsustainable model for the massive growth Stan needed. Three key changes he implemented to help the company scale were:

• Implementing an automated sales funnel vs. taking 1-to-1 sales calls manually
• Building self-serve courses for customers vs. manually onboarding them
• Hiring and training amazing people so he didn’t have to do it all himself.

Focus on values

Stan’s corporate values drive everything they do and inform every decision this company makes. In their case, of course, it was putting creators and creation first. He started the company with the mantra of “give, give, give.” But he realized he needed to do this with data-driven execution. So, to that end, like an effective content creator,  they think of their values in the context of finding a balance between their left brain (“killer executer”) and right brain (“emotional empathy.”)

Providing excellent service

Taking these values to heart, Stan pushed excellent, white-glove service for their customers. The result is that their service team drove sales by keeping creators not just happy, but delighted. Delighted customers gave great reviews, and these acted as referrals, which caused new sign-ups to snowball and subscriptions to soar, completing the flywheel

Producing a better product

A huge part of keeping these positive reviews coming in was improving the product. In 2023, Stan’s engineering team developed new features that had a significant impact. 

• They added unlimited email marketing to centralize communications, providing a valuable service at a significantly lower price than legacy solutions.
• Their AI assistant, “Stanley,” is more than just a customer chatbot. But it will scrape the creator's content to either 1) help them create scripts for new content in their voice, or 2) make product recommendations for digital products!
•  A beta version of their community feature to connect creators directly with followers. This improved the customer experience and drove further adoption.

Stan’s biggest risk and the solution

According to Hu, Stan’s biggest existential risk is churn. Every month, the company loses 13% of its customers, some to other platforms, but many more people who couldn’t keep up in the competitive creator space.

The answer, according to Hu, is that Stan needs to re-frame growth retention into net revenue retention. They will do this by helping creators with their biggest problem — scale.

As an experienced creator, Hu believes that it’s hard to scale a business based on a single personality. A creator only focused on creating content will max out their ability to produce and resonate with an audience. According to Hu, the answer to scaling these businesses is first to help them build a customer base, and then launch new products to these customers repeatedly. This helps the creator become the distribution channel for these products.

By participating in the payments upside of any transaction performed on the platform, this, in turn, helps to maximize revenue from the multiple payments that come in from their biggest clients. When these clients achieve massive success, so will Stan.

Billion dollar business or bust

Hu states that Stan is currently in a scaling phase of the business, with their eyes set on ARR of $100M and above. So far, the prospect looks good. People are already calling Stan a “Shopify for creators,” and if current trends continue, we may just see this start-up develop into a massively successful company, achieving that elusive status of unicorn with a billion-dollar valuation. And fortunately for us, we’ll continue to see the journey unfold as Hu continues to share the ups and the downs with full transparency.