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In this episode of Startups For The Rest Of Us, Rob and Mike talk about the 5 stages of your sales funnel and tools you can use at each stage. This episode is based off of a Ignite Visibility article, the guys give their takes on the points made in the article as well as add additional tool options.
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Mike: In this episode, Startups For the Rest of Us, Rob and I are going to be talking about the five stages of your sales funnel and the tools to use in each one. This is Startups For the Rest of Us episode 391.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: I’m doing alright, I actually have a bit of an announcement to make, my last day at Drip. When this goes live, it would have been a couple of weeks since I decided to leave.
Mike: Does that mean that you are gone or you’re in the process of leaving?
Rob: No, I’m gone. It was totally amicable. Obviously this has to happen at some point. Your company gets acquired and you hang around for the transition. Both Derrick and I worked there for almost two years after the Leadpages acquired Drip and Derrick left in February. That of course got me thinking working on Drip without Derrick was less fun for me and it definitely got me thinking about plans of what I wanted to do and I started thinking about, “Hey, am I going to stick around for all of 2018?” And then in all honesty, the team came together really well.
We hired a CTO, and there’s the senior director of product who I mentioned on the show in the past really came up to speed super fast and suddenly I looked around and I thought to myself, “What am I doing here anymore? What am I contributing?” Obviously there’s value that I bring as the cofounder and as someone who’s worked on it for five and a half years. Realistically, people are kicking ass and taking names and they’re really fired up about it in the company. There’s 60 something people working on Drip now.
What I can contribute is so much less valuable than what I could when we were 5 or 10 people. Five and a half years for me is a really long time to work on anything. The longest I’ve ever worked on something before that, I had a job for two and a half years. We talked about this on the podcast, I tend to do these 18, maybe 24-month things, and then I move on to the next thing.
Drip was a long one because it was big and there was an acquisition and all that. It makes me happy, I really do—I know everybody says, “I left it in really good hands.” I wouldn’t have left if it wasn’t in good hands. This is a pretty big part of my career, I spent like a third of my career—I was doing the math—about a third of my career working on Drip. I still run several businesses and mailing lists on it, so it’s not anything that I’ll be switching away from, I still think it’s the best tool out there to do it.
We mapped out the roadmap for about a year, and there’s a two to three-year vision that we talked through. There’s all the stuff in place that I feel honestly pretty good about. But it is bittersweet. It’s always bittersweet to do anything like this because I don’t get to go in the office and I like the team, I like working with the people. That was probably the hardest part of that decision for me.
Mike: I’ll be blunt about it, you’re unemployed, is that what you’re saying?
Rob: Exactly, that is a very good way. Unemployed and unemployable is probably better. You’re right, man. Should I file for unemployment?
Mike: I don’t know if you can if you quit. You’d have to look into that but my guess is probably not.
Rob: Probably not, yeah. I’ve never even filed for unemployment in my life so I don’t know what that would be like. You’re right, man, I’m just—aside from MicroConf and and doing some writing like I’ve been talking about in the two podcasts—hanging around, taking some time off. I think I want to take the whole summer off and not do anything serious, not tackle anything. I’m still sticking by my, “I’m never doing that again,” thing. I’m not doing that again, man, I just can’t, not from the ground up, it’s just too much.
Mike: Cool. I’m not sure how this really factors into it but I’ve been meaning to bring this up for a while and I kept forgetting. I was driving downtown in the town that I live in the other day, I came across this street, it was Atwood Ave, it immediately made me think of Jeff Atwood. Then, I came across Walling Ave literally right next to it. If I come across Spolsky Boulevard without seeing Taber Street, I’m going to piss.
Rob: Without Taber Street, that’s awesome. Jeff Atwood, the man, codinghorror.com. I used to read his blog years ago. I haven’t read it in a while, have you?
Mike: I pop over there on occasion but he doesn’t blog nearly as much as he used to. The content doesn’t refresh as regularly. He still does really highly in-depth articles on various things. I was reading about the stuff he does. High performance, low power computing things that he puts together because he’s always looking for ways to improve on previous designs with lower cost and better computer parts and things like that. I think it’s a home theater PC, that he’s basically […].
Rob: I love how his pieces are really long which is very much in vogue today, but he has been doing that since he started the blog. I’m thinking his blog has been around since—I started mine in 2005 and I think we started within a few months of each other because we were in some early blogging books together and that’s how he and I ran across each other. An interesting thing, my first big speaking gig was in 2008 or 2009 and it was a business offering, it was a lightning talk, it was the PechaKucha seven-minute thing where the slides flip automatically. I was encouraged to do that by Jeff Atwood and I saw him at one of Spolsky’s events.
Remember when they used to do the Stack Overflow, Dev days, it was $99. I ran into Jeff Atwood, we have never met, and I introduced myself and said, “I’m Software by Rob,” and he said, “I love that blog,” so we connected, we had emailed before. In the back of my mind, I was super nervous going up to him because I never met him and I hold him in high regard, and I’ve never once regretted having that conversation because it really—I’ve never been to BoS, I went, I talked. A bunch of people knew who I was and I was like, “That’s weird, how did they know me?” and it was from this blog. This is early days, this was before all of the podcasts and all this other stuff.
I didn’t realize how small our community actually was. I knew I had at the time probably 20,000 readers but I didn’t realize that a huge chunk of them would be at a conference like BoS. It was a very concentrated thing. That was my first thing that then encouraged me to write a book. I don’t know, there was something about the momentum that that created. I guess the moral of that story is it has always encouraged me to do things that are really terrifying because that one move—I actually left the building, I was walking up to my car, I had seen Jeff Atwood and I left.
I’m too scared or nervous to go up to him. I walked back in from the parking lot and I walked up to him. He was in a buffet line and I just said, “Jeff Atwood, Rob Walling,” that moment, I think it literally changed my life may be a little overstating it but it’s had a pretty profound impact on the course of my professional career.
Mike: Long story short, you met Jeff Atwood a long time ago and now you’re buying roads in my town and naming them after yourself.
Rob: That’s right, indeed, sir. How about you? What’s new this week?
Mike: I recently went through a disaster. I used Chrome for my web browser, and for whatever reason, the last time I went through an update, you get that little green arrow in the corner, it’s just like click here and it will shut down everything and open up all the windows for you again. When it did that, it blew away my local cache for literally every website that I’ve ever gone to. For some reason, I have no idea why or how this happened.
All my two-factor authentication stuff went away, I had to relog-in to all the different sites that I was using whether it was Facebook or Twitter and Amazon, a bunch of stuff. It was all gone for some reason. Fortunately, I have LastPass, so it wasn’t that bad. There were some of these websites, “Use your authenticator,” like crap, I’ve got three of them, which one is this?
Rob: That sucks, dude. It nuked your two-factor authentication, I hate it when that happens, and then all the sites are slow now because it has to recache everything?
Mike: No, the sites don’t seem slow. It’s just that all my cookies and stuff are gone and I use Clicky for my website analytics and I have my own machine, I was logged into it, it excludes all my IP address information. It automatically filters out me when I visit the site and I hadn’t realized that it blew away everything until I went to check my analytics that day and realized that there were tons of actions and “visitors” on there because it was me doing a bunch of testing on it so all my stats for that day are totally screwed up.
Rob: That’s a bummer, man. iOS has done that to me a couple of times where it will install an update and it nukes a bunch of my setting and I’ll be like, “Why am I not getting texts on my MacBook anymore?” and I just go into the settings, off, and it used to be on. It was on last week. I’m not quite sure why that would happen. Obviously, it’s a bug in the upgrade but it’s really irritating, certainly not as bad as what you’ve experienced but that’s a pain in the butt when that happens.
Mike: That’s the only time that that’s ever happened to me, at least that bad with Chrome, but that’s one of those things that it encourages people to not upgrade software or their devices.
Rob: To resist doing it, I hear you.
Mike: That’s why I try to really be careful about doing updates and stuff on my own software. Sometimes there’s the need to sort of break stuff on occasion.
Rob: Cool, what are we talking about today?
Mike: Today, we’re going to be going through the five stages of your sales funnel and the tools to use at each stage. This is an outline that I put together based on an article over at ignitevisibility.com and we’ll link that up in the show notes. I found it fascinating the way that they broke out the stages of the sales funnel and specifically showed different tools that you could use in each one. I looked back through our archives and we don’t have an episode on how to put together a sales funnel, or specifically what it looks like or what tools to use. I thought it would be good to go through this article and talk about what they have to say and then provide our own take on it.
Rob: Cool, sounds good, let’s dive in.
Mike: Stage one in today’s list is awareness. The basic idea with stage one is that unless somebody knows that you even exist, they’re not aware of it, of course. They’re not going to come to your website, they’re not going to download anything, they’re not going to go put their name in for a trial or sign up for a trial, they’re not going to come to a webinar, nothing. You have to make them aware that you exist to begin with.
In this stage, they put a bunch of tools that we talked about on the show in the past and the lists that are probably used in the past, things like SEMrush, Ahrefs, Buffer, Hootsuite, LinkedIn Sales Navigator, and there’s several others in there that are probably much further ahead than most people, one example is Growbots, but that’s $500 a month and they bill it annually. I think anyone who’s starting out, that’s really beyond their price range, but the basic gist of a lot of these things is that there are ways to help put you in front of people or to connect with people. If you categorize those tools, it’s really based around SEO and social media. There’s lots of other ways to find channels of customers, but those are the ones that they kind of focus on with the tools that they showed.
Rob: If you’re interested in more, this is the list of marketing approaches. This is putting together a marketing plan. You can go back to episode 384, just a few weeks back, where you and I tore down the Bluetick marketing plan. You can also read the book Traction that gives you 15 or 20 different ideas for driving traffic and SaaS Marketing Essentials by Ryan Battles. Those are the three off the top of my head that I would read if I was thinking about creating awareness for a new or an existing app.
Mike: I do want to take a few minutes to dive into some additional tools that they don’t use here or call out here and maybe that’s just because their company provides certain services and the other marketing channels are not including those. But some of the things that came to mind was paid advertising. Whether it’s Facebook ads, or Twitter ads, it’s just traffic acquisition in stage one and trying to get people to know who you are. You can also do billboard advertisements for example or you could pay to be in a newsletter that gets sent out regularly.
There’s several that I’ve seen out there where you can take $500 or $1000 and they will include an advertisement, basically a sponsorship for whatever your product is or your service to their newsletter list. And then there’s tools like Canva which helps you provide marketing collaterals that you can either publish on your website or send to people. Another option for social media would be TweetDeck which I think is offered directly from Twitter.
Rob: I believe they acquired it a few years ago.
Mike: That’s another alternative to either HootSuite or Buffer. Stage one is really just about building awareness that you even exist as an option to solve the problem that a customer may have.
Rob: Stage two is about interest. It’s finding out if a customer is interested, keeping them on your website, or getting an email address from them. This is not a full qualification when you think of qualifying a sales lead. This is really just getting one more step past, they’re on your website now, are they going to click around or opt-in to hear more from you.
Mike: One other thing that I want to point out as we go through these is that the way that they break down these different stages, it seems to me like there’s a little bit of a difference between how they would do it versus I would do it, but the basic gist of what they’re trying to do here is say that when you get past the point of where they’re aware of you, they express some sort of interest, but you still don’t know who they are as the vendor.
You have to use tools like Unbounce or Crazy Egg, or visual website optimizer to try and find out are they browsing around on your website, and are they taking an interest in whatever it is that you’re doing. That stage one are those people who you put an advertisement from, maybe they clicked through it to come to your website and then immediately bounced, or they searched for something and they get on your website and they’re like, “Nope, this is not what I was looking for.” They hit the back button.
Whereas with interest, you try to engage how interested are those people who are coming to your website in what it is that you have to offer, whether it’s articles, or educational materials, or an email list, or lead magnets, any of those kinds of things. Are they clicking around the website and actually reading? Because if they’re not, they’re not interested and they really fall in that first bucket. But if they are, you can see heat maps and things like that that will help you provide a better idea of what is going on.
Rob: Yeah. To summarize, these are people on your website who you don’t know who they are yet. Tools for this are going to be things like Google Analytics which is going to give you a lot of aggregate data. Clicky, which is essentially a competitor, one of the main competitors I know to Google Analytics, it’s real-time web analytics, and then tools for capturing that email address, obviously something like OptinMonster or Drip with its email capture widget, or Kickofflabs. Kickofflabs, they do more than just landing pages and pre-launch pages.
Mike: They have widgets that you can embed into your website that would allow people to sign up and then they can take those and they can add additional metadata to them and then send it over to whatever your marketing platform is. If you have Drip, they’ll pre-populate it based on the email address and then sent it over to you.
Rob: That’s cool, that makes sense. Sumo Media is another one that’s going to help you capture emails. I think Mixpanel and Kissmetrics at this point would also be helpful. They are designed more to measure funnels and actually maybe at this step, it would be less helpful, but I think to cover all five stages of the funnel, one of those tools that gets into—it’s not just aggregate data but you can look at individuals once they’re identified and see where they stopped.
Mike: Another good tool in this stage is Hotjar. I have an account with them, they’ve got a free account that you can sign up for. It’s pretty good if you don’t have a ton of traffic to your website, and it will give you some of that heat mapping information and show you click conversion rates where people are going to let’s say the homepage and you want to see how many people who come to the website are coming to the pricing page for example. It will show you that information.
You can also do screen recordings as people browse around your website, or on certain pages, and it will give you an idea of what people are looking at. That can be helpful for deciding what it is that you should be focusing on or what changes you should make on your website. Stage two is really about tracking what people are doing on the website and then optimizing it to help move them onto stage three.
Rob: I think Hotjar is a good tool. We’ve used it on Drip as well.
Mike: The third stage is called evaluation. I don’t like the phrasing of this solely because if you say evaluations, to me it means you’re doing a trial, but the context that they mean it in is they’re evaluating whether or not to give your tool a chance or which tool it is that they’re going to spend some time and effort looking into, whether they’re going to find a trial for it or they’re going to go to some webinars.
This is just them trying to gather more information about your tool and potentially some others to give them more information. Tools that fall into this category are things like Camtasia Studio, Jing, Wistia, Soapbox, really for capturing videos. Whether it’s a demo of your product, or a webinar, or an educational video of some kind, or even just a marketing video of the founder talking about a specific reason why he or she built the product.
For hosting those things, you want to use something like Wistia or Vimeo, you can also use YouTube. And then additional pieces of the evaluation stage is providing educational content to people. Things like ebooks fall into this category as well.
Rob: Yeah, this is that education stage where you are trying to get people to raise their hand and essentially either sign up for a trial, or sign up for a demo, or continue to ask for more information so that their lead score or their interest score rises to the point where you reach out to them directly.
Mike: As you said with raising their hands, if they do that, then they end up in stage four which is engagement. I hear the prospects have made a conscious decision that they’re interested in finding out more. I would almost say that there’s probably a few more things in between here, between stage four and stage five, because stage four, the way that they lay it out, you’re getting somebody to sign up for your email list or get on a demo, whether it’s GoToWebinar or Zoom or a variety of other webinar tools, something like Bluetick or Drip falls into this category as well.
I feel like CRMs almost fall into this category as well, into stage four because you’re gathering more information about them. You’ve had them signup for your email list and you started populating that data, whether you’ve asked them for information in a form, you’ve had them fill out a survey. Those types of things have to end up some place and the CRM is really the logical place to start putting some of that information so that you can use that information in additional marketing materials to help move them to the next step.
Rob: Some people phrase it as lead nurturing. Obviously, an email tool is going to be a really nice way to do it as well as webinars that will get you that one to many. Like you said, CRM, it depends on if you are truly a self-serve business or self service where people just come up and they sign up for a $10 a month account. Obviously, your CRM is probably your ESP; that was really jargoning. I just put two acronyms back-to-back. Your CRM is probably your email service provider.
It’s a tool like MailChimp, or Drip, or Infusion Software, you actually keep a lot of your prospect and customer data. If you have a higher price point and you really are doing some medium touch sales, then having something like a Pipedrive, or Base CRM, or Highrise, one of the CRMs I think is obviously going to be helpful, and Salesforce obviously. Something like that is really going to help move people through the funnel, and then it attracts your individual one-on-one communication, you obviously need sales people to use tools like that or get a lot of benefit out of them.
Mike: The thing I was mentioning earlier where I feel like there should be more between stage four and stage five is that, here they played stage five as the commitment in the purchase. They list a bunch of ways to take payments. Whether it’s PayPal or WooCommerce, for whatever reason Stripe is not on this list, but they have a couple of shopping carts in there as well. It seems to me like even in stage four, there’s a lot of flexibility for somebody to move forward and back in the funnel here a little bit because somebody might download an ebook for example and then you don’t see or hear from them for two weeks, five weeks, eight weeks because they got busy doing other things.
There’s a lot of circular patterns between customers who come in, they enter in your sales funnel, and then they just repeat in this area for a while before they move on. You may look at it as it just takes them longer to get from stage four to stage five. The reality is that sometimes people can regress a little bit inside of your sales funnel. You have to make sure that you have enough marketing materials in there to nurture those people along to the point that they go to that demo and ask the questions that you want them to ask or you find ways to turn them out on your own.
Rob: Yeah, I think this sales funnel that ignite visibility is in essence more of a services sales funnel because they’re a services firm. I guess it can also be a one-time purchase but certainly if you have SaaS and you have a trial, there’s a step after engagement before the purchase, and I think that’s where this is just a little bit different.
Mike: Yeah, once you get into a SaaSified version of this, then you get into that measuring the trial and seeing how many people are going from the email list into the trial and then how many people are converting from a trial into a paid customer. And then you also have to talk about things like on-boarding, and are they using certain features in your products, are they getting the most value out of it, who is using the features that will turn them into a paid customer, who’s not, how do you get them to use those features, should you make them front and center, or should you provide them a walkthrough videos inside the app.
There’s all these things that you can measure in that area. It could get complicated but it’s very specific to whatever your app is because what somebody does in Bluetick for example is going to be very different than what somebody does in Drip, or any countless other applications in order to be successful with that product.
Rob: Right, and in terms of measuring what people are doing in the product, Hotjar like you said can do a lot of things. I know that Crazy Egg, you can do in-app heat maps. Do you know of any other tools off the top of your head that help you kind of be aware of it? It’s almost in-app analytics and metrics.
Mike: One I would take a look at is probably Segment. You install Segment and there’s a developer edition or a developer tier that is in the people with less than a thousand what they call MT Uses monthly, transactional users or something like, that but monthly total users. What it does is if you have it in the app and you’re only using two data sources they say, then it’s free. Otherwise, it’s $100 a month and the monthly total users could actually kill you depending on how much traffic you have.
If you put it on your website and you’re using that as a source, if you get 10,000 unique visitors a month, it’s counted as 10,000 MTUs. Depending on how big your business is, that could get expensive. But if you’re just doing it in the app, then you’re trying to pinpoint things and optimize things inside the app, you can send the data into Segment, and then from there, you can take a look at another product called Amplitude—which is amplitude.com—and that allows you to take information that comes directly out of Segment or get a JavaScript snippet that you could plug-in and it will allow you to track people through your app and what they’re doing.
Their product is free as well until you get to something 10 million events per month. You have to be fairly large in order to hit their pricing tier but I would imagine once you get to that, it’s going to be really expensive, but if you’re at that level, it’s probably going to be worth it for you because it allows you to drill in and see exactly who is using which features, how much they’re paying, and you can have all that data piped in through Segment from your website or from your backend database and through to Amplitude.
Rob: Very nice, I haven’t heard of Amplitude before so that’s a cool little stack that you hacked together there. We’ve used Segment for years but getting it into those other data analysis platforms I think is probably a head kicker and a real value there.
Mike: Yeah, Amplitude, I just found out about it recently so I’ve been looking into it. It’s interesting to see some of the dashboards and stuff that they have available. It’s an example so you can just see who is using what in your app and how much they’re using it, it gives you real time data so that you can take a look at who’s doing what today, and how many times have they performed this action, or how many times does this thing happen in the background? You can use those customized dashboards to help you make decisions about your own product versus some off the shell tool like Crazy Egg which has one very specific use case, to see where people are clicking. Yes, you can do other things but the dashboard allows you to customize a lot of things and create one that is specific for your own app.
Rob: Cool. To recap the five stages of your sales funnel, number one is awareness, number two is interest, three is evaluation, four is engagement, and five is commitment. If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: I’m doing alright, I actually have a bit of an announcement to make, my last day at Drip. When this goes live, it would have been a couple of weeks since I decided to leave.
Mike: Does that mean that you are gone or you’re in the process of leaving?
Rob: No, I’m gone. It was totally amicable. Obviously this has to happen at some point. Your company gets acquired and you hang around for the transition. Both Derrick and I worked there for almost two years after the Leadpages acquired Drip and Derrick left in February. That of course got me thinking working on Drip without Derrick was less fun for me and it definitely got me thinking about plans of what I wanted to do and I started thinking about, “Hey, am I going to stick around for all of 2018?” And then in all honesty, the team came together really well.
We hired a CTO, and there’s the senior director of product who I mentioned on the show in the past really came up to speed super fast and suddenly I looked around and I thought to myself, “What am I doing here anymore? What am I contributing?” Obviously there’s value that I bring as the cofounder and as someone who’s worked on it for five and a half years. Realistically, people are kicking ass and taking names and they’re really fired up about it in the company. There’s 60 something people working on Drip now.
What I can contribute is so much less valuable than what I could when we were 5 or 10 people. Five and a half years for me is a really long time to work on anything. The longest I’ve ever worked on something before that, I had a job for two and a half years. We talked about this on the podcast, I tend to do these 18, maybe 24-month things, and then I move on to the next thing.
Drip was a long one because it was big and there was an acquisition and all that. It makes me happy, I really do—I know everybody says, “I left it in really good hands.” I wouldn’t have left if it wasn’t in good hands. This is a pretty big part of my career, I spent like a third of my career—I was doing the math—about a third of my career working on Drip. I still run several businesses and mailing lists on it, so it’s not anything that I’ll be switching away from, I still think it’s the best tool out there to do it.
We mapped out the roadmap for about a year, and there’s a two to three-year vision that we talked through. There’s all the stuff in place that I feel honestly pretty good about. But it is bittersweet. It’s always bittersweet to do anything like this because I don’t get to go in the office and I like the team, I like working with the people. That was probably the hardest part of that decision for me.
Mike: I’ll be blunt about it, you’re unemployed, is that what you’re saying?
Rob: Exactly, that is a very good way. Unemployed and unemployable is probably better. You’re right, man. Should I file for unemployment?
Mike: I don’t know if you can if you quit. You’d have to look into that but my guess is probably not.
Rob: Probably not, yeah. I’ve never even filed for unemployment in my life so I don’t know what that would be like. You’re right, man, I’m just—aside from MicroConf and and doing some writing like I’ve been talking about in the two podcasts—hanging around, taking some time off. I think I want to take the whole summer off and not do anything serious, not tackle anything. I’m still sticking by my, “I’m never doing that again,” thing. I’m not doing that again, man, I just can’t, not from the ground up, it’s just too much.
Mike: Cool. I’m not sure how this really factors into it but I’ve been meaning to bring this up for a while and I kept forgetting. I was driving downtown in the town that I live in the other day, I came across this street, it was Atwood Ave, it immediately made me think of Jeff Atwood. Then, I came across Walling Ave literally right next to it. If I come across Spolsky Boulevard without seeing Taber Street, I’m going to piss.
Rob: Without Taber Street, that’s awesome. Jeff Atwood, the man, codinghorror.com. I used to read his blog years ago. I haven’t read it in a while, have you?
Mike: I pop over there on occasion but he doesn’t blog nearly as much as he used to. The content doesn’t refresh as regularly. He still does really highly in-depth articles on various things. I was reading about the stuff he does. High performance, low power computing things that he puts together because he’s always looking for ways to improve on previous designs with lower cost and better computer parts and things like that. I think it’s a home theater PC, that he’s basically […].
Rob: I love how his pieces are really long which is very much in vogue today, but he has been doing that since he started the blog. I’m thinking his blog has been around since—I started mine in 2005 and I think we started within a few months of each other because we were in some early blogging books together and that’s how he and I ran across each other. An interesting thing, my first big speaking gig was in 2008 or 2009 and it was a business offering, it was a lightning talk, it was the PechaKucha seven-minute thing where the slides flip automatically. I was encouraged to do that by Jeff Atwood and I saw him at one of Spolsky’s events.
Remember when they used to do the Stack Overflow, Dev days, it was $99. I ran into Jeff Atwood, we have never met, and I introduced myself and said, “I’m Software by Rob,” and he said, “I love that blog,” so we connected, we had emailed before. In the back of my mind, I was super nervous going up to him because I never met him and I hold him in high regard, and I’ve never once regretted having that conversation because it really—I’ve never been to BoS, I went, I talked. A bunch of people knew who I was and I was like, “That’s weird, how did they know me?” and it was from this blog. This is early days, this was before all of the podcasts and all this other stuff.
I didn’t realize how small our community actually was. I knew I had at the time probably 20,000 readers but I didn’t realize that a huge chunk of them would be at a conference like BoS. It was a very concentrated thing. That was my first thing that then encouraged me to write a book. I don’t know, there was something about the momentum that that created. I guess the moral of that story is it has always encouraged me to do things that are really terrifying because that one move—I actually left the building, I was walking up to my car, I had seen Jeff Atwood and I left.
I’m too scared or nervous to go up to him. I walked back in from the parking lot and I walked up to him. He was in a buffet line and I just said, “Jeff Atwood, Rob Walling,” that moment, I think it literally changed my life may be a little overstating it but it’s had a pretty profound impact on the course of my professional career.
Mike: Long story short, you met Jeff Atwood a long time ago and now you’re buying roads in my town and naming them after yourself.
Rob: That’s right, indeed, sir. How about you? What’s new this week?
Mike: I recently went through a disaster. I used Chrome for my web browser, and for whatever reason, the last time I went through an update, you get that little green arrow in the corner, it’s just like click here and it will shut down everything and open up all the windows for you again. When it did that, it blew away my local cache for literally every website that I’ve ever gone to. For some reason, I have no idea why or how this happened.
All my two-factor authentication stuff went away, I had to relog-in to all the different sites that I was using whether it was Facebook or Twitter and Amazon, a bunch of stuff. It was all gone for some reason. Fortunately, I have LastPass, so it wasn’t that bad. There were some of these websites, “Use your authenticator,” like crap, I’ve got three of them, which one is this?
Rob: That sucks, dude. It nuked your two-factor authentication, I hate it when that happens, and then all the sites are slow now because it has to recache everything?
Mike: No, the sites don’t seem slow. It’s just that all my cookies and stuff are gone and I use Clicky for my website analytics and I have my own machine, I was logged into it, it excludes all my IP address information. It automatically filters out me when I visit the site and I hadn’t realized that it blew away everything until I went to check my analytics that day and realized that there were tons of actions and “visitors” on there because it was me doing a bunch of testing on it so all my stats for that day are totally screwed up.
Rob: That’s a bummer, man. iOS has done that to me a couple of times where it will install an update and it nukes a bunch of my setting and I’ll be like, “Why am I not getting texts on my MacBook anymore?” and I just go into the settings, off, and it used to be on. It was on last week. I’m not quite sure why that would happen. Obviously, it’s a bug in the upgrade but it’s really irritating, certainly not as bad as what you’ve experienced but that’s a pain in the butt when that happens.
Mike: That’s the only time that that’s ever happened to me, at least that bad with Chrome, but that’s one of those things that it encourages people to not upgrade software or their devices.
Rob: To resist doing it, I hear you.
Mike: That’s why I try to really be careful about doing updates and stuff on my own software. Sometimes there’s the need to sort of break stuff on occasion.
Rob: Cool, what are we talking about today?
Mike: Today, we’re going to be going through the five stages of your sales funnel and the tools to use at each stage. This is an outline that I put together based on an article over at ignitevisibility.com and we’ll link that up in the show notes. I found it fascinating the way that they broke out the stages of the sales funnel and specifically showed different tools that you could use in each one. I looked back through our archives and we don’t have an episode on how to put together a sales funnel, or specifically what it looks like or what tools to use. I thought it would be good to go through this article and talk about what they have to say and then provide our own take on it.
Rob: Cool, sounds good, let’s dive in.
Mike: Stage one in today’s list is awareness. The basic idea with stage one is that unless somebody knows that you even exist, they’re not aware of it, of course. They’re not going to come to your website, they’re not going to download anything, they’re not going to go put their name in for a trial or sign up for a trial, they’re not going to come to a webinar, nothing. You have to make them aware that you exist to begin with.
In this stage, they put a bunch of tools that we talked about on the show in the past and the lists that are probably used in the past, things like SEMrush, Ahrefs, Buffer, Hootsuite, LinkedIn Sales Navigator, and there’s several others in there that are probably much further ahead than most people, one example is Growbots, but that’s $500 a month and they bill it annually. I think anyone who’s starting out, that’s really beyond their price range, but the basic gist of a lot of these things is that there are ways to help put you in front of people or to connect with people. If you categorize those tools, it’s really based around SEO and social media. There’s lots of other ways to find channels of customers, but those are the ones that they kind of focus on with the tools that they showed.
Rob: If you’re interested in more, this is the list of marketing approaches. This is putting together a marketing plan. You can go back to episode 384, just a few weeks back, where you and I tore down the Bluetick marketing plan. You can also read the book Traction that gives you 15 or 20 different ideas for driving traffic and SaaS Marketing Essentials by Ryan Battles. Those are the three off the top of my head that I would read if I was thinking about creating awareness for a new or an existing app.
Mike: I do want to take a few minutes to dive into some additional tools that they don’t use here or call out here and maybe that’s just because their company provides certain services and the other marketing channels are not including those. But some of the things that came to mind was paid advertising. Whether it’s Facebook ads, or Twitter ads, it’s just traffic acquisition in stage one and trying to get people to know who you are. You can also do billboard advertisements for example or you could pay to be in a newsletter that gets sent out regularly.
There’s several that I’ve seen out there where you can take $500 or $1000 and they will include an advertisement, basically a sponsorship for whatever your product is or your service to their newsletter list. And then there’s tools like Canva which helps you provide marketing collaterals that you can either publish on your website or send to people. Another option for social media would be TweetDeck which I think is offered directly from Twitter.
Rob: I believe they acquired it a few years ago.
Mike: That’s another alternative to either HootSuite or Buffer. Stage one is really just about building awareness that you even exist as an option to solve the problem that a customer may have.
Rob: Stage two is about interest. It’s finding out if a customer is interested, keeping them on your website, or getting an email address from them. This is not a full qualification when you think of qualifying a sales lead. This is really just getting one more step past, they’re on your website now, are they going to click around or opt-in to hear more from you.
Mike: One other thing that I want to point out as we go through these is that the way that they break down these different stages, it seems to me like there’s a little bit of a difference between how they would do it versus I would do it, but the basic gist of what they’re trying to do here is say that when you get past the point of where they’re aware of you, they express some sort of interest, but you still don’t know who they are as the vendor.
You have to use tools like Unbounce or Crazy Egg, or visual website optimizer to try and find out are they browsing around on your website, and are they taking an interest in whatever it is that you’re doing. That stage one are those people who you put an advertisement from, maybe they clicked through it to come to your website and then immediately bounced, or they searched for something and they get on your website and they’re like, “Nope, this is not what I was looking for.” They hit the back button.
Whereas with interest, you try to engage how interested are those people who are coming to your website in what it is that you have to offer, whether it’s articles, or educational materials, or an email list, or lead magnets, any of those kinds of things. Are they clicking around the website and actually reading? Because if they’re not, they’re not interested and they really fall in that first bucket. But if they are, you can see heat maps and things like that that will help you provide a better idea of what is going on.
Rob: Yeah. To summarize, these are people on your website who you don’t know who they are yet. Tools for this are going to be things like Google Analytics which is going to give you a lot of aggregate data. Clicky, which is essentially a competitor, one of the main competitors I know to Google Analytics, it’s real-time web analytics, and then tools for capturing that email address, obviously something like OptinMonster or Drip with its email capture widget, or Kickofflabs. Kickofflabs, they do more than just landing pages and pre-launch pages.
Mike: They have widgets that you can embed into your website that would allow people to sign up and then they can take those and they can add additional metadata to them and then send it over to whatever your marketing platform is. If you have Drip, they’ll pre-populate it based on the email address and then sent it over to you.
Rob: That’s cool, that makes sense. Sumo Media is another one that’s going to help you capture emails. I think Mixpanel and Kissmetrics at this point would also be helpful. They are designed more to measure funnels and actually maybe at this step, it would be less helpful, but I think to cover all five stages of the funnel, one of those tools that gets into—it’s not just aggregate data but you can look at individuals once they’re identified and see where they stopped.
Mike: Another good tool in this stage is Hotjar. I have an account with them, they’ve got a free account that you can sign up for. It’s pretty good if you don’t have a ton of traffic to your website, and it will give you some of that heat mapping information and show you click conversion rates where people are going to let’s say the homepage and you want to see how many people who come to the website are coming to the pricing page for example. It will show you that information.
You can also do screen recordings as people browse around your website, or on certain pages, and it will give you an idea of what people are looking at. That can be helpful for deciding what it is that you should be focusing on or what changes you should make on your website. Stage two is really about tracking what people are doing on the website and then optimizing it to help move them onto stage three.
Rob: I think Hotjar is a good tool. We’ve used it on Drip as well.
Mike: The third stage is called evaluation. I don’t like the phrasing of this solely because if you say evaluations, to me it means you’re doing a trial, but the context that they mean it in is they’re evaluating whether or not to give your tool a chance or which tool it is that they’re going to spend some time and effort looking into, whether they’re going to find a trial for it or they’re going to go to some webinars.
This is just them trying to gather more information about your tool and potentially some others to give them more information. Tools that fall into this category are things like Camtasia Studio, Jing, Wistia, Soapbox, really for capturing videos. Whether it’s a demo of your product, or a webinar, or an educational video of some kind, or even just a marketing video of the founder talking about a specific reason why he or she built the product.
For hosting those things, you want to use something like Wistia or Vimeo, you can also use YouTube. And then additional pieces of the evaluation stage is providing educational content to people. Things like ebooks fall into this category as well.
Rob: Yeah, this is that education stage where you are trying to get people to raise their hand and essentially either sign up for a trial, or sign up for a demo, or continue to ask for more information so that their lead score or their interest score rises to the point where you reach out to them directly.
Mike: As you said with raising their hands, if they do that, then they end up in stage four which is engagement. I hear the prospects have made a conscious decision that they’re interested in finding out more. I would almost say that there’s probably a few more things in between here, between stage four and stage five, because stage four, the way that they lay it out, you’re getting somebody to sign up for your email list or get on a demo, whether it’s GoToWebinar or Zoom or a variety of other webinar tools, something like Bluetick or Drip falls into this category as well.
I feel like CRMs almost fall into this category as well, into stage four because you’re gathering more information about them. You’ve had them signup for your email list and you started populating that data, whether you’ve asked them for information in a form, you’ve had them fill out a survey. Those types of things have to end up some place and the CRM is really the logical place to start putting some of that information so that you can use that information in additional marketing materials to help move them to the next step.
Rob: Some people phrase it as lead nurturing. Obviously, an email tool is going to be a really nice way to do it as well as webinars that will get you that one to many. Like you said, CRM, it depends on if you are truly a self-serve business or self service where people just come up and they sign up for a $10 a month account. Obviously, your CRM is probably your ESP; that was really jargoning. I just put two acronyms back-to-back. Your CRM is probably your email service provider.
It’s a tool like MailChimp, or Drip, or Infusion Software, you actually keep a lot of your prospect and customer data. If you have a higher price point and you really are doing some medium touch sales, then having something like a Pipedrive, or Base CRM, or Highrise, one of the CRMs I think is obviously going to be helpful, and Salesforce obviously. Something like that is really going to help move people through the funnel, and then it attracts your individual one-on-one communication, you obviously need sales people to use tools like that or get a lot of benefit out of them.
Mike: The thing I was mentioning earlier where I feel like there should be more between stage four and stage five is that, here they played stage five as the commitment in the purchase. They list a bunch of ways to take payments. Whether it’s PayPal or WooCommerce, for whatever reason Stripe is not on this list, but they have a couple of shopping carts in there as well. It seems to me like even in stage four, there’s a lot of flexibility for somebody to move forward and back in the funnel here a little bit because somebody might download an ebook for example and then you don’t see or hear from them for two weeks, five weeks, eight weeks because they got busy doing other things.
There’s a lot of circular patterns between customers who come in, they enter in your sales funnel, and then they just repeat in this area for a while before they move on. You may look at it as it just takes them longer to get from stage four to stage five. The reality is that sometimes people can regress a little bit inside of your sales funnel. You have to make sure that you have enough marketing materials in there to nurture those people along to the point that they go to that demo and ask the questions that you want them to ask or you find ways to turn them out on your own.
Rob: Yeah, I think this sales funnel that ignite visibility is in essence more of a services sales funnel because they’re a services firm. I guess it can also be a one-time purchase but certainly if you have SaaS and you have a trial, there’s a step after engagement before the purchase, and I think that’s where this is just a little bit different.
Mike: Yeah, once you get into a SaaSified version of this, then you get into that measuring the trial and seeing how many people are going from the email list into the trial and then how many people are converting from a trial into a paid customer. And then you also have to talk about things like on-boarding, and are they using certain features in your products, are they getting the most value out of it, who is using the features that will turn them into a paid customer, who’s not, how do you get them to use those features, should you make them front and center, or should you provide them a walkthrough videos inside the app.
There’s all these things that you can measure in that area. It could get complicated but it’s very specific to whatever your app is because what somebody does in Bluetick for example is going to be very different than what somebody does in Drip, or any countless other applications in order to be successful with that product.
Rob: Right, and in terms of measuring what people are doing in the product, Hotjar like you said can do a lot of things. I know that Crazy Egg, you can do in-app heat maps. Do you know of any other tools off the top of your head that help you kind of be aware of it? It’s almost in-app analytics and metrics.
Mike: One I would take a look at is probably Segment. You install Segment and there’s a developer edition or a developer tier that is in the people with less than a thousand what they call MT Uses monthly, transactional users or something like, that but monthly total users. What it does is if you have it in the app and you’re only using two data sources they say, then it’s free. Otherwise, it’s $100 a month and the monthly total users could actually kill you depending on how much traffic you have.
If you put it on your website and you’re using that as a source, if you get 10,000 unique visitors a month, it’s counted as 10,000 MTUs. Depending on how big your business is, that could get expensive. But if you’re just doing it in the app, then you’re trying to pinpoint things and optimize things inside the app, you can send the data into Segment, and then from there, you can take a look at another product called Amplitude—which is amplitude.com—and that allows you to take information that comes directly out of Segment or get a JavaScript snippet that you could plug-in and it will allow you to track people through your app and what they’re doing.
Their product is free as well until you get to something 10 million events per month. You have to be fairly large in order to hit their pricing tier but I would imagine once you get to that, it’s going to be really expensive, but if you’re at that level, it’s probably going to be worth it for you because it allows you to drill in and see exactly who is using which features, how much they’re paying, and you can have all that data piped in through Segment from your website or from your backend database and through to Amplitude.
Rob: Very nice, I haven’t heard of Amplitude before so that’s a cool little stack that you hacked together there. We’ve used Segment for years but getting it into those other data analysis platforms I think is probably a head kicker and a real value there.
Mike: Yeah, Amplitude, I just found out about it recently so I’ve been looking into it. It’s interesting to see some of the dashboards and stuff that they have available. It’s an example so you can just see who is using what in your app and how much they’re using it, it gives you real time data so that you can take a look at who’s doing what today, and how many times have they performed this action, or how many times does this thing happen in the background? You can use those customized dashboards to help you make decisions about your own product versus some off the shell tool like Crazy Egg which has one very specific use case, to see where people are clicking. Yes, you can do other things but the dashboard allows you to customize a lot of things and create one that is specific for your own app.
Rob: Cool. To recap the five stages of your sales funnel, number one is awareness, number two is interest, three is evaluation, four is engagement, and five is commitment. If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 390 | SaaS Pricing, Sponsoring Events, Subscription Boxes and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions. The topics in this episode include GDPR, SaaS pricing, sponsoring events as a marketing strategy and subscription box companies.
Items mentioned in this episode:
- MicroConf
- ZenFounder
- RobWalling.com
- FounderCafe
- Cloudforecast.io
- Crated with Love
- Bigfoot Capital Solutions
- Angel List
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about SaaS pricing, sponsoring events as a SaaS marketing strategy, subscription box approaches, and even revisit GDPR once again, and we answer more listener questions. This is Startups for the Rest of Us Episode 390.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it, or even your second, or third. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What is the word this week, sir?
Mike: I’ve spent a lot of time this past week cleaning up my email list, setting up some marketing automations, and working on my website. With the email list, there was a time frame of about six-seven months where I didn’t have I any sort of captcha in place and the form for adding your email address onto the list was embedded directly into the website. Because of that, because it wasn’t being loaded through JavaScript, there were a lot of bots that came through and just randomly entered in email addresses and I did not have double opt-ins enabled for this short-time period. I could very clearly see it in Drip like there were stuff that just should not have been in there.
Rob: Yup, totally. That’s a good way to do it. Like you said if it had been a Drip JavaScript widget, I think it’s just one checkbox in Drip where you can add captcha to it, you add re-captcha, but obviously if it’s embedded form, that’s not so easy. Cool, nice work there. I meant to ask you at the top of the episode through the magic of time travel, MicroConf is happening right now as this episode goes live. It’s Tuesday morning. What do you think you’re doing? Are you hungover or regretting that you stayed up so late?
Mike: No, I doubt it. I learned that back in 2011 not to do that.
Rob: You’re pacing yourself these days especially because it’s four days for us now which is definitely a bigger deal because we have obviously growth for two days and starter.
Mike: Definitely. I head out on Friday so I’m there from Friday to Friday. It’s not just four days, it’s seven days.
Rob: Dude, that is a long time to be in Vegas.
Mike: I know.
Rob: Drink a lot of water, go to bed early, use chapstick. All the things we said last week on the episode, you’re going to really want to double down on those.
Mike: Yeah, last week’s episode was sort of a reminder for me like, “Hey, these are all the things to make sure you remember to do it just so you can fix yourself.”
Rob: Yup. I’m in Vegas one day less than you are and I will be thanking my lucky stars. After about three or four days in Vegas, man, I’m done.
Mike: Yeah. I considered staying until Saturday but I decided against it.
Rob: That would be a tough call. My grandma used to live in Vegas and so we would visit her couple of times a year. I’ve been to Vegas 30, 40 times. I live in California so it’s a super quick hop from Oakland Airport. Yeah, they would always be 2-3 day trip and it was a perfect amount of time, it was like, “Oh yeah, that’s what this place is like—” Then by the time you’re three days in you’re like, “Oh yeah, that’s what this place is like.”
For me, I just came back from a two night, almost three day retreat, it’s the longest retreat I’ve taken in quite some time. I was trying to think, because I took like a one day last year and then in 2016 I took three days and got away but I got strepthrough so it wasn’t exactly a restful retreat, it’s more like recovery. But I really enjoyed it. I drove 2 ½ hours North up to Duluth, Minnesota which is right on the southern tip of Lake Superior. Lake Superior is so big you can’t see the other side. Aside from there being no waves, it kind of feels a little bit like the ocean because there’s no beaches as well, no planes flying over with the little banner saying rent the surfboards and stuff.
But I thought about a lot of different things, probably stuff that I’ll talk about in the coming weeks and months on the podcast. But a good reminder, if you haven’t taken your retreat for 2018, check out The Zen Founder Guide to Founders Retreat, go to zenfounder.com, and Sherry wrote like a 30-page guide that I use religiously, has all the questions, and all the things you should be thinking about if you go on a founder retreat.
Mike: Awesome. What’s the word for this week?
Rob: We’re answering some more listener questions, they keep trickling in at an even pace which is really nice, allows us to do these Q&A episodes pretty frequently. The subject line of this email is, “Loved episode 384, GDPR. I’m Chris Duke. I’ve been listening for a while in my walks through town. This is the first time I probably laughed and shouted out loud. I try not to use the word stupid very much but it is hard these days and GDPR is one of those things that brings it to mind. Not the basic idea, it’s good to make those of us in technology business think about protecting data but the people who think of things like GDPR completely clueless and I have no business coming up with the regulation on something they don’t understand.
I keep thinking about one example, MailChimp. If I tell them to forget me, does that mean they have to forever take my email off of every list? What if removing my data from an application breaks something in the app or someone else that I willingly given permission, has used my email, it’s called referential integrity. Thanks for talking about this, guys. We’ve already written a sequel script to delete data in my SaaS app, we used it as part of our development and testing. That and some clarity on our terms is about it for me. Keep up the great work.” I know the answer to this one, do you know?
Mike: Didn’t we talk about it last week or the week before where the forget me is on a per-provider basis? Let’s say you and somebody else are my customer and people have data for both of them. If they tell you to delete it, the other person does not have to. The person has to go to each of the individuals and it has to do with who’s the data provider and who’s the data processor.
Rob: In the case of MailChimp, If you emailed MailChimp and said, “My email is on a bunch of your customer’s email lists, forget me,” MailChimp would say, “You have to contact the MailChimp customers.” We can’t delete it out of their account or we’re not required to, I guess. Now if you went to meet MailChimp and said, “Remove me from your list and forget me,” obviously they could do that from their own list that they own, but that’s exactly right.
Mike: I still don’t think that it answers the question of how do you remember that you deleted somebody.
Rob: That’s right. Yeah, if they sign up again, I don’t think you’re supposed to block or I don’t think you’re required to block them. Because like you said, you have to keep their email if you are not going to allow them to sign up again.
Mike: The other thing I’ve wondered about is if you could just anonymize their data so it’s no longer personally identifiable and you just overwrite the IP addresses with all zeros or all ones or something like that.
Rob: I think that’s a realistic approach the people should evaluate because in complex systems, you don’t delete stuff. As a rule, you don’t delete rows from database tables especially as you get larger and more complicated. As a listener out there, if you’re thinking about this, just changing their email to something@example.com to gooit@example.com, like you said overwriting their IP with blank stuff and having some probably on a flag or whatever that this is anonymized but I do think that’s an interesting approach.
Mike: No, I don’t even think it says that it’s just an interesting approach, like in certain business situations you almost have to do that because it’s not even just about deleting the data, it’s about knowing historically how different things that you’ve done turned out. Like if you go in and you have to delete a bunch of data for all these people that came in and visit your website for example on a certain month, it skews all of your reporting for all those months so you can’t really see how things went or what happens during that time. All of your decision making moving forward is completely screwed up, you can’t delete it, you have to just anonymize it and be done with it.
Rob: Cool. Thanks for the question, Chris. I hope that was helpful. Our next question is from Kenneth. He says, “Hey guys, as always, love your podcast, been a fan for a few years since I read Rob’s book, Start Small, Stay Small in 2011. Rob’s book was a huge inspiration for me. However, I realized it’s been almost a decade or about eight years to be exact since he wrote it. Obviously many things have changed since then in the internet, it’s totally a different world today.
My question, if Rob were to update or rewrite the book in 2018, what would he change? Would he remove chapters, focus more on certain points include new topics, etc.? That’s about it. Thanks for all the resources, podcast stories, etc., that you guys have openly shared. Been a constant inspiration for me and hopefully one day I’ll be able to share my own story on how much you guys have impacted my life. Best regards, Ken.”
Mike: I think I know the answer to this, you’d rename it to Start Small and Get Big.
Rob: I don’t think I would.
Mike: No?
Rob: No. Because that’s the thing. Obviously that’s what I wound up doing when I was starting small and then going into something much bigger than I had originally intended. But I still think there is a really good case to be made for doing this kind of micro SaaS or micropreneur approach where you just have a lifestyle business and you never need to worry about all the headaches that I dealt with starting in 2013 of growing this company larger. It obviously came with rewards as well but I also think it’s a totally viable approach to start small and stay small. I wouldn’t presume just because I did something that everyone should. You know what I’m saying? I think it’s totally legit that startup business make low six figures and if you’re happy with that, man, that’s a great life.
Mike: I was just pointing out that it should have been renamed to Start Small and Get Big just because on your website where’d you go to sign up for your newsletter, it says exactly that. And then there’s also that in the Drip widget where you can sign up for the newsletter.
Rob: Yeah. Which I did that once Drip started getting big. I realized I’m not just talking about staying small anymore, isn’t even that appropriate. I need to rename that headline anyway. I’ve kind of neglected that unfortunately. That’s on my personal website at robwalling.com.
This question is interesting. I’ve thought about it a bit over the years. To be honest, I had not opened my book, I mean it’s been five years since I went back and looked at it all, maybe more. This forced me to go back and take a copy and flip through it. What I’ve realized is that so many of the concepts are still 100% valid today, it’s some of the tactics that are not. I go really deep. I thought it was like half the book where I deep-dive and then like break out, I forget micro-niche finder, or market samurai, and I click this button, and I have screenshot, almost like it’s some web tutorial but it’s only 5 or 10 pages of the book is that and that’s the part that I would remove because that part changed so fast. It was like probably less than 18 months after it’s published, a bunch of those links and screenshots were just invalidated. Realizing that it’s a book and it’s not a living, breathing online course that I can edit easily, that is part of it that I would pull out.
I would still talk about niching down, I have a lot of concepts in there to still hold but I would remove some of the tactics that—and again it wouldn’t be a huge chunk of them, it would be a small part of the book—but there’s tons of stuff about outsourcing and hiring VAs, the mindset, and product last, market first. All that stuff I still hold true.
I was trying to think of anything else that I would add today, certainly there are marketing channels I didn’t even cover like Facebook ads that are probably mentioned. I would double down. I had a whole section of building your email list, I would probably expand that given how much more powerful I believe email is today and how much more I know about it.
I wrote the book in 2010 in essence, you can say I’ve learned quite a bit about it in eight years so there are parts that I would expand. I have butted this around obviously for years and I get talked about every since I started going even slightly how the data I was going to do an updated version or second edition, I toyed around, I talked to a couple of publishers, talked about doing a little more of a mainstream release. It’s still in the back of my mind somewhere to go back and revise it.
Flipping through the book made me realize I always thought that’s going to be too much effort, it’s going to take a tremendous amount of time, might as well write a new book, but that’s not the case. It wouldn’t be near the effort of writing a new book. As I flipped through it I was like, “Oh, this stuff’s still really good content that’s applicable.”
What do you think? You think I should go back and redo it?
Mike: I think that there’s definitely room for a second edition. It really depends on whether or not you want to go through and have a second edition versus writing a new book. Obviously if you write a new book, it’s going to be a different topic of some kind. But whereas if you’re simply revising the current book, it’s obviously a lot less work and you could probably bang that out in like a couple of weeks. It’s not like it’s that much effort, I don’t think, because really you’re just cutting out a bunch of pages where it’s hyper-specific, and the tools themselves or the URLs have changed, or maybe you replace the tools or you drop the pages entirely, and there is probably a few things that you left out that you want to add, maybe stories that you’ve shared over the years that resonated that with people that never just made it into the book or better examples you have of different things. I think that with the book itself you’re mostly concentrated on your own experiences. I doubt you’d go into sharing things that you’ve heard from other people but like specific examples from other people but I don’t know. It’s a toss up, I guess.
Rob: I think that’s a good point. As you were talking, I realized that was the one other thing that I felt was a bit dated with the examples I used. I used a lot of my own examples because there was really no one else that I knew. It was like Patrick McKenzie, Ruben from Bidsketch, Harry and Ted from Moraware. Then I used a bunch of the sites that I owned in Basecamp. It’s like there just wasn’t that much going on in 2010 when I was reading this in terms of the bootstrapping and the Micro-SaaS in the micropreneur space. Now I have dozens if not hundreds of examples. That’s where I could really beef it up.
I don’t know if I would go so far as to interview people or you and I just know the stories of so many people who have taken this approach, whether they’re Founder Cafe lifetime members, or they’ve come to MicroConf, or they listen to the podcast, or they’ve read one of our books, we just have that knowledge so much more. There’s so much more of a community than there is today. Now I’m kind of fired up about it as you’re talking about it.
It would be almost fun to go back and see, because you’re right if I write another book, it can’t be on that same topic and I wouldn’t even have the interest to really focus on that exact same topic today. But rewriting it and just making it better is actually something that I think would be interesting. Thanks for the question, Ken. I’ll definitely keep noodling on it and see if it leads anywhere.
Our next question is a question about SaaS pricing. It’s from François at cloudforecaste.io. He sent us a couple of questions I think. He says, “I’m reaching out to you again because we’re trying to figure out our pricing model for a new feature. Here’s my question, cloudforecaste.io is currently helping our clients monitor their AWS cost and we are now working on a new feature to help them save money.
The new feature will tell them how they can easily save money by fixing naive mistakes, unused resources, reserved instances, etc. on a weekly basis. We have a hard time figuring out the pricing since the first email is much more valuable because there’s a lot of potential optimization then the email in the third month, or the fourth month, or whenever. The first one’s going to have a lot of value.
The value also depend on the size of their AWS account. Here are a few ideas we have in mind, first one is a percentage based monthly price based on their overall spend. Second one is a flat-monthly price based on their overall spend. Third one is an expensive first email followed by a low flat-monthly price. The fourth one is remove the weekly cadence offered as a stand-alone product, and charge a percentage of what they can potentially save. Looking forward to hearing your thoughts on this. Thanks for the podcast.” What do you think, sir?
Mike: I think this is a really interesting question just because there are situations where people can really undervalue what a piece of software can provide for them. I can definitely see, there is an analogy for this situation which I saw, I think it was an online tool where you could go and somebody would basically build an example of how to use as your services or something like that and they were letting you put in your email address and find out if it had been hacked across hundreds of millions of records. It was coming back too quickly. People did not believe the results that they were getting because it came back so fast. They ended up inserting some artificial delays into it to make it appear like it was doing more work than it actually was.
I’ve heard similar examples in other places as well from different people doing different things and this seems to me like that’s one of those situations where people may look at that and say, “Oh, your software is doing this but I don’t value it as much even though I’m on paper saving a heck of a lot of money.” I wonder if the solution to this would not be to price it like as a stand-alone thing but to price it as, “Hey, here’s a service that we offer and it’s X thousand dollars or a percentage of whatever the monthly prices that’s saved,” and you offered it as such as a service, not as something you can just go in and automatically get this report that shows you all this information. That way gives the impression that you’re doing all this extra work and analysis.
The reality is most of it’s automatically generated but it’s based on all the work that you have done already. Then the ongoing monthly reports could be some flat-monthly price that is related to their overall spend to kind of help them save money. Because that first email, I totally agree that if you’re saving them a heck a lot of money up front, then trying to go down the path of having a SaaS pricing model that is variable in some way that reflects the value that you’re providing to them is really not going to work very well. I think that positioning it as a service as opposed to like, “Hey, here’s this off-the-shelf thing that you can buy that the software will do everything for you, that’s probably the approach I’d at least look at and test it out with a few people first.
Rob: You’re saying like present it as, “Hey, we do this manually type thing,” maybe not coming out and saying that but like, “This is a valuable service the we offer,” and don’t imply that software is doing all of it.
Mike: No. I wouldn’t say that, I would say that it is not something that you can go in, you can just click a few buttons, and automatically get the report. You have to talk to somebody in order to get it.
Rob: I see. Yeah.
Mike: Yeah. That way you can look at that and you could almost give them a ballpark estimate or price based on what you’re seeing from the stats and say, “Hey, this is the price that we have for this and we think that you’re going to save probably in this neighborhood.” You could give them a range like they’re going to save $10,000-$20,000 a month. You can tell them that and you say, “This is going to be $5,000 and just ballpark looking at what you’ve got, this is what we think you will save.” Then when you give them the actual report, it will show them exactly the steps they need to do that will both give them $17,000 a month in savings.
Rob: Yeah, that makes sense. I think that’s a pretty good approach, actually. I’m kind of torn on a couple things, I think the percentage based on how much they spend, it’s very logical, I’m curious to see what customers think of that. I guess it all depends on what the percentage is. I guess it makes a lot of sense, you can tell I’m torn on it. I like that you have better flat pricing but I actually do think the percentage could make a lot of sense because when we were tiny, and bootstrapped, and AWS bill was $5000 a month and if you said it was 1%—that’s $50 a month—that would probably have been a no brainer for me. Then of course once you’re doing $30 or $40 a month it is worth more, and at $300, $400 a month kind of feels equivalent. That’s probably what I would lean towards as this percentage.
I think trying to make the first email more expensive, I think it’s kind of a tough call. I don’t think I would go that way. But I would consider making this kind of an annual only thing that you give, they can get a sample email or they can get the first 20% of what the email looks like. You give them some information to prove that it does something.
Then like you said, they have to talk to someone in order to get this and it’s relatively high-priced and you do annual. The challenge with annual is their spending’s going to go up and down over the years, so how do you build a whole year when metered in a sense, with that you can either do it on a credit-based system or you can bill them where they are today and then bill them just the incremental each month, if they’re up or down you can keep it there.
I think this is an interesting thing with their two data the points in essence and I think talking to either existing customers or prospects is going to be your next step to basically say, “We’re going to do it based on a percentage and it’s going to be quarterly only or it’s going to be annual only. Do you want to sign up?” That, you are going to see if the rubber meets the road at that point.
Our next question is about sponsoring events as a SaaS marketing strategy. This is from Ed Freyfogle who is a speaker at this year’s MicroConf Europe. He says, “Given that you’ve run many events, I’m wondering what you think of sponsoring events as a marketing strategy? Particularly, I’d love to hear any tangible tips or best practices you’ve seen from sponsors as a way to make the most out of an event in terms of general brand building, but also specifically winning new customers.” What do you think, Mike?
Mike: Obviously, I run the sponsorship side of MicroConf so I have a lot of thoughts on this and I’ll try to keep them briefer than I would if we were doing an entire episode on it. When you’re looking to sponsor events, the thing I would keep in mind is that before you even try to figure out which events you’re going to be sponsoring, figure out what your goal is.
If your goal is to build brand awareness, then make sure that you know that in advance. You don’t try to do things that go outside of building brand awareness. That would include going to events or conferences where it’s not the right audience for building brands, like if you’re selling a marketing tool, going to a developer’s conference, obviously like there’s probably a little bit of crossover if you’re going for entrepreneurs but you don’t want to just build brand awareness with developers if they’re not the ones making the decisions. Because if you’re trying to get customers, you want to be able to get in touch with the decision makers, not the people who are at the other end of it, like the bottom layer of the organization.
The other thing I think to keep in mind is that when you are talking to people at a conference or an event, how close are you to the decision maker? How many hops are you going to have to make between the person that you talk to and the rest of the team or the people who actually make the decision? Because you may be able to run into the people who would use your products but they don’t necessarily care.
For example if you sell transactional email service of some kind and you go to a developer’s conference, those developers may not actually care about deliverability rates. The marketers would, but they’re not the ones that you are talking to. You’re going to have to convince the developer to give you an introduction to the marketer or whoever the VP of sales is that is going to say, “Hey, this deliverability is important to me and we should possibly switch providers in order to get better deliverability.” Those are the types of things that I would think of to start off with, and then beyond that, you want to stand out from the other sponsors.
If you have an opportunity to customize whatever it is that you are doing, whether it’s a specific giveaway to the audience or you are trying to drive traffic or drive conversations with people, figure out ways to do that so you might do like up Q&A session that is informal either during lunch, or after the conference, or during one evening event, something along those lines. If you do give away, you can provide people with that giveaway as a link and then you capture their email address.
The other thing is make sure that when you attend these events, if you try to sponsor an event from afar, it’s probably not going to get nearly the level of engagement or awareness that you’re looking for so make sure that you have business cards to hand out and make sure that you collect business cards or contact information from people while you’re there. Then once you’ve done that, absolutely make sure that you follow up with those people to take it to whatever the next logical step happens to be, whether it’s to having other conversation, or to get on a demo, or to just discuss what sorts of things you’re doing.
The last piece of advice I’d say is to make sure that if you can lead things in that direction to get to a promise of a future conversation and not suck up somebody’s time at the conference, that’s also not a bad thing.
Rob: Awesome, yeah. I’m actually going to leave it there because I feel like you have so much more experience dealing with this topic. I think that was a pretty good little primer there. We’ll probably do a whole episode on that, huh?
Mike: Probably.
Rob: Our next question is a subscription box company asking about technical issues and funding. It’s from Tyler Turk at cratedwithlove.com. He says, “I’m a Fresno-based startup and I have a question for you. I own a subscription box company. I found the company with my wife while attending Fresno State in 2015. In our first three years we’ve accumulated over $500,000 in revenue. I’ve been pretty much on my own from a business perspective doing all the ideation, curation, and even packing and shipping. My wife helps occasionally.”
They’re a monthly box subscription company obviously and it looks like they’re kind of date night boxes. You would buy it and then there’s activities and stuff for you to do with your significant other. Our biggest weakness right now is our technology and product market fit. We have a large amount of subscribers that have been with us for two years or more and the average active subscriber stays about eight months. But our churn is higher than we’d like. I know where the holes are in our website but I lack the technical skills to fix them.
In addition, I think the future of our company is more digital but I’m having a hard time figuring out how I pitch the future technology based on the data from the physical products we sell now, especially since the biggest needs are technical. I feel like I’m in a vicious circle where I won’t be able to raise money I need to scale until I fix our churn problem, but I can’t fix our churn problem until I get funds to fix the technical problems. I have two questions, is a startup from a smaller market with no relative experience in fundraising or network in larger markets, where should I start? Second, how do I transition from a product-based company to a tech company or a hybrid of both using the data I have now to support our pitch?” Do you have thoughts on either of those?
Mike: With these two questions, just before I answer them, I do want to kind of at least comment on one thing. Tyler said that he has a large number of subscribers that have been there for two or more years and the average subscribers stays about eight months but the churn is higher than they’d like.
I’m not sure exactly what the problem is on the website that would have any bearing on that. I’ll say an open question that I might have on that. If you’re sending those emails to them and they are making purchases and sticking around for a while, what is it about the website that would make them go away? Are things fundamentally broken which are causing people to drop through the cracks or is there something wrong with your email provider? I’m just kind of curious about what that is.
But neglecting that, going back to the two questions, the first one which was as someone who have no experience with fundraising or network some larger markets, how should I start? Coincidentally, one of our sponsors from MicroConf this year is called Bigfoot Capital. They provide funding for subscription-based businesses. I think that they’re focused mainly on SaaS businesses but this is a subscription business so it might fall under their wheelhouse, you can go check them out at bigfootcap.com.
Basically what they do is they look at your financials and they have a wide variety of people that they have provided funding to and they give you a loan. That loan is whatever percentage but it’s going to be based on the risk that they see, and you’re probably going to have a much better chance or opportunity of getting a loan to address some of the technical challenges that you have from somebody like that than you would from a traditional bank who has absolutely no understanding of online businesses. They just don’t get it.
He asks with $500,000 revenue over 3 years, they may be able to do something but my guess is that they just do not understand. I would look for some sort of private funding like that. I don’t know about fundraising—Rob, you could probably speak to them.
The second question he has is, “How do I transition from a product-based company to a tech company or a hybrid of both using the data I have now to support our pitch?” I think we’re going to have to make some assumptions here because I don’t really understand what you are specifically intending by that. But my assumption is that what you’re trying to do is take your current offerings that you probably sent to people physically through the mail, whether it’s worksheets, or PDFs that you deliver digitally, basically make them into online worksheets that you can fill out on the website and share them, or through your app, or something along those lines.
With that in mind, I think that you need to test some of these things out and get information from the subscribers that you currently have now. Can you get hard data that really says, “Hey, this is why I left, and it has to do with like the convenience factor.” Because I think that if you try to look at this as a way to simply cut costs, like if you’re suffering from a problem were your cost of goods sold is too high and you’re trying to cut into that, I don’t know if going down the road of automated things and putting all this technical stuff in place is going to really change that because developers are going to be expensive to build all custom stuff for that. I think that you’re really just going to end up burning a hole in your pocket to try and build that stuff.
In the meantime you’re still paying those current costs for the goods that you’re selling. Later on, you’re still going to need to have ongoing updates, and maintenance, and things like that. There’s always going to be a subset of people who do not want to switch from the physical stuff that they are already getting, so then you have to make some decisions about do you cut those people off and abandon them, or do you try to move them over and say, “Look, if you don’t move, we really can’t do anything for you,” or you just force them. Those are the things that I would have to say about that. Rob, what are your thoughts on this?
Rob: Yeah. I would definitely agree on the second part about trying to move into software I think is a great long term play but I would not do that without funding if you’re not technical because it’s just going to be really expensive and you’re going to get more bang for your buck if you take whatever earnings you have and put them essentially back into the business.
I do agree that this is the kind of business where funding is actually kind of meted like physical goods are just really time consuming and really expensive. At a certain point you’re going to need a small warehouse, you’re going to need to pay rent, and the margin on physical goods obviously is nothing like software. This is one of those cases where I think, especially since you have some traction—because if you look at an 8 month lifetime is 12%, 12.5% churn and that’s not terrible. You want to improve upon that, obviously, and it sounds like you have some ideas on how to do it but there are companies raising funding that are pre-revenue in let’s say the $1-$3 million dollar range. If there’s like a proven founder, they can raise $4 million or $5 million pre-revenue. If they’re in Y Combinator, they can raise $10 million or whatever.
The fact that you have revenue, and you have some type of numbers, and you have a business model, and you’ve shown the hustle over three years, it’s a big plus. For angel investors, I’m not saying it’s going to be a slam dunk, it would be great if you had a network but if you raise $250,000, I would say you’re not raising enough. I think you probably need to raise half a million. I mean you really need to look at what you want to do with the money. If you want to do a series A later, then you have to think, “I want this money to last about 12 to 18 months.” If you never want to raise a series A and you want this to get you growth and then take you to the profitability, that I think somewhere between $250,000 and $500,000 is a decent number.
In a couple of ways, I would get on AngelList, angel.co, I would try to connect with either local investors because there is money to be had, I know it’s crazy but there’s money, to be had in the Central Valley of California. It’s lot of farmland but there are a lot of people who’ve made money and want to invest especially in local startups.
Since I happen to have the hometown advantage of having lived there, industries downtown, that’s the tech hub for really Fresno and the Central Valley, that’s why I would somehow get on their radar, they have pitch competitions every once in awhile, I attended one when I still lived there and there were three or four startups that pitched. With your story, I really do think that you could hustle and raise the money. You’ve already shown that you have the hustle to see this business through for three years on your own and sort of me raising funding is not actually going to be that difficult for someone with the focus and the kind of the grip that you’ve shown already.
That really would be my next move if I were on your shoes is to go out and again I would raise an angel round. I would probably stay away from institutional money where it’s someone investing in someone else’s money because they want quite a bit of control and there’s complications with that but it certainly is interesting and a vortuitous place to find yourself in.
Really nice work on this, man. You’ve done something that not many people can do, A, getting in business to last for three years and essentially I guess break even or be profitable, and B, to do it with physical products. Good for you. Thanks for the question, Tyler. I wish you the best of luck moving forward.
Mike: Are we all set for today?
Rob: We are, that will do it.
Mike: If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it, or even your second, or third. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What is the word this week, sir?
Mike: I’ve spent a lot of time this past week cleaning up my email list, setting up some marketing automations, and working on my website. With the email list, there was a time frame of about six-seven months where I didn’t have I any sort of captcha in place and the form for adding your email address onto the list was embedded directly into the website. Because of that, because it wasn’t being loaded through JavaScript, there were a lot of bots that came through and just randomly entered in email addresses and I did not have double opt-ins enabled for this short-time period. I could very clearly see it in Drip like there were stuff that just should not have been in there.
Rob: Yup, totally. That’s a good way to do it. Like you said if it had been a Drip JavaScript widget, I think it’s just one checkbox in Drip where you can add captcha to it, you add re-captcha, but obviously if it’s embedded form, that’s not so easy. Cool, nice work there. I meant to ask you at the top of the episode through the magic of time travel, MicroConf is happening right now as this episode goes live. It’s Tuesday morning. What do you think you’re doing? Are you hungover or regretting that you stayed up so late?
Mike: No, I doubt it. I learned that back in 2011 not to do that.
Rob: You’re pacing yourself these days especially because it’s four days for us now which is definitely a bigger deal because we have obviously growth for two days and starter.
Mike: Definitely. I head out on Friday so I’m there from Friday to Friday. It’s not just four days, it’s seven days.
Rob: Dude, that is a long time to be in Vegas.
Mike: I know.
Rob: Drink a lot of water, go to bed early, use chapstick. All the things we said last week on the episode, you’re going to really want to double down on those.
Mike: Yeah, last week’s episode was sort of a reminder for me like, “Hey, these are all the things to make sure you remember to do it just so you can fix yourself.”
Rob: Yup. I’m in Vegas one day less than you are and I will be thanking my lucky stars. After about three or four days in Vegas, man, I’m done.
Mike: Yeah. I considered staying until Saturday but I decided against it.
Rob: That would be a tough call. My grandma used to live in Vegas and so we would visit her couple of times a year. I’ve been to Vegas 30, 40 times. I live in California so it’s a super quick hop from Oakland Airport. Yeah, they would always be 2-3 day trip and it was a perfect amount of time, it was like, “Oh yeah, that’s what this place is like—” Then by the time you’re three days in you’re like, “Oh yeah, that’s what this place is like.”
For me, I just came back from a two night, almost three day retreat, it’s the longest retreat I’ve taken in quite some time. I was trying to think, because I took like a one day last year and then in 2016 I took three days and got away but I got strepthrough so it wasn’t exactly a restful retreat, it’s more like recovery. But I really enjoyed it. I drove 2 ½ hours North up to Duluth, Minnesota which is right on the southern tip of Lake Superior. Lake Superior is so big you can’t see the other side. Aside from there being no waves, it kind of feels a little bit like the ocean because there’s no beaches as well, no planes flying over with the little banner saying rent the surfboards and stuff.
But I thought about a lot of different things, probably stuff that I’ll talk about in the coming weeks and months on the podcast. But a good reminder, if you haven’t taken your retreat for 2018, check out The Zen Founder Guide to Founders Retreat, go to zenfounder.com, and Sherry wrote like a 30-page guide that I use religiously, has all the questions, and all the things you should be thinking about if you go on a founder retreat.
Mike: Awesome. What’s the word for this week?
Rob: We’re answering some more listener questions, they keep trickling in at an even pace which is really nice, allows us to do these Q&A episodes pretty frequently. The subject line of this email is, “Loved episode 384, GDPR. I’m Chris Duke. I’ve been listening for a while in my walks through town. This is the first time I probably laughed and shouted out loud. I try not to use the word stupid very much but it is hard these days and GDPR is one of those things that brings it to mind. Not the basic idea, it’s good to make those of us in technology business think about protecting data but the people who think of things like GDPR completely clueless and I have no business coming up with the regulation on something they don’t understand.
I keep thinking about one example, MailChimp. If I tell them to forget me, does that mean they have to forever take my email off of every list? What if removing my data from an application breaks something in the app or someone else that I willingly given permission, has used my email, it’s called referential integrity. Thanks for talking about this, guys. We’ve already written a sequel script to delete data in my SaaS app, we used it as part of our development and testing. That and some clarity on our terms is about it for me. Keep up the great work.” I know the answer to this one, do you know?
Mike: Didn’t we talk about it last week or the week before where the forget me is on a per-provider basis? Let’s say you and somebody else are my customer and people have data for both of them. If they tell you to delete it, the other person does not have to. The person has to go to each of the individuals and it has to do with who’s the data provider and who’s the data processor.
Rob: In the case of MailChimp, If you emailed MailChimp and said, “My email is on a bunch of your customer’s email lists, forget me,” MailChimp would say, “You have to contact the MailChimp customers.” We can’t delete it out of their account or we’re not required to, I guess. Now if you went to meet MailChimp and said, “Remove me from your list and forget me,” obviously they could do that from their own list that they own, but that’s exactly right.
Mike: I still don’t think that it answers the question of how do you remember that you deleted somebody.
Rob: That’s right. Yeah, if they sign up again, I don’t think you’re supposed to block or I don’t think you’re required to block them. Because like you said, you have to keep their email if you are not going to allow them to sign up again.
Mike: The other thing I’ve wondered about is if you could just anonymize their data so it’s no longer personally identifiable and you just overwrite the IP addresses with all zeros or all ones or something like that.
Rob: I think that’s a realistic approach the people should evaluate because in complex systems, you don’t delete stuff. As a rule, you don’t delete rows from database tables especially as you get larger and more complicated. As a listener out there, if you’re thinking about this, just changing their email to something@example.com to gooit@example.com, like you said overwriting their IP with blank stuff and having some probably on a flag or whatever that this is anonymized but I do think that’s an interesting approach.
Mike: No, I don’t even think it says that it’s just an interesting approach, like in certain business situations you almost have to do that because it’s not even just about deleting the data, it’s about knowing historically how different things that you’ve done turned out. Like if you go in and you have to delete a bunch of data for all these people that came in and visit your website for example on a certain month, it skews all of your reporting for all those months so you can’t really see how things went or what happens during that time. All of your decision making moving forward is completely screwed up, you can’t delete it, you have to just anonymize it and be done with it.
Rob: Cool. Thanks for the question, Chris. I hope that was helpful. Our next question is from Kenneth. He says, “Hey guys, as always, love your podcast, been a fan for a few years since I read Rob’s book, Start Small, Stay Small in 2011. Rob’s book was a huge inspiration for me. However, I realized it’s been almost a decade or about eight years to be exact since he wrote it. Obviously many things have changed since then in the internet, it’s totally a different world today.
My question, if Rob were to update or rewrite the book in 2018, what would he change? Would he remove chapters, focus more on certain points include new topics, etc.? That’s about it. Thanks for all the resources, podcast stories, etc., that you guys have openly shared. Been a constant inspiration for me and hopefully one day I’ll be able to share my own story on how much you guys have impacted my life. Best regards, Ken.”
Mike: I think I know the answer to this, you’d rename it to Start Small and Get Big.
Rob: I don’t think I would.
Mike: No?
Rob: No. Because that’s the thing. Obviously that’s what I wound up doing when I was starting small and then going into something much bigger than I had originally intended. But I still think there is a really good case to be made for doing this kind of micro SaaS or micropreneur approach where you just have a lifestyle business and you never need to worry about all the headaches that I dealt with starting in 2013 of growing this company larger. It obviously came with rewards as well but I also think it’s a totally viable approach to start small and stay small. I wouldn’t presume just because I did something that everyone should. You know what I’m saying? I think it’s totally legit that startup business make low six figures and if you’re happy with that, man, that’s a great life.
Mike: I was just pointing out that it should have been renamed to Start Small and Get Big just because on your website where’d you go to sign up for your newsletter, it says exactly that. And then there’s also that in the Drip widget where you can sign up for the newsletter.
Rob: Yeah. Which I did that once Drip started getting big. I realized I’m not just talking about staying small anymore, isn’t even that appropriate. I need to rename that headline anyway. I’ve kind of neglected that unfortunately. That’s on my personal website at robwalling.com.
This question is interesting. I’ve thought about it a bit over the years. To be honest, I had not opened my book, I mean it’s been five years since I went back and looked at it all, maybe more. This forced me to go back and take a copy and flip through it. What I’ve realized is that so many of the concepts are still 100% valid today, it’s some of the tactics that are not. I go really deep. I thought it was like half the book where I deep-dive and then like break out, I forget micro-niche finder, or market samurai, and I click this button, and I have screenshot, almost like it’s some web tutorial but it’s only 5 or 10 pages of the book is that and that’s the part that I would remove because that part changed so fast. It was like probably less than 18 months after it’s published, a bunch of those links and screenshots were just invalidated. Realizing that it’s a book and it’s not a living, breathing online course that I can edit easily, that is part of it that I would pull out.
I would still talk about niching down, I have a lot of concepts in there to still hold but I would remove some of the tactics that—and again it wouldn’t be a huge chunk of them, it would be a small part of the book—but there’s tons of stuff about outsourcing and hiring VAs, the mindset, and product last, market first. All that stuff I still hold true.
I was trying to think of anything else that I would add today, certainly there are marketing channels I didn’t even cover like Facebook ads that are probably mentioned. I would double down. I had a whole section of building your email list, I would probably expand that given how much more powerful I believe email is today and how much more I know about it.
I wrote the book in 2010 in essence, you can say I’ve learned quite a bit about it in eight years so there are parts that I would expand. I have butted this around obviously for years and I get talked about every since I started going even slightly how the data I was going to do an updated version or second edition, I toyed around, I talked to a couple of publishers, talked about doing a little more of a mainstream release. It’s still in the back of my mind somewhere to go back and revise it.
Flipping through the book made me realize I always thought that’s going to be too much effort, it’s going to take a tremendous amount of time, might as well write a new book, but that’s not the case. It wouldn’t be near the effort of writing a new book. As I flipped through it I was like, “Oh, this stuff’s still really good content that’s applicable.”
What do you think? You think I should go back and redo it?
Mike: I think that there’s definitely room for a second edition. It really depends on whether or not you want to go through and have a second edition versus writing a new book. Obviously if you write a new book, it’s going to be a different topic of some kind. But whereas if you’re simply revising the current book, it’s obviously a lot less work and you could probably bang that out in like a couple of weeks. It’s not like it’s that much effort, I don’t think, because really you’re just cutting out a bunch of pages where it’s hyper-specific, and the tools themselves or the URLs have changed, or maybe you replace the tools or you drop the pages entirely, and there is probably a few things that you left out that you want to add, maybe stories that you’ve shared over the years that resonated that with people that never just made it into the book or better examples you have of different things. I think that with the book itself you’re mostly concentrated on your own experiences. I doubt you’d go into sharing things that you’ve heard from other people but like specific examples from other people but I don’t know. It’s a toss up, I guess.
Rob: I think that’s a good point. As you were talking, I realized that was the one other thing that I felt was a bit dated with the examples I used. I used a lot of my own examples because there was really no one else that I knew. It was like Patrick McKenzie, Ruben from Bidsketch, Harry and Ted from Moraware. Then I used a bunch of the sites that I owned in Basecamp. It’s like there just wasn’t that much going on in 2010 when I was reading this in terms of the bootstrapping and the Micro-SaaS in the micropreneur space. Now I have dozens if not hundreds of examples. That’s where I could really beef it up.
I don’t know if I would go so far as to interview people or you and I just know the stories of so many people who have taken this approach, whether they’re Founder Cafe lifetime members, or they’ve come to MicroConf, or they listen to the podcast, or they’ve read one of our books, we just have that knowledge so much more. There’s so much more of a community than there is today. Now I’m kind of fired up about it as you’re talking about it.
It would be almost fun to go back and see, because you’re right if I write another book, it can’t be on that same topic and I wouldn’t even have the interest to really focus on that exact same topic today. But rewriting it and just making it better is actually something that I think would be interesting. Thanks for the question, Ken. I’ll definitely keep noodling on it and see if it leads anywhere.
Our next question is a question about SaaS pricing. It’s from François at cloudforecaste.io. He sent us a couple of questions I think. He says, “I’m reaching out to you again because we’re trying to figure out our pricing model for a new feature. Here’s my question, cloudforecaste.io is currently helping our clients monitor their AWS cost and we are now working on a new feature to help them save money.
The new feature will tell them how they can easily save money by fixing naive mistakes, unused resources, reserved instances, etc. on a weekly basis. We have a hard time figuring out the pricing since the first email is much more valuable because there’s a lot of potential optimization then the email in the third month, or the fourth month, or whenever. The first one’s going to have a lot of value.
The value also depend on the size of their AWS account. Here are a few ideas we have in mind, first one is a percentage based monthly price based on their overall spend. Second one is a flat-monthly price based on their overall spend. Third one is an expensive first email followed by a low flat-monthly price. The fourth one is remove the weekly cadence offered as a stand-alone product, and charge a percentage of what they can potentially save. Looking forward to hearing your thoughts on this. Thanks for the podcast.” What do you think, sir?
Mike: I think this is a really interesting question just because there are situations where people can really undervalue what a piece of software can provide for them. I can definitely see, there is an analogy for this situation which I saw, I think it was an online tool where you could go and somebody would basically build an example of how to use as your services or something like that and they were letting you put in your email address and find out if it had been hacked across hundreds of millions of records. It was coming back too quickly. People did not believe the results that they were getting because it came back so fast. They ended up inserting some artificial delays into it to make it appear like it was doing more work than it actually was.
I’ve heard similar examples in other places as well from different people doing different things and this seems to me like that’s one of those situations where people may look at that and say, “Oh, your software is doing this but I don’t value it as much even though I’m on paper saving a heck of a lot of money.” I wonder if the solution to this would not be to price it like as a stand-alone thing but to price it as, “Hey, here’s a service that we offer and it’s X thousand dollars or a percentage of whatever the monthly prices that’s saved,” and you offered it as such as a service, not as something you can just go in and automatically get this report that shows you all this information. That way gives the impression that you’re doing all this extra work and analysis.
The reality is most of it’s automatically generated but it’s based on all the work that you have done already. Then the ongoing monthly reports could be some flat-monthly price that is related to their overall spend to kind of help them save money. Because that first email, I totally agree that if you’re saving them a heck a lot of money up front, then trying to go down the path of having a SaaS pricing model that is variable in some way that reflects the value that you’re providing to them is really not going to work very well. I think that positioning it as a service as opposed to like, “Hey, here’s this off-the-shelf thing that you can buy that the software will do everything for you, that’s probably the approach I’d at least look at and test it out with a few people first.
Rob: You’re saying like present it as, “Hey, we do this manually type thing,” maybe not coming out and saying that but like, “This is a valuable service the we offer,” and don’t imply that software is doing all of it.
Mike: No. I wouldn’t say that, I would say that it is not something that you can go in, you can just click a few buttons, and automatically get the report. You have to talk to somebody in order to get it.
Rob: I see. Yeah.
Mike: Yeah. That way you can look at that and you could almost give them a ballpark estimate or price based on what you’re seeing from the stats and say, “Hey, this is the price that we have for this and we think that you’re going to save probably in this neighborhood.” You could give them a range like they’re going to save $10,000-$20,000 a month. You can tell them that and you say, “This is going to be $5,000 and just ballpark looking at what you’ve got, this is what we think you will save.” Then when you give them the actual report, it will show them exactly the steps they need to do that will both give them $17,000 a month in savings.
Rob: Yeah, that makes sense. I think that’s a pretty good approach, actually. I’m kind of torn on a couple things, I think the percentage based on how much they spend, it’s very logical, I’m curious to see what customers think of that. I guess it all depends on what the percentage is. I guess it makes a lot of sense, you can tell I’m torn on it. I like that you have better flat pricing but I actually do think the percentage could make a lot of sense because when we were tiny, and bootstrapped, and AWS bill was $5000 a month and if you said it was 1%—that’s $50 a month—that would probably have been a no brainer for me. Then of course once you’re doing $30 or $40 a month it is worth more, and at $300, $400 a month kind of feels equivalent. That’s probably what I would lean towards as this percentage.
I think trying to make the first email more expensive, I think it’s kind of a tough call. I don’t think I would go that way. But I would consider making this kind of an annual only thing that you give, they can get a sample email or they can get the first 20% of what the email looks like. You give them some information to prove that it does something.
Then like you said, they have to talk to someone in order to get this and it’s relatively high-priced and you do annual. The challenge with annual is their spending’s going to go up and down over the years, so how do you build a whole year when metered in a sense, with that you can either do it on a credit-based system or you can bill them where they are today and then bill them just the incremental each month, if they’re up or down you can keep it there.
I think this is an interesting thing with their two data the points in essence and I think talking to either existing customers or prospects is going to be your next step to basically say, “We’re going to do it based on a percentage and it’s going to be quarterly only or it’s going to be annual only. Do you want to sign up?” That, you are going to see if the rubber meets the road at that point.
Our next question is about sponsoring events as a SaaS marketing strategy. This is from Ed Freyfogle who is a speaker at this year’s MicroConf Europe. He says, “Given that you’ve run many events, I’m wondering what you think of sponsoring events as a marketing strategy? Particularly, I’d love to hear any tangible tips or best practices you’ve seen from sponsors as a way to make the most out of an event in terms of general brand building, but also specifically winning new customers.” What do you think, Mike?
Mike: Obviously, I run the sponsorship side of MicroConf so I have a lot of thoughts on this and I’ll try to keep them briefer than I would if we were doing an entire episode on it. When you’re looking to sponsor events, the thing I would keep in mind is that before you even try to figure out which events you’re going to be sponsoring, figure out what your goal is.
If your goal is to build brand awareness, then make sure that you know that in advance. You don’t try to do things that go outside of building brand awareness. That would include going to events or conferences where it’s not the right audience for building brands, like if you’re selling a marketing tool, going to a developer’s conference, obviously like there’s probably a little bit of crossover if you’re going for entrepreneurs but you don’t want to just build brand awareness with developers if they’re not the ones making the decisions. Because if you’re trying to get customers, you want to be able to get in touch with the decision makers, not the people who are at the other end of it, like the bottom layer of the organization.
The other thing I think to keep in mind is that when you are talking to people at a conference or an event, how close are you to the decision maker? How many hops are you going to have to make between the person that you talk to and the rest of the team or the people who actually make the decision? Because you may be able to run into the people who would use your products but they don’t necessarily care.
For example if you sell transactional email service of some kind and you go to a developer’s conference, those developers may not actually care about deliverability rates. The marketers would, but they’re not the ones that you are talking to. You’re going to have to convince the developer to give you an introduction to the marketer or whoever the VP of sales is that is going to say, “Hey, this deliverability is important to me and we should possibly switch providers in order to get better deliverability.” Those are the types of things that I would think of to start off with, and then beyond that, you want to stand out from the other sponsors.
If you have an opportunity to customize whatever it is that you are doing, whether it’s a specific giveaway to the audience or you are trying to drive traffic or drive conversations with people, figure out ways to do that so you might do like up Q&A session that is informal either during lunch, or after the conference, or during one evening event, something along those lines. If you do give away, you can provide people with that giveaway as a link and then you capture their email address.
The other thing is make sure that when you attend these events, if you try to sponsor an event from afar, it’s probably not going to get nearly the level of engagement or awareness that you’re looking for so make sure that you have business cards to hand out and make sure that you collect business cards or contact information from people while you’re there. Then once you’ve done that, absolutely make sure that you follow up with those people to take it to whatever the next logical step happens to be, whether it’s to having other conversation, or to get on a demo, or to just discuss what sorts of things you’re doing.
The last piece of advice I’d say is to make sure that if you can lead things in that direction to get to a promise of a future conversation and not suck up somebody’s time at the conference, that’s also not a bad thing.
Rob: Awesome, yeah. I’m actually going to leave it there because I feel like you have so much more experience dealing with this topic. I think that was a pretty good little primer there. We’ll probably do a whole episode on that, huh?
Mike: Probably.
Rob: Our next question is a subscription box company asking about technical issues and funding. It’s from Tyler Turk at cratedwithlove.com. He says, “I’m a Fresno-based startup and I have a question for you. I own a subscription box company. I found the company with my wife while attending Fresno State in 2015. In our first three years we’ve accumulated over $500,000 in revenue. I’ve been pretty much on my own from a business perspective doing all the ideation, curation, and even packing and shipping. My wife helps occasionally.”
They’re a monthly box subscription company obviously and it looks like they’re kind of date night boxes. You would buy it and then there’s activities and stuff for you to do with your significant other. Our biggest weakness right now is our technology and product market fit. We have a large amount of subscribers that have been with us for two years or more and the average active subscriber stays about eight months. But our churn is higher than we’d like. I know where the holes are in our website but I lack the technical skills to fix them.
In addition, I think the future of our company is more digital but I’m having a hard time figuring out how I pitch the future technology based on the data from the physical products we sell now, especially since the biggest needs are technical. I feel like I’m in a vicious circle where I won’t be able to raise money I need to scale until I fix our churn problem, but I can’t fix our churn problem until I get funds to fix the technical problems. I have two questions, is a startup from a smaller market with no relative experience in fundraising or network in larger markets, where should I start? Second, how do I transition from a product-based company to a tech company or a hybrid of both using the data I have now to support our pitch?” Do you have thoughts on either of those?
Mike: With these two questions, just before I answer them, I do want to kind of at least comment on one thing. Tyler said that he has a large number of subscribers that have been there for two or more years and the average subscribers stays about eight months but the churn is higher than they’d like.
I’m not sure exactly what the problem is on the website that would have any bearing on that. I’ll say an open question that I might have on that. If you’re sending those emails to them and they are making purchases and sticking around for a while, what is it about the website that would make them go away? Are things fundamentally broken which are causing people to drop through the cracks or is there something wrong with your email provider? I’m just kind of curious about what that is.
But neglecting that, going back to the two questions, the first one which was as someone who have no experience with fundraising or network some larger markets, how should I start? Coincidentally, one of our sponsors from MicroConf this year is called Bigfoot Capital. They provide funding for subscription-based businesses. I think that they’re focused mainly on SaaS businesses but this is a subscription business so it might fall under their wheelhouse, you can go check them out at bigfootcap.com.
Basically what they do is they look at your financials and they have a wide variety of people that they have provided funding to and they give you a loan. That loan is whatever percentage but it’s going to be based on the risk that they see, and you’re probably going to have a much better chance or opportunity of getting a loan to address some of the technical challenges that you have from somebody like that than you would from a traditional bank who has absolutely no understanding of online businesses. They just don’t get it.
He asks with $500,000 revenue over 3 years, they may be able to do something but my guess is that they just do not understand. I would look for some sort of private funding like that. I don’t know about fundraising—Rob, you could probably speak to them.
The second question he has is, “How do I transition from a product-based company to a tech company or a hybrid of both using the data I have now to support our pitch?” I think we’re going to have to make some assumptions here because I don’t really understand what you are specifically intending by that. But my assumption is that what you’re trying to do is take your current offerings that you probably sent to people physically through the mail, whether it’s worksheets, or PDFs that you deliver digitally, basically make them into online worksheets that you can fill out on the website and share them, or through your app, or something along those lines.
With that in mind, I think that you need to test some of these things out and get information from the subscribers that you currently have now. Can you get hard data that really says, “Hey, this is why I left, and it has to do with like the convenience factor.” Because I think that if you try to look at this as a way to simply cut costs, like if you’re suffering from a problem were your cost of goods sold is too high and you’re trying to cut into that, I don’t know if going down the road of automated things and putting all this technical stuff in place is going to really change that because developers are going to be expensive to build all custom stuff for that. I think that you’re really just going to end up burning a hole in your pocket to try and build that stuff.
In the meantime you’re still paying those current costs for the goods that you’re selling. Later on, you’re still going to need to have ongoing updates, and maintenance, and things like that. There’s always going to be a subset of people who do not want to switch from the physical stuff that they are already getting, so then you have to make some decisions about do you cut those people off and abandon them, or do you try to move them over and say, “Look, if you don’t move, we really can’t do anything for you,” or you just force them. Those are the things that I would have to say about that. Rob, what are your thoughts on this?
Rob: Yeah. I would definitely agree on the second part about trying to move into software I think is a great long term play but I would not do that without funding if you’re not technical because it’s just going to be really expensive and you’re going to get more bang for your buck if you take whatever earnings you have and put them essentially back into the business.
I do agree that this is the kind of business where funding is actually kind of meted like physical goods are just really time consuming and really expensive. At a certain point you’re going to need a small warehouse, you’re going to need to pay rent, and the margin on physical goods obviously is nothing like software. This is one of those cases where I think, especially since you have some traction—because if you look at an 8 month lifetime is 12%, 12.5% churn and that’s not terrible. You want to improve upon that, obviously, and it sounds like you have some ideas on how to do it but there are companies raising funding that are pre-revenue in let’s say the $1-$3 million dollar range. If there’s like a proven founder, they can raise $4 million or $5 million pre-revenue. If they’re in Y Combinator, they can raise $10 million or whatever.
The fact that you have revenue, and you have some type of numbers, and you have a business model, and you’ve shown the hustle over three years, it’s a big plus. For angel investors, I’m not saying it’s going to be a slam dunk, it would be great if you had a network but if you raise $250,000, I would say you’re not raising enough. I think you probably need to raise half a million. I mean you really need to look at what you want to do with the money. If you want to do a series A later, then you have to think, “I want this money to last about 12 to 18 months.” If you never want to raise a series A and you want this to get you growth and then take you to the profitability, that I think somewhere between $250,000 and $500,000 is a decent number.
In a couple of ways, I would get on AngelList, angel.co, I would try to connect with either local investors because there is money to be had, I know it’s crazy but there’s money, to be had in the Central Valley of California. It’s lot of farmland but there are a lot of people who’ve made money and want to invest especially in local startups.
Since I happen to have the hometown advantage of having lived there, industries downtown, that’s the tech hub for really Fresno and the Central Valley, that’s why I would somehow get on their radar, they have pitch competitions every once in awhile, I attended one when I still lived there and there were three or four startups that pitched. With your story, I really do think that you could hustle and raise the money. You’ve already shown that you have the hustle to see this business through for three years on your own and sort of me raising funding is not actually going to be that difficult for someone with the focus and the kind of the grip that you’ve shown already.
That really would be my next move if I were on your shoes is to go out and again I would raise an angel round. I would probably stay away from institutional money where it’s someone investing in someone else’s money because they want quite a bit of control and there’s complications with that but it certainly is interesting and a vortuitous place to find yourself in.
Really nice work on this, man. You’ve done something that not many people can do, A, getting in business to last for three years and essentially I guess break even or be profitable, and B, to do it with physical products. Good for you. Thanks for the question, Tyler. I wish you the best of luck moving forward.
Mike: Are we all set for today?
Rob: We are, that will do it.
Mike: If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 389 | Pro Tips for Attending Conferences
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike share tips for attending conferences. They discuss things to do before, during, and after a conference in order to get the most out of the event.
Items mentioned in this episode:
Mike: In this episode of Startups For The Rest Of Us, Rob and I are going to be talking about pro tips for attending conferences. This is Startups For The Rest Of Us episode 389.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: Doing alright. I was just thinking, the subset 389 man, we have 11 more episodes until episode 400.
Mike: That’s insane.
Rob: What kind of cray-cray celebration are we going to do for 400?
Mike: Or what sort of group therapy are we going to have for the people who listen to 400?
Rob: I hope that there is no one out there who’s listened to all 400. That would be catastrophic.
Mike: We should have Sherry come on and just do a group therapy session for Episode 400. I think that’d be prudent.
Rob: I agree. If we just said 30 minutes per episode, that gives us 200 hours, which is 8.33 days straight. Whereas if you stayed up, you could hear the entire journey of this eight years and eight days, wouldn’t that be crazy?
Mike: Yeah. I don’t know if anyone would even attempt that.
Rob: It wouldn’t just be crazy, it would be clinical, you should get committed for trying to do something like that.
Mike: Yeah, definitely, definitely.
Rob: But we do have 595 worldwide iTunes reviews. You know what I’m going to ask you, the listener, to do? Get is to 600. Seriously. In the next couple of days, this comes out on a Tuesday, I would love that by Friday of this week, we’re over 600 reviews. Some of our recent reviews include awesome show, highly recommended from [00:01:52], he says, “Rob and Mike are truly two of the best in the biz at expertly extracting those bits of gold listeners are looking for.” We really appreciate reviews of course, and it does help us spread the word, keep us motivated to do it. Right now, we are accepting five star reviews, five stars reviews only, and look forward to seeing that number tick over to 600 well before our episode count/ticks over the 400. How about you, what’s going on?
Mike: I’m still doing a lot of stuff to prepare for MicroConf but last night I drove into Downtown Boston, into Cambridge and went to Wistia. They had a panel of people discussing how to use video and your marketing efforts, and different ways to use to it, different parts of the funnel that you can address to it. It was very interesting, it was nice to get some perspective from people who are actively doing it a lot as opposed to just reading around certain things. I wouldn’t say that it was a course, but it was definitely a crash briefing on things to pay attention to and edge cases that you might run into. It was cool to meet everybody there as well.
Rob: Oh, that is fun. That’s always nice to get out and go to events like that. I really enjoy those, as long as there’s at least some cool people to meet or some type of cool presentation that’s given out that provides value and gets me thinking about things. I do enjoy hitting up a local event just to see who’s in town in my field every once in a while.
Mike: I did get some laughs when people asked me why it was that I came in for that. I said, “I haven’t left the house all weekend. Figured it was about time.”
Rob: Yeah, totally. Alright, what are we talking about today?
Mike: In preparation for MicroConf, I thought it’d be a good idea to go through some pro tips for attending conferences and I know that we’re probably going to give some advice about attending MicroConf specifically but there’s also a lot of general advice in terms of how to approach going to a conference. This isn’t something that I think we’ve talked about specifically before. We’ve touched on it in a couple of episodes here and there but we never really just sat down and gone through what sorts of things should you do in preparation for going to a conference. Whether it’s a business conference, or a developer conference, or marketing, or what have you. I thought it’d be good to go through that stuff and give our own take on it since we do run a conference.
Rob: Cool. Let’s dive in.
Mike: Some of this is loosely based on an article from Justin Jackson, he specifically talked about MicroConf. We’ll link that up in the show notes. I did want to call that out before we get started into this. The first thing that came to mind when I was putting together this list was making a point to look up what the weather is in advance and plan accordingly. I just think that I remember last year at MicroConf where it was late at night on I forgot how far into the conference we were but we were standing outside and it was freezing. It was not something I had actually thought about doing because I was like, oh, it’s Vegas, it’s a desert, it’s going to be generally warm and I hadn’t realized how much earlier in the year it was and how much of a cold wave was going through the country at that time, I did not dress accordingly for it.
I think that that’s the thing that I would say is pay attention to what the temperature is and actually go look at it, don’t just assume that it’s 70 degrees and it’s sunny because it may not be.
Rob: Yeah. That’s a good point. Especially the desert gets really cold at night. I’m just looking at the forecast for the next week in Vegas and highs are all 80s and 90s but the lows get down 61 and when it’s 61 and it’s dark and there’s no sun and the wind’s blowing, it’s pretty dang cold. Have some type of long sleeve because often aside from just my collared shirts, I don’t tend to think about bringing a long sleeve shirt to Vegas, but of course, in this case, you’re going to want some type of light jacket or windbreaker or something.
Mike: And also because it’s a desert, you have to pay attention a little bit to the climate because it does get cold and because it’s a desert and so dry, you have to bring ChapStick or lip balm or something like that. It’s something that I just happen to keep it in my jacket at all times anyways so I never have to think about it, but if you’re not the type of person who travels a lot or just keeps it around, it’s definitely worth thinking about stuff like that.
Rob: Yup. What I used to do is I used to get to Vegas and then my lips would get all red and chapped and then I would start applying it, and my lips look like Ronald McDonald’s lips because they were red and then they were all glossy. What I do now is bring it with me, from the moment I hit the ground, I start applying it, and that’s worked for the past three or four years. I also drink a ton of water. I bring my water bottle and pretty much a refillable one. From the time I hit the ground, I’m just chugging water constantly.
Mike: The other thing is that there’s also the opposite problem sometimes where if you go someplace and you don’t have gloves, for example, when we went over to FemtoConf in Germany. It was cold enough that it started to snow in certain cases. It’s like you have to just bring the things that you need for that type of weather. Even if you don’t think that you’re going to be outside very much, make sure that you have those things available and consider them before you even walk out the door. I’d say the bulk of the first third of this particular podcast is going to be to all the things that you should do before the conference, before you even get on the plane to go there.
Rob: Another thing you want to think about is spend time in advance to consider your goals for the conference. Think about if there are specific people that you want to meet. You can research attendees, you can look at the speakers, and make it a point that you introduce yourself or try to catch a meal with somebody. Think about the types of relationships you want to establish. Who can you help and who can help you now or in the future because that’s one way to make a conference so much more valuable is to be really deliberate about who you are going to hang around with and who you’re going to surround yourself with while you’re at the conference.
Of course there’s always serendipity, especially at a really focused conference where everyone is doing interesting things. Almost everybody you meet is going to be a fun conversation. But I’ve got to get more value myself out of conferences when I look at the speaker list, look at the attendee list and really pi point who it is that I want to talk to and about what.
Tacking onto that, also I think of two other things, one, are there any questions that you want answered? Are they questions you want to just ask a bunch of people, do you want to ask a specific person, do you want to ask knowledgeable people? I know that Harry and Ted from Moraware Software do a really good job at this. They come each year to MicroConf with a question that they are thinking through, and they get a bunch of knowledgeable opinions on it and I’ve heard it helped shape their decision making.
And then finally, are there any topics that you really are interested in discussing, even though it’s not a question you have but something that you think is going to be relevant to attendees.
Mike: Or if you just want to use somebody as a sounding board because you have a particular thought in mind about hey, there’s a problem that I have, or some sort of challenge that I’m facing. I’d like some external opinions on it. If you’re working at home, or at a remote office, or remote office environment where you go to work and you sit down and you don’t really talk to any co-workers all day except over Slack or email or anything like that, it can be very isolating and you don’t get the benefit of having brainstorm sessions or a lot of external input into your thoughts and thought processes. It’s very helpful to have those topics in mind and written down so that you consider them in advance instead of, “Hey, I want to get other perspectives on this,” and then take them to the conference and hash it out with people, just to hear what they have to say.
Another thing to do is to do some pre conference networking and try to find out who’s going to be there. If there is a conference coordinator that is putting things together, whether they have an online community or something like that that they’re building, or a Slack chat. Anything along those lines, it gives you a sense of who else is going to be at the conference. Try to find out who’s going to be there and reach out in advance of the conference to people that you really want to spend some time and meet.
Whether they are new people that you want to introduce yourselves to, or you’re searching for people who are experts in this particular field or situation, you can always go out to that list or that community and ask them like, “Hey, can we schedule breakfast or lunch or chat for a few minutes?” Even if you just want to put your name on the radar so that they’re actively looking for you and if you happen to be in a conversation, they say, “Oh, I remember I got an email from you or a message from you and you wanted to talk about X.” Just being able to put your name directly in front of them with a message that says, “Hey, I wanted to talk to you about this. I’d love to chat about this for X minutes or whatever.” That will help you establish some of those relationships.
Rob: Another thing is to research local travel and potential scams or things that could trip you up. A few years ago, Vegas didn’t allow Lyft and Uber into the airport. I think before that, they didn’t have Lyft and Uber, they didn’t allow it within city limits. And then they eventually allowed in the airport, and now, it’s everywhere. You can take a Lift at the airport. But before then, it was either a shuttle, or you can just grab a cab, and it’s so close to the airport, it was not worth doing a shuttle because it took a lot longer. It’s things like that that can save you a lot of time and a bit of money.
And then another thing is, talking about potential scams or whatever, before we went to Portugal last year, I was reading through the Lonely Planet and they said pick pocketing is really big there. That just made me more aware to have everything zipped up. And then you had mentioned that the cabbies that drives south out of the airport, they go this long way around right on the freeway, it’s a much longer fare because it’s almost right next to the airport.
Mike: Yeah. That was a classy scam several years ago before Lyft and Uber came around because what would happen is that people would get into a cab and the cab would say, “Do you want to take the highway to the hotel or do you want to go north?” They wouldn’t really give you a clear indication that the highway is actually south out of the airport, then you have to go all the way around. They would really just basically scam you because they could.
I remember that specifically happened to Andrew Warner because he wasn’t paying attention back in 2011 and he was telling me about it afterwards. I was like, “You totally got scammed by them.” Which sucks but at the same time, you wouldn’t know that unless you actively looked for that, either behavior or things to watch out for.
Rob: Another thing to do is to install or update the conference app before you leave. Often, conferences will issue a new app each year or you can update it and get the updated content and that’s certainly something that you can think about. You can obviously do that on site too, but I know that before I leave, I’m downloading a bunch of shows for the plane, I’m downloading any new games or anything to play on the plane but that’s less about for the conference and more just about the travel.
Mike: Yeah. But I think it’s important to make sure that if you have a bunch of updates to your apps, or your phone, or your laptop that you get those things taken care of before you hit the road so that you’re not trying download stuff over wifi because you don’t always have a lot of control over what gets downloaded when or what’s updated first or you may not even have a lot of bandwidth to work with. Like oh, I suddenly need to install this app so that I know where to go next, and then all this other stuff is in the way and taking precedence then you have to wait a heck of a lot more time to get it done.
Another thing to make sure you have taken care of is your passport and travel documents of any kind. Make sure that they’re up to date before you leave. I have heard of people who’ve forgotten to get that stuff taken care of before they go for a big trip that they’ve been planning or they planned three months, six months in advance, and they didn’t think about that, and then suddenly the night before or the day of, they realize oh, this stuff is out of date and it’s going to take three weeks to get it taken care of and I can’t go. Be mindful of those types of things as well. Because there’s literally nothing you can do at that point. You can’t argue with TSA agents, for example, if you’re trying to go to another country.
Rob: Yeah, that’s brutal. I’ve heard of few friends who’ve had that where their passport expired or even if it expires within six months or something, and when you’re travelling, it’s pretty crazy. That would be a serious bummer to have to cancel a trip or miss a conference because of that.
Another thing to think about is figure out, potentially even rehearse your answers to common questions like what are you working on, what do you do, what company are you with, what are you hoping to get out of the conference. Just think about that stuff in advance so that it couldn’t come as a shock, you’re going to get asked the same thing over and over.
And, think about what questions you want to ask of people. Often times, I will try not to ask the same questions that everyone else does. Typically, I want to get to what are you working on, what’s really interesting you right now. I’ll often ask people what books they are reading or listening to to try to get more ideas, or what their favorite podcast is. Just because people like to talk about themselves and share their knowledge, and if it’s something new that I haven’t heard, that’s good. I totally want to add it to my content queue if you will. That’s a perfect place to do it because I’m surrounded by people that are similar to us, they’re one of us in essence.
Mike: The opposite of that is also true. Make sure that you have some ways to gracefully exit a conversation whether it’s hey, I need to go get a drink, or use a restroom, or you need to go take a phone call, or make a phone call to somebody, to call your spouse or significant other, or you just see somebody else that you really wanted to meet and you need to step out of the conversation and go talk to them.
This is more about protecting your time and making sure that you get the most out of the time that you are there. Because sometimes there’s a conversation going on and it’s not like you don’t like the people that you’re talking to or you don’t appreciate the things that they have to say but you have other things and other priorities that you need to pay attention to and your time is one of them. Because your time at that event is very limited and it will be over before you know it.
Rob: That’s a big deal. Don’t get cornered and get stuck talking to someone that you don’t have anything in common or the person is just talking too much and it really isn’t providing value. Like you said, you only have a limited amount of time. It’s not all about take, take, take. It’s about giving some value as well. But there are just some conversations that are mutually awesome and you know that’s going somewhere and you know that it’s valuable. Other ones, they just wander and you realize this is just mindless and I don’t really want to do this. Really be mindful and figure out how you’re going to gracefully exit those kinds of conversations.
Mike: Now we’re finished talking about the things that you should do before the conference, let’s talk about the stuff that you should pay attention to at the conference. You already mentioned this, the number one thing I think is to stay hydrated and there’s a corollary there which is to also get enough sleep. But with the hydration, if it’s the type of conference where you’re going to be talking a lot, you’re going to find yourself dehydrated. Make sure that you are drinking enough water to get you through the days.
There are certain environments, like a desert in Las Vegas, that’s going to amplify that. It’s going to make you even more dehydrated, so does alcohol. You have to be careful about that stuff because it’s very easy to go to a conference in Vegas and I’ve had this happen to myself where I didn’t drink anything alcoholic, it was just water, I didn’t drink enough water though. I woke up the next day and I felt hungover even though I hadn’t had anything to drink. That’s just going to impact the rest of your day. You do have to pay attention to how much water you’re drinking.
Rob: Big time. It’s easier said than done to say get enough sleep, but I have really found that I enjoy conferences more when I am at least getting seven hours of sleep and I can feel rested getting into it, otherwise I’m sitting in a ballroom for seven to eight hours, and I’m tired and not listening. You’re not getting a ton of value from things anymore.
It’s easy to hang out especially when you’re at a conference with friends, and colleagues, and relationships that you’ve built and you only see them once or twice a year. I think that making a graceful exit at midnight and getting your solid eight hours. That’s something that we’ve done past couple of years with MicroConf is we moved the start times of all the conferences to 10:00AM, and I actually think that was a really good idea because we’ve gotten positive feedback about it, about how people have time to get breakfast together, especially people who are on later time zones, Central or Eastern time zone. But it also just allows if you do stay up late, it’s just gives you that a little bit more leeway. You could feasibly wake up at 9:00AM and still have a nice breakfast and get to the conference on time.
Mike: What do you mean feasibly? I think we do that, don’t we?
Rob: That is what I do. I was trying not to be too overt about it, but yes. I’m not embarrassed to say, even though I should be on Central time, 9:00AM is like 11:00AM for me. I think last year, I had to set my alarm for 8:30AM and 8:45AM both days. All four days of the conference just to make sure that I didn’t sleep through it.
Mike: One thing that I found to be a little bit less valuable over time is taking notes at a conference. I used to be the type of person who go to a conference and I would take pages and pages of notes. What I realized overtime was that I was writing down stuff but not necessarily paying attention to how important it was or whether it was new to me. I’d have these pages of notes and a lot of it turned out to be irrelevant, but I was writing it down just because I felt like I should because the speaker had said something or commented on it.
I was trying to create almost a transcript of what they were talking about and the reality is if you already know that stuff, don’t bother writing it down. Only write down the stuff that is new, or that you find insightful, or if an idea pops into your head and you find that it’s going to be actionable. Those are the things that you need to write down because you will probably forget them later on. But the stuff that you already know, there’s no need to write that stuff down.
In addition, there’s usually other people who are taking notes or there may even be an official note taker for the conference, a lot of speaker make their slides available for after their talks, definitely write down the URLs for those, or get them from the conference afterwards if they’re collecting them and just distributing them. But don’t feel compelled to write down every little thing that the speakers say. Just write down the stuff that’s important.
Rob: Another thing to consider is to think about asking questions during speaker Q&A. It’s a valuable opportunity to get interesting feedback. Obviously, be respectful of time and whether an answer to your question is generally applicable to other people. You can always follow up with the speaker when they’re off stage.
I do think that part of the beauty of a conference is everybody is in the same room. One way to bring value is to ask interesting questions. That gives you an excuse to then follow up later if you ask a question a speaker answers in general and you can come up and say, “Hey, I actually have this specific thing I want to talk to you about.” But if it is generally applicable, it can be helpful to the whole audience. I think that’s good to give back to community in that way.
Mike: A really nice way to stand out in the minds of the speakers who are presumably leaders in the community is to thank them directly if you found what they were talking about helpful. I would obviously encourage people to put feedback into the conference surveys but I think that for most speakers, it’s really helpful for them and gratifying to hear that somebody got a lot out of their talk. Definitely make it a point to thank them and if you have follow up questions, don’t hesitate to ask them after the talk, especially in situations where if you have a question that you think you might want to ask during the Q&A session but you realized that that question is so very specific to your business, or your particular problem, then save that for a later conversation when you’re not going to be using other people’s time to hear an answer to a question that just has no bearing or relevance on them.
Rob: Another thing to do is to make sure that you are social. It’s easy to go and lock yourself in your hotel room and watch this week’s episode of Walking Dead instead of hanging out. If it’s a good conference, the hallway track is worth almost as much as or more than the actual speaker track.
With that said, I will say know your limits. Get out and meet people. There comes a point where that’s demising returns and you can become so tired or so over stimulated or overwhelmed that you’re no longer having fun and you’re no longer really getting that much value.
I think there’s a balance to be struck here. I do notice that as I get older, and as I go to more conferences, I’m still quite social but I don’t do the 4:00AM nights like the early MicroConfs. Maybe that’s just a factor of sleep but I definitely get my fill of conversation earlier than I did maybe seven or eight years ago.
Mike: Moving on to the last section of this is after the conference is over, take some time to follow up with the people that you met. Whether you exchanged business cards or contact information.
It was funny last night, when I was at the Wistia event, there were a lot of people there who would ask me for business cards, I’m like, “I don’t have business cards.” Certain conferences you go to, that’s the expectation and then there are certain ones where it really isn’t. But if you are exchanging contact information with people because you want to talk to them later, or follow up on a business opportunity, or ask them more questions, definitely make sure that you follow up with them and help maintain those relationships that you started with them and you can maintain those relationships over time. Don’t feel that you can just let those lapse because I think if you let more than a couple of weeks go by once a conference is over, and you’ve met somebody, I think it starts to become more awkward to reintroduce yourself to the person and you feel weird about reaching out to them. The earlier you do that after the conference is over the better.
Rob: Another thing to do after the conference is review your notes to see if you need to fill in any gaps. That’s a great thing to do on the plane. I’m assuming you’re going to take notes locally, you probably have no internet, it’s a great time to sit and think back, are there any takeaways or any people that I met or any things that I want to take away that aren’t in these notes? Because I like my notes to capture the entire event and really be able to refer back to them and refresh everything that came out of it because it can spark new information later when you view it through different eyes if you look at it 6 months or 12 months from now. Be sure that your notes are buttoned up and they don’t have to be super professional, but at least in a format that you feel like you can interpret them in 6-12 months.
Mike: Another thing I’d highly recommend, and this comes from the stance of an event coordinator but make sure that you fill out the conference surveys. I say this not just because it’s a nice thing to do but a conference is not going to get any better if you don’t provide them with helpful feedback or at least with a good sense of where their conference did well and where they didn’t. If you don’t give them an idea of where they stand, then it’s very difficult for them to make decisions that will help improve things moving forward.
Rob: And then finally, I think it’s helpful to reflect, especially if this is the first or second conference you’ve gone to. Reflect on your time there and make a few notes about what you feel worked really well and things that you regret that you did or didn’t do. Let’s just be honest in Vegas, there’s a lot to regret that you did. Use the list. Honestly, use the list to improve your ROI on conferences in the future. Without reflecting and looking at your process figuring out what worked and what didn’t, it’s hard to improve upon that in the future.
Mike: I don’t think that the things that you regret doing or not doing are limited to just being in Vegas. One thing that comes to mind is there has been conferences where I’ve gone to where I stayed up way too late involved in a conversation that really was not of any value to me. I ended up being extremely tired the next day, for no good reason. I felt like I’ll stay up because of the people here and you really have no obligation to other people to stay involved in a conversation if there are other things that you could or should be doing like going to bed and getting some sleep.
Rob: Yep. I’ve done that. I’ve stayed up too late, I have done the wasn’t social enough, didn’t meet enough people, wasn’t deliberate enough about picking up the people in advance that I wanted to meet, a lot of things in this list, I have certainly made those mistakes. With that, go to your next conference, enjoy it, and get the most value that you can, we hope to see you at this MicroConf happening next week or MicroConf in the future. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. As I like to say, voicemails go to the top of the queue.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: Doing alright. I was just thinking, the subset 389 man, we have 11 more episodes until episode 400.
Mike: That’s insane.
Rob: What kind of cray-cray celebration are we going to do for 400?
Mike: Or what sort of group therapy are we going to have for the people who listen to 400?
Rob: I hope that there is no one out there who’s listened to all 400. That would be catastrophic.
Mike: We should have Sherry come on and just do a group therapy session for Episode 400. I think that’d be prudent.
Rob: I agree. If we just said 30 minutes per episode, that gives us 200 hours, which is 8.33 days straight. Whereas if you stayed up, you could hear the entire journey of this eight years and eight days, wouldn’t that be crazy?
Mike: Yeah. I don’t know if anyone would even attempt that.
Rob: It wouldn’t just be crazy, it would be clinical, you should get committed for trying to do something like that.
Mike: Yeah, definitely, definitely.
Rob: But we do have 595 worldwide iTunes reviews. You know what I’m going to ask you, the listener, to do? Get is to 600. Seriously. In the next couple of days, this comes out on a Tuesday, I would love that by Friday of this week, we’re over 600 reviews. Some of our recent reviews include awesome show, highly recommended from [00:01:52], he says, “Rob and Mike are truly two of the best in the biz at expertly extracting those bits of gold listeners are looking for.” We really appreciate reviews of course, and it does help us spread the word, keep us motivated to do it. Right now, we are accepting five star reviews, five stars reviews only, and look forward to seeing that number tick over to 600 well before our episode count/ticks over the 400. How about you, what’s going on?
Mike: I’m still doing a lot of stuff to prepare for MicroConf but last night I drove into Downtown Boston, into Cambridge and went to Wistia. They had a panel of people discussing how to use video and your marketing efforts, and different ways to use to it, different parts of the funnel that you can address to it. It was very interesting, it was nice to get some perspective from people who are actively doing it a lot as opposed to just reading around certain things. I wouldn’t say that it was a course, but it was definitely a crash briefing on things to pay attention to and edge cases that you might run into. It was cool to meet everybody there as well.
Rob: Oh, that is fun. That’s always nice to get out and go to events like that. I really enjoy those, as long as there’s at least some cool people to meet or some type of cool presentation that’s given out that provides value and gets me thinking about things. I do enjoy hitting up a local event just to see who’s in town in my field every once in a while.
Mike: I did get some laughs when people asked me why it was that I came in for that. I said, “I haven’t left the house all weekend. Figured it was about time.”
Rob: Yeah, totally. Alright, what are we talking about today?
Mike: In preparation for MicroConf, I thought it’d be a good idea to go through some pro tips for attending conferences and I know that we’re probably going to give some advice about attending MicroConf specifically but there’s also a lot of general advice in terms of how to approach going to a conference. This isn’t something that I think we’ve talked about specifically before. We’ve touched on it in a couple of episodes here and there but we never really just sat down and gone through what sorts of things should you do in preparation for going to a conference. Whether it’s a business conference, or a developer conference, or marketing, or what have you. I thought it’d be good to go through that stuff and give our own take on it since we do run a conference.
Rob: Cool. Let’s dive in.
Mike: Some of this is loosely based on an article from Justin Jackson, he specifically talked about MicroConf. We’ll link that up in the show notes. I did want to call that out before we get started into this. The first thing that came to mind when I was putting together this list was making a point to look up what the weather is in advance and plan accordingly. I just think that I remember last year at MicroConf where it was late at night on I forgot how far into the conference we were but we were standing outside and it was freezing. It was not something I had actually thought about doing because I was like, oh, it’s Vegas, it’s a desert, it’s going to be generally warm and I hadn’t realized how much earlier in the year it was and how much of a cold wave was going through the country at that time, I did not dress accordingly for it.
I think that that’s the thing that I would say is pay attention to what the temperature is and actually go look at it, don’t just assume that it’s 70 degrees and it’s sunny because it may not be.
Rob: Yeah. That’s a good point. Especially the desert gets really cold at night. I’m just looking at the forecast for the next week in Vegas and highs are all 80s and 90s but the lows get down 61 and when it’s 61 and it’s dark and there’s no sun and the wind’s blowing, it’s pretty dang cold. Have some type of long sleeve because often aside from just my collared shirts, I don’t tend to think about bringing a long sleeve shirt to Vegas, but of course, in this case, you’re going to want some type of light jacket or windbreaker or something.
Mike: And also because it’s a desert, you have to pay attention a little bit to the climate because it does get cold and because it’s a desert and so dry, you have to bring ChapStick or lip balm or something like that. It’s something that I just happen to keep it in my jacket at all times anyways so I never have to think about it, but if you’re not the type of person who travels a lot or just keeps it around, it’s definitely worth thinking about stuff like that.
Rob: Yup. What I used to do is I used to get to Vegas and then my lips would get all red and chapped and then I would start applying it, and my lips look like Ronald McDonald’s lips because they were red and then they were all glossy. What I do now is bring it with me, from the moment I hit the ground, I start applying it, and that’s worked for the past three or four years. I also drink a ton of water. I bring my water bottle and pretty much a refillable one. From the time I hit the ground, I’m just chugging water constantly.
Mike: The other thing is that there’s also the opposite problem sometimes where if you go someplace and you don’t have gloves, for example, when we went over to FemtoConf in Germany. It was cold enough that it started to snow in certain cases. It’s like you have to just bring the things that you need for that type of weather. Even if you don’t think that you’re going to be outside very much, make sure that you have those things available and consider them before you even walk out the door. I’d say the bulk of the first third of this particular podcast is going to be to all the things that you should do before the conference, before you even get on the plane to go there.
Rob: Another thing you want to think about is spend time in advance to consider your goals for the conference. Think about if there are specific people that you want to meet. You can research attendees, you can look at the speakers, and make it a point that you introduce yourself or try to catch a meal with somebody. Think about the types of relationships you want to establish. Who can you help and who can help you now or in the future because that’s one way to make a conference so much more valuable is to be really deliberate about who you are going to hang around with and who you’re going to surround yourself with while you’re at the conference.
Of course there’s always serendipity, especially at a really focused conference where everyone is doing interesting things. Almost everybody you meet is going to be a fun conversation. But I’ve got to get more value myself out of conferences when I look at the speaker list, look at the attendee list and really pi point who it is that I want to talk to and about what.
Tacking onto that, also I think of two other things, one, are there any questions that you want answered? Are they questions you want to just ask a bunch of people, do you want to ask a specific person, do you want to ask knowledgeable people? I know that Harry and Ted from Moraware Software do a really good job at this. They come each year to MicroConf with a question that they are thinking through, and they get a bunch of knowledgeable opinions on it and I’ve heard it helped shape their decision making.
And then finally, are there any topics that you really are interested in discussing, even though it’s not a question you have but something that you think is going to be relevant to attendees.
Mike: Or if you just want to use somebody as a sounding board because you have a particular thought in mind about hey, there’s a problem that I have, or some sort of challenge that I’m facing. I’d like some external opinions on it. If you’re working at home, or at a remote office, or remote office environment where you go to work and you sit down and you don’t really talk to any co-workers all day except over Slack or email or anything like that, it can be very isolating and you don’t get the benefit of having brainstorm sessions or a lot of external input into your thoughts and thought processes. It’s very helpful to have those topics in mind and written down so that you consider them in advance instead of, “Hey, I want to get other perspectives on this,” and then take them to the conference and hash it out with people, just to hear what they have to say.
Another thing to do is to do some pre conference networking and try to find out who’s going to be there. If there is a conference coordinator that is putting things together, whether they have an online community or something like that that they’re building, or a Slack chat. Anything along those lines, it gives you a sense of who else is going to be at the conference. Try to find out who’s going to be there and reach out in advance of the conference to people that you really want to spend some time and meet.
Whether they are new people that you want to introduce yourselves to, or you’re searching for people who are experts in this particular field or situation, you can always go out to that list or that community and ask them like, “Hey, can we schedule breakfast or lunch or chat for a few minutes?” Even if you just want to put your name on the radar so that they’re actively looking for you and if you happen to be in a conversation, they say, “Oh, I remember I got an email from you or a message from you and you wanted to talk about X.” Just being able to put your name directly in front of them with a message that says, “Hey, I wanted to talk to you about this. I’d love to chat about this for X minutes or whatever.” That will help you establish some of those relationships.
Rob: Another thing is to research local travel and potential scams or things that could trip you up. A few years ago, Vegas didn’t allow Lyft and Uber into the airport. I think before that, they didn’t have Lyft and Uber, they didn’t allow it within city limits. And then they eventually allowed in the airport, and now, it’s everywhere. You can take a Lift at the airport. But before then, it was either a shuttle, or you can just grab a cab, and it’s so close to the airport, it was not worth doing a shuttle because it took a lot longer. It’s things like that that can save you a lot of time and a bit of money.
And then another thing is, talking about potential scams or whatever, before we went to Portugal last year, I was reading through the Lonely Planet and they said pick pocketing is really big there. That just made me more aware to have everything zipped up. And then you had mentioned that the cabbies that drives south out of the airport, they go this long way around right on the freeway, it’s a much longer fare because it’s almost right next to the airport.
Mike: Yeah. That was a classy scam several years ago before Lyft and Uber came around because what would happen is that people would get into a cab and the cab would say, “Do you want to take the highway to the hotel or do you want to go north?” They wouldn’t really give you a clear indication that the highway is actually south out of the airport, then you have to go all the way around. They would really just basically scam you because they could.
I remember that specifically happened to Andrew Warner because he wasn’t paying attention back in 2011 and he was telling me about it afterwards. I was like, “You totally got scammed by them.” Which sucks but at the same time, you wouldn’t know that unless you actively looked for that, either behavior or things to watch out for.
Rob: Another thing to do is to install or update the conference app before you leave. Often, conferences will issue a new app each year or you can update it and get the updated content and that’s certainly something that you can think about. You can obviously do that on site too, but I know that before I leave, I’m downloading a bunch of shows for the plane, I’m downloading any new games or anything to play on the plane but that’s less about for the conference and more just about the travel.
Mike: Yeah. But I think it’s important to make sure that if you have a bunch of updates to your apps, or your phone, or your laptop that you get those things taken care of before you hit the road so that you’re not trying download stuff over wifi because you don’t always have a lot of control over what gets downloaded when or what’s updated first or you may not even have a lot of bandwidth to work with. Like oh, I suddenly need to install this app so that I know where to go next, and then all this other stuff is in the way and taking precedence then you have to wait a heck of a lot more time to get it done.
Another thing to make sure you have taken care of is your passport and travel documents of any kind. Make sure that they’re up to date before you leave. I have heard of people who’ve forgotten to get that stuff taken care of before they go for a big trip that they’ve been planning or they planned three months, six months in advance, and they didn’t think about that, and then suddenly the night before or the day of, they realize oh, this stuff is out of date and it’s going to take three weeks to get it taken care of and I can’t go. Be mindful of those types of things as well. Because there’s literally nothing you can do at that point. You can’t argue with TSA agents, for example, if you’re trying to go to another country.
Rob: Yeah, that’s brutal. I’ve heard of few friends who’ve had that where their passport expired or even if it expires within six months or something, and when you’re travelling, it’s pretty crazy. That would be a serious bummer to have to cancel a trip or miss a conference because of that.
Another thing to think about is figure out, potentially even rehearse your answers to common questions like what are you working on, what do you do, what company are you with, what are you hoping to get out of the conference. Just think about that stuff in advance so that it couldn’t come as a shock, you’re going to get asked the same thing over and over.
And, think about what questions you want to ask of people. Often times, I will try not to ask the same questions that everyone else does. Typically, I want to get to what are you working on, what’s really interesting you right now. I’ll often ask people what books they are reading or listening to to try to get more ideas, or what their favorite podcast is. Just because people like to talk about themselves and share their knowledge, and if it’s something new that I haven’t heard, that’s good. I totally want to add it to my content queue if you will. That’s a perfect place to do it because I’m surrounded by people that are similar to us, they’re one of us in essence.
Mike: The opposite of that is also true. Make sure that you have some ways to gracefully exit a conversation whether it’s hey, I need to go get a drink, or use a restroom, or you need to go take a phone call, or make a phone call to somebody, to call your spouse or significant other, or you just see somebody else that you really wanted to meet and you need to step out of the conversation and go talk to them.
This is more about protecting your time and making sure that you get the most out of the time that you are there. Because sometimes there’s a conversation going on and it’s not like you don’t like the people that you’re talking to or you don’t appreciate the things that they have to say but you have other things and other priorities that you need to pay attention to and your time is one of them. Because your time at that event is very limited and it will be over before you know it.
Rob: That’s a big deal. Don’t get cornered and get stuck talking to someone that you don’t have anything in common or the person is just talking too much and it really isn’t providing value. Like you said, you only have a limited amount of time. It’s not all about take, take, take. It’s about giving some value as well. But there are just some conversations that are mutually awesome and you know that’s going somewhere and you know that it’s valuable. Other ones, they just wander and you realize this is just mindless and I don’t really want to do this. Really be mindful and figure out how you’re going to gracefully exit those kinds of conversations.
Mike: Now we’re finished talking about the things that you should do before the conference, let’s talk about the stuff that you should pay attention to at the conference. You already mentioned this, the number one thing I think is to stay hydrated and there’s a corollary there which is to also get enough sleep. But with the hydration, if it’s the type of conference where you’re going to be talking a lot, you’re going to find yourself dehydrated. Make sure that you are drinking enough water to get you through the days.
There are certain environments, like a desert in Las Vegas, that’s going to amplify that. It’s going to make you even more dehydrated, so does alcohol. You have to be careful about that stuff because it’s very easy to go to a conference in Vegas and I’ve had this happen to myself where I didn’t drink anything alcoholic, it was just water, I didn’t drink enough water though. I woke up the next day and I felt hungover even though I hadn’t had anything to drink. That’s just going to impact the rest of your day. You do have to pay attention to how much water you’re drinking.
Rob: Big time. It’s easier said than done to say get enough sleep, but I have really found that I enjoy conferences more when I am at least getting seven hours of sleep and I can feel rested getting into it, otherwise I’m sitting in a ballroom for seven to eight hours, and I’m tired and not listening. You’re not getting a ton of value from things anymore.
It’s easy to hang out especially when you’re at a conference with friends, and colleagues, and relationships that you’ve built and you only see them once or twice a year. I think that making a graceful exit at midnight and getting your solid eight hours. That’s something that we’ve done past couple of years with MicroConf is we moved the start times of all the conferences to 10:00AM, and I actually think that was a really good idea because we’ve gotten positive feedback about it, about how people have time to get breakfast together, especially people who are on later time zones, Central or Eastern time zone. But it also just allows if you do stay up late, it’s just gives you that a little bit more leeway. You could feasibly wake up at 9:00AM and still have a nice breakfast and get to the conference on time.
Mike: What do you mean feasibly? I think we do that, don’t we?
Rob: That is what I do. I was trying not to be too overt about it, but yes. I’m not embarrassed to say, even though I should be on Central time, 9:00AM is like 11:00AM for me. I think last year, I had to set my alarm for 8:30AM and 8:45AM both days. All four days of the conference just to make sure that I didn’t sleep through it.
Mike: One thing that I found to be a little bit less valuable over time is taking notes at a conference. I used to be the type of person who go to a conference and I would take pages and pages of notes. What I realized overtime was that I was writing down stuff but not necessarily paying attention to how important it was or whether it was new to me. I’d have these pages of notes and a lot of it turned out to be irrelevant, but I was writing it down just because I felt like I should because the speaker had said something or commented on it.
I was trying to create almost a transcript of what they were talking about and the reality is if you already know that stuff, don’t bother writing it down. Only write down the stuff that is new, or that you find insightful, or if an idea pops into your head and you find that it’s going to be actionable. Those are the things that you need to write down because you will probably forget them later on. But the stuff that you already know, there’s no need to write that stuff down.
In addition, there’s usually other people who are taking notes or there may even be an official note taker for the conference, a lot of speaker make their slides available for after their talks, definitely write down the URLs for those, or get them from the conference afterwards if they’re collecting them and just distributing them. But don’t feel compelled to write down every little thing that the speakers say. Just write down the stuff that’s important.
Rob: Another thing to consider is to think about asking questions during speaker Q&A. It’s a valuable opportunity to get interesting feedback. Obviously, be respectful of time and whether an answer to your question is generally applicable to other people. You can always follow up with the speaker when they’re off stage.
I do think that part of the beauty of a conference is everybody is in the same room. One way to bring value is to ask interesting questions. That gives you an excuse to then follow up later if you ask a question a speaker answers in general and you can come up and say, “Hey, I actually have this specific thing I want to talk to you about.” But if it is generally applicable, it can be helpful to the whole audience. I think that’s good to give back to community in that way.
Mike: A really nice way to stand out in the minds of the speakers who are presumably leaders in the community is to thank them directly if you found what they were talking about helpful. I would obviously encourage people to put feedback into the conference surveys but I think that for most speakers, it’s really helpful for them and gratifying to hear that somebody got a lot out of their talk. Definitely make it a point to thank them and if you have follow up questions, don’t hesitate to ask them after the talk, especially in situations where if you have a question that you think you might want to ask during the Q&A session but you realized that that question is so very specific to your business, or your particular problem, then save that for a later conversation when you’re not going to be using other people’s time to hear an answer to a question that just has no bearing or relevance on them.
Rob: Another thing to do is to make sure that you are social. It’s easy to go and lock yourself in your hotel room and watch this week’s episode of Walking Dead instead of hanging out. If it’s a good conference, the hallway track is worth almost as much as or more than the actual speaker track.
With that said, I will say know your limits. Get out and meet people. There comes a point where that’s demising returns and you can become so tired or so over stimulated or overwhelmed that you’re no longer having fun and you’re no longer really getting that much value.
I think there’s a balance to be struck here. I do notice that as I get older, and as I go to more conferences, I’m still quite social but I don’t do the 4:00AM nights like the early MicroConfs. Maybe that’s just a factor of sleep but I definitely get my fill of conversation earlier than I did maybe seven or eight years ago.
Mike: Moving on to the last section of this is after the conference is over, take some time to follow up with the people that you met. Whether you exchanged business cards or contact information.
It was funny last night, when I was at the Wistia event, there were a lot of people there who would ask me for business cards, I’m like, “I don’t have business cards.” Certain conferences you go to, that’s the expectation and then there are certain ones where it really isn’t. But if you are exchanging contact information with people because you want to talk to them later, or follow up on a business opportunity, or ask them more questions, definitely make sure that you follow up with them and help maintain those relationships that you started with them and you can maintain those relationships over time. Don’t feel that you can just let those lapse because I think if you let more than a couple of weeks go by once a conference is over, and you’ve met somebody, I think it starts to become more awkward to reintroduce yourself to the person and you feel weird about reaching out to them. The earlier you do that after the conference is over the better.
Rob: Another thing to do after the conference is review your notes to see if you need to fill in any gaps. That’s a great thing to do on the plane. I’m assuming you’re going to take notes locally, you probably have no internet, it’s a great time to sit and think back, are there any takeaways or any people that I met or any things that I want to take away that aren’t in these notes? Because I like my notes to capture the entire event and really be able to refer back to them and refresh everything that came out of it because it can spark new information later when you view it through different eyes if you look at it 6 months or 12 months from now. Be sure that your notes are buttoned up and they don’t have to be super professional, but at least in a format that you feel like you can interpret them in 6-12 months.
Mike: Another thing I’d highly recommend, and this comes from the stance of an event coordinator but make sure that you fill out the conference surveys. I say this not just because it’s a nice thing to do but a conference is not going to get any better if you don’t provide them with helpful feedback or at least with a good sense of where their conference did well and where they didn’t. If you don’t give them an idea of where they stand, then it’s very difficult for them to make decisions that will help improve things moving forward.
Rob: And then finally, I think it’s helpful to reflect, especially if this is the first or second conference you’ve gone to. Reflect on your time there and make a few notes about what you feel worked really well and things that you regret that you did or didn’t do. Let’s just be honest in Vegas, there’s a lot to regret that you did. Use the list. Honestly, use the list to improve your ROI on conferences in the future. Without reflecting and looking at your process figuring out what worked and what didn’t, it’s hard to improve upon that in the future.
Mike: I don’t think that the things that you regret doing or not doing are limited to just being in Vegas. One thing that comes to mind is there has been conferences where I’ve gone to where I stayed up way too late involved in a conversation that really was not of any value to me. I ended up being extremely tired the next day, for no good reason. I felt like I’ll stay up because of the people here and you really have no obligation to other people to stay involved in a conversation if there are other things that you could or should be doing like going to bed and getting some sleep.
Rob: Yep. I’ve done that. I’ve stayed up too late, I have done the wasn’t social enough, didn’t meet enough people, wasn’t deliberate enough about picking up the people in advance that I wanted to meet, a lot of things in this list, I have certainly made those mistakes. With that, go to your next conference, enjoy it, and get the most value that you can, we hope to see you at this MicroConf happening next week or MicroConf in the future. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. As I like to say, voicemails go to the top of the queue.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 388 | GDPR, Why You Should Strive For High Prices, and More Listener Questions
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In this episode of Startups For The Rest Of Us, Rob and Mike continue their discussion on GDPR and get additional insight from a listener. They also talk about why to strive for higher price points.
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Episode 387 | Before You Run Any Facebook Ads, Listen to This
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In this episode of Startups For The Rest Of Us, Mike interviews Mojca Mars, a Facebook Ads expert, about what things you need to do before you even begin running Facebook ads. Some of the topics discussed include lead magnets, custom audiences, email sequences and more.
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Mike: In this episode of Startups for the Rest of Us I’m gonna be talking about Mojca Mars about the foundational work you need to do before even getting started with Facebook Ads. This is Startups for the Rest of Us episode 387.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Mojca: I’m Mojca.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week?
Mojca: I’m doing very well this week.
Mike: You just got back from an extended vacation, didn’t you?
Mojca: Oh, yeah. I did. It was actually a seven-day vacation. I wish it was a little bit longer but the good thing about it is that I turned off everything. I turned off my phone, I wasn’t on my laptop, and I was completely offline, aside from my Kindle, but that was about it and it felt amazing.
Mike: I used to own a cottage up in the Adirondack Mountains up in upstate New York and it did not have electricity or running water. I noticed that when I went up there–because I just couldn’t charge my phone or anything, I just left it off–just the feeling of being that far disconnected. You couldn’t even hear the refrigerator hum because there was not a refrigerator. It was just very relaxing. I don’t know if you found something with like turning off your phone for that long.
Mojca: Yeah. I was at the beach actually and it felt so good not having my phone and not checking my notifications every two seconds. My brain started to breathe again.
Mike: Yeah. It’s almost like having a giant reset button for your brain.
Mojca: Oh, yeah. It was so good.
Mike: That’s awesome. Today I wanna have you on the show because you are a Facebook Ads Expert and you’re also an Author, a Public Speaker. You spoke in a Double Your Freelancing Conference, you spoke in a FemtoConf, you spoke in a MicroConf Europe this past year, and you’re also speaking at MicroConf in Vegas this coming Spring in about five or six weeks.
I wanted to have you on the show and have you talk a little bit about Facebook Ads because it’s something that we get asked about but I wouldn’t say that we have nearly the level of knowledge that you do so I think that you could definitely shed some light on the topic for us and for the listeners.
Mojca: Yeah. I would love to do that. Yeah.
Mike: Aside from the Facebook Ads Expert, Author, Public Speaker like leave anything out that was a major.
Mojca: Not really, just maybe an interesting story that I actually got fired from my first job.
Mike: Oh.
Mojca: Yeah. That’s how I got into the business of Facebook Ads.
Mike: I was gonna say I hope it wasn’t a Facebook Ads job that you got fired from.
Mojca: It wasn’t a Facebook Ads job, I was a copywriter at an advertising agency. It was similar but not the same. But the thing is that I started to notice that all of our clients were asking about social media—Facebook—and our agency, they weren’t interested in that. We started to drift apart and they fired me. That’s how I got into the business.
Mike: You kind of fell into it, it wasn’t like you actively sought it out and decided, “Hey, I’m gonna do this.”
Mojca: I was thinking about it for a while. I was always saying, “I’m gradually going to make that transfer or that change and gradually go from being employed to working for myself.” But then I got fired and I said, “Okay, this is my chance.”
Mike: Not everything kind of goes exactly as planned anyway. I think there’s a lot of people who listen to this show who’ve kind of just fallen into whatever it is that they got into. I don’t think that that’s necessarily uncommon but it’s interesting that you took that opportunity or took that—I don’t wanna say low point in your career—but like that native experience and turned it around into a greatly positive one.
Mojca: Exactly, yeah. Looking back now, that kick-in-the-butt was the best thing that happened to me.
Mike: Awesome. I wanted to talk to you today specifically about setting up a foundation for how you’re going to run Facebook Ads. We’ve talked a little bit about this before the show about what is it that people need to know, what common mistakes they make. I wanted to walk through what you feel is the foundational things that people need to put into place before they even start running Facebook Ads because I think it’s very easy to get wrapped up in all the things that you need to do in order to set up a Facebook Ads account but not think about the fundamental framework or structures that you need to have in place to actually manage an advertising campaign using those tools that they provided. I wanted to talk through those and just figure out what exactly it is that people need to do first.
Mojca: Yeah. You are totally right about that. I think that when a person decides to use or to start experimenting with Facebook advertising, they all just say, “Okay, I have a product to sell, what can I do now? How can I sell this product with Facebook?” But they don’t think about the other things that you need to have updated or you need to have ready to go when you start advertising.
Mike: Right. I think the first one that you had thrown out there was a lead magnet. I think this is something that most people—myself included—kind of put at the end of the list. But we’re gonna talk about that first because it’s almost like the most important thing that the have to have in place.
Mojca: Oh yeah, absolutely. I think it’s the most underestimated marketing asset when it comes to your Facebook advertising.
Mike: Let’s talk about the lead magnet itself. When you’re creating these Facebook Ads, what forms can a lead magnet take? What sorts of things should you be advertising to people in order to move them through that sales funnel using a Facebook Ad?
Mojca: Yeah. It should be something that’s very valuable and just easy to consume so you don’t want a very long ebook, let’s say, that you offer for free. You want it to be like a snackable PDF, a cheat sheet, or maybe, let’s say, a chapter of your ebook, let’s say just a free chapter, a couple of pages, something that’s easily consumable. Once they download it, they can browse through it very quickly and get the sense of your business, of your expertise, of what do you do, and so on.
Also, one good lead magnet is, for example, an email course or a webinar. Webinars do really, really well with Facebook Ads. If you, let’s say, sell services or a software and you can have a webinar on that topic explaining something your software does, or not your software but maybe just talking about your expertise and what your software, some problem that it solves, that’s a very good start. Having a webinar on that topic is a great start.
Mike: There’s two things that I kind of wanna unpack that you just said. The first one was like a full book is not a good idea. Why is that? It seems to me like the more value you’re giving them upfront, isn’t that better?
Mojca: With a lead magnet, you want that lead magnet to be very snackable. Usually, we advertise the lead magnet to someone that has visited our webpage for the first time. We want to offer them something for free but we don’t want to overwhelm them with different possibilities and we want them to get that value. Let’s say you had someone does visit your webpage and soon after, he or she sees a Facebook Ad for your lead magnet. If it’s the ebook, they won’t go through that ebook, they won’t read it through if it’s a 50 page long ebook because they don’t know you at the moment. They will download it but that lead is not going to be very qualified so you want to offer a very snackable asset like a PDF so they would go through it and they will be interested in seeing more of that.
Mike: I got it. That’s like actually a very subtle difference, I think because like an ebook for example, they might download it and according to Facebook would be a conversion but later on I guess moving them through your sales funnel, they’re gonna end up to be a poor converting prospect because they just didn’t read it.
Mojca: Exactly. I think that’s one of the aspects that a lot of marketers are forgetting about so you don’t want to just collect leads, you want to get quality leads, someone that you can convert at the end.
Mike: Excellent. It’s not even just like how much value you are supplying to them, it is the appropriate amount of value at the stage of the relationship that you’re in.
Mojca: Exactly. That’s a perfect description.
Mike: Perfect. The other thing that you said was that email courses and webinars do really well. Could you unpack that a little bit? Why is it that those do so well?
Mojca: For webinars specifically, it let’s you connect with your target audience in a totally different way. They see your face, they get to know you personally, so to speak. That’s a good connection to establish with your target audience. You want them to connect with you on a personal level because they would be easier to convert.
I’ve done this for such a long time so I have a ton of webinars and I do them very regularly. I see that change in my target audience. Once I started doing webinars, I started collecting a lot more leads because people were drawn to me and were drawn to my personality and my content and they wanted to get advice from me. That really helped with all of the other marketing aspects. The people that came to my webinars came to another webinar that I had later on and they just stuck to it. That was a really big difference, just connecting with them on a totally different level.
Mike: Does that impact the initial conversion rate or you’re really referring to the total conversion rate from first touch to end when you’re hopefully making a sale? Obviously, those two things are different but it goes back to what I just asked about delivering the appropriate amount of value based on the stage of the relationship. Is it localized or is it really like a global improvement?
Mojca: It works both ways. People are really easy to convert and come to webinars. When they see an ad for a webinar, they usually sign up very quickly and they also come to the webinar. That conversion is really, really easy.
The people that come to the webinars are more likely to purchase. That happened to me time and time again. People that actually attended and came to my webinars, they were so easy to convert at the end because we had a totally different relationship than someone that just downloaded a lead magnet and read through it and that was it.
Mike: Awesome. I think it absolutely has a much bigger factor associated with that. Anything with either advertising or demos. I found that demos for example convert really, really well just because there’s that one on one interaction, but I think even in a webinar, you can get a good sense from somebody whether or not they are selling snake oil versus actually committed to solving whatever the problem happens to be.
Mojca: That’s a good point. I worked with a lot of software companies and demos, they work amazing. We frequently have webinars that are just pretty much live demos and people sign up to that and people convert at the end. At the end of a demo, we offer let’s say, a free trial or a special price for the software and they convert really, really well.
Mike: Now that you’ve got an idea for lead magnet or you’ve gotten one developed, how do you go about promoting that on Facebook? Because that obviously lead the next step like you have to have that asset first and then once you have that, then you have to promote it whether it’s through retargeting audience or to a completely new audience. How do you go about putting it in front of people and finding the right people to do it?
Mojca: You have two different objectives that you can use when it comes to advertising lead magnet. There’s this thing called a Lead Ad, Facebook calls it a Lead Ad. It’s basically a type of ad that lets a user download your lead magnets, PDF preferably, in just a couple of clicks. Facebook collects your email and basically kind of passes it on to you.
The other objective that you can use is more like a traditional ad that is called website conversions. You can choose whatever feels good for you. Lead Ads are very easy to set up so you don’t even need a landing page, you just need that lead magnet and Facebook will take care of the rest.
On the other hand, you have the traditional ads called website conversions. Per my experience, website conversions, when it comes to Lead Ads, tend to work a little bit better although you still need a landing page. The set up takes a little bit longer but it converts a lot better and the leads are more qualified. But anyone listening to this podcast, I do recommend experimenting with both objectives and see what works for you and what type of leads you get from each of these objectives.
Mike: I understand in general why it’s best practice to experiment with those things. But what sorts of things have you seen when you go through and start doing the experimentation? Because you’ve said that the website conversions tend to work better even though the Facebook Lead Ads are easier to set up. What have you seen as a direct result of the experiments?
Mojca: With traditional ads, with website conversions, the cost per lead was a bit higher but the quality of those leads was definitely better than the leads that we collected through Lead Ads. Maybe that has something to do with just how easy it is to collect leads with Lead Ads so a lot of people just collect those two buttons and download the lead magnet and you have their email. Just people really going to the landing page where you have your lead magnet described for example, that’s a bit harder to do. I think, that’s where most quality leads come from.
Mike: Now that we’ve kind of gotten through the lead magnet itself and talk a little bit about how to promote them inside of Facebook, the next step is taking a look at the email sequences that you need to setup because obviously, once somebody has downloaded the lead magnet, you want to be able to email them. Obviously, your Facebook is gathering their email address. Then the next step is to put them in some sort of email campaign. What sorts of things should people pay attention to there?
Mojca: When it comes to email sequences, I think that like you said, this is definitely one of the things that you do need to have set up before you start advertising because once a person downloads the lead magnet, you want to do something with that lead, not just have it on your email list and that’s it.
Usually, I recommend doing five to seven emails long email sequences that talk about a specific topic that has something to do with the product or a software or a service that you’re going to pitch at the end. Each email sequence that you write has to have some sort of an outcome. You want to reach or you want to achieve a goal at the end. You definitely want to pitch that goal or to pitch something at the end whether that is an ebook, a service, a software.
Mike: Somebody just came to mind as you were talking about pitching the product or service in that email sequence, one thing that I was wondering about was going back to the lead magnets, will a good lead magnet be a video versus a webinar or a demo? Because it almost seems like that’s a way to automate that piece of it without actually being there.
I’ve seen a lot of webinar like automated webinar things and they tend to look very scammy. I’m curious to know whether just like a video hosted it like YouTube, or Wistia, or Vimeo or anything like that. Is that a decent lead magnet or not?
Mojca: I have a love-hate relationship with automated webinars. Like you said, they do look scammy and people recognize that and people tend to move away from that kind of content. What I would recommend is, like you said video demos that aren’t kind of gift wrapped into, “Wow, this is a live demo that we’re doing and everyone knows that it’s not a live demo.” Maybe just say, unpack that into, “This is a video demo that has been pre-recorded, etc., etc.” If you pack it like that and offer video content as a lead magnet, that’s definitely a very good way to go about it especially because video consumption is on the rise and people are watching videos regularly so just doing that is definitely a great way to go.
Mike: I was just trying to think about how to combine the two things without actually being present because automated things, if people are working on product themselves, it will be in present for webinar is not always the easiest thing in the world. Video’s kind of the next best but you’re absolutely right. Everytime I go to one of those automated webinars where they tried to pitch you do something live, it really comes across the wrong way just because you’re using that.
Mojca: Yeah. I think it has an impact on your brand as well. People will look at you in a different way once you do that. Like I said, if I do any demos or anything like that, I pack it in a different way. I don’t say, “Yeah, this is the live demo that we’re doing.” Everyone knows that it’s not. But I just pack it, “Here’s a video con, here’s a video over demo.” I’m not trying to say that it’s live or anything. I’d want to kind of communicate that integrity.
Mike: Okay. Kind of going back to the email sequences, you said pitch your products or your service at the end. Did you mean by the end of the entire series or was there something specific, should your goal for the entire email sequence of five to seven emails be the same at the end of each email or is it wise to kind of divide it up and have different mini goals or something like that along the way? I’m not sure how to get too complicated with it, that’s really what I’m saying.
Mojca: Yeah. I don’t wanna get too complicated with it as well. I think it depends on how well structured your funnels are. Some people have the same goals for every email sequences and some people have mini goals. Some people have two different funnels and two different email sequences for two different target audiences so it all depends on what setup you have.
If you’re just starting out, I do recommend just making it easy on yourself and just have one goal. As your business gets more structured, you can definitely work your way down and just kind of create different funnels and work your way from there.
Mike: I think that’s the best advice; don’t create more complexity just for the sake of creating complexity.
Mojca: Yeah. I did that, I did that once and I regret it.
Mike: I think we all do.
Mojca: My Drip is going crazy with the different funnels and it’s just too complicated and whenever I login, I just get so stressed. It’s my own downfall too.
Mike: Now that we’ve got the lead magnet in place, we’ve got the email sequence set up, what’s the next step? It seems to me like you need to dive into Facebook at some point along the way if you’re gonna get into this Facebook Ads. What’s the first step in setting up Facebook Ads?
Mojca: The absolute first step that you should do is implement a Facebook Pixel to your webpage so you can retarget anyone that visits your webpage. You want to do that as soon as possible so you are collecting all of that data before you launch your first campaign. That is one step that a lot of people just forget to take once they are ready to implement their first campaign they’re like, “Woah, how am I going to retarget people?” The first thing, the absolute first thing is to implement a Facebook Pixel to your webpage and it’s a two minute task so it shouldn’t take you too long and it just has a lot of benefits to it.
Mike: You can just install this on your website even if you are not running the Facebook Ads, you can always just put it there and then go off like create the lead magnet and then email sequence and then come back to this.
Mojca: Oh yeah, absolutely. You can do it right away and maybe come back to it after two months. You don’t need to be creating the campaign immediately after you implement your Facebook Pixel. Actually, the preferred way is not to launch a campaign, especially not a retargeting campaign, immediately after implementing a Facebook Pixel.
Mike: Why is that?
Mojca: The most effective campaign to start with is a retargeted campaign where you are retargeting for example people that are visiting your web page so people that already know what you do. Without a Facebook Pixel implemented to your site and without all of that data collected, you won’t be able to retarget people so you would be stuck with interest targeting and targeting based on different interests and behaviors which is a good approach but definitely not as effective as retargeting.
Mike: Got it. Once you’ve got the Facebook Pixel in place, is there anything especially need to pay attention to when you’re implementing the Facebook Pixel or is it just like you install this one little snippet and everything takes care of itself?
Mojca: You install this one little snippet but you have to install it in the right place.
Mike: Oh, okay.
Mojca: Yeah.
Mike: You really have to follow their guidelines of exactly where it needs to go?
Mojca: Yeah. You need to put it in the head section of your webpage. A lot of businesses do a mistake and implement it into a body section. For example, that Facebook Pixel triggers just on their homepage, not on their whole webpage. Just be careful where you implement it. Facebook has really clear instructions on how to do that. It’s really, really easy. You just have to implement it once in the head section and you’re good to go.
Mike: Awesome. Now that we’ve got the Facebook Pixel in place, what’s the next step? How do you get started setting up who’s gonna get targeted? Assuming the Facebook has been there a little while–should you start with retargeting? Is there a different approach that you should use?
Mojca: If you have your Facebook Pixel implemented for a while, let’s say for a month and it has collected a lot of data from your website visitors, you definitely want to implement a custom audience. Custom audiences is a fancy word of you uploading your email list or just connecting your Facebook Pixel to custom audiences and just build up your retargeted audience, so to speak. That’s definitely the first thing that you should do because custom audiences take a little while to properly populate, it doesn’t take a day but it does take an hour so you want to take care of that before you launch your first campaign.
Mike: This is one of the situations were even though you wanna get it done right away, you wanna be able to allocate that hour to go over and get this taken care of, it could very well take you two, three, five hours, depending on how long it takes Facebook to process things and put things together for you.
Mojca: Yeah. You can actually, as soon as you implement a Facebook Pixel, you can actually create your first custom audience of just retargeted audience of your website visitors, you can create it immediately. Even if you come back after a month, that audience will still grow and regularly update day after day. You don’t need to wait for a month and then create a custom audience but you can do it right away and just wait for it to populate properly even if it takes a month.
Mike: Got it. You uploaded, you set up this custom audience, you recommend getting started with the retargeting audience first.
Mojca: Yeah. Correct.
Mike: After that, now you’ve got this retargeting audience set up, now what?
Mojca: Now, what you wanna do is because you want to start retargeting and you want to start retargeting people with a lead magnet, you need to let Facebook know somehow what a conversion is.
Setting up a custom conversions is the right thing to do as a next step. You have a custom conversions tab in your Facebook Ads Manager. Basically what you need to set up is you need to let Facebook know what your Thank You page is. For example for this lead magnet, this is the Thank You page and you connect Facebook to that Thank You page. Anytime someone lands on that Thank You page, the Facebook Pixel gets triggered and Facebook recognizes that as a conversion.
When you set up custom conversions, you will be able to optimize for those conversions. For example, you will create a campaign that’s called website conversions and you’ll say, “Okay, I want this website conversion.” Facebook will optimize everything properly. When someone downloads or converts, Facebook will analyze that person and then target similar people to that person because they are able to optimize based on conversions because you created that custom conversions in the first place.
Mike: Now, I know that you can go in there and you override that and just say, “I’m gonna manage this based on behaviors or interests or things like that.” Is that something that you would recommend people do or do you generally recommend that people just let Facebook analyze that data itself? Because I think the concern that people have—myself included—is that what an incentive does Facebook have to make them convert for you because the more that they put those advertisements out, the more clicks that they get even if it doesn’t necessarily convert. It kind of makes you pay more. It’s almost like not in their best interest to drive the greatest returns on that. What kinds of things do you have to comment on about that?
Mojca: When it comes to retargeting people, especially if I work with smaller audiences, I tend not to narrow down based on interests or behaviors, it will impact the results if I narrow it down especially if an audience is already really, really small. If an audience is a little bit bigger, I do experiment with narrowing that down. That said, as you said, Facebook has its own ways of analyzing who to show your ad to. Based on my experience, that works really, really well. I mean, not only would generate a lot of leads for a very effective price, those leads are actually of good quality as well.
That said, if you do work with interest targeting and if you’re using interest targeting as your targeting approach, or behavioral targeting for that matter, you do want to narrow it down based on different behaviors so you don’t want to, for example, target two million people and let Facebook do its job because they won’t attract the most quality audience, to be honest.
Mike: I guess one of the ballpark ranges of, in terms of size, when should you decide to start tweaking based on behaviors or interests and things like that versus when should you just let Facebook do its job. Is there guidelines around like different sizes?
Mojca: If you have, let’s say, a retargeted audience of 100,000 people, I would definitely start playing with narrowing that down.
Mike: Got it. Anything less than that, maybe you could probably make a judgement call around 50k or so but less than that is fine just let them retarget.
Mojca: Yeah, yeah, yeah. It really depends on the service that you’re offering of yourself or whatever. It’s not really the size of the audience but the ballpark figure would be around 100,000 people. You can start playing around with it with a little smaller audience, like you said 50k. That said, what I do recommend is just keeping your eye on that campaign in case you noticed that, “Okay, that approach definitely isn’t working.”
Mike: Okay. Again, all of this stuff that we’ve talked about just in the past couple of minutes is really for a custom audience built around retargeting?
Mojca: Correct. Yeah. Because like I said, retargeting is the best way to start with Facebook Ads.
Mike: Okay. Now that the we’ve got the custom audience based on that retargeting campaign, we’ve got the custom conversion set up for our Thank You page, is there anything else that we really need to pay attention to or does that really put us in a good position to start optimizing from there?
Mojca: That definitely puts you in a good position. You will have all the assets in place to successfully launch your first campaign with Facebook Ads.
Mike: The other one that I’ve heard people talk about in addition to retargeting audiences is look alike audiences. Can you talk a little bit about specifically what those are and how those play into people that you’re retargeting from your website?
Mojca: For sure. Look alike audiences are basically cold audiences that are created on top of some data that Facebook has or basically the data that you provide to Facebook. For example, let’s say you have collected a lot of data on your website visitors, you have 1,000 website visitors connected to your Facebook Ad account. But you do want to experiment with cold audiences but you’re not sure what interests to use, what behavioral targeting to do, you’re not exactly sure how to go about that. But you do know that your website visitors are very qualified.
What you can do is create a lookalike audience based on your website visitors. What Facebook will do is they will analyze your website visitors and they will analyze their behaviors, their interests, their demographic data, where are they coming from, how old are they, and they will create a brand new audience based on that information. A lookalike audience is an audience to feel that, don’t know who you are, it’s a cold audience but it’s built upon, for example, website visitors. It’s built up on a custom audience.
Mike: Got it. They work together not necessarily directly opposing from one and each other.
Mojca: Yeah. Correct, correct.
Mike: Okay. Once you’ve got all of these fundamentals in place, at this point you obviously can go and you need to start optimizing things but I think the other approach that I can think of here is to go back and start almost like creating a sequence where people are moving through a sales funnel. Does that really not makes sense in this case where you’re moving them from one Facebook conversion to the next? Is it the point to really just get their contact information or email address and put them on your newsletter?
Mojca: Creating different funnels definitely makes a lot of sense but I also wanna come back to what we previously talked about. You don’t want to make things too complicated for yourself. If you already have a funnel that starts let’s say with the lead magnet and then with the demo and then gradually ends up with a pitch, you definitely want to implement that to your Facebook Ads. But if you don’t have that funnel already developed, you want to make things as easy for yourself as possible and maybe just use one lead magnet. Once they go through an email sequence and at the end kind of connect Facebook to your email sequence again and start pitching them when they enter the pitch sequence in your email sequence as well.
Mike: Got it. That makes a lot of sense. One of the things I did before this episode is I went on on Twitter and asked people if they had any questions for you. I’m gonna go through a couple of questions here and just kind of rapid fire through them and let you kind of answer them.
The first one is from Jamie Laurence. He said, “Is it morally wrong to use Facebook Ads? It feeds the money machine and makes us culpable in data collection.” I think what he’s really referring to is the new information kind of coming out about like how much data Facebook is actually collecting on people, which I think people knew but I don’t think they had ever looked at it before, had a way to look at it.
Mojca: Yeah. I think that’s a fantastic question and it’s definitely something that we need to be talking about. I talk about it with my clients, I talk about it with my students, I talk about it with everyone that wants to talk about it. I wouldn’t exactly say that it makes us culpable because the data collection that we’ve seen was a different one, it was a misuse of data, it was a criminal offense. It’s not similar to the data collection or targeting options that you see on Facebook. There are different nuances to it. That said, what I do think is that you have to decide on your own.
When you do Facebook advertising, the truth to it all is that you will be investing in Facebook. You will be investing in that business funnel, you will be investing in data collection as well. If you feel fine with that, by all means, just continue advertising and just use Facebook advertising as it is intended for you to use it. If not, just not don’t do Facebook anymore, don’t do Facebook advertisements anymore.
To be honest, I did have a couple of clients that left for that specific reason. With the upcoming news, they just decided that they don’t want to invest on Facebook Ads anymore, they don’t want to support that and I support their decision. I know where they’re coming from so I’m fine with it. That said, I do think people will still advertise on Facebook. But coming back to the idea, what I do recommend is just using Facebook advertising as it was intended for you to use it.
Mike: Yeah. I saw an interesting–it was a meme but it was a picture about the US government going in and starting to look at Facebook and how they’d announce that they were gonna do an investigation. On the page itself where they said they were investigating them, it said, it had a Share this through Facebook link.
Mojca: They probably had a Facebook Pixel implemented to their page as well.
Mike. I’m sure that they did.
Moving on, Jeremy asked, “Can Facebook Ads be visual rather than text based? My product is visual and I’d rather show it to people than tell them about it.”
Mojca: Oh, yeah, absolutely. I do support any visual based ads. What I do recommend is—I’m not sure about the product that he was referring to—if you have an opportunity to use video to show off your product, by all means, do that. It’s a similar approach that ecommerce businesses have been using all that time. They are really, really visual based, they have a lot of images or videos of their product. If you have a product that’s similar to that, you can, by all means, go ahead and use the same approach. Like I said, coming back, I do recommend using video in that case, it brings the best results.
Mike: With the video, this kind of goes into how you structure your Facebook Ads, maybe we touched on that for a couple of minutes, but obviously, there’s lots of different ways that you could advertise on Facebook. One of them is to have a video and you could also have like long form copy, short form copy. Could you just kind of touch very briefly on each of those and what your experience has been with them because I don’t necessarily think that we’ve talked about the specifics of what you’re going to put in your ad once it’s out there.
Mojca: Yeah, for sure. First of all, referring to long form copy, what I recently discovered through multiple A/B tests that I’ve done with all of my clients is that long form copy works really, really well, especially if you are advertising a software or a service business, long form copy tends to work really, really well.
Videos as well, along with long form copy. For example, if I’m working with a client that is trying to promote their software, we use long form copy so it’s a very long sales page like copy along with a video of them. It tends to work really well. But for other businesses, I have a couple of ecommerce companies that I worked with this as well, we don’t use long form copy but what we do use is a lot of images of their products.
But if you have a software company, if you offer services, what I do recommend is A/B testing with copy. Launch an ad, one ad with short copy, same visual, one ad using a short copy, one ad using a long copy. I’m definitely taking a bet on that and I think that long form copy will prevail on that case.
Mike: Awesome. The next question comes from Ed and he asked, “Will Facebook tracking effectiveness drop as more people use ad blockers?”
Mojca: Yeah. I love that question. They have been actually saying this for years now. For years, my clients have been coming to me saying, “More and more people are using ad blockers, is effectiveness going to drop?” Actually, we haven’t seen a bigger drop since I started talking about this with my clients two years ago. I think maybe that that drop is gradual, but to be honest, right now I would say that it’s not going to affect Facebook advertising as we might think that it’s going to affect it.
Mike: Our next question comes from [Kelso] and he says, “Do you have any case studies that you can point us to for successful ad campaigns? The second question he says, “How deep should you go with segmentation?” Do you have a couple of things we could link up on the show notes?
Mojca: I’m actually working on them but you will be able to find them on my webpage, definitely.
Mike: Awesome.
Mojca: A couple of results, with Facebook we’ve seen—I’ve worked with an ecommerce company—and we’ve seen up to 400% ROI. That was actually a standard especially when we did retargeting, we had 400% ROI. Or for example working with software companies, one software company in particular, we were paying $20 for an acquisition where lifetime value of a customer was $500 or right now I’m working with another software company and we are paying $50 for a conversion and they’re paying on Google $500 for the same conversions. It’s been incredibly effective.
But as far as segmentation goes, I definitely recommend as much segmentation as possible. That said, you always need to be careful of potential reach, you can segment all you want but if, let’s say, a specific custom audience that you really segmented out, the potential reach is only 20 people, that will not be effective. Be careful of that.
Also you need to keep in mind that the more segmentation that you have, the more work you’ll have with your Facebook Ad campaigns so you really need to decide if you want to do that or not. Segmentation is incredibly effective when it comes to Facebook Ads, like I said, it’s a tricky thing to do especially if you’re working with a bit smaller audiences, but if you have a lot of data collected already, by all means, segment as much as you want, I really recommend it.
Mike: This kind of brings me to a couple of questions. I kind of specifically had like when you are looking at what your ad spend is gonna be and what your minimum reach are, are there kind of guidelines that you would follow? Say make sure that you’re spending at least this much on a daily or weekly basis and make sure that your reach is at least this because otherwise, it’s probably not worth your time. Is there some quick calculation you could do based on “performance metrics” or average conversions kind of going through those Facebook Ads to figure out like if its 20,000 people, you have to have a conversion rate of at least 10% in order for it to be worth it if your cost per good sold is X. Is there anything like that that you can go and point to?
Mojca: Everyone asked me about that and that’s a very, very hard question to answer because for example, I’ve worked with multiple software businesses and they are so different when it comes to conversion rate and ROIs. With each and every customer, and with each and every client, I have to figure out a way of how to properly measure that and how to properly determine how big of an investment we need in order for our Facebook Ads to be effective. If you’re starting with Facebook Ads right now, if you haven’t done this before, I do recommend starting it slow. Don’t say, “Oh well, we have a well established business and we can spend $10,000 a day on Facebook Ads. Let’s just do that.”
Even if right now you have a lot of assets that you can promote, you have the money to do that, I definitely recommend starting slow with investing $50 a day or $100 a day and just kind of seeing what do you can do with that money and establishing where the ROI is coming from and what you need to do and what kind of cost per lead magnet download you can get for that kind of money. Just filling your way through that and then investing more and more once you get the hang of it.
If you do have a small business, so to speak, for example you’re just starting out, you just launched your new product, it hasn’t generated any revenue yet but you do want to experiment with lead generation with Facebook advertising, I recommend starting with $10-$20 a day and just seeing how that goes.
Facebook offers a lot of different tracking options, you can really track your ROI, you can input for example for each lead or for each conversion, you can connect that conversion to a specific value and Facebook will track ROI. It all comes down to your setup and so on.
Mike: Thanks. That’s extremely helpful because I think that the ballpark numbers that people have, people just don’t even really know where to start in terms of how much to spend, I mean is it $5, $10, $20. I think that the guideline of $10-$20 a day, at least to start of with especially if you’re just starting out and you just have a new business or product that you’re pushing out there, it sounds totally reasonable and I think within the reach of most people. We hear people talk about like you just mentioned, $10,000 a day, some products are just not even gonna make that in a year. It’s just not realistic.
Mojca: Yeah, yeah.
Mike: I think the last question I had was how do you go about managing or documenting your custom audiences and the custom conversions because one thing that I find, especially when it gets into like marketing automation side of things, you tend to lose track of stuff over time even if you’re working on it right now, it’s very easy to forget all the specifics of it and a week or five weeks or two months down the road. How do you go about tracking those things in a way that’s going to be easy for you to come back to later?
Mojca: Yeah. I absolutely know what you’re talking about because you have different campaigns within Facebook, you have different custom conversions, different custom audiences, just a ton of different things that you need to be tracking off and you need to have a higher level approach and just a higher level view on.
First of all, what I would emphasize is to properly name your custom conversion so you don’t get lost in, for example, lead number one or lead number two, you want to name them properly. Kind of the formula that I use on Facebook when it comes to custom conversions is I describe that custom audience as much as possible. For example, if you’re using a retargeted audience, I use website visitors 180 days landing page or website visitors 180 days this blog post. I use very specific names that I always know what this is when I come in Facebook.
Same for custom conversions and I document everything in Google Docs or Spreadsheets. I also document a lot of my custom conversions especially audiences and basecamps so I have documents for each client, for different audiences, it piles up, I tell you. Just using Spreadsheets, I think that is kind of the best way to go about it just to keep track of everything and for you not to get lost in the amount of data and different audiences and custom conversions and every other assets.
Mike: Awesome. I think that’s probably a pretty good place for us to wrap up. Is there anything that you wanna add or leave the listeners with?
Mojca: Maybe just giving one advice. I know that the Facebook might look very overwhelming. When you decide that you want to start advertising, you come on Facebook and you open up your Facebook Ads Manager and there are a ton of different options that you can choose from, don’t be afraid, it’s all very manageable. Facebook is really trying to simplify the process of advertising. Just like I said, start slow, invest a couple of bucks in launching your first campaign and see where that takes you and I promise that it will be worth it.
Mike: Awesome. If people have questions for you or they wanna follow up and kind of check into what you’re working on or if they wanna have you manage their Facebook Ads, where can they find you?
Mojca: Yeah. I would love for them to write me, I have my email so mojca@superspicymedia.com. I would be more than happy to answer any questions or hesitation or to just help them with setting up their first campaign. Send me an email at mojca@superspicymedia.com or if you’re interested in my blog posts and videos that I publish, services, you can find me on superspicymedia.com and you’ll find everything there.
Mike: I also see a link here for the facebookadsacademy.com?
Mojca: Oh, correct, yeah. I have the Facebook Ads Academy. If you’re just starting out with advertising and you need someone to pretty much hold your hand and help you with launching your first campaign or if you already launched the campaign and you have a question of how to set things up or what does this mean or what do these results mean, Facebook Ads Academy is definitely a great way to start. It’s basically a community of small business owners, we just help each other out when it comes to Facebook advertising, give each other advice, comment on specific visuals or copy.
Mike: I could say from experience that looking through the Facebook Ads Manager right next to somebody else who’s supposedly using the exact same thing, sometimes the interfaces can be very different from one to the next. I remember you telling me over FemtoConf that the ads manager, they’re running like a couple dozen of them at the same time basically A/B testing between them. Your interface could very well be different from somebody else’s.
Mojca: Yeah. I actually heard that they’re running hundreds of different Facebook Ads Manager. You might have a Facebook Ads Manager version that I do not have. I used to remember FemtoConf, I think they were like three different versions of Facebook Ads but it’s just that we were working with.
Mike: Yeah. They were like six or seven people in the room which makes that even scary.
Mojca: Yeah, it was crazy.
Mike: I think that about wraps us up for the day. Mojca, thank you very much for coming on the show. I really appreciate you having you.
Mojca: Thank you so much for having me.
Mike: We will see you at MicroConf in about five weeks or so too.
Mojca: Yeah. I’m so excited. This is going to be my first time in Vegas.
Mike: Awesome. You will be there straight through Growth Edition through Start Edition.
Mojca: Oh yeah.
Mike: If anyone is there, feel free to stop by and say hi.
Mojca: Yup.
Mike: If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Mojca: I’m Mojca.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week?
Mojca: I’m doing very well this week.
Mike: You just got back from an extended vacation, didn’t you?
Mojca: Oh, yeah. I did. It was actually a seven-day vacation. I wish it was a little bit longer but the good thing about it is that I turned off everything. I turned off my phone, I wasn’t on my laptop, and I was completely offline, aside from my Kindle, but that was about it and it felt amazing.
Mike: I used to own a cottage up in the Adirondack Mountains up in upstate New York and it did not have electricity or running water. I noticed that when I went up there–because I just couldn’t charge my phone or anything, I just left it off–just the feeling of being that far disconnected. You couldn’t even hear the refrigerator hum because there was not a refrigerator. It was just very relaxing. I don’t know if you found something with like turning off your phone for that long.
Mojca: Yeah. I was at the beach actually and it felt so good not having my phone and not checking my notifications every two seconds. My brain started to breathe again.
Mike: Yeah. It’s almost like having a giant reset button for your brain.
Mojca: Oh, yeah. It was so good.
Mike: That’s awesome. Today I wanna have you on the show because you are a Facebook Ads Expert and you’re also an Author, a Public Speaker. You spoke in a Double Your Freelancing Conference, you spoke in a FemtoConf, you spoke in a MicroConf Europe this past year, and you’re also speaking at MicroConf in Vegas this coming Spring in about five or six weeks.
I wanted to have you on the show and have you talk a little bit about Facebook Ads because it’s something that we get asked about but I wouldn’t say that we have nearly the level of knowledge that you do so I think that you could definitely shed some light on the topic for us and for the listeners.
Mojca: Yeah. I would love to do that. Yeah.
Mike: Aside from the Facebook Ads Expert, Author, Public Speaker like leave anything out that was a major.
Mojca: Not really, just maybe an interesting story that I actually got fired from my first job.
Mike: Oh.
Mojca: Yeah. That’s how I got into the business of Facebook Ads.
Mike: I was gonna say I hope it wasn’t a Facebook Ads job that you got fired from.
Mojca: It wasn’t a Facebook Ads job, I was a copywriter at an advertising agency. It was similar but not the same. But the thing is that I started to notice that all of our clients were asking about social media—Facebook—and our agency, they weren’t interested in that. We started to drift apart and they fired me. That’s how I got into the business.
Mike: You kind of fell into it, it wasn’t like you actively sought it out and decided, “Hey, I’m gonna do this.”
Mojca: I was thinking about it for a while. I was always saying, “I’m gradually going to make that transfer or that change and gradually go from being employed to working for myself.” But then I got fired and I said, “Okay, this is my chance.”
Mike: Not everything kind of goes exactly as planned anyway. I think there’s a lot of people who listen to this show who’ve kind of just fallen into whatever it is that they got into. I don’t think that that’s necessarily uncommon but it’s interesting that you took that opportunity or took that—I don’t wanna say low point in your career—but like that native experience and turned it around into a greatly positive one.
Mojca: Exactly, yeah. Looking back now, that kick-in-the-butt was the best thing that happened to me.
Mike: Awesome. I wanted to talk to you today specifically about setting up a foundation for how you’re going to run Facebook Ads. We’ve talked a little bit about this before the show about what is it that people need to know, what common mistakes they make. I wanted to walk through what you feel is the foundational things that people need to put into place before they even start running Facebook Ads because I think it’s very easy to get wrapped up in all the things that you need to do in order to set up a Facebook Ads account but not think about the fundamental framework or structures that you need to have in place to actually manage an advertising campaign using those tools that they provided. I wanted to talk through those and just figure out what exactly it is that people need to do first.
Mojca: Yeah. You are totally right about that. I think that when a person decides to use or to start experimenting with Facebook advertising, they all just say, “Okay, I have a product to sell, what can I do now? How can I sell this product with Facebook?” But they don’t think about the other things that you need to have updated or you need to have ready to go when you start advertising.
Mike: Right. I think the first one that you had thrown out there was a lead magnet. I think this is something that most people—myself included—kind of put at the end of the list. But we’re gonna talk about that first because it’s almost like the most important thing that the have to have in place.
Mojca: Oh yeah, absolutely. I think it’s the most underestimated marketing asset when it comes to your Facebook advertising.
Mike: Let’s talk about the lead magnet itself. When you’re creating these Facebook Ads, what forms can a lead magnet take? What sorts of things should you be advertising to people in order to move them through that sales funnel using a Facebook Ad?
Mojca: Yeah. It should be something that’s very valuable and just easy to consume so you don’t want a very long ebook, let’s say, that you offer for free. You want it to be like a snackable PDF, a cheat sheet, or maybe, let’s say, a chapter of your ebook, let’s say just a free chapter, a couple of pages, something that’s easily consumable. Once they download it, they can browse through it very quickly and get the sense of your business, of your expertise, of what do you do, and so on.
Also, one good lead magnet is, for example, an email course or a webinar. Webinars do really, really well with Facebook Ads. If you, let’s say, sell services or a software and you can have a webinar on that topic explaining something your software does, or not your software but maybe just talking about your expertise and what your software, some problem that it solves, that’s a very good start. Having a webinar on that topic is a great start.
Mike: There’s two things that I kind of wanna unpack that you just said. The first one was like a full book is not a good idea. Why is that? It seems to me like the more value you’re giving them upfront, isn’t that better?
Mojca: With a lead magnet, you want that lead magnet to be very snackable. Usually, we advertise the lead magnet to someone that has visited our webpage for the first time. We want to offer them something for free but we don’t want to overwhelm them with different possibilities and we want them to get that value. Let’s say you had someone does visit your webpage and soon after, he or she sees a Facebook Ad for your lead magnet. If it’s the ebook, they won’t go through that ebook, they won’t read it through if it’s a 50 page long ebook because they don’t know you at the moment. They will download it but that lead is not going to be very qualified so you want to offer a very snackable asset like a PDF so they would go through it and they will be interested in seeing more of that.
Mike: I got it. That’s like actually a very subtle difference, I think because like an ebook for example, they might download it and according to Facebook would be a conversion but later on I guess moving them through your sales funnel, they’re gonna end up to be a poor converting prospect because they just didn’t read it.
Mojca: Exactly. I think that’s one of the aspects that a lot of marketers are forgetting about so you don’t want to just collect leads, you want to get quality leads, someone that you can convert at the end.
Mike: Excellent. It’s not even just like how much value you are supplying to them, it is the appropriate amount of value at the stage of the relationship that you’re in.
Mojca: Exactly. That’s a perfect description.
Mike: Perfect. The other thing that you said was that email courses and webinars do really well. Could you unpack that a little bit? Why is it that those do so well?
Mojca: For webinars specifically, it let’s you connect with your target audience in a totally different way. They see your face, they get to know you personally, so to speak. That’s a good connection to establish with your target audience. You want them to connect with you on a personal level because they would be easier to convert.
I’ve done this for such a long time so I have a ton of webinars and I do them very regularly. I see that change in my target audience. Once I started doing webinars, I started collecting a lot more leads because people were drawn to me and were drawn to my personality and my content and they wanted to get advice from me. That really helped with all of the other marketing aspects. The people that came to my webinars came to another webinar that I had later on and they just stuck to it. That was a really big difference, just connecting with them on a totally different level.
Mike: Does that impact the initial conversion rate or you’re really referring to the total conversion rate from first touch to end when you’re hopefully making a sale? Obviously, those two things are different but it goes back to what I just asked about delivering the appropriate amount of value based on the stage of the relationship. Is it localized or is it really like a global improvement?
Mojca: It works both ways. People are really easy to convert and come to webinars. When they see an ad for a webinar, they usually sign up very quickly and they also come to the webinar. That conversion is really, really easy.
The people that come to the webinars are more likely to purchase. That happened to me time and time again. People that actually attended and came to my webinars, they were so easy to convert at the end because we had a totally different relationship than someone that just downloaded a lead magnet and read through it and that was it.
Mike: Awesome. I think it absolutely has a much bigger factor associated with that. Anything with either advertising or demos. I found that demos for example convert really, really well just because there’s that one on one interaction, but I think even in a webinar, you can get a good sense from somebody whether or not they are selling snake oil versus actually committed to solving whatever the problem happens to be.
Mojca: That’s a good point. I worked with a lot of software companies and demos, they work amazing. We frequently have webinars that are just pretty much live demos and people sign up to that and people convert at the end. At the end of a demo, we offer let’s say, a free trial or a special price for the software and they convert really, really well.
Mike: Now that you’ve got an idea for lead magnet or you’ve gotten one developed, how do you go about promoting that on Facebook? Because that obviously lead the next step like you have to have that asset first and then once you have that, then you have to promote it whether it’s through retargeting audience or to a completely new audience. How do you go about putting it in front of people and finding the right people to do it?
Mojca: You have two different objectives that you can use when it comes to advertising lead magnet. There’s this thing called a Lead Ad, Facebook calls it a Lead Ad. It’s basically a type of ad that lets a user download your lead magnets, PDF preferably, in just a couple of clicks. Facebook collects your email and basically kind of passes it on to you.
The other objective that you can use is more like a traditional ad that is called website conversions. You can choose whatever feels good for you. Lead Ads are very easy to set up so you don’t even need a landing page, you just need that lead magnet and Facebook will take care of the rest.
On the other hand, you have the traditional ads called website conversions. Per my experience, website conversions, when it comes to Lead Ads, tend to work a little bit better although you still need a landing page. The set up takes a little bit longer but it converts a lot better and the leads are more qualified. But anyone listening to this podcast, I do recommend experimenting with both objectives and see what works for you and what type of leads you get from each of these objectives.
Mike: I understand in general why it’s best practice to experiment with those things. But what sorts of things have you seen when you go through and start doing the experimentation? Because you’ve said that the website conversions tend to work better even though the Facebook Lead Ads are easier to set up. What have you seen as a direct result of the experiments?
Mojca: With traditional ads, with website conversions, the cost per lead was a bit higher but the quality of those leads was definitely better than the leads that we collected through Lead Ads. Maybe that has something to do with just how easy it is to collect leads with Lead Ads so a lot of people just collect those two buttons and download the lead magnet and you have their email. Just people really going to the landing page where you have your lead magnet described for example, that’s a bit harder to do. I think, that’s where most quality leads come from.
Mike: Now that we’ve kind of gotten through the lead magnet itself and talk a little bit about how to promote them inside of Facebook, the next step is taking a look at the email sequences that you need to setup because obviously, once somebody has downloaded the lead magnet, you want to be able to email them. Obviously, your Facebook is gathering their email address. Then the next step is to put them in some sort of email campaign. What sorts of things should people pay attention to there?
Mojca: When it comes to email sequences, I think that like you said, this is definitely one of the things that you do need to have set up before you start advertising because once a person downloads the lead magnet, you want to do something with that lead, not just have it on your email list and that’s it.
Usually, I recommend doing five to seven emails long email sequences that talk about a specific topic that has something to do with the product or a software or a service that you’re going to pitch at the end. Each email sequence that you write has to have some sort of an outcome. You want to reach or you want to achieve a goal at the end. You definitely want to pitch that goal or to pitch something at the end whether that is an ebook, a service, a software.
Mike: Somebody just came to mind as you were talking about pitching the product or service in that email sequence, one thing that I was wondering about was going back to the lead magnets, will a good lead magnet be a video versus a webinar or a demo? Because it almost seems like that’s a way to automate that piece of it without actually being there.
I’ve seen a lot of webinar like automated webinar things and they tend to look very scammy. I’m curious to know whether just like a video hosted it like YouTube, or Wistia, or Vimeo or anything like that. Is that a decent lead magnet or not?
Mojca: I have a love-hate relationship with automated webinars. Like you said, they do look scammy and people recognize that and people tend to move away from that kind of content. What I would recommend is, like you said video demos that aren’t kind of gift wrapped into, “Wow, this is a live demo that we’re doing and everyone knows that it’s not a live demo.” Maybe just say, unpack that into, “This is a video demo that has been pre-recorded, etc., etc.” If you pack it like that and offer video content as a lead magnet, that’s definitely a very good way to go about it especially because video consumption is on the rise and people are watching videos regularly so just doing that is definitely a great way to go.
Mike: I was just trying to think about how to combine the two things without actually being present because automated things, if people are working on product themselves, it will be in present for webinar is not always the easiest thing in the world. Video’s kind of the next best but you’re absolutely right. Everytime I go to one of those automated webinars where they tried to pitch you do something live, it really comes across the wrong way just because you’re using that.
Mojca: Yeah. I think it has an impact on your brand as well. People will look at you in a different way once you do that. Like I said, if I do any demos or anything like that, I pack it in a different way. I don’t say, “Yeah, this is the live demo that we’re doing.” Everyone knows that it’s not. But I just pack it, “Here’s a video con, here’s a video over demo.” I’m not trying to say that it’s live or anything. I’d want to kind of communicate that integrity.
Mike: Okay. Kind of going back to the email sequences, you said pitch your products or your service at the end. Did you mean by the end of the entire series or was there something specific, should your goal for the entire email sequence of five to seven emails be the same at the end of each email or is it wise to kind of divide it up and have different mini goals or something like that along the way? I’m not sure how to get too complicated with it, that’s really what I’m saying.
Mojca: Yeah. I don’t wanna get too complicated with it as well. I think it depends on how well structured your funnels are. Some people have the same goals for every email sequences and some people have mini goals. Some people have two different funnels and two different email sequences for two different target audiences so it all depends on what setup you have.
If you’re just starting out, I do recommend just making it easy on yourself and just have one goal. As your business gets more structured, you can definitely work your way down and just kind of create different funnels and work your way from there.
Mike: I think that’s the best advice; don’t create more complexity just for the sake of creating complexity.
Mojca: Yeah. I did that, I did that once and I regret it.
Mike: I think we all do.
Mojca: My Drip is going crazy with the different funnels and it’s just too complicated and whenever I login, I just get so stressed. It’s my own downfall too.
Mike: Now that we’ve got the lead magnet in place, we’ve got the email sequence set up, what’s the next step? It seems to me like you need to dive into Facebook at some point along the way if you’re gonna get into this Facebook Ads. What’s the first step in setting up Facebook Ads?
Mojca: The absolute first step that you should do is implement a Facebook Pixel to your webpage so you can retarget anyone that visits your webpage. You want to do that as soon as possible so you are collecting all of that data before you launch your first campaign. That is one step that a lot of people just forget to take once they are ready to implement their first campaign they’re like, “Woah, how am I going to retarget people?” The first thing, the absolute first thing is to implement a Facebook Pixel to your webpage and it’s a two minute task so it shouldn’t take you too long and it just has a lot of benefits to it.
Mike: You can just install this on your website even if you are not running the Facebook Ads, you can always just put it there and then go off like create the lead magnet and then email sequence and then come back to this.
Mojca: Oh yeah, absolutely. You can do it right away and maybe come back to it after two months. You don’t need to be creating the campaign immediately after you implement your Facebook Pixel. Actually, the preferred way is not to launch a campaign, especially not a retargeting campaign, immediately after implementing a Facebook Pixel.
Mike: Why is that?
Mojca: The most effective campaign to start with is a retargeted campaign where you are retargeting for example people that are visiting your web page so people that already know what you do. Without a Facebook Pixel implemented to your site and without all of that data collected, you won’t be able to retarget people so you would be stuck with interest targeting and targeting based on different interests and behaviors which is a good approach but definitely not as effective as retargeting.
Mike: Got it. Once you’ve got the Facebook Pixel in place, is there anything especially need to pay attention to when you’re implementing the Facebook Pixel or is it just like you install this one little snippet and everything takes care of itself?
Mojca: You install this one little snippet but you have to install it in the right place.
Mike: Oh, okay.
Mojca: Yeah.
Mike: You really have to follow their guidelines of exactly where it needs to go?
Mojca: Yeah. You need to put it in the head section of your webpage. A lot of businesses do a mistake and implement it into a body section. For example, that Facebook Pixel triggers just on their homepage, not on their whole webpage. Just be careful where you implement it. Facebook has really clear instructions on how to do that. It’s really, really easy. You just have to implement it once in the head section and you’re good to go.
Mike: Awesome. Now that we’ve got the Facebook Pixel in place, what’s the next step? How do you get started setting up who’s gonna get targeted? Assuming the Facebook has been there a little while–should you start with retargeting? Is there a different approach that you should use?
Mojca: If you have your Facebook Pixel implemented for a while, let’s say for a month and it has collected a lot of data from your website visitors, you definitely want to implement a custom audience. Custom audiences is a fancy word of you uploading your email list or just connecting your Facebook Pixel to custom audiences and just build up your retargeted audience, so to speak. That’s definitely the first thing that you should do because custom audiences take a little while to properly populate, it doesn’t take a day but it does take an hour so you want to take care of that before you launch your first campaign.
Mike: This is one of the situations were even though you wanna get it done right away, you wanna be able to allocate that hour to go over and get this taken care of, it could very well take you two, three, five hours, depending on how long it takes Facebook to process things and put things together for you.
Mojca: Yeah. You can actually, as soon as you implement a Facebook Pixel, you can actually create your first custom audience of just retargeted audience of your website visitors, you can create it immediately. Even if you come back after a month, that audience will still grow and regularly update day after day. You don’t need to wait for a month and then create a custom audience but you can do it right away and just wait for it to populate properly even if it takes a month.
Mike: Got it. You uploaded, you set up this custom audience, you recommend getting started with the retargeting audience first.
Mojca: Yeah. Correct.
Mike: After that, now you’ve got this retargeting audience set up, now what?
Mojca: Now, what you wanna do is because you want to start retargeting and you want to start retargeting people with a lead magnet, you need to let Facebook know somehow what a conversion is.
Setting up a custom conversions is the right thing to do as a next step. You have a custom conversions tab in your Facebook Ads Manager. Basically what you need to set up is you need to let Facebook know what your Thank You page is. For example for this lead magnet, this is the Thank You page and you connect Facebook to that Thank You page. Anytime someone lands on that Thank You page, the Facebook Pixel gets triggered and Facebook recognizes that as a conversion.
When you set up custom conversions, you will be able to optimize for those conversions. For example, you will create a campaign that’s called website conversions and you’ll say, “Okay, I want this website conversion.” Facebook will optimize everything properly. When someone downloads or converts, Facebook will analyze that person and then target similar people to that person because they are able to optimize based on conversions because you created that custom conversions in the first place.
Mike: Now, I know that you can go in there and you override that and just say, “I’m gonna manage this based on behaviors or interests or things like that.” Is that something that you would recommend people do or do you generally recommend that people just let Facebook analyze that data itself? Because I think the concern that people have—myself included—is that what an incentive does Facebook have to make them convert for you because the more that they put those advertisements out, the more clicks that they get even if it doesn’t necessarily convert. It kind of makes you pay more. It’s almost like not in their best interest to drive the greatest returns on that. What kinds of things do you have to comment on about that?
Mojca: When it comes to retargeting people, especially if I work with smaller audiences, I tend not to narrow down based on interests or behaviors, it will impact the results if I narrow it down especially if an audience is already really, really small. If an audience is a little bit bigger, I do experiment with narrowing that down. That said, as you said, Facebook has its own ways of analyzing who to show your ad to. Based on my experience, that works really, really well. I mean, not only would generate a lot of leads for a very effective price, those leads are actually of good quality as well.
That said, if you do work with interest targeting and if you’re using interest targeting as your targeting approach, or behavioral targeting for that matter, you do want to narrow it down based on different behaviors so you don’t want to, for example, target two million people and let Facebook do its job because they won’t attract the most quality audience, to be honest.
Mike: I guess one of the ballpark ranges of, in terms of size, when should you decide to start tweaking based on behaviors or interests and things like that versus when should you just let Facebook do its job. Is there guidelines around like different sizes?
Mojca: If you have, let’s say, a retargeted audience of 100,000 people, I would definitely start playing with narrowing that down.
Mike: Got it. Anything less than that, maybe you could probably make a judgement call around 50k or so but less than that is fine just let them retarget.
Mojca: Yeah, yeah, yeah. It really depends on the service that you’re offering of yourself or whatever. It’s not really the size of the audience but the ballpark figure would be around 100,000 people. You can start playing around with it with a little smaller audience, like you said 50k. That said, what I do recommend is just keeping your eye on that campaign in case you noticed that, “Okay, that approach definitely isn’t working.”
Mike: Okay. Again, all of this stuff that we’ve talked about just in the past couple of minutes is really for a custom audience built around retargeting?
Mojca: Correct. Yeah. Because like I said, retargeting is the best way to start with Facebook Ads.
Mike: Okay. Now that the we’ve got the custom audience based on that retargeting campaign, we’ve got the custom conversion set up for our Thank You page, is there anything else that we really need to pay attention to or does that really put us in a good position to start optimizing from there?
Mojca: That definitely puts you in a good position. You will have all the assets in place to successfully launch your first campaign with Facebook Ads.
Mike: The other one that I’ve heard people talk about in addition to retargeting audiences is look alike audiences. Can you talk a little bit about specifically what those are and how those play into people that you’re retargeting from your website?
Mojca: For sure. Look alike audiences are basically cold audiences that are created on top of some data that Facebook has or basically the data that you provide to Facebook. For example, let’s say you have collected a lot of data on your website visitors, you have 1,000 website visitors connected to your Facebook Ad account. But you do want to experiment with cold audiences but you’re not sure what interests to use, what behavioral targeting to do, you’re not exactly sure how to go about that. But you do know that your website visitors are very qualified.
What you can do is create a lookalike audience based on your website visitors. What Facebook will do is they will analyze your website visitors and they will analyze their behaviors, their interests, their demographic data, where are they coming from, how old are they, and they will create a brand new audience based on that information. A lookalike audience is an audience to feel that, don’t know who you are, it’s a cold audience but it’s built upon, for example, website visitors. It’s built up on a custom audience.
Mike: Got it. They work together not necessarily directly opposing from one and each other.
Mojca: Yeah. Correct, correct.
Mike: Okay. Once you’ve got all of these fundamentals in place, at this point you obviously can go and you need to start optimizing things but I think the other approach that I can think of here is to go back and start almost like creating a sequence where people are moving through a sales funnel. Does that really not makes sense in this case where you’re moving them from one Facebook conversion to the next? Is it the point to really just get their contact information or email address and put them on your newsletter?
Mojca: Creating different funnels definitely makes a lot of sense but I also wanna come back to what we previously talked about. You don’t want to make things too complicated for yourself. If you already have a funnel that starts let’s say with the lead magnet and then with the demo and then gradually ends up with a pitch, you definitely want to implement that to your Facebook Ads. But if you don’t have that funnel already developed, you want to make things as easy for yourself as possible and maybe just use one lead magnet. Once they go through an email sequence and at the end kind of connect Facebook to your email sequence again and start pitching them when they enter the pitch sequence in your email sequence as well.
Mike: Got it. That makes a lot of sense. One of the things I did before this episode is I went on on Twitter and asked people if they had any questions for you. I’m gonna go through a couple of questions here and just kind of rapid fire through them and let you kind of answer them.
The first one is from Jamie Laurence. He said, “Is it morally wrong to use Facebook Ads? It feeds the money machine and makes us culpable in data collection.” I think what he’s really referring to is the new information kind of coming out about like how much data Facebook is actually collecting on people, which I think people knew but I don’t think they had ever looked at it before, had a way to look at it.
Mojca: Yeah. I think that’s a fantastic question and it’s definitely something that we need to be talking about. I talk about it with my clients, I talk about it with my students, I talk about it with everyone that wants to talk about it. I wouldn’t exactly say that it makes us culpable because the data collection that we’ve seen was a different one, it was a misuse of data, it was a criminal offense. It’s not similar to the data collection or targeting options that you see on Facebook. There are different nuances to it. That said, what I do think is that you have to decide on your own.
When you do Facebook advertising, the truth to it all is that you will be investing in Facebook. You will be investing in that business funnel, you will be investing in data collection as well. If you feel fine with that, by all means, just continue advertising and just use Facebook advertising as it is intended for you to use it. If not, just not don’t do Facebook anymore, don’t do Facebook advertisements anymore.
To be honest, I did have a couple of clients that left for that specific reason. With the upcoming news, they just decided that they don’t want to invest on Facebook Ads anymore, they don’t want to support that and I support their decision. I know where they’re coming from so I’m fine with it. That said, I do think people will still advertise on Facebook. But coming back to the idea, what I do recommend is just using Facebook advertising as it was intended for you to use it.
Mike: Yeah. I saw an interesting–it was a meme but it was a picture about the US government going in and starting to look at Facebook and how they’d announce that they were gonna do an investigation. On the page itself where they said they were investigating them, it said, it had a Share this through Facebook link.
Mojca: They probably had a Facebook Pixel implemented to their page as well.
Mike. I’m sure that they did.
Moving on, Jeremy asked, “Can Facebook Ads be visual rather than text based? My product is visual and I’d rather show it to people than tell them about it.”
Mojca: Oh, yeah, absolutely. I do support any visual based ads. What I do recommend is—I’m not sure about the product that he was referring to—if you have an opportunity to use video to show off your product, by all means, do that. It’s a similar approach that ecommerce businesses have been using all that time. They are really, really visual based, they have a lot of images or videos of their product. If you have a product that’s similar to that, you can, by all means, go ahead and use the same approach. Like I said, coming back, I do recommend using video in that case, it brings the best results.
Mike: With the video, this kind of goes into how you structure your Facebook Ads, maybe we touched on that for a couple of minutes, but obviously, there’s lots of different ways that you could advertise on Facebook. One of them is to have a video and you could also have like long form copy, short form copy. Could you just kind of touch very briefly on each of those and what your experience has been with them because I don’t necessarily think that we’ve talked about the specifics of what you’re going to put in your ad once it’s out there.
Mojca: Yeah, for sure. First of all, referring to long form copy, what I recently discovered through multiple A/B tests that I’ve done with all of my clients is that long form copy works really, really well, especially if you are advertising a software or a service business, long form copy tends to work really, really well.
Videos as well, along with long form copy. For example, if I’m working with a client that is trying to promote their software, we use long form copy so it’s a very long sales page like copy along with a video of them. It tends to work really well. But for other businesses, I have a couple of ecommerce companies that I worked with this as well, we don’t use long form copy but what we do use is a lot of images of their products.
But if you have a software company, if you offer services, what I do recommend is A/B testing with copy. Launch an ad, one ad with short copy, same visual, one ad using a short copy, one ad using a long copy. I’m definitely taking a bet on that and I think that long form copy will prevail on that case.
Mike: Awesome. The next question comes from Ed and he asked, “Will Facebook tracking effectiveness drop as more people use ad blockers?”
Mojca: Yeah. I love that question. They have been actually saying this for years now. For years, my clients have been coming to me saying, “More and more people are using ad blockers, is effectiveness going to drop?” Actually, we haven’t seen a bigger drop since I started talking about this with my clients two years ago. I think maybe that that drop is gradual, but to be honest, right now I would say that it’s not going to affect Facebook advertising as we might think that it’s going to affect it.
Mike: Our next question comes from [Kelso] and he says, “Do you have any case studies that you can point us to for successful ad campaigns? The second question he says, “How deep should you go with segmentation?” Do you have a couple of things we could link up on the show notes?
Mojca: I’m actually working on them but you will be able to find them on my webpage, definitely.
Mike: Awesome.
Mojca: A couple of results, with Facebook we’ve seen—I’ve worked with an ecommerce company—and we’ve seen up to 400% ROI. That was actually a standard especially when we did retargeting, we had 400% ROI. Or for example working with software companies, one software company in particular, we were paying $20 for an acquisition where lifetime value of a customer was $500 or right now I’m working with another software company and we are paying $50 for a conversion and they’re paying on Google $500 for the same conversions. It’s been incredibly effective.
But as far as segmentation goes, I definitely recommend as much segmentation as possible. That said, you always need to be careful of potential reach, you can segment all you want but if, let’s say, a specific custom audience that you really segmented out, the potential reach is only 20 people, that will not be effective. Be careful of that.
Also you need to keep in mind that the more segmentation that you have, the more work you’ll have with your Facebook Ad campaigns so you really need to decide if you want to do that or not. Segmentation is incredibly effective when it comes to Facebook Ads, like I said, it’s a tricky thing to do especially if you’re working with a bit smaller audiences, but if you have a lot of data collected already, by all means, segment as much as you want, I really recommend it.
Mike: This kind of brings me to a couple of questions. I kind of specifically had like when you are looking at what your ad spend is gonna be and what your minimum reach are, are there kind of guidelines that you would follow? Say make sure that you’re spending at least this much on a daily or weekly basis and make sure that your reach is at least this because otherwise, it’s probably not worth your time. Is there some quick calculation you could do based on “performance metrics” or average conversions kind of going through those Facebook Ads to figure out like if its 20,000 people, you have to have a conversion rate of at least 10% in order for it to be worth it if your cost per good sold is X. Is there anything like that that you can go and point to?
Mojca: Everyone asked me about that and that’s a very, very hard question to answer because for example, I’ve worked with multiple software businesses and they are so different when it comes to conversion rate and ROIs. With each and every customer, and with each and every client, I have to figure out a way of how to properly measure that and how to properly determine how big of an investment we need in order for our Facebook Ads to be effective. If you’re starting with Facebook Ads right now, if you haven’t done this before, I do recommend starting it slow. Don’t say, “Oh well, we have a well established business and we can spend $10,000 a day on Facebook Ads. Let’s just do that.”
Even if right now you have a lot of assets that you can promote, you have the money to do that, I definitely recommend starting slow with investing $50 a day or $100 a day and just kind of seeing what do you can do with that money and establishing where the ROI is coming from and what you need to do and what kind of cost per lead magnet download you can get for that kind of money. Just filling your way through that and then investing more and more once you get the hang of it.
If you do have a small business, so to speak, for example you’re just starting out, you just launched your new product, it hasn’t generated any revenue yet but you do want to experiment with lead generation with Facebook advertising, I recommend starting with $10-$20 a day and just seeing how that goes.
Facebook offers a lot of different tracking options, you can really track your ROI, you can input for example for each lead or for each conversion, you can connect that conversion to a specific value and Facebook will track ROI. It all comes down to your setup and so on.
Mike: Thanks. That’s extremely helpful because I think that the ballpark numbers that people have, people just don’t even really know where to start in terms of how much to spend, I mean is it $5, $10, $20. I think that the guideline of $10-$20 a day, at least to start of with especially if you’re just starting out and you just have a new business or product that you’re pushing out there, it sounds totally reasonable and I think within the reach of most people. We hear people talk about like you just mentioned, $10,000 a day, some products are just not even gonna make that in a year. It’s just not realistic.
Mojca: Yeah, yeah.
Mike: I think the last question I had was how do you go about managing or documenting your custom audiences and the custom conversions because one thing that I find, especially when it gets into like marketing automation side of things, you tend to lose track of stuff over time even if you’re working on it right now, it’s very easy to forget all the specifics of it and a week or five weeks or two months down the road. How do you go about tracking those things in a way that’s going to be easy for you to come back to later?
Mojca: Yeah. I absolutely know what you’re talking about because you have different campaigns within Facebook, you have different custom conversions, different custom audiences, just a ton of different things that you need to be tracking off and you need to have a higher level approach and just a higher level view on.
First of all, what I would emphasize is to properly name your custom conversion so you don’t get lost in, for example, lead number one or lead number two, you want to name them properly. Kind of the formula that I use on Facebook when it comes to custom conversions is I describe that custom audience as much as possible. For example, if you’re using a retargeted audience, I use website visitors 180 days landing page or website visitors 180 days this blog post. I use very specific names that I always know what this is when I come in Facebook.
Same for custom conversions and I document everything in Google Docs or Spreadsheets. I also document a lot of my custom conversions especially audiences and basecamps so I have documents for each client, for different audiences, it piles up, I tell you. Just using Spreadsheets, I think that is kind of the best way to go about it just to keep track of everything and for you not to get lost in the amount of data and different audiences and custom conversions and every other assets.
Mike: Awesome. I think that’s probably a pretty good place for us to wrap up. Is there anything that you wanna add or leave the listeners with?
Mojca: Maybe just giving one advice. I know that the Facebook might look very overwhelming. When you decide that you want to start advertising, you come on Facebook and you open up your Facebook Ads Manager and there are a ton of different options that you can choose from, don’t be afraid, it’s all very manageable. Facebook is really trying to simplify the process of advertising. Just like I said, start slow, invest a couple of bucks in launching your first campaign and see where that takes you and I promise that it will be worth it.
Mike: Awesome. If people have questions for you or they wanna follow up and kind of check into what you’re working on or if they wanna have you manage their Facebook Ads, where can they find you?
Mojca: Yeah. I would love for them to write me, I have my email so mojca@superspicymedia.com. I would be more than happy to answer any questions or hesitation or to just help them with setting up their first campaign. Send me an email at mojca@superspicymedia.com or if you’re interested in my blog posts and videos that I publish, services, you can find me on superspicymedia.com and you’ll find everything there.
Mike: I also see a link here for the facebookadsacademy.com?
Mojca: Oh, correct, yeah. I have the Facebook Ads Academy. If you’re just starting out with advertising and you need someone to pretty much hold your hand and help you with launching your first campaign or if you already launched the campaign and you have a question of how to set things up or what does this mean or what do these results mean, Facebook Ads Academy is definitely a great way to start. It’s basically a community of small business owners, we just help each other out when it comes to Facebook advertising, give each other advice, comment on specific visuals or copy.
Mike: I could say from experience that looking through the Facebook Ads Manager right next to somebody else who’s supposedly using the exact same thing, sometimes the interfaces can be very different from one to the next. I remember you telling me over FemtoConf that the ads manager, they’re running like a couple dozen of them at the same time basically A/B testing between them. Your interface could very well be different from somebody else’s.
Mojca: Yeah. I actually heard that they’re running hundreds of different Facebook Ads Manager. You might have a Facebook Ads Manager version that I do not have. I used to remember FemtoConf, I think they were like three different versions of Facebook Ads but it’s just that we were working with.
Mike: Yeah. They were like six or seven people in the room which makes that even scary.
Mojca: Yeah, it was crazy.
Mike: I think that about wraps us up for the day. Mojca, thank you very much for coming on the show. I really appreciate you having you.
Mojca: Thank you so much for having me.
Mike: We will see you at MicroConf in about five weeks or so too.
Mojca: Yeah. I’m so excited. This is going to be my first time in Vegas.
Mike: Awesome. You will be there straight through Growth Edition through Start Edition.
Mojca: Oh yeah.
Mike: If anyone is there, feel free to stop by and say hi.
Mojca: Yup.
Mike: If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 386 | Balancing Feature Development with Marketing, the Cost of Technical Debt, and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions. The topics include balancing development and marketing, overcoming hesitations about partnering, and the costs of technical debt.
Items mentioned in this episode:
Rob: In this episode of Startups for the Rest of Us, Mike and I talk about balancing feature development with marketing, the cost of technical debt, and answer more listener questions. This is Startups for the Rest of Us Episode 386.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: I have the plague.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. You were sick all weekend?
Mike: Yeah. My eldest son got sick the last Wednesday, I think it was. It was like Wednesday and Thursday and we sent him back to school on Friday. Then my wife got sick between Friday and Saturday and then I got sick between Saturday and Sunday. It’s been a rough week to say the least.
Rob: Yeah. That’s brutal. Being sick just tears you up, means you can’t get anything done, especially when you don’t have vacation time, you don’t have to paid time off and you’re trying to drive a business forward, it’s like every hour is precious.
Mike: Yeah. Fortunately for us, it was kind of over the weekend but still we’re recording now, we don’t usually record till Thursday but today’s Monday and after this podcast episode, I’m probably gonna go to bed.
Rob: Right, right. Yeah. Today, we’re actually continuing kind of a continuation of last week’s episode. I had picked out several questions last week that you and I were gonna go through and answer and we only got through a couple of them because the GDPR conversation was so extensive. I think that was a good thing. I think we went in depth and gave ideas and feedback but it meant that we had this big block of unanswered questions and I wanted to keep going with them.
Now we have a few voicemails and some others today. But before we do that, I want to tell you, I know I haven’t talked about Drip features in a while but I’m pretty excited about this upcoming feature. We’ve been working on it for–I’m trying to think–it’s gotta have to be about four months now so it’s one of the larger features we’ve embarked on but it’s a visual email builder.
Mike: Oh, nice. What’s that involve?
Rob: A lot of stuff. Yeah, you can imagine not only the frontend which is obviously a lot of dynamic stuff, a lot of Javascript and pointing and clicking and moving things around the screen but then taking something that is essentially JSON and translating into the table-based email render to HTML is a challenge.
We found some AltSize and trade secret workarounds that we found, we’ve really done a lot of research and I think I’ve done a good job with it. But what I’ve heard from folks who have built visual email builders is building the visual portion of it is one project and it will takes six months or nine months, depending on how many […] we have on it and how good they are. Then just doing the table-based rendering and getting all of that to work and working all the clients is at whole separate project. It can take as long as building the actual visual builder. This is why a lot of upstart ESPs don’t build them because the time investment is so extensive.
Mike: When you say rendering the stuff and the clients–I understand what you mean by the differences between them–but when you go back to the visual email builder, what advantages does that have over what Drip does now?
Rob: Right. Today, Drip just has a nice little WYSIWYG text editor and I’m still gonna use that. I never use visual email builders because I like the personal interaction or it just feels more like you’re getting a plain-text email when you send using our standard plain-text template. This is how I’ve always recommended doing it. I believe the conversation rates are higher when you do that.
However, there are a few industries where they have done tests–so they’ve done tests across many industries in terms of visual email with a lot of images and table-based layout, two columns and this and that versus just something that kind of looks like a plain-text email, much like we send out to a MicroConf list, or I send out to my blogs Software by Rob list, they tend to be more personal. It’s from Rob Walling, Founder, it looks like he’s actually typing it to you. But there are few industries—ecommerce is one and travel is another—where having back these more exotic layouts and emails can and will convert better.
Since we do have a large ecommerce contingent and since we’ve been focusing on commerce-based businesses, people who are selling things, we have found a time to break ground on a visual builder. It allows you to do the things where you see the fancy, neat template, you can just insert your images and have that layout. It’s not something I’m gonna recommend for everybody but there are instances and match your converts better.
Mike: Got it. Kind of like if you go over to MailChimp for example, they’ve got like 30 or 50 different templates you can choose from and okay, that makes sense.
Rob: Exactly.
Mike: That makes sense.
Rob: Right. We won’t have 30 or 50 templates to start with but obviously that’s a direction that you’ll wind up going and it’s become table stakes. Again, in certain industries if you’re doing ecommerce and you’re working with companies using let’s say a platform like Shopify, BigCommerce, or WooCommerce, or if they have their own custom solution for ecommerce, they tend to want to send emails with a lot of images and not just to frustrate top to bottom flow where it’s image-text, image-text, you wanna have things that just look nicer than that.
Mike: Yeah. Things that come to mind for that are things like Amazon, Newegg, or ThinkGeek, all those, it’s exactly the same. I totally get what you’re saying where that’s going, but it totally makes sense.
Rob: Yup. The reason I’m excited about it is because I feel much like we did with workflows, we went back to the first principles and said, “What did everyone else do wrong? What do we hate about builders? How can we do this differently?” It isn’t just look at what everyone did and copy the best features, just like we’re doing things that are different than anyone else. There are obviously gonna be commonalities. There’s stuff on the left that you’re text and your image block and your divider and whatever, then there’s the email on the right. That’s common stuff but there’s certain paradigms that we use that I think are superior and gonna make for a better user experience.
The team has been working hard on it and everytime I see it down the road, I’m like, “Man, this is super cool, actually. I wanna use this even though I don’t really…” Like I said, I don’t use other visual builders as a rule when I’m writing my emails because I’ve always liked the more plain-text feel.
Mike: Awesome. Let’s dive right into the episode and they’ve got a couple of questions outlined here. Let’s get started on this.
Rob: For sure. Our first one is a voicemail and it’s about how to balance feature development and marketing specifically for an IOS app. But let’s hear the question and we can figure out what form we wanna answer it.
Steven: Hi Mike and Rob. This is Steven Johnson with […] Plus, an iOS and Mac app for hikers. My website is […]studios.com. I have a question about how you work […] user feedback. I’ve been getting a lot of feedback about my app on the Apple Watch, it’s still like I’m missing out on some opportunities as well as on just keeping up with where the market’s going.
However, right now I’ve really been prioritizing a lot of marketing efforts, working on conversion rates, lowering churn, […] partnerships with business development and […] by knowing […] you talk a lot about having more marketing always speeds out features and I completely agree with that. I’m just trying to figure out how do I kind of balance these two priorities and knowing how to balance user requests that come in, especially one that feel like the market’s making changes and I feel like am I missing out on something, maybe I am and maybe I’m not, but I know that there’s opportunities that I’m not capturing with my marketing, I know there’s conversion opportunities as well as churn that I need to work on. I’m just curious about your thoughts on that. Thanks for the show. Love what you guys do. Thanks.
Mike: I think this is an interesting question mainly because it’s an iOS and Mac app but there’s also the recurring annual subscription from productivity. I think the prices–there is a free plan–but then they range from $20 a year up to $80 a year which is of around what, $5-$8 a month, something along those lines. I think that the challenge here is identifying why that churn happens. Is it legitimately because people are churning out and they’re no longer using it or is it just they find that the app doesn’t help them nearly as much as they thought it would? I think it’d be easy to assume that, “Oh, you should be doing this.” Or, “You should be implementing that feature.” But I think I might dive a little bit more into the churn itself and start ask a lot more detailed questions about why the people aren’t using that.
My concerns/fear here would be that what you’re offering people is conceptually what they want but either the implementation itself is not really what they’re looking for or it doesn’t really quite match up with what the value proposition they were sold on is and it could turn out to be that somebody tries one app and they think that it’s gonna work and once they get out of the field and they’re using it, it sort of works or does most of what they want but it’s not quite enough so they just decide to switch and use something else. Maybe look at your performance metrics or your usability metrics to see like are people actually using it after three or four months in or is it that they’ve paid for and it was a low enough price point that they said, “Well, I paid $50 for this and it’s not a big deal so I’ll just try this other thing over here for another $50.”
As I said, the fear/concern that I would have is something that people use and it may just not be able to deliver on the promise. It’s not to say that you can never deliver on that promise. The fear that I have is it even possible to do what it is that they really want. I don’t know the answer to that, you have to ask people to find out. But as you said, the other component is like do you invest more on the marketing side and try and ramp it up or do you drill in and start trying to fix those things and add more features?
I think the first place to start to find out why people are churning out and what the fundamental issue is there and from there look back and say is it important enough for you to fix? The reason I say that is because there’s a question for road map and what is the most important to you, not roadmap, runway is more it than anything else, are you able to make ends meet with the app the way it is or are you chewing through runway and sort of losing money on it as you’re going along? In that case, you need to lean more towards scaling things up and then fixing things versus being able to make ends meet on a regular basis and you don’t have to worry about it as much. At that point, you can dig in and start fixing things in the app. That’s probably the place that I would start. Rob, I’m sure you have some thoughts on this as well.
Rob: Yeah. This is the age-old question. I think it’s a really good one to think about. I think in general, as developers, we think features are the answer, and in general, they are not. Not to say, all at all times because in certain markets, in certain niches, it really will make a big difference like Drip launching workflows was game changing for us, it doubled our month over month growth. It can happen.
But so many of the little features that are constantly being requested, if you have thousands of users you’re gonna get 50 or 100 feature requests a month and most of them you need to not build. Not only to keep the product simple enough that it doesn’t become bloated, but because you just don’t have the time to build them all. The caller is so much closer to his business than we are so it’s hard for me to make a recommendation to him, but my recommendation in general would be stir away from the mindset that I just need this one more feature to do this thing, unless everyone’s requesting it.
There comes a certain point where 10% of your feature requests are for the exact same feature. At that point, that’s when we break down–in the early days, we build a lot more now, we have a team of 18 developers or whatever, but in the early days when we were super cash and resource trapped, it was pretty much no by default and yes to these highly focused things that we knew were gonna move the needle. That’s how I balance it.
I think that the caller’s approach to doing joint ventures and focusing on marketing is genius. That’s exactly what I would be doing because the more marketing you do, assuming it’s effective, the more revenue you get, and that revenue will allow you to then hire a contractor in essence or perhaps the first time employee, how ever you wanna work it. But hire a developer that you can supervise because that will then, I should take one step back first, first person I would hire is a part-time VA to handle all your support, if you’re still handling that, because that will free up.
Then start thinking about hiring someone to write the code and this is the part that developers always struggle with because no one “is going to write the code as well as I do.” However, if you can free up 12-30 hours of your time in a week and features are still moving forward and you have some budget to pay someone, it can be game changing for your business and that frees you up to focus on really moving the needle.
I think marketing in the early days is such a big deal because you need to get the revenue to allow yourself to start stepping away from certain roles that while you may enjoy doing them are probably in the early days are less effective and what more if the needle is matched.
Thanks for the question. I hope that was helpful. Our next question is about overcoming hesitations about partnerships to move the business forward.
Joshua: Hi Mike and Rob. This is Joshua from [Perspexa Labs]. First, thanks so much to this podcast. Every episode is invaluable. My question is this, how do I overcome my hesitancy of partnering with someone to move the business forward?
For context, I run a B2B SaaS company that offers monthly subs in the range of 100-350 a month, and we’ve plateaued about $2,500 in MRR I co-founded the business with an office colleague but I just realized circumstances he really isn’t able to participate materially in the business anymore and our product is solid at this point but I know we need to move the needle and sell the marketing in a big way. Try as I might, I just can’t seem to crack that nut.
I know that finding the right person to bring onboard will probably do wonders and turn us into a vital business but on a do-it-yourself-er and I just have trouble, one, convince myself that I ought to do this, and two, coming up with the vital way to achieve it. Any advice for effectively a solopreneur who doesn’t wanna be stuck in a half business for forever? Thanks so much for the both of you. Everyone, go leave a review to this podcast on iTunes. Thanks guys. Bye.
Rob: Joshua was kind enough to also send us an email with a bit more background and he said, “The main product outreach is at [perspexalabs.com], we’ve got a core group of customers and service businesses like pest control and electricity and we’ll soon be getting into healthcare providers because our revenue is only $2,500 a month with margins of around 70%. It’s not enough yet to pay salaries. I’m guessing that bringing someone onboard will probably need to be an equity arrangement which I’d be fine with.
With regards to my own efforts to sales and marketing I’ve gone to the Traction book and tried several different approaches including online ads, cold-calls, cold-email outreach and attended a very targeted trade show. That really hasn’t generated fruit as nearly all of our current customers are referrals from other customers. Unmentioned to my question bills are related issue, should I let my current co-founder remain in the business? I’d really like him to be here if we can get into healthcare because of his connections, but I know this isn’t the first priority anymore.” What do you think, Mike? It’s a tough one.
Mike: Yeah. I think you can almost divide this into two entirely different things. One of which is what to do about the co-founder and then the other is how do you move the business forward when you’ve got $2,500 a month and not enough money to do a lot and you’ve also obviously got the co-founder onboard and I don’t know what the relationship there is in specifically call that out.
Rob: It sounds like it’s still amicable and he’d like to keep him on if they were to go into healthcare but not if they don’t. You don’t know if they vested so the first thing is that you should have done four year vesting probably so that your co-founder wouldn’t own the entire percentage that they had. Because if they decide to leave, that will go back into the pool to get the next person.
Mike: I think, with regards to what to do about the co-founder, that’s probably the first thing to do. It sounds like you wanna keep them on but the question is how much is he going to be able to contribute. As Rob said, the vesting schedule maybe he owns 25% because he’s stuck around a year, 50% because he’s stuck around for 2 years. That seems to me like the first thing to look at and try and figure out and if he has to walk away because he’s just not involved, that doesn’t mean he still doesn’t own a certain percentage of the business anymore and can’t contribute under the […] capacity or something along those lines. That’s something I think you have to work out with your co-founder and sit down and have an honest conversation about what him stepping away from the business really means for the business and for the relationship between you guys.
Then once you’ve figured that out, the next question to tackle is what do you do about the business itself. I think you didn’t specify what your own personal situation is or whether you’re taking money from the business and living off of it. But with the $2,500 a month, it sounds to me like because you’re a do-it-yourself-er, it might be a viable strategy to go out and find a business coach who can walk you through a bunch of different things and that does a couple of things.
One, is it avoids handing equity over to somebody else, and two, it still allows you to do those things yourself and you get that personalized assistance from somebody else and a sounding board from somebody who’s vested in the business because you are paying them to give you ideas and take a hard look at what it is that you’re doing and how effective those things are but you’re still doing those things yourself and you still don’t necessarily hand over control to a third party or a co-founder or another partner in the business and avoid some of those other issues that maybe you’re struggling with right now.
I don’t think that it’s wise to introduce too many changes all at once. That could be a nice bridge scenario where you are involving somebody else but you’re not handing over the reins to somebody else in a co-founder capacity while you’re having your current co-founder step away from the business a little bit. That’s probably where I’d start looking and see if that makes sense to you.
Rob: Yeah. I think you’re right, there are two separate issues here, it’s existing co-founder and then pulling on a new partner. I think given that the business you have to de-risk the business a small amount that bringing on a new partner, you could obviously give equity without giving an enormous amount. It wouldn’t need to be a third of the equity or something. It depends on your aspirations and think where the business is headed and who you can find but I’m thinking in the 10%-20% range given where you are. If you were gonna go raise funding and you’re gonna go try to find like a COO or something or a CTO, they get 5%, but you’re in a little bit different situation because it doesn’t sound like you’re gonna get so big so fast, that that’s gonna be warranted. As a result you have to bump that equity to 10% or 15% or whatever. But at this point, in my opinion wouldn’t just be an even split.
I think the hard part is finding that person and vetting them and it’s like a marriage because you guys are gonna have shared ownership of things and breaking that up later can be like a divorce. I think getting over your hesitation is one thing, but I think the harder thing is to find someone who is good enough or who’s gonna work with your style, who’s willing to be in the trenches with you, who I think it really wants to stick around and is able to work because it sounds like this is gonna be nights and weekends, people are not cut out for that in general, most people just think they wanna do it and then a month or two months and they just flick out or they just decide not to do it.
I think finding someone who meets all this criteria is really hard but I think if you can, then what I would look at doing is definitely have kind of a trial period, maybe 90 days, just to say how things feel, I would definitely have four year vesting on that with the one year cliff, meaning they don’t get any shares until they’ve been around for a year. I think that’s how I would approach it and I would look to be meeting people in person so I would be going to the MicroConfs and the businesses software and these conferences where there are folks who could potentially be in that pool for you separately regarding your current co-founder. I think you just need to make the choice sooner rather than later whether they’re going to healthcare. If you’re gonna go onto it and he wants to stay around, you wanna keep him around, that’s great, and if you’re not, then I think the decision is made there.
I know it’s not always that crystal clear but it does, given that information you’ve provided, seem perhaps how I would perceive. Thanks for the question, hope that was helpful.
The next question is about technical debt. Mike, does technical debt really come back to bite you?
Mike: Oh, yeah. No question on that.
Rob: Alright. The subject line of the email is actually, “Have technical debt decisions been easy to pay down later or did they really come back to bite you?” He says, “Love the show, listened for the past year, really love the practical advice. I’m looking for your technical perspective about what matters in the early days of getting a site running while keeping customers happy with mission critical data, building a data heavy B2B SaaS startup.
The frontend is in Angular, the backend is in Rails, intermediate self-taught developers, new things I haven’t done before can sometimes take a week or two to figure out. I’m making early technical debt tradeoffs hosting using Heroku versus AWS, database PostgreSQL versus Aurora, and the other miscellaneous things relating to data structures.
I’m not looking for technical help but the question is more geared to your experience of how much this stuff matters up front and really needs to be solved to get functional versus it’s not too hard to change it later. Theoretically important but won’t kill you so pick the simpler thing even if you know you’ll need it to change it after launch. Am I wasting a lot of time by taking the shortcut now and having to pull the app apart later to move it around when I have real customers using it in production?”
Mike, this is not gonna be as long as GDPR, I promise, but I feel like we have a lot to say on this, so go. Just start rolling with this. What do you think?
Mike: Yeah. Do we have like beeps cued up immediately for all the profanity that’s about to be dropped on this?
Rob: Yeah. Technical debt, it’s a *.
Mike: Yes, it is, yes, it is. I think looking back on this particular piece of it, some of the things that he had brought up, the things like hosting and the database selection and the data structures that you’re using on a backend, some of those can be really hard to change later on, versely impossible. In some cases, you’re looking at a complete rewrite.
You at least have to have enough technical knowledge to make those decisions in a way that is not going to completely kill the app later on or force you to do an absolute rewrite from the ground up. That said, I do know people who have done complete rewrites after they’ve gotten to a point where they’ve gotten customers onboard and it basically delays things, you may have to take three, six, nine months of accepting the fact that you’re just not gonna make any progress on the features in order to fix that fundamental positions that will bust it.
Then, there’s kind of a second level which is where you’re trying to make decisions about how do you structure the data or how do you create the database in such a way that it makes easy to do certain queries or provide a solid error handling, error returns to the API for example. I think in those cases, you can mitigate them to some extent by using dependency injection and creating these interfaces that sit in front of it and if you need to rewrite one, then you can, you’re almost swapping out an entire layer of the application for another in a very specific way.
I’ll give an example with Bluetick, like the backend storage system for storing emails has been rewritten four times. It’s because at first it was like let’s just get something working and then it was trying to optimize for local storage and then the next level was things are not working in local storage because there’s so much data coming in at all times like I just can’t scale that much on one machine and then I kind of move everything into the cloud and into the Azure tables in no sequel storage. Then the fourth rewrite was essentially making that more scalable and optimized.
Each level on the way like there was some level of rewrite but because it was essentially being able to flip a switch and say instead of using this set of data structures, you can do those on a per user basis or on small sub-segments of the users and not affect others. I would definitely do some research on dependency injection.
The other nice by-product of them is that it helps with writing unit test to be able to make sure that those things that are working from one version of your rewrite to the next in that particular component or module. Beyond that, there’s always gonna be things that you run into where you think that one way is a good way to solve a technical challenge and you turn around and find that it just wasn’t, you get down in the weed sometimes and you realize that you made a really, really big mistake and the only way to resolve that at that point is to rewrite it and there’s nothing you can do at that point.
The only way to have mitigated those four types of problems is to run into them and then realize after the fact that it was a mistake. It’s really hard to generalize from one application or problem space to the next and say like, “Oh, you should never do it this way. You should always do it this way.” Those things don’t apply. Each problem space has its own unique way of storing data or things that need to be surfaced to the user and you don’t always know what those are until afterwards. Sometimes, you just make the best decision that you have and you find out later that it was wrong, there’s nothing you can do.
Rob: Yeah. I would just say in general, technical debt is underrated in the startup space. I think people think that it’s not a big deal and it’s a way bigger deal than most people do because if you aren’t technical, it’s hard to understand why you can’t just quickly rewrite a piece or quickly change a decision you made later. These metaphors don’t always work but it’s akin to building a building and then needing to go back and replace the concrete foundation because you poured it incorrectly. You literally have to jack the building up and it’s just painstaking and agonizing to replace that and that’s what code is. You’re building things on top of each other.
I think of it like a 4×4 matrix where there’s basically two binary things. One is I know that this is a shortcut and I’m gonna take it anyways versus I don’t know this is a shortcut like I accidentally introduced technical debt. I think that’s the switch you’re talking about.
Then I think the other one is it’s easy to undo later versus it’s a complete fiasco to undo it. You can imagine that 4×4 matrix and we’ll go through all of those matching up but obviously any decision you make on purpose to introduce technical debt, you need to explore and thought experiment like how hard is this to undo later. If it’s hard, then don’t do it.
There were a lot of decisions Derrick and I made in the early days that were very slow, they caused Drip development to be very slow in the early days and it was pretty agonizing when we were bleeding cash and we couldn’t get the features out the door to keep people from churning because it was a very specific feature set that people wanted, and it was taking us months to build them and it was because Derrick wanted to build them very carefully with extensive unit test and he wanna do it right and he had to refactor the database twice in the first year of the app, because the app went from a very simple thing to very complicated thing.
It was agonizing but it was the right decision, because now, it would be catastrophic right now, we would probably have to have rewritten major parts of Drip. I don’t know if it would have impacted the acquisition or if it just would have been post acquisition or what it would have been but it would have been really hard and between he and I, we figured out a good sense of what was gonna be hard to change later–things that are easier to change later like you said where you can just build an interface and then swap it out later. Obviously those are the ones that you can maybe take shortcuts on.
But I think some people take shortcuts on like not running unit test, some people make cold-quality shortcuts where they just start hacking things together and later on, everything’s buggy because you took a shortcut and you didn’t build that right in the first place. In general, I have seen no less than half a dozen or maybe closer to a dozen companies get to the point where they’re between 10k and 50k MRR, they’re growing fast and they have to rewrite their entire codebase. I’ve seen some that have done it more than ones.
It is so painful to spend six months of standing still while your competition gains on you because you took shortcuts in the early days. Now, you’re just hanging out, waiting to build more features until your codebase can be completely rewritten. I would say proceed with caution, obviously, you’re always gonna have some level of technical debt, but be very deliberate about those choices because I think it’s easy to be in such a hurry to get to the point where you have more revenue and this is certainly a tradeoff because in the early, early days, when you just trying to get to $5,000 or $10,000 revenue, you’re gonna have to make some trade offs but try to take shortcuts on things that are easy to change later. That’s how I think about it.
Mike: I think one of the biggest places to make that trade off is that when you’re looking at unit tests, I’m not saying you write unit tests for everything because I certainly don’t think that that has a ton of value for a startup but I do think that there’s value in having like continuous integration server of some kind or a build system put in place so that later on you don’t have to figure out, “Okay, how am I gonna deploy my app?” You want that to be a systematic thing where you can literally just click a button and it runs through everything and is able to deploy the app.
But with that comes at least some level of unit tests or a mechanism for running those, and even if you don’t write a ton of unit tests, as bugs come in, you should be adding those unit tests to make sure that if a bug comes in and it breaks something that you had a unit test in there so that later on, as you’re making other changes, it doesn’t break that again.
Like I said, I don’t think you should write unit tests for everything, but I do think that as those bugs come in you should be writing them to make sure that once you fix a particular problem that you don’t have to refix it 3, 4, 5, 10 different times moving forward because it just keeps coming up.
Rob: Thanks for the question. I hope that was helpful.
Next question is from Jay Pablo Fernandez and he says, “I just finished going through all my newsletter subscribers and I noticed there are a few industries that are well-represented such as education, health, IT and government. When it comes to my product, they all use it in the same way. The feature set they made is pretty much the same. I wouldn’t say they are verticals in the SaaS way of thinking. I can sell to all of them or I can focus on one industry. Are there any advantages to either approach?”
Mike: I think this is a tough question, as you said you don’t wanna paint yourself into a corner and make people think that you don’t serve their industry. I think what I would do in this case sn focus on the specific problem that you solve and then maybe have different case studies for each of those industries and even segment your list a little bit so that when you talk to them, when you’re sending out newsletters or you’re sending out articles to them, maybe you’ll only send an article that highlights a case study for the electric and gas industry to those people who were subscribers that fit into that bucket. It seems to me like that would probably be an appropriate way to go, but at the same time there’s value to be had to for saying, “Hey, this also works in other industries because there’s gonna be some crossover between them.”
Let’s say that you have a case study on the nuclear power plant industry, if it’s safe enough for them to use, pure application, then whatever other industry they happen to be in, they would probably translate that and say, “Oh, well, if these guys are using it, then surely it’s passed master and I could use it as well.” I would think about it in terms of just trying to make sure that you’re covering enough of each of them but not focusing so hard on any of them that it makes people think that, “Oh, this is not for me.”
Rob: I think I might try to run an experiment. He has this list and he has these four sectors, four verticals, and I would consider trying to do physically exploratory calls, I don’t know if you wanna call it customer development or even just sales calls, if the product’s already there, across all of them, and figure out that you wanna validate your assumption that they use it in the same way with the same feature set. Because I find that a little bit hard to believe, just having run the apps that I’ve run, different industries tend to want slightly different feature sets and have a slightly to just enough it settle but by the time you really get and they start using it, it becomes a pain-in-the-butt to have four different industries or wanting something just slightly, “Oh, just tweak this one thing, oh, can I just have a setting to do this? But we have a permission in the reporting thing.” It’s just enough that there will be a difference. I guess it’s what I’m guessing.
If you have the time to do this upfront and just have a bunch of phone calls with these folks and try to do the demos and try to figure out is it truly gonna be something that they all can use, then that’s fine. But I do think you’re gonna find differences in payment terms, like you said sales cycle because government’s gonna take forever to come through, maybe in your early days since you’re trying to get ahead of funding running out or whatever, you go after the ones that close quickest, which I don’t know if that’d be IT, education, sure it seems like it’s gonna take a long time too, so focus on the one that are gonna close the quickest and get the early value in order to keep around long enough to focus on all four.
But I would try to answer that question, there’s still a question in my mind of is the product actually gonna serve all four? If that’s the case and you can work your entire list and work all four of them at once and try to get as many customers paying you on day one, then that’s what I would do. Right now, you’re just trying to get revenue and see how people use the app and if they’re gonna get value out of the app and there are across four different industries, then you’re gonna learn more about all four and maybe later you decide to focus down on one industry.
I do think that there are some advantages focusing on one industry in terms of how your marketing can really speak to people so you’re gonna close more deals probably, how you are sales conversation can focus on them, how your features set can focus, and how word of mouth would be such a big component of it. Assuming that people in your industry hang out at conferences, or hang out online, word of mouth if you just become the defacto in in the industry and in a vertical then you can land and expand words like, “Alright, we are the go-to for this task in the IT space. Now we’re gonna start adding on these other verticals.”
That’s the other way to approach it. It’s just a pick one based on your information so far, your best guess, and then later on, a year or two down the line, once you own a big chunk of this, you’ll expand into the others but I feel like you don’t have enough information to do either approach right now and I would try to close as many deals as I could, see if they actually will all use it and then try to make the decision once you have a little more information.
For our final question of the day, we have a question from Ed Freyfogle. He was a MicroConf Europe speaker this year. He says, “Hey, guys. Long time listener, first time asker. One target audience of my SaaS service is academic researchers. They are not the best customers as typically they’re low budget and they only need this service for a project or semester. Nevertheless their niche seems to like my service. Often they ask for academic discounts. My pricing is already very affordable and I offer discounts for annual purchases. Still, I can’t help but wonder if I might be able to grow this niche by offering an academic discount.
Alternatively, I have also thought about selling to universities and offering them a bulk rate. But so far I’ve always been busy with other things so I haven’t acted on this idea. I’m wondering if you guys have any advice on academic discounts in general, how to ensure they are not abused by other customers and selling to universities. Thanks for the great show, I learn a lot.”
This is a tough question. I like the fact that he’s thinking pretty strategically about it. I think that if you haven’t had the time to try to sell to the universities and offer them a bulk rate, if you haven’t made the time, it’s probably not that important. That’s where I found like this is right. It’s like you go toward the money’s coming in and your biggest fires are. I’m guessing that unless you are to hire someone to handle that that it’s not gonna make it to the top of your to-do list anytime soon.
I tend to think about discounts in two ways. There is academic and then there’s non-profit discounts. I don’t know if you have a non-profit discount as well, that’s something that I would consider modelling it after and there you just ask for proof of their non-profit status which can totally be abused. I think with DotNetInvoice we had profit one and it was maybe 1 in 20 or 1 in 30 who ask for it and show the stock seemed a little bit like, “You signed up with this just to get the discount.”
In terms of academic stuff, it depends on what volume you have coming in, it’s like if it really isn’t education it’s 1 in 50 people ask for it. You can always have an unpublished academic discount and you just need to get proof from them, I don’t know it’s a student ID or if it’s a professor ID, what it is, but it’s gonna be a process, it’s fairly lightweight. I personally don’t see a huge drawback to doing it. I’m curious when people email and ask for academic discounts and you say no, how many sales do you think you loose? Is it worth even doing any of this effort to get those sales?
Your pricing is already reasonable, if you offered another 20%, 30%, 40% off for academic discounts and that’s probably the range, I would think, although I haven’t done any research about this, but mentally it would be in that range. Is that worth it if you have to go through validation of some type of ID, I don’t know, there’s some trade offs here.
If the volume is high enough that you’re asking this question, I would probably just do an experiment where the next time I got an email about it, I would say, “Yes, we have a 25% discount, but you have to prove you’re a student or you’re faculty.” See where it goes from there and handle it as a one off to start and then I don’t know if it has support people or not, but if you distract them to do that and then tally up in a Google Spreadsheet how often it gets asked and which sales come through, you can start getting at least a little bit of data about it.
Those are my initial thoughts without a ton of experience, to back that up, it’s more of the got feel, so much of entrepreneurship is making enough as you go along. It’s just figuring out what’s the priority and making the best judgment call based on the information you have. What do you think, Mike? You have other thoughts?
Mike: I’ve looked at the academic discounts in the past. You just do a quick search for academic discounts for software and you’ll find that they can be upwards of 85% which is extremely high especially for something like a SaaS, I mean. Is the money that you’re getting even enough to offset the cost of you actually doing business for that person? I don’t know the answer to that. I think you need to figure out what that is.
Rob: Yeah. I know that Microsoft and Adobe and those guys discount because they’ve been pirated so much. Too often students who don’t have the money and they do these huge discounts. When you’re a SaaS app, especially when you’re Bootstrap like this and cash is important, there’s no chance I would offer a discount that large.
Mike: Yeah. I mean I think that part of the reason that those types of companies offer discounts that are high is one, it’s downloadable software so they don’t have to worry about their own cost, and two, they’re really just trying to make sure that there’s some form of legitimacy for the software that you’re using and giving that high of a discount helps them to get market penetration so that Microsoft has 90% market penetration on the best app for Office and Windows.
I agree, I wouldn’t go that high, but it’s not to say that you couldn’t have a discount for students versus a discount for academic researchers/the university itself. Because if somebody’s using it for a class, then they’re probably not going to be able to pay nearly as much as the person who’s doing it for the university and offering it on behalf of the class itself. I might think about that, but I do agree with Rob that you probably want to go through and run at least some tests to find out like what is it that people are using it for.
Something else to consider is that if somebody is purchasing it on behalf of the classroom because they’re teaching it, what’s the value of having those people in the class know about your product and then they leave and graduate and go out and do things in the workforce and having them know, “Hey, I can come over to opencagedata.com and buy this stuff off-the-shelf and we use it in our classroom so it has a lot of legitimacy.” There’s probably some value in that, I don’t know what that level is because I mean if you go through like an engineering degree, chances are good you’ll probably use Autocad some place along the way. When you get out into the industry like you first thought is, “Oh, I need to create some 3D models of something. Where’s the copy of Autocad?” There’s a student discount that you can get but once you get out in that at the real world, your company has to pay for it.
Having those people go to their bosses and say, “Hey, I use this data over here from opencagedata.com. We should buy a license for that.” There’s value there. I don’t know what that is but I definitely think there’s some value there. I would look into it, I don’t know how much time and effort I would spend on it because the return on that is probably gonna be wild. It’s gonna be a couple of years.
Rob: Yeah. Those are good points. I like your idea of not making an academic discount but making it a student discount. It’s an interesting thing because students really don’t have the money whereas if a university is buying it for a class, they do have some budget, and he’s right, his prices are reasonable like a university should be able to afford it.
Mike: Even with like a student. A student could probably get away with a free trial or even like the extra small plan that they have there for like a class or project or something like that but the university, if it’s for a class, and they’re buying it on behalf of the students for a class, I’ll offer them a 30% discount if you’re a student and you just want to use it for yourself, maybe it’s a 60% discount. I don’t know, but if you separate them, I think that there’s a way of targeting those people in that way that says, “Oh, we give individual students 60% and for universities we give them 30%.” It shows that you’re doing both. It shows you’re helping out on both sides.
Rob: It’s a question of whether or not the volume of incoming request warrant spending the time to figure all this out. If the answer is no, we have reasonable prices and we aren’t able to support any of these because you don’t have the bandwidth. It’s less about money and it’s more about Bootstrap startup with not a lot of time and just having yet another program to maintain and then we have to get a fax of your idea or an email with a screenshot and then check that off that it’s approved and then they just want more process that you have to wait if that’s gonna be worth it for in order to make another few discounted sales.
Mike: Thanks for the question, Ed. I think that about wraps us up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Welcome to Startups for the Rest of Us–the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike: I have the plague.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. You were sick all weekend?
Mike: Yeah. My eldest son got sick the last Wednesday, I think it was. It was like Wednesday and Thursday and we sent him back to school on Friday. Then my wife got sick between Friday and Saturday and then I got sick between Saturday and Sunday. It’s been a rough week to say the least.
Rob: Yeah. That’s brutal. Being sick just tears you up, means you can’t get anything done, especially when you don’t have vacation time, you don’t have to paid time off and you’re trying to drive a business forward, it’s like every hour is precious.
Mike: Yeah. Fortunately for us, it was kind of over the weekend but still we’re recording now, we don’t usually record till Thursday but today’s Monday and after this podcast episode, I’m probably gonna go to bed.
Rob: Right, right. Yeah. Today, we’re actually continuing kind of a continuation of last week’s episode. I had picked out several questions last week that you and I were gonna go through and answer and we only got through a couple of them because the GDPR conversation was so extensive. I think that was a good thing. I think we went in depth and gave ideas and feedback but it meant that we had this big block of unanswered questions and I wanted to keep going with them.
Now we have a few voicemails and some others today. But before we do that, I want to tell you, I know I haven’t talked about Drip features in a while but I’m pretty excited about this upcoming feature. We’ve been working on it for–I’m trying to think–it’s gotta have to be about four months now so it’s one of the larger features we’ve embarked on but it’s a visual email builder.
Mike: Oh, nice. What’s that involve?
Rob: A lot of stuff. Yeah, you can imagine not only the frontend which is obviously a lot of dynamic stuff, a lot of Javascript and pointing and clicking and moving things around the screen but then taking something that is essentially JSON and translating into the table-based email render to HTML is a challenge.
We found some AltSize and trade secret workarounds that we found, we’ve really done a lot of research and I think I’ve done a good job with it. But what I’ve heard from folks who have built visual email builders is building the visual portion of it is one project and it will takes six months or nine months, depending on how many […] we have on it and how good they are. Then just doing the table-based rendering and getting all of that to work and working all the clients is at whole separate project. It can take as long as building the actual visual builder. This is why a lot of upstart ESPs don’t build them because the time investment is so extensive.
Mike: When you say rendering the stuff and the clients–I understand what you mean by the differences between them–but when you go back to the visual email builder, what advantages does that have over what Drip does now?
Rob: Right. Today, Drip just has a nice little WYSIWYG text editor and I’m still gonna use that. I never use visual email builders because I like the personal interaction or it just feels more like you’re getting a plain-text email when you send using our standard plain-text template. This is how I’ve always recommended doing it. I believe the conversation rates are higher when you do that.
However, there are a few industries where they have done tests–so they’ve done tests across many industries in terms of visual email with a lot of images and table-based layout, two columns and this and that versus just something that kind of looks like a plain-text email, much like we send out to a MicroConf list, or I send out to my blogs Software by Rob list, they tend to be more personal. It’s from Rob Walling, Founder, it looks like he’s actually typing it to you. But there are few industries—ecommerce is one and travel is another—where having back these more exotic layouts and emails can and will convert better.
Since we do have a large ecommerce contingent and since we’ve been focusing on commerce-based businesses, people who are selling things, we have found a time to break ground on a visual builder. It allows you to do the things where you see the fancy, neat template, you can just insert your images and have that layout. It’s not something I’m gonna recommend for everybody but there are instances and match your converts better.
Mike: Got it. Kind of like if you go over to MailChimp for example, they’ve got like 30 or 50 different templates you can choose from and okay, that makes sense.
Rob: Exactly.
Mike: That makes sense.
Rob: Right. We won’t have 30 or 50 templates to start with but obviously that’s a direction that you’ll wind up going and it’s become table stakes. Again, in certain industries if you’re doing ecommerce and you’re working with companies using let’s say a platform like Shopify, BigCommerce, or WooCommerce, or if they have their own custom solution for ecommerce, they tend to want to send emails with a lot of images and not just to frustrate top to bottom flow where it’s image-text, image-text, you wanna have things that just look nicer than that.
Mike: Yeah. Things that come to mind for that are things like Amazon, Newegg, or ThinkGeek, all those, it’s exactly the same. I totally get what you’re saying where that’s going, but it totally makes sense.
Rob: Yup. The reason I’m excited about it is because I feel much like we did with workflows, we went back to the first principles and said, “What did everyone else do wrong? What do we hate about builders? How can we do this differently?” It isn’t just look at what everyone did and copy the best features, just like we’re doing things that are different than anyone else. There are obviously gonna be commonalities. There’s stuff on the left that you’re text and your image block and your divider and whatever, then there’s the email on the right. That’s common stuff but there’s certain paradigms that we use that I think are superior and gonna make for a better user experience.
The team has been working hard on it and everytime I see it down the road, I’m like, “Man, this is super cool, actually. I wanna use this even though I don’t really…” Like I said, I don’t use other visual builders as a rule when I’m writing my emails because I’ve always liked the more plain-text feel.
Mike: Awesome. Let’s dive right into the episode and they’ve got a couple of questions outlined here. Let’s get started on this.
Rob: For sure. Our first one is a voicemail and it’s about how to balance feature development and marketing specifically for an IOS app. But let’s hear the question and we can figure out what form we wanna answer it.
Steven: Hi Mike and Rob. This is Steven Johnson with […] Plus, an iOS and Mac app for hikers. My website is […]studios.com. I have a question about how you work […] user feedback. I’ve been getting a lot of feedback about my app on the Apple Watch, it’s still like I’m missing out on some opportunities as well as on just keeping up with where the market’s going.
However, right now I’ve really been prioritizing a lot of marketing efforts, working on conversion rates, lowering churn, […] partnerships with business development and […] by knowing […] you talk a lot about having more marketing always speeds out features and I completely agree with that. I’m just trying to figure out how do I kind of balance these two priorities and knowing how to balance user requests that come in, especially one that feel like the market’s making changes and I feel like am I missing out on something, maybe I am and maybe I’m not, but I know that there’s opportunities that I’m not capturing with my marketing, I know there’s conversion opportunities as well as churn that I need to work on. I’m just curious about your thoughts on that. Thanks for the show. Love what you guys do. Thanks.
Mike: I think this is an interesting question mainly because it’s an iOS and Mac app but there’s also the recurring annual subscription from productivity. I think the prices–there is a free plan–but then they range from $20 a year up to $80 a year which is of around what, $5-$8 a month, something along those lines. I think that the challenge here is identifying why that churn happens. Is it legitimately because people are churning out and they’re no longer using it or is it just they find that the app doesn’t help them nearly as much as they thought it would? I think it’d be easy to assume that, “Oh, you should be doing this.” Or, “You should be implementing that feature.” But I think I might dive a little bit more into the churn itself and start ask a lot more detailed questions about why the people aren’t using that.
My concerns/fear here would be that what you’re offering people is conceptually what they want but either the implementation itself is not really what they’re looking for or it doesn’t really quite match up with what the value proposition they were sold on is and it could turn out to be that somebody tries one app and they think that it’s gonna work and once they get out of the field and they’re using it, it sort of works or does most of what they want but it’s not quite enough so they just decide to switch and use something else. Maybe look at your performance metrics or your usability metrics to see like are people actually using it after three or four months in or is it that they’ve paid for and it was a low enough price point that they said, “Well, I paid $50 for this and it’s not a big deal so I’ll just try this other thing over here for another $50.”
As I said, the fear/concern that I would have is something that people use and it may just not be able to deliver on the promise. It’s not to say that you can never deliver on that promise. The fear that I have is it even possible to do what it is that they really want. I don’t know the answer to that, you have to ask people to find out. But as you said, the other component is like do you invest more on the marketing side and try and ramp it up or do you drill in and start trying to fix those things and add more features?
I think the first place to start to find out why people are churning out and what the fundamental issue is there and from there look back and say is it important enough for you to fix? The reason I say that is because there’s a question for road map and what is the most important to you, not roadmap, runway is more it than anything else, are you able to make ends meet with the app the way it is or are you chewing through runway and sort of losing money on it as you’re going along? In that case, you need to lean more towards scaling things up and then fixing things versus being able to make ends meet on a regular basis and you don’t have to worry about it as much. At that point, you can dig in and start fixing things in the app. That’s probably the place that I would start. Rob, I’m sure you have some thoughts on this as well.
Rob: Yeah. This is the age-old question. I think it’s a really good one to think about. I think in general, as developers, we think features are the answer, and in general, they are not. Not to say, all at all times because in certain markets, in certain niches, it really will make a big difference like Drip launching workflows was game changing for us, it doubled our month over month growth. It can happen.
But so many of the little features that are constantly being requested, if you have thousands of users you’re gonna get 50 or 100 feature requests a month and most of them you need to not build. Not only to keep the product simple enough that it doesn’t become bloated, but because you just don’t have the time to build them all. The caller is so much closer to his business than we are so it’s hard for me to make a recommendation to him, but my recommendation in general would be stir away from the mindset that I just need this one more feature to do this thing, unless everyone’s requesting it.
There comes a certain point where 10% of your feature requests are for the exact same feature. At that point, that’s when we break down–in the early days, we build a lot more now, we have a team of 18 developers or whatever, but in the early days when we were super cash and resource trapped, it was pretty much no by default and yes to these highly focused things that we knew were gonna move the needle. That’s how I balance it.
I think that the caller’s approach to doing joint ventures and focusing on marketing is genius. That’s exactly what I would be doing because the more marketing you do, assuming it’s effective, the more revenue you get, and that revenue will allow you to then hire a contractor in essence or perhaps the first time employee, how ever you wanna work it. But hire a developer that you can supervise because that will then, I should take one step back first, first person I would hire is a part-time VA to handle all your support, if you’re still handling that, because that will free up.
Then start thinking about hiring someone to write the code and this is the part that developers always struggle with because no one “is going to write the code as well as I do.” However, if you can free up 12-30 hours of your time in a week and features are still moving forward and you have some budget to pay someone, it can be game changing for your business and that frees you up to focus on really moving the needle.
I think marketing in the early days is such a big deal because you need to get the revenue to allow yourself to start stepping away from certain roles that while you may enjoy doing them are probably in the early days are less effective and what more if the needle is matched.
Thanks for the question. I hope that was helpful. Our next question is about overcoming hesitations about partnerships to move the business forward.
Joshua: Hi Mike and Rob. This is Joshua from [Perspexa Labs]. First, thanks so much to this podcast. Every episode is invaluable. My question is this, how do I overcome my hesitancy of partnering with someone to move the business forward?
For context, I run a B2B SaaS company that offers monthly subs in the range of 100-350 a month, and we’ve plateaued about $2,500 in MRR I co-founded the business with an office colleague but I just realized circumstances he really isn’t able to participate materially in the business anymore and our product is solid at this point but I know we need to move the needle and sell the marketing in a big way. Try as I might, I just can’t seem to crack that nut.
I know that finding the right person to bring onboard will probably do wonders and turn us into a vital business but on a do-it-yourself-er and I just have trouble, one, convince myself that I ought to do this, and two, coming up with the vital way to achieve it. Any advice for effectively a solopreneur who doesn’t wanna be stuck in a half business for forever? Thanks so much for the both of you. Everyone, go leave a review to this podcast on iTunes. Thanks guys. Bye.
Rob: Joshua was kind enough to also send us an email with a bit more background and he said, “The main product outreach is at [perspexalabs.com], we’ve got a core group of customers and service businesses like pest control and electricity and we’ll soon be getting into healthcare providers because our revenue is only $2,500 a month with margins of around 70%. It’s not enough yet to pay salaries. I’m guessing that bringing someone onboard will probably need to be an equity arrangement which I’d be fine with.
With regards to my own efforts to sales and marketing I’ve gone to the Traction book and tried several different approaches including online ads, cold-calls, cold-email outreach and attended a very targeted trade show. That really hasn’t generated fruit as nearly all of our current customers are referrals from other customers. Unmentioned to my question bills are related issue, should I let my current co-founder remain in the business? I’d really like him to be here if we can get into healthcare because of his connections, but I know this isn’t the first priority anymore.” What do you think, Mike? It’s a tough one.
Mike: Yeah. I think you can almost divide this into two entirely different things. One of which is what to do about the co-founder and then the other is how do you move the business forward when you’ve got $2,500 a month and not enough money to do a lot and you’ve also obviously got the co-founder onboard and I don’t know what the relationship there is in specifically call that out.
Rob: It sounds like it’s still amicable and he’d like to keep him on if they were to go into healthcare but not if they don’t. You don’t know if they vested so the first thing is that you should have done four year vesting probably so that your co-founder wouldn’t own the entire percentage that they had. Because if they decide to leave, that will go back into the pool to get the next person.
Mike: I think, with regards to what to do about the co-founder, that’s probably the first thing to do. It sounds like you wanna keep them on but the question is how much is he going to be able to contribute. As Rob said, the vesting schedule maybe he owns 25% because he’s stuck around a year, 50% because he’s stuck around for 2 years. That seems to me like the first thing to look at and try and figure out and if he has to walk away because he’s just not involved, that doesn’t mean he still doesn’t own a certain percentage of the business anymore and can’t contribute under the […] capacity or something along those lines. That’s something I think you have to work out with your co-founder and sit down and have an honest conversation about what him stepping away from the business really means for the business and for the relationship between you guys.
Then once you’ve figured that out, the next question to tackle is what do you do about the business itself. I think you didn’t specify what your own personal situation is or whether you’re taking money from the business and living off of it. But with the $2,500 a month, it sounds to me like because you’re a do-it-yourself-er, it might be a viable strategy to go out and find a business coach who can walk you through a bunch of different things and that does a couple of things.
One, is it avoids handing equity over to somebody else, and two, it still allows you to do those things yourself and you get that personalized assistance from somebody else and a sounding board from somebody who’s vested in the business because you are paying them to give you ideas and take a hard look at what it is that you’re doing and how effective those things are but you’re still doing those things yourself and you still don’t necessarily hand over control to a third party or a co-founder or another partner in the business and avoid some of those other issues that maybe you’re struggling with right now.
I don’t think that it’s wise to introduce too many changes all at once. That could be a nice bridge scenario where you are involving somebody else but you’re not handing over the reins to somebody else in a co-founder capacity while you’re having your current co-founder step away from the business a little bit. That’s probably where I’d start looking and see if that makes sense to you.
Rob: Yeah. I think you’re right, there are two separate issues here, it’s existing co-founder and then pulling on a new partner. I think given that the business you have to de-risk the business a small amount that bringing on a new partner, you could obviously give equity without giving an enormous amount. It wouldn’t need to be a third of the equity or something. It depends on your aspirations and think where the business is headed and who you can find but I’m thinking in the 10%-20% range given where you are. If you were gonna go raise funding and you’re gonna go try to find like a COO or something or a CTO, they get 5%, but you’re in a little bit different situation because it doesn’t sound like you’re gonna get so big so fast, that that’s gonna be warranted. As a result you have to bump that equity to 10% or 15% or whatever. But at this point, in my opinion wouldn’t just be an even split.
I think the hard part is finding that person and vetting them and it’s like a marriage because you guys are gonna have shared ownership of things and breaking that up later can be like a divorce. I think getting over your hesitation is one thing, but I think the harder thing is to find someone who is good enough or who’s gonna work with your style, who’s willing to be in the trenches with you, who I think it really wants to stick around and is able to work because it sounds like this is gonna be nights and weekends, people are not cut out for that in general, most people just think they wanna do it and then a month or two months and they just flick out or they just decide not to do it.
I think finding someone who meets all this criteria is really hard but I think if you can, then what I would look at doing is definitely have kind of a trial period, maybe 90 days, just to say how things feel, I would definitely have four year vesting on that with the one year cliff, meaning they don’t get any shares until they’ve been around for a year. I think that’s how I would approach it and I would look to be meeting people in person so I would be going to the MicroConfs and the businesses software and these conferences where there are folks who could potentially be in that pool for you separately regarding your current co-founder. I think you just need to make the choice sooner rather than later whether they’re going to healthcare. If you’re gonna go onto it and he wants to stay around, you wanna keep him around, that’s great, and if you’re not, then I think the decision is made there.
I know it’s not always that crystal clear but it does, given that information you’ve provided, seem perhaps how I would perceive. Thanks for the question, hope that was helpful.
The next question is about technical debt. Mike, does technical debt really come back to bite you?
Mike: Oh, yeah. No question on that.
Rob: Alright. The subject line of the email is actually, “Have technical debt decisions been easy to pay down later or did they really come back to bite you?” He says, “Love the show, listened for the past year, really love the practical advice. I’m looking for your technical perspective about what matters in the early days of getting a site running while keeping customers happy with mission critical data, building a data heavy B2B SaaS startup.
The frontend is in Angular, the backend is in Rails, intermediate self-taught developers, new things I haven’t done before can sometimes take a week or two to figure out. I’m making early technical debt tradeoffs hosting using Heroku versus AWS, database PostgreSQL versus Aurora, and the other miscellaneous things relating to data structures.
I’m not looking for technical help but the question is more geared to your experience of how much this stuff matters up front and really needs to be solved to get functional versus it’s not too hard to change it later. Theoretically important but won’t kill you so pick the simpler thing even if you know you’ll need it to change it after launch. Am I wasting a lot of time by taking the shortcut now and having to pull the app apart later to move it around when I have real customers using it in production?”
Mike, this is not gonna be as long as GDPR, I promise, but I feel like we have a lot to say on this, so go. Just start rolling with this. What do you think?
Mike: Yeah. Do we have like beeps cued up immediately for all the profanity that’s about to be dropped on this?
Rob: Yeah. Technical debt, it’s a *.
Mike: Yes, it is, yes, it is. I think looking back on this particular piece of it, some of the things that he had brought up, the things like hosting and the database selection and the data structures that you’re using on a backend, some of those can be really hard to change later on, versely impossible. In some cases, you’re looking at a complete rewrite.
You at least have to have enough technical knowledge to make those decisions in a way that is not going to completely kill the app later on or force you to do an absolute rewrite from the ground up. That said, I do know people who have done complete rewrites after they’ve gotten to a point where they’ve gotten customers onboard and it basically delays things, you may have to take three, six, nine months of accepting the fact that you’re just not gonna make any progress on the features in order to fix that fundamental positions that will bust it.
Then, there’s kind of a second level which is where you’re trying to make decisions about how do you structure the data or how do you create the database in such a way that it makes easy to do certain queries or provide a solid error handling, error returns to the API for example. I think in those cases, you can mitigate them to some extent by using dependency injection and creating these interfaces that sit in front of it and if you need to rewrite one, then you can, you’re almost swapping out an entire layer of the application for another in a very specific way.
I’ll give an example with Bluetick, like the backend storage system for storing emails has been rewritten four times. It’s because at first it was like let’s just get something working and then it was trying to optimize for local storage and then the next level was things are not working in local storage because there’s so much data coming in at all times like I just can’t scale that much on one machine and then I kind of move everything into the cloud and into the Azure tables in no sequel storage. Then the fourth rewrite was essentially making that more scalable and optimized.
Each level on the way like there was some level of rewrite but because it was essentially being able to flip a switch and say instead of using this set of data structures, you can do those on a per user basis or on small sub-segments of the users and not affect others. I would definitely do some research on dependency injection.
The other nice by-product of them is that it helps with writing unit test to be able to make sure that those things that are working from one version of your rewrite to the next in that particular component or module. Beyond that, there’s always gonna be things that you run into where you think that one way is a good way to solve a technical challenge and you turn around and find that it just wasn’t, you get down in the weed sometimes and you realize that you made a really, really big mistake and the only way to resolve that at that point is to rewrite it and there’s nothing you can do at that point.
The only way to have mitigated those four types of problems is to run into them and then realize after the fact that it was a mistake. It’s really hard to generalize from one application or problem space to the next and say like, “Oh, you should never do it this way. You should always do it this way.” Those things don’t apply. Each problem space has its own unique way of storing data or things that need to be surfaced to the user and you don’t always know what those are until afterwards. Sometimes, you just make the best decision that you have and you find out later that it was wrong, there’s nothing you can do.
Rob: Yeah. I would just say in general, technical debt is underrated in the startup space. I think people think that it’s not a big deal and it’s a way bigger deal than most people do because if you aren’t technical, it’s hard to understand why you can’t just quickly rewrite a piece or quickly change a decision you made later. These metaphors don’t always work but it’s akin to building a building and then needing to go back and replace the concrete foundation because you poured it incorrectly. You literally have to jack the building up and it’s just painstaking and agonizing to replace that and that’s what code is. You’re building things on top of each other.
I think of it like a 4×4 matrix where there’s basically two binary things. One is I know that this is a shortcut and I’m gonna take it anyways versus I don’t know this is a shortcut like I accidentally introduced technical debt. I think that’s the switch you’re talking about.
Then I think the other one is it’s easy to undo later versus it’s a complete fiasco to undo it. You can imagine that 4×4 matrix and we’ll go through all of those matching up but obviously any decision you make on purpose to introduce technical debt, you need to explore and thought experiment like how hard is this to undo later. If it’s hard, then don’t do it.
There were a lot of decisions Derrick and I made in the early days that were very slow, they caused Drip development to be very slow in the early days and it was pretty agonizing when we were bleeding cash and we couldn’t get the features out the door to keep people from churning because it was a very specific feature set that people wanted, and it was taking us months to build them and it was because Derrick wanted to build them very carefully with extensive unit test and he wanna do it right and he had to refactor the database twice in the first year of the app, because the app went from a very simple thing to very complicated thing.
It was agonizing but it was the right decision, because now, it would be catastrophic right now, we would probably have to have rewritten major parts of Drip. I don’t know if it would have impacted the acquisition or if it just would have been post acquisition or what it would have been but it would have been really hard and between he and I, we figured out a good sense of what was gonna be hard to change later–things that are easier to change later like you said where you can just build an interface and then swap it out later. Obviously those are the ones that you can maybe take shortcuts on.
But I think some people take shortcuts on like not running unit test, some people make cold-quality shortcuts where they just start hacking things together and later on, everything’s buggy because you took a shortcut and you didn’t build that right in the first place. In general, I have seen no less than half a dozen or maybe closer to a dozen companies get to the point where they’re between 10k and 50k MRR, they’re growing fast and they have to rewrite their entire codebase. I’ve seen some that have done it more than ones.
It is so painful to spend six months of standing still while your competition gains on you because you took shortcuts in the early days. Now, you’re just hanging out, waiting to build more features until your codebase can be completely rewritten. I would say proceed with caution, obviously, you’re always gonna have some level of technical debt, but be very deliberate about those choices because I think it’s easy to be in such a hurry to get to the point where you have more revenue and this is certainly a tradeoff because in the early, early days, when you just trying to get to $5,000 or $10,000 revenue, you’re gonna have to make some trade offs but try to take shortcuts on things that are easy to change later. That’s how I think about it.
Mike: I think one of the biggest places to make that trade off is that when you’re looking at unit tests, I’m not saying you write unit tests for everything because I certainly don’t think that that has a ton of value for a startup but I do think that there’s value in having like continuous integration server of some kind or a build system put in place so that later on you don’t have to figure out, “Okay, how am I gonna deploy my app?” You want that to be a systematic thing where you can literally just click a button and it runs through everything and is able to deploy the app.
But with that comes at least some level of unit tests or a mechanism for running those, and even if you don’t write a ton of unit tests, as bugs come in, you should be adding those unit tests to make sure that if a bug comes in and it breaks something that you had a unit test in there so that later on, as you’re making other changes, it doesn’t break that again.
Like I said, I don’t think you should write unit tests for everything, but I do think that as those bugs come in you should be writing them to make sure that once you fix a particular problem that you don’t have to refix it 3, 4, 5, 10 different times moving forward because it just keeps coming up.
Rob: Thanks for the question. I hope that was helpful.
Next question is from Jay Pablo Fernandez and he says, “I just finished going through all my newsletter subscribers and I noticed there are a few industries that are well-represented such as education, health, IT and government. When it comes to my product, they all use it in the same way. The feature set they made is pretty much the same. I wouldn’t say they are verticals in the SaaS way of thinking. I can sell to all of them or I can focus on one industry. Are there any advantages to either approach?”
Mike: I think this is a tough question, as you said you don’t wanna paint yourself into a corner and make people think that you don’t serve their industry. I think what I would do in this case sn focus on the specific problem that you solve and then maybe have different case studies for each of those industries and even segment your list a little bit so that when you talk to them, when you’re sending out newsletters or you’re sending out articles to them, maybe you’ll only send an article that highlights a case study for the electric and gas industry to those people who were subscribers that fit into that bucket. It seems to me like that would probably be an appropriate way to go, but at the same time there’s value to be had to for saying, “Hey, this also works in other industries because there’s gonna be some crossover between them.”
Let’s say that you have a case study on the nuclear power plant industry, if it’s safe enough for them to use, pure application, then whatever other industry they happen to be in, they would probably translate that and say, “Oh, well, if these guys are using it, then surely it’s passed master and I could use it as well.” I would think about it in terms of just trying to make sure that you’re covering enough of each of them but not focusing so hard on any of them that it makes people think that, “Oh, this is not for me.”
Rob: I think I might try to run an experiment. He has this list and he has these four sectors, four verticals, and I would consider trying to do physically exploratory calls, I don’t know if you wanna call it customer development or even just sales calls, if the product’s already there, across all of them, and figure out that you wanna validate your assumption that they use it in the same way with the same feature set. Because I find that a little bit hard to believe, just having run the apps that I’ve run, different industries tend to want slightly different feature sets and have a slightly to just enough it settle but by the time you really get and they start using it, it becomes a pain-in-the-butt to have four different industries or wanting something just slightly, “Oh, just tweak this one thing, oh, can I just have a setting to do this? But we have a permission in the reporting thing.” It’s just enough that there will be a difference. I guess it’s what I’m guessing.
If you have the time to do this upfront and just have a bunch of phone calls with these folks and try to do the demos and try to figure out is it truly gonna be something that they all can use, then that’s fine. But I do think you’re gonna find differences in payment terms, like you said sales cycle because government’s gonna take forever to come through, maybe in your early days since you’re trying to get ahead of funding running out or whatever, you go after the ones that close quickest, which I don’t know if that’d be IT, education, sure it seems like it’s gonna take a long time too, so focus on the one that are gonna close the quickest and get the early value in order to keep around long enough to focus on all four.
But I would try to answer that question, there’s still a question in my mind of is the product actually gonna serve all four? If that’s the case and you can work your entire list and work all four of them at once and try to get as many customers paying you on day one, then that’s what I would do. Right now, you’re just trying to get revenue and see how people use the app and if they’re gonna get value out of the app and there are across four different industries, then you’re gonna learn more about all four and maybe later you decide to focus down on one industry.
I do think that there are some advantages focusing on one industry in terms of how your marketing can really speak to people so you’re gonna close more deals probably, how you are sales conversation can focus on them, how your features set can focus, and how word of mouth would be such a big component of it. Assuming that people in your industry hang out at conferences, or hang out online, word of mouth if you just become the defacto in in the industry and in a vertical then you can land and expand words like, “Alright, we are the go-to for this task in the IT space. Now we’re gonna start adding on these other verticals.”
That’s the other way to approach it. It’s just a pick one based on your information so far, your best guess, and then later on, a year or two down the line, once you own a big chunk of this, you’ll expand into the others but I feel like you don’t have enough information to do either approach right now and I would try to close as many deals as I could, see if they actually will all use it and then try to make the decision once you have a little more information.
For our final question of the day, we have a question from Ed Freyfogle. He was a MicroConf Europe speaker this year. He says, “Hey, guys. Long time listener, first time asker. One target audience of my SaaS service is academic researchers. They are not the best customers as typically they’re low budget and they only need this service for a project or semester. Nevertheless their niche seems to like my service. Often they ask for academic discounts. My pricing is already very affordable and I offer discounts for annual purchases. Still, I can’t help but wonder if I might be able to grow this niche by offering an academic discount.
Alternatively, I have also thought about selling to universities and offering them a bulk rate. But so far I’ve always been busy with other things so I haven’t acted on this idea. I’m wondering if you guys have any advice on academic discounts in general, how to ensure they are not abused by other customers and selling to universities. Thanks for the great show, I learn a lot.”
This is a tough question. I like the fact that he’s thinking pretty strategically about it. I think that if you haven’t had the time to try to sell to the universities and offer them a bulk rate, if you haven’t made the time, it’s probably not that important. That’s where I found like this is right. It’s like you go toward the money’s coming in and your biggest fires are. I’m guessing that unless you are to hire someone to handle that that it’s not gonna make it to the top of your to-do list anytime soon.
I tend to think about discounts in two ways. There is academic and then there’s non-profit discounts. I don’t know if you have a non-profit discount as well, that’s something that I would consider modelling it after and there you just ask for proof of their non-profit status which can totally be abused. I think with DotNetInvoice we had profit one and it was maybe 1 in 20 or 1 in 30 who ask for it and show the stock seemed a little bit like, “You signed up with this just to get the discount.”
In terms of academic stuff, it depends on what volume you have coming in, it’s like if it really isn’t education it’s 1 in 50 people ask for it. You can always have an unpublished academic discount and you just need to get proof from them, I don’t know it’s a student ID or if it’s a professor ID, what it is, but it’s gonna be a process, it’s fairly lightweight. I personally don’t see a huge drawback to doing it. I’m curious when people email and ask for academic discounts and you say no, how many sales do you think you loose? Is it worth even doing any of this effort to get those sales?
Your pricing is already reasonable, if you offered another 20%, 30%, 40% off for academic discounts and that’s probably the range, I would think, although I haven’t done any research about this, but mentally it would be in that range. Is that worth it if you have to go through validation of some type of ID, I don’t know, there’s some trade offs here.
If the volume is high enough that you’re asking this question, I would probably just do an experiment where the next time I got an email about it, I would say, “Yes, we have a 25% discount, but you have to prove you’re a student or you’re faculty.” See where it goes from there and handle it as a one off to start and then I don’t know if it has support people or not, but if you distract them to do that and then tally up in a Google Spreadsheet how often it gets asked and which sales come through, you can start getting at least a little bit of data about it.
Those are my initial thoughts without a ton of experience, to back that up, it’s more of the got feel, so much of entrepreneurship is making enough as you go along. It’s just figuring out what’s the priority and making the best judgment call based on the information you have. What do you think, Mike? You have other thoughts?
Mike: I’ve looked at the academic discounts in the past. You just do a quick search for academic discounts for software and you’ll find that they can be upwards of 85% which is extremely high especially for something like a SaaS, I mean. Is the money that you’re getting even enough to offset the cost of you actually doing business for that person? I don’t know the answer to that. I think you need to figure out what that is.
Rob: Yeah. I know that Microsoft and Adobe and those guys discount because they’ve been pirated so much. Too often students who don’t have the money and they do these huge discounts. When you’re a SaaS app, especially when you’re Bootstrap like this and cash is important, there’s no chance I would offer a discount that large.
Mike: Yeah. I mean I think that part of the reason that those types of companies offer discounts that are high is one, it’s downloadable software so they don’t have to worry about their own cost, and two, they’re really just trying to make sure that there’s some form of legitimacy for the software that you’re using and giving that high of a discount helps them to get market penetration so that Microsoft has 90% market penetration on the best app for Office and Windows.
I agree, I wouldn’t go that high, but it’s not to say that you couldn’t have a discount for students versus a discount for academic researchers/the university itself. Because if somebody’s using it for a class, then they’re probably not going to be able to pay nearly as much as the person who’s doing it for the university and offering it on behalf of the class itself. I might think about that, but I do agree with Rob that you probably want to go through and run at least some tests to find out like what is it that people are using it for.
Something else to consider is that if somebody is purchasing it on behalf of the classroom because they’re teaching it, what’s the value of having those people in the class know about your product and then they leave and graduate and go out and do things in the workforce and having them know, “Hey, I can come over to opencagedata.com and buy this stuff off-the-shelf and we use it in our classroom so it has a lot of legitimacy.” There’s probably some value in that, I don’t know what that level is because I mean if you go through like an engineering degree, chances are good you’ll probably use Autocad some place along the way. When you get out into the industry like you first thought is, “Oh, I need to create some 3D models of something. Where’s the copy of Autocad?” There’s a student discount that you can get but once you get out in that at the real world, your company has to pay for it.
Having those people go to their bosses and say, “Hey, I use this data over here from opencagedata.com. We should buy a license for that.” There’s value there. I don’t know what that is but I definitely think there’s some value there. I would look into it, I don’t know how much time and effort I would spend on it because the return on that is probably gonna be wild. It’s gonna be a couple of years.
Rob: Yeah. Those are good points. I like your idea of not making an academic discount but making it a student discount. It’s an interesting thing because students really don’t have the money whereas if a university is buying it for a class, they do have some budget, and he’s right, his prices are reasonable like a university should be able to afford it.
Mike: Even with like a student. A student could probably get away with a free trial or even like the extra small plan that they have there for like a class or project or something like that but the university, if it’s for a class, and they’re buying it on behalf of the students for a class, I’ll offer them a 30% discount if you’re a student and you just want to use it for yourself, maybe it’s a 60% discount. I don’t know, but if you separate them, I think that there’s a way of targeting those people in that way that says, “Oh, we give individual students 60% and for universities we give them 30%.” It shows that you’re doing both. It shows you’re helping out on both sides.
Rob: It’s a question of whether or not the volume of incoming request warrant spending the time to figure all this out. If the answer is no, we have reasonable prices and we aren’t able to support any of these because you don’t have the bandwidth. It’s less about money and it’s more about Bootstrap startup with not a lot of time and just having yet another program to maintain and then we have to get a fax of your idea or an email with a screenshot and then check that off that it’s approved and then they just want more process that you have to wait if that’s gonna be worth it for in order to make another few discounted sales.
Mike: Thanks for the question, Ed. I think that about wraps us up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-96-90 or you can email to us at questions@startupsfortherestofus.com.
Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 385 | GDPR, Preparing to be Acquired, Technical Debt, and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about GDPR, preparing to be acquired, and technical debt. With the regulations of GDPR coming into effect, the guys discuss how it will affect small businesses and what you should do. Also an in depth discussion on things to have in order before you get acquired.
Items mentioned in this episode:
- Mike’s Indie Hackers Article
- Mike’s Interview on Product People
- Sherry Walling Interview on Mixergy
- FemtoConf Recap
Rob: In this episode of Startups For The Rest Of Us, Mike and I talked about GDPR, preparing to be acquired, technical debt and we answered more listener questions. This is Startups For The Rest Of Us episode 385.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products whether you built your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What is our word this week, sir?
Mike: Why is it in Zencastr it says Chronomustard?
Rob: Chronomustard, that’s my name this week. I think that’s gonna confuse our editor. I’m trying a new thing, creativity. I’m trying to enter a different name each week just to see if I can make you laugh.
Mike: They usually do make me laugh, I appreciate that.
Rob: For sure. What’s going on this week?
Mike: I did a demo yesterday for a customer who’s looking at switching over from a competitor and they have a bunch of different users for the product that are in the competitor. When I went through and was doing the demo, afterwards he’s just like, “Wow this is way more advanced than what we’re currently using.” I’m just thinking to myself, “Is that a good thing or a bad thing?” Apparently it was a good thing.
They were looking through and signing up for it. Next week they’re gonna reach internally. Hopefully they’ll turn into a fairly large customer for Bluetick.
Rob: It’s always good to get off a demo and get that feeling that you’re gonna be making more money, it’s always worth it.
Mike: What was really interesting to me was just the fact that they had said how advanced it was in relation to this competitor because the impression that I get from their website and all the things that it seems like it does is that it’s probably more advanced than Bluetick but I got the distinct feeling that that was not the case.
I knew that they were having problems with it but I wasn’t clear until the phone call and exactly what those problems were and how they were dealing with them and what they were looking to do.
Rob: That’s awesome, man. Do you have any avenue if you sign this guys up that you’re able to find more customers like them?
Mike: I do but I think it’s gonna be more word of mouth relationship than anything else. This one came through a personal relationship so it’s not as if they came in through a marketing channel or anything like that. I knew who the person was and contact them and went from there.
Rob: You could also think about going to build with your Datanyze. Since they are using this competitor pulling down the list to people who are using the competitor doing the cold email thing, we talked a little bit about that last week. It’s obviously time consuming but that can be an interesting avenue if you do know that you are better than a specific competitor.
Mike: I don’t know how well BuiltWith would identify that because it’s through email so there’s no really a lot of onsite stuff that’s gonna tell me who’s using that unless they have a JavaScript which I don’t have that so nobody will be able to use BuiltWith to reverse engine but maybe they do, I’d have to go take a look though.
Rob: Probably be worth a few minutes. You have been busy, man. I was pleased to see an article on Indie Hackers, Starting and Growing a Conference for Internet Entrepreneurs, got quite a few upvotes. You said you spent several hours doing this, it’s one of the most in depth Indie Hackers Q and A I had seen.
Mike: I spent a lot of time on that, probably close to a day and a half to two days. I threw in the word because I was curious since how long it actually was, it came in at 6000 words.
Rob: It’s like a book chapter or two. It has screenshots and everything, you did a really good job. If folks are interested in hearing about the history of MicroConf, what it was like starting it, how it runs today. There’s just a ton of insight stuff, although some of it is projected revenue, I think you gave this year. Some years don’t include MicroConf Europe, it’s not all exact but there are graphs and everything that I think that Indie Hackers folks put together.
Mike: They took the attendance numbers and extrapolated with the revenue was from those numbers. It’s off a little bit but it’s not really that big deal, it’s more of the trajectory, I think, that’s important to see.
Rob: It doesn’t include sponsorships and all which are big chunk. It’s fun for me to read because I could be like, “Oh yeah.” I was nodding along like, “I remember that. I can’t believe Mike remembers this.” You are pulling stuff out, all the anecdotes that I had long forgotten.
Mike: Some of the things I had to go back. I looked through my email to see when it was that we first started talking about MicroConf and I traced it back to the exact day which I don’t know if we talked about. We had a name for it before then and we were talking about it separately and just calling it a conference or we had the name and we picked it on the day and went from there.
I don’t remember how long we talked about it before we decided to register the domain name and start looking forward or if it was just like spare the moment thing.
Rob: I remember being very spur of the moment. It just made sense, it was like, “Why don’t we just do that?” That’s cool. There’s a lot of engagement, a lot of really good comments and in depth discussion going on and 36 upvotes, I get the feeling that’s quite a few for most articles. Anyways, if you’re interested in hearing that story, we’ll link it up in the show notes but you can obviously go to indiehackers.com and give it a search. You also went on Justin Jackson’s podcast, MegaMaker. It was a couple weeks ago.
Mike: I think that was last week as well. We recorded it and then it went live either later that day or the very next day. It was all about MicroConf itself and what Starter Edition was about. We’ve announced that Justin Jackson is going to be emcee for Starter Edition.
We did that last year, Starter Edition as well, with Jordan Gal from CartHook. He was the emcee for that, we basically turned over the reins to him and let him run the show at Starter Edition which was really cool because it’s nice to be able to sit back a little bit and enjoy the conference a little bit more. I don’t know how you feel about that but it’s nice to let somebody else take the reins for a little while.
Rob: That was something that Zander, our conference coordinator, encouraged us to do because since Growth and Starter are back to back, we’d be solo energy by the fourth day of trying to emcee and run the conference that I think he knew that it would just wouldn’t come off as well as it could. Jordan certainly knocked it out the park as the emcee that was really, really good and to give them their style up there on stage is fun.
You know, with Starter, Justin is such a good fit for it because that is really the crowd that he is talking to everyday and interacting with so he knows that crowd perhaps these days, you know better than I do in all honesty. It was years ago that I was really knee deep in all of the transitioning from developer to marketer and talking about all that stuff. He just has his finger on the pulse of that. I think he’s a good fit to emcee. This year he’s also doing a talk which is cool.
Mike: How about you, what have you been up to?
Rob: I’ve just been working, kicking back a little bit. I have a spring break coming in a week or two. We are heading down to Florida, starting to warm up in Minneapolis but still in the 30s and we wanna get some sun. It’s an easy flight down to Miami and we rented up Big Ol’ Airbnb off of 80 and we’re looking forward to that.
I was enjoying, I don’t know if you’ve heard it but Sherry was on Mixergy. It’s actually her second time on Mixergy. Her first time, it was when she interviewed Andrew Warner and put it on ZenFounder and he simulcast that basically onto Mixergy. But this time it’s called Keeping Your Feet Together As A Founder and it’s Andrew Warner interviewing Sherry about the book and about the stuff she’s doing in the entrepreneurial communities. It’s really a pretty intense interview but it’s really good. Have you had the chance to listen to it?
Mike: I have not, no. I don’t get a chance to listen to Mixergy too often. I’m actually about two months behind on most of my podcast at the moment anyway.
Rob: I listen to select Mixergy interviews just because there’s a lot of them and they are long but this is one that obviously I jumped on, I just wanted to hear the content. It’s a good one, we’ll link it up in the show notes but you can obviously search for Sherry Walling Mixergy and find that in Google.
Mike: Awesome. What are we talking about today?
Rob: We’re gonna answer a bunch of listener questions and see how many we get through. It was cool, we were down to one listener question. When we announced it on the show, I think we’re up to 12 or 15 now and so we can hammer through. I feel like this cadence every other week answering these questions has become something that I’ve enjoyed and I’ve gotten positive feedback about it.
Voicemails are even better because it shows people that there are all these different people with different businesses listening to the show. You and I know we have tens of thousands of listeners but as a listener, you don’t know that. It would be hard to know or understand your fellow listeners and your fellow entrepreneurs doing it. I have enjoyed this and I think we’ll keep doing it as long as the questions keep coming in.
Our first question today is for me, it’s actually from a guy, Louis. He said, “The question I have is what would Rob wished he had prepared in advance in going through the process of selling Drip? Imagine there might be things like intellectual property who may have purchased the use with his own name but now need to be transferred to the company, manuals and processes, bank issues such as PayPal not being able to transfer, etc. The list could be endless, maybe a good topic for a book.”
I’ve actually thought about this. There are two thing I wanted to say here. The first is I’m gonna make an announcement but not really an announcement, Mike, I haven’t even told you this. I’ve started writing what I think may become a book. That’s the exact right response. I don’t know if it will yet. My goal for this year is not to tackle any big new projects.
There’s a lot to tell, there’s a lot of story that has happened since the last book I wrote. Maybe it’ll just be about Drip and the trials and tribulations, the last year of personal finance hell and being unable to fund the business and then the year of the acquisition and then the year of moving. As I started thinking about it, I was like, “Isn’t this interesting enough? Will anyone care?”
I sat down with a notebook and I just wrote out what were the most stressful parts of my life both personally and professionally since 2011 in essence. The list was crazy long. Each of them just shaped into this narrative and they link together in this very interesting way. Even if I were to write about acquiring HitTail and not use it in the book, it’s still […] for me to write about the process of growing it and then selling it. There’s a bunch of stress that went along with that sale.
I started just thinking about all the stuff that happened growing Drip. I made this big list, when I looked at it I feel like it’s interesting enough, at least worth sitting down and hacking some stuff out. I had like three pages of just bulleted list. About a week and a half ago, I just sat down one evening, I started doing it on a weekend. It’s kind of writing itself because it’s a narrative. I’m pulling out actionable things but I’m trying to get the grit of what it was actually like.
I have emails, I have Voxers, I have all this, I have my MicroConf talk from last year talking about the sale and my thought process, I started to listen to that and transcribing pieces of it. It’s cool in this day and age, all the digital elements that we have because I can’t remember exact dates but Gmail sure doesn’t forget. It remembers the exact date of this email that I sent to Derrick about this topic.
I’ve literally just been doing it on the side almost as a journal but trying to be very honest about everything, trying not to sugarcoat things. I’m about 7000 words in and it has just poured out of me, it’s all out of order, I just picked the next thing on the list that I think, “Man, I really wanna write about that today,” and I’m cranking it out.
I don’t know if it will be a book, I don’t know if I will ever release it but it’s something that I think could have the potential to be that. It’s always funny, when I got this question I started thinking, “Maybe that should be a piece of this.” Because I don’t just want it to be a narrative, I actually want it to be in typical or a podcast style and MicroConf style. I want it to have lessons that people can take away.
Whether they’re acquired or not, even just the growing part of it, the mistakes that they can avoid that I made or smart decisions that we made that I feel like people can learn from.
Mike: There are two pieces of that because there are people who would read that just because they know who you are or they’ve seen you speak and they just want the inside baseballs so to speak. They’re interested in the story, I totally hear what you’re saying about having the lessons but I think you could do both where you’ve got the story itself and then after each chapter or after each section you have a list of things that you personally pull out and be like, “Here are the lessons that you could take away from this, here’s the story piece of it and then here’s the lessons that go with each of these.”
Some of them may not have any lessons at all, it’s just something happened and you got lucky or unlucky and you just had to deal with the consequences or fallout. There may not have been anything that you could do about it. Maybe that’s the lessons, you can’t plan for everything but I think that it’s still going to be interesting to a lot of people.
Rob: I appreciate that. I kind of think of it as I think of any MicroConf talk I’ve ever given or at least the best talks that I’ve given tend to be a story, like a hero’s journey and then pulling out super actionable tactical things. That’s how I’m envisioning it. I’ve read only a couple books like that, I like it because it’s different, it’s not just a narrative. I want them to be not obvious takeaways, it’s not like work hard and persevere and you will make it. It’s not stupid stuff like that.
I realized that I think I’m telling myself that I don’t know if it’ll be a book so that I don’t feel in pressure or anxiety. I don’t want to feel forced to write it, I don’t want the writing to feel forced. I’m telling myself no one will ever read this because I wanna tell the story honestly, because there’s obviously a lot that went on that no one else knows that was very internal, that was between Derrick and I or between Clay and I or whatever.
Eventually, I’m sure I’ll have to edit some of that out but I’m trying to get it all out and then evaluate, is this worth doing? Maybe it’s an ebook or maybe it’s a series of blog posts that I’ll release or maybe it’s an audiobook, I don’t even know. It’s an interesting project. Hopefully it’ll turn into something.
Mike: Man, if it doesn’t, you did it for yourself and that’s not a big deal either. There’s something to be said for just doing things for yourself once in a while.
Rob: Exactly. That’s what I said, it’s like what’s the worst that can happen, I should just write this out. If nothing else, my kids can read it someday or something.
Mike: All of these aside and back to the question, are there any top level things that you can take away that you wish you had done that were probably a major things that you either overlooked or hadn’t thought about upfront that needed to be transferred or you wish you had done?
Rob: The prep work that I think everyone should do that you don’t think about is it’s far more mental prep work than anything else. I listened to the book Built to Sell three or four times, I listened to Finish Big multiple times, I did a lot of journaling, I did a lot of thinking. You have to know what your deal breakers are, you have to know probably what your drop dead price is. There’s a bunch of stuff that you need to think about and that it the prep work that I would focus on. I’ll just put that out there, first and foremost spend more time doing that.
The examples that the guy brought up, the guy who answered the question, most of these were not an issue. He brought up intellectual property, I had already transferred all of that into an LLC. If I hadn’t done that, it would’ve been disastrous, it would’ve been a huge pain in the ass.
One big thing that I do think you need to think about as you’re building your companies to have a clean IP, meaning that all of your contractors who touch your code, all of your employees who touch your code, you need to have them sign in their employee agreement, it should say, “Everything I do, the company owns.” I had that, I had only missed one contractor. I went back and asked him nicely, we still have a good relationship and everything was fine.
Had I not had that, it would’ve been really tough because when we went through the acquisition, they needed that. This funded company is not going to pay a premium for my startup if there are IP holes that someone could come back later and sue them or ask for ownership with the code or whatever. It’s not something you think about when you’re two, four or five person startup but it’s something that you should definitely have.
I signed to the same employee agreement, and Derrick signed, even us cofounders. We had to have agreements that basically Drip, the S Corp that owned everything own everything, that Derrick and I couldn’t walk away with that. That’s one thing I would think about.
The guy mentioned manuals and processes, that was not an issue because we were an eight person team and they’re acquiring the team. They weren’t looking to automate everything. I think if the team was walking away, yes they would want manuals and processes to hand off to the next team but there was zero questions about that. There were more questions about what our vacation policy and HR staff and employment agreements looks like than anything like that.
In terms of bank issues, they didn’t acquire the company, if you think about it. They acquired all the assets of the company and that’s typically how it’s done because they don’t want any of the liabilities. They left an S Corp that Derrick and I still own the same amount that we’ve always owned, they just bought all the internal assets of it including the code and the goodwill and the recurring revenue and employment agreements and all that stuff.
As a result, the corp still owns the bank account, they didn’t acquire any of that stuff. Thankfully we never had to setup a PayPal account or anything like that. Same thing with domain names, we just transferred them over. They were all in the GoDaddy account and we transferred them over to their GoDaddy account.
The only other thing I could think of as I was going through this list that I think would be interesting to think about it they ask for, this is typical, the standard due diligence stuff, all corporate documentation, your articles of incorporation, every single amendment you’ve ever made to them, everything. Have that all in one place because going out and finding it and scanning it is a pain in the ass.
Having record keeping doesn’t seem like a big deal when you’re a three person startup or when you’re a solo founder. But if you’re ever planning being acquired, you probably want all of this stuff somewhere so it doesn’t take you weeks to put these docs together.
The next thing is having really solid books, basically having income statements for every month. For me it was literally just a Google Doc with revenue, expenses and that kind of stuff. I also had Xero, the accounting software that they could look at. When they were asking for high level numbers, top line revenue and that kind of stuff, I was sending them Google Docs.
They’re gonna ask every single service you use, what’s every SaaS app that you pay for? Hopefully they’re all on a credit card, you could just go to credit card, that’s what I did and just started listing those out. Copies of leases and every contract you’ve ever signed for every service. Transferring the Stripe account did happen because all the subscriptions were in there.
That’s the high level overview, I think it’s something that I hadn’t thought about. When there’s a technology transfer, you think more about, “Boy, the tech has to be good and has to be automated and you want processes in place.” When it’s a company acquisition, it can be different. When people bought HitTail just as a product, they didn’t ask for articles of incorporation because they weren’t buying the team, it wasn’t a strategic acquisition. Those are my high level thoughts.
Mike: I hadn’t realized that they did not acquire the entire company itself and they were just acquiring the assets from the company. That’s the way that my wife had purchased the fitness studio that was in town. She didn’t acquire the business, she acquired the assets of the business.
I was very clear to her about just because the records of the business were obviously a little screwy and the person who own the business before couldn’t really explain certain things and was a little cagey about certain pieces of it where I’m just like, “Do not acquire the business.” Because let’s say she’s got a car, for example, that is owned by the business, if you acquire the business, you’re also acquiring the debts that go with it and any liens or anything else that goes with it. You will be on the hook for those things. If you don’t know about it, it doesn’t matter, you still have acquired them which may suck.
Rob: If you buy the company, you acquire the assets and all liabilities. That’s why almost without exception, anyone who knows what they’re doing, when they buy a “company” they’re just buying the assets of the business, that’s the standard. When Facebook bought Instagram, you can bet, their lawyers did not buy the Instagram LLC or C Corp. They bought just the assets of it.
As a result, you have to then list out what all the assets are which is interesting because you have to list out your code and the database and this, it’s just a big long list of stuff.
Mike: With my wife, there was a tax bill that ended up coming in. It was sent to her and she’s like, “No, this isn’t me because I didn’t acquire the business.” There was stuff that came up afterwards that had she’d acquired it, she would’ve been stuck with it and there is nothing she would’ve been able to do.
The other thing I find interesting is that when I worked for Pedestal Software and they got acquired by Altiris, the Altiris acquisition team came in and they handed us, all the employees, these documents that we had to sign that were basically more or less a copy of what our previous agreement with Pedestal had been for all the IP rights and signing them over to Pedestal but it was their version of it.
We’d already signed all the stuff but they said, “Yes that’s fine and everything looks good but you also have to sign these.” I think maybe there are updated ways of covering additional holes or something like that, I’m not sure.
Rob: I guess our agreements were perhaps good enough for their lawyers, they probably looked at them and said, “This covers everything.” Because it was recent, it was within the last year or something and everyone had signed. I broke everything out, Numa Group which is my umbrella LLC that owns a bunch of stuff, it owned Drip until maybe 9 or 10 months before it was acquired.
I was already in the process of ripping it out of Numa Group because that was when Derrick was taking some equity in the company and he essentially became cofounder. I was already in that process which was painful and agonizing and took five months and more money than it should have. Drip was already in an S Corp. I was very, very thankful for that because if it did not, then it would’ve been a fiasco to try it doing during the negotiation and the acquisition process.
When that all happened, I basically fired all of us from Numa Group, we all got new jobs with Drip, S Corp, Drip Incorporated. We all signed agreements at that point again even though some of us already signed up with Numa Group. Then, essentially when Leadpages acquired us, we all got fired from Drip Incorporated and all got new employment agreements with Leadpages.
I think they probably had some IP stuff in their employment agreement as well which is fine because then anything you do for them they own but they didn’t have a specific additional stuff we had to sign.
Mike: I wonder if it maybe it was because Altiris was a public company and they had additional things that they had to cover themselves, I don’t know.
Rob: I can see that, it makes sense. Thanks for the question, guy. I hope that was helpful. Our next question is actually not a question, it’s some kudos for us and it’s a voicemail.
“I just listened to episode 838 with the questions. It was great to have that interactive […] podcast, I just wanna give you guys some feedback, a long time listener. My name is Chris. I really enjoyed the episode, just hearing those questions and getting some more of your perspectives and your background and experience. […]. Take care, guys. Thank you again. Keep up the good work.”
Awesome. Thanks for calling, Chris. I wanted to play that because it’s good to hear feedback and folk’s opinion. He said episode 838 but I think he meant 383 which was just another one of these Q and A episodes. I specifically mentioned in that one that I like doing them more often and that I like getting voicemails because it shows it has the interaction. Thanks for that, man. I’m always happy to hear from folks.
Our next question is from Mr. Andrew Connell about GDPR. “Hey Rob and Mike, this is Andrew Connell from Voitanos, that’s voitanos.io. I do online training and I do it for everybody around the world or developers around the world. With the coming effectiveness of the GDPR for data privacy and personal privacy data at Europe, I’m curious if you guys can comment a little bit, of course not being lawyers, I’m not a lawyer either. I just think about what kinds of things developers really need to be paying attention to? What kinds of things you need to be careful of?
I’m asking these guys because it’s also very much in the way of how we’ve all be listeners of your show worked on doing email based marketing and collecting email addresses and potentially phone numbers and other information about users. What kinds of things you need to think about, I’ve seen things about privacy statements that you need to have on your site, how you’re collecting the data, what talent is being used, how you’re protecting it, all those kinds of things.
I’m just curious, what things do you really need to be paying attention to? There’s probably the gold standard but also what’s the standard that you can do where you’re at least defensible. Maybe you’re collecting data and the user finds out, they decided they no longer wanna be tracked by you. Can you just go back to them and say, ‘Yes I track you by your email address. Here’s all the information I have about you. If you want me to delete you, I can delete you.’ I’m just curious, do you guys have some comment there or maybe even have somebody who is a lawyer who can jump on the show and maybe comment? Thanks a lot. I love the show. See you guys in Vegas.”
The riveting conversation topic of GDPR.
Mike:Oh, joy.
Rob: Everyone is thinking about it so it’s important, it’s just such a fiasco. I’m gonna use the word stupid a lot in this conversation insight. Big parts of it, I think, are really dumb. There’s a 250 page doc or whatever and Brandon, our senior director product, went through the entire thing.
The end result is gonna wind up being something like we have to rewrite a bunch of internal policies and we’re gonna add a checkbox to a form for our users. That’s very similar to what MailChimp is doing and Active Campaign, all the ESPs. I’ll stop there and circle back because I’ve been talking a lot this episode. I know that you saw a talk at FemtoConf about it and I’m sure you have other thoughts on this.
Again couching it that we aren’t lawyers, we are not giving personal advice to anyone and certainly don’t have an exhaustive understanding of this but this is just our general thoughts on what we feel like folks might wanna do for GDPR.
Mike: The talk that I saw on FemtoConf, there’s a linkable posted in the show notes from Aleth, she’s the one who gave the talk. There’s a link to an overview of her talk as a recap from Christoph. He runs FemtoConf with Benedikt. You can go out there, there’s an overview of it but I’ll say it glosses over certain details that she talked about specifically.
With GDPR, the thing that you really have to make sure that you’re aware of is that if you touched the data in any way, shape or form, you’re on the hook for it. You have to make sure that you are both protecting it and if you are able to personally identify somebody, that you are complying to those GDPR policies.
If you have metadata about somebody, like custom fields or something like that, that’s not considered personally identifiable information but there are certain pieces that are. For example, an email address would be personally identifiable, an IP address would be personally identifiable, first name, last name, address, those kinds of things.
You tag somebody, that’s not considered personally identifiable but you have to spell it out in your privacy policy what you are doing with those types of things. Are you adding those types of things?
Rob: How is an IP address personally identifiable? That’s stupid. It’s not personally identifiable because IP address, a, can change constantly, b, you could have a single IP address for 100 people at a company, there’s so many ways that that’s not. I will stop.
Mike: You just have to be careful about what it is that you’re doing with that data. A couple of big things that I’ve seen that you have to really pay attention to if you’re selling stuff is that one, people have to be able to request a copy of all of the data that is associated with them.
If you’re running a SaaS app and it’s collecting the information, let’s say it’s Drip ESP, your customers are gathering information based on that email address, the person who owns that email address has to be able to come in and say, “Show me everything that you collected about me.” You have to provide them with the mechanism to give them that data dump. I’ve seen this recently, Facebook is doing this, Twitter is doing this.
You can go and you can request a download of all the information that Facebook has on you, the same thing with Twitter, you can get a download of it. I haven’t done that with mine yet but my understanding is that it is absurd and I’ve seen the amount that Facebook has on you, for example. There’s obviously backlash in the news right now about the amount of data and how personal it can be in certain cases. That’s something you have to pay attention to when you’re trying to comply to these, you need to give that to somebody.
Rob: Here’s what I would say, if you’re a developer, you don’t have to have an automated way. They can email you and you can go run a sequel query. I would not go and build something consul or anything especially it’s a small company. You know that you can do stuff agile and just do it when it happens, do it just in time, whatever.
They can also request that you have to delete everything, then at that point, the first time, it’s gonna be a pain in the butt but you’re gonna write that sequel query to delete it out, it probably gonna break something then you’re gonna fix it and then the next time you’ll have the same query. That’s how I would think about it. If you’re Facebook, that’s not gonna work because it’s not scalable. The odds of you getting a request when you have 1000 users or 5000 users, it’s pretty low.
Mike: The downside of that, though—I was just about to mention that—with deleting the information because you do have to comply to the right to be forgotten clauses.
Rob: Which is the stupidest thing I’ve ever heard.
Mike: I think you said it in the middle of the other comment as well, we’ll say it’s three. The right to be forgotten says that somebody can say, “Completely forget about me.” The problem I have with this is that where do you draw the line for that? I know that there’s a timeline that you have in which you can say, “We’ll get this taken care of.” You have a certain amount of time or this 14 days or 30 days to get rid of the data.
The question I have in my mind is that yes, I understand that that applies to backups but does that mean you have to go into your backups or you are only allowed to basically hold 30 days worth of backups? For the sake of arguments, say that it’s 30 days, is that all you’re allowed to maintain because that seems scary.
Rob: That’s why this is insane. It’s a legislation, it’s government getting involved in something that technically is a bad choice for a company or a bad choice for a business. We know as IT people, as developers, as professionals, as DBAs, you wanna have weekly backups or monthly backups for literally years probably. It’s not so you can hoard and use a bunch of information, it’s so if stuff goes sideways at some point and you realized you have this big error, you always go back, it’s a safety mechanism.
Mike: The other thing that bugs me about this is the right to be forgotten. I get the intent and I understand it but let’s say that somebody comes to you and says, “Rob, I want Drip to forget about Mike Taber.” What happens in three days if my contact information makes it back into Drip? How do you prevent my information from going back into the system without knowing who I am and keeping track of that? That’s a total chicken and egg problem.
Rob: None of that, as far as we’ve seen, is in GDPR. That isn’t addressed. The example is you say you want the right to be forgotten, you sign up for Rob Walling’s newsletter and you, Mike Taber, say, “I want to be pulled out of there.” You’re pulled out. What if you’re in 10 of our other customer’s accounts, are you only forgotten out of that one account? Are you forgotten out of everyone? It’s not specified.
Like you said, what if you then go to sign up to a new newsletter tomorrow and XYZ person is also hosting on Drip. There are so many edgy cases. The problem is every version is gonna be this much of a pain in the ass. If they do V2 in a year, think of how many personal hours and how many dollars have been pissed away by companies that would otherwise have been productive building products, doing interesting things, creating jobs.
Marketing alone on the Drip team which is not a huge app, we’ve wasted hundreds of hours and thousands, if not tens of thousands, on legal fees just having our lawyer’s advice and stuff. That sucks, that’s money that could’ve actually been productive and instead it’s sitting here dealing with what essentially is legislation.
Another issue I have is that in the US, they often will pass things, they’ll pass laws like this but they will exempt small businesses. If you’re 25 employees or less, you don’t have to comply to certain things. They do that because they don’t wanna put an undo burden on small companies because small companies are the ones that don’t have the budget, that don’t have the analysis council and that don’t have the bandwidth to handle a 250 page doc that’s completely opaque and everyone is confused about and freaking out. I think there should be an exception.
Isn’t this really meant to be for Google and Facebook and Apple and Fortune 1000 or Fortune 5000 Companies. How much do they care about these tiny little 3 person, 5 person, 10 person companies. They’re just trying to run a business, they’re just trying to make a living. That’s where I think they overlooked having some kind of exemption for small businesses.
Mike: There are certain pieces of it that are exempt; there’s the security officer, a dedicated security officer. Stuff like that, I believe is exempt. If you’re a small business below a certain size, you don’t have to have that. But the reality, at the end of the day is if you’re a single owner, that’s you anyway. It almost doesn’t matter. I totally agree, they’ve overreached is really what it comes down to. It doesn’t makes sense for much smaller businesses to try and have to comply to that.
Rob: Again, you and I agree, we understand the spirit of what they are trying to do. I don’t disagree with any of that, I disagree with the amount of burden that they’re placing on all the small businesses. Everyone is talking about this right now. It’s a waste of everyone’s time. When I say everyone, in our circles, in the startup circles. Yes, Facebook should worry about it but it’s so much wasted bandwidth.
Mike: The other thing that I saw that was interesting was when you spell out in your privacy policy what data you have that you’re collecting and what you’re using it for, you also have to give the person the ability to opt out of individual pieces of it which to me seems absurd. I don’t know why you would allow that.
Rob: I have not come across that, I don’t know about that. That’s an interesting piece.
Mike: Let me give you an example, if on your website you have Google Analytics, a Facebook Pixel, and a Drip Widget for example, somebody can come and say, “I don’t want you to track me using Facebook Pixels but the other things are okay, just not that.”
Rob: I had a guy who read all 250 pages of it and that is not on our list. I would look to see if perhaps there’s an exemption or there’s something in there that says you can otherwise not do that because, again, I haven’t heard anyone else talk about that.
Mike: The thing is there’s a piece that revolves whether or not you’re a data processor or a data controller. That’s the part that revolves on it. You mentioned earlier that there’s a question in your mind about whether or not if somebody is asked to be forgotten, is it just for that one account or is it for all them? My understanding is it’s all of them.
They could go to Facebook, you don’t have control over but they could go to Facebook and say, “Opt me out of everything, don’t track me. Forget me completely.” That has a trickle down effect on you running Drip because if you guys use the Facebook Pixel to track people, then you can’t track me, for example. Facebook essentially blocked it. Again it goes back to how do you keep track of that unless you know who the person is to not track them.
Rob: To be honest, I asked someone who I know is familiar with GDPR and had spent some time looking at it. He runs a small business, less than 10 employees. I was saying, “What are you actually gonna do here?” He said he is gonna handle things as they come in in terms of the request, in terms of deleting and in terms of giving a report of what they know.
He is seriously considering not creating all the documents because they basically say you have to have these 10 policies or 12 policies, all this internal documentation you’re supposed to have, processes to do this. He was going to say that his company is compliant with the spirit of GDPR and we’ll live up to the request but they do not have all of those policies in place.
It was like some verbiage of we believe in the spirit of it, we will comply as needed type of thing with the thought in mind that he’s not in Europe so he’s not European business so it would be very unlikely that the EU is gonna reach across the pond and come and try to take some little 10 person company out. Like I was saying, this is really more intended, my understanding is more intended for these larger companies.
That’s the balance, is being practical about it and not putting your head in the sand and not doing anything but understanding some basic fundamentals which is what we’ve talked about here. If folks are opting in to hear from you or receive marketing, there’s supposed to be a specific checkbox that says you agree to the privacy policy and our terms of service or whatever which again I think is idiotic because they already know that.
A checkbox and them checking a checkbox is gonna make a difference, it’s like agreeing to a ULA, user license agreement with Apple, no one reads those things. You’re gonna put a checkbox with the link and it’s just gonna become this route thing that everyone does. It’s not gonna change anything but that is what it says technically. Consider if you’re asking for keeping your customer’s customers data somewhere, it gets more complicated.
In Andrew’s case, he runs online training. He has an online training, video training, people can sign in. He’s not collecting his customer’s customers data so it’s very much more simplified. I would consider a just in time or a simplified approach if I were in his shoes. How about you, Mike? You wanna talk about how every aspect of your business is not gonna comply and open yourself up towards the EU?
Mike: That’s the interesting thing is that for businesses that are not based in Europe, they don’t have the jurisdiction to force you to do any of that anyway. There’s literally nothing that they can do, they can’t sue you and say, “You are not complying to this.”
Rob: They could sue you in US court, they could. The EU could file a sue in Massachusetts court. You would have to fight it out, you would have to settle or you would have to fight. The odds of that happening, though, for you are almost non existent.
Mike: The thing is there’s a difference between them filing suit versus them having jurisdiction over. The sucky part would be you’re gonna have to comply to it just to make that lawsuit go away or you’re gonna have to fight it which you’ll win if you fight but you’re gonna incur a ton of legal fees over the course of doing that because they don’t have the jurisdiction and that’s what the court would rule.
I certainly wouldn’t recommend trying to fight it yourself and be your own lawyer there. I’m sure that somebody probably is skilled enough to be able to do that but I wouldn’t wanna be that person, I wouldn’t wanna risk it.
Rob: Here’s another option I heard someone throw out. They said EU customers are less than 10% of my business, I’m gonna reject, not allow EU customers anymore because I don’t have the bandwidth to do it. That’s what someone told me, that was really interesting. That’s a super bummer but at some point you have to throw your hands up and you gotta do IP detection or you just ask, “Are you in the EU, yes or no?” If they say yes, during the signup, you just say, “Sorry we can’t support you through the GDPR.” It’s pretty fascinating, I hope it does not come to that but I can imagine some businesses that’s just going to be easier and simpler to do that.
Mike: I’ve heard some people tried to, I think it came up at MicroConf Europe this past year about the legislation. There is someone there I met who was basically basing his higher business idea off of the idea that there were going to be US based businesses who aren’t going to comply to GDPR and they were gonna say. “You can use our service and you will be compliant.” I disagree that that’s a great business idea because all they have to do is comply and then suddenly your whole business value proposition goes off the window.
Rob: Obviously it’s complicated but I do think there’s a pragmatic way to approach this. As with any legislation, it will iron itself out, it will be more understood. You can watch companies like MailChimp or Drip Leadpages or whatever, GitHub, or Slack and watch how they handle it and then evaluate, “Do I need to do some other things?” You can also read that 250 pages doc and try to sort it out.
I don’t think it’s as bad as people make it out, I’m hoping it’s not gonna be that way. I do think if you’re in the EU, there is definitely more of a cause for concern if you’re running a business. Thanks for the question, Andrew. I think that was super helpful and a timely topic to discuss.
Mike: I think with that question, we’ll wrap things up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products whether you built your first product or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What is our word this week, sir?
Mike: Why is it in Zencastr it says Chronomustard?
Rob: Chronomustard, that’s my name this week. I think that’s gonna confuse our editor. I’m trying a new thing, creativity. I’m trying to enter a different name each week just to see if I can make you laugh.
Mike: They usually do make me laugh, I appreciate that.
Rob: For sure. What’s going on this week?
Mike: I did a demo yesterday for a customer who’s looking at switching over from a competitor and they have a bunch of different users for the product that are in the competitor. When I went through and was doing the demo, afterwards he’s just like, “Wow this is way more advanced than what we’re currently using.” I’m just thinking to myself, “Is that a good thing or a bad thing?” Apparently it was a good thing.
They were looking through and signing up for it. Next week they’re gonna reach internally. Hopefully they’ll turn into a fairly large customer for Bluetick.
Rob: It’s always good to get off a demo and get that feeling that you’re gonna be making more money, it’s always worth it.
Mike: What was really interesting to me was just the fact that they had said how advanced it was in relation to this competitor because the impression that I get from their website and all the things that it seems like it does is that it’s probably more advanced than Bluetick but I got the distinct feeling that that was not the case.
I knew that they were having problems with it but I wasn’t clear until the phone call and exactly what those problems were and how they were dealing with them and what they were looking to do.
Rob: That’s awesome, man. Do you have any avenue if you sign this guys up that you’re able to find more customers like them?
Mike: I do but I think it’s gonna be more word of mouth relationship than anything else. This one came through a personal relationship so it’s not as if they came in through a marketing channel or anything like that. I knew who the person was and contact them and went from there.
Rob: You could also think about going to build with your Datanyze. Since they are using this competitor pulling down the list to people who are using the competitor doing the cold email thing, we talked a little bit about that last week. It’s obviously time consuming but that can be an interesting avenue if you do know that you are better than a specific competitor.
Mike: I don’t know how well BuiltWith would identify that because it’s through email so there’s no really a lot of onsite stuff that’s gonna tell me who’s using that unless they have a JavaScript which I don’t have that so nobody will be able to use BuiltWith to reverse engine but maybe they do, I’d have to go take a look though.
Rob: Probably be worth a few minutes. You have been busy, man. I was pleased to see an article on Indie Hackers, Starting and Growing a Conference for Internet Entrepreneurs, got quite a few upvotes. You said you spent several hours doing this, it’s one of the most in depth Indie Hackers Q and A I had seen.
Mike: I spent a lot of time on that, probably close to a day and a half to two days. I threw in the word because I was curious since how long it actually was, it came in at 6000 words.
Rob: It’s like a book chapter or two. It has screenshots and everything, you did a really good job. If folks are interested in hearing about the history of MicroConf, what it was like starting it, how it runs today. There’s just a ton of insight stuff, although some of it is projected revenue, I think you gave this year. Some years don’t include MicroConf Europe, it’s not all exact but there are graphs and everything that I think that Indie Hackers folks put together.
Mike: They took the attendance numbers and extrapolated with the revenue was from those numbers. It’s off a little bit but it’s not really that big deal, it’s more of the trajectory, I think, that’s important to see.
Rob: It doesn’t include sponsorships and all which are big chunk. It’s fun for me to read because I could be like, “Oh yeah.” I was nodding along like, “I remember that. I can’t believe Mike remembers this.” You are pulling stuff out, all the anecdotes that I had long forgotten.
Mike: Some of the things I had to go back. I looked through my email to see when it was that we first started talking about MicroConf and I traced it back to the exact day which I don’t know if we talked about. We had a name for it before then and we were talking about it separately and just calling it a conference or we had the name and we picked it on the day and went from there.
I don’t remember how long we talked about it before we decided to register the domain name and start looking forward or if it was just like spare the moment thing.
Rob: I remember being very spur of the moment. It just made sense, it was like, “Why don’t we just do that?” That’s cool. There’s a lot of engagement, a lot of really good comments and in depth discussion going on and 36 upvotes, I get the feeling that’s quite a few for most articles. Anyways, if you’re interested in hearing that story, we’ll link it up in the show notes but you can obviously go to indiehackers.com and give it a search. You also went on Justin Jackson’s podcast, MegaMaker. It was a couple weeks ago.
Mike: I think that was last week as well. We recorded it and then it went live either later that day or the very next day. It was all about MicroConf itself and what Starter Edition was about. We’ve announced that Justin Jackson is going to be emcee for Starter Edition.
We did that last year, Starter Edition as well, with Jordan Gal from CartHook. He was the emcee for that, we basically turned over the reins to him and let him run the show at Starter Edition which was really cool because it’s nice to be able to sit back a little bit and enjoy the conference a little bit more. I don’t know how you feel about that but it’s nice to let somebody else take the reins for a little while.
Rob: That was something that Zander, our conference coordinator, encouraged us to do because since Growth and Starter are back to back, we’d be solo energy by the fourth day of trying to emcee and run the conference that I think he knew that it would just wouldn’t come off as well as it could. Jordan certainly knocked it out the park as the emcee that was really, really good and to give them their style up there on stage is fun.
You know, with Starter, Justin is such a good fit for it because that is really the crowd that he is talking to everyday and interacting with so he knows that crowd perhaps these days, you know better than I do in all honesty. It was years ago that I was really knee deep in all of the transitioning from developer to marketer and talking about all that stuff. He just has his finger on the pulse of that. I think he’s a good fit to emcee. This year he’s also doing a talk which is cool.
Mike: How about you, what have you been up to?
Rob: I’ve just been working, kicking back a little bit. I have a spring break coming in a week or two. We are heading down to Florida, starting to warm up in Minneapolis but still in the 30s and we wanna get some sun. It’s an easy flight down to Miami and we rented up Big Ol’ Airbnb off of 80 and we’re looking forward to that.
I was enjoying, I don’t know if you’ve heard it but Sherry was on Mixergy. It’s actually her second time on Mixergy. Her first time, it was when she interviewed Andrew Warner and put it on ZenFounder and he simulcast that basically onto Mixergy. But this time it’s called Keeping Your Feet Together As A Founder and it’s Andrew Warner interviewing Sherry about the book and about the stuff she’s doing in the entrepreneurial communities. It’s really a pretty intense interview but it’s really good. Have you had the chance to listen to it?
Mike: I have not, no. I don’t get a chance to listen to Mixergy too often. I’m actually about two months behind on most of my podcast at the moment anyway.
Rob: I listen to select Mixergy interviews just because there’s a lot of them and they are long but this is one that obviously I jumped on, I just wanted to hear the content. It’s a good one, we’ll link it up in the show notes but you can obviously search for Sherry Walling Mixergy and find that in Google.
Mike: Awesome. What are we talking about today?
Rob: We’re gonna answer a bunch of listener questions and see how many we get through. It was cool, we were down to one listener question. When we announced it on the show, I think we’re up to 12 or 15 now and so we can hammer through. I feel like this cadence every other week answering these questions has become something that I’ve enjoyed and I’ve gotten positive feedback about it.
Voicemails are even better because it shows people that there are all these different people with different businesses listening to the show. You and I know we have tens of thousands of listeners but as a listener, you don’t know that. It would be hard to know or understand your fellow listeners and your fellow entrepreneurs doing it. I have enjoyed this and I think we’ll keep doing it as long as the questions keep coming in.
Our first question today is for me, it’s actually from a guy, Louis. He said, “The question I have is what would Rob wished he had prepared in advance in going through the process of selling Drip? Imagine there might be things like intellectual property who may have purchased the use with his own name but now need to be transferred to the company, manuals and processes, bank issues such as PayPal not being able to transfer, etc. The list could be endless, maybe a good topic for a book.”
I’ve actually thought about this. There are two thing I wanted to say here. The first is I’m gonna make an announcement but not really an announcement, Mike, I haven’t even told you this. I’ve started writing what I think may become a book. That’s the exact right response. I don’t know if it will yet. My goal for this year is not to tackle any big new projects.
There’s a lot to tell, there’s a lot of story that has happened since the last book I wrote. Maybe it’ll just be about Drip and the trials and tribulations, the last year of personal finance hell and being unable to fund the business and then the year of the acquisition and then the year of moving. As I started thinking about it, I was like, “Isn’t this interesting enough? Will anyone care?”
I sat down with a notebook and I just wrote out what were the most stressful parts of my life both personally and professionally since 2011 in essence. The list was crazy long. Each of them just shaped into this narrative and they link together in this very interesting way. Even if I were to write about acquiring HitTail and not use it in the book, it’s still […] for me to write about the process of growing it and then selling it. There’s a bunch of stress that went along with that sale.
I started just thinking about all the stuff that happened growing Drip. I made this big list, when I looked at it I feel like it’s interesting enough, at least worth sitting down and hacking some stuff out. I had like three pages of just bulleted list. About a week and a half ago, I just sat down one evening, I started doing it on a weekend. It’s kind of writing itself because it’s a narrative. I’m pulling out actionable things but I’m trying to get the grit of what it was actually like.
I have emails, I have Voxers, I have all this, I have my MicroConf talk from last year talking about the sale and my thought process, I started to listen to that and transcribing pieces of it. It’s cool in this day and age, all the digital elements that we have because I can’t remember exact dates but Gmail sure doesn’t forget. It remembers the exact date of this email that I sent to Derrick about this topic.
I’ve literally just been doing it on the side almost as a journal but trying to be very honest about everything, trying not to sugarcoat things. I’m about 7000 words in and it has just poured out of me, it’s all out of order, I just picked the next thing on the list that I think, “Man, I really wanna write about that today,” and I’m cranking it out.
I don’t know if it will be a book, I don’t know if I will ever release it but it’s something that I think could have the potential to be that. It’s always funny, when I got this question I started thinking, “Maybe that should be a piece of this.” Because I don’t just want it to be a narrative, I actually want it to be in typical or a podcast style and MicroConf style. I want it to have lessons that people can take away.
Whether they’re acquired or not, even just the growing part of it, the mistakes that they can avoid that I made or smart decisions that we made that I feel like people can learn from.
Mike: There are two pieces of that because there are people who would read that just because they know who you are or they’ve seen you speak and they just want the inside baseballs so to speak. They’re interested in the story, I totally hear what you’re saying about having the lessons but I think you could do both where you’ve got the story itself and then after each chapter or after each section you have a list of things that you personally pull out and be like, “Here are the lessons that you could take away from this, here’s the story piece of it and then here’s the lessons that go with each of these.”
Some of them may not have any lessons at all, it’s just something happened and you got lucky or unlucky and you just had to deal with the consequences or fallout. There may not have been anything that you could do about it. Maybe that’s the lessons, you can’t plan for everything but I think that it’s still going to be interesting to a lot of people.
Rob: I appreciate that. I kind of think of it as I think of any MicroConf talk I’ve ever given or at least the best talks that I’ve given tend to be a story, like a hero’s journey and then pulling out super actionable tactical things. That’s how I’m envisioning it. I’ve read only a couple books like that, I like it because it’s different, it’s not just a narrative. I want them to be not obvious takeaways, it’s not like work hard and persevere and you will make it. It’s not stupid stuff like that.
I realized that I think I’m telling myself that I don’t know if it’ll be a book so that I don’t feel in pressure or anxiety. I don’t want to feel forced to write it, I don’t want the writing to feel forced. I’m telling myself no one will ever read this because I wanna tell the story honestly, because there’s obviously a lot that went on that no one else knows that was very internal, that was between Derrick and I or between Clay and I or whatever.
Eventually, I’m sure I’ll have to edit some of that out but I’m trying to get it all out and then evaluate, is this worth doing? Maybe it’s an ebook or maybe it’s a series of blog posts that I’ll release or maybe it’s an audiobook, I don’t even know. It’s an interesting project. Hopefully it’ll turn into something.
Mike: Man, if it doesn’t, you did it for yourself and that’s not a big deal either. There’s something to be said for just doing things for yourself once in a while.
Rob: Exactly. That’s what I said, it’s like what’s the worst that can happen, I should just write this out. If nothing else, my kids can read it someday or something.
Mike: All of these aside and back to the question, are there any top level things that you can take away that you wish you had done that were probably a major things that you either overlooked or hadn’t thought about upfront that needed to be transferred or you wish you had done?
Rob: The prep work that I think everyone should do that you don’t think about is it’s far more mental prep work than anything else. I listened to the book Built to Sell three or four times, I listened to Finish Big multiple times, I did a lot of journaling, I did a lot of thinking. You have to know what your deal breakers are, you have to know probably what your drop dead price is. There’s a bunch of stuff that you need to think about and that it the prep work that I would focus on. I’ll just put that out there, first and foremost spend more time doing that.
The examples that the guy brought up, the guy who answered the question, most of these were not an issue. He brought up intellectual property, I had already transferred all of that into an LLC. If I hadn’t done that, it would’ve been disastrous, it would’ve been a huge pain in the ass.
One big thing that I do think you need to think about as you’re building your companies to have a clean IP, meaning that all of your contractors who touch your code, all of your employees who touch your code, you need to have them sign in their employee agreement, it should say, “Everything I do, the company owns.” I had that, I had only missed one contractor. I went back and asked him nicely, we still have a good relationship and everything was fine.
Had I not had that, it would’ve been really tough because when we went through the acquisition, they needed that. This funded company is not going to pay a premium for my startup if there are IP holes that someone could come back later and sue them or ask for ownership with the code or whatever. It’s not something you think about when you’re two, four or five person startup but it’s something that you should definitely have.
I signed to the same employee agreement, and Derrick signed, even us cofounders. We had to have agreements that basically Drip, the S Corp that owned everything own everything, that Derrick and I couldn’t walk away with that. That’s one thing I would think about.
The guy mentioned manuals and processes, that was not an issue because we were an eight person team and they’re acquiring the team. They weren’t looking to automate everything. I think if the team was walking away, yes they would want manuals and processes to hand off to the next team but there was zero questions about that. There were more questions about what our vacation policy and HR staff and employment agreements looks like than anything like that.
In terms of bank issues, they didn’t acquire the company, if you think about it. They acquired all the assets of the company and that’s typically how it’s done because they don’t want any of the liabilities. They left an S Corp that Derrick and I still own the same amount that we’ve always owned, they just bought all the internal assets of it including the code and the goodwill and the recurring revenue and employment agreements and all that stuff.
As a result, the corp still owns the bank account, they didn’t acquire any of that stuff. Thankfully we never had to setup a PayPal account or anything like that. Same thing with domain names, we just transferred them over. They were all in the GoDaddy account and we transferred them over to their GoDaddy account.
The only other thing I could think of as I was going through this list that I think would be interesting to think about it they ask for, this is typical, the standard due diligence stuff, all corporate documentation, your articles of incorporation, every single amendment you’ve ever made to them, everything. Have that all in one place because going out and finding it and scanning it is a pain in the ass.
Having record keeping doesn’t seem like a big deal when you’re a three person startup or when you’re a solo founder. But if you’re ever planning being acquired, you probably want all of this stuff somewhere so it doesn’t take you weeks to put these docs together.
The next thing is having really solid books, basically having income statements for every month. For me it was literally just a Google Doc with revenue, expenses and that kind of stuff. I also had Xero, the accounting software that they could look at. When they were asking for high level numbers, top line revenue and that kind of stuff, I was sending them Google Docs.
They’re gonna ask every single service you use, what’s every SaaS app that you pay for? Hopefully they’re all on a credit card, you could just go to credit card, that’s what I did and just started listing those out. Copies of leases and every contract you’ve ever signed for every service. Transferring the Stripe account did happen because all the subscriptions were in there.
That’s the high level overview, I think it’s something that I hadn’t thought about. When there’s a technology transfer, you think more about, “Boy, the tech has to be good and has to be automated and you want processes in place.” When it’s a company acquisition, it can be different. When people bought HitTail just as a product, they didn’t ask for articles of incorporation because they weren’t buying the team, it wasn’t a strategic acquisition. Those are my high level thoughts.
Mike: I hadn’t realized that they did not acquire the entire company itself and they were just acquiring the assets from the company. That’s the way that my wife had purchased the fitness studio that was in town. She didn’t acquire the business, she acquired the assets of the business.
I was very clear to her about just because the records of the business were obviously a little screwy and the person who own the business before couldn’t really explain certain things and was a little cagey about certain pieces of it where I’m just like, “Do not acquire the business.” Because let’s say she’s got a car, for example, that is owned by the business, if you acquire the business, you’re also acquiring the debts that go with it and any liens or anything else that goes with it. You will be on the hook for those things. If you don’t know about it, it doesn’t matter, you still have acquired them which may suck.
Rob: If you buy the company, you acquire the assets and all liabilities. That’s why almost without exception, anyone who knows what they’re doing, when they buy a “company” they’re just buying the assets of the business, that’s the standard. When Facebook bought Instagram, you can bet, their lawyers did not buy the Instagram LLC or C Corp. They bought just the assets of it.
As a result, you have to then list out what all the assets are which is interesting because you have to list out your code and the database and this, it’s just a big long list of stuff.
Mike: With my wife, there was a tax bill that ended up coming in. It was sent to her and she’s like, “No, this isn’t me because I didn’t acquire the business.” There was stuff that came up afterwards that had she’d acquired it, she would’ve been stuck with it and there is nothing she would’ve been able to do.
The other thing I find interesting is that when I worked for Pedestal Software and they got acquired by Altiris, the Altiris acquisition team came in and they handed us, all the employees, these documents that we had to sign that were basically more or less a copy of what our previous agreement with Pedestal had been for all the IP rights and signing them over to Pedestal but it was their version of it.
We’d already signed all the stuff but they said, “Yes that’s fine and everything looks good but you also have to sign these.” I think maybe there are updated ways of covering additional holes or something like that, I’m not sure.
Rob: I guess our agreements were perhaps good enough for their lawyers, they probably looked at them and said, “This covers everything.” Because it was recent, it was within the last year or something and everyone had signed. I broke everything out, Numa Group which is my umbrella LLC that owns a bunch of stuff, it owned Drip until maybe 9 or 10 months before it was acquired.
I was already in the process of ripping it out of Numa Group because that was when Derrick was taking some equity in the company and he essentially became cofounder. I was already in that process which was painful and agonizing and took five months and more money than it should have. Drip was already in an S Corp. I was very, very thankful for that because if it did not, then it would’ve been a fiasco to try it doing during the negotiation and the acquisition process.
When that all happened, I basically fired all of us from Numa Group, we all got new jobs with Drip, S Corp, Drip Incorporated. We all signed agreements at that point again even though some of us already signed up with Numa Group. Then, essentially when Leadpages acquired us, we all got fired from Drip Incorporated and all got new employment agreements with Leadpages.
I think they probably had some IP stuff in their employment agreement as well which is fine because then anything you do for them they own but they didn’t have a specific additional stuff we had to sign.
Mike: I wonder if it maybe it was because Altiris was a public company and they had additional things that they had to cover themselves, I don’t know.
Rob: I can see that, it makes sense. Thanks for the question, guy. I hope that was helpful. Our next question is actually not a question, it’s some kudos for us and it’s a voicemail.
“I just listened to episode 838 with the questions. It was great to have that interactive […] podcast, I just wanna give you guys some feedback, a long time listener. My name is Chris. I really enjoyed the episode, just hearing those questions and getting some more of your perspectives and your background and experience. […]. Take care, guys. Thank you again. Keep up the good work.”
Awesome. Thanks for calling, Chris. I wanted to play that because it’s good to hear feedback and folk’s opinion. He said episode 838 but I think he meant 383 which was just another one of these Q and A episodes. I specifically mentioned in that one that I like doing them more often and that I like getting voicemails because it shows it has the interaction. Thanks for that, man. I’m always happy to hear from folks.
Our next question is from Mr. Andrew Connell about GDPR. “Hey Rob and Mike, this is Andrew Connell from Voitanos, that’s voitanos.io. I do online training and I do it for everybody around the world or developers around the world. With the coming effectiveness of the GDPR for data privacy and personal privacy data at Europe, I’m curious if you guys can comment a little bit, of course not being lawyers, I’m not a lawyer either. I just think about what kinds of things developers really need to be paying attention to? What kinds of things you need to be careful of?
I’m asking these guys because it’s also very much in the way of how we’ve all be listeners of your show worked on doing email based marketing and collecting email addresses and potentially phone numbers and other information about users. What kinds of things you need to think about, I’ve seen things about privacy statements that you need to have on your site, how you’re collecting the data, what talent is being used, how you’re protecting it, all those kinds of things.
I’m just curious, what things do you really need to be paying attention to? There’s probably the gold standard but also what’s the standard that you can do where you’re at least defensible. Maybe you’re collecting data and the user finds out, they decided they no longer wanna be tracked by you. Can you just go back to them and say, ‘Yes I track you by your email address. Here’s all the information I have about you. If you want me to delete you, I can delete you.’ I’m just curious, do you guys have some comment there or maybe even have somebody who is a lawyer who can jump on the show and maybe comment? Thanks a lot. I love the show. See you guys in Vegas.”
The riveting conversation topic of GDPR.
Mike:Oh, joy.
Rob: Everyone is thinking about it so it’s important, it’s just such a fiasco. I’m gonna use the word stupid a lot in this conversation insight. Big parts of it, I think, are really dumb. There’s a 250 page doc or whatever and Brandon, our senior director product, went through the entire thing.
The end result is gonna wind up being something like we have to rewrite a bunch of internal policies and we’re gonna add a checkbox to a form for our users. That’s very similar to what MailChimp is doing and Active Campaign, all the ESPs. I’ll stop there and circle back because I’ve been talking a lot this episode. I know that you saw a talk at FemtoConf about it and I’m sure you have other thoughts on this.
Again couching it that we aren’t lawyers, we are not giving personal advice to anyone and certainly don’t have an exhaustive understanding of this but this is just our general thoughts on what we feel like folks might wanna do for GDPR.
Mike: The talk that I saw on FemtoConf, there’s a linkable posted in the show notes from Aleth, she’s the one who gave the talk. There’s a link to an overview of her talk as a recap from Christoph. He runs FemtoConf with Benedikt. You can go out there, there’s an overview of it but I’ll say it glosses over certain details that she talked about specifically.
With GDPR, the thing that you really have to make sure that you’re aware of is that if you touched the data in any way, shape or form, you’re on the hook for it. You have to make sure that you are both protecting it and if you are able to personally identify somebody, that you are complying to those GDPR policies.
If you have metadata about somebody, like custom fields or something like that, that’s not considered personally identifiable information but there are certain pieces that are. For example, an email address would be personally identifiable, an IP address would be personally identifiable, first name, last name, address, those kinds of things.
You tag somebody, that’s not considered personally identifiable but you have to spell it out in your privacy policy what you are doing with those types of things. Are you adding those types of things?
Rob: How is an IP address personally identifiable? That’s stupid. It’s not personally identifiable because IP address, a, can change constantly, b, you could have a single IP address for 100 people at a company, there’s so many ways that that’s not. I will stop.
Mike: You just have to be careful about what it is that you’re doing with that data. A couple of big things that I’ve seen that you have to really pay attention to if you’re selling stuff is that one, people have to be able to request a copy of all of the data that is associated with them.
If you’re running a SaaS app and it’s collecting the information, let’s say it’s Drip ESP, your customers are gathering information based on that email address, the person who owns that email address has to be able to come in and say, “Show me everything that you collected about me.” You have to provide them with the mechanism to give them that data dump. I’ve seen this recently, Facebook is doing this, Twitter is doing this.
You can go and you can request a download of all the information that Facebook has on you, the same thing with Twitter, you can get a download of it. I haven’t done that with mine yet but my understanding is that it is absurd and I’ve seen the amount that Facebook has on you, for example. There’s obviously backlash in the news right now about the amount of data and how personal it can be in certain cases. That’s something you have to pay attention to when you’re trying to comply to these, you need to give that to somebody.
Rob: Here’s what I would say, if you’re a developer, you don’t have to have an automated way. They can email you and you can go run a sequel query. I would not go and build something consul or anything especially it’s a small company. You know that you can do stuff agile and just do it when it happens, do it just in time, whatever.
They can also request that you have to delete everything, then at that point, the first time, it’s gonna be a pain in the butt but you’re gonna write that sequel query to delete it out, it probably gonna break something then you’re gonna fix it and then the next time you’ll have the same query. That’s how I would think about it. If you’re Facebook, that’s not gonna work because it’s not scalable. The odds of you getting a request when you have 1000 users or 5000 users, it’s pretty low.
Mike: The downside of that, though—I was just about to mention that—with deleting the information because you do have to comply to the right to be forgotten clauses.
Rob: Which is the stupidest thing I’ve ever heard.
Mike: I think you said it in the middle of the other comment as well, we’ll say it’s three. The right to be forgotten says that somebody can say, “Completely forget about me.” The problem I have with this is that where do you draw the line for that? I know that there’s a timeline that you have in which you can say, “We’ll get this taken care of.” You have a certain amount of time or this 14 days or 30 days to get rid of the data.
The question I have in my mind is that yes, I understand that that applies to backups but does that mean you have to go into your backups or you are only allowed to basically hold 30 days worth of backups? For the sake of arguments, say that it’s 30 days, is that all you’re allowed to maintain because that seems scary.
Rob: That’s why this is insane. It’s a legislation, it’s government getting involved in something that technically is a bad choice for a company or a bad choice for a business. We know as IT people, as developers, as professionals, as DBAs, you wanna have weekly backups or monthly backups for literally years probably. It’s not so you can hoard and use a bunch of information, it’s so if stuff goes sideways at some point and you realized you have this big error, you always go back, it’s a safety mechanism.
Mike: The other thing that bugs me about this is the right to be forgotten. I get the intent and I understand it but let’s say that somebody comes to you and says, “Rob, I want Drip to forget about Mike Taber.” What happens in three days if my contact information makes it back into Drip? How do you prevent my information from going back into the system without knowing who I am and keeping track of that? That’s a total chicken and egg problem.
Rob: None of that, as far as we’ve seen, is in GDPR. That isn’t addressed. The example is you say you want the right to be forgotten, you sign up for Rob Walling’s newsletter and you, Mike Taber, say, “I want to be pulled out of there.” You’re pulled out. What if you’re in 10 of our other customer’s accounts, are you only forgotten out of that one account? Are you forgotten out of everyone? It’s not specified.
Like you said, what if you then go to sign up to a new newsletter tomorrow and XYZ person is also hosting on Drip. There are so many edgy cases. The problem is every version is gonna be this much of a pain in the ass. If they do V2 in a year, think of how many personal hours and how many dollars have been pissed away by companies that would otherwise have been productive building products, doing interesting things, creating jobs.
Marketing alone on the Drip team which is not a huge app, we’ve wasted hundreds of hours and thousands, if not tens of thousands, on legal fees just having our lawyer’s advice and stuff. That sucks, that’s money that could’ve actually been productive and instead it’s sitting here dealing with what essentially is legislation.
Another issue I have is that in the US, they often will pass things, they’ll pass laws like this but they will exempt small businesses. If you’re 25 employees or less, you don’t have to comply to certain things. They do that because they don’t wanna put an undo burden on small companies because small companies are the ones that don’t have the budget, that don’t have the analysis council and that don’t have the bandwidth to handle a 250 page doc that’s completely opaque and everyone is confused about and freaking out. I think there should be an exception.
Isn’t this really meant to be for Google and Facebook and Apple and Fortune 1000 or Fortune 5000 Companies. How much do they care about these tiny little 3 person, 5 person, 10 person companies. They’re just trying to run a business, they’re just trying to make a living. That’s where I think they overlooked having some kind of exemption for small businesses.
Mike: There are certain pieces of it that are exempt; there’s the security officer, a dedicated security officer. Stuff like that, I believe is exempt. If you’re a small business below a certain size, you don’t have to have that. But the reality, at the end of the day is if you’re a single owner, that’s you anyway. It almost doesn’t matter. I totally agree, they’ve overreached is really what it comes down to. It doesn’t makes sense for much smaller businesses to try and have to comply to that.
Rob: Again, you and I agree, we understand the spirit of what they are trying to do. I don’t disagree with any of that, I disagree with the amount of burden that they’re placing on all the small businesses. Everyone is talking about this right now. It’s a waste of everyone’s time. When I say everyone, in our circles, in the startup circles. Yes, Facebook should worry about it but it’s so much wasted bandwidth.
Mike: The other thing that I saw that was interesting was when you spell out in your privacy policy what data you have that you’re collecting and what you’re using it for, you also have to give the person the ability to opt out of individual pieces of it which to me seems absurd. I don’t know why you would allow that.
Rob: I have not come across that, I don’t know about that. That’s an interesting piece.
Mike: Let me give you an example, if on your website you have Google Analytics, a Facebook Pixel, and a Drip Widget for example, somebody can come and say, “I don’t want you to track me using Facebook Pixels but the other things are okay, just not that.”
Rob: I had a guy who read all 250 pages of it and that is not on our list. I would look to see if perhaps there’s an exemption or there’s something in there that says you can otherwise not do that because, again, I haven’t heard anyone else talk about that.
Mike: The thing is there’s a piece that revolves whether or not you’re a data processor or a data controller. That’s the part that revolves on it. You mentioned earlier that there’s a question in your mind about whether or not if somebody is asked to be forgotten, is it just for that one account or is it for all them? My understanding is it’s all of them.
They could go to Facebook, you don’t have control over but they could go to Facebook and say, “Opt me out of everything, don’t track me. Forget me completely.” That has a trickle down effect on you running Drip because if you guys use the Facebook Pixel to track people, then you can’t track me, for example. Facebook essentially blocked it. Again it goes back to how do you keep track of that unless you know who the person is to not track them.
Rob: To be honest, I asked someone who I know is familiar with GDPR and had spent some time looking at it. He runs a small business, less than 10 employees. I was saying, “What are you actually gonna do here?” He said he is gonna handle things as they come in in terms of the request, in terms of deleting and in terms of giving a report of what they know.
He is seriously considering not creating all the documents because they basically say you have to have these 10 policies or 12 policies, all this internal documentation you’re supposed to have, processes to do this. He was going to say that his company is compliant with the spirit of GDPR and we’ll live up to the request but they do not have all of those policies in place.
It was like some verbiage of we believe in the spirit of it, we will comply as needed type of thing with the thought in mind that he’s not in Europe so he’s not European business so it would be very unlikely that the EU is gonna reach across the pond and come and try to take some little 10 person company out. Like I was saying, this is really more intended, my understanding is more intended for these larger companies.
That’s the balance, is being practical about it and not putting your head in the sand and not doing anything but understanding some basic fundamentals which is what we’ve talked about here. If folks are opting in to hear from you or receive marketing, there’s supposed to be a specific checkbox that says you agree to the privacy policy and our terms of service or whatever which again I think is idiotic because they already know that.
A checkbox and them checking a checkbox is gonna make a difference, it’s like agreeing to a ULA, user license agreement with Apple, no one reads those things. You’re gonna put a checkbox with the link and it’s just gonna become this route thing that everyone does. It’s not gonna change anything but that is what it says technically. Consider if you’re asking for keeping your customer’s customers data somewhere, it gets more complicated.
In Andrew’s case, he runs online training. He has an online training, video training, people can sign in. He’s not collecting his customer’s customers data so it’s very much more simplified. I would consider a just in time or a simplified approach if I were in his shoes. How about you, Mike? You wanna talk about how every aspect of your business is not gonna comply and open yourself up towards the EU?
Mike: That’s the interesting thing is that for businesses that are not based in Europe, they don’t have the jurisdiction to force you to do any of that anyway. There’s literally nothing that they can do, they can’t sue you and say, “You are not complying to this.”
Rob: They could sue you in US court, they could. The EU could file a sue in Massachusetts court. You would have to fight it out, you would have to settle or you would have to fight. The odds of that happening, though, for you are almost non existent.
Mike: The thing is there’s a difference between them filing suit versus them having jurisdiction over. The sucky part would be you’re gonna have to comply to it just to make that lawsuit go away or you’re gonna have to fight it which you’ll win if you fight but you’re gonna incur a ton of legal fees over the course of doing that because they don’t have the jurisdiction and that’s what the court would rule.
I certainly wouldn’t recommend trying to fight it yourself and be your own lawyer there. I’m sure that somebody probably is skilled enough to be able to do that but I wouldn’t wanna be that person, I wouldn’t wanna risk it.
Rob: Here’s another option I heard someone throw out. They said EU customers are less than 10% of my business, I’m gonna reject, not allow EU customers anymore because I don’t have the bandwidth to do it. That’s what someone told me, that was really interesting. That’s a super bummer but at some point you have to throw your hands up and you gotta do IP detection or you just ask, “Are you in the EU, yes or no?” If they say yes, during the signup, you just say, “Sorry we can’t support you through the GDPR.” It’s pretty fascinating, I hope it does not come to that but I can imagine some businesses that’s just going to be easier and simpler to do that.
Mike: I’ve heard some people tried to, I think it came up at MicroConf Europe this past year about the legislation. There is someone there I met who was basically basing his higher business idea off of the idea that there were going to be US based businesses who aren’t going to comply to GDPR and they were gonna say. “You can use our service and you will be compliant.” I disagree that that’s a great business idea because all they have to do is comply and then suddenly your whole business value proposition goes off the window.
Rob: Obviously it’s complicated but I do think there’s a pragmatic way to approach this. As with any legislation, it will iron itself out, it will be more understood. You can watch companies like MailChimp or Drip Leadpages or whatever, GitHub, or Slack and watch how they handle it and then evaluate, “Do I need to do some other things?” You can also read that 250 pages doc and try to sort it out.
I don’t think it’s as bad as people make it out, I’m hoping it’s not gonna be that way. I do think if you’re in the EU, there is definitely more of a cause for concern if you’re running a business. Thanks for the question, Andrew. I think that was super helpful and a timely topic to discuss.
Mike: I think with that question, we’ll wrap things up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 384 | Bluetick Marketing Plan Teardown
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the Bluetick marketing plan. Mike breaks down his plan in three categories, one-time, ongoing, and long-term. The two go back and forth on the most effective strategies for each category.
Items mentioned in this episode:
- Bluetick
- FemtoConf
- Price Intelligently
- Product Hunt
- CSS Gallery List
- LeadFuze
- Whitetail Software
- Zapier
Mike: In this episode of Startups For The Rest Of Us, Rob and I are gonna be doing a teardown of the Bluetick Marketing plan. This is Startups For The Rest Of Us episode 384.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: I’m doing alright. I was just looking through our 584 worldwide iTunes reviews. We’re approaching 600 people, 16 more and we’ll be crossing that 600 mark, which is quite a milestone. Some recent reviews, there’s one here form just last week, from […] and he says, “Great podcast, been listening for years.” One from Mr. Man Man from the UK, he says, “Full of great practical advice. Discovered the show recently and now a regular listener. Extremely valuable advice for anyone who wants to build tech products.” Limons from the US says, “Every episode is invaluable. Somehow Mike and Rob ensure that every episode has at least one and usually a ton of valuable info. I love the presentation style and how much they pack in. I don’t think anyone just started tech business without listening to this podcast.” Thank you very much for those.
You can log into iTunes, or Stitcher, or Downcast, or Overcast, and leave a five-star review without even typing in all those crazy technical words and phrases and sentences. Just hit the five star button and it will go a long way towards helping us stay motivated to record the podcast. Also, helps us grow our audience which convinces us to keep doing every week, to ship every Tuesday, as they say.
How about you? What have you been up to aside from-so you lost power. People know I did a solo episode last week. How was that with no power and no water?
Mike: Oh, that sucks. It was about a day or so that we lost power. We lost it, I think, at around 10:00 o’clock or 11:00 o’clock at night and then we didn’t get power back until probably 6:00 or 7:00 the next day.
Rob: It’s tough.
Mike: Yeah, it sucks. The real hard part is that with no running water either because we have a well and the water comes up through the well with the electricity that powers the pump. We actually have some giant jugs of water that we keep downstairs just in case we do lose power or something happens with our water because we’ve had issues with our pump as well. You lose your pump and you can’t have any running water which is surprising, you use it a lot but you never ever think about of what would happen if I didn’t have water today or what would happen if I don’t have electricity today. It’s just inconvenient to say the least.
Rob: Right. I’m glad you’re back. You went to Germany recently.
Mike: Yup. Went to FemtoConf which was pretty awesome. I had a great time. There were probably about 40-50 people there. There were some issues with a few people getting into FemtoConf just because they were flying in from the Eastern US. Of course the snow storm came through and hit the New England area so some people were delayed, some people just didn’t get there at all. Travel for a few people was kind of a mess. Fortunately, I flew out on Thursday and got there and kind of recovered, no real major issues with jet lag. But I really like the feel of it.
It was a lot like MicroConf when it was much, much smaller. Just much smaller groups, intimate conversations very much like MicroConf. The feel of it and the vibe was very reminiscent of that, I’d say in the very, very early days of MicroConf 2011-2012 when you didn’t necessarily know everybody or you’re just kind of getting introduced to what other people’s businesses were. There were a couple of talks on the first day. Then the next day Sherry gave a small workshop. Then we split off into a couple other ones where Alex Yumashev from JitBit did one on kind of like engineering growth hacking that you could do. Then Mojca Mars gave one on Facebook Ads which I went to that one. She went through and basically set everybody up with their Facebook Ads account, walked them through exactly how to get things started, and kind of helped them figure out what it was that they needed to do moving forward.
Rob: That sounds super cool. There was just one or two talks a day?
Mike: On Saturday there was four talks and then on Sunday there was Sherry’s workshop in the morning, and then there were two other workshops after that. Thomas Smale from FE International was supposed to be there, so there was supposed to be two workshops, and followed by another two workshops. It kind of run simultaneously in different rooms but because Thomas couldn’t make it, Sherry ended up doing one for everybody, and then the other two were split. First speaker on Saturday was Claire Suellentrop who’s also going to be speaking at MicroConf in a couple of months.
Actually, what’s that? Six weeks away right now? Claire spoke first and then it was followed by Aleth, she spoke about GDPR, and then I spoke about email follow-ups, and then Patrick Campbell, he was one of the people who was delayed, he spoke about modifying your pricing and how to figure out what an ideal pricing model should be for your business, and then using it as one of the biggest growth leverage in your business. I think I got a lot out of that talk because I’m kind of right in the middle of evaluating pricing and figuring out what to do with it, and how to pitch it to people.
But he also pointed out the fact that SaaS has gotten substantially more competitive over the past several years. He had graphs and charts to show the number of competitors, the people that started five years ago had versus people who started two years ago versus people who started last year. It was just fascinating the amount of data that he had on that based on all the stuff that they do for Price Intelligently.
Rob: Yep. His talks are always super valuable and have a lot of data. It sounds like a lot of fun, man. Sherry was there, obviously. Told me about it and said she enjoyed it as well and said there was a ton of overlap with the MicroConf crowd. I think she said most people go to one of the MicroConfs which is fun. It’s fun to get together in almost a more mastermind-y arrangement. I know it’s not that small but I bet you kind of know everybody and know what they’re up to and you can literally talk to everyone at the conference.
Mke: Yeah. If you don’t know them before you get there then it’s easy to at least have those conversations and get to know them by the end of it.
Rob: For sure. Cool. What are we talking about today?
Mike: Well, I had asked a few people what they wanted to hear on the podcast. One of the biggest things that came out of it was what is going to be the initial marketing plan for Bluetick now that the new website is up and running. I wanted to talk about that and kind of just go back and forth, and giving I guess a high level indication of what I’m going to be doing. And then you and I can talk about either specifics of it or vet some ideas around or even just tear some of these ideas apart, and say, “Look, don’t do this,” because more than happy to hear some of the advice that you have to share.
Rob: For sure. I know I had shared with you at one point the Drip marketing game plan and the HitTail one actually. The HitTail is a little bit out of date but did you look through that, at all, to populate this list you have?
Mike: Some of those things are pulled from there. I haven’t gone back to either those in a while. I probably should do that at this point. Most of what I’ve been doing lately has been really focused on either MicroConf or getting the new website up and running and now that that’s in place and things are settling down a little bit with MicroConf, I can go back and take a look at those. But some of these things are pulled from that.
Rob: Yeah, that makes sense. One thing I would consider before we dive in, you have it broken down into two categories, kind of, “I’m gonna do these things now,” and then my longer term things. Maybe you do them over as you get time or as you get budget. Something I would think about is to even have one before now or to split the now into two buckets is to have one-time things and on-going things. One of your bullets here is product listing sites, like product on beta list, and I would even go so far as to say all the CSS Galleries.
There’s 50 different things; there’s getapp.com, there’s Capterra, there’s AppStorm, there’s this whole list that you can put together. Those are truly gonna be one-time things. I think it might help your mental model of like, “Okay, gonna do those once. Gonna get the heat of traffic.” Even podcast store is kind of a one-time thing. You’re not gonna do that for a year whereas webinars, joint webinars, and that kind of stuff I think is more on-going. Does it help for you to think about it like that?
Mike: Yes. In Teamwork I have a project that’s specifically called Bluetick Marketing that just has lists and lists of things there. I’m looking at it now there’s probably 20 different lists in here and there’s about 162 different to-do items in there. One of them is specifically one-time marketing tasks. Things like going into the Chrome Web Store and looking to see if there’s anything that can be leveraged there, submit into the Google Apps Marketplace. The products listing sites, inside of that various accounts are different places, and documented certain processes, etc. Mostly just one-time things that I need to do it once or is it’s a task that needs to be done but the output of that could then be leveraged over and over again.
Rob: Okay, that makes sense. What I’ve done is update the list a little bit and I just kind of threw some things that’s called one-time and then we have on-going, and then a later list. Will that work for you?
Mike: Yeah.
Rob: Let’s see. Let’s dive in.
Mike: You wanna go straight into the now sort of things?
Rob: Yeah. Let’s talk about the one-time things because I think that these are things that I have all of my marketing plans. But specifically, I’m gonna keep talking about HitTail and Drip because that’s when I formalized this and put it into a doc. I really thought through where are the places that I can get a bump now that I’ve launched. It’s like the website’s live, every time I try to get written up on Venturebeat, and Techcrunch, and ReadWrite web, and GigaOM when it existed, all these things. It never worked but at least I tried it. I was trying to get some type of buzz.
Then there are the ones that are easier or guaranteed. It’s like startupli.st and BetaList, and makeuseof.com, all the things we just talked about, like Producton and that kind of stuff. You’re almost guaranteed to get a listing even though it might take a while to do. I think if you ever venture back, maybe those little-oh, and CSS Galleries is the other one. If your site is good enough and is a custom-design, I realize yours is probably more templatized, but always got a lot of traffic with HitTail and Drip from the CSS Galleries.
Did it convert amazingly well? No. But did it to convert to some trials for almost zero effort because in essence I would have a VA or I think I may have even hired a service at one point because there are like a hundred different CSS Galleries. I think there was someone who productized it and I paid $99 and submitted some info and they submitted it to all of them. To me, that’s a great zero time $99 investment because if you get one or two trials, depending on your price point, that pays it off.
That’s how I always entered it. I think if you ever venture back then need to make a bazillion dollars then maybe these kind of little initial approaches could be a waste of focus or a waste of time but I think given that every trial counts for you, I think those things are important to do. Chrome Web Store is the other one you said in the Google Apps Marketplace. I had zero look with the Chrome Web Store. What’s the difference between the Chrome Web Store and the Google Apps Marketplace?
Mike: I’ll be honest, I don’t know. I’d have to go and take a look at that. I think the Chrome Web Store was specifically for Chrome plugins. At one point, I had on my list of things to put into Bluetick like a small Chrome extension. Obviously, it never materialized. It’s not that it’s not a road map, it’s just I didn’t get there. I don’t know if that’s even viable or something that I could do because they may just say, “No, you have to have an actual Chrome extension to be able to put that in here.”
Rob: Yeah, that’s what it is. While you were talking, I went to the Google Apps Marketplace. It’s now called the G Suite Marketplace. If you integrate essentially into the G Suite, it also looks like you can just integrate with Gmail as well. Since you do that and neither Drip nor HitTail did, I never submitted to the Google Apps Marketplace. That would an interesting distributing channel.
On the Chrome Web Store I did get a minimum Drip and HitTail in and it had zero traction. But I’m not saying it’s not worth the time but it didn’t do anything. It’s pretty crowded in there now. It’s kind of like the iOS app store I think about, in the early days it was a lot easier to get found. I know that PipeDrive said that a lot of their early growth came from the Chrome Web Store but that was a different time. It was five years ago or whatever. It’s one of those things where you have to create some images and you have to create some XML and you have to submit it and it will take you probably half a day to do. You gotta wait if you wanna do that or not. It depends on what else you have going on.
I would probably lean towards doing it just because it is one more distribution channel and you could get lucky but I think it’s not as high priority as pitching podcasts as an example, because that’s gonna have a really high success rate for you.
Mike: Right. The other thing that comes to mind is going through the process of putting out on all those products listing sites. It contributes to long tail SEO as well.
Rob: Yeah, that’s right.
Mike: It contributes to your page authority and Google will see all those lengths coming in and just building those backlinks is kind of important.
Rob: Yup, I would agree with that.
Mike: You said CSS Galleries, fill me in on this because this is something that hadn’t even crossed my mind.
Rob: The only reason that they even came on my radar is when I acquired HitTail–no, it wasn’t HitTail. It was a different site. It was a productized service I had. It was called CMS Themer, CMS Themer at the time.
Mike: I remember that.
Rob: Yeah. It had a really nice design and it would get quite a bit traffic from CSS Galleries. The interesting thing is CMS Themer was really targeting designers and so that traffic converted very well. I’ve just always made it part of the marketing plan. Obviously, it doesn’t convert nearly as well when it’s an app like HitTail or Drip, but again, this posted a link into our docket. It’s cssgallerylist.com. For $60, they submit to hundreds of galleries. For $60 and almost no time it’s worth it for the backlinks, it’s worth it even if the traffic doesn’t convert, it’s just another channel to get out there. Again, the last time I did this was five years ago, there maybe a better resource than this cssgallerylist.com but I do know that I used these guys and it saved me a lot of time.
Mike: Yeah, for sure.
Rob: This is not something that’s gonna grow your business overnight or be some huge game-changing thing but it’s just all these little parts of the snowball that you’re kind of turn the pack on and then seeing which ones get you any kind of traction.
Mike: Right. I think the important thing to keep in mind when going through this stuff is that every little bit helps and you don’t always know that any one link is going to contribute anything but if it gets one person over and the ROI on that is gonna be almost no way to calculate that but you may get three people over and one person converts. It’s not a 33% conversion rate for that obviously but that can help.
Rob: That’s right. Have you considered how you could do an ‘ask me anything’ on Reddit or you could do a Show HN where you say, “Hey, here’s this business. It doing…” whatever the revenue is, or I don’t know if you can be vague about that or not, but I don’t know how you wanna handle it. Then basically say, “I’ve grown it to this. Give me your feedback,” or whatever. Have you thought about that? I don’t know if that’s worthwhile or if that’s just a big waste of time.
Mike: I have. I’m in a couple of Facebook groups. That was suggested to me a couple of months ago via somebody that said, “Hey, you should do an ‘ask me anything’ on Reddit.” I put it on my list but it wasn’t something that kind of rose, I’ll say, close to the top of things that I thought were, not necessarily game changers, but in terms of weighted priority, I didn’t feel it was something that would help out a lot.
Rob: It’s tough. If you’re marketing directly towards developers, then it would make more sense.
Mike: Right. If it was something like ‘ask me anything’ on growthhackers.com for example, that’d be a totally different story. That’s something that I probably should add to the list to be honest.
Rob: Oh, I think you should, yep.
Mike: Anything else in terms of one-time activities that come to mind that’s not on this list?
Rob: I was just trying to think about that. On startups.com, answers that are on Startups used to be kind of a place but I don’t even think that exist anymore. The bummer about Quora is that it’s really not a one-time thing. What I would do with a one-time thing is set-up, subscribe to some topics, there’s probably a cold email, or even just email. You want email sales, you want the email sales channels not the email marketing channel because email marketing tends to be bulk email and that’s not what you’re doing.
I would subscribe to categories or topics that fit your thing so that you’re notified when questions are asked because you wanna be an early answer. You don’t wanna go on a bunch of old Quora threads and add your answer because those threads already have a bunch of up votes and you’re not likely to be the answer that shows for everybody because that’s really what you want. I did that in the early days of Drip. It’s a bit time-consuming but what I found was the questions that come through tend to be so far into your wheelhouse, that they’re really easy to answer.
Even if I type a couple of paragraphs, it just flowed out. I didn’t have to research because it was things like, “What are approximate open right rights? What’s a good open right for a list?” It’s like, “Well, I actually know what the range is. Here, I’ll talk it through.” It’s gonna be stuff that these questions for me would be tough to answer because I’m not knee-deep in this warm email engagement the way you are. Anyways, I would consider as the one-time part of that just subscribing and seeing how it shapes out.
Mike: Yeah,that’s interesting being able to rattle off some of those numbers right off the top of your head. Because it’s part of my talk that I did for FemtoConf. I looked specifically into that and looked across 70,000 emails that had been sent out through Bluetick and looked to see what the open rates were and what the response rates were across those, and then I cross-sectioned them and got the average, the best case, worst case, across everybody’s accounts. It was interesting what the numbers came out to be and then asking the audience I said, “Hey, here is a number, what do you think is this in terms of the open rate?” It was about, I’d say a third of the audience got it right which means that two-thirds did not which indicates that these numbers are, I’ll say, a little bit obscure or opaque and not everybody knows that they are.
Rob: Yeah, that makes sense.
Mike: I think a couple of other things that come onto this list is, I don’t know if they’re one-time or you would classify them as one-time, but like a podcast tour, for example. I feel like it’s something that you can do it once when you start and then if you’re going to try and do it again you have to have something compelling to follow-up with, I’ll say.
Rob: I do think of a podcast tour as a one-time thing but it’s not as one-time as say CSS Gallery submission, but it’s gonna move the needle more than them. CSS Gallery and the BetaList and all that stuff. I just posted a link to whitetailsoftware.com and Robert Graham had that pre launch email list building directories. We can include that in the show notes but I think you have 50 or 100 that he had his VA submit to, so that’ll help as well. But all that to say, podcast tour is gonna take several months because you’re gonna email and get scheduled, and by the time it comes out, it’ll be months down the line.
I think the big thing, the advice that I would give when doing a podcast tour is it would be easy for you to just go on a bunch of entrepreneur podcasts and say, “Look, I launched a product. I’m building this SaaS product.” You’ll convert some of those, it’ll be a low conversion rate. The audience who’s gonna convert the best for you is gonna be folks doing sales. It’s gonna be folks both doing cold outreach and then doing the warm nurturing that Bluetick allows you to do, this stuff that comes right out of your inbox and looks very personable. It’s not bulk email like MailChimp or Drip but it’s the one-on-one connecting whether it’s cold or warm. Who’s doing that, right? This is BDRs and salespeople. I know some of those are also founders but I don’t think that’s gonna be your market.
I think initially, you can get SaaS founders, and you can get our audience, and the MicroConf audience, and not crew. It’s good to talk about it here. I’m not saying you shouldn’t go on Mixergy and talk about it but compared to the size of that audience, the conversion rate is gonna be pretty small. The podcast that I would target that I think are gonna be your low-hanging fruit, is to go on podcast that are talking about sales, and talking about tech sales, selling SaaS apps is probably the B2B sales approach.
You can come on not to tell the story of your product but you can pitch it as, “Look, I’m an expert in this because I’m in it day-to-day and I’m seeing dozens or hundreds of customers who use our product and I’m seeing the patterns. I’m seeing the successes and how they’re doing it well. I see the failures and the mistakes people are making.” Does that make sense? I would definitely go after that space rather than focus on the founder and entrepreneur space.
Mike: Yeah, it totally makes sense. That was actually my hesitation, I’ll say, of doing that because I didn’t think that approaching those, the startups community would be something that will really resonate. Like you said, I’ll get some sales out of it but it’s not gonna be a high-converting channel for me.
Rob: Yeah, in all honesty, I will probably do both but I would start with the sales folks, the sales podcast. We both know at least a dozen people who have podcasts that I’m sure you could come on and talk about some aspect of your business. Try to vary it because we have this small community and so if you go on all the podcast of our friends and talk about the same thing on every podcast, everybody hears it, there’s only so many people in it. I will try to suggest different topics, different aspects. If you could talk about the launch on one, you could talk about the stress on another, you could talk about marketing approaches on another.
I do think that is still worthwhile because it’s easy for you to do because you’re used to doing podcasts and it’s 30-45 minutes of your time once it’s booked. It’s not actually that much of a time investment to be in the earbuds of likely several thousands or tens of thousands of people, but as I said, I do think I would start with trying to assess out what are kind of some B2B sales podcast that I can get on?
Mike: The interesting thing about that is there’s two different ways that I could approach that particular problem of going out to the people who are running those podcast. One of them is send directly into Bluetick and let Bluetick follow up with those people. The other one is that there’s a company I’ve stumbled across that will take kind of what your requirements are for appearing on podcast and will go out through the different network of podcasts that they have contact with, and essentially pitch you to them. I’ve mixed feelings on doing that, to be perfectly honest, but at the same time, there’s a time component that it’s gonna suck up some of my time to do it myself but in many ways, it comes across better if I do it myself.
Rob: Yeah. That’s hard. There is a balance because we get a lot of pitches on this show and on Zen Founder. If it’s not the person pitching themselves, I tend to delete them, that’s just a thing. I do glance through them but I don’t think we’ve ever had anyone on the show who wasn’t pitching themselves. When I had an executive assistant who is doing stuff back in the Drip days, when I was still running the business, she could email people as me, look straight out of my inbox, and so you could develop the pitch and have someone else send it as you. But it just depends on what you wanna do. I don’t know but I don’t have a good answer for that.
Mike: But again, at that point, I could just put it through directly into Bluetick and have Bluetick send out the email.
Rob: That’s true. Ta-da. That’s cool.
Mike: It’s interesting because occasionally, when I’ll email people whether they contacted me to ask me something about Bluetick, occasionally they’ll have heard the podcast and they’ll ask in their email as to whether or not it was sent from me personally or whether Bluetick sent it. I’m just, “If you can’t tell, doesn’t that speak to what the product does?”
Rob: Right. Does it matter? Yeah, that’s funny.
Mike: Does it matter?
Rob: We’ve talked at length here about the one-time upfront things. You have nice list of the things that you plan to do on an on-going basis, why don’t we look at a few of those?
Mike: Sure. The things that pop-up high on my priority list-actually, you know what, now that I’m looking through this, one of the other things that is on the on-going list should probably be moved over into one-time is the public Zapier integration.
Rob: Oh, yeah.
Mike: I’ve got a private integration right now but I’ve not taken it public and that’s something that I’ve been asked about a couple of times by Zapier. I just haven’t done it yet to be perfectly honest. There’s a lot of edge cases that either are not handled well or I know that there’s other changes that need to be made and I’d rather make those changes before I open it up than have to fix a bunch of other stuff. Because there’s some things that I do some manual data manipulation just to make sure that things are working right for certain customers. I need to put a more permanent solution in place for those.
That’s something that after going through the process, I believe they put it out through their mailing list. I forget what their mailing list is but it’s something like 1 million people or something like that, something ridiculously large. The conversion rate is not gonna be high but it’s more about driving awareness than it is about converting people at that point.
Rob: Yeah, you’re just trying to get the word out so people have heard of you at this point. One other one-time thing that I would do, it’s not a marketing approach, but I would set up Google alerts for relevant terms that you wanna monitor like company names of competitors, try to hear about like articles I think are relevant or conversations that are relevant, you have to use your judgment there but I do think getting something setup so that your kind of participating or at least aware of what’s going on in your space is helpful.
Mike: Yeah. I have a couple of them set up right now but it’s mainly for Bluetick. What I find is I’m getting a lot of emails about dog conversations that are happening.
Rob: Yeah, I could see that.
Mike: I guess if we’re gonna jump right into the ongoing stuff or the short term things that I was looking at, the first on my list is webinars.
Rob: Yep. Are you planning, because right below that you have JV webinars.
Mike: Right. I wouldn’t say I lumped them together but I think the general process is going to be similar for them whereas with the webinars, there’s joint webinars and there’s just the regular webinars. The regular ones are ones that I was probably gonna promote to my own email list and then maybe do one on a regular basis or promote it on a Tuesday every other week or something like that. And then with the joint webinars those would be much more scheduled where I’m leveraging other people’s audiences and contacting influencers and see if they’re interested in having me come and talk specifically to their audience about how Bluetick can solve a particular problem for them. I see it almost like the podcast tour but with a little bit more, I’ll say, pinpoint accuracy or a little bit more focused specifically on those people because I don’t wanna go pitch somebody and say, “Hey, can I just do a joint webinar with you?” But not actually have something that’s gonna be valuable to offer to their audience.
Rob: Right. I would the joint webinars before I try to do internal webinars because it is such a nice way to reach out beyond your own audience. Just through doing webinars to your own list, you’re gonna one and then you’re not gonna fill anymore, you know what I mean, until you get more people either using your product or on your email list. We tried early on with Drip to just run Facebook ads, get people to opt into a webinar, and we’re gonna try to run one every week, and we just couldn’t get people to show up at a price that was worth it for us.
Again, not saying it’s not possible but it’s an entire funnel that you have to develop. It’s gonna take you quite a bit of time and money to do whereas the JV webinars is a low-hanging fruit for you, because JV webinars is about who you know. You do have a good network of people who I think you could contact and have access to their audience right away, basically for free, without running all the ads and developing a funnel. It’s just conversations. I’d definitely prioritize the joint webinars above do your own.
Mike: How would you structure any sort of special offers for those people going to a joint webinar? There’s a lot of discussion and I’ve thought about this myself. I was like, do I wanna offer a discount or I wanna give additional services or special templates like, “Hey, you can only get this here because you’re coming to this particular person’s webinar.” My concern is really putting a lot of extra effort into something that-at the end of the webinar, it may turn out to be nothing. I may not get very many sign-ups out of it or I may get a lot but I don’t know. It’s hard to predict how much time and effort to make things custom for that person’s audience. You know what I mean?
Rob: Yeah, I do. I would lean heavily towards some type of bonus and it’s time-limited. You say, “Hey, free to sign up in the next two or three days, then you get this extra thing.” whether it’s a discount or the thing that you billed. Discounts are the lazy way to do it. It’s like the zero time way but it chews through your money. If you have no time, absolutely no time, then yeah, give people a discount, but discounts are not exciting. They’re not as exciting as like, “Get this complete email series,” even if it’s only three or four emails, my guess is, you can crank that out just using copy+paste from what you’re using already or from what you’re recommending to people and just edit it for their specific niche.
If you talk to a bunch of freelancers then it’s like, “Here’s the way they follow-up and do it for freelancers.” A lot of it is gonna be the same as any other sequence you have but you’re just gonna tweak a few things. I’m guessing, in about half an hour you could probably crank something like that out. You don’t even need to do that in advance of the webinar because if you don’t get sign-ups then you just don’t build it. But if you get sign-ups using that coupon code then you just manually reach out to people because it’s not like you’re gonna get 500 sign-ups. You’re gonna get 10, or 20, or 30. It’s gonna be a small amount. You can just hit people up and distribute that to them. I’m thinking of something like that. It’s high value for someone signing-up but it’s pretty low effort for you to create.
Mike: Yeah, that makes sense. I think right now when you go and sign up, I was probably gonna pull this off as things progress, but when you go and sign up right now, there’s kind of an offer there that basically says I’ll create an email sequence for you based on whatever scenario you describe and that will be your first sequence. It’s kind of concierge onboarding but I’ll say it’s probably not very well described in the website right now but it is something that I just offer to people as they come to sign up.
Rob: Yeah. If you get 30 sign-ups at a time that’s gonna get tough. I think you’re gonna have to stop doing that because it’s too time-intensive. You have to back off as you start getting more sign-ups.
Mike: Right.
Rob: What else? You have direct follow-ups with the following; invite to demos, you have current mailing list, prior prospects which I think is good, and personal LinkedIn contacts.
Mike: Yep. I have a couple of different spreadsheets based on when I was doing early validation. Some people said, “Hey, now is not a good time. Maybe later on when you’re further along.” And then there’s people who have come in and I’ve done a demo with them and things just didn’t work out for whatever reason, or they sign-up but they never followed through or they used it for a little bit, and then they said, “Yeah, this isn’t working out for me.” I’ve got this pool of people that I can go to that fit into that criteria, that I can put them into a Bluetick sequence, for example, and invite them to come back and check it out or go to a demo or something like.
But in addition to that, I also have the mailing list that is in the Drip account which I have been putting on the website where there’s an email course that you can go through. It’s like a 5-day course which I’m in the process of copy+pasting all the content all of that to make it a slightly longer course. But those people that I can go to directly, I can take them out of Drip and then plug them into Bluetick, and individually follow up with each of them. I could do that based on lead score for example and just sort them by lead score and then add them in in that order and say, “These are the people that I’m gonna approach first versus these are all the people who are probably, I’ll say, less interested, but still on the list.”
Rob: Yeah. I think that’s a good idea to kind of approach. I was definitely gonna say anybody who’s cancelled in the past, if the product’s a lot better than when they’ve tried it, you definitely wanna contact them. Prospect who haven’t converted, people who’ve been paywalled because they don’t wanna give their credit card, now is the time when you’re doing this to just circle back and clean all that out.
The personal LinkedIn contacts, you gotta use your judgement there, you don’t wanna come off as… I’ve never done that but if you know someone who really should value out of it and you do a very soft pitch like, “Hey, just to let you know I just launched this. I thought it might be helpful.” Not anything that’s forceful like, “Jump on a call. Jump on a call.” Then, I think, it’s halfway reasonable.
Mike: Yeah. I wasn’t planning on doing that. What I was gonna do was go through my LinkedIn contacts and just look. Obviously, I’m gonna hand pick which ones i’m gonna contact and which ones I’m not. I’ve got people who I know are software developers or they’re engineering managers, or something like. They’re really not a good fit for it but that doesn’t mean that I can’t go to them and say, “Hey, I just wanted to check in with you and see how are things going, and let you know I just recently launched this. If you know of anyone who could use this, I’d love an introduction just to kind of help me out.” I’m leveraging my personal relationships at that point.
Rob: I could see doing that. I just added a couple things to the list. Actually, you have retargeting on there, mostly Facebook. I think it says Facebook primarily, I think that’s a really good idea to get set up whether you use perfect audience, you have the display networks like Google and stuff already, you just tick Facebook and it gets probably a material but I think you should get that set up pretty quick. That’d be probably towards the top of my list. Do you already have the pixel installed?
Mike: Yep.
Rob: Okay, good.
Mike: yeah, I’ve had that in pixel installed for a while. But then, the reality there is, I’ve put it under ongoing because there’s a one-time piece of setting it up and there is the follow on activities where you go in and you analyze how much traffic you’ve brought in, do you have a critical mass yet, what kind of advertisements you’re doing. It’s kind of two different components to that but I do find that even with my two-step process for the sign-up, you put in your email address and password, and it takes you over to a credit card page, and there’s people who don’t fill that out.
Obviously, those people, I wanna follow up with anyway but I also wanna make sure that people who come to the iste and then go over there but never even fill out that first page, I still wanna be able to retarget those people to bring them back. Because obviously, they were interested enough to go look at the signup page but they didn’t actually sign up.
Rob: I think in the interest of time here because we’re running pretty long today. I think you should consider-paid acquisition I have written here, it’s a tough one. It all depends on if you have budget and if you have time to sit there and test a bunch of stuff, so something to consider, maybe it goes on your later list but it’s definitely if you can get it to work, it’s really, really good. Cold email outreach, you have the tool to do it, nice to use your own tool. You can go to something like LeadFuze and get a list of people, and start doing the outreach yourself, or you can hire someone to the outreach for you.
We had mixed results when we did Drip but it definitely drove enough trials that have made it worth spending. We were spending money on it at that time and it definitely had positive ROI for us. Integration Marketing which is you just think of all the top 10 integrations that you would wanna have and think about trying to get either in their director. If it’s Stripe or Basecamp, they’re probably not gonna co-promote with you because they’re so big but they have these integration directories. Or if they’re a little bit smaller, if they’re a startup, they’ll probably have a list and are willing to email out and promote you. That requires dev time, of course, so it has to be worth your while.
But that was something we did 30 something integrations with Drip and it makes a lot of sense with a tool like Drip because it it a hub of data and so we integrated with a bunch of shopping carts and all types of marketing tools. That both helped our customers but it also really helped to start to get traction and kind of be everywhere in their early days. I think those are the other three I would throw out that you may wanna do sooner rather than later.
Mike: Yeah. I’ve already been asked by people about integrating directly into Bluetick using the API and I’ve kind of pushed off mainly because I know that there are parts of the API that are still changing, so I haven’t really structured it in a way that says, “Hey, this is available for you to use and it’s pretty solid versus these other pieces where you shouldn’t touch it.” I had a conversation with somebody at FemtoConf where they said they actually have three different versions of their API published. One of them was for them internally, and then there’s another one that’s a public API, and then they have special endpoint specifically for Zapier. It’s interesting they split theirs out and I think it makes a lot of sense as well. It’s just a matter of rearranging some things a little bit to allow people to do that and say, “Hey, this area is solid. This area is off-limits or don’t touch them.”
Rob: Yep, that makes sense. Anything else that you wanna pull out of here? Either in ongoing? It looks like you have a couple more and then you have some stuff for later?
Mike: Yup. The one idea that have come to mind that somebody had mentioned to me at FemtoConf was the idea of having Bluetick offered as sort of a managed service for x thousand dollars a month. Then they’ll send all of their contacts over into Bluetick and then, it’s my responsibility to make sure that things are running smoothly for them so that they don’t have to go in and manage anything which, if you set up a lot of the automation and stuff, you don’t have to worry about that, but there’s also ongoing tweaking, A/B testing, or making sure that, “Are these numbers any reasonable ballpark of what they should be?” If you’re getting a low open rate, for example, how would you necessarily know unless you’re looking at all the other data. I have access to that but other people don’t. Those are the things that I can provide a lot of additional value for customers but they don’t necessarily have access to it on their own if they just signed up.
Rob: Yeah. That makes sense. There’s a risk with managed services because they can just suck up a bunch of your time and also the revenue is not worth nearly what a SaaS revenue is in terms of a multiple-whether you’re gonna raise funding or whether you’re gonna sell or whatever. If you have a bunch of consulting revenue, it’s worth like 1X, 1X the revenue versus actual recurring revenue, it’s a different story. I shouldn’t say recurring. It’s higher margin revenue where if it’s software it has 70% or 80% margin. If it’s consulting it has what, 10%, 20%, 30% margin. It’s something that I would consider in the early days but it just matters what cash position you’re in. I think you would do it for the cash and not really for the long term prospect of the company because I don’t think you wanna grow a big kind of productized service long term.
Mike: No, I agree. The way I was gonna structure it was like, “Hey, here’s a managed service that if you wanna subscribe to you can,” and it’s either a three-month or a six-month contract, and then that’s it. If I decide to continue offering it then they can continue paying me for it but if I decide that we’re not gonna do this anymore, then things are kind of pushed back. It wouldn’t be something that you can just go to the website and buy off the shelf but it’d be limited three to six months contract or something like that. You’re right, it would absolutely be for improving cash flow for example, but it would also put a solid number on, “Hey, what is this particular customer going to be worth to me in the next three months or in the next six months.” Does that make sense?
Rob: Yeah, I think it’s interesting. Certainly trying it with one customer is not gonna hurt much. That’s the thing, is to see how much-if it’s valuable to them, if it’s workable for you, and obviously if you do it for 10 or 20 people, you’re getting yourself in pretty deep but you don’t have to do that. You can just dip your toe and then figure it out.
Mike: Yeah. I was gonna do it for probably one to five. The other nice thing that I thought that would deliver to me is the ability to work hand-in-hand with those customers and see what exactly what it was that they’re trying to do as opposed to, “Hey, here sign up to Bluetick,” and then after that, I don’t really have a ton of visibility into their business or exactly what challenges they’re trying to solve. I know generally what they’re trying to do but I don’t get that insight or I don’t have calls with them to really see on a weekly basis like, “Hey, what are you really trying to get out with this?” I think that those insights would actually help me build a better product longer term.
Rob: One of the thing I see on your later list that I like, that I don’t think we’ve covered, is you have this library of email templates, lead gen, and you use this as a lead gen to acquire email addresses? I think that’s intriguing both for the SEO and you can always run ads to it, you could retarget to it and you’re basically giving something away. I think that’s gonna take a ton of time for you to set-up. It’s a little more complicated than it sound but I’m glad you have it on your later list so at least, in a few months, once you get some of these other ones done, you can move into that, and start thinking about how to shape that up.
Mike: Right. The other nice, I’ll say, by-product of doing that is that, I could create those inside of Bluetick as a library where you can when you create your account, you can just select from a bunch of them, kind of a similar to the way that Drip has those pre-made blueprints for different situations, this would be exactly that. Like, “What situations have I run into with different customers that they’re trying to get a response or get the customer to take an action? What sorts of things work? What sorts of things don’t? What sorts of approaches do you wanna try?” You can almost categorize them. It’s like, “This is extremely aggressive versus to do the exact same thing to get somebody to a call. This one is much more laid back and hands off, and it depends on the situation whether it’s cold email versus a warm email with somebody who’ve had three or four conversations with us.” Which one you would use?
Rob: Cool. Well this was a good run. Thanks for bringing this on the show. I had fun talking about it. I’m guessing we’ve provided quite a bit of value for the folks who are thinking about this kind of stuff.
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Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob: I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: I’m doing alright. I was just looking through our 584 worldwide iTunes reviews. We’re approaching 600 people, 16 more and we’ll be crossing that 600 mark, which is quite a milestone. Some recent reviews, there’s one here form just last week, from […] and he says, “Great podcast, been listening for years.” One from Mr. Man Man from the UK, he says, “Full of great practical advice. Discovered the show recently and now a regular listener. Extremely valuable advice for anyone who wants to build tech products.” Limons from the US says, “Every episode is invaluable. Somehow Mike and Rob ensure that every episode has at least one and usually a ton of valuable info. I love the presentation style and how much they pack in. I don’t think anyone just started tech business without listening to this podcast.” Thank you very much for those.
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How about you? What have you been up to aside from-so you lost power. People know I did a solo episode last week. How was that with no power and no water?
Mike: Oh, that sucks. It was about a day or so that we lost power. We lost it, I think, at around 10:00 o’clock or 11:00 o’clock at night and then we didn’t get power back until probably 6:00 or 7:00 the next day.
Rob: It’s tough.
Mike: Yeah, it sucks. The real hard part is that with no running water either because we have a well and the water comes up through the well with the electricity that powers the pump. We actually have some giant jugs of water that we keep downstairs just in case we do lose power or something happens with our water because we’ve had issues with our pump as well. You lose your pump and you can’t have any running water which is surprising, you use it a lot but you never ever think about of what would happen if I didn’t have water today or what would happen if I don’t have electricity today. It’s just inconvenient to say the least.
Rob: Right. I’m glad you’re back. You went to Germany recently.
Mike: Yup. Went to FemtoConf which was pretty awesome. I had a great time. There were probably about 40-50 people there. There were some issues with a few people getting into FemtoConf just because they were flying in from the Eastern US. Of course the snow storm came through and hit the New England area so some people were delayed, some people just didn’t get there at all. Travel for a few people was kind of a mess. Fortunately, I flew out on Thursday and got there and kind of recovered, no real major issues with jet lag. But I really like the feel of it.
It was a lot like MicroConf when it was much, much smaller. Just much smaller groups, intimate conversations very much like MicroConf. The feel of it and the vibe was very reminiscent of that, I’d say in the very, very early days of MicroConf 2011-2012 when you didn’t necessarily know everybody or you’re just kind of getting introduced to what other people’s businesses were. There were a couple of talks on the first day. Then the next day Sherry gave a small workshop. Then we split off into a couple other ones where Alex Yumashev from JitBit did one on kind of like engineering growth hacking that you could do. Then Mojca Mars gave one on Facebook Ads which I went to that one. She went through and basically set everybody up with their Facebook Ads account, walked them through exactly how to get things started, and kind of helped them figure out what it was that they needed to do moving forward.
Rob: That sounds super cool. There was just one or two talks a day?
Mike: On Saturday there was four talks and then on Sunday there was Sherry’s workshop in the morning, and then there were two other workshops after that. Thomas Smale from FE International was supposed to be there, so there was supposed to be two workshops, and followed by another two workshops. It kind of run simultaneously in different rooms but because Thomas couldn’t make it, Sherry ended up doing one for everybody, and then the other two were split. First speaker on Saturday was Claire Suellentrop who’s also going to be speaking at MicroConf in a couple of months.
Actually, what’s that? Six weeks away right now? Claire spoke first and then it was followed by Aleth, she spoke about GDPR, and then I spoke about email follow-ups, and then Patrick Campbell, he was one of the people who was delayed, he spoke about modifying your pricing and how to figure out what an ideal pricing model should be for your business, and then using it as one of the biggest growth leverage in your business. I think I got a lot out of that talk because I’m kind of right in the middle of evaluating pricing and figuring out what to do with it, and how to pitch it to people.
But he also pointed out the fact that SaaS has gotten substantially more competitive over the past several years. He had graphs and charts to show the number of competitors, the people that started five years ago had versus people who started two years ago versus people who started last year. It was just fascinating the amount of data that he had on that based on all the stuff that they do for Price Intelligently.
Rob: Yep. His talks are always super valuable and have a lot of data. It sounds like a lot of fun, man. Sherry was there, obviously. Told me about it and said she enjoyed it as well and said there was a ton of overlap with the MicroConf crowd. I think she said most people go to one of the MicroConfs which is fun. It’s fun to get together in almost a more mastermind-y arrangement. I know it’s not that small but I bet you kind of know everybody and know what they’re up to and you can literally talk to everyone at the conference.
Mke: Yeah. If you don’t know them before you get there then it’s easy to at least have those conversations and get to know them by the end of it.
Rob: For sure. Cool. What are we talking about today?
Mike: Well, I had asked a few people what they wanted to hear on the podcast. One of the biggest things that came out of it was what is going to be the initial marketing plan for Bluetick now that the new website is up and running. I wanted to talk about that and kind of just go back and forth, and giving I guess a high level indication of what I’m going to be doing. And then you and I can talk about either specifics of it or vet some ideas around or even just tear some of these ideas apart, and say, “Look, don’t do this,” because more than happy to hear some of the advice that you have to share.
Rob: For sure. I know I had shared with you at one point the Drip marketing game plan and the HitTail one actually. The HitTail is a little bit out of date but did you look through that, at all, to populate this list you have?
Mike: Some of those things are pulled from there. I haven’t gone back to either those in a while. I probably should do that at this point. Most of what I’ve been doing lately has been really focused on either MicroConf or getting the new website up and running and now that that’s in place and things are settling down a little bit with MicroConf, I can go back and take a look at those. But some of these things are pulled from that.
Rob: Yeah, that makes sense. One thing I would consider before we dive in, you have it broken down into two categories, kind of, “I’m gonna do these things now,” and then my longer term things. Maybe you do them over as you get time or as you get budget. Something I would think about is to even have one before now or to split the now into two buckets is to have one-time things and on-going things. One of your bullets here is product listing sites, like product on beta list, and I would even go so far as to say all the CSS Galleries.
There’s 50 different things; there’s getapp.com, there’s Capterra, there’s AppStorm, there’s this whole list that you can put together. Those are truly gonna be one-time things. I think it might help your mental model of like, “Okay, gonna do those once. Gonna get the heat of traffic.” Even podcast store is kind of a one-time thing. You’re not gonna do that for a year whereas webinars, joint webinars, and that kind of stuff I think is more on-going. Does it help for you to think about it like that?
Mike: Yes. In Teamwork I have a project that’s specifically called Bluetick Marketing that just has lists and lists of things there. I’m looking at it now there’s probably 20 different lists in here and there’s about 162 different to-do items in there. One of them is specifically one-time marketing tasks. Things like going into the Chrome Web Store and looking to see if there’s anything that can be leveraged there, submit into the Google Apps Marketplace. The products listing sites, inside of that various accounts are different places, and documented certain processes, etc. Mostly just one-time things that I need to do it once or is it’s a task that needs to be done but the output of that could then be leveraged over and over again.
Rob: Okay, that makes sense. What I’ve done is update the list a little bit and I just kind of threw some things that’s called one-time and then we have on-going, and then a later list. Will that work for you?
Mike: Yeah.
Rob: Let’s see. Let’s dive in.
Mike: You wanna go straight into the now sort of things?
Rob: Yeah. Let’s talk about the one-time things because I think that these are things that I have all of my marketing plans. But specifically, I’m gonna keep talking about HitTail and Drip because that’s when I formalized this and put it into a doc. I really thought through where are the places that I can get a bump now that I’ve launched. It’s like the website’s live, every time I try to get written up on Venturebeat, and Techcrunch, and ReadWrite web, and GigaOM when it existed, all these things. It never worked but at least I tried it. I was trying to get some type of buzz.
Then there are the ones that are easier or guaranteed. It’s like startupli.st and BetaList, and makeuseof.com, all the things we just talked about, like Producton and that kind of stuff. You’re almost guaranteed to get a listing even though it might take a while to do. I think if you ever venture back, maybe those little-oh, and CSS Galleries is the other one. If your site is good enough and is a custom-design, I realize yours is probably more templatized, but always got a lot of traffic with HitTail and Drip from the CSS Galleries.
Did it convert amazingly well? No. But did it to convert to some trials for almost zero effort because in essence I would have a VA or I think I may have even hired a service at one point because there are like a hundred different CSS Galleries. I think there was someone who productized it and I paid $99 and submitted some info and they submitted it to all of them. To me, that’s a great zero time $99 investment because if you get one or two trials, depending on your price point, that pays it off.
That’s how I always entered it. I think if you ever venture back then need to make a bazillion dollars then maybe these kind of little initial approaches could be a waste of focus or a waste of time but I think given that every trial counts for you, I think those things are important to do. Chrome Web Store is the other one you said in the Google Apps Marketplace. I had zero look with the Chrome Web Store. What’s the difference between the Chrome Web Store and the Google Apps Marketplace?
Mike: I’ll be honest, I don’t know. I’d have to go and take a look at that. I think the Chrome Web Store was specifically for Chrome plugins. At one point, I had on my list of things to put into Bluetick like a small Chrome extension. Obviously, it never materialized. It’s not that it’s not a road map, it’s just I didn’t get there. I don’t know if that’s even viable or something that I could do because they may just say, “No, you have to have an actual Chrome extension to be able to put that in here.”
Rob: Yeah, that’s what it is. While you were talking, I went to the Google Apps Marketplace. It’s now called the G Suite Marketplace. If you integrate essentially into the G Suite, it also looks like you can just integrate with Gmail as well. Since you do that and neither Drip nor HitTail did, I never submitted to the Google Apps Marketplace. That would an interesting distributing channel.
On the Chrome Web Store I did get a minimum Drip and HitTail in and it had zero traction. But I’m not saying it’s not worth the time but it didn’t do anything. It’s pretty crowded in there now. It’s kind of like the iOS app store I think about, in the early days it was a lot easier to get found. I know that PipeDrive said that a lot of their early growth came from the Chrome Web Store but that was a different time. It was five years ago or whatever. It’s one of those things where you have to create some images and you have to create some XML and you have to submit it and it will take you probably half a day to do. You gotta wait if you wanna do that or not. It depends on what else you have going on.
I would probably lean towards doing it just because it is one more distribution channel and you could get lucky but I think it’s not as high priority as pitching podcasts as an example, because that’s gonna have a really high success rate for you.
Mike: Right. The other thing that comes to mind is going through the process of putting out on all those products listing sites. It contributes to long tail SEO as well.
Rob: Yeah, that’s right.
Mike: It contributes to your page authority and Google will see all those lengths coming in and just building those backlinks is kind of important.
Rob: Yup, I would agree with that.
Mike: You said CSS Galleries, fill me in on this because this is something that hadn’t even crossed my mind.
Rob: The only reason that they even came on my radar is when I acquired HitTail–no, it wasn’t HitTail. It was a different site. It was a productized service I had. It was called CMS Themer, CMS Themer at the time.
Mike: I remember that.
Rob: Yeah. It had a really nice design and it would get quite a bit traffic from CSS Galleries. The interesting thing is CMS Themer was really targeting designers and so that traffic converted very well. I’ve just always made it part of the marketing plan. Obviously, it doesn’t convert nearly as well when it’s an app like HitTail or Drip, but again, this posted a link into our docket. It’s cssgallerylist.com. For $60, they submit to hundreds of galleries. For $60 and almost no time it’s worth it for the backlinks, it’s worth it even if the traffic doesn’t convert, it’s just another channel to get out there. Again, the last time I did this was five years ago, there maybe a better resource than this cssgallerylist.com but I do know that I used these guys and it saved me a lot of time.
Mike: Yeah, for sure.
Rob: This is not something that’s gonna grow your business overnight or be some huge game-changing thing but it’s just all these little parts of the snowball that you’re kind of turn the pack on and then seeing which ones get you any kind of traction.
Mike: Right. I think the important thing to keep in mind when going through this stuff is that every little bit helps and you don’t always know that any one link is going to contribute anything but if it gets one person over and the ROI on that is gonna be almost no way to calculate that but you may get three people over and one person converts. It’s not a 33% conversion rate for that obviously but that can help.
Rob: That’s right. Have you considered how you could do an ‘ask me anything’ on Reddit or you could do a Show HN where you say, “Hey, here’s this business. It doing…” whatever the revenue is, or I don’t know if you can be vague about that or not, but I don’t know how you wanna handle it. Then basically say, “I’ve grown it to this. Give me your feedback,” or whatever. Have you thought about that? I don’t know if that’s worthwhile or if that’s just a big waste of time.
Mike: I have. I’m in a couple of Facebook groups. That was suggested to me a couple of months ago via somebody that said, “Hey, you should do an ‘ask me anything’ on Reddit.” I put it on my list but it wasn’t something that kind of rose, I’ll say, close to the top of things that I thought were, not necessarily game changers, but in terms of weighted priority, I didn’t feel it was something that would help out a lot.
Rob: It’s tough. If you’re marketing directly towards developers, then it would make more sense.
Mike: Right. If it was something like ‘ask me anything’ on growthhackers.com for example, that’d be a totally different story. That’s something that I probably should add to the list to be honest.
Rob: Oh, I think you should, yep.
Mike: Anything else in terms of one-time activities that come to mind that’s not on this list?
Rob: I was just trying to think about that. On startups.com, answers that are on Startups used to be kind of a place but I don’t even think that exist anymore. The bummer about Quora is that it’s really not a one-time thing. What I would do with a one-time thing is set-up, subscribe to some topics, there’s probably a cold email, or even just email. You want email sales, you want the email sales channels not the email marketing channel because email marketing tends to be bulk email and that’s not what you’re doing.
I would subscribe to categories or topics that fit your thing so that you’re notified when questions are asked because you wanna be an early answer. You don’t wanna go on a bunch of old Quora threads and add your answer because those threads already have a bunch of up votes and you’re not likely to be the answer that shows for everybody because that’s really what you want. I did that in the early days of Drip. It’s a bit time-consuming but what I found was the questions that come through tend to be so far into your wheelhouse, that they’re really easy to answer.
Even if I type a couple of paragraphs, it just flowed out. I didn’t have to research because it was things like, “What are approximate open right rights? What’s a good open right for a list?” It’s like, “Well, I actually know what the range is. Here, I’ll talk it through.” It’s gonna be stuff that these questions for me would be tough to answer because I’m not knee-deep in this warm email engagement the way you are. Anyways, I would consider as the one-time part of that just subscribing and seeing how it shapes out.
Mike: Yeah,that’s interesting being able to rattle off some of those numbers right off the top of your head. Because it’s part of my talk that I did for FemtoConf. I looked specifically into that and looked across 70,000 emails that had been sent out through Bluetick and looked to see what the open rates were and what the response rates were across those, and then I cross-sectioned them and got the average, the best case, worst case, across everybody’s accounts. It was interesting what the numbers came out to be and then asking the audience I said, “Hey, here is a number, what do you think is this in terms of the open rate?” It was about, I’d say a third of the audience got it right which means that two-thirds did not which indicates that these numbers are, I’ll say, a little bit obscure or opaque and not everybody knows that they are.
Rob: Yeah, that makes sense.
Mike: I think a couple of other things that come onto this list is, I don’t know if they’re one-time or you would classify them as one-time, but like a podcast tour, for example. I feel like it’s something that you can do it once when you start and then if you’re going to try and do it again you have to have something compelling to follow-up with, I’ll say.
Rob: I do think of a podcast tour as a one-time thing but it’s not as one-time as say CSS Gallery submission, but it’s gonna move the needle more than them. CSS Gallery and the BetaList and all that stuff. I just posted a link to whitetailsoftware.com and Robert Graham had that pre launch email list building directories. We can include that in the show notes but I think you have 50 or 100 that he had his VA submit to, so that’ll help as well. But all that to say, podcast tour is gonna take several months because you’re gonna email and get scheduled, and by the time it comes out, it’ll be months down the line.
I think the big thing, the advice that I would give when doing a podcast tour is it would be easy for you to just go on a bunch of entrepreneur podcasts and say, “Look, I launched a product. I’m building this SaaS product.” You’ll convert some of those, it’ll be a low conversion rate. The audience who’s gonna convert the best for you is gonna be folks doing sales. It’s gonna be folks both doing cold outreach and then doing the warm nurturing that Bluetick allows you to do, this stuff that comes right out of your inbox and looks very personable. It’s not bulk email like MailChimp or Drip but it’s the one-on-one connecting whether it’s cold or warm. Who’s doing that, right? This is BDRs and salespeople. I know some of those are also founders but I don’t think that’s gonna be your market.
I think initially, you can get SaaS founders, and you can get our audience, and the MicroConf audience, and not crew. It’s good to talk about it here. I’m not saying you shouldn’t go on Mixergy and talk about it but compared to the size of that audience, the conversion rate is gonna be pretty small. The podcast that I would target that I think are gonna be your low-hanging fruit, is to go on podcast that are talking about sales, and talking about tech sales, selling SaaS apps is probably the B2B sales approach.
You can come on not to tell the story of your product but you can pitch it as, “Look, I’m an expert in this because I’m in it day-to-day and I’m seeing dozens or hundreds of customers who use our product and I’m seeing the patterns. I’m seeing the successes and how they’re doing it well. I see the failures and the mistakes people are making.” Does that make sense? I would definitely go after that space rather than focus on the founder and entrepreneur space.
Mike: Yeah, it totally makes sense. That was actually my hesitation, I’ll say, of doing that because I didn’t think that approaching those, the startups community would be something that will really resonate. Like you said, I’ll get some sales out of it but it’s not gonna be a high-converting channel for me.
Rob: Yeah, in all honesty, I will probably do both but I would start with the sales folks, the sales podcast. We both know at least a dozen people who have podcasts that I’m sure you could come on and talk about some aspect of your business. Try to vary it because we have this small community and so if you go on all the podcast of our friends and talk about the same thing on every podcast, everybody hears it, there’s only so many people in it. I will try to suggest different topics, different aspects. If you could talk about the launch on one, you could talk about the stress on another, you could talk about marketing approaches on another.
I do think that is still worthwhile because it’s easy for you to do because you’re used to doing podcasts and it’s 30-45 minutes of your time once it’s booked. It’s not actually that much of a time investment to be in the earbuds of likely several thousands or tens of thousands of people, but as I said, I do think I would start with trying to assess out what are kind of some B2B sales podcast that I can get on?
Mike: The interesting thing about that is there’s two different ways that I could approach that particular problem of going out to the people who are running those podcast. One of them is send directly into Bluetick and let Bluetick follow up with those people. The other one is that there’s a company I’ve stumbled across that will take kind of what your requirements are for appearing on podcast and will go out through the different network of podcasts that they have contact with, and essentially pitch you to them. I’ve mixed feelings on doing that, to be perfectly honest, but at the same time, there’s a time component that it’s gonna suck up some of my time to do it myself but in many ways, it comes across better if I do it myself.
Rob: Yeah. That’s hard. There is a balance because we get a lot of pitches on this show and on Zen Founder. If it’s not the person pitching themselves, I tend to delete them, that’s just a thing. I do glance through them but I don’t think we’ve ever had anyone on the show who wasn’t pitching themselves. When I had an executive assistant who is doing stuff back in the Drip days, when I was still running the business, she could email people as me, look straight out of my inbox, and so you could develop the pitch and have someone else send it as you. But it just depends on what you wanna do. I don’t know but I don’t have a good answer for that.
Mike: But again, at that point, I could just put it through directly into Bluetick and have Bluetick send out the email.
Rob: That’s true. Ta-da. That’s cool.
Mike: It’s interesting because occasionally, when I’ll email people whether they contacted me to ask me something about Bluetick, occasionally they’ll have heard the podcast and they’ll ask in their email as to whether or not it was sent from me personally or whether Bluetick sent it. I’m just, “If you can’t tell, doesn’t that speak to what the product does?”
Rob: Right. Does it matter? Yeah, that’s funny.
Mike: Does it matter?
Rob: We’ve talked at length here about the one-time upfront things. You have nice list of the things that you plan to do on an on-going basis, why don’t we look at a few of those?
Mike: Sure. The things that pop-up high on my priority list-actually, you know what, now that I’m looking through this, one of the other things that is on the on-going list should probably be moved over into one-time is the public Zapier integration.
Rob: Oh, yeah.
Mike: I’ve got a private integration right now but I’ve not taken it public and that’s something that I’ve been asked about a couple of times by Zapier. I just haven’t done it yet to be perfectly honest. There’s a lot of edge cases that either are not handled well or I know that there’s other changes that need to be made and I’d rather make those changes before I open it up than have to fix a bunch of other stuff. Because there’s some things that I do some manual data manipulation just to make sure that things are working right for certain customers. I need to put a more permanent solution in place for those.
That’s something that after going through the process, I believe they put it out through their mailing list. I forget what their mailing list is but it’s something like 1 million people or something like that, something ridiculously large. The conversion rate is not gonna be high but it’s more about driving awareness than it is about converting people at that point.
Rob: Yeah, you’re just trying to get the word out so people have heard of you at this point. One other one-time thing that I would do, it’s not a marketing approach, but I would set up Google alerts for relevant terms that you wanna monitor like company names of competitors, try to hear about like articles I think are relevant or conversations that are relevant, you have to use your judgment there but I do think getting something setup so that your kind of participating or at least aware of what’s going on in your space is helpful.
Mike: Yeah. I have a couple of them set up right now but it’s mainly for Bluetick. What I find is I’m getting a lot of emails about dog conversations that are happening.
Rob: Yeah, I could see that.
Mike: I guess if we’re gonna jump right into the ongoing stuff or the short term things that I was looking at, the first on my list is webinars.
Rob: Yep. Are you planning, because right below that you have JV webinars.
Mike: Right. I wouldn’t say I lumped them together but I think the general process is going to be similar for them whereas with the webinars, there’s joint webinars and there’s just the regular webinars. The regular ones are ones that I was probably gonna promote to my own email list and then maybe do one on a regular basis or promote it on a Tuesday every other week or something like that. And then with the joint webinars those would be much more scheduled where I’m leveraging other people’s audiences and contacting influencers and see if they’re interested in having me come and talk specifically to their audience about how Bluetick can solve a particular problem for them. I see it almost like the podcast tour but with a little bit more, I’ll say, pinpoint accuracy or a little bit more focused specifically on those people because I don’t wanna go pitch somebody and say, “Hey, can I just do a joint webinar with you?” But not actually have something that’s gonna be valuable to offer to their audience.
Rob: Right. I would the joint webinars before I try to do internal webinars because it is such a nice way to reach out beyond your own audience. Just through doing webinars to your own list, you’re gonna one and then you’re not gonna fill anymore, you know what I mean, until you get more people either using your product or on your email list. We tried early on with Drip to just run Facebook ads, get people to opt into a webinar, and we’re gonna try to run one every week, and we just couldn’t get people to show up at a price that was worth it for us.
Again, not saying it’s not possible but it’s an entire funnel that you have to develop. It’s gonna take you quite a bit of time and money to do whereas the JV webinars is a low-hanging fruit for you, because JV webinars is about who you know. You do have a good network of people who I think you could contact and have access to their audience right away, basically for free, without running all the ads and developing a funnel. It’s just conversations. I’d definitely prioritize the joint webinars above do your own.
Mike: How would you structure any sort of special offers for those people going to a joint webinar? There’s a lot of discussion and I’ve thought about this myself. I was like, do I wanna offer a discount or I wanna give additional services or special templates like, “Hey, you can only get this here because you’re coming to this particular person’s webinar.” My concern is really putting a lot of extra effort into something that-at the end of the webinar, it may turn out to be nothing. I may not get very many sign-ups out of it or I may get a lot but I don’t know. It’s hard to predict how much time and effort to make things custom for that person’s audience. You know what I mean?
Rob: Yeah, I do. I would lean heavily towards some type of bonus and it’s time-limited. You say, “Hey, free to sign up in the next two or three days, then you get this extra thing.” whether it’s a discount or the thing that you billed. Discounts are the lazy way to do it. It’s like the zero time way but it chews through your money. If you have no time, absolutely no time, then yeah, give people a discount, but discounts are not exciting. They’re not as exciting as like, “Get this complete email series,” even if it’s only three or four emails, my guess is, you can crank that out just using copy+paste from what you’re using already or from what you’re recommending to people and just edit it for their specific niche.
If you talk to a bunch of freelancers then it’s like, “Here’s the way they follow-up and do it for freelancers.” A lot of it is gonna be the same as any other sequence you have but you’re just gonna tweak a few things. I’m guessing, in about half an hour you could probably crank something like that out. You don’t even need to do that in advance of the webinar because if you don’t get sign-ups then you just don’t build it. But if you get sign-ups using that coupon code then you just manually reach out to people because it’s not like you’re gonna get 500 sign-ups. You’re gonna get 10, or 20, or 30. It’s gonna be a small amount. You can just hit people up and distribute that to them. I’m thinking of something like that. It’s high value for someone signing-up but it’s pretty low effort for you to create.
Mike: Yeah, that makes sense. I think right now when you go and sign up, I was probably gonna pull this off as things progress, but when you go and sign up right now, there’s kind of an offer there that basically says I’ll create an email sequence for you based on whatever scenario you describe and that will be your first sequence. It’s kind of concierge onboarding but I’ll say it’s probably not very well described in the website right now but it is something that I just offer to people as they come to sign up.
Rob: Yeah. If you get 30 sign-ups at a time that’s gonna get tough. I think you’re gonna have to stop doing that because it’s too time-intensive. You have to back off as you start getting more sign-ups.
Mike: Right.
Rob: What else? You have direct follow-ups with the following; invite to demos, you have current mailing list, prior prospects which I think is good, and personal LinkedIn contacts.
Mike: Yep. I have a couple of different spreadsheets based on when I was doing early validation. Some people said, “Hey, now is not a good time. Maybe later on when you’re further along.” And then there’s people who have come in and I’ve done a demo with them and things just didn’t work out for whatever reason, or they sign-up but they never followed through or they used it for a little bit, and then they said, “Yeah, this isn’t working out for me.” I’ve got this pool of people that I can go to that fit into that criteria, that I can put them into a Bluetick sequence, for example, and invite them to come back and check it out or go to a demo or something like.
But in addition to that, I also have the mailing list that is in the Drip account which I have been putting on the website where there’s an email course that you can go through. It’s like a 5-day course which I’m in the process of copy+pasting all the content all of that to make it a slightly longer course. But those people that I can go to directly, I can take them out of Drip and then plug them into Bluetick, and individually follow up with each of them. I could do that based on lead score for example and just sort them by lead score and then add them in in that order and say, “These are the people that I’m gonna approach first versus these are all the people who are probably, I’ll say, less interested, but still on the list.”
Rob: Yeah. I think that’s a good idea to kind of approach. I was definitely gonna say anybody who’s cancelled in the past, if the product’s a lot better than when they’ve tried it, you definitely wanna contact them. Prospect who haven’t converted, people who’ve been paywalled because they don’t wanna give their credit card, now is the time when you’re doing this to just circle back and clean all that out.
The personal LinkedIn contacts, you gotta use your judgement there, you don’t wanna come off as… I’ve never done that but if you know someone who really should value out of it and you do a very soft pitch like, “Hey, just to let you know I just launched this. I thought it might be helpful.” Not anything that’s forceful like, “Jump on a call. Jump on a call.” Then, I think, it’s halfway reasonable.
Mike: Yeah. I wasn’t planning on doing that. What I was gonna do was go through my LinkedIn contacts and just look. Obviously, I’m gonna hand pick which ones i’m gonna contact and which ones I’m not. I’ve got people who I know are software developers or they’re engineering managers, or something like. They’re really not a good fit for it but that doesn’t mean that I can’t go to them and say, “Hey, I just wanted to check in with you and see how are things going, and let you know I just recently launched this. If you know of anyone who could use this, I’d love an introduction just to kind of help me out.” I’m leveraging my personal relationships at that point.
Rob: I could see doing that. I just added a couple things to the list. Actually, you have retargeting on there, mostly Facebook. I think it says Facebook primarily, I think that’s a really good idea to get set up whether you use perfect audience, you have the display networks like Google and stuff already, you just tick Facebook and it gets probably a material but I think you should get that set up pretty quick. That’d be probably towards the top of my list. Do you already have the pixel installed?
Mike: Yep.
Rob: Okay, good.
Mike: yeah, I’ve had that in pixel installed for a while. But then, the reality there is, I’ve put it under ongoing because there’s a one-time piece of setting it up and there is the follow on activities where you go in and you analyze how much traffic you’ve brought in, do you have a critical mass yet, what kind of advertisements you’re doing. It’s kind of two different components to that but I do find that even with my two-step process for the sign-up, you put in your email address and password, and it takes you over to a credit card page, and there’s people who don’t fill that out.
Obviously, those people, I wanna follow up with anyway but I also wanna make sure that people who come to the iste and then go over there but never even fill out that first page, I still wanna be able to retarget those people to bring them back. Because obviously, they were interested enough to go look at the signup page but they didn’t actually sign up.
Rob: I think in the interest of time here because we’re running pretty long today. I think you should consider-paid acquisition I have written here, it’s a tough one. It all depends on if you have budget and if you have time to sit there and test a bunch of stuff, so something to consider, maybe it goes on your later list but it’s definitely if you can get it to work, it’s really, really good. Cold email outreach, you have the tool to do it, nice to use your own tool. You can go to something like LeadFuze and get a list of people, and start doing the outreach yourself, or you can hire someone to the outreach for you.
We had mixed results when we did Drip but it definitely drove enough trials that have made it worth spending. We were spending money on it at that time and it definitely had positive ROI for us. Integration Marketing which is you just think of all the top 10 integrations that you would wanna have and think about trying to get either in their director. If it’s Stripe or Basecamp, they’re probably not gonna co-promote with you because they’re so big but they have these integration directories. Or if they’re a little bit smaller, if they’re a startup, they’ll probably have a list and are willing to email out and promote you. That requires dev time, of course, so it has to be worth your while.
But that was something we did 30 something integrations with Drip and it makes a lot of sense with a tool like Drip because it it a hub of data and so we integrated with a bunch of shopping carts and all types of marketing tools. That both helped our customers but it also really helped to start to get traction and kind of be everywhere in their early days. I think those are the other three I would throw out that you may wanna do sooner rather than later.
Mike: Yeah. I’ve already been asked by people about integrating directly into Bluetick using the API and I’ve kind of pushed off mainly because I know that there are parts of the API that are still changing, so I haven’t really structured it in a way that says, “Hey, this is available for you to use and it’s pretty solid versus these other pieces where you shouldn’t touch it.” I had a conversation with somebody at FemtoConf where they said they actually have three different versions of their API published. One of them was for them internally, and then there’s another one that’s a public API, and then they have special endpoint specifically for Zapier. It’s interesting they split theirs out and I think it makes a lot of sense as well. It’s just a matter of rearranging some things a little bit to allow people to do that and say, “Hey, this area is solid. This area is off-limits or don’t touch them.”
Rob: Yep, that makes sense. Anything else that you wanna pull out of here? Either in ongoing? It looks like you have a couple more and then you have some stuff for later?
Mike: Yup. The one idea that have come to mind that somebody had mentioned to me at FemtoConf was the idea of having Bluetick offered as sort of a managed service for x thousand dollars a month. Then they’ll send all of their contacts over into Bluetick and then, it’s my responsibility to make sure that things are running smoothly for them so that they don’t have to go in and manage anything which, if you set up a lot of the automation and stuff, you don’t have to worry about that, but there’s also ongoing tweaking, A/B testing, or making sure that, “Are these numbers any reasonable ballpark of what they should be?” If you’re getting a low open rate, for example, how would you necessarily know unless you’re looking at all the other data. I have access to that but other people don’t. Those are the things that I can provide a lot of additional value for customers but they don’t necessarily have access to it on their own if they just signed up.
Rob: Yeah. That makes sense. There’s a risk with managed services because they can just suck up a bunch of your time and also the revenue is not worth nearly what a SaaS revenue is in terms of a multiple-whether you’re gonna raise funding or whether you’re gonna sell or whatever. If you have a bunch of consulting revenue, it’s worth like 1X, 1X the revenue versus actual recurring revenue, it’s a different story. I shouldn’t say recurring. It’s higher margin revenue where if it’s software it has 70% or 80% margin. If it’s consulting it has what, 10%, 20%, 30% margin. It’s something that I would consider in the early days but it just matters what cash position you’re in. I think you would do it for the cash and not really for the long term prospect of the company because I don’t think you wanna grow a big kind of productized service long term.
Mike: No, I agree. The way I was gonna structure it was like, “Hey, here’s a managed service that if you wanna subscribe to you can,” and it’s either a three-month or a six-month contract, and then that’s it. If I decide to continue offering it then they can continue paying me for it but if I decide that we’re not gonna do this anymore, then things are kind of pushed back. It wouldn’t be something that you can just go to the website and buy off the shelf but it’d be limited three to six months contract or something like that. You’re right, it would absolutely be for improving cash flow for example, but it would also put a solid number on, “Hey, what is this particular customer going to be worth to me in the next three months or in the next six months.” Does that make sense?
Rob: Yeah, I think it’s interesting. Certainly trying it with one customer is not gonna hurt much. That’s the thing, is to see how much-if it’s valuable to them, if it’s workable for you, and obviously if you do it for 10 or 20 people, you’re getting yourself in pretty deep but you don’t have to do that. You can just dip your toe and then figure it out.
Mike: Yeah. I was gonna do it for probably one to five. The other nice thing that I thought that would deliver to me is the ability to work hand-in-hand with those customers and see what exactly what it was that they’re trying to do as opposed to, “Hey, here sign up to Bluetick,” and then after that, I don’t really have a ton of visibility into their business or exactly what challenges they’re trying to solve. I know generally what they’re trying to do but I don’t get that insight or I don’t have calls with them to really see on a weekly basis like, “Hey, what are you really trying to get out with this?” I think that those insights would actually help me build a better product longer term.
Rob: One of the thing I see on your later list that I like, that I don’t think we’ve covered, is you have this library of email templates, lead gen, and you use this as a lead gen to acquire email addresses? I think that’s intriguing both for the SEO and you can always run ads to it, you could retarget to it and you’re basically giving something away. I think that’s gonna take a ton of time for you to set-up. It’s a little more complicated than it sound but I’m glad you have it on your later list so at least, in a few months, once you get some of these other ones done, you can move into that, and start thinking about how to shape that up.
Mike: Right. The other nice, I’ll say, by-product of doing that is that, I could create those inside of Bluetick as a library where you can when you create your account, you can just select from a bunch of them, kind of a similar to the way that Drip has those pre-made blueprints for different situations, this would be exactly that. Like, “What situations have I run into with different customers that they’re trying to get a response or get the customer to take an action? What sorts of things work? What sorts of things don’t? What sorts of approaches do you wanna try?” You can almost categorize them. It’s like, “This is extremely aggressive versus to do the exact same thing to get somebody to a call. This one is much more laid back and hands off, and it depends on the situation whether it’s cold email versus a warm email with somebody who’ve had three or four conversations with us.” Which one you would use?
Rob: Cool. Well this was a good run. Thanks for bringing this on the show. I had fun talking about it. I’m guessing we’ve provided quite a bit of value for the folks who are thinking about this kind of stuff.
If you have question for us, call our voicemail at 1-888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 383 | Considering Monetizing SaaS with Ads, Should a WP Plugin Company Consider SaaS, and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob flies solo and answers a number of listener questions. The topics include monetizing SaaS with ads, should a WP plugin company consider SaaS and more.
Items mentioned in this episode:
- ZenFounder
Startup Blueprint: 7 Skills For Founders, Builders & Leaders
Start Small, Stay Small: A Developer’s Guide to Launching a Startup
In this episode of Startups For The Rest Of Us, I kicked Mike off the show. I fly solo and I’m answering a bunch of listener questions, covering topics ranging from monetizing SaaS using ads to whether a WordPress Plugin company should consider launching a SaaS, as well as how to deal with the struggles of launching a two sided marketplace. This is Startups For the Rest of Us episode 383.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product or you’re just thinking about it. I’m Rob, and Mike has no power for the past day or two. He has no internet, and I think a storm came through and knocked out a bunch of power. He won’t have it back he said at the earliest til midnight tonight. I jump into a car with my son, my 11 year old. We are heading to Lake Geneva, Wisconsin for Gary Con in about two hours. There was no overlap.
Mike emailed me and let me know he wasn’t able to make it and so my goal was to find a guest this morning. I emailed three or four people short notice and no one is able to show up. Here I am, we ship every week, every Tuesday morning an episode comes out.
I dug into our listener question bag and we were down to one listener question last week, we’re up to eight or nine this week, which is great. I enjoy these episodes when we answer listener questions. We’ve been doing them a lot more lately. What I’ve noticed is it feels like there’s a lot more listener participation and it also feels like we’re keeping up with topics that are not just coming out of our heads.
These are really questions and topics that you, the listener, are thinking about. It feels like I enjoy these episodes because I feel like they’re as relevant as we can be to the moment of what you’re thinking about and what you’re launching as a listener base. We are here to share our experiences, to hope you avoid the same mistakes we’ve made. Also, to weigh in on questions that you have as you’re growing, building, launching your startup.
Let’s dive into our first question. It’s from [Dylan Dee 00:02:10] and it’s about whether he can use advertising as a SaaS revenue model. He says, “My company is Dunwich Technologies, it’s a healthcare focused consultancy. We’re developing a SaaS app to help patients better understand their confusing medical bills. I see the value in one off uses, doesn’t feel like an app that could garner much daily activity or many daily active users. It’s more like an every so often use. This coupled with not wanting to charge for the app leaves me with few revenue options. Would medical/pharma ads on this app be the only or the best way to monetize it in your opinion?”
My opinion is this will not work at all. Because if you don’t have a lot of daily actives, then ad based revenue models are gonna bring in pennies for you. I would be shocked if you have people logging in once a month or once every other month. Let’s say you had 100,00 people using the app and they only log in once a month, you’re gonna make hundreds of dollar. It is catastrophically low, the ad rates are just very low these days. You look at a company like Facebook or Twitter, Google, and the only reason that ads work for them is because they have so many people constantly using the app.
If you’re going direct to consumer and you don’t think you can charge for it or don’t want to charge for it, I would think of this as more of a lead gen thing. Can it generate leads? Can you build up a free customer based and generate leads for your consultancy? Or, can it generate leads for another SaaS app that you may want to charge for, or a video course–I’m just throwing things out.
Obviously, you may not want to create a video course, you get the idea. If you’re gonna build something that truly is freemium but there is no ‘mium’ to it, there’s no premium aspect because you’re not gonna upsell. But actually, that is another thing you can think about is to launch this. See what happens, see if there’s any uptick. If you get 10,000 free users in there asking for more things, you could then consider going freemium and having a paid tier on top of this. Even if it does just a $5 or $10 a month thing.
It’s really hard to do B2C SaaS, it’s not done very often. If you look at even Dropbox, they are trying to pivot into the enterprise because that’s where more money is and the lower churn and all the stuff. Box.net kind of beat them to the punch on that. I think that Dropbox was conceived as a B2C company but if they really want to maximize the valuation frankly, they want to get into the enterprise because enterprise customers have higher lifetime values. And if you look at the stock market in public or even the private markets, companies serving mid market and enterprise, and even SMBs are valued higher than the same amount of revenue serving consumers because that revenue tends to be more volatile.
All that to say, I don’t think you have any chance of making any money that’s gonna move the needle using an advertising model. I would say if you’re gonna build it, if you really want to, give the thing away, see what happens, see if it becomes lead gen. If nobody uses it, then that’s fine too. At least you took your shot.
Our next question is an audio question. It’s about a WordPress Plugin company, whether they should offer a SaaS offering.
“Hey Rob and Mike. I love the show. My name is Kyle, thanks for taking my question. I work for a small WordPress Plugin company. We’re pretty well established and doing just fine, but looking to grow and take on some new exciting project. I have some ideas that I wanted to get your input on.
Basically, I want to see if introducing a small SaaS offering might make sense for our business? Obviously, we distribute our WordPress Plugin, that’s our business right now. Our customers are mostly in ecommerce but I was in the interest of helping our customers succeed and solve real problems that they have. Also becoming as indispensable to them as we can be while at the same time introducing new streams of revenue for our business.
I was wondering if maybe we should consider adding a SaaS offering which we make available only initially to our existing users. Not something that we market to our broad audience, but something that we just silently roll out to users of our plugins already. I’m thinking this could be something very simple, some tool like helping them with their email delivery or file storage, data backups, staging environments, remote site management, reporting businesses sites, something like that, I don’t know. We can make a simple tool, put it in front of existing users and say, ‘Click here to take advantage of this extra monthly tool.’
My questions are, how do you feel about the idea of creating some simple, light MVP simple SaaS product? Initially making it only available to current users of our plugin. Do you have any opinions about the type of SaaS product which would be the best for us to choose if so? Something simple yet still useful to our customers for mostly running ecommerce sites. Thanks so much and I look forward to meeting both of you this year at Micro Conf, thanks.”
This is a great question. I think a lot of WordPress Plugin vendors probably think about this because the appeal of having monthly recurring revenue versus the potential spikiness of WordPress Plugin in the one time sales, it’s appealing. SaaS and subscription revenue is the golden ticket that everyone is looking for.
I would say that just to start with, a, I think this is a great idea. I’m all for it. I think if you wanted to tip toe into it, you should definitely do it. I would say that when I talk to folks who do WordPress or do one time sales, they’re always talking about launching a SaaS. When I talk to people who have SaaS apps, so many of them are jealous of these one time sale products because those product price points tend to be higher.
You might sell a WordPress Plugin for $40 to $200 and you get that nice pop right off the bat. If you sell one customer, you make $200 that month. Whereas if you have a lightweight SaaS, you might make $10 that month from the customer and you gotta keep them around and you’re constantly working to do that to retain them. I know that with DotNetInvoice, which was an invoicing software I owned years ago, it was $300 for the product, for a developer to buy it and use it.
We only sold 8-15 copies a month. You think about that, you think about let’s just say 10, you think about making 10 new SaaS sign ups that stick around and become customers and that is catastrophic. Unless you’re very, very expensive, in the enterprise. But just the normal, let’s say you’re $20, $30, $40 a month, that’s slow growth. It’s gonna be agonizing. Whereas if we sold 10 of DotNetInvoice, it was $3,000 a month. At the time, I was looking to make a car payment or make a house payment and I was doing consulting. This was just a little side project that I didn’t spend a ton of time on. That dollar amount and getting all the lifetime value upfront from your customers, there is some appeal to that.
I would say don’t look that [inaudible 00:09:17]. Do realize that the couple beauties of WordPress are that you do get all the lifetime value upfront and that you have that built-in distribution channel of the WordPress repo, and that also ranks high in Google which then can bring people to your WordPress page and get that free download. With all that said, when I talked to a lot of WordPress folks who have plugins, are making some money, they are always thinking of how to get into SaaS, and I don’t think that’s a bad thing. A, I think it’s great. SaaS is more complicated, it levels you up. There’s more to learn, it is that recurring revenue that you’re looking for.
Number one, I think yes, you should give this a shot. Number two, I think you have an advantage because you already have paying customers. I have no idea about this business if you have a thousand people who’ve purchased it or if you have ten thousand, but that is a great built in audience right there to start a SaaS from.
I’ve talked on the podcast and at MicroCon a couple of years ago about what I believe are the only four true competitive advantages in SaaS. It’s who you know, it’s your network. It’s who knows you, it’s your audience, that includes customers. And it’s being early to a space and being a growth hacker, someone who knows how to think through methodically and really grow anything.
This is a case where you already have an existing audience of customers, you do have an advantage over someone starting from scratch. You have customers who probably trust you and like you. If you build something with them in mind, you should be able to have a pretty good strat to your business.
In addition, you probably have a bunch of free users and I know they won’t convert as well but that should be a number that’s 10 or even 100 times the number of people who’ve actually paid you and so you do have some reach there. That’s the plus side.
The negative side is you building a SaaS is gonna take a lot more time than building a WordPress Plugin in general. There’s so much more, there’s the hosting and the infrastructure and uptime and all the stuff that you don’t have to deal with. It is gonna be a big learning experience. I wouldn’t want you to think just because you’ve built software, you’ve built products and you’ve sold it, you definitely have learned a lot but SaaS is going to be that next level up in terms of complexity.
In my opinion, if I were you, especially in the ecommerce space, I would start talking to my customers, you already have them. You can have a few ideas and I think in a perfect world you might have three of four ideas that you start running by customers and saying which one of these would you absolutely, no doubt, would sign up for tomorrow. Take that short list and run it by, I’m sure you know a bunch of them personally, and then start emailing a hundred of your customers at a time even if you don’t know them and being just like, “Hey we’re considering branching into this, would you buy it?” I think you’re gonna get pretty good feedback form that pretty quickly.
That’s how I would approach it, I think, asking my opinion, you’ve asked my opinion about what kind of app you should build, I have no idea because I don’t know. I don’t know your customer base or what you’re currently serving. I think that the best WordPress to SaaS progressions are things like Opt-In Monster where it was just a WordPress Plugin and then they just launched basically the same thing as the SaaS app. It was subscription, they already had the features that they knew that was killer, they had experience in it. They literally just turned the WordPress Plugin into a recurring subscription.
If you’re not on WordPress, you can still use it but you pay the monthly. Craig Hewitt is doing this with his WordPress Plugin Seriously Simple Hosting, and then it’s Castos now. Moving from this WordPress space and just building a SaaS out of it, I think that’s a good way to go because you already have experience with that. You already have inbound interest, folks finding you through the WordPress repo so you do have that traffic source and distribution channel.
Again, I think if you want to get in this and get into the recurring game, I think it’s a good idea and I do think you have some advantages given your current business. Thanks for the question.
Our next question is from Alex Baxter. He says, “Love the podcast, big fan. I’m attempting to bootstrap a startup in the job site space.” A job website, a two-sided marketplace. “As I begin to look for companies to post jobs to the site, would you suggest allowing companies to post jobs for free to get the initial supply of jobs up for candidates to view then worry about monthly fees later, or trying to charge from the get go? I’m leaning towards free but I wanted your thoughts.”
The reason I like this question is because it’s the classic two sided marketplace. Whenever I talk to anyone about a two-sided marketplace, I say basically the same thing. You’re gonna have to figure out which side you need to get first. In this case, you’re not gonna have any job seekers come to the site if it has no jobs. You have to get the jobs up first.
Yes, I would beg, borrow, and steal to get jobs on this site. I’ve seen new job sites launched and they’ll go and scrape Monster, Indeed, Hot Jobs and all these other things in order to populate their jobs and start form there and then spin out. I’m not saying you should or shouldn’t do that but it’s a way to think about it. There are jobs postings out there that you would be able to populate on your site and it’s additional distribution for them.
In terms of offering for free to employers, I probably would, because you have no traffic. You really can’t charge them because you have no job seekers yet. In my opinion, it’s probably a, “Hey, this is going to be free for the first three months or six months or until we have 10,000 uniques a month, or until every job receives 50 views per month.” There’s something that just needs to trigger that they need to start paying you. Because you don’t want to get a bunch of your best employers and just be like, “Yep, this side is free to post,” because that’s not a business perpetually.
You have to take an approach that long term you’re not comping your best customers. That’s why it kills me, I‘ve seen people pretty often do this with SaaS where they get this launch list or they get 5 or 10 interested customers and they say, “Yeah, for your feedback, I’m just going to comp you lifetime.” I think to myself no, these are your first 10 people. You can give them a discount, you can comp them for six months, give a discount for the first year. You can do that because they are giving you effort but also providing them a ton of value with the software.
If they’re willing to sit and work for beta software with you, then they probably have a pain point that you’re also helping with. Don’t do that would be my advice. Don’t cut that revenue off at the knees, especially in the early days when you need it most.
For this, I would definitely consider just cold outbound outreach. I’m guessing this is probably a vertical and you probably know all the companies in that vertical and that would be cold emails, cold phone calls to basically just start with like, “Hey, I see jobs on your site. Can I repost these here? Do you give me permission?”
Technically, I got to be honest, I don’t know if you even need permission legally. Whether it’s an ethical thing. You’re providing them with more distribution, you’re republishing jobs, but do they have a copyright to the job posting? They may. You may want to check with them first. You’re gonna have to talk to a lawyer, just do your research on that, but that’s what I would do is if they already have jobs posted in their own site, I would look to just be like I will do this for free for the first three months since we’re getting started up and I will just pull all your jobs in, are you cool with that? Try to make it as easy as possible. I would either a scraper, an importer, hire a VA, I would do something that is able to pull in those jobs so these folks are not having to do the work and it’s just a simple and easy yes.
And then, your results are gonna make or break whether they want to pay you. That’s a cool and a stressful situation to be in. I think back to I believe it was TripAdvisor in their early days. Their big game is building all these SEO pages. They’ll have a destination and then they’ll have all the rankings and then they get all the search engine traffic. They were trying to monetize and they went to cut deals with travel ticketers, airlines, hotels, all of this stuff. They basically said, “Buzz off, we don‘t care.”
TripAdvisor already had a bunch of traffic, they turned on this [inaudible 00:17:22] to some of these ticketers, and I don’t know if it was airlines or hotels or just people selling tickets but whatever it is, people selling the things that they were talking about on TripAdvisor. They turned on this [inaudible 00:17:33] and just started sending a bunch of traffic, they didn’t charge for it and they didn’t get a kickback, they didn’t get a commission, but then they turned it off after two to four weeks. At that point, the people selling tickets said, “Wait a minute, what did you just do?” They said, “We turned the traffic off.” They said, “What do we need to do to get that turned back on?” That’s your conversation.
That’s where you start. You said, “Well, we’re gonna charge you. You need to give us a cut of the ticket sales.” That’s what you’re going to be, that’s the situation you’re gonna be in here is thinking about if you get these job for free for three months and no one applies to your site, they’re not gonna pay you. But if they get fantastic talent, it doesn’t need to be a lot, I’ve used a few job sites where I only got three or four applicants but they were all top notch because it was just a really small niche and I continued using them after that. Very good question, I appreciate that Alex and I hope it helps.
Our next question comes from Robert Andrews. He says, “I’m a long time tech journalist and editor turned content consultant. I’ve written a book it’s called Startup Blueprint: Seven Skills For Founders, Leaders and Builders. It was a bit of an experiment in discovering those skills, distilling them and frankly trying to make my first product. Think it turned out great. I have some good reviews but I’d love to get feedback particularly on the marketing strategy. After spending so long witting the book, I did almost nothing to get it in people’s hands. It’s the proverbial tree which no one heard falling in the forest.
My current approach is to offer a free sample chapter in return for an email triggering email sequence and weekly insights from the book as well as links to purchase,” which I think is a great idea. “Built out the campaign in Drip, put the sign up form on the site, but it has no traffic. I thought of driving sign-ups with Facebook and LinkedIn lead ads but I’m not sure these can be cost effective enough to market product like a book. Any thoughts? Appreciate it.”
This is a good question. I think, as Robert alluded to, this is somewhat of a common thing. Authors don’t tend to think about the marketing side of it. If you were to do this “right”, then you would be doing pre launch. You’d build a prelaunch list. If you listen to ZenFounder, you heard Sherry and I talking about our book for the past six months when we started writing it. You can even go so far–when Brennan Dunn works on a project, he’s actively sharing pieces of it on Twitter, on his blog, to his email list, and just build anticipation over time. That’s what I did when I wrote my first book back in 2010. I was sharing pieces of it getting feedback and that’s really the way to do it because it engages people and then by the time you get there it’s a no brainer for someone to buy it.
If you haven’t done that, then, yeah you are starting from a cold start and especially in this space, there’s so many people with the startup message and the entrepreneurial message. It is hard to stand out. I think Facebook and LinkedIn ads I do not believe will work just because of the cost. Typically, you need LTV of 150 and up to work but you know what? This is the learning experience.
You’ve said it, I totally, personally, would run some Facebook and LinkedIn ads just to see what it feels like. Maybe your conversion rate on a book because it’s so cheap will be way higher than the software that I’ve tried to sell using Facebook and LinkedIn ads. There’s a chance it will work, you can find a small subset of people or some some audience that will be willing to buy it. Even if you only breakeven, part of this is just getting the reach out there. Because every customer who buys from you, now they’re part of your audience. You have their email address and I think that’s a great way to do it.
I think another way is of course, I’ve talked about this a lot, is a podcast tour. If you have no name or no reach, then it is just gonna be cold emails to podcasts, you’re going to have to figure out what the story is because it’s not, “I just wrote a book. Can I come and talk about it on your show?” Because you’re gonna get zero yeses for that. You have to figure out what the angle is for that particular show and why that show’s audience would really want to hear about one of the concepts from your book. If you have any type of network in this space obviously, then that’s where you want to start.
And then of course public speaking, if you do any of that. If you get invited, you can often ask the organizers to buy a copy of your book for everybody at the conference, both Sherry and I have done that and it’s worked out really well. It gets it in more people’s hands, you give them a discount of course. But then you get up there and people get to here you and then you have a video that gets on YouTube or Vimeo and then you can promote that. There’s all these angles.
But I find selling a book a lot different than selling software because it’s so much more about your credibility, it’s about the person who wrote it, and it’s also about the message as well but it’s much less about the utility than software. Software has to solve a problem right away. People will churn out of it immediately. But a book can be an impulse purchase and it’s just about throwing a wide net and finding a lot of people who could potentially be interested. Like I said, it’s an impulse purchase. I will often hear about a book, and just as I’m hearing the podcast, jump into Audible and buy it because my Audible credits were so dang cheap.
I’m on the annual plan and I buy a bazillion books a year, very much an impulse purchase for a lot of people, especially if it’s a $20, $25 book. But the advice I would give is figure out how you’re gonna couch or position your book so that it’s different than everything else. Because when I hear the title, which again is Startup Blueprint: Seven Skills For Founders, Leaders and Builders, it sounds like a lot of other books, it sounds somewhat generic, it’s not super inspiring to me, personally. I probably wouldn’t buy it based in the title alone. You’re gonna have to figure out how do I further differentiate it from all the other books that are talking about the same topics.
An example is my first book came out 2010, it’s called Start Small, Stay Small: A Developer’s Guide to Launching a Startup. I had a couple of advantages. I had an audience of a bunch of developers who a lot were into products. I called it Start Small, Stay Small which was interesting title for a startup book because no one ever talks about staying small. It was like that’s curious. I really niched it down; A Developer’s Guide to Launching a Startup. I actually got a bunch of people telling me, “This isn’t just for developers, anyone can use this.” I said, “I know, but I really wanted, if you were a developer, to just basically be a no brainer purchase for you.” That’s what happened, and the book has done very well.
I’m trying to think what the most recent numbers are, it’s probably sold maybe 12,000 copies at between $20 and $35 a piece. Some of that’s been on Amazon, but yeah, hundreds of thousands of dollars literally I’ve made from that book. That was never the intent but it definitely did very well and I think part of that was because I had this small audience. This was before Micro Conf, it was I believe before the podcast or maybe right at the same time as the podcast was coming out. It was before a lot of this stuff.
I was really just a blogger and a guy who was making a full time living off of these small products and that was about it. It wasn’t like I had the reach or the network or anything that I have today and yet this book just kept selling. I think it also helped, it was a good book. It was well written, I put everything I had into it. I was super prescriptive and super detailed. It wasn’t like it was just a pure marketing thing, there was also a virtuous cycle of word of mouth that helped it continue to spread and sell over the years.
Good question, Robert, I appreciate it. I hope those thoughts are helpful.
I think that wraps this show. If you have a question for us, call our voicemail at 888-801-9690. You can also email an mp3 file or any type of audio file really to us at questions@stratupsfortherestofus.com, audio questions go to the top of the stack almost always, answer those first, but we do of course accept text questions as well via email. Theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, we’ll see you next time.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product or you’re just thinking about it. I’m Rob, and Mike has no power for the past day or two. He has no internet, and I think a storm came through and knocked out a bunch of power. He won’t have it back he said at the earliest til midnight tonight. I jump into a car with my son, my 11 year old. We are heading to Lake Geneva, Wisconsin for Gary Con in about two hours. There was no overlap.
Mike emailed me and let me know he wasn’t able to make it and so my goal was to find a guest this morning. I emailed three or four people short notice and no one is able to show up. Here I am, we ship every week, every Tuesday morning an episode comes out.
I dug into our listener question bag and we were down to one listener question last week, we’re up to eight or nine this week, which is great. I enjoy these episodes when we answer listener questions. We’ve been doing them a lot more lately. What I’ve noticed is it feels like there’s a lot more listener participation and it also feels like we’re keeping up with topics that are not just coming out of our heads.
These are really questions and topics that you, the listener, are thinking about. It feels like I enjoy these episodes because I feel like they’re as relevant as we can be to the moment of what you’re thinking about and what you’re launching as a listener base. We are here to share our experiences, to hope you avoid the same mistakes we’ve made. Also, to weigh in on questions that you have as you’re growing, building, launching your startup.
Let’s dive into our first question. It’s from [Dylan Dee 00:02:10] and it’s about whether he can use advertising as a SaaS revenue model. He says, “My company is Dunwich Technologies, it’s a healthcare focused consultancy. We’re developing a SaaS app to help patients better understand their confusing medical bills. I see the value in one off uses, doesn’t feel like an app that could garner much daily activity or many daily active users. It’s more like an every so often use. This coupled with not wanting to charge for the app leaves me with few revenue options. Would medical/pharma ads on this app be the only or the best way to monetize it in your opinion?”
My opinion is this will not work at all. Because if you don’t have a lot of daily actives, then ad based revenue models are gonna bring in pennies for you. I would be shocked if you have people logging in once a month or once every other month. Let’s say you had 100,00 people using the app and they only log in once a month, you’re gonna make hundreds of dollar. It is catastrophically low, the ad rates are just very low these days. You look at a company like Facebook or Twitter, Google, and the only reason that ads work for them is because they have so many people constantly using the app.
If you’re going direct to consumer and you don’t think you can charge for it or don’t want to charge for it, I would think of this as more of a lead gen thing. Can it generate leads? Can you build up a free customer based and generate leads for your consultancy? Or, can it generate leads for another SaaS app that you may want to charge for, or a video course–I’m just throwing things out.
Obviously, you may not want to create a video course, you get the idea. If you’re gonna build something that truly is freemium but there is no ‘mium’ to it, there’s no premium aspect because you’re not gonna upsell. But actually, that is another thing you can think about is to launch this. See what happens, see if there’s any uptick. If you get 10,000 free users in there asking for more things, you could then consider going freemium and having a paid tier on top of this. Even if it does just a $5 or $10 a month thing.
It’s really hard to do B2C SaaS, it’s not done very often. If you look at even Dropbox, they are trying to pivot into the enterprise because that’s where more money is and the lower churn and all the stuff. Box.net kind of beat them to the punch on that. I think that Dropbox was conceived as a B2C company but if they really want to maximize the valuation frankly, they want to get into the enterprise because enterprise customers have higher lifetime values. And if you look at the stock market in public or even the private markets, companies serving mid market and enterprise, and even SMBs are valued higher than the same amount of revenue serving consumers because that revenue tends to be more volatile.
All that to say, I don’t think you have any chance of making any money that’s gonna move the needle using an advertising model. I would say if you’re gonna build it, if you really want to, give the thing away, see what happens, see if it becomes lead gen. If nobody uses it, then that’s fine too. At least you took your shot.
Our next question is an audio question. It’s about a WordPress Plugin company, whether they should offer a SaaS offering.
“Hey Rob and Mike. I love the show. My name is Kyle, thanks for taking my question. I work for a small WordPress Plugin company. We’re pretty well established and doing just fine, but looking to grow and take on some new exciting project. I have some ideas that I wanted to get your input on.
Basically, I want to see if introducing a small SaaS offering might make sense for our business? Obviously, we distribute our WordPress Plugin, that’s our business right now. Our customers are mostly in ecommerce but I was in the interest of helping our customers succeed and solve real problems that they have. Also becoming as indispensable to them as we can be while at the same time introducing new streams of revenue for our business.
I was wondering if maybe we should consider adding a SaaS offering which we make available only initially to our existing users. Not something that we market to our broad audience, but something that we just silently roll out to users of our plugins already. I’m thinking this could be something very simple, some tool like helping them with their email delivery or file storage, data backups, staging environments, remote site management, reporting businesses sites, something like that, I don’t know. We can make a simple tool, put it in front of existing users and say, ‘Click here to take advantage of this extra monthly tool.’
My questions are, how do you feel about the idea of creating some simple, light MVP simple SaaS product? Initially making it only available to current users of our plugin. Do you have any opinions about the type of SaaS product which would be the best for us to choose if so? Something simple yet still useful to our customers for mostly running ecommerce sites. Thanks so much and I look forward to meeting both of you this year at Micro Conf, thanks.”
This is a great question. I think a lot of WordPress Plugin vendors probably think about this because the appeal of having monthly recurring revenue versus the potential spikiness of WordPress Plugin in the one time sales, it’s appealing. SaaS and subscription revenue is the golden ticket that everyone is looking for.
I would say that just to start with, a, I think this is a great idea. I’m all for it. I think if you wanted to tip toe into it, you should definitely do it. I would say that when I talk to folks who do WordPress or do one time sales, they’re always talking about launching a SaaS. When I talk to people who have SaaS apps, so many of them are jealous of these one time sale products because those product price points tend to be higher.
You might sell a WordPress Plugin for $40 to $200 and you get that nice pop right off the bat. If you sell one customer, you make $200 that month. Whereas if you have a lightweight SaaS, you might make $10 that month from the customer and you gotta keep them around and you’re constantly working to do that to retain them. I know that with DotNetInvoice, which was an invoicing software I owned years ago, it was $300 for the product, for a developer to buy it and use it.
We only sold 8-15 copies a month. You think about that, you think about let’s just say 10, you think about making 10 new SaaS sign ups that stick around and become customers and that is catastrophic. Unless you’re very, very expensive, in the enterprise. But just the normal, let’s say you’re $20, $30, $40 a month, that’s slow growth. It’s gonna be agonizing. Whereas if we sold 10 of DotNetInvoice, it was $3,000 a month. At the time, I was looking to make a car payment or make a house payment and I was doing consulting. This was just a little side project that I didn’t spend a ton of time on. That dollar amount and getting all the lifetime value upfront from your customers, there is some appeal to that.
I would say don’t look that [inaudible 00:09:17]. Do realize that the couple beauties of WordPress are that you do get all the lifetime value upfront and that you have that built-in distribution channel of the WordPress repo, and that also ranks high in Google which then can bring people to your WordPress page and get that free download. With all that said, when I talked to a lot of WordPress folks who have plugins, are making some money, they are always thinking of how to get into SaaS, and I don’t think that’s a bad thing. A, I think it’s great. SaaS is more complicated, it levels you up. There’s more to learn, it is that recurring revenue that you’re looking for.
Number one, I think yes, you should give this a shot. Number two, I think you have an advantage because you already have paying customers. I have no idea about this business if you have a thousand people who’ve purchased it or if you have ten thousand, but that is a great built in audience right there to start a SaaS from.
I’ve talked on the podcast and at MicroCon a couple of years ago about what I believe are the only four true competitive advantages in SaaS. It’s who you know, it’s your network. It’s who knows you, it’s your audience, that includes customers. And it’s being early to a space and being a growth hacker, someone who knows how to think through methodically and really grow anything.
This is a case where you already have an existing audience of customers, you do have an advantage over someone starting from scratch. You have customers who probably trust you and like you. If you build something with them in mind, you should be able to have a pretty good strat to your business.
In addition, you probably have a bunch of free users and I know they won’t convert as well but that should be a number that’s 10 or even 100 times the number of people who’ve actually paid you and so you do have some reach there. That’s the plus side.
The negative side is you building a SaaS is gonna take a lot more time than building a WordPress Plugin in general. There’s so much more, there’s the hosting and the infrastructure and uptime and all the stuff that you don’t have to deal with. It is gonna be a big learning experience. I wouldn’t want you to think just because you’ve built software, you’ve built products and you’ve sold it, you definitely have learned a lot but SaaS is going to be that next level up in terms of complexity.
In my opinion, if I were you, especially in the ecommerce space, I would start talking to my customers, you already have them. You can have a few ideas and I think in a perfect world you might have three of four ideas that you start running by customers and saying which one of these would you absolutely, no doubt, would sign up for tomorrow. Take that short list and run it by, I’m sure you know a bunch of them personally, and then start emailing a hundred of your customers at a time even if you don’t know them and being just like, “Hey we’re considering branching into this, would you buy it?” I think you’re gonna get pretty good feedback form that pretty quickly.
That’s how I would approach it, I think, asking my opinion, you’ve asked my opinion about what kind of app you should build, I have no idea because I don’t know. I don’t know your customer base or what you’re currently serving. I think that the best WordPress to SaaS progressions are things like Opt-In Monster where it was just a WordPress Plugin and then they just launched basically the same thing as the SaaS app. It was subscription, they already had the features that they knew that was killer, they had experience in it. They literally just turned the WordPress Plugin into a recurring subscription.
If you’re not on WordPress, you can still use it but you pay the monthly. Craig Hewitt is doing this with his WordPress Plugin Seriously Simple Hosting, and then it’s Castos now. Moving from this WordPress space and just building a SaaS out of it, I think that’s a good way to go because you already have experience with that. You already have inbound interest, folks finding you through the WordPress repo so you do have that traffic source and distribution channel.
Again, I think if you want to get in this and get into the recurring game, I think it’s a good idea and I do think you have some advantages given your current business. Thanks for the question.
Our next question is from Alex Baxter. He says, “Love the podcast, big fan. I’m attempting to bootstrap a startup in the job site space.” A job website, a two-sided marketplace. “As I begin to look for companies to post jobs to the site, would you suggest allowing companies to post jobs for free to get the initial supply of jobs up for candidates to view then worry about monthly fees later, or trying to charge from the get go? I’m leaning towards free but I wanted your thoughts.”
The reason I like this question is because it’s the classic two sided marketplace. Whenever I talk to anyone about a two-sided marketplace, I say basically the same thing. You’re gonna have to figure out which side you need to get first. In this case, you’re not gonna have any job seekers come to the site if it has no jobs. You have to get the jobs up first.
Yes, I would beg, borrow, and steal to get jobs on this site. I’ve seen new job sites launched and they’ll go and scrape Monster, Indeed, Hot Jobs and all these other things in order to populate their jobs and start form there and then spin out. I’m not saying you should or shouldn’t do that but it’s a way to think about it. There are jobs postings out there that you would be able to populate on your site and it’s additional distribution for them.
In terms of offering for free to employers, I probably would, because you have no traffic. You really can’t charge them because you have no job seekers yet. In my opinion, it’s probably a, “Hey, this is going to be free for the first three months or six months or until we have 10,000 uniques a month, or until every job receives 50 views per month.” There’s something that just needs to trigger that they need to start paying you. Because you don’t want to get a bunch of your best employers and just be like, “Yep, this side is free to post,” because that’s not a business perpetually.
You have to take an approach that long term you’re not comping your best customers. That’s why it kills me, I‘ve seen people pretty often do this with SaaS where they get this launch list or they get 5 or 10 interested customers and they say, “Yeah, for your feedback, I’m just going to comp you lifetime.” I think to myself no, these are your first 10 people. You can give them a discount, you can comp them for six months, give a discount for the first year. You can do that because they are giving you effort but also providing them a ton of value with the software.
If they’re willing to sit and work for beta software with you, then they probably have a pain point that you’re also helping with. Don’t do that would be my advice. Don’t cut that revenue off at the knees, especially in the early days when you need it most.
For this, I would definitely consider just cold outbound outreach. I’m guessing this is probably a vertical and you probably know all the companies in that vertical and that would be cold emails, cold phone calls to basically just start with like, “Hey, I see jobs on your site. Can I repost these here? Do you give me permission?”
Technically, I got to be honest, I don’t know if you even need permission legally. Whether it’s an ethical thing. You’re providing them with more distribution, you’re republishing jobs, but do they have a copyright to the job posting? They may. You may want to check with them first. You’re gonna have to talk to a lawyer, just do your research on that, but that’s what I would do is if they already have jobs posted in their own site, I would look to just be like I will do this for free for the first three months since we’re getting started up and I will just pull all your jobs in, are you cool with that? Try to make it as easy as possible. I would either a scraper, an importer, hire a VA, I would do something that is able to pull in those jobs so these folks are not having to do the work and it’s just a simple and easy yes.
And then, your results are gonna make or break whether they want to pay you. That’s a cool and a stressful situation to be in. I think back to I believe it was TripAdvisor in their early days. Their big game is building all these SEO pages. They’ll have a destination and then they’ll have all the rankings and then they get all the search engine traffic. They were trying to monetize and they went to cut deals with travel ticketers, airlines, hotels, all of this stuff. They basically said, “Buzz off, we don‘t care.”
TripAdvisor already had a bunch of traffic, they turned on this [inaudible 00:17:22] to some of these ticketers, and I don’t know if it was airlines or hotels or just people selling tickets but whatever it is, people selling the things that they were talking about on TripAdvisor. They turned on this [inaudible 00:17:33] and just started sending a bunch of traffic, they didn’t charge for it and they didn’t get a kickback, they didn’t get a commission, but then they turned it off after two to four weeks. At that point, the people selling tickets said, “Wait a minute, what did you just do?” They said, “We turned the traffic off.” They said, “What do we need to do to get that turned back on?” That’s your conversation.
That’s where you start. You said, “Well, we’re gonna charge you. You need to give us a cut of the ticket sales.” That’s what you’re going to be, that’s the situation you’re gonna be in here is thinking about if you get these job for free for three months and no one applies to your site, they’re not gonna pay you. But if they get fantastic talent, it doesn’t need to be a lot, I’ve used a few job sites where I only got three or four applicants but they were all top notch because it was just a really small niche and I continued using them after that. Very good question, I appreciate that Alex and I hope it helps.
Our next question comes from Robert Andrews. He says, “I’m a long time tech journalist and editor turned content consultant. I’ve written a book it’s called Startup Blueprint: Seven Skills For Founders, Leaders and Builders. It was a bit of an experiment in discovering those skills, distilling them and frankly trying to make my first product. Think it turned out great. I have some good reviews but I’d love to get feedback particularly on the marketing strategy. After spending so long witting the book, I did almost nothing to get it in people’s hands. It’s the proverbial tree which no one heard falling in the forest.
My current approach is to offer a free sample chapter in return for an email triggering email sequence and weekly insights from the book as well as links to purchase,” which I think is a great idea. “Built out the campaign in Drip, put the sign up form on the site, but it has no traffic. I thought of driving sign-ups with Facebook and LinkedIn lead ads but I’m not sure these can be cost effective enough to market product like a book. Any thoughts? Appreciate it.”
This is a good question. I think, as Robert alluded to, this is somewhat of a common thing. Authors don’t tend to think about the marketing side of it. If you were to do this “right”, then you would be doing pre launch. You’d build a prelaunch list. If you listen to ZenFounder, you heard Sherry and I talking about our book for the past six months when we started writing it. You can even go so far–when Brennan Dunn works on a project, he’s actively sharing pieces of it on Twitter, on his blog, to his email list, and just build anticipation over time. That’s what I did when I wrote my first book back in 2010. I was sharing pieces of it getting feedback and that’s really the way to do it because it engages people and then by the time you get there it’s a no brainer for someone to buy it.
If you haven’t done that, then, yeah you are starting from a cold start and especially in this space, there’s so many people with the startup message and the entrepreneurial message. It is hard to stand out. I think Facebook and LinkedIn ads I do not believe will work just because of the cost. Typically, you need LTV of 150 and up to work but you know what? This is the learning experience.
You’ve said it, I totally, personally, would run some Facebook and LinkedIn ads just to see what it feels like. Maybe your conversion rate on a book because it’s so cheap will be way higher than the software that I’ve tried to sell using Facebook and LinkedIn ads. There’s a chance it will work, you can find a small subset of people or some some audience that will be willing to buy it. Even if you only breakeven, part of this is just getting the reach out there. Because every customer who buys from you, now they’re part of your audience. You have their email address and I think that’s a great way to do it.
I think another way is of course, I’ve talked about this a lot, is a podcast tour. If you have no name or no reach, then it is just gonna be cold emails to podcasts, you’re going to have to figure out what the story is because it’s not, “I just wrote a book. Can I come and talk about it on your show?” Because you’re gonna get zero yeses for that. You have to figure out what the angle is for that particular show and why that show’s audience would really want to hear about one of the concepts from your book. If you have any type of network in this space obviously, then that’s where you want to start.
And then of course public speaking, if you do any of that. If you get invited, you can often ask the organizers to buy a copy of your book for everybody at the conference, both Sherry and I have done that and it’s worked out really well. It gets it in more people’s hands, you give them a discount of course. But then you get up there and people get to here you and then you have a video that gets on YouTube or Vimeo and then you can promote that. There’s all these angles.
But I find selling a book a lot different than selling software because it’s so much more about your credibility, it’s about the person who wrote it, and it’s also about the message as well but it’s much less about the utility than software. Software has to solve a problem right away. People will churn out of it immediately. But a book can be an impulse purchase and it’s just about throwing a wide net and finding a lot of people who could potentially be interested. Like I said, it’s an impulse purchase. I will often hear about a book, and just as I’m hearing the podcast, jump into Audible and buy it because my Audible credits were so dang cheap.
I’m on the annual plan and I buy a bazillion books a year, very much an impulse purchase for a lot of people, especially if it’s a $20, $25 book. But the advice I would give is figure out how you’re gonna couch or position your book so that it’s different than everything else. Because when I hear the title, which again is Startup Blueprint: Seven Skills For Founders, Leaders and Builders, it sounds like a lot of other books, it sounds somewhat generic, it’s not super inspiring to me, personally. I probably wouldn’t buy it based in the title alone. You’re gonna have to figure out how do I further differentiate it from all the other books that are talking about the same topics.
An example is my first book came out 2010, it’s called Start Small, Stay Small: A Developer’s Guide to Launching a Startup. I had a couple of advantages. I had an audience of a bunch of developers who a lot were into products. I called it Start Small, Stay Small which was interesting title for a startup book because no one ever talks about staying small. It was like that’s curious. I really niched it down; A Developer’s Guide to Launching a Startup. I actually got a bunch of people telling me, “This isn’t just for developers, anyone can use this.” I said, “I know, but I really wanted, if you were a developer, to just basically be a no brainer purchase for you.” That’s what happened, and the book has done very well.
I’m trying to think what the most recent numbers are, it’s probably sold maybe 12,000 copies at between $20 and $35 a piece. Some of that’s been on Amazon, but yeah, hundreds of thousands of dollars literally I’ve made from that book. That was never the intent but it definitely did very well and I think part of that was because I had this small audience. This was before Micro Conf, it was I believe before the podcast or maybe right at the same time as the podcast was coming out. It was before a lot of this stuff.
I was really just a blogger and a guy who was making a full time living off of these small products and that was about it. It wasn’t like I had the reach or the network or anything that I have today and yet this book just kept selling. I think it also helped, it was a good book. It was well written, I put everything I had into it. I was super prescriptive and super detailed. It wasn’t like it was just a pure marketing thing, there was also a virtuous cycle of word of mouth that helped it continue to spread and sell over the years.
Good question, Robert, I appreciate it. I hope those thoughts are helpful.
I think that wraps this show. If you have a question for us, call our voicemail at 888-801-9690. You can also email an mp3 file or any type of audio file really to us at questions@stratupsfortherestofus.com, audio questions go to the top of the stack almost always, answer those first, but we do of course accept text questions as well via email. Theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, we’ll see you next time.
Episode 382 | Fixing Onboarding, Marketing a Low LTV Product, and More Listener Questions
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike answer a number of listener questions, topics include fixing onboarding, marketing a low LTV product, and the legality of cold email.
Items mentioned in this episode:
Mike: In this episode of Startups For The Rest Of Us, Mike and I talked about how to fix your onboarding, marketing the product with a low lifetime value, and more listener questions. This is Startups For The Rest Of Us episode 382.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
-: And I’m Rob, I guess. And I’m not Mike.
Rob: That’s what Sherry said when she was on the show, “And I’m not Mike.” What’s going on this week, man?
Mike: I just pushed the new Bluetick website live this week. That’s finally out there, they were out, I think, Monday night. Just been making some minor tweaks here and there just to get the images all straightened out and smooth out some other rough edges.
My main focus was just getting the design itself in place and then the copy along with the new updated theme because it’s all built on WordPress. Now that that’s stuff’s in place, I actually have to leave in four or five hours to go to FemtoConf and then once I get back, then I’ll probably finish off the rest of the little minor things that need to be taken care of and just make sure all my plugins are installed and all the analytics are working and then from there just start marketing.
Rob: The site looks great, it looks really nice. It’s like ten times better than what you had up there. All the way from the look, to the images, to just the verbiage and then what you have there. Bravo on that. Can I give you two small critiques? I’m sure these are behind on your list. You have a testimonial on the home page which I think is great.
Mike: Actually those are gonna be swapped out.
Rob: Cool, you got multiple, but put big old quotes around it. There’s something about seeing quotes around it. I know there’s Justin’s face there and then there’s a testimonial to the right of it but without the quotes, it’s like there’s just something there. I really like to call out large quotes because then people know the guy is saying that. It’s a little thing that I see in a lot of sites but I think there’s some impact.
Mike: Yeah, I’ll definitely do that. What’s the next one?
Rob: The other one is, you know what, this one isn’t actually a critique. You have one sentence description at the bottom of the page in the footer about Bluetick and it says, “Bluetick relieves the soul deadening drudgery of email follow up for founders, overworked sales executives, and anyone who’s ever lost a perfectly good lead to the email blackhole.” That’s a really well-written thing. Why does it say FIP? What’s FIP mean?
Mike: I don’t know, actually I think that’s gotta be RIP.
Rob: There’s just a little typo there. I don’t love your logo because it took me a while to figure out what it is but it looks like it’s a dog eating an envelope or carrying an envelope, is that right?
Mike: Yeah, it’s carrying an envelope.
Rob: I’m sure it looks better when it’s big but given the size on your site right now. Listeners, you should go to bluetick.io and check all this out and see if you agree with me or what else we can figure out. I’m sure changing your logo is like priority 942 on your list right now.
Mike: Yeah. The only reason I even had the logo done was because before it was just text and I wanted to have something up there so that people could associate the logo with the text itself because there’s familiarity that people get with certain text fonts especially when they go with a particular logo but I’m gonna be using that logo inside of some of the emails and stuff that are being sent out. I just want that familiarity to at least be there.
It wasn’t necessarily important, it was just like okay, if I’m doing a step up, the previous logo was literally a stock image that was just black and white of a dog’s face and it was just not very relevant, I’ll say.
Rob: I would think if you could somehow simplify just the dog’s face, turn it into a line drawing or something. Again, I realized it’s hard because you can’t do it yourself, you’re gonna have to hire somebody. I don’t think this is a deal breaker, I don’t think people are not gonna sign up for the app because of that. It’s just something that every time I come to the site I notice it and I’m like it’s a little busy.
Mike: This is gonna turn into a website tear down episode.
Rob: It’s gonna be the whole episode. These are very minor things. There are no typos on the page, the copy is good, personal touch at scale for all your follow up emails, that’s your headline. It’s really well-written. Obviously you could split test against something but nothing comes to mind as like boy, this copy is really jacked up or anything. It looks good.
The only two, again these are minor things, your Drip widget popped up on me after maybe 5 to 10 seconds. I was in the middle of reading your headline or the subheading and the thing popped up. I would probably push that out to 30 seconds, you have quite a bit of [inaudible 00:05:05] on the page, maybe even 45 seconds. Just give people a bit of time to read a little more.
Last thing is, your title tag on your home page, it says, “Home-Bluetick.” I know you’re not doubling down on SEO right now but really, Google has probably indexed you already. You may wanna start that with something, I don’t know what keyword you’re gonna be targeting or keywords but whether it’s email follow up or whatever generic phrase you would love to rank number one in Google, at least have that somewhere in there, probably towards the front.
Again, I wouldn’t keyword stuff but Home-Bluetick isn’t gonna get you much. You don’t want people to find you for the word home. People are gonna find you for the word Bluetick. Neither those really need to be there, although I’d probably still have Bluetick in there somewhere. That’s about it, man.
Mike: All of those are great suggestions. Some of them, like you said, the typo, I knew that I had to get to that but I just hadn’t gotten to it. I feel like extending out the Drip widget a little bit so that it gives people more time. All the title tags and stuff like that, I have not even looked at any of those yet. That’s on the list of things to do when I get back.
Rob: You have some art on the tour page, that’s very cartooning. Those look really cool, I like the feel of that. It’s very professional feel.
Mike: The designer who did the website, he came up with those illustrations. We went back and forth on a couple of different design ideas that he had and those are the ones that came out of it.
Rob: Very cool, man. Good luck. I’m interested to hear how it impacts conversions and all that kind of stuff.
Mike: The main focus of doing all of this stuff was just to give the website a much better feel to it so that when somebody either came to the website itself or was directed to it because of a referral, it doesn’t look like something that they would’ve just clicked the back button and said, “No, I’m not even gonna give this a chance.” I did hear that as feedback from people where I recommend it to so and so they told me that if I had not recommended it to them, they wouldn’t have even given a second thought.
It’s really to just overcome that as a primary objection. I can do a demo for somebody or a webinar and I could sell them on it and say, “Yes, this is what the product does.” By showing them inside the product and what it can do for them and solve their problems, yes it’s fine. But a completely cold lead who comes to the website has no idea and they’re not gonna give it a chance, that’s really what it is. The bar for something like a SaaS product is much higher than something that the old website could even overcome.
Rob: The bar is much higher than it was five or ten years ago as well. I think you made a good call here. Doubling down on this, you’re at the point where you’re starting to scale getting more trials coming through the websites, now is the time to do that. If you spent much time on this when you’re in customer development, it would’ve been a waste of time. I think it was a good use of time and money.
I wanted to talk a little bit about MicroConf, it’s coming up in April, Starter Edition. We still have tickets left and we have some really good speakers this year. We have Mary Pullen who’s talking about her first year of SaaS bootstrapping. We have Alli Blum talking about copywriting and onboarding emails, she’s been on the show. You’re speaking, Justin Jackson, Ben Orenstein, Courtland Allen from Indie Hackers, Mojca Mars about Facebook Ads, really solid lineup this year.
If you’re at all interested in hanging out with 100-250 folks who are all the way from idea to making a full time living from their business, head over to microconf.com, click on Starter and the tickets are relatively inexpensive compared to most conferences and we do still have some left. We’d love to see you there.
The other thing is I’m driving to Lake Geneva, Wisconsin next Thursday or I guess it’s two days after this will air to attend Gary Con, have you heard of that?
Mike: I have not. Is that related to Gary Gygax?
Rob: Yes, Gary Gygax was the creator of Dungeons and Dragons. He died in I think it was 2010, 2012. Basically friends and family just got together and played a bunch of games. It’s like there’s table top games, there’s card games, and RPGs and miniatures and the war games and all that kind of stuff. It was like 20 or 30 people the first year and they jokingly called it Gary Con in his honor. The next year, they sold a few tickets and they had 100 people and it just turned into this thing.
I went last year, it’s kinda neat being in the midwest. I’ve never gone because I was never gonna fly from California out to Lake Geneva, Wisconsin but being in the midwest, it’s like a four or five hour drive. Last year I was kinda nervous about going, my son and I, we obviously love and play these games but we’re not sophisticated gamers, we’re just playing for fun and there are about 1200 people there. It was a blast, man. It was so much fun.
People are really nice and welcoming. I’d come up with my ten year old son and I was like, “Hey, we’ve never played this.” They’re like, “No problem, we have a character for you, here’s how you do it.” They were just super helpful. Anyways, I’m really looking forward to that. If anybody happens to listen to this and be there, please drop me a line. We’d love to connect with you but if not, I’ll certainly report back about the nerdery that’s gonna take place in Lake Geneva next week.
Mike: That’s awesome. I’ve been to a couple of gaming conventions like that, there was one in Buffalo, New York that I went to. It’s probably 10 or 12 years ago. It’s interesting because there was a guy there who had a role playing game that he was trying to launch and trying to get funding for but he was also still doing play testing for it. There was a room of 25 of us, he basically threw us into this game. I think the game was called monoxide amazon or something like that.
The idea was you’re in this world where you just basically have to run away from everything, everything is out to kill you. Half the people died in 10 or 15 minutes or something like that. It was like an hour long session but out of all of us, I think there were only five or six of us that made it out alive.
Rob: That’s cool. That’s the neat part. Last year the same thing happened, there were several people there who were trying to get their games on Kickstarter or going to put them on but they were doing play testing. My son actually played that Tower Defense game board game that he enjoyed a lot. The convention itself, it is four days.
We’re only going for three days of it but it’s not just some eight hour session, we’ll probably game as much as we can, eight to twelve hours a day, we’ve already signed up for tables in advance and then we’re also wandering around. There’s so much cool stuff to buy too, it’s really bad. I need to limit my spending but I get overwhelmed how much cool stuff people bring. It’s a great time to buy dice and miniatures and all kinds of geeky stuff.
Mike: Cool. What are we talking about this week?
Rob: We have a few listener questions. Actually, by the end of this episode, we will have zero listener questions in the cue. I don’t know if it’s woohoo or not. We’re gonna have to come up with some content next week. If you do have questions for us, please, email them to us at questions@startupsfortherestofus.com or certainly call our voicemail number which we read at the end of every show.
Our first question is from Tim Win. He has a couple questions in the same email. His first question, he says, “I was wondering, for a B2B Saas targeting specific niche market, what will be a good amount of traffic I should try to generate to get meaningful feedback?” Aside from it depends, do you have thoughts on this? Because it does depend, that’s a very general answer. Let’s weigh it on, I may have some thoughts.
Mike: I think when you ask a question like this, what you’re really trying to get out is the amount of feedback that I’m getting good enough in relation to what other people would get or are you getting the feedback that you need to make a decision. I think that’s how I would approach it to figure out whether or not you’re getting enough traffic.
You have to decide on what your KPI for that website is and how you’re going to be gathering information from people. Let’s say that you use Hotjar and you put a poll on your website and you get 100 or 500 people to it and you get 3 people to answer the poll, that’s not a good percentage but 3 people out of 500 visitors is not going to help you in any way, shape, or form. Even just adding once answer is gonna skew things in such a direction that it’s just not helpful.
I think I would look at it in terms of how much feedback you’re getting versus how many people are visiting. Also, recognize that when you’re looking at the traffic stats for a particular website, it’s very easy to misinterpret bots coming to the website to just crawl it versus actual visitors who were there for purpose or came from a particular search term or were directed from an email or another website.
Rob: If you’re using Google Analytics, though, I don’t think it picks up bots, I’m pretty sure it does not, it’s only if you look at raw server logs, just a caveat in there.
Mike: But it is hard to tell when you’re looking at that because you do see on the server logs, you’ll get 20 or 30 visits a day. I’m not convinced that Google accurately filters out all the robots that it’s supposed to.
Rob: Really? Because it’s JavaScript. Typically a bot is like a crawler, it’s a Python Script that’s just doing something. It shouldn’t “execute” JavaScript. You need to execute JavaScript to have Google Analytics track you. I know that Google’s crawler does execute some JavaScript, there are stuff, it’s possible but my guess is that most bots are not executing the Google Analytics.
I’m guessing they would exclude it if they could. They’re pretty smart about that. The point is if you’re not using Google Analytics and you’re using your logs, they could be in there.
Mike: That’s true. With this particular question, what you’re really trying to get out is what is the information that you’re trying to retrieve from people and what feedback is it that you want. Do you want conversations? Do you want them to comment on something? Do you want to get them on a phone call? What is the KPI that you’re trying to push people towards? Are they doing it?
I don’t think it’s a matter of trying to measure the actual traffic itself because, I think, bear minimum, you probably need at least 500 visitors a month, anything below that you’re just really not gonna be able to make a meaningful business out of it.
The other thing to consider is the fact that not every B2B SaaS product needs to have traffic coming to its website if that’s not your primary source or primary channel for marketing the product. If you’re doing outbound cold emails, for example, or if you’re sending postcards in the mail to people or you’re doing cold calling, none of those things involve people coming back to your website so there’s an implicit assumption here that the traffic that’s coming to the website is based on SEO or content marketing or something along those lines.
I would just be hesitant to say that there’s 100% correlation between website traffic versus being able to get that meaningful feedback because if you are doing cold calling, for example, you can get on a call with somebody and you can ask them questions and talk to them, get the information you need and they never hit your website at all. That’s something to keep in mind.
Rob: I think that’s probably the first point that I would make. I think that that’s something to keep in mind, is it’s not about necessarily driving a bunch of traffic to a form or to an opt-in. It depends on your business idea but boy, if you have no audience and no reach, I would probably start with some type of outbound, cold email, or maybe some ads going to a landing page or something.
There’s just no better way to get feedback because that’s his questions, it’s not how do I build a meaningful business, it’s how do I get meaningful feedback. The way you do that is you ask for it. It tends to have to be outbound. I would hang on with this concentric circle marketing I was talking about.
I would talk to my friends and colleagues and then their friends and colleagues and then their audience and then eventually you get to the cold audiences but I would start in the center with the people that you know if you truly are going for feedback.
In the early days of Drip, yes, I threw up a landing page and put some copy on there. The only reason I did that was because I was going on podcasts and people were asking me about it and I wanted somewhere to send people.
Eventually, once I knew what we were gonna build, I started doing some ads to it and I did build a list from there but that was not the way I got meaningful feedback. The way I got meaningful feedback was a bunch of warm emails to people within my network asking them, would you use this tool? Here’s a screenshot, what do you think? And then started building momentum there. I think that’s the way to think about this.
If you wanna build an actual sustainable business and you’re asking about how much traffic, DotNetInvoice, which depended on the month but between $2000 and $4000 a month, pretty consistent, sometimes it got to 5000. That site had 1000 to 1500 uniques for years. It was just a really high converting site and it was in a vertical. That’s what he’s asking about here.
He’s like, it’s a B2B SaaS, it’s in a vertical niche. You don’t need that much but you are gonna top out at some point and just stop growing. DotNetInvoice was $300 one-time purchase. Keep that in mind as well.
With 1500 people coming to your site, if you think about, let’s just throw out a 1% conversion rate to trial, you’re gonna get 15 people into trial funnel, that’s with credit card upfront. Let’s say you close 50% of those to customers which is likely, then you’re gonna have seven or eight new customer a month.
You have to ask yourself, if you charge $1000 a month, that’s probably pretty good. If you’re charging $10 a month, that’s not very good. You have to think about your price point and just think about the numbers that I threw out there and you can do backwards math and figure out how many people you need to send to figure out how fast you wanna grow.
Tom’s second question was that he seems to be getting free trial sign ups but once users get into his onboarding which is like a getting started wizard, he seems to lose them. It’s only three steps, it’s nothing too complicated, just adding their location, product service they provide, and setting a payment processor so they can take payments from their customer.
“Some seem to get to this part and never log in. Any idea why? It’s driving me crazy.” What would you do if you were in his shoes, Mike?
Mike: I was gonna say there’s no way for us to really answer why that is. I think that if I were in his shoes and I was having this particular problem, I would email those people individually who never got past that point and see if you can help them, either just walk them through it or ask them questions about what their experience was. Your best case scenario is to get them onto a call to walk them through it and do a personalized onboarding session and then watch them as they go through it so you could just use Zoom to watch over their shoulder as they go through.
The nice thing about doing that is if you do it for them, then they see it but if you let them do it because they don’t know exactly what they’re doing, they’re going to click on stuff that they shouldn’t and you’re gonna be able to recognize that and say, “Why did that person click there?” You can ask them literally on the call, “Why did you click on that? What was it that made you think that you were supposed to click on that?”
Maybe they’re getting confused about the UI, maybe they just don’t have time to log in so they never set up their account.
I think there are other questions I would also ask about like do they come into the site and get there or do they just never come in? If they’ve gone through the signup, does it take them directly over to this three-step process or do they have to get an email and then they click on the email and then they come back into the application. How is that sequence of events set up and what’s the flow look like for the end user?
It could very well be that some people, depending on their browser for example. I’ve run into this with Bluetick in certain situations where some browsers, on occasion, do not work and it had to do with a race condition inside the JavaScript code. Some things work fine and then other ones didn’t. I didn’t know that because I wasn’t monitoring exactly what browsers people were using.
Like I said, because it was a race condition, it sometimes happened but not always. You really just need to talk to them and watch over their shoulder to watch them go through that and ask those questions to find out what it is that you’re doing. If they already got through that first step, they signed up, you have their email address or at least presumably you should. Contact them and follow up with them until you get an answer as to why they didn’t go through that next step.
Maybe they realized at that point that it was going to be more to set up than they thought it was. At that point, you have to evaluate, do I put this process in place? Do I need them to do those three things all at once? Could I spread it out? Are there ways to interject that as part of them using the product without forcing them through that concrete step all upfront? Let’s say that the location, for example, could you pull that from their credit card information?
Rob: Like their IP.
Mike: Yeah, that too. It depends on how accurate you need it to be. Like time zone, you could probably pull from somebody’s browser. If you need the address, could you pull it from their credit card? That depends on whether or not you’re taking credit card upfront which sounds like it’s not because it’s free trial. Those are the places I would start.
Rob: I think that’s spot on. The one other thing I would consider is taking away self-service signup and just putting a request demo button. When they hit that, they can just book right in Calendly and set something up. If you really wanna do this well and this is what you’re focused on, the requested demo button, you could respond to that within minutes.
If you’re relatively low traffic and you really are just hacking away all day right now, try to get back to people within ten minutes of them clicking that and just get them on the phone, do a Zoom meeting and do a screen share and walk them through. It’s essentially what you said, Mike, but I’m just saying you take away the self-service signup portion.
I think that right now it’s gonna be about talking to customer sounds like you’re still in the early days. You could throw Hotjar on there and do screen recordings, you could throw Crazy Egg in there and do heat maps, you can do all that stuff but you’re never gonna find out why, you’re just gonna see what is happening. The why is obtained through having a conversation with them. I would be more hands on these early days, you don’t have to do that forever. I think you’ll certainly find out that it’s pretty valuable for your learning, for accelerating your learning in these early days.
The last question was for you, Mike. He says, “I was listening to one of the podcasts, Mike was saying bluetick.io was having usability issues he had to fix. Are you able to get into detail? Just curious as to what some of them are.” I recall you talking about one usability issue, interested in talking about that?
Mike: Sure. The main usability issue that I have addressed towards the past six months or so, they had to do with onboarding. When somebody signs up for Bluetick, one of the first things that you have to do is you have to set up your mailbox and you have to add in your username and password. If you’re using Gmail, there’s all these different settings that you have to connect. You have to have IMAPS or hostname, username, password, port number, the encryption level. You also have to have the exact same information for your SMTP server because it may not be the same.
Initially, I had a set up page where you had to set up your mailbox and there were probably a dozen different settings. What I would do is I would personalize onboarding for each person, walk them through it, watch the backend because not everybody knows what ports they’re using for their mail server. Some people are technical, some people are not, so I walk through it with them.
I got to a point where I knew that certain types of mail servers were very common, you’re using Gmail or Google Apps. I could guess what those are because it’s always gonna be imap.gmail.com and then also smtp.gmail.com but your username and password are gonna be different.
I could basically filter out a bunch of those and I was able to shorten down the page itself but in addition to that, there were still problems because if you a have two factor authentication set up or you don’t, you either have to enable less secure apps or you have to enable two factor authentication and you also have to make sure that IMAP is enabled.
Overtime, I whittled down the number of things that somebody had to do to get their mailbox set up. At some point, I transitioned to the point where if you are using Google Apps or G Suite, as I call it now, you can just click through and go through the OAuth authentication. That basically takes care of everything for you, you’re just putting your username and password in Google, click the button and boom, everything is taken care of for you.
There’s very much a progression where I slowly pulled myself out of the setup process. On day one, I didn’t necessarily know what everybody needed and I didn’t have everything coded. I pushed myself into the process to make sure that it got done.
Rob: I think that’s a great way to do it. We had several integrations in Drip that were a pain in the butt to set up. You had to go and install a WebHook and do all this and that. We’ve been going back as we’ve grown and scaled and making them all OAuth if the provider allows OAuth. We always call it V1. V1 integration was just to plugin and then V2 is to add OAuth and V3 was to make the triggers native. There were all these things and we just have the verbiage or the language that we all knew on the dev team.
You have been in your early days, it’s customer development time. You could’ve spent another three weeks in the early days making it super simple but you didn’t need to because you’re walking people through it. I guess this is technically a usability issue but it’s like a deliberate decision to move faster and then circle back and iterate. I think that’s something that people should keep in mind as you’re building your app. It doesn’t need to be the best all the time, you gotta do your best.
Do you want your code to have not a lot of croft and not have technical debt? I wouldn’t skimp on that. But when you’re moving fast, I think making a first past through and having the usability in some areas be not as ideal as maybe you’d like and you know that and you plan to come back, I think that’s a pretty good approach.
Mike: The other thing that I use specifically in this particular case which people might find useful is that I made this decision for this piece of it specifically because it was a setup piece. I knew that it was something that most customers are only ever going to do once and once it’s done, that’s the end of it. Even if it takes me 30 minutes or 45 minutes on a call to set somebody up and get that stuff connected properly, it doesn’t matter because it won’t have to be done again.
Obviously I don’t wanna be on a call with every single person for 45 minutes just to get them set up and then after that try to do some level of onboarding and customer development. If I can get that stuff taken care of later on, I basically just kicked it down the road because it was that one-time set up and it wasn’t gonna have to be done again. You can use that as a deciding factor as to where you’re going to spend your time.
I see a lot of other vendors doing this where if certain things are painful, you tend to find those things in places where the customer doesn’t have to do it very often. The one example that comes to mind is Oracle installer which for 10 to 15 years was busted. It was fundamentally broken on Windows, you literally could not install Oracle without it failing and then having to go in and fix stuff. They finally fixed it in 2012 or something like that. But for a long time, it did not work at all.
Rob: I remember that, that was crazy.
Our next question is about cold email, it’s from Greg Ristow from utheory.com. He says, “I love the show, I’ve got a startup music theory learning site which is just now at $1500 per month in revenue with very little marketing.” Congratulations, by the way. That’s a nice market to hit.
“Starting to think about email marketing strategies for reaching college music theory faculty, and high school music teachers. I’m wondering about the legality of gathering names and emails from school websites. When I look around the web, I get conflicting information on how CAN-SPAM applies.” That’s a law in the US about not spamming people. “I know in my own day job as a college music faculty member, I regularly get emails from companies who pulled my email from my school’s website. Any advice?”
Mike, I know you have a lot of thoughts on this. I’d say give a short answer and then a longer answer.
Mike: The shorter answer is that it is legal to go to somebody’s website and pull the email addresses. At that point, depending on how you email them, that’s where the piece of CAN-SPAM falls into place. It’s not about whether or not you pull the emails from the website or whether you gather their contact information, it’s really about what you do with it after the fact.
Underneath the umbrella of the CAN-SPAM Act, there’s basically three different types of emails that are sent out. There’s commercial emails, there’s transactional emails or relationship emails, and then there’s other. I’ll talk about those in a minute but most of what CAN-SPAM basically says is don’t lie to people or forge header information when you’re sending emails and try to hide what it is that you’re trying to do.
For example your from email address should actually be you or your business. Who it’s to should be that person, don’t be forging emails to people like if I were to send an email to you and I forged the header information and said that it was Bill Gates, then it starts to fall under the CAN-SPAM laws. Lying about those things, not specifying that something’s an advertisement, or line about what the subject is.
Let’s say that you say that it’s about your recent payment, and then in the body of the email you’re saying it’s a Viagra commercial or advertisement. That right there is a violation of CAN-SPAM because you’ve not said that it’s an advertisement and you’ve also lied in the subject line.
Not telling people how to opt out of future emails, that’s another one and then honoring the opt outs. A lot of those things are typically handled by an email service provider. Those are the things that you don’t typically have to worry about.
Going back to the three different categories of email that are defined here, there’s the commercial intent which basically is an advertisement of some kind. That’s really where the pieces of the CAN-SPAM Act are that you need to pay attention to. If you’re advertising a product or a service and you’re promoting it and sending emails to these people, it’s very clear that you’re trying to get them to sign up for a service, that is a commercial intent email.
If it’s a transactional email, that essentially is exemplified by things like somebody comes to your website, buy something, and then you send them a receipt. Emailing them the receipt, that’s a transactional email because they did something and then they received based on what they did.
The third one is other. This is where you get into a very, very grey area because all three of these things are all about the primary purpose of the message. What is it that that email was intended to do and what are the contents of it. If I send somebody an email that is completely unsolicited and it’s got links for them to buy my service or to come into my website and look at the product to learn more because I’m essentially pitching it to them and saying, “Hey, would you like to learn more about this? Here’s the website.” That is more of a commercial content.
If I email somebody and I say, “Hey, I’d like to talk to you about X because I’m exploring this idea.” Or, “I have a product and I’m doing some customer development.” That is not commercial because you’re not actively selling them something, there’s not an advertisement in it. It’s also not transactional. What happens is those types of emails fall under other.
I will put a blanket categorization here that says I’m not a lawyer. Just take some of this with a little bit of interpretation and a grain of salt because this isn’t legal advice. But my reading of all of these things is that that commercial content, the transactional and other, you can essentially leverage those three. Depending on what it is that you’re putting in the email, a lot of times, you can force it to fall underneath the other category which essentially says that it doesn’t need to follow these CAN-SPAM laws and regulations.
Rob: I think the TLDR on that. Again, we’re not lawyers, we can’t give legal advice but it is generally accepted practice that, yes, people do scrape emails from websites, whether they gather them by hand or whether they have a VA to do it or whether they write a script to do it. It is legal to cold email people even for commercial purposes, I receive them all the time.
I may morally or ethically consider them spam and certain people do and they say, “You’re spamming me.” Based on the legal definition, that’s not. I would give you the advice, don’t use a bulk email program, you’ll get shut down. Script that list and then import it into Drip or MailChimp or anywhere, we’ll block your account because people will mark them as spam, there’s gonna be bounces, people are not gonna open them, they’re just gonna have low engagement. Those cold emails should not be in a tool like Drip or MailChimp, they should be in a tool more like Yesware or Bluetick.
Mike: That’s correct. The interesting thing there is that the reason Drip and AWeber and MailChimp and all those others are stopping people from sending those types of emails and stopping them from importing the list and blasting them out is because what happens is that people on the receiving end of it, if they don’t like the message, they can mark it as spam. That’s not a legal definition that it was spammed, it was that that person classified as spam. What happens is that then negatively impacts the provider.
In that case, they’re protecting not only themselves but also all of the other customers that they have. Let’s say that I imported a thousand emails into Drip and I basically blast something out and then a lot of them started getting marked as spam, I am then thereby impacting the rest of Drip’s customer which obviously is a no, no. I would expect them to shut me down.
Versus if you send it out through Yesware or Bluetick or all these other things. What happens in those cases is if somebody reports to the spam, it actually goes against your own domain as opposed to somebody else’s. From my standpoint, if you’re gonna bash your own domain and you really are spamming people, and it is classified as spam, then you’re negatively affecting your own domains, not mine, not any other customers. At that point it doesn’t impact me as much.
The email service providers, the reason they’re doing it is not for legal reasons, it’s to essentially protect their current customer base and the send rates and deliverability of everything else that they’re doing.
Rob: That’s right because they shared IPs and shared sending domains. We are at time, sir. At the start of the show I said we’d get through all the questions but we did not, we have one question for future episodes. We will revisit that at some point. You wanna wrap us up for today?
Mike: Was that a deliberate lengthening of the episode to make sure that we had the one left or no?
Rob: No it wasn’t, I figured we would get to all of them, we didn’t have that many questions but obviously some of the answers were more in depth and we just ran a little long today.
Mike: If you have questions for us, you can call it into number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.
-: And I’m Rob, I guess. And I’m not Mike.
Rob: That’s what Sherry said when she was on the show, “And I’m not Mike.” What’s going on this week, man?
Mike: I just pushed the new Bluetick website live this week. That’s finally out there, they were out, I think, Monday night. Just been making some minor tweaks here and there just to get the images all straightened out and smooth out some other rough edges.
My main focus was just getting the design itself in place and then the copy along with the new updated theme because it’s all built on WordPress. Now that that’s stuff’s in place, I actually have to leave in four or five hours to go to FemtoConf and then once I get back, then I’ll probably finish off the rest of the little minor things that need to be taken care of and just make sure all my plugins are installed and all the analytics are working and then from there just start marketing.
Rob: The site looks great, it looks really nice. It’s like ten times better than what you had up there. All the way from the look, to the images, to just the verbiage and then what you have there. Bravo on that. Can I give you two small critiques? I’m sure these are behind on your list. You have a testimonial on the home page which I think is great.
Mike: Actually those are gonna be swapped out.
Rob: Cool, you got multiple, but put big old quotes around it. There’s something about seeing quotes around it. I know there’s Justin’s face there and then there’s a testimonial to the right of it but without the quotes, it’s like there’s just something there. I really like to call out large quotes because then people know the guy is saying that. It’s a little thing that I see in a lot of sites but I think there’s some impact.
Mike: Yeah, I’ll definitely do that. What’s the next one?
Rob: The other one is, you know what, this one isn’t actually a critique. You have one sentence description at the bottom of the page in the footer about Bluetick and it says, “Bluetick relieves the soul deadening drudgery of email follow up for founders, overworked sales executives, and anyone who’s ever lost a perfectly good lead to the email blackhole.” That’s a really well-written thing. Why does it say FIP? What’s FIP mean?
Mike: I don’t know, actually I think that’s gotta be RIP.
Rob: There’s just a little typo there. I don’t love your logo because it took me a while to figure out what it is but it looks like it’s a dog eating an envelope or carrying an envelope, is that right?
Mike: Yeah, it’s carrying an envelope.
Rob: I’m sure it looks better when it’s big but given the size on your site right now. Listeners, you should go to bluetick.io and check all this out and see if you agree with me or what else we can figure out. I’m sure changing your logo is like priority 942 on your list right now.
Mike: Yeah. The only reason I even had the logo done was because before it was just text and I wanted to have something up there so that people could associate the logo with the text itself because there’s familiarity that people get with certain text fonts especially when they go with a particular logo but I’m gonna be using that logo inside of some of the emails and stuff that are being sent out. I just want that familiarity to at least be there.
It wasn’t necessarily important, it was just like okay, if I’m doing a step up, the previous logo was literally a stock image that was just black and white of a dog’s face and it was just not very relevant, I’ll say.
Rob: I would think if you could somehow simplify just the dog’s face, turn it into a line drawing or something. Again, I realized it’s hard because you can’t do it yourself, you’re gonna have to hire somebody. I don’t think this is a deal breaker, I don’t think people are not gonna sign up for the app because of that. It’s just something that every time I come to the site I notice it and I’m like it’s a little busy.
Mike: This is gonna turn into a website tear down episode.
Rob: It’s gonna be the whole episode. These are very minor things. There are no typos on the page, the copy is good, personal touch at scale for all your follow up emails, that’s your headline. It’s really well-written. Obviously you could split test against something but nothing comes to mind as like boy, this copy is really jacked up or anything. It looks good.
The only two, again these are minor things, your Drip widget popped up on me after maybe 5 to 10 seconds. I was in the middle of reading your headline or the subheading and the thing popped up. I would probably push that out to 30 seconds, you have quite a bit of [inaudible 00:05:05] on the page, maybe even 45 seconds. Just give people a bit of time to read a little more.
Last thing is, your title tag on your home page, it says, “Home-Bluetick.” I know you’re not doubling down on SEO right now but really, Google has probably indexed you already. You may wanna start that with something, I don’t know what keyword you’re gonna be targeting or keywords but whether it’s email follow up or whatever generic phrase you would love to rank number one in Google, at least have that somewhere in there, probably towards the front.
Again, I wouldn’t keyword stuff but Home-Bluetick isn’t gonna get you much. You don’t want people to find you for the word home. People are gonna find you for the word Bluetick. Neither those really need to be there, although I’d probably still have Bluetick in there somewhere. That’s about it, man.
Mike: All of those are great suggestions. Some of them, like you said, the typo, I knew that I had to get to that but I just hadn’t gotten to it. I feel like extending out the Drip widget a little bit so that it gives people more time. All the title tags and stuff like that, I have not even looked at any of those yet. That’s on the list of things to do when I get back.
Rob: You have some art on the tour page, that’s very cartooning. Those look really cool, I like the feel of that. It’s very professional feel.
Mike: The designer who did the website, he came up with those illustrations. We went back and forth on a couple of different design ideas that he had and those are the ones that came out of it.
Rob: Very cool, man. Good luck. I’m interested to hear how it impacts conversions and all that kind of stuff.
Mike: The main focus of doing all of this stuff was just to give the website a much better feel to it so that when somebody either came to the website itself or was directed to it because of a referral, it doesn’t look like something that they would’ve just clicked the back button and said, “No, I’m not even gonna give this a chance.” I did hear that as feedback from people where I recommend it to so and so they told me that if I had not recommended it to them, they wouldn’t have even given a second thought.
It’s really to just overcome that as a primary objection. I can do a demo for somebody or a webinar and I could sell them on it and say, “Yes, this is what the product does.” By showing them inside the product and what it can do for them and solve their problems, yes it’s fine. But a completely cold lead who comes to the website has no idea and they’re not gonna give it a chance, that’s really what it is. The bar for something like a SaaS product is much higher than something that the old website could even overcome.
Rob: The bar is much higher than it was five or ten years ago as well. I think you made a good call here. Doubling down on this, you’re at the point where you’re starting to scale getting more trials coming through the websites, now is the time to do that. If you spent much time on this when you’re in customer development, it would’ve been a waste of time. I think it was a good use of time and money.
I wanted to talk a little bit about MicroConf, it’s coming up in April, Starter Edition. We still have tickets left and we have some really good speakers this year. We have Mary Pullen who’s talking about her first year of SaaS bootstrapping. We have Alli Blum talking about copywriting and onboarding emails, she’s been on the show. You’re speaking, Justin Jackson, Ben Orenstein, Courtland Allen from Indie Hackers, Mojca Mars about Facebook Ads, really solid lineup this year.
If you’re at all interested in hanging out with 100-250 folks who are all the way from idea to making a full time living from their business, head over to microconf.com, click on Starter and the tickets are relatively inexpensive compared to most conferences and we do still have some left. We’d love to see you there.
The other thing is I’m driving to Lake Geneva, Wisconsin next Thursday or I guess it’s two days after this will air to attend Gary Con, have you heard of that?
Mike: I have not. Is that related to Gary Gygax?
Rob: Yes, Gary Gygax was the creator of Dungeons and Dragons. He died in I think it was 2010, 2012. Basically friends and family just got together and played a bunch of games. It’s like there’s table top games, there’s card games, and RPGs and miniatures and the war games and all that kind of stuff. It was like 20 or 30 people the first year and they jokingly called it Gary Con in his honor. The next year, they sold a few tickets and they had 100 people and it just turned into this thing.
I went last year, it’s kinda neat being in the midwest. I’ve never gone because I was never gonna fly from California out to Lake Geneva, Wisconsin but being in the midwest, it’s like a four or five hour drive. Last year I was kinda nervous about going, my son and I, we obviously love and play these games but we’re not sophisticated gamers, we’re just playing for fun and there are about 1200 people there. It was a blast, man. It was so much fun.
People are really nice and welcoming. I’d come up with my ten year old son and I was like, “Hey, we’ve never played this.” They’re like, “No problem, we have a character for you, here’s how you do it.” They were just super helpful. Anyways, I’m really looking forward to that. If anybody happens to listen to this and be there, please drop me a line. We’d love to connect with you but if not, I’ll certainly report back about the nerdery that’s gonna take place in Lake Geneva next week.
Mike: That’s awesome. I’ve been to a couple of gaming conventions like that, there was one in Buffalo, New York that I went to. It’s probably 10 or 12 years ago. It’s interesting because there was a guy there who had a role playing game that he was trying to launch and trying to get funding for but he was also still doing play testing for it. There was a room of 25 of us, he basically threw us into this game. I think the game was called monoxide amazon or something like that.
The idea was you’re in this world where you just basically have to run away from everything, everything is out to kill you. Half the people died in 10 or 15 minutes or something like that. It was like an hour long session but out of all of us, I think there were only five or six of us that made it out alive.
Rob: That’s cool. That’s the neat part. Last year the same thing happened, there were several people there who were trying to get their games on Kickstarter or going to put them on but they were doing play testing. My son actually played that Tower Defense game board game that he enjoyed a lot. The convention itself, it is four days.
We’re only going for three days of it but it’s not just some eight hour session, we’ll probably game as much as we can, eight to twelve hours a day, we’ve already signed up for tables in advance and then we’re also wandering around. There’s so much cool stuff to buy too, it’s really bad. I need to limit my spending but I get overwhelmed how much cool stuff people bring. It’s a great time to buy dice and miniatures and all kinds of geeky stuff.
Mike: Cool. What are we talking about this week?
Rob: We have a few listener questions. Actually, by the end of this episode, we will have zero listener questions in the cue. I don’t know if it’s woohoo or not. We’re gonna have to come up with some content next week. If you do have questions for us, please, email them to us at questions@startupsfortherestofus.com or certainly call our voicemail number which we read at the end of every show.
Our first question is from Tim Win. He has a couple questions in the same email. His first question, he says, “I was wondering, for a B2B Saas targeting specific niche market, what will be a good amount of traffic I should try to generate to get meaningful feedback?” Aside from it depends, do you have thoughts on this? Because it does depend, that’s a very general answer. Let’s weigh it on, I may have some thoughts.
Mike: I think when you ask a question like this, what you’re really trying to get out is the amount of feedback that I’m getting good enough in relation to what other people would get or are you getting the feedback that you need to make a decision. I think that’s how I would approach it to figure out whether or not you’re getting enough traffic.
You have to decide on what your KPI for that website is and how you’re going to be gathering information from people. Let’s say that you use Hotjar and you put a poll on your website and you get 100 or 500 people to it and you get 3 people to answer the poll, that’s not a good percentage but 3 people out of 500 visitors is not going to help you in any way, shape, or form. Even just adding once answer is gonna skew things in such a direction that it’s just not helpful.
I think I would look at it in terms of how much feedback you’re getting versus how many people are visiting. Also, recognize that when you’re looking at the traffic stats for a particular website, it’s very easy to misinterpret bots coming to the website to just crawl it versus actual visitors who were there for purpose or came from a particular search term or were directed from an email or another website.
Rob: If you’re using Google Analytics, though, I don’t think it picks up bots, I’m pretty sure it does not, it’s only if you look at raw server logs, just a caveat in there.
Mike: But it is hard to tell when you’re looking at that because you do see on the server logs, you’ll get 20 or 30 visits a day. I’m not convinced that Google accurately filters out all the robots that it’s supposed to.
Rob: Really? Because it’s JavaScript. Typically a bot is like a crawler, it’s a Python Script that’s just doing something. It shouldn’t “execute” JavaScript. You need to execute JavaScript to have Google Analytics track you. I know that Google’s crawler does execute some JavaScript, there are stuff, it’s possible but my guess is that most bots are not executing the Google Analytics.
I’m guessing they would exclude it if they could. They’re pretty smart about that. The point is if you’re not using Google Analytics and you’re using your logs, they could be in there.
Mike: That’s true. With this particular question, what you’re really trying to get out is what is the information that you’re trying to retrieve from people and what feedback is it that you want. Do you want conversations? Do you want them to comment on something? Do you want to get them on a phone call? What is the KPI that you’re trying to push people towards? Are they doing it?
I don’t think it’s a matter of trying to measure the actual traffic itself because, I think, bear minimum, you probably need at least 500 visitors a month, anything below that you’re just really not gonna be able to make a meaningful business out of it.
The other thing to consider is the fact that not every B2B SaaS product needs to have traffic coming to its website if that’s not your primary source or primary channel for marketing the product. If you’re doing outbound cold emails, for example, or if you’re sending postcards in the mail to people or you’re doing cold calling, none of those things involve people coming back to your website so there’s an implicit assumption here that the traffic that’s coming to the website is based on SEO or content marketing or something along those lines.
I would just be hesitant to say that there’s 100% correlation between website traffic versus being able to get that meaningful feedback because if you are doing cold calling, for example, you can get on a call with somebody and you can ask them questions and talk to them, get the information you need and they never hit your website at all. That’s something to keep in mind.
Rob: I think that’s probably the first point that I would make. I think that that’s something to keep in mind, is it’s not about necessarily driving a bunch of traffic to a form or to an opt-in. It depends on your business idea but boy, if you have no audience and no reach, I would probably start with some type of outbound, cold email, or maybe some ads going to a landing page or something.
There’s just no better way to get feedback because that’s his questions, it’s not how do I build a meaningful business, it’s how do I get meaningful feedback. The way you do that is you ask for it. It tends to have to be outbound. I would hang on with this concentric circle marketing I was talking about.
I would talk to my friends and colleagues and then their friends and colleagues and then their audience and then eventually you get to the cold audiences but I would start in the center with the people that you know if you truly are going for feedback.
In the early days of Drip, yes, I threw up a landing page and put some copy on there. The only reason I did that was because I was going on podcasts and people were asking me about it and I wanted somewhere to send people.
Eventually, once I knew what we were gonna build, I started doing some ads to it and I did build a list from there but that was not the way I got meaningful feedback. The way I got meaningful feedback was a bunch of warm emails to people within my network asking them, would you use this tool? Here’s a screenshot, what do you think? And then started building momentum there. I think that’s the way to think about this.
If you wanna build an actual sustainable business and you’re asking about how much traffic, DotNetInvoice, which depended on the month but between $2000 and $4000 a month, pretty consistent, sometimes it got to 5000. That site had 1000 to 1500 uniques for years. It was just a really high converting site and it was in a vertical. That’s what he’s asking about here.
He’s like, it’s a B2B SaaS, it’s in a vertical niche. You don’t need that much but you are gonna top out at some point and just stop growing. DotNetInvoice was $300 one-time purchase. Keep that in mind as well.
With 1500 people coming to your site, if you think about, let’s just throw out a 1% conversion rate to trial, you’re gonna get 15 people into trial funnel, that’s with credit card upfront. Let’s say you close 50% of those to customers which is likely, then you’re gonna have seven or eight new customer a month.
You have to ask yourself, if you charge $1000 a month, that’s probably pretty good. If you’re charging $10 a month, that’s not very good. You have to think about your price point and just think about the numbers that I threw out there and you can do backwards math and figure out how many people you need to send to figure out how fast you wanna grow.
Tom’s second question was that he seems to be getting free trial sign ups but once users get into his onboarding which is like a getting started wizard, he seems to lose them. It’s only three steps, it’s nothing too complicated, just adding their location, product service they provide, and setting a payment processor so they can take payments from their customer.
“Some seem to get to this part and never log in. Any idea why? It’s driving me crazy.” What would you do if you were in his shoes, Mike?
Mike: I was gonna say there’s no way for us to really answer why that is. I think that if I were in his shoes and I was having this particular problem, I would email those people individually who never got past that point and see if you can help them, either just walk them through it or ask them questions about what their experience was. Your best case scenario is to get them onto a call to walk them through it and do a personalized onboarding session and then watch them as they go through it so you could just use Zoom to watch over their shoulder as they go through.
The nice thing about doing that is if you do it for them, then they see it but if you let them do it because they don’t know exactly what they’re doing, they’re going to click on stuff that they shouldn’t and you’re gonna be able to recognize that and say, “Why did that person click there?” You can ask them literally on the call, “Why did you click on that? What was it that made you think that you were supposed to click on that?”
Maybe they’re getting confused about the UI, maybe they just don’t have time to log in so they never set up their account.
I think there are other questions I would also ask about like do they come into the site and get there or do they just never come in? If they’ve gone through the signup, does it take them directly over to this three-step process or do they have to get an email and then they click on the email and then they come back into the application. How is that sequence of events set up and what’s the flow look like for the end user?
It could very well be that some people, depending on their browser for example. I’ve run into this with Bluetick in certain situations where some browsers, on occasion, do not work and it had to do with a race condition inside the JavaScript code. Some things work fine and then other ones didn’t. I didn’t know that because I wasn’t monitoring exactly what browsers people were using.
Like I said, because it was a race condition, it sometimes happened but not always. You really just need to talk to them and watch over their shoulder to watch them go through that and ask those questions to find out what it is that you’re doing. If they already got through that first step, they signed up, you have their email address or at least presumably you should. Contact them and follow up with them until you get an answer as to why they didn’t go through that next step.
Maybe they realized at that point that it was going to be more to set up than they thought it was. At that point, you have to evaluate, do I put this process in place? Do I need them to do those three things all at once? Could I spread it out? Are there ways to interject that as part of them using the product without forcing them through that concrete step all upfront? Let’s say that the location, for example, could you pull that from their credit card information?
Rob: Like their IP.
Mike: Yeah, that too. It depends on how accurate you need it to be. Like time zone, you could probably pull from somebody’s browser. If you need the address, could you pull it from their credit card? That depends on whether or not you’re taking credit card upfront which sounds like it’s not because it’s free trial. Those are the places I would start.
Rob: I think that’s spot on. The one other thing I would consider is taking away self-service signup and just putting a request demo button. When they hit that, they can just book right in Calendly and set something up. If you really wanna do this well and this is what you’re focused on, the requested demo button, you could respond to that within minutes.
If you’re relatively low traffic and you really are just hacking away all day right now, try to get back to people within ten minutes of them clicking that and just get them on the phone, do a Zoom meeting and do a screen share and walk them through. It’s essentially what you said, Mike, but I’m just saying you take away the self-service signup portion.
I think that right now it’s gonna be about talking to customer sounds like you’re still in the early days. You could throw Hotjar on there and do screen recordings, you could throw Crazy Egg in there and do heat maps, you can do all that stuff but you’re never gonna find out why, you’re just gonna see what is happening. The why is obtained through having a conversation with them. I would be more hands on these early days, you don’t have to do that forever. I think you’ll certainly find out that it’s pretty valuable for your learning, for accelerating your learning in these early days.
The last question was for you, Mike. He says, “I was listening to one of the podcasts, Mike was saying bluetick.io was having usability issues he had to fix. Are you able to get into detail? Just curious as to what some of them are.” I recall you talking about one usability issue, interested in talking about that?
Mike: Sure. The main usability issue that I have addressed towards the past six months or so, they had to do with onboarding. When somebody signs up for Bluetick, one of the first things that you have to do is you have to set up your mailbox and you have to add in your username and password. If you’re using Gmail, there’s all these different settings that you have to connect. You have to have IMAPS or hostname, username, password, port number, the encryption level. You also have to have the exact same information for your SMTP server because it may not be the same.
Initially, I had a set up page where you had to set up your mailbox and there were probably a dozen different settings. What I would do is I would personalize onboarding for each person, walk them through it, watch the backend because not everybody knows what ports they’re using for their mail server. Some people are technical, some people are not, so I walk through it with them.
I got to a point where I knew that certain types of mail servers were very common, you’re using Gmail or Google Apps. I could guess what those are because it’s always gonna be imap.gmail.com and then also smtp.gmail.com but your username and password are gonna be different.
I could basically filter out a bunch of those and I was able to shorten down the page itself but in addition to that, there were still problems because if you a have two factor authentication set up or you don’t, you either have to enable less secure apps or you have to enable two factor authentication and you also have to make sure that IMAP is enabled.
Overtime, I whittled down the number of things that somebody had to do to get their mailbox set up. At some point, I transitioned to the point where if you are using Google Apps or G Suite, as I call it now, you can just click through and go through the OAuth authentication. That basically takes care of everything for you, you’re just putting your username and password in Google, click the button and boom, everything is taken care of for you.
There’s very much a progression where I slowly pulled myself out of the setup process. On day one, I didn’t necessarily know what everybody needed and I didn’t have everything coded. I pushed myself into the process to make sure that it got done.
Rob: I think that’s a great way to do it. We had several integrations in Drip that were a pain in the butt to set up. You had to go and install a WebHook and do all this and that. We’ve been going back as we’ve grown and scaled and making them all OAuth if the provider allows OAuth. We always call it V1. V1 integration was just to plugin and then V2 is to add OAuth and V3 was to make the triggers native. There were all these things and we just have the verbiage or the language that we all knew on the dev team.
You have been in your early days, it’s customer development time. You could’ve spent another three weeks in the early days making it super simple but you didn’t need to because you’re walking people through it. I guess this is technically a usability issue but it’s like a deliberate decision to move faster and then circle back and iterate. I think that’s something that people should keep in mind as you’re building your app. It doesn’t need to be the best all the time, you gotta do your best.
Do you want your code to have not a lot of croft and not have technical debt? I wouldn’t skimp on that. But when you’re moving fast, I think making a first past through and having the usability in some areas be not as ideal as maybe you’d like and you know that and you plan to come back, I think that’s a pretty good approach.
Mike: The other thing that I use specifically in this particular case which people might find useful is that I made this decision for this piece of it specifically because it was a setup piece. I knew that it was something that most customers are only ever going to do once and once it’s done, that’s the end of it. Even if it takes me 30 minutes or 45 minutes on a call to set somebody up and get that stuff connected properly, it doesn’t matter because it won’t have to be done again.
Obviously I don’t wanna be on a call with every single person for 45 minutes just to get them set up and then after that try to do some level of onboarding and customer development. If I can get that stuff taken care of later on, I basically just kicked it down the road because it was that one-time set up and it wasn’t gonna have to be done again. You can use that as a deciding factor as to where you’re going to spend your time.
I see a lot of other vendors doing this where if certain things are painful, you tend to find those things in places where the customer doesn’t have to do it very often. The one example that comes to mind is Oracle installer which for 10 to 15 years was busted. It was fundamentally broken on Windows, you literally could not install Oracle without it failing and then having to go in and fix stuff. They finally fixed it in 2012 or something like that. But for a long time, it did not work at all.
Rob: I remember that, that was crazy.
Our next question is about cold email, it’s from Greg Ristow from utheory.com. He says, “I love the show, I’ve got a startup music theory learning site which is just now at $1500 per month in revenue with very little marketing.” Congratulations, by the way. That’s a nice market to hit.
“Starting to think about email marketing strategies for reaching college music theory faculty, and high school music teachers. I’m wondering about the legality of gathering names and emails from school websites. When I look around the web, I get conflicting information on how CAN-SPAM applies.” That’s a law in the US about not spamming people. “I know in my own day job as a college music faculty member, I regularly get emails from companies who pulled my email from my school’s website. Any advice?”
Mike, I know you have a lot of thoughts on this. I’d say give a short answer and then a longer answer.
Mike: The shorter answer is that it is legal to go to somebody’s website and pull the email addresses. At that point, depending on how you email them, that’s where the piece of CAN-SPAM falls into place. It’s not about whether or not you pull the emails from the website or whether you gather their contact information, it’s really about what you do with it after the fact.
Underneath the umbrella of the CAN-SPAM Act, there’s basically three different types of emails that are sent out. There’s commercial emails, there’s transactional emails or relationship emails, and then there’s other. I’ll talk about those in a minute but most of what CAN-SPAM basically says is don’t lie to people or forge header information when you’re sending emails and try to hide what it is that you’re trying to do.
For example your from email address should actually be you or your business. Who it’s to should be that person, don’t be forging emails to people like if I were to send an email to you and I forged the header information and said that it was Bill Gates, then it starts to fall under the CAN-SPAM laws. Lying about those things, not specifying that something’s an advertisement, or line about what the subject is.
Let’s say that you say that it’s about your recent payment, and then in the body of the email you’re saying it’s a Viagra commercial or advertisement. That right there is a violation of CAN-SPAM because you’ve not said that it’s an advertisement and you’ve also lied in the subject line.
Not telling people how to opt out of future emails, that’s another one and then honoring the opt outs. A lot of those things are typically handled by an email service provider. Those are the things that you don’t typically have to worry about.
Going back to the three different categories of email that are defined here, there’s the commercial intent which basically is an advertisement of some kind. That’s really where the pieces of the CAN-SPAM Act are that you need to pay attention to. If you’re advertising a product or a service and you’re promoting it and sending emails to these people, it’s very clear that you’re trying to get them to sign up for a service, that is a commercial intent email.
If it’s a transactional email, that essentially is exemplified by things like somebody comes to your website, buy something, and then you send them a receipt. Emailing them the receipt, that’s a transactional email because they did something and then they received based on what they did.
The third one is other. This is where you get into a very, very grey area because all three of these things are all about the primary purpose of the message. What is it that that email was intended to do and what are the contents of it. If I send somebody an email that is completely unsolicited and it’s got links for them to buy my service or to come into my website and look at the product to learn more because I’m essentially pitching it to them and saying, “Hey, would you like to learn more about this? Here’s the website.” That is more of a commercial content.
If I email somebody and I say, “Hey, I’d like to talk to you about X because I’m exploring this idea.” Or, “I have a product and I’m doing some customer development.” That is not commercial because you’re not actively selling them something, there’s not an advertisement in it. It’s also not transactional. What happens is those types of emails fall under other.
I will put a blanket categorization here that says I’m not a lawyer. Just take some of this with a little bit of interpretation and a grain of salt because this isn’t legal advice. But my reading of all of these things is that that commercial content, the transactional and other, you can essentially leverage those three. Depending on what it is that you’re putting in the email, a lot of times, you can force it to fall underneath the other category which essentially says that it doesn’t need to follow these CAN-SPAM laws and regulations.
Rob: I think the TLDR on that. Again, we’re not lawyers, we can’t give legal advice but it is generally accepted practice that, yes, people do scrape emails from websites, whether they gather them by hand or whether they have a VA to do it or whether they write a script to do it. It is legal to cold email people even for commercial purposes, I receive them all the time.
I may morally or ethically consider them spam and certain people do and they say, “You’re spamming me.” Based on the legal definition, that’s not. I would give you the advice, don’t use a bulk email program, you’ll get shut down. Script that list and then import it into Drip or MailChimp or anywhere, we’ll block your account because people will mark them as spam, there’s gonna be bounces, people are not gonna open them, they’re just gonna have low engagement. Those cold emails should not be in a tool like Drip or MailChimp, they should be in a tool more like Yesware or Bluetick.
Mike: That’s correct. The interesting thing there is that the reason Drip and AWeber and MailChimp and all those others are stopping people from sending those types of emails and stopping them from importing the list and blasting them out is because what happens is that people on the receiving end of it, if they don’t like the message, they can mark it as spam. That’s not a legal definition that it was spammed, it was that that person classified as spam. What happens is that then negatively impacts the provider.
In that case, they’re protecting not only themselves but also all of the other customers that they have. Let’s say that I imported a thousand emails into Drip and I basically blast something out and then a lot of them started getting marked as spam, I am then thereby impacting the rest of Drip’s customer which obviously is a no, no. I would expect them to shut me down.
Versus if you send it out through Yesware or Bluetick or all these other things. What happens in those cases is if somebody reports to the spam, it actually goes against your own domain as opposed to somebody else’s. From my standpoint, if you’re gonna bash your own domain and you really are spamming people, and it is classified as spam, then you’re negatively affecting your own domains, not mine, not any other customers. At that point it doesn’t impact me as much.
The email service providers, the reason they’re doing it is not for legal reasons, it’s to essentially protect their current customer base and the send rates and deliverability of everything else that they’re doing.
Rob: That’s right because they shared IPs and shared sending domains. We are at time, sir. At the start of the show I said we’d get through all the questions but we did not, we have one question for future episodes. We will revisit that at some point. You wanna wrap us up for today?
Mike: Was that a deliberate lengthening of the episode to make sure that we had the one left or no?
Rob: No it wasn’t, I figured we would get to all of them, we didn’t have that many questions but obviously some of the answers were more in depth and we just ran a little long today.
Mike: If you have questions for us, you can call it into number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
